UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2025

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-41870

Diversified Energy Company
(Exact name of registrant as specified in its charter)
Delaware	42-2283606
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)
1600 Corporate Drive Birmingham, Alabama	35242
(Address of principal executive offices)	(Zip Code)	Registrant’s telephone number, including area code:	(205) 408-0909
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Securities registered, pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	DEC	New York Stock Exchange
		London Stock Exchange

Securities registered, pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the

preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90

days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging

growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of

the Exchange Act.

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised

financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over

financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the

correction of an error to previously issued financial statements. ¨

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the

registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the Common Stock held by non-affiliates of the registrant on June 30, 2025, based on the closing price of the Common Stock on the New

York Stock Exchange on such date, was approximately $814 million.

The registrant had 76,070,756 shares of common stock outstanding (excluding shares held by the Employee Benefit Trust) as of February 25, 2026.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the definitive proxy statement of Diversified Energy Company relating to the 2026 Annual Meeting of Stockholders are incorporated into Part III of this

Form 10-K. Such definitive proxy statement or an amendment to this Annual Report on Form 10-K will be filed no later than 120 days after December 31, 2025.

Table of Contents	Form 10-K	Diversified Energy Company

		Page
Part I
Item 1.	Business	4
Item 1A	Risk Factors	17
Item 1B	Unresolved Staff Comments	34
Item 1C	Cybersecurity	34
Item 2.	Properties	35
Item 3.	Legal Proceedings	35
Item 4.	Mine Safety Disclosures	35
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity<br><br>Securities	36
Item 6.	[Reserved]	37
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	52
Item 8.	Financial Statements and Supplementary Data	54
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	100
Item 9A.	Controls and Procedures	100
Item 9B.	Other Information	100
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	101
Part III
Item 10.	Directors, Executive Officers and Corporate Governance	101
Item 11.	Executive Compensation	101
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	101
Item 13.	Certain Relationships and Related Transactions, and Director Independence	101
Item 14.	Principal Accountant Fees and Services	101
Part IV
Item 15.	Exhibits and Financial Statement Schedules	102
Item 16.	Form 10-K Summary	105
	Signatures	105
Table of Contents	Form 10-K	Diversified Energy Company
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Glossary of Terms

£ - British pound sterling

ABS - Asset-Backed Security

ASU - Accounting Standards Updates

Bbl - Barrel or barrels of oil or natural gas liquids

Board - Board of Directors

Btu - A British thermal unit, which is a measure of the amount

of energy required to raise the temperature of one pound of

water one degree Fahrenheit.

E&P - Exploration and production

EBITDAX - Earnings before interest, tax, depreciation,

amortization and exploration expense

EHS - Environmental, health & safety

EPA - Environmental Protection Agency

EPS - Earnings per share

GAAP - U.S. General Accepted Accounting Principles

GHG - Greenhouse gas

Henry Hub - A natural gas pipeline delivery point that serves

as the benchmark natural gas price underlying NYMEX natural

gas futures contracts.

LSE - London Stock Exchange

Mbbls - Thousand barrels

Mcf - Thousand cubic feet of natural gas

Mcfe - Thousand cubic feet of natural gas equivalent

Midstream - Midstream activities include the processing,

storing, transporting and marketing of natural gas, NGLs

and oil.

Mmbtu - Million British thermal units

Mmcf - Million cubic feet of natural gas

Mmcfe - Million cubic feet of natural gas equivalent

Mont Belvieu - A mature trading hub with a high level of

liquidity and transparency that sets spot and futures prices

for NGLs.

NGLs - Natural gas liquids, such as ethane, propane, butane

and natural gasoline that are extracted from natural gas

production streams.

NYMEX - New York Mercantile Exchange

NYSE - New York Stock Exchange

Oil - Includes crude oil and condensate

OSHA - Occupational Safety and Health Administration

PSU - Performance-based restricted stock unit

PV-10 - PV-10 is a non-GAAP financial measure that

represents the present value of estimated future cash inflows

from proved oil and gas reserves, less future development and

production costs, discounted at 10% per annum to reflect the

timing of future cash flows and utilizes an SEC pricing

assumption. PV-10 is derived from the standardized measure of

discounted future net cash flows (the “Standardized Measure”),

which is the most comparable financial measure calculated in

accordance with GAAP. PV-10 differs from the Standardized

Measure in that PV-10 excludes the effects of income taxes on

future net revenues. We believe the presentation of PV-10 is

relevant and useful to investors because it provides the

discounted future net cash flows attributable to our proved

reserves without regard to any of our specific income tax

characteristics and is a useful measure for evaluating the

relative monetary significance of our oil and natural gas

properties. Investors may use PV-10 as a basis for comparing

the relative size and value of our proved reserves to that of

other companies. PV-10 should not be considered as a

substitute for, or more meaningful than, the Standardized

Measure. Neither PV-10 nor the Standardized Measure

represents an estimate of the fair market value of our oil and

natural gas properties.

Realized price - The cash market price less all expected

quality, transportation and demand adjustments.

ROU - Right-of-use asset

RSU - Restricted stock unit

SOFR - Secured Overnight Financing Rate

TSR - Total Shareholder Return

UK - United Kingdom

Upstream - Upstream activities include exploration, discovery,

and extracting of natural gas, NGLS, and oil. Often referred to

as exploration and production activities, or E&P.

WTI - West Texas Intermediate grade crude oil, used as a

pricing benchmark for sales contracts and NYMEX oil

futures contracts.

Table of Contents	Form 10-K	Diversified Energy Company

Explanatory Note

On November 21, 2025, Diversified Energy Company PLC, a public company limited by shares, incorporated under the laws of

England and Wales, completed a redomestication to the United States, which was approved by the shareholders of Diversified Energy

Company PLC, resulting in Diversified Energy Company, a Delaware corporation, becoming our publicly traded parent company (the

“U.S. Domestication”). Immediately prior to the effective time of the U.S. Domestication, existing shares of Diversified Energy

Company PLC were exchanged on a one-for-one basis for newly issued shares of corresponding common stock of Diversified Energy

Company, and all issued and outstanding equity awards of Diversified Energy Company PLC were assumed by Diversified Energy

Company and were converted into rights to acquire Diversified Energy Company shares of common stock on the same terms. As a

result, all outstanding shareholders of Diversified Energy Company PLC became common stockholders of Diversified Energy

Company. Following the U.S. Domestication, the listing of the common stock of Diversified Energy Company on the New York Stock

Exchange and the equity shares (International Commercial Companies Secondary Listing) category of the Official List of the FCA and

the trading on the London Stock Exchange’s main market for listed securities became effective on November 24, 2025. Throughout

this Annual Report on Form 10-K, references to “Diversified,” “DEC”, the “Company,” “our,” “we” and “us” (i) for periods until the

completion of the U.S. Domestication, refer to Diversified Energy Company PLC and (ii) for periods at or after the completion of the

U.S. Domestication, refer to Diversified Energy Company.

Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements that can be identified by the following terminology, including

the terms “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “seek,” “believe,” “estimate,”

“predict,” “potential,” “continue,” “contemplate,” “possible,” or the negative of these terms or other variations or comparable

terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements

include all matters that are not historical facts. They appear in a number of places throughout this Annual Report on Form 10-K and

include, but are not limited to, statements regarding our intentions, beliefs or current expectations concerning, among other things, our

results of operations, financial positions, liquidity, prospects, growth, strategies and the natural gas and oil industry. By their nature,

forward-looking statements involve risk and uncertainty because they relate to future events and circumstances.

Forward-looking statements are not guarantees of future performance and the actual results of our operations, financial position and

liquidity, and the development of the markets and the industry in which we operate, may differ materially from those described in, or

suggested by, the forward-looking statements contained in this Annual Report on Form 10-K. In addition, even if the results of

operations, financial position and liquidity, and the development of the markets and the industry in which we operate are consistent

with the forward-looking statements contained in this Annual Report on Form 10-K, those results or developments may not be

indicative of results or developments in subsequent periods. A number of factors could cause results and developments to differ

materially from those expressed or implied by the forward-looking statements including, without limitation, general economic and

business conditions, the behavior of other market participants, industry trends, competition, commodity prices, changes in regulation,

currency fluctuations, our ability to recover our reserves, our ability to successfully integrate acquisitions, our ability to obtain

financing to meet liquidity needs, changes in our business strategy, political and economic uncertainty.

Forward-looking statements may, and often do, differ materially from actual results. Any forward-looking statements in this Annual

Report on Form 10-K speak only as of the date of this Annual Report on Form 10-K, reflect our current view with respect to future

events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to our operations, results

of operations, growth strategy and liquidity. Investors should specifically consider the factors identified in this Annual Report on Form

10-K which could cause actual results to differ before making an investment decision. Subject to the requirements of the Public Offers

and Admissions to Trading Regulations 2024, the Prospectus Rules: Admission to Trading on a Regulated Market of the Financial

Conduct Authority, we explicitly disclaim any obligation or undertaking to revise any forward-looking statements in this Annual

Report on Form 10-K that may occur due to any change in our expectations or to reflect events or circumstances after the date of this

Annual Report on Form 10-K except as may be required by applicable law.

Table of Contents	Form 10-K	Diversified Energy Company

PART I

Item 1. Business

Business Overview

We are engaged in the production, transportation, and marketing of natural gas, NGLs, and oil, managing a diversified portfolio of

mature, long-life assets. Our assets are located in the United States within the following geographical operating areas:

•Appalachian Region, which spans Ohio, Pennsylvania, Virginia, West Virginia, Kentucky, Tennessee and Alabama;

•Central Region, which includes Texas, Oklahoma, New Mexico, Louisiana and Arkansas;

•Other, which includes Florida and Wyoming.

Our business model emphasizes responsible stewardship and operational excellence, focusing on maximizing value from existing

reserves.

Our disciplined, full-lifecycle asset management approach is central to our success. We focus on optimizing and extending the

productive life of existing wells, using advanced monitoring technologies and data analytics to drive operational efficiency and safety.

In addition to our work on our producing wells, we have an extensive and innovative asset retirement program that consists of a

vertically integrated plugging company based in our Appalachian Region. With over 69,000 total net productive wells, we produced

an annual average of 1,086 MMcfepd during the year ended December 31, 2025, and we are well-positioned to maximize asset value

while maintaining a sound balance sheet and upholding high standards for safety and environmental responsibility.

Our strategy is designed to deliver consistent shareholder returns and long-term value through disciplined growth and operational

excellence.

•We maintain a diversified asset base that supports stable and predictable production.

•Our efficient capital investment process enables us to pursue growth opportunities and optimize returns.

•Operational reliability is enhanced by robust infrastructure and a focus on preventative maintenance.

•We execute a disciplined commodity hedging program that is designed to mitigate price volatility.

•Our experienced leadership team drives disciplined execution and strategic decision-making.

•We have a proven track record of integrating new assets efficiently and realizing operational synergies.

2025 Highlights

•Average daily production of 1,086 MMcfepd representing an increase of 37% when compared to 791 MMcfepd for the same

period in 2024;

•In November 2025, we acquired Canvas Energy Inc. (“Canvas”) for total consideration of approximately $533 million. The

transaction was funded through the issuance of 3,718,209 shares of common stock and approximately $399 million in cash. The

cash portion of the consideration was primarily funded through the issuance of the ABS XI Notes with a total principal amount of

$400 million. The ABS XI Notes are secured by certain upstream producing assets acquired in the Canvas acquisition;

•In November 2025, we completed the U.S. Domestication, resulting in Diversified Energy Company, a Delaware corporation,

becoming our publicly traded parent company;

•In October 2025, we launched a well plugging fund with the state of West Virginia dedicated to retiring oil and gas wells. Over

the initial 20 year period of the agreement, we plan to invest $70 million, which is held and guaranteed by OneNexus, an

insurance provider for asset retirement obligations, to ensure we have provided financial assurance so that all of our wells in the

state are safely retired. The State of West Virginia is a third party beneficiary of the plugging fund;

•In April 2025, we issued $300 million of new senior secured notes in the Nordic bond market at a 2% discount, resulting in net

proceeds of $294 million (the “Nordic Bonds”);

•In March 2025, we acquired Maverick Natural Resources, LLC (“Maverick”) for net consideration of $666 million. The gross

value of the transaction was approximately $1.3 billion and was funded through the issuance of 21,194,213 shares of common

stock direct to the unitholders of Maverick, and approximately $211 million in cash. The transaction also included the assumption

of approximately $518 million of ABS Maverick Notes outstanding and the payoff of $202 million outstanding on Maverick’s

credit facility on the acquisition date;

•In March 2025, concurrent with the Maverick acquisition, we amended and restated the credit agreement governing our revolving

loan facility (the “Credit Facility”), increasing the borrowing base to $900 million and extending the maturity to March 2029.

During our semi-annual redetermination in October 2025, the borrowing base was reduced to $825 million;

•In February 2025, we formed Diversified ABS Phase X LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary

(“ABS X”), to issue asset-backed securities with a total principal amount of $530 million (the “ABS X Notes”);

Table of Contents	Form 10-K	Diversified Energy Company

•In February 2025 , we issued 8,500,000 shares of common stock at $14.50 per share to raise gross proceeds of $123 million;

•In February 2025, we acquired certain upstream assets and related infrastructure in the Appalachian Region from Summit Natural

Resources, LLC (“Summit”) for $42 million; and

•In 2025, we divested certain non-core undeveloped acreage across our operating footprint for consideration of approximately

$160 million.

Refer to Notes 3, 11, and 15 in the Notes to the Consolidated Financial Statements for additional information regarding acquisitions,

common stock, and debt.

Geographical Operating Areas

Our operations are primarily concentrated within the Appalachian and Central regions of the United States. Our Appalachian Region

spans Pennsylvania, Ohio, Virginia, West Virginia, Kentucky, Tennessee and Alabama and consists of multiple productive, shallow

conventional formations and two productive, deeper unconventional shale formations, the Marcellus Shale and the slightly deeper

Utica Shale. Our Central Region consists of the Bossier and Haynesville shale formations and the Cotton Valley sandstones in East

Texas and West Louisiana, the Barnett Shale in North Texas and the Mid-Continent producing areas across Central Texas, along with

the Anadarko Basin across North Texas and Oklahoma and Permian Basin in West Texas and New Mexico.

Reserve Data

Summary of Reserves

The following table sets forth summary information with respect to our estimated proved reserves, standardized measure of discounted

future net cash flows (“Standardized Measure”) and PV-10 as of December 31, 2025. Our estimated proved reserves were prepared by

Netherland, Sewell & Associates, Inc. (“NSAI”), our independent third-party reserve engineers. A copy of the reserve report is

included as an exhibit to this Annual Report on Form 10-K. We used SEC pricing in the calculation of our estimated proved reserves

and PV-10.

	As of December 31, 2025
Proved developed reserves
Natural gas (MMcf)	4,224,112
NGLs (MBbls)	159,025
Oil (MBbls)	87,041
Total proved developed reserves (MMcfe)(a)	5,700,508
Proved undeveloped reserves
Natural gas (MMcf)	201,621
NGLs (MBbls)	5,950
Oil (MBbls)	24,109
Total proved undeveloped reserves (MMcfe)(a)	381,975
Total proved reserves
Natural gas (MMcf)	4,425,733
NGLs (MBbls)	164,975
Oil (MBbls)	111,150
Total proved reserves (MMcfe)(a)	6,082,483
Proved developed reserves %	94%
Proved undeveloped reserves %	6%
12-Month Average Realized Prices(b)
Natural gas ($/Mmbtu)	$3.39
Oil and NGLs ($/Bbl)	$66.01

Table of Contents	Form 10-K	Diversified Energy Company
	As of December 31, 2025
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Standardized measure of discounted future net cash flows (GAAP) (in thousands)	$4,182,484
PV-10 (Non-GAAP)(in thousands)
Proved developed PV-10	$4,825,578
Proved undeveloped PV-10	353,873
Total PV-10 (Non-GAAP)(c)	$5,179,451

(a)The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the

ratio of one Bbl of oil or NGLs to six Mcf of natural gas.

(b)Our estimated net proved reserves were determined using average first-day-of-the-month prices for the prior 12 months in

accordance with SEC guidance. For natural gas, NGLs, and oil volumes, the average Henry Hub spot price and WTI price were

adjusted for gravity, quality, local conditions, gathering and transportation fees, and distance from market. All prices are held

constant throughout the lives of the properties.

(c)The PV-10 of our proved reserves were prepared without giving effect to taxes or hedges. PV-10 is a non-GAAP financial

measure and generally differs from Standardized Measure, the most directly comparable GAAP measure, because it does not

include the effects of income taxes on future net cash flows. We believe that the presentation of PV-10 is relevant and useful to our

investors as supplemental disclosure to the Standardized Measure because it presents the discounted future net cash flows

attributable to our reserves prior to taking into account future corporate income taxes and our current tax structure. While the

Standardized Measure is free cash dependent on the unique tax situation of each company, PV-10 is based on a pricing

methodology and discount factors that are consistent for all companies. Because of this, PV-10 can be used within the industry

and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.

Investors should be cautioned that neither PV-10 nor the Standardized Measure represents an estimate of the fair market value of

our proved reserves.

Reconciliation of Standardized Measure (GAAP) to PV-10 (Non-GAAP)

(in thousands)	As of December 31, 2025
Standardized measure of discounted future net cash flows (GAAP)	$4,182,484
Add: present value of future income taxes discounted at 10% per annum	996,967
PV-10 (Non-GAAP)	$5,179,451

Proved Reserves

As of December 31, 2025, our estimated proved reserves totaled 6,082,483 MMcfe, an increase of 68% from the prior year-end, with a

Standardized Measure of $4.2 billion. Natural gas constituted approximately 73% of our total estimated proved reserves and 74% of

our total estimated proved developed reserves. The following table provides a summary of the changes in our proved reserves during

the year ended December 31, 2025.

	Total (MMcfe)(a)
Total proved reserves as of December 31, 2024	3,627,589
Extensions and discoveries	16,341
Revisions to previous estimates	793,516
Purchase of reserves in place	2,041,296
Sales of reserves in place	—
Production	(396,259)
Total proved reserves as of December 31, 2025	6,082,483

(a)The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the

ratio of one Bbl of oil or NGLs to six Mcf of natural gas.

Revisions to Previous Estimates

During 2025, we recorded 793,516 MMcfe in revisions to previous estimates. The upward revisions were primarily associated with

changes in the trailing 12-month average realized Henry Hub first day of the month spot price, which increased approximately 59% as

compared to December 31, 2024.

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Purchase of Reserves in Place

During 2025, 2,041,296 MMcfe of purchases of reserves in place were associated with the Summit, Maverick, and Canvas

acquisitions. Refer to Note 3 in the Notes to the Consolidated Financial Statements for additional information about acquisitions and

divestitures.

Proved Undeveloped Reserves (“PUDs”)

We aim to obtain proved developed producing wells through acquisitions in accordance with our growth strategy rather than through

development activities. We accordingly contribute limited capital to development activities. From time to time, when acquiring

packages of wells, we also acquire certain locations that are in development by the acquiree at the time of the acquisition or could be

developed in the future. When economic, we may engage third parties to complete the existing development activities or may

participate in the development of acquired non-operated locations, and such reserves are included below as PUDs. As of December 31,

2025, we are actively engaged or have plans to engage in developing certain locations acquired in the Maverick and Canvas

acquisitions. Therefore, we have classified these undrilled locations as PUDs.

The following table summarizes the changes in our estimated PUDs during the year ended December 31, 2025:

	Total (MMcfe)
Proved undeveloped reserves as of December 31, 2024	—
Extensions and discoveries	16,341
Revisions to previous estimates	—
Purchase of reserves in place	365,634
Sales of reserves in place	—
Converted to proved developed reserves	—
Proved undeveloped reserves as of December 31, 2025	381,975

Purchase of Reserves in Place

During 2025, there were 365,634 MMcfe of purchases of PUDs in place related to the Maverick and Canvas acquisitions. Refer to

Note 3 in the Notes to the Consolidated Financial Statements for additional information about acquisitions and divestitures.

Preparation of Reserve Estimates

Our reserve estimates as of December 31, 2025 included in this Annual Report on Form 10-K were prepared by our independent

reserves auditors, Netherland, Sewell & Associates, Inc. (“NSAI”), in accordance with petroleum engineering and evaluation

standards published by The Petroleum Resources Management System jointly sponsored by the Society of Petroleum Engineers, the

World Petroleum Council, the American Association of Petroleum Geologists and the Society of Petroleum Evaluation Engineers.

These estimates have been prepared in accordance with the definitions and regulations of the SEC.

Our internal staff of petroleum engineers and geoscience professionals work diligently to ensure the integrity, accuracy and timeliness

of data furnished to our independent reserves auditors for their reserve evaluation process. Our technical team regularly meets with the

independent reserves auditors to review properties and discuss methods and assumptions used to prepare reserve estimates. The

reserve estimates and related reports are reviewed and approved by our Vice President of Reservoir Engineering. The Vice President

of Reservoir Engineering holds a Bachelor of Science in Petroleum Engineering and has been with the Company since 2018 with 27

years of experience in petroleum engineering and over 24 years of experience evaluating natural gas and oil reserves. Prior to joining

the Company in 2018, our Vice President of Reservoir Engineering, who is an active member of the Society of Petroleum Engineers,

served in various reservoir engineering roles for public companies engaged in exploration and production operations.

Estimation of Proved Reserves

Proved reserves are quantities of natural gas or oil which, by analysis of geoscience and engineering data, can be estimated with

reasonable certainty to be commercially recoverable from known reservoirs under existing economic and operating conditions. The

term “reasonable certainty” implies a high degree of confidence that the quantities of natural gas or oil actually recovered will equal or

exceed the estimate. To achieve reasonable certainty, DEC and the independent reserves auditors employed technologies that have

been demonstrated to yield results with consistency and repeatability. The technologies and economic data used in the estimation of

our proved reserves may include, but are not limited to, well logs, geologic maps and available downhole and production data, and

well-test data.

Reserves engineering is and must be recognized as a subjective process of estimating volumes of economically recoverable oil and

natural gas that cannot be measured in an exact manner. The accuracy of any reserve estimate is a function of the quality of available

data and of engineering and geological interpretation. As a result, the estimates of different engineers often vary. In addition, the

results of drilling, testing and production may justify revisions of such estimates. Accordingly, reserve estimates often differ from the

Table of Contents	Form 10-K	Diversified Energy Company

quantities of natural gas, NGLs and oil that are ultimately recovered. Estimates of economically recoverable natural gas, NGLs and oil

and of future net cash flows are based on a number of variables and assumptions, all of which may vary from actual results, including

geologic interpretation, prices and future production rates and costs. See Item 1A. Risk Factors for additional information.

Developed and Undeveloped Acreage

The following table sets forth certain information regarding the total developed and undeveloped acreage in which we owned an

interest as of December 31, 2025. Developed acres are acres spaced or assigned to productive wells and do not include undrilled

acreage held by production under the terms of the lease. Undeveloped acres are acres on which wells have not been drilled or

completed to a point that would permit the production of commercial quantities of oil or natural gas, regardless of whether such

acreage contains proved reserves. Approximately 99.5% of our acreage was held by production at December 31, 2025.

	Developed Acreage		Undeveloped Acreage		Total Acreage
	Gross(a)	Net(b)	Gross(a)	Net(b)	Gross(a)	Net(b)
As of December 31, 2025	18,728,541	8,331,729	813,981	462,473	19,542,522	8,794,202

(a)A gross acre is an acre in which a working interest is owned. The number of gross acres is the total number of acres in which a

working interest is owned.

(b)A net acre is deemed to exist when the sum of the fractional ownership working interests in gross acres equals one. The number of

net acres is the sum of the fractional working interests owned in gross acres expressed as whole numbers and fractions thereof.

The undeveloped acreage numbers presented in the table above have been compiled using best efforts to review and determine acreage

that is not currently drilled but may be available for drilling at the current time under certain circumstances. Whether or not undrilled

acreage may be drilled and thereafter produce economic quantities of oil or gas is related to many factors which may change over

time, including natural gas and oil prices, service vendor availability, regulatory regimes, midstream markets, end user demand, and

macro and micro financial conditions; the undeveloped acreage described herein is presented without an opinion as to economic

viability, as a result of the aforesaid factors. Additionally, it is noted that certain formations on a land tract may be already developed

while other formations are undeveloped.

The following table sets forth the number of total gross and net undeveloped acres as of December 31, 2025 that will expire in 2026,

2027 and 2028 unless production is established within the spacing units covering the acreage prior to the expiration dates or unless

such acreage is extended or renewed.

	Gross	Net
2026	55,654	796
2027	63,962	2,813
2028	988	225

Our primary focus is to operate our existing producing assets safely, efficiently and responsibly. However we also evaluate areas

nearing lease expiration for potential development opportunities when it is prudent to do so.

Productive Wells

Productive wells consist of producing wells, wells capable of production and wells awaiting connection to production facilities. Gross

wells are the total number of producing wells in which we have an interest, operated and non-operated, and net wells are the sum of

our fractional working interest owned in gross wells. The following table summarizes our productive natural gas and oil wells as of

December 31, 2025.

	As of December 31, 2025
Natural gas wells	80,212
Oil wells	10,465
Total gross productive wells	90,677
Natural gas wells	64,404
Oil wells	4,752
Total net productive wells	69,156

Table of Contents	Form 10-K	Diversified Energy Company
	As of December 31, 2025
---	---
Total gross in progress wells	288
Total net in progress wells	97

Exploratory and Development Drilling Activities

Information regarding our drilling and development activities for the year ended December 31, 2025 is set forth below:

	Development
	Productive Wells		Dry Wells		Total
Year	Gross	Net	Gross	Net	Gross	Net
2025	59	10	—	—	59	10
2024	4	4	—	—	4	4
2023	3	1	—	—	3	1

We drilled no exploratory wells (productive or dry) during the years ended December 31, 2025, 2024 and 2023.

During 2023, we completed the development of two of the seven Appalachian wells that were under development as of December 31,

The remaining five Appalachian wells were divested in connection with the sale of 80% of the equity interest in DP Lion Equity

Holdco LLC in December 2023. On March 1, 2023, we also completed the Tanos II acquisition, which included five wells in the

Central Region that were under development at the date of acquisition. During 2023, we completed one of these five wells. Four

Central Region development wells remained in progress as of December 31, 2023.

During 2024, we completed the development of the four remaining wells acquired in the Tanos II acquisition that had been under

development as of December 31, 2023. As of December 31, 2024, we had zero development wells in progress.

In March 2025, we completed the Maverick acquisition, which included 71 wells that were under development at the time of purchase.

During 2025, through a joint development agreement with an experienced development company, we brought 57 of these wells to

completion. In addition, we completed two wells located adjacent to the Maverick acquisition wells. As of December 31, 2025, 14

development wells from the acquisition remained in progress.

Refer to Note 3 in the Notes to the Consolidated Financial Statements for additional information regarding the acquisitions and

divestitures.

Production Volumes, Average Sales Prices and Operating Costs

	For the Year Ended December 31,
	2025	2024	2023
Production
Natural Gas (MMcf)	295,723	244,298	256,378
NGLs (MBbls)	8,821	5,980	5,832
Oil (MBbls)	7,935	1,568	1,377
Total production (MMcfe)	396,259	289,586	299,632
Average realized sales price
(excluding impact of derivatives settled in cash)
Natural gas (Mcf)	$2.81	$1.90	$2.17
NGLs (Bbls)	23.57	25.17	24.23
Oil (Bbls)	63.10	74.71	75.46
Total (Mcfe)	$3.88	$2.53	$2.68
Average realized sales price
(including impact of derivatives settled in cash)
Natural gas (Mcf)	$2.80	$2.57	$2.86
NGLs (Bbls)	23.34	24.32	26.05
Oil (Bbls)	66.80	69.54	68.44
Total (Mcfe)	$3.94	$3.05	$3.27

Table of Contents	Form 10-K	Diversified Energy Company
	For the Year Ended December 31,
---	---	---	---
	2025	2024	2023
Operating costs per Mcfe
LOE	$1.15	$0.80	$0.71
Production taxes	0.22	0.12	0.21
Midstream operating expense	0.20	0.25	0.24
Transportation expense	0.29	0.31	0.32
Total operating expense per Mcfe	$1.86	$1.48	$1.48

Significant Fields

We operate in three primary producing areas:

(i)Appalachian Region, covering Pennsylvania, Ohio, Virginia, West Virginia, Kentucky, Tennessee, and Alabama;

(ii)Central Region, covering Oklahoma, Texas, New Mexico, Louisiana, and Arkansas; and

(iii)Other, includes Florida and Wyoming.

The following tables present production volumes, realized prices, and per-unit operating costs for our significant fields that account for

15% or more of our total proved reserves. Both the Appalachian Region and the Mid-Continent field, which is one of four separate

fields within the Central Region, meet the criteria for significance.

	For the Year Ended December 31,
APPALACHIA	2025	2024	2023
Production
Natural Gas (MMcf)	132,100	139,900	167,930
NGLs (MBbls)	2,655	2,931	3,018
Oil (MBbls)	369	390	394
Total production (MMcfe)	150,244	159,826	188,402
Average realized sales prices
Natural gas (Mcf)	$3.17	$2.12	$2.31
NGLs (Bbls)	20.94	24.07	21.58
Oil (Bbls)	61.72	72.61	74.81
Total (Mcfe)	$3.31	$2.47	$2.57
Operating costs per Mcfe
LOE	$0.67	$0.59	$0.56
Production taxes	0.15	0.09	0.18
Midstream operating expense	0.41	0.40	0.35
Transportation expense	0.37	0.29	0.29
Total operating expense per Mcfe	$1.60	$1.37	$1.38

Table of Contents	Form 10-K	Diversified Energy Company
	For the Year Ended December 31,
---	---	---	---
MID-CONTINENT	2025	2024	2023
Production
Natural Gas (MMcf)	71,859	24,661	20,254
NGLs (MBbls)	3,920	1,285	980
Oil (MBbls)	5,026	951	715
Total production (MMcfe)	125,535	38,077	30,424
Average realized sales prices
Natural gas (Mcf)(a)	$2.12	$0.97	$1.42
NGLs (Bbls)	21.90	26.10	24.21
Oil (Bbls)	58.54	65.71	68.45
Total (Mcfe)	$4.24	$3.15	$3.33
Operating costs per Mcfe
LOE(a)	$1.00	$0.69	$0.55
Production taxes	0.23	0.18	0.20
Transportation expense	0.18	0.12	0.17
Total operating expense per Mcfe	$1.41	$0.99	$0.92

(a)Processing fees of approximately $0.85-$1.25 per Mcfe are classified as revenue deductions as opposed to operating expenses.

Delivery Commitments

We have contractually agreed to deliver firm quantities of natural gas to various customers, which we expect to fulfill with production

from existing reserves. We regularly monitor our proved developed reserves to ensure sufficient availability to meet these

commitments. The following table summarizes our total gross commitments, compiled using best estimates based on our sales

strategy, as of December 31, 2025.

	2026	2027	2028	2029	2030	Thereafter	Total
Natural gas (MMcf)	169,054	49,203	25,942	15,727	15,727	275,622	551,275

Transportation and Marketing

Diversified Energy Marketing, LLC, our wholly owned marketing subsidiary, focuses on commodity marketing, asset optimization,

producer services and strategic management of our transportation portfolio. The focus of our marketing team is to enhance operational

efficiency and profitability by leveraging market insights, operational expertise and strategic asset management to ensure reliable flow

of our products to attractive available markets.

We offer a comprehensive suite of services, including the marketing of natural gas, NGL’s and oil, risk management, logistical

support and strategic transportation management. This approach maximizes market presence, financial outcomes and consistent

product flow, capitalizing on our transportation infrastructure and vertically integrated midstream systems. Our midstream

infrastructure and strategic arrangements provide access to high-demand markets, particularly in the U.S. Gulf Coast, while utilizing

low-cost transportation in Appalachia. This synergy with our asset profile provides advantageous pricing and flow assurance

supported by strategic firm transportation agreements. As of December 31, 2025, our transportation arrangements provide access to

375 MMcfepd of takeaway capacity.

As a dedicated arm of DEC, our marketing team aligns closely with our broader goals of optimizing free cash flow generation. With

experienced professionals and a deep understanding of the energy market, we are committed to delivering value and reliability to our

stakeholders, navigating industry complexities to achieve operational excellence.

Competition

The natural gas and oil industry is highly competitive, and we compete with other companies in all aspects of our business to acquire,

operate, and market our production. Operating conditions may be affected by future legislation and regulations as the United States

regulatory environment modernizes. In addition, some of our competitors may have a competitive advantage when responding to

factors that affect demand for natural gas and oil production, such as changing prices, domestic and foreign political conditions,

weather conditions, the proximity and capacity of natural gas pipelines and other transportation facilities and overall economic

conditions. Our industry and our company can also be impacted by alternative energy sources, including wind, solar, and electric

power. Our ability to acquire properties in the future will depend on our ability to evaluate and select suitable properties and to finalize

transactions in a highly competitive environment.

Table of Contents	Form 10-K	Diversified Energy Company

Major Customers

Our production is generally sold on month-to-month contracts at prevailing market prices.

During the years ended December 31, 2025, 2024 and 2023, no customers individually comprised more than 10% of total revenues.

Given the availability of alternative purchasers for oil and natural gas, we believe that losing any single purchaser would not

materially impact our ability to sell future production. To mitigate potential credit risk, we may occasionally require customers to

provide financial security.

Seasonality

Demand for natural gas typically decreases in spring and fall, and increases in summer and winter. However, seasonal anomalies and

consumer procurement initiatives can mitigate these fluctuations. Seasonal anomalies can also heighten competition for equipment,

supplies, and personnel, potentially causing shortages, increased costs or, operational delays.

Title to Properties

We believe we hold satisfactory title to our active properties, adhering to industry standards. Our properties are subject to customary

royalties, contracts, consents, preferential purchase rights, tax liens, laws and other encumbrances, which we believe do not materially

affect their use or value. Before acquiring producing wells, we conduct title investigations consistent with industry standards. For

properties we operate, we address significant title defects as needed. We believe our title reviews are reasonable and protective for a

representative cross-section of our wells.

Human Capital Resources

As of December 31, 2025, the Company employed 1,987 full-time individuals across 23 U.S. states. Our employees are fundamental

to the execution of our operational strategy, and we focus on maintaining robust operating standards with an emphasis on EHS

practices to promote the well‑being of our workforce and the communities in which we operate.

We are committed to fostering an inclusive work environment and making recruitment, development, and promotion decisions based

solely on merit, qualifications, and business needs. We are an equal opportunity employer and do not discriminate against legally

protected classes. Employees have access to a confidential, externally managed whistleblower hotline and a compliance website that

enables direct reporting of concerns to senior leadership.

Our employees are our most important asset. We invest in employee engagement and development through regular communication,

site visits, structured feedback mechanisms, and regular training. We offer a comprehensive compensation package with base pay,

discretionary bonus and equity incentive opportunities, paid time off, 401(k) matching contributions, an employee stock purchase plan

and an affordable and comprehensive health insurance program, among other benefits. In 2025, our CEO and senior leadership team

met directly with approximately 950 employees through our “Winning Language” town halls. Additionally, the Company conducted

its annual Employee Engagement Survey, which received an 80% participation rate from the 1,922 surveys distributed. The survey

assesses organizational alignment, communication effectiveness, leadership, and overall employee engagement. Results from our

Employee Engagement Survey will be used to inform our human capital initiatives and priorities for 2026.

We offer a comprehensive suite of employee benefits designed to support physical, mental, and financial well‑being. In 2025, we

expanded our benefits program to include paid adoption assistance and launched an integrated wellness platform that provides

individualized tools for health tracking, fitness goal setting, and preventive care. Our financial wellness resources include bi‑monthly

educational seminars and complimentary one‑on‑one consultations through our third‑party investment advisors. Participation in the

Company’s 401(k) retirement savings plan reached 93% in 2025, with the Company providing a dollar‑for‑dollar match on employee

contributions up to 7%. Employees also have access to the Company’s Employee Stock Purchase Plan, which allows participants to

purchase Company stock at a discounted rate.

The Company is committed to supporting the communities in which we operate. In 2025, we contributed approximately $1.8 million

to local organizations, programs, and initiatives focused on health, education, student athletics, public safety, and municipal services.

Our community impact efforts included distributing winter coats and shoes to more than 4,240 children and providing support to foster

care organizations. Our Community Relations Committee oversees these initiatives and promotes employee volunteerism throughout

our operating areas. We remain committed to maintaining a safe, inclusive workplace and to positively contributing to the

communities we serve.

Table of Contents	Form 10-K	Diversified Energy Company

Government Regulation

General

Our operations in the United States are subject to various U.S. federal, state and local (including county and municipal level) laws and

regulations. These laws and regulations cover virtually every aspect of our operations including, among other things: use of public

roads; construction of well pads, impoundments, tanks and roads; pooling and unitizations; water withdrawal and procurement for well

stimulation purposes; wastewater discharge, well drilling, casing and hydraulic fracturing; stormwater management; well production;

well plugging; venting or flaring of natural gas; pipeline construction and the compression and transportation of natural gas and

liquids; reclamation and restoration of properties after natural gas and oil operations are completed; handling, storage, transportation

and disposal of materials used or generated by natural gas and oil operations; the calculation, reporting and payment of taxes on

natural gas and oil production; and gathering of natural gas production. Various governmental permits, authorizations and approvals

under these laws and regulations are required for exploration and production as well as midstream operations. These laws and

regulations, and the permits, authorizations and approvals issued pursuant to such laws and regulations are intended to protect, among

other things: air quality; ground water and surface water resources, including drinking water supplies; wetlands; waterways; protected

plants and animal species; natural resources; and the health and safety of our employees and the communities in which we operate.

We endeavor to conduct our operations in compliance with all applicable U.S. federal, state and local laws and regulations. However,

because of extensive and comprehensive regulatory requirements against a backdrop of variable geologic and seasonal conditions,

non-compliance during operations can occur. Certain non-compliance may result in fines or penalties, but depending on the nature of

the non-compliance could also result in civil or criminal enforcement actions, additional restrictions on our operations, or make it

more difficult for us to obtain necessary permits in the future. The possibility exists that new laws or regulations may be adopted

which could have a significant impact on our operations or on our customers’ ability to use our natural gas, natural gas liquids and oil,

and may require us or our customers to change their operations significantly or incur substantial costs.

Environmental Laws

Many of the U.S. laws and regulations vary according to the jurisdiction in which we conduct our operations. In addition to state or

local laws and regulations, our operations are also subject to numerous federal environmental laws and regulations. Below is a

discussion of some of the more significant federal laws and regulations applicable to our operations.

Clean Air Act

The federal Clean Air Act and associated federal and state regulations regulate air emissions through permitting and/or emissions

control requirements. These regulations affect the entire value chain from oil and natural gas production, to gathering, to processing, to

transmission and storage, and then to distribution operations. Various equipment and activities in our assets are subject to regulation,

including compressors, engines, dehydrators, storage tanks, pneumatic devices, fugitive components, and blowdowns. We obtain

permits, typically from state or local authorities, or document exemptions necessary to authorize these activities. Further, we are

required to obtain pre-approval for construction or modification of certain facilities, and/or to use specific equipment, technologies or

best management practices to control emissions. Some states also require a separate operating permit to be obtained for on-going

operations.

Federal and state governmental agencies continue to review and revise the air quality regulations affecting oil and natural gas

activities, and expanded regulations could increase our cost or otherwise affect our ability to produce.

Clean Water Act

The federal Clean Water Act (“CWA”) and corresponding state laws affect our operations by regulating storm water or other

discharges of substances, including pollutants, sediment, and spills and releases of oil, brine and other substances, into surface waters,

and in certain instances imposing requirements to dispose of produced wastes and other oil and gas wastes at approved disposal

facilities. The discharge of pollutants into jurisdictional waters is prohibited, except in accordance with the terms of a permit issued by

the EPA, the U.S. Army Corps of Engineers, or a delegated state agency. These permits require regular monitoring and compliance

with effluent limitations, and include reporting requirements. Federal and state regulatory agencies can impose administrative, civil

and/or criminal penalties for non-compliance with discharge permits or other requirements of the CWA and analogous state laws and

regulations.

Endangered Species and Migratory Birds

The Endangered Species Act and related state laws and regulations protect plant and animal species that are threatened or endangered.

The Migratory Bird Treaty Act and the Bald and Golden Eagle Protection Act provide similar protections to migratory birds and bald

and golden eagles, respectively. Some of our operations are located in areas that are or may be designated as protected habitats for

endangered or threatened species, or in areas where migratory birds or bald and golden eagles are known to exist. Laws and

regulations intended to protect threatened and endangered species, migratory birds, or bald and golden eagles could have a seasonal

impact on our construction activities and operations. New or additional species that may be identified as requiring protection or

consideration could also lead to delays in obtaining permits and/or other restrictions, including operational restrictions.

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Safety of Gas Transmission and Gathering Pipelines

Natural gas pipelines serving our operations are subject to regulation by the U.S. Department of Transportation’s Pipeline and

Hazardous Materials Safety Administration (“PHMSA”) pursuant to the Natural Gas Pipeline Safety Act of 1968 (“NGPSA”), as

amended by the Pipeline Safety Act of 1992, the Accountable Pipeline Safety and Partnership Act of 1996, the Pipeline Safety

Improvement Act of 2002 (“PSIA”), the Pipeline Inspection, Protection, Enforcement and Safety Act of 2006, and the 2011 Pipeline

Safety Act. The NGPSA regulates safety requirements in the design, construction, operation and maintenance of natural gas pipeline

facilities, while the PSIA establishes mandatory inspections for all U.S. oil and natural gas transmission pipelines in high-consequence

areas. Additionally, certain states, such as West Virginia, also maintain jurisdiction over intrastate natural gas lines. PHMSA has over

the years finalized rules that, collectively, impose additional safety requirements on natural gas transmission pipelines and certain

onshore gas gathering pipelines.

The adoption of laws or regulations that apply more comprehensive or stringent safety standards can increase the expenses we incur

for gathering service.

Resource Conservation and Recovery Act

The Federal Resource Conservation and Recovery Act (“RCRA”) and corresponding state laws and regulations impose requirements

for the management, treatment, storage and disposal of hazardous and non-hazardous wastes, including wastes generated by our

operations. Drilling fluids, produced waters and most of the other wastes associated with the exploration, development and production

of natural gas and oil are currently regulated under RCRA’s solid (non-hazardous) waste provisions. Future changes in the law could

result in the reclassification of certain natural gas and oil exploration and production wastes as “hazardous wastes,” which would make

such wastes subject to much more stringent handling, disposal and clean-up requirements. A change in the RCRA exclusion for

drilling fluids, produced waters and related wastes could result in an increase in our costs to manage and dispose of generated wastes,

which could have a material adverse effect on the industry as well as on our results of operations and financial position.

Comprehensive Environmental Response, Compensation, and Liability Act

The Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA” or “Superfund”) imposes joint and

several liability for costs of investigation and remediation, and for natural resource damages without regard to fault or the legality of

the original conduct, on certain classes of persons with respect to the release into the environment of substances designated under

CERCLA as hazardous substances. These classes of persons, called potentially responsible parties (“PRP”), include the current and

past owners or operators of a site where the release occurred and anyone who disposed, transported, or arranged for the disposal,

transportation, or treatment of a hazardous substance found at the site. CERCLA also authorizes the EPA and, in some instances, third

parties to take actions in response to threats to public health or the environment, and to seek to recover from PRPs for the costs of such

action. Many states, including states in which we operate, have adopted comparable state statutes.

Although CERCLA generally exempts “petroleum” from regulation, in the course of our operations we have generated and will

generate wastes that may fall within CERCLA’s definition of hazardous substances, and may have disposed of these wastes at disposal

sites owned and operated by others. We may also be the owner or operator of sites on which hazardous substances have been released.

In the event contamination is discovered at a site on which we are or have been an owner or operator, or to which we have sent

hazardous substances, we could be jointly and severally liable for the costs of investigation and remediation, and for natural resource

damages. Further, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and

property damage allegedly caused by hazardous substances or other pollutants released into the environment.

Oil Pollution Act

The primary federal law related to oil spill liability is the Oil Pollution Act (“OPA”), which amends and augments oil spill provisions

of the CWA and imposes certain duties and liabilities on certain “responsible parties” related to the prevention of oil spills and

damages resulting from such spills in or threatening waters of the United States or adjoining shorelines. A liable “responsible party”

includes the owner or operator of a facility, vessel or pipeline that is a source of an oil discharge or that poses the substantial threat of

discharge. The OPA assigns joint and several liability, without regard to fault, to each responsible party for oil removal costs and a

variety of public and private damages. Although defenses exist to the liability imposed by the OPA, they are limited. In the event of an

oil discharge or substantial threat of discharge, we may be liable for costs and damages.

Regulation of the Sale and Transportation of Natural Gas, NGLs and Oil

The transportation and sale, or resale, of natural gas in interstate commerce are regulated by the Federal Energy Regulatory

Commission (“FERC”) under the Natural Gas Act of 1938, the Natural Gas Policy Act of 1978, and regulations issued under those

statutes. FERC regulates interstate natural gas transportation rates, and the terms and conditions of service, which affects the

marketing of natural gas that we produce, as well as the revenues we receive for sales of our natural gas. FERC regulations require that

rates, terms and conditions of service for interstate service pipelines that transport crude oil and refined products and certain other

liquids be just and reasonable and must not be unduly discriminatory or confer any undue preference upon any shipper. FERC

regulations also require interstate common carrier petroleum pipelines to file with FERC and publicly post tariffs stating their

interstate transportation rates, terms and conditions of service.

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Section 1(b) of the Natural Gas Act exempts from regulation by FERC facilities used for the production and gathering of natural gas.

However, the distinction between federally unregulated gathering facilities and FERC regulated transmission facilities is a fact-based

determination, and the classification of facilities has recently been the subject of regulatory dispute. We own certain natural gas

pipeline facilities that we believe meet the traditional tests FERC has used to establish a pipeline’s primary function as “gathering,”

thus exempting it from the jurisdiction of FERC under the Natural Gas Act.

Intrastate natural gas transportation is also subject to regulation by state regulatory agencies. The basis for intrastate regulation of

natural gas transportation and the degree of regulatory oversight and scrutiny given to intrastate natural gas pipeline rates and services

varies from state to state. Like the regulation of interstate transportation rates, the regulation of intrastate transportation rates affects

the marketing of natural gas that we produce, as well as the revenues we receive for sales of our natural gas.

FERC regulates the rates and terms and conditions of service for transportation of oil and NGLs on interstate pipelines under the

provisions of the Interstate Commerce Act, the Energy Policy Act of 1992 and amendments to and regulations issued under those

statutes. Intrastate transportation of oil, NGLs and other products is dependent on pipelines whose rates, terms and conditions of

service are subject to regulation by state regulatory bodies under state statutes.

The price of natural gas, NGLs, and crude oil are currently not directly regulated, but Congress historically has been active in the area

of natural gas, NGLs and crude oil regulation. We cannot predict whether new legislation to regulate sales and commodity prices

might be enacted in the future or what effect, if any, such legislation might have on our operations.

Health and Safety Laws

Our operations are subject to regulation under the federal Occupational Safety and Health Act (“OSHA”) and comparable state laws in

some states, all of which regulate health and safety of employees at our operations. Additionally, OSHA’s hazardous communication

standard, the EPA community right-to-know regulations under Title III of the federal Superfund Amendment and Reauthorization Act,

and comparable state laws require that information be maintained about hazardous materials used or produced by our operations and

that this information be provided to employees, state and local governments and the public.

Emissions Laws and Regulations

There are a number of proposed and recently-enacted laws and regulations at the international, federal, state, regional and local level

that seek to limit or require disclosure regarding greenhouse gas emissions (“GHG”) and other climate-related matters. Such laws and

regulations could increase our costs, including requirements that necessitate the installation of new equipment or the purchase of

emission allowances. These laws and regulations could also impact our customers, including the electric generation industry, making

alternative sources of energy more competitive and thereby decreasing demand for the natural gas and oil we produce. Additional

regulation could also lead to permitting delays and additional monitoring and administrative requirements, in turn impacting electricity

generating operations.

At the international level, the UN-sponsored “Paris Agreement,” for nations to limit their GHG emissions through non-binding,

individually-determined reduction goals every five years after 2020. In November 2021, the international community gathered in

Glasgow at the 26th Conference of the Parties to the UN Framework Convention on Climate Change, during which multiple

announcements were made, including a call for parties to eliminate certain natural gas and oil subsidies and pursue further action on

non-carbon dioxide GHGs. In a related gesture, the United States and the European Union jointly announced the launch of the “Global

Methane Pledge,” which aims to cut global methane pollution by at least 30% by 2030 relative to 2020 levels, including “all feasible

reductions” in the energy sector. Such commitments were re-affirmed at the 27th Conference of the Parties in Sharm El Sheikh.

However, on January 2025, President Trump issued an Executive Order directing the U.S. Ambassador to the United Nations to

withdraw from the Paris Agreement. Accordingly, the UN Secretary General issued a depositary notification of the U.S. withdrawal

from the Paris Agreement, effective January 27, 2026. More recently, in February 2026, the U.S. Environmental Protection Agency

finalized a regulation rescinding its prior finding that certain GHG emissions endangered public health and welfare, which had served

as the basis for certain GHG emission regulation by the agency. This and other changes undertaken by the Trump Administration have

or may in the future reverse or rescind climate-related initiatives and regulations and focus on driving increased U.S. energy

production. In response, several U.S. states separately expressed their commitment to the Paris Agreement and its goals, while others

have pursed emissions reporting regulations. Although it is not possible at this time to predict how legislation or new regulations that

may be adopted pursuant to the Paris Agreement to address GHG emissions, including state emission reduction targets or reporting,

would impact our business, any such future laws and regulations imposing reporting obligations on, or limiting emissions of GHGs

from, our equipment and operations could require us to incur costs to implement such measures associated with our operations.

In addition, activists that are not supportive of our energy producing products have directed their attention at sources of funding for

energy companies, which has resulted in certain financial institutions, funds and other sources of capital restricting or eliminating their

investment in natural gas and oil activities. Ultimately, this could make it more difficult to secure funding for exploration and

production activities. Litigation risks are also a potential concern, as a number of cities and other local governments have sought to

bring suits against the largest oil and natural gas exploration and production companies in state or federal court, alleging, among other

things, that such companies created public nuisances by producing fuels that contributed to global weather events, and therefore are

responsible for roadway and infrastructure and other damages, or alleging that the companies have been aware of the unsubstantiated

effects of weather pattern changes for some time.

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Available Information

Our corporate office is located at 1600 Corporate Drive, Birmingham, Alabama 35242, and our telephone number at that location is

(205) 408-0909. Our website address is www.div.energy. The information contained on our website is not incorporated by reference

into this Annual Report on Form 10-K and should not be considered part of this report.

We make available, free of charge, through our website, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current

reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange

Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and

Exchange Commission (“SEC”). The SEC maintains an internet site that contains reports, proxy and information statements, and other

information regarding issuers that file electronically with the SEC at www.sec.gov (Commission File Number: 001-41870).

Required UK Regulatory Disclosures

As required as a result of our membership on the London Stock Exchange, we make the following disclosures:

Board Composition

The Board’s composition prioritizes a broad range of perspectives, emphasizing relevant professional experience and industry

knowledge aligned with our strategic objectives.

As required to be presented in accordance with UK Listing Rule 14.3.30R, as of December 31, 2025, the Board’s composition did not

align with the UK Listing Rules’ numerical targets relating to gender and ethnic representation. At that date, women comprised 17%

of the Board, no woman held a senior Board position (defined as Chief Executive Officer, Senior Independent Director, Chair of

Board, or Chief Financial Officer; although it is noted that a woman chaired two of the Company’s committees), and there was no

director from a minority ethnic background.

Board and Executive Management Composition

As required to be presented in accordance with UK Listing Rule 14.3.30R(2) as of December 31, 2025:

	Number of Board<br><br>Members	Percentage of the<br><br>Board	Number of<br><br>Senior Positions<br><br>on the Board<br><br>(Defined under<br><br>UK Listing Rules<br><br>as CEO, CFO,<br><br>SID & Chair)(a)	Number of<br><br>Executive<br><br>Management	Percentage of<br><br>Executive<br><br>Management
Gender Identity or Sex(a)
Male	5	83%	2	6	100%
Female	1	17%	0	0	0%
Other categories	0	0%	0	0	0%
Not specified/prefer not to<br><br>say	0	0%	0	0	0%
Ethnic Background
White British or other White<br><br>(including minority-white<br><br>groups)	6	100%	2	6	100%
Mixed/Multiple Ethnic<br><br>Groups	0	0%	0	0	0%
Asian/Asian British	0	0%	0	0	0%
Black/African/Caribbean/<br><br>Black British	0	0%	0	0	0%
Other ethnic group, including<br><br>Arab	0	0%	0	0	0%
Not specific/prefer not to say	0	0%	0	0	0%

(a)Data reported on the basis of gender identity.

The Board’s Directors are from the U.S. as well as the UK, bringing a range of domestic and international experience to the Board.

The Board’s diverse range of experience and expertise covers not only a wealth of experience of operating in the natural gas and oil

industry but also extensive technical, operational, financial, legal and environmental expertise.

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Other Regulatory UK Disclosures

As a company admitted to listing on the Equity Shares (International Commercial Companies Secondary Listing) category of the

Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange, the Company is

required to make certain disclosures under the U.K. Listing Rules (the “UKLRs”) and the Disclosure, Guidance and Transparency

Rules (the “DTRs”).

Set out below are details of where such disclosures can be found:

•As required under DTR 7.2, the Company’s Corporate Governance Statement is available on its website at https://

www.div.energy/about-us/corporate-governance/;

•As required under UKLR 14.3.30R, the UK Board Diversity Statement and associated numerical data can be found in the

Board and Executive Management Composition section herein;

•In accordance with UKLR 14.3.24R, the Company will include in its 2025 Sustainability Report weather-related disclosures

consistent with the four recommendations and the eleven recommended disclosures set out in Figure 4 of Section C of the

report entitled “Recommendations of the Task Force on Climate-related Financial Disclosures” published in June 2017 by the

Task Force on Climate-related Financial Disclosures. For ease of review and given the detailed and technical content of these

disclosures, the Company considered the 2025 Sustainability Report to be the most appropriate location for the disclosures.

•The 2025 Sustainability Report provides an overview of our commitments to responsible conduct and sustainable business

practices, as well as our sustainability priorities. It will be made available on our website; and

•As required under DTR 4.1.12R, each member of the Board of Directors of the Company confirms that to the best of their

knowledge:

(a)The consolidated financial statements, prepared in accordance with U.S. GAAP, give a true and fair view of the

assets, liabilities, financial position and profit or loss of the Company and its wholly-owned subsidiaries taken as a

whole; and

(b)Management’s discussion and analysis of financial condition and results of operations includes a fair review of the

development and performance of the business and the position of the Company and its wholly-owned subsidiaries

taken as a whole, together with a description of the risks and uncertainties that they face.

Item 1A. Risk Factors

You should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 10-

K. The risks and uncertainties below are not the only ones we face. Additional risks and uncertainties not presently known to us or that

we believe to be immaterial may also adversely affect our business. If any of the following risks occur, our business, financial

condition, and results of operations could be seriously harmed and you could lose all or part of your investment. This Annual Report

on Form 10-K also contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially

from those anticipated in these forward-looking statements as a result of various factors, including the risks described below and

elsewhere in this Annual Report on Form 10-K.

Summary of Risk Factors

We are subject to a variety of risks and uncertainties which could have a material adverse effect on our business, financial condition,

and results of operations. The summary below is not exhaustive and is qualified by reference to the full set of risk factors set forth in

this “Risk Factors” section.

•Volatility and future changes in natural gas, NGLs and oil prices could materially and adversely affect our business, results of

operations, financial condition, cash flows or prospects.

•We face production risks and hazards that may affect our ability to produce natural gas, NGLs and oil at expected levels, quality

and costs that may result in additional liabilities to us.

•The levels of our natural gas and oil reserves and resources and their quality and production volumes may be lower than estimated

or expected.

•PV-10 will not necessarily be the same as the current market value of our estimated natural gas, NGL and oil reserves.

•We may face unanticipated increased or incremental costs in connection with decommissioning obligations such as plugging.

•We may not be able to keep pace with technological developments in our industry or be able to implement them effectively.

•Deterioration in the economic conditions in any of the industries in which our customers operate, a domestic or worldwide

financial downturn, or negative credit market conditions could have a material adverse effect on our liquidity, results of

operations, business and financial condition that we cannot predict.

•Our operations are subject to a series of risks relating to weather events.

•We rely on third-party infrastructure that we do not control and/or are subject to tariff charges that we do not control.

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•Failure by us, our contractors or our primary offtakers to obtain access to necessary equipment and transportation systems could

materially and adversely affect our business, results of operations, financial condition, cash flows or prospects.

•A proportion of our equipment has substantial prior use and significant expenditure may be required to maintain operability and

operations integrity.

•We depend on our directors, key members of management, independent experts, and technical and operational service providers

and on our ability to retain and hire such persons to effectively manage our growing business.

•We may face unanticipated water and other waste disposal costs.

•We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs.

•Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability to

enter into future debt financing.

•There are risks inherent in our acquisitions of natural gas and oil assets.

•We may not have good title to all our assets and licenses.

•Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

•The securitizations of our limited purpose, bankruptcy-remote, wholly owned subsidiaries may expose us to financing and other

risks, and there can be no assurance that we will be able to access the securitization market in the future, which may require us to

seek more costly financing.

•We are subject to regulation and liability under environmental, health and safety regulations, the violation of which may affect our

financial condition and operations.

•Our operations are dependent on our compliance with obligations under permits, licenses, contracts and field development plans.

•Our internal systems and website may be subject to intentional and unintentional disruption, and our confidential information may

be misappropriated, stolen or misused, which could adversely impact our reputation and future sales.

•Our operations are subject to the risk of litigation.

•Failure to comply with requirements to design, implement and maintain effective internal control over financial reporting could

have a material adverse effect on our business.

•We are subject to certain tax risks, including changes in tax legislation in the United States.

Risks Related to Our Business, Operations and Industry

Volatility and future changes in natural gas, NGLs and oil prices could materially and adversely affect our business, results of

operations, financial condition, cash flows or prospects.

Our business, results of operations, financial condition, cash flows or prospects depend substantially upon prevailing natural gas, NGL

and oil prices, which may be adversely impacted by unfavorable global, regional and national macroeconomic conditions, including

but not limited to instability related to the military conflicts in Ukraine and the Middle East. Natural gas, NGLs and oil are

commodities for which prices are determined based on global and regional demand, supply and other factors, all of which are beyond

our control.

Historically, prices for natural gas, NGLs and oil have fluctuated widely for many reasons, including:

•Global and regional supply and demand, and expectations regarding future supply and demand, for gas and oil products;

•Global and regional economic conditions;

•Evolution of stocks of oil and related products;

•Increased production due to new extraction developments and improved extraction and production methods;

•Geopolitical uncertainty;

•Threats or acts of terrorism, war or threat of war, which may affect supply, transportation or demand;

•Weather events, natural disasters and environmental incidents;

•Access to pipelines, storage platforms, shipping vessels and other means of transporting, storing and refining gas and oil,

including without limitation, changes in availability of, and access to, pipeline ullage;

•Prices and availability of alternative fuels;

•Prices and availability of new technologies affecting energy consumption;

•Increasing competition from alternative energy sources;

•The ability of OPEC and other oil-producing nations, to set and maintain specified levels of production and prices;

•Political, economic and military developments in gas and oil producing regions generally;

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•Governmental regulations and actions, including the imposition of tariffs, export restrictions and taxes and environmental

requirements and restrictions as well as anti-hydrocarbon production policies;

•Trading activities by market participants and others either seeking to secure access to natural gas, NGLs and oil or to hedge

against commercial risks, or as part of an investment portfolio; and

•Market uncertainty, including fluctuations in currency exchange rates, and speculative activities by those who buy and sell natural

gas, NGLs and oil on the world markets.

It is impossible to accurately predict future gas, NGL and oil price movements. Historically, natural gas prices have been highly

volatile and subject to large fluctuations in response to relatively minor changes in the demand for natural gas.

The economics of producing from some wells and assets may also result in a reduction in the volumes of our reserves which can be

produced commercially, resulting in decreases to our reported reserves. Additionally, further reductions in commodity prices may

result in a reduction in the volumes of our reserves. We might also elect not to continue production from certain wells at lower prices,

or our license partners may not want to continue production regardless of our position.

Each of these factors could result in a material decrease in the value of our reserves, which could lead to a reduction in our natural gas,

NGLs and oil development activities and acquisition of additional reserves. In addition, certain development projects or potential

future acquisitions could become unprofitable as a result of a decline in prices and could result in us postponing or canceling a planned

project or potential acquisition, or if it is not possible to cancel, to carry out the project or acquisition with negative economic impacts.

Further, a reduction in natural gas, NGL or oil prices may lead our producing fields to be shut in and to be entered into the

decommissioning phase earlier than estimated.

Our revenues, cash flows, operating results, profitability, dividends, future rate of growth and the carrying value of our gas and oil

properties depend heavily on the prices we receive for natural gas, NGLs and oil sales. Commodity prices also affect our cash flows

available for capital investments and other items, including the amount and value of our gas and oil reserves. In addition, we may face

gas and oil property impairments if prices fall significantly. In light of the continuing increase in supply coming from the Utica and

Marcellus shale plays of the Appalachian Basin, no assurance can be given that commodity prices will remain at levels which enable us

to do business profitably or at levels that make it economically viable to produce from certain wells and any material decline in such

prices could result in a reduction of our net production volumes and revenue and a decrease in the valuation of our production

properties, which could negatively impact our business, results of operations, financial condition, cash flows or prospects.

We conduct our business in a highly competitive industry.

The gas and oil industry is highly competitive. The key areas in which we face competition include:

•Engagement of third-party service providers whose capacity to provide key services may be limited;

•Acquisition of other companies that may already own licenses or existing producing assets;

•Acquisition of assets offered for sale by other companies;

•Access to capital (debt and equity) for financing and operational purposes;

•Purchasing, leasing, hiring, chartering or other procuring of equipment that may be scarce; and

•Employment of qualified and experienced skilled management and gas and oil professionals and field operations personnel.

Competition in our markets is intense and depends, among other things, on the number of competitors in the market, their financial

resources, their degree of geological, geophysical, engineering and management expertise and capabilities, their degree of vertical

integration and pricing policies, their ability to develop properties on time and on budget, their ability to select, acquire and develop

reserves and their ability to foster and maintain relationships with the relevant authorities. The cost to attract and retain qualified and

experienced personnel has increased and may increase substantially in the future.

Our competitors also include those entities with greater technical, physical and financial resources than us. Finally, companies and

certain private equity firms not previously investing in natural gas and oil may choose to acquire reserves to establish a firm supply or

simply as an investment. Any such companies will also increase market competition which may directly affect us.

If we are unsuccessful in competing against other companies, our business, results of operations, financial condition, cash flows or

prospects could be materially adversely affected.

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We may experience delays in production, transportation and marketing.

Various production, transportation and marketing conditions may cause delays in natural gas, NGLs and oil production and adversely

affect our business. For example, the gas gathering systems that we own connect to other pipelines or facilities which are owned and

operated by third parties. These pipelines and other midstream facilities and others upon which we rely may become unavailable

because of testing, turnarounds, line repair, reduced operating pressure, lack of operating capacity, regulatory requirements,

curtailments of receipt or deliveries due to insufficient capacity or because of damage. Our largest processor of NGLs is the MarkWest

Energy Partners, L.P. (“MarkWest”) plant located in Langley, Kentucky. If we were to lose the ability to process NGLs at MarkWest’s

plant during a period of high pricing, our revenues would be negatively impacted. As a short-term measure, we could divert the natural

gas through other pipeline routes; however, certain pipeline operators would eventually decline to transport the gas due to its liquid

content at a level that would exceed tariff specifications for those pipelines. The lack of available capacity on third-party systems and

facilities could reduce the price offered for our production or result in the shut-in of producing wells. Any significant changes

affecting these infrastructure systems and facilities, as well as any delays in constructing new infrastructure systems and facilities,

could delay our production, which could negatively impact our business, results of operations, financial condition, cash flows or

prospects.

We face production risks and hazards that may affect our ability to produce natural gas, NGLs and oil at expected levels,

quality and costs that may result in additional liabilities to us.

Our natural gas and oil production operations are subject to numerous risks common to our industry, including, but not limited to,

premature decline of reservoirs, incorrect production estimates, invasion of water into producing formations, geological uncertainties

such as unusual or unexpected rock formations and abnormal geological pressures, low permeability of reservoirs, contamination of

natural gas and oil, blowouts, oil and other chemical spills, explosions, fires, equipment damage or failure, challenges relating to

transportation, pipeline infrastructure, natural disasters, uncontrollable flows of oil, natural gas or well fluids, adverse weather

conditions, shortages of skilled labor, delays in obtaining regulatory approvals or consents, pollution and other environmental risks.

If any of the above events occur, environmental damage, including biodiversity loss or habitat destruction, injury to persons or

property and other species and organisms, loss of life, failure to produce natural gas, NGLs and oil in commercial quantities or an

inability to fully produce discovered reserves could result. These events could also cause substantial damage to our property or the

property of others and our reputation and put at risk some or all of our interests in licenses, which enable us to produce, and could

result in the incurrence of fines or penalties, criminal sanctions potentially being enforced against us and our management, as well as

other governmental and third-party claims. Consequent production delays and declines from normal field operating conditions and

other adverse actions taken by third parties may result in revenue and cash flow levels being adversely affected.

Moreover, should any of these risks materialize, we could incur legal defense costs, remedial costs and substantial losses, including

those due to injury or loss of life, human health risks, severe damage to or destruction of property, natural resources and equipment,

environmental damage, unplanned production outages, clean-up responsibilities, regulatory investigations and penalties, increased

public interest in our operational performance and suspension of operations, which could negatively impact our business, results of

operations, financial condition, cash flows or prospects.

The levels of our natural gas and oil reserves and resources, their quality and production volumes may be lower than

estimated or expected.

The reserves data as of December 31, 2025, 2024 and 2023 contained in this Annual Report on Form 10-K has been audited by NSAI

unless stated otherwise. The standards utilized to prepare the reserves information may be different from the standards of reporting

adopted in other jurisdictions. Investors, therefore, should not assume that our reserves information as set forth in this Annual Report

on Form 10-K is directly comparable to similar information that has been prepared in accordance with the reserve reporting standards

of other jurisdictions.

In general, estimates of economically recoverable natural gas, NGLs and oil reserves are based on a number of factors and

assumptions made as of the date on which the reserves estimates were determined, such as geological, geophysical and engineering

estimates (which have inherent uncertainties), historical production from the properties or analogous reserves, the assumed effects of

regulation by governmental agencies and estimates of future commodity prices, operating costs, gathering and transportation costs and

production related taxes, all of which may vary considerably from actual results.

Underground accumulations of hydrocarbons cannot be measured in an exact manner and estimates thereof are a subjective process

aimed at understanding the statistical probabilities of recovery. Estimates of the quantity of economically recoverable natural gas and

oil reserves, rates of production and, where applicable, the timing of development expenditures depend upon several variables and

assumptions.

Many of the factors in respect of which assumptions are made when estimating reserves are beyond our control and therefore these

estimates may prove to be incorrect over time. Evaluations of reserves necessarily involve multiple uncertainties. The accuracy of any

reserves evaluation depends on the quality of available information and natural gas, NGLs and oil engineering and geological

interpretation. Interpretation, testing and production after the date of the estimates may require substantial upward or downward

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revisions in our reserves and resources data. Moreover, different reserves engineers may make different estimates of reserves and cash

flows based on the same available data. Actual production, revenues and expenditures with respect to reserves will vary from

estimates and the variances may be material.

If the assumptions upon which the estimates of our natural gas and oil reserves prove to be incorrect or if the actual reserves available

to us (or the operator of an asset in we have an interest) are otherwise less than the current estimates or of lesser quality than expected,

we may be unable to recover and produce the estimated levels or quality of natural gas, NGLs or oil set out in this document and this

may materially and adversely affect our business, results of operations, financial condition, cash flows or prospects.

The PV-10 of our reserves will not necessarily be the same as the current market value of our estimated natural gas, NGL and

oil reserves.

You should not assume that the present value of future net cash flows from our reserves is the current market value of our estimated

natural gas, NGL and oil reserves. Actual future net cash flows from our natural gas and oil properties will be affected by factors such

as:

•Actual prices we receive for natural gas, NGL and oil;

•Actual cost of development and production expenditures;

•The amount and timing of actual production;

•Transportation and processing; and

•Changes in governmental regulations or taxation.

The timing of both our production and our incurrence of expenses in connection with the development and production of our natural

gas and oil properties will affect the timing and amount of actual future net cash flows from reserves, and thus their actual present

value. In addition, the 10% discount factor we use when calculating discounted future net cash flows may not be the most appropriate

discount factor based on interest rates in effect from time to time and risks associated with us or the natural gas and oil industry in

general. Actual future prices and costs may differ materially from those used in the present value estimate.

We may face unanticipated increased or incremental costs in connection with decommissioning obligations such as plugging.

In the future, we may become responsible for costs associated with abandoning and reclaiming wells, facilities and pipelines which we use

for the processing of natural gas and oil reserves. With regards to plugging, we are party to agreements with regulators in the states of

Ohio, West Virginia, Kentucky and Pennsylvania, four of our largest wellbore states, setting forth plugging and abandonment schedules

spanning a period ranging from 10 to 100 years. We will incur such decommissioning costs at the end of the operating life of some of our

properties or in the future period that wells are scheduled to be plugged. The ultimate decommissioning costs are uncertain and cost

estimates can vary in response to many factors including changes to relevant legal requirements, the emergence of new restoration

techniques, the shortage of plugging vendors, difficult terrain or weather conditions or experience at other well locations. The expected

timing and amount of expenditure can also change, for example, in response to changes in reserves, wells losing commercial viability

sooner than forecasted or changes in laws and regulations or their interpretation. As a result, there could be significant adjustments to the

provisions established which would affect future financial results. The use of other funds to satisfy such decommissioning costs may

impair our ability to focus capital investment in other areas of our business, which could materially and adversely affect our business,

results of operations, financial condition, cash flows or prospects.

We may not be able to keep pace with technological developments in our industry or be able to implement them effectively.

The natural gas and oil industry is characterized by rapid and significant technological advancements and introductions of new

products and services using new technologies, such as emissions controls and processing technologies. Rapid technological

advancements in information technology and operational technology domains require seamless integration. Failure to integrate these

technologies efficiently may result in operational inefficiencies, security vulnerabilities, and increased costs. During mergers and

acquisitions, integrating technology assets from acquired companies can be complex. Poor integration may lead to data

inconsistencies, security gaps and operational disruptions. Technology systems are also susceptible to cybersecurity threats, including

malware, denial-of-service attacks, data breaches, hacking, social engineering or "phishing", deepfake attacks, computer viruses,

employee or insider threats, malfeasance, supply chain attacks, physical breaches, vendor email compromise, payment fraud, and

ransomware attacks. These threats may disrupt operations, compromise sensitive data and lead to significant financial losses. Further,

inefficient data management practices may result in data breaches, data loss and missed opportunities for operational insights. The

presence of legacy technology systems can also pose challenges, as they may lack modern security features, making them vulnerable

to cyber threats and necessitating costly upgrades. As others use or develop new technologies (including technologies related to

artificial intelligence), we may be placed at a competitive disadvantage or may be forced by competitive pressures to implement those

new technologies at substantial costs. In addition, other natural gas and oil companies may have greater financial, technical and

personnel resources that allow them to enjoy technological advantages, which may in the future allow them to implement new

technologies before we can. Additionally, reliance on global supply chains for information technology hardware, software and

operational technology equipment exposes the industry to supply chain disruptions, shortages and cybersecurity risks.

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Our operations are subject to a series of risks relating to weather events.

Continued public concern regarding weather events and potential mitigation through regulation could have a material impact on our

business. International agreements, national, regional, state and local legislation, and regulatory measures to limit GHG emissions or

mandate related disclosures are currently in place or in various stages of discussion or implementation. Given that some of our

operations are associated with emissions of GHGs, these and other GHG emissions-related laws, policies and regulations may result in

substantial capital, compliance, operating and maintenance costs. The level of expenditure required to comply with these laws and

regulations is uncertain and is expected to vary depending on the laws enacted by particular countries, states, provinces and

municipalities.

Additionally, regulatory, market and other changes to respond to weather events may adversely impact our business, financial

condition or results of operations. Reporting expectations are also increasing, with a variety of customers, capital providers and

regulators seeking increased information on weather-related risks. For example, U.S. states have adopted or proposed weather-related

disclosures rules that may require us to incur significant costs to assess and disclose on a range of weather-related data and risks.

Internationally, the United Nations-sponsored “Paris Agreement” requires member nations to individually determine and submit non-

binding emissions reduction targets every five years after 2020. In November 2021, the international community gathered in Glasgow

at the 26th Conference of the Parties to the UN Framework Convention on Climate Change, during which multiple announcements

were made, including a call for parties to eliminate certain natural gas and oil subsidies and pursue further action on non-carbon

dioxide GHGs. Relatedly, the United States and European Union jointly announced the launch of the “Global Methane Pledge,” which

aims to cut global methane pollution at least 30% by 2030 relative to 2020 levels, including “all feasible reductions” in the energy

sector. Such commitments were re-affirmed at the 27th Conference of the Parties in Sharm El Sheikh. However, on January 20, 2025,

President Trump issued an Executive Order directing the U.S. Ambassador to the United Nations to withdraw from the Paris

Agreement. Accordingly, the UN Secretary General issued a depositary notification of the U.S. withdrawal from the Paris Agreement,

effective January 27, 2026. More recently, in February 2026, the U.S. Environmental Protection Agency rescinded its prior finding

that certain GHG emissions endangered public health and welfare, which had served as the basis for certain GHG emission regulation

by the agency. This, and other changes undertaken by the Trump Administration have or may in the future reverse or rescind weather-

related initiatives and regulations and focus on driving increased U.S. energy production. The emission reduction targets and other

provisions of legislative or regulatory initiatives and policies enacted in the future by the states in which we operate, could adversely

impact our business by imposing increased costs in the form of higher taxes or increases in the prices of emission allowances, limiting

our ability to develop new gas and oil reserves, transport hydrocarbons through pipelines or other methods to market, decreasing the

value of our assets, or reducing the demand for hydrocarbons and refined petroleum products. With increased pressure to reduce GHG

emissions by replacing natural gas and oil energy generation with alternative energy generation, it is possible that peak demand for gas

and oil will be reached, and gas and oil prices will be adversely impacted as and when this happens. Further, the consequences of the

effects of global weather events and patterns, and the continued political and societal attention afforded to mitigating the effects of

weather events and patterns, may generate adverse investor and stakeholder sentiment towards the hydrocarbon industry and

negatively impact the ability to invest in the sector. Similarly, longer term reduction in the demand for hydrocarbon products due to

the pace of commercial deployment of alternative energy technologies or due to shifts in consumer preference for lower GHG

emissions products could reduce the demand for the hydrocarbons that we produce.

Further, in response to concerns related to weather events, companies in the natural gas and oil sector may be exposed to increasing

financial risks. Financial institutions, including investment advisors and certain sovereign wealth, pension and endowment funds, may

elect in the future to shift some or all of their investment into non-natural gas and oil related sectors. Institutional lenders who provide

financing to fossil-fuel energy companies have also become more attentive to sustainable lending practices, and some of them may elect

in the future not to provide funding for natural gas and oil energy companies. A material reduction in the capital available to the natural

gas and oil industry could make it more difficult to secure funding for exploration, development, production, and transportation activities,

which could in turn negatively affect our operations.

The Company may also be subject to activism from environmental non-governmental organizations (“NGOs”) campaigning against

natural gas and oil extraction or negative publicity from media alleging inadequate remedial actions to retire non-producing wells

effectively, which could affect our reputation, disrupt our programs, require us to incur significant, unplanned expense to respond or react

to intentionally disruptive campaigns or media reports, create blockades to interfere with operations or otherwise negatively impact our

business, results of operations, financial condition, cash flows or prospects. Litigation risks are also increasing as a number of entities

have sought to bring suit against various oil and natural gas companies in state or federal court, alleging among other things, that such

companies created public nuisances by producing fuels that contributed to weather events or alleging that the companies have been aware

of the adverse effects of weather events and patterns for some time.

Finally, our operations are subject to disruption from the physical effects that may be caused or aggravated by weather events. These

include risks from extreme weather events, such as hurricanes, severe storms, floods, heat waves, and ambient temperature increases,

as well as wildfires.

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We rely on third-party infrastructure that we do not control and/or, in each case, are subject to tariff charges that we do not

control.

A significant portion of our production passes through third-party owned and controlled infrastructure. If these third-party pipelines or

liquids processing facilities experience any event that causes an interruption in operations or a shut-down such as mechanical problems,

an explosion, adverse weather conditions, a terrorist attack or labor dispute, our ability to produce or transport natural gas could be

severely affected. For example, we have an agreement with a third-party where approximately 28% of the NGLs we sold during the

year ending December 31, 2025 were processed at the third-party’s facility in Kentucky. Any material decreases in our ability to

process or transport our natural gas through third-party infrastructure could have a material adverse effect on our business, results of

operations, financial condition, cash flows or prospects.

Our use of third-party infrastructure may be subject to tariff charges. Although we seek to manage our flow via our midstream

infrastructure, we may not always be able to avoid higher tariffs or basis blowouts due to the lack of interconnections. In such instances,

the tariff charges can be substantial and the cost is not subject to our direct control, although we may have certain contractual or

governmental protections and rights. Generally, the operator of the gathering or transmission pipelines sets these tariffs and expenses on a

cost sharing basis according to our proportionate hydrocarbon through-put of that facility. A provisional tariff rate is applied during the

relevant year and then finalized the following year based on the actual final costs and final through-put volumes. Such tariffs are

dependent on continued production from assets owned by third parties and, may be priced at such a level as to lead to production from

our assets ceasing to be economic and thus may have a material adverse effect on our business, results of operations, financial condition,

cash flows or prospects.

Furthermore, our use of third-party infrastructure exposes us to the possibility that such infrastructure will cease to be operational or

be decommissioned and therefore require us to source alternative export routes and/or prevent economic production from our assets.

This could also have a material adverse effect on our business, results of operations, financial condition, cash flows or prospects.

Failure by us, our contractors or our primary offtakers to obtain access to necessary equipment and transportation systems

could materially and adversely affect our business, results of operations, financial condition, cash flows or prospects.

We rely on our natural gas and oil field suppliers and contractors to provide materials and services that facilitate our production

activities, including plugging and abandonment contractors. Any competitive pressures on the oil field suppliers and contractors could

result in a material increase of costs for the materials and services required to conduct our business and operations. For example, we

are dependent on the availability of plugging vendors to help us satisfy abandonment schedules that we have agreed to with the states

of Ohio, West Virginia, Kentucky and Pennsylvania. Such personnel and services can be scarce and may not be readily available at the

times and places required. Future cost increases could have a material adverse effect on our asset retirement liability, operating

income, cash flows and borrowing capacity and may require a reduction in the carrying value of our properties, our planned level of

spending for development and the level of our reserves. Prices for the materials and services we depend on to conduct our business

may not be sustained at levels that enable us to operate profitably.

We and our offtakers rely, and any future offtakers will rely, upon the availability of pipeline and storage capacity systems, including

such infrastructure systems that are owned and operated by third parties. As a result, we may be unable to access or source alternatives

for the infrastructure and systems which we currently use or plan to use, or otherwise be subject to interruptions or delays in the

availability of infrastructure and systems necessary for the delivery of our natural gas, NGLs and oil to commercial markets. In

addition, such infrastructure may be close to its design life and decisions may be taken to decommission such infrastructure or perform

life extension work to maintain continued operations. Any of these events could result in disruptions to our projects and thereby

impact our ability to deliver natural gas, NGLs and oil to commercial markets and/or may increase our costs associated with the

production of natural gas, NGLs and oil reliant upon such infrastructure and systems. Further, our offtakers could become subject to

increased tariffs imposed by government regulators or the third-party operators or owners of the transportation systems available for

the transport of our natural gas, NGLs and oil, which could result in decreased offtaker demand and downward pricing pressure.

If we are unable to access infrastructure systems facilitating the delivery of our natural gas, NGLs and oil to commercial markets due

to our contractors or primary offtakers being unable to access the necessary equipment or transportation systems, our operations will

be adversely affected. If we are unable to source the most efficient and expedient infrastructure systems for our assets then delivery of

our natural gas, NGLs and oil to the commercial markets may be negatively impacted, as may our costs associated with the production

of natural gas, NGLs and oil reliant upon such infrastructure and systems.

A proportion of our equipment has substantial prior use and significant expenditure may be required to maintain operability

and operations integrity.

A part of our business strategy is to optimize or refurbish producing assets where possible to maximize the efficiency of our operations

while avoiding significant expenses associated with purchasing new equipment. Our producing assets and midstream infrastructure

require ongoing maintenance to ensure continued operational integrity. For example, some older wells may struggle to produce

suitable line pressure and will require the addition of compression to push natural gas. Despite our planned operating and capital

expenditures, there can be no guarantee that our assets or the assets we use will continue to operate without fault and not suffer

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material damage in this period through, for example, wear and tear, severe weather conditions, natural disasters or industrial accidents.

If our assets, or the assets we use, do not operate at or above expected efficiencies, we may be required to make substantial

expenditures beyond the amounts budgeted. Any material damage to these assets or significant capital expenditure on these assets for

improvement or maintenance may have a material adverse effect on our business, results of operations, financial condition, cash flows

or prospects. In addition, as with planned operating and capital expenditure, there is no guarantee that the amounts expended will

ensure continued operation without fault or address the effects of wear and tear, severe weather conditions, natural disasters or

industrial accidents. We cannot guarantee that such optimization or refurbishment will be commercially feasible to undertake in the

future and we cannot provide assurance that we will not face unexpected costs during the optimization or refurbishment process.

We depend on our directors, key members of management, independent experts, and technical and operational service

providers and on our ability to retain and hire such persons to effectively manage our growing business.

Our future operating results depend in significant part upon the continued contribution of our directors, key senior management and

technical, financial and operations personnel. Management of our growth will require, among other things, stringent control of

financial systems and operations, the continued development of our control environment, the ability to attract and retain sufficient

numbers of qualified management and other personnel, the continued training of such personnel and the presence of adequate

supervision.

In addition, the personal connections and relationships of our directors and key management are important to the conduct of our

business. If we were to unexpectedly lose a member of our key management or fail to maintain one of the strategic relationships of our

key management team, our business, results of operations, financial condition, cash flows or prospects could be materially adversely

affected. In particular, we are very dependent on our Chief Executive Officer, Robert Russell (“Rusty”) Hutson, Jr. Acquisitions are a

key part of our strategy, and Mr. Hutson has been instrumental in sourcing them and securing their financing. Furthermore, as our

founder, Mr. Hutson is strongly associated with our success, and if he were to cease being the Chief Executive Officer, perception of

our future prospects may be diminished.

Attracting and retaining additional skilled personnel will be fundamental to the continued growth and operation of our business. We

require skilled personnel in the areas of development, operations, engineering, business development, natural gas, NGLs and oil

marketing, finance and accounting relating to our projects. Personnel costs, including salaries, are increasing as industry wide demand

for suitably qualified personnel increases. We may not successfully attract new personnel and retain existing personnel required to

continue to expand our business and to successfully execute and implement our business strategy.

We may face unanticipated water and other waste disposal costs.

We may be subject to regulation that restricts our ability to discharge water produced as part of our natural gas, oil and NGL

production operations. Productive zones frequently contain water that must be removed for the natural gas, oil and NGL to produce,

and our ability to remove and dispose of sufficient quantities of water from the various zones will determine whether we can produce

natural gas, oil and NGL in commercial quantities. The produced water must be transported from the leasehold and/or injected into

disposal wells. The availability of disposal wells with sufficient capacity to receive all of the water produced from our wells may

affect our ability to produce our wells. Also, the cost to transport and dispose of that water, including the cost of complying with

regulations concerning water disposal, may reduce our profitability. We have entered into various water management services

agreements in the Appalachian Region which provide for the disposal of our produced water by established counterparties with large

integrated pipeline networks. If these counterparties fail to perform, we may have to shut in wells, reduce drilling activities, or upgrade

facilities for water handling or treatment. The costs to dispose of this produced water may increase for a number of reasons, including

if new laws and regulations require water to be disposed in a different manner.

In 2016, the EPA adopted effluent limitations for the treatment and discharge of wastewater resulting from onshore unconventional

natural gas, oil and NGL extraction facilities to publicly owned treatment works. In addition, the injection of fluids gathered from

natural gas, oil and NGL producing operations in underground disposal wells has been identified by some groups and regulators as a

potential cause of increased seismic events in certain areas of the country, including the states of West Virginia, Ohio and Kentucky in

the Appalachian Region as well as Oklahoma, Texas and Louisiana in our Central Region. Certain states, including those located in

the Appalachian Region have adopted, or are considering adopting, laws and regulations that may restrict or prohibit oilfield fluid

disposal in certain areas or underground disposal wells, and state agencies implementing those requirements may issue orders directing

certain wells in areas where seismic events have occurred to restrict or suspend disposal well permits or operations or impose certain

conditions related to disposal well construction, monitoring, or operations. Any of these developments could increase our cost to

dispose of our produced water.

We may incur significant costs and liabilities resulting from performance of pipeline integrity programs and related repairs.

Pursuant to the authority under the Natural Gas Pipeline Safety Act of 1968 (“NGPSA”) and Hazardous Liquid Pipeline Safety Act of

1979 (“HLPSA”), as amended by the Pipeline Safety Improvement Act of 2002 (“PSIA”), the Pipeline Inspection, Protection,

Enforcement and Safety Act of 2006 (“PIPESA”) and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 (the

“2011 Pipeline Safety Act”), the PHMSA has promulgated regulations requiring pipeline operators to develop and implement integrity

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management programs for certain gas and hazardous liquid pipelines that, in the event of a pipeline leak or rupture could affect high

consequence areas (“HCAs”), which are areas where a release could have the most significant adverse consequences, including high-

population areas, certain drinking water sources and unusually sensitive ecological areas. These regulations require operators of

covered pipelines to:

•Perform ongoing assessments of pipeline integrity;

•Identify and characterize applicable threats to pipeline segments that could impact HCAs;

•Improve data collection, integration and analysis;

•Repair and remediate the pipeline as necessary; and

•Implement preventive and mitigating actions.

In addition, states have adopted regulations similar to existing PHMSA regulations for certain intrastate gas and hazardous liquid

pipelines. At this time, we cannot predict the ultimate cost of compliance with applicable pipeline integrity management regulations,

as the cost will vary significantly depending on the number and extent of any repairs found to be necessary as a result of pipeline

integrity testing, but the results of these tests could cause us to incur significant and unanticipated capital and operating expenditures

for repairs or upgrades deemed necessary to ensure the safe and reliable operation of our pipelines.

At this time, we cannot predict the cost of such requirements, but they could be significant. Moreover, federal and state legislative and

regulatory initiatives relating to pipeline safety that require the use of new or more stringent safety controls or result in more stringent

enforcement of applicable legal requirements could subject us to increased capital costs, operational delays and costs of operation.

Moreover as of January 2025, the maximum civil penalties PHMSA can impose are $272,926 per pipeline safety violation per day,

with a maximum of $2,729,245 for a related series of violations. The safety enhancement requirements and other provisions of the

2011 Pipeline Safety Act as well as any implementation of PHMSA regulations thereunder or any issuance or reinterpretation of

guidance by PHMSA or any state agencies with respect thereto could require us to install new or modified safety controls, pursue

additional capital projects or conduct maintenance programs on an accelerated basis, any or all of which tasks could result in our

incurring increased operating costs that could have a material adverse effect on our results of operations or financial position. States

are also pursuing regulatory programs intended to safely build pipeline infrastructure. The adoption of new or amended regulations by

PHMSA or the states that result in more stringent or costly pipeline integrity management or safety standards could have a significant

adverse effect on us and similarly situated midstream operators.

Risks Relating to Our Financing, Acquisitions, Investment and Indebtedness

Inflation may adversely affect us by increasing costs beyond what we can recover through price increases and limit our ability

to enter into future debt financing.

Inflation can adversely affect us by increasing costs of materials, equipment, labor and other services. In addition, inflation is often

accompanied by higher interest rates. Continued inflationary pressures could impact our profitability. Though we believe that the rates

of inflation in recent years, including the 12 months ended December 31, 2025, have not had a significant impact on our operations, a

continued increase in inflation, including inflationary pressure on labor, could result in increases to our operating costs, and we may be

unable to pass these costs on to our customers. These inflationary pressures could also adversely impact our ability to procure

materials and equipment in a cost-effective manner, which could result in reduced margins and production delays and, as a result, our

business, financial condition, results of operations and cash flows could be materially and adversely affected. We continue to

undertake actions and implement plans to address these inflationary pressures and protect the requisite access to materials and

equipment. With respect to our costs of capital, our ABS Notes (as defined in the Notes to the Consolidated Financial Statements) are

fixed-rate instruments (described in Note 15 in the Notes to the Consolidated Financial Statements) and as of February 25, 2026, we

had $243 million outstanding on our Credit Facility and $500 million of 9.75% senior secured bonds due 2029. Nevertheless, inflation

may also affect our ability to enter into future debt financing, including refinancing of our Credit Facility or issuing additional SPV-

level asset backed securities, as high inflation may result in a relative increase in the cost of debt capital.

We are taking efforts to mitigate inflationary pressures, by working closely with other suppliers and service providers to ensure

procurement of materials and equipment in a cost-effective manner. However, these mitigation efforts may not succeed or may be

insufficient.

Concerns about global economic growth have had a significant adverse impact on global financial markets and commodity prices. If

the economic climate in the United States or abroad deteriorates, worldwide demand for petroleum products could diminish further,

which could impact the price at which natural gas, NGLs and oil can be sold, which could affect our results of operations, financial

condition, cash flows and prospects.

There are risks inherent in our acquisitions of natural gas and oil assets.

Acquisitions are an essential part of our strategy for protecting and growing cash flow, particularly in relation to the risk that some of

our wells may have a higher than anticipated production decline rate. Over the past several years, we have undertaken a number of

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acquisitions of natural gas and oil assets (and of companies holding such assets). Our ability to complete future acquisitions will

depend on us being able to identify suitable acquisition candidates and negotiate favorable terms for their acquisition, in each case,

before any attractive candidates are purchased by other parties such as private equity firms, some of whom have substantially greater

financial and other resources than we do. We may face competition for attractive acquisition targets that may also increase the price of

the target business. As a result, there is no assurance that we will always be able to source and execute acquisitions in the future at

attractive valuations.

Furthermore, an acquisition in a new area in which we lack experience may present unanticipated risks and challenges that were not

accounted for or previously experienced. Ordinarily, our due diligence efforts are focused on higher valued and material properties or

assets. Even an in-depth review of all properties and records may not reveal all existing or potential problems, nor will such review

always permit a buyer to become sufficiently familiar with the properties to fully assess their deficiencies and capabilities. Generally,

physical inspections are not performed on every well or facility, and structural or environmental problems are not necessarily

observable even when an inspection is undertaken.

There can be no assurance that our prior acquisitions or any other potential acquisition will perform operationally as anticipated or be

profitable. We could fail to appropriately value any acquired business and the value of any business, company or property that we

acquire or invest in may actually be less than the amount paid for it or its estimated production capacity. We may be required to

assume pre-closing liabilities with respect to an acquisition, including known and unknown title, contractual, and environmental and

decommissioning liabilities, and may acquire interests in properties on an “as is” basis without recourse to the seller of such interest or

the seller may have limited resources to provide post-sale indemnities.

In addition, successful acquisitions of gas and oil assets require an assessment of a number of factors, including estimates of

recoverable reserves, the time of recovering reserves, exploration potential, future natural gas, NGLs and oil prices and operating

costs. Such assessments are inexact, and we cannot guarantee that we make these assessments with a high degree of accuracy. In

connection with assessments, we perform a review of the acquired assets. However, such a review will not reveal all existing or

potential problems. Furthermore, review may not permit us to become sufficiently familiar with the assets to fully assess their

deficiencies and capabilities.

We may be unable to make attractive acquisitions or successfully integrate acquired businesses, and any inability to do so may

disrupt our business and hinder our ability to grow.

In the future we may make acquisitions of businesses that complement or expand our current business. However, we may not be able

to identify attractive acquisition opportunities. Even if we do identify attractive acquisition opportunities, we may not be able to

complete the acquisition or do so on commercially acceptable terms.

The success of any completed acquisition will depend on our ability to integrate effectively the acquired business into our existing

operations. The process of integrating acquired businesses may involve unforeseen difficulties and may require a disproportionate

amount of our managerial and financial resources. In addition, possible future acquisitions may be larger and for purchase prices

significantly higher than those paid for earlier acquisitions. No assurance can be given that we will be able to identify additional

suitable acquisition opportunities, negotiate acceptable terms, obtain financing for acquisitions on acceptable terms or successfully

acquire identified targets. Our failure to achieve consolidation savings, to integrate the acquired businesses and assets into our existing

operations successfully or to minimize any unforeseen operational difficulties could have a material adverse effect on our financial

condition and results of operations.

Our Credit Facility and other debt agreements also limit our ability to incur certain indebtedness, which could indirectly limit our

ability to engage in acquisitions of businesses.

The Company’s success will be impacted by its ability to fully integrate Canvas and deliver the value of the combined

underlying businesses; the full financial benefits expected from the Company may not be fully achieved.

While the Company believes that the financial benefits of the Canvas acquisition and the costs associated with the Canvas acquisition

have been reasonably estimated, unanticipated events or liabilities may arise or become apparent which may, in turn, result in a delay

or reduction in the benefits anticipated to be derived from the Canvas acquisition, or in costs significantly in excess of those estimated.

No assurance can be given that the integration process will deliver all or substantially all of the expected benefits or realize any such

benefits within the assumed timeframe, or that the costs to integrate and achieve the financial benefits will not be higher than

anticipated.

Further, the demands that the integration process may have on management time could result in diversion of the attention of the

Company's management and employees from ongoing operations, pursuing other potential business opportunities and may cause a

delay in other projects currently contemplated by the Company. To the extent that the combined company is unable to efficiently

integrate the operations of the Company and Canvas, realize anticipated financial benefits, retain key personnel and avoid unforeseen

costs or delay, there may be a material adverse effect on the business, results of operations, financial condition, cash flows or

prospects of the Company.

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We may not have good title to all our assets and licenses.

Although we believe that we take due care and conduct due diligence on new acquisitions in a manner that is consistent with industry

practice, there can be no assurance that we have good title to all our assets and the rights to develop and produce natural gas and oil

from our assets. Such reviews are inherently incomplete and it is generally not feasible to review in depth every individual well or

field involved in each acquisition. There can be no assurance that any due diligence carried out by us or by third parties on our behalf

in connection with any assets that we acquire will reveal all of the risks associated with those assets, and the assets may be subject to

preferential purchase rights, consents and title defects that were not apparent at the time of acquisition. We may acquire interests in

properties on an “as is” basis without recourse to the seller of such interest or the seller may have limited resources to provide post-

sale indemnities. In addition, changes in law or change in the interpretation of law or political events may arise to defeat or impair our

claim to certain properties which we currently own or may acquire which could result in a material adverse effect on our business,

results of operations, financial condition, cash flows or prospects.

Restrictions in our existing and future debt agreements could limit our growth and our ability to engage in certain activities.

Our Credit Facility and other debt agreements contain a number of significant covenants that may limit our ability to, among other

things:

•Incur additional indebtedness;

•Incur liens;

•Sell assets;

•Make certain debt payments;

•Enter into agreements that restrict or prohibit the payment of dividends;

•Limits our subsidiaries’ ability to make certain payments with respect to their equity, based on the pro forma effect thereof on

certain financial ratios, which would be the source of distributable profits and available cash from which we may issue a dividend;

and

•Conduct hedging activities.

In addition, our Credit Facility and other debt agreements require us to maintain compliance with certain financial covenants.

We may also be prevented from taking advantage of business opportunities that arise because of the limitations from the restrictive

covenants under our Credit Facility and other debt agreements. These restrictions may limit our ability to obtain future financings to

withstand a future downturn in our business or the economy in general, or to otherwise conduct necessary corporate activities.

A material uncured breach of any covenant in our Credit Facility and other debt agreements will result in a default under the

agreement and may result in an event of default if such default is not cured during any applicable grace period. An event of default, if

not waived, could result in acceleration of the indebtedness outstanding and in an event of default with respect to, and an acceleration

of, the indebtedness outstanding under any other debt agreements to which we are a party. Any such accelerated indebtedness would

become immediately due and payable. If that occurs, we may not be able to make all of the required payments or borrow sufficient

funds to refinance such indebtedness. Even if new financing were available at that time, it may not be on terms that are acceptable to

us.

Any significant reduction in our borrowing base under our Credit Facility as a result of periodic borrowing base

redeterminations or otherwise may negatively impact our ability to fund our operations.

Our Credit Facility limits the amounts we can borrow up to a borrowing base amount, which the lenders, in their sole discretion,

unilaterally determine based upon our reserve reports for the applicable period and other data and reports. Such determinations will be

made on a regular basis semi-annually (each a “Scheduled Redetermination”) and at the option of the lenders with more than 66.6% of

the loans and commitments under the Credit Facility, no more than one time in between each Scheduled Redetermination. As of

February 25, 2026, our borrowing base was $825 million.

In the future, we may not be able to access adequate funding under our Credit Facility as a result of a decrease in our borrowing base

due to the issuance of new indebtedness, the outcome of a borrowing base redetermination, or an unwillingness or inability on the part

of lending counterparties to meet their funding obligations and the inability of other lenders to provide additional funding to cover a

defaulting lender’s portion. Declines in commodity prices from their current levels could result in a determination to lower the

borrowing base and, in such a case, we could be required to repay any indebtedness in excess of the redetermined borrowing base. As

a result, we may be unable to make acquisitions or otherwise carry out business plans, which could have a material adverse effect on

our business, results of operations, financial condition, cash flows or prospects.

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The securitizations of our limited purpose, bankruptcy-remote, wholly owned subsidiaries may expose us to financing and

other risks, and there can be no assurance that we will be able to access the securitization market in the future, which may

require us to seek more costly financing.

Through limited purpose, bankruptcy-remote, wholly owned subsidiaries (“SPVs”), we have securitized and expect to securitize in the

future, certain of our assets to generate financing. In such transactions, we convey a pool of assets to an SPV, that, in turn, issues

certain securities or enters into certain debt agreements. The securities issued by the SPVs are each collateralized by a pool of assets.

In exchange for the transfer of finance receivables to the SPV, we typically receive the cash proceeds from the sale of the securities or

entering into term loans.

Although our SPVs have completed securitizations in connection with the ABS IV Notes, ABS VI Notes, ABS VII Notes, ABS VIII

Notes (which now covers ABS III Notes and ABS V Notes), ABS IX Notes, ABS X Notes (which now covers Term Loan I, ABS I

Notes, and ABS II Notes) (each as defined herein), and ABS XI Notes, there can be no assurance that we, through our SPVs, will be

able to complete additional securitizations, particularly if the securitization markets become constrained. In addition, the value of any

securities that our limited purpose, bankruptcy-remote, wholly owned subsidiaries retain in our securitizations, including securities

retained to comply with applicable risk retention rules, might be reduced or, in some cases, eliminated as a result of an adverse change

in economic conditions or the financial markets. In addition, our ABS IV Notes, ABS VI Notes, ABS VII Notes, ABS VIII Notes

(which now covers ABS III Notes and ABS V Notes), ABS IX Notes, ABS X Notes (which now covers Term Loan I, ABS I Notes,

and ABS II Notes), and ABS XI Notes are subject to customary accelerated amortization events, including events tied to the failure to

maintain stated debt service coverage ratios.

If it is not possible or economical for us to securitize our assets in the future, we would need to seek alternative financing to support

our operations and to meet our existing debt obligations, which may be less efficient and more expensive than raising capital via

securitizations and may have a material adverse effect on our results of operations, financial condition, cash flows and liquidity.

An increase in interest rates would increase the cost of servicing our indebtedness and could reduce our profitability, decrease

our liquidity and impact our solvency.

Our Credit Facility provides for, and our future debt agreements may provide for, debt incurred thereunder to bear interest at variable

rates. As of February 25, 2026, we had $243 million outstanding on our Credit Facility. Increases in interest rates would increase the

cost of servicing indebtedness under our Credit Facility or under future debt agreements subject to interest at variable rates, and

materially reduce our profitability, decrease our liquidity and impact our solvency.

Our hedging activities could result in financial losses or could reduce our net income.

To achieve more predictable cash flows, we employ a hedging strategy involving opportunistically hedging a majority of our first two

years of production as well as hedging a significant percentage of production beyond our first two years of forecasted production.

Even so, the remainder of our production that is unhedged is exposed to the continuing and prolonged declines in the prices of natural

gas, NGLs and oil. Our results of operations and financial condition would be negatively impacted if the prices of natural gas, NGLs

or oil were to remain depressed or decline materially from current levels. To achieve more predictable cash flows and to reduce our

exposure to fluctuations in the prices of natural gas, NGLS and oil, we may enter into additional hedging arrangements for a

significant portion of our production.

Our derivative contracts may result in substantial gains or losses. For example, we reported income from operations of $535 million

for the year ended December 31, 2025, compared to a loss of $97 million for the year ended December 31, 2024 and income of

$1.1 billion for the year ended December 31, 2023. While our earnings are impacted by a variety of factors as described in Results of

Operations, a key driver of our year-over-year change from a loss to income was attributable to a change of $255 million in the mark-

to-market valuation adjustment on our derivative financial instrument valuations to a gain of $218 million in 2025 from a loss of $38

million in 2024. There can be no assurance that we will not realize additional losses due to our hedging activities in the future. In

addition, if we enter into any derivative contracts and experience a sustained material interruption in our production, we might be

forced to satisfy all or a portion of our hedging obligations without the benefit of the cash flows from our sale of the underlying

physical commodity, resulting in a substantial diminution of our liquidity. Our ability to use hedging transactions to protect us from

future natural gas, NGL and oil price volatility will be dependent upon natural gas, NGL and oil prices at the time we enter into future

hedging transactions and our future levels of hedging and, as a result, our future net cash flows may be more sensitive to commodity

price changes. In addition, if commodity prices remain low, we will not be able to replace our hedges or enter into new hedges at

favorable prices.

Our price hedging strategy and future hedging transactions will be determined at our discretion, subject to the terms of certain

agreements governing our indebtedness. The prices at which we hedge our production in the future will be dependent upon commodity

prices at the time we enter into these transactions, which may be substantially higher or lower than current prices. Accordingly, our

price hedging strategy may not protect us from significant declines in prices received for our future production. Conversely, our

hedging strategy may limit our ability to realize cash flows from commodity price increases. It is also possible that a substantially

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larger percentage of our future production will not be hedged as compared with the next few years, which would result in our natural

gas, NGL and oil revenues becoming more sensitive to commodity price fluctuations.

The failure of our hedge counterparties to meet their obligations to us may adversely affect our financial results.

An attendant risk exists in hedging activities that the counterparty in any derivative transaction cannot or will not perform under the

instrument and that we will not realize the benefit of the hedge. Disruptions in the financial markets could lead to sudden decreases in

a counterparty’s liquidity, which could make them unable to perform under the terms of the derivative contract and we may not be

able to realize the benefit of the derivative contract. Any default by the counterparty to these derivative contracts when they become

due would have a material adverse effect on our results of operations, financial condition, cash flows and prospects.

We may not be able to enter into commodity derivatives on favorable terms or at all.

To achieve a more predictable cash flow, we employ a hedging strategy involving opportunistically hedging a majority of our first two

years of production as well as hedging a significant percentage of production beyond our first two years of forecasted production. If

we are unable to maintain sufficient hedging capacity with our counterparties, we could have greater exposure to changes in

commodity prices and interest rates, which could have a material adverse impact on our business, results of operations, financial

condition, cash flows or prospects.

Risks Relating to Legal, Tax, Environmental and Regulatory Matters

We are subject to regulation and liability under environmental, health and safety regulations, the violation of which may affect

our financial condition and operations.

We operate in an industry that has certain inherent hazards and risks, and consequently we are subject to stringent and comprehensive

laws and regulations, especially with regard to the protection of health, safety and the environment. For example, we are subject to

laws and regulations related to occupational safety and health, hydraulic fracturing activities, air emissions, soil and water quality, the

protection of threatened and endangered plant and animal species, biodiversity and ecosystems, and the safety of our assets and

employees. Although we believe that we have adequate procedures in place to mitigate operational risks, there can be no assurances

that these procedures will be adequate to address every potential health, safety and environmental hazard, and a failure to adequately

mitigate risks may result in loss of life, injury, or adverse impacts on the health of employees, contractors and third-parties or the

environment. Any failure by us or one of our subcontractors, whether inadvertent or otherwise, to comply with applicable legal or

regulatory requirements may give rise to civil, administrative and/or criminal liabilities, civil fines and penalties, delays or restrictions

in acquiring or disposing of assets and/or delays in securing or maintaining required permits, licenses and approvals. Further, a lack of

regulatory compliance may lead to denial, suspension, or termination of permits, licenses, or approvals that are required to operate our

sites or could result in other operational restrictions or obligations. Our health, safety and environmental policies require us to observe

local, state and national legal and regulatory requirements and to apply generally accepted industry best practices where legislation or

regulation does not exist.

The terms and conditions of licenses, permits, regulatory orders, approvals or permissions may include more stringent operational,

environmental and/or health and safety requirements. Obtaining development or production licenses and permits may become more

difficult or may be delayed due to federal, regional, state or local governmental constraints, considerations, or requirements on issuing.

Furthermore, third-parties such as environmental NGOs may administratively or judicially contest or protest licenses and permits

already granted by relevant authorities or applications for the same and operations may be subject to other administrative or judicial

challenges.

In addition, under certain environmental laws and regulations, we could be subject to joint and several strict liability for the removal or

remediation of previously released materials, pollution, or property contamination regardless of whether we were responsible for the

release or contamination or whether the operations were in compliance with all applicable laws at the time those actions were taken.

Private parties, including the owners of properties on or adjacent to well sites and facilities where petroleum hydrocarbons or wastes

are taken for reclamation or disposal, may also have the right to pursue legal actions as well as to seek damages for non-compliance

with environmental laws and regulations or for personal injury or property damage. In addition, the risk of accidental spills or releases

of pollutants or contaminants could expose us to significant liabilities that could have a material adverse effect on our business,

financial condition and results of operations.

We incur, and expect to continue to incur, capital and operating costs in an effort to comply with increasingly complex operational

health and safety and environmental laws and regulations. New laws and regulations, the imposition of more stringent requirements in

permits and licenses, increasingly strict enforcement of, or new interpretations of, existing laws, regulations and permits and licenses,

or the discovery of previously unknown contamination or hazards may require further costly expenditures to, for example:

•Modify operations, including an increase in plugging and abandonment operations;

•Install or upgrade pollution or emissions control equipment;

•Perform site clean ups, including the remediation and reclamation of gas and oil sites;

•Curtail or cease certain operations;

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•Provide financial securities, bonds, and/or take out insurance; or

•Pay fees or fines or make other payments for pollution, discharges to the environment or other breaches of environmental or

health and safety requirements or consent agreements with regulatory agencies.

We cannot predict with any certainty the full impact of any new laws, regulations, or policies on our operations or on the cost or

availability of insurance to cover the risks associated with such operations. The costs of such measures and liabilities related to

potential operational health and safety or environmental risks associated with the Company may increase, which could materially and

adversely affect our business, results of operations, financial condition, cash flows or prospects. In addition, it is not possible to predict

what future operational health and safety or environmental laws and regulations will be enacted or how current or future operational,

health, safety or environmental laws and regulations will be applied or enforced. We may have to incur significant expenditure for the

installation and operation of additional systems and equipment for monitoring and carry out remedial measures in the event that

operational health and, safety and environmental regulations become more stringent or costly reform is implemented by regulators.

Any such expenditure may have a material adverse effect on our business, results of operations, financial condition, cash flows or

prospects. No assurance can be given that compliance with occupational health and safety and environmental laws or regulations in the

regions where we operate will not result in a curtailment of production or a material increase in the cost of production or development

activities.

Heightened attention to sustainability matters may impact our business and financial results.

In recent years, heightened attention has been given to corporate activities related to sustainability matters in public discourse and the

investment community. A number of advocacy groups, both domestically and internationally, have previously campaigned for

governmental and private action to promote change at public companies related to sustainability matters, including through the

investment and voting practices of investment advisers, public pension funds, activist investors, universities and other members of the

investing community. These activities include attention and demands for action related to weather events and promoting the use of

alternative forms of energy. These activities may result in demand shifts for oil and natural gas products and additional governmental

investigations and private litigation against us. In addition, stakeholder views continue to evolve and vary, and our initiatives related to

these matters, which rely on standards for measuring progress that are subject to change, are unlikely to satisfy all stakeholders. Our

failure to comply with evolving investor or customer expectations and standards (which may support or disfavor sustainability

initiatives) or if we are perceived to not have responded appropriately to the growing concern for sustainability issues, regardless of

whether there is a legal requirement to do so, could cause reputational harm to our business, increase our risk of litigation, including as

a result of heightened scrutiny of and challenges to sustainability initiatives and related claims, and could have a material adverse

effect on our results of operation.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings

systems for evaluating companies on their approach to sustainability matters. These ratings are used by some investors to inform their

investment and voting decisions. Unfavorable sustainability ratings may lead to increased negative investor sentiment toward us and

our industry and to the diversion of investment to other companies or industries, which could have a negative impact on our stock

price and our access to and costs of capital. Also, institutional lenders may decide not to provide funding for oil and natural gas

companies based on weather event-related concerns, which could affect our access to capital for potential growth projects.

The U.S. administration, acting through the executive branch and/or in coordination with Congress, could enact or rescind

rules and regulations that may impact our operations.

Governmental, scientific and public concern over the threat of weather events has resulted in increasing political risks in the United

States, including weather event-related commitments and uncertainty expressed by some officials and political candidates who are

now, or may in the future be, in political office.

While our operations are largely not conducted on federal lands, we may in the future consider acquisitions of natural gas and oil

assets located in areas in which the development of such assets would require permits and authorizations to be obtained from or issued

by federal agencies. To conduct these operations, we may be required to file applications for permits, seek agency authorizations and

comply with various other statutory and regulatory requirements. Further, new oil and gas leasing on public lands has been the subject

of recent proposed executive action rescinding weather event-related initiatives and requirements. Complying with these evolving

requirements may adversely affect our ability to conduct operations at the costs and in the time periods anticipated, and may

consequently adversely impact our anticipated returns from our operations.

Any such measures or increased costs could have a material adverse effect on our business, results of operations, financial condition,

cash flows or prospects.

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Our operations are dependent on our compliance with obligations under permits, licenses, contracts and field development

plans.

Our operations must be carried out in accordance with the terms of permits, licenses, operating agreements, annual work programs and

budgets. Fines, penalties, or enforcement actions may be imposed and a permit or license may be suspended or terminated if a permit

or license holder, or party to a related agreement, fails to comply with its obligations under such permit, license or agreement, or fails

to make timely payments of levies and taxes for the licensed activity, or fails to provide the required geological information or meet

other reporting requirements. It may from time to time be difficult to ascertain whether we have complied with obligations under

permits or licenses as the extent of such obligations may be unclear or ambiguous and regulatory authorities in jurisdictions in which

we do business, or in which we may do business in the future, may not be forthcoming with confirmatory statements that work

obligations have been fulfilled, which can lead to further operational uncertainty.

In addition, we and our commercial partners, as applicable, have obligations to operate assets in accordance with specific requirements

under certain licenses and related agreements, field development agreements, laws and regulations. If we or our partners were to fail to

satisfy such obligations with respect to a specific field, the license or related agreements for that field may be suspended, revoked or

terminated. Although we have in the past acquired and may in the future acquire shale assets, a significant source of our natural gas

and crude oil remains conventional wells. In some instances, these conventional wells are located on the same property as

unconventional wells that produce shale oil and gas. In these cases, the rights to access the shale layers of the property will typically

be conditioned on the ongoing productivity of conventional wells on the property. Furthermore, the shale rights may be owned by a

third party, and in such instances, we will enter into a joint use agreement with the third party. This joint use agreement may stipulate

that in consideration for permission to operate the conventional wells, we are to use reasonable efforts to maintain production so that the

third party retains the shale licenses. If we fail to maintain production in the conventional wells, under the joint use agreement, we may

be liable to the third party for replacing the lost land rights. The relevant authorities are typically authorized to, and do from time to time,

inspect to verify compliance by us or our commercial partners, as applicable, with relevant laws and the licenses or the agreements

pursuant to which we conduct our business. There can be no assurance that the views of the relevant government agencies regarding the

development of the fields that we operate or the compliance with the terms of the licenses pursuant to which we conduct such operations

will coincide with our views, which might lead to disagreements that may not be resolved.

The suspension, revocation, withdrawal or termination of any of the permits, licenses or related agreements pursuant to which we may

conduct business, as well as any delays in the continuous development of or production at our fields caused by the issues detailed

above could materially and adversely affect our business, results of operations, financial condition, cash flows or prospects. In

addition, failure to comply with the obligations under the permits, licenses or agreements pursuant to which we conduct business,

whether inadvertent or otherwise, may lead to fines, penalties, restrictions, enforcement actions brought by governmental authorities,

withdrawal of licenses and termination of related agreements.

We do not insure against certain risks and our insurance coverage may not be adequate for covering losses arising from

potential operational hazards and unforeseen interruptions.

We insure our operations in accordance with industry practice and plan to continue to insure the risks we consider appropriate for our

needs and circumstances. However, we may elect not to have insurance for certain risks, due to the high premium costs associated

with insuring those risks or for various other reasons, including an assessment in some cases that the risks are remote.

Our insurance may not be adequate to cover all losses or liabilities we may suffer. We cannot assure that we will be able to obtain

insurance coverage at reasonable rates (or at all), or that any coverage we or the relevant operator obtain, and any proceeds of

insurance, will be adequate and available to cover any claims arising. We may become subject to liability for pollution, blow-outs or

other hazards against which we have not insured or cannot insure, including those in respect of past activities for which we were not

responsible. Any indemnities we may receive from sub-contractors, operators or joint venture partners may be difficult to enforce if

such sub-contractors, operators or joint venture partners lack adequate resources.

Operational insurance policies are usually placed in one year contracts and the insurance market can withdraw cover for certain risks

due to events occurring in other parts of the industry, thus greatly increasing the costs of risk transfer. For example, in September

2018, a gas pipeline operated by another midstream company exploded in Beaver County, Pennsylvania, a state in which we have

operations. The explosion resulted in the destruction of residential property and motor vehicles as well as the evacuation of nearby

households. Catastrophic events such as these may cause the insurance costs for our midstream operations to rise, despite us not being

involved in the catastrophic event. In the event that insurance coverage is not available or our insurance is insufficient to fully cover

any losses, including losses incurred due to lost revenues resulting from third party operations or processing plants, claims and/or

liabilities incurred, or indemnities are difficult to enforce, our business and operations, financial results or financial position may be

disrupted and adversely affected.

The payment by our insurers of any insurance claims may result in increases in the premiums payable by us for our insurance coverage

and could adversely affect our financial performance. In the future, some or all of our insurance coverage may become unavailable or

prohibitively expensive.

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Our internal systems and website may be subject to intentional and unintentional disruption, and our confidential information

may be misappropriated, stolen or misused, which could adversely impact our reputation and future sales.

We have faced, and may in the future continue to face, cyber-attacks and data security breaches. Such cyber-attacks and breaches may

come from criminal hackers, state-sponsored threat actors, industrial espionage or employee malfeasance and are designed to penetrate

our network security or the security of our internal systems, misappropriate proprietary information and/or cause interruptions to our

services. We expect to continue to face similar threats in the future, and cannot guarantee that we will be able to successfully prevent all

future attacks. Such future attacks could include malware, denial-of-service attacks, data breaches, hacking, social engineering or

"phishing", deepfake attacks, computer viruses, employee or insider threats, malfeasance, supply chain attacks, physical breaches,

vendor email compromise, payment fraud and ransomware attacks. If an actual or perceived breach of our network security occurs, it

could adversely affect our business or reputation, and may trigger governmental notice requirements and public disclosure, and expose

us to the loss of information, fines, regulatory actions, sanctions, litigation and possible liability. An actual security breach could also

impair our ability to operate our business and provide products and services to our customers. Additionally, malicious attacks,

including cyber-attacks, may damage our assets, prevent production at our producing assets, cause disruptions in business operations,

lead to injury to people or harm to the environment and otherwise significantly affect corporate activities. For example, we utilize

electronic monitoring of meters and flow rate devices to monitor pressure build-up in our production wells. If there were a cyber-attack

that penetrated our monitoring systems such that they provided false readings, this could result in an unknown pressure build-up,

creating a dangerous situation which could lead to an explosion. As techniques used to obtain unauthorized access to or to sabotage

systems change frequently and may not be known until launched against us or our third-party service providers, we may be unable to

anticipate or implement adequate measures to protect against these attacks and our service providers may likewise be unable to do so.

Additionally, artificial intelligence has contributed to an increase in the number and sophistication of cyber-attacks. As there continue

to be advances in artificial intelligence, threat actors will develop increasingly sophisticated cyber-attack strategies. This may include

the use of artificial intelligence to enhance and automate phishing schemes, advance malware, or carry out cyber-attacks that are more

effective and more difficult to detect or stop. Such an outcome would have a material adverse impact on our business, results of

operations, financial condition, cash flows or prospects.

In addition, confidential or financial payment information that we maintain may be subject to misappropriation, theft and deliberate or

unintentional misuse by current or former employees, third-party contractors or other parties who have had access to such information.

Any such misappropriation and/or misuse of our information could result in the Company, among other things, being in breach of

certain data protection requirements and related legislation as well as incurring liability to third parties. We expect that we will need to

continue closely monitoring the accessibility and use of confidential information in our business, educate our employees and third-

party contractors about the risks and consequences of any misuse of confidential information and, to the extent necessary, pursue legal

or other remedies to enforce our policies and deter future misuse. If our confidential information is misappropriated, stolen or misused

as a result of a disruption to our website or internal systems this could have a material adverse effect on our business, results of

operations, financial condition, cash flows or prospects.

Although we maintain insurance to protect against losses resulting from certain of data protection breaches and cyber-attacks, our

coverage for protecting against such risks may not be sufficient.

Our operations are subject to the risk of litigation.

From time to time, we may be subject, directly or indirectly, to litigation arising out of our operations and the regulatory environments

in our areas of operations. Historically, categories of litigation that we have faced included actions by royalty owners over payment

disputes, personal injury claims and property related claims, including claims over property damage, trespass or nuisance. Although

we currently face no material litigation that is reasonably expected to have an adverse material impact for which we are not

sufficiently indemnified or insured, damages claimed under such litigation in the future may be material or may be indeterminate, and

the outcome of such litigation, if determined adversely to us, could individually or in the aggregate, be reasonably expected to have a

material and adverse effect on our business, financial position or results of operations. While we assess the merits of each lawsuit and

defend ourselves accordingly, we may be required to incur significant expenses or devote significant resources to defend against such

litigation. In addition, the adverse publicity surrounding such claims may have a material adverse effect on our business.

We are subject to certain tax risks.

Tax legislation may be enacted in the future that could negatively impact our current or future tax structure and effective tax rates.

Following the completion of the U.S. Domestication, our public holding company is a U.S. corporation. Accordingly, any changes in

U.S. federal income tax law could negatively impact our effective tax rate and cash flows, which could cause our business, results of

operations, financial condition, cash flows or prospects to be materially adversely affected.

We are subject to income taxes in the United States, and there can be no certainty that the current taxation regime in the United States

or other jurisdictions within which we currently operate or may operate in the future will remain in force or that the current levels of

corporation taxation will remain unchanged. For example, the U.S. government has imposed a minimum tax on corporations and

proposed and may enact significant changes to the taxation of business entities, including, among others, an increase in the U.S.

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federal income tax rate applicable to corporations, like us, and surtaxes on certain types of income. Certain U.S. localities also

maintain a severance tax or impact fee on the removal of oil and natural gas from the ground, and such tax rates may be increased or

new severance taxes or impact fees may be implemented.

Our domestic tax liabilities are subject to the allocation of expenses in differing jurisdictions. Our effective tax rate could be adversely

affected by changes in the mix of earnings and losses in taxing jurisdictions with differing statutory tax rates, certain non-deductible

expenses, the valuation of deferred tax assets and liabilities and changes in federal or state tax laws and accounting principles.

Increases in our effective tax rate could materially affect our net financial results. Although we believe that our income tax liabilities

are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more

uncertain tax positions in any period could have a material adverse effect on our business, results of operations, financial condition,

cash flows or prospects.

In the past, we have been able to offset a large portion of our U.S. federal income tax burden with marginal well tax credits that are

available to qualified producers who operate lower-volume wells during a low commodity pricing environment. There can be no

assurance that there will be no amendment to the existing taxation laws applicable to us, which may have a material adverse effect on

our financial position. Our ability to utilize marginal well tax credits in the United States could be or become subject to limitations (for

example, if we are deemed to undergo an “ownership change” for applicable U.S. federal income tax purposes).

The nature and amount of tax that we expect to pay and the tax attributes expected to be available to us are each dependent upon

several assumptions, any one of which may change and which would, if so changed, affect the nature and amount of tax payable and

tax attributes available.

Risks Relating to Our Common Stock

The expected benefits of the U.S. Domestication may not be realized.

On November 21, 2025, we completed the U.S. Domestication following our Board’s conclusion that the U.S. market is the natural

long term primary listing venue for the Company and that moving to a US primary listing (while retaining a secondary UK listing) is

in the best interests of the business and its stakeholders. We believe that the U.S. Domestication and moving to a U.S. primary listing

will increase access to a broader set of investors, support inclusion in additional stock indices, streamline our corporate structure, and

provide more flexibility in accessing capital and, as a result, will be beneficial to our business and operations, the holders of our

common stock, and other stakeholders. The success of the U.S. Domestication and moving to a U.S. primary listing will depend, in

part, on our ability to realize the anticipated benefits associated with the U.S. Domestication and associated reorganization of our

corporate structure. There can be no assurance that all of the anticipated benefits of the U.S. Domestication and moving to a U.S.

primary listing will be achieved, particularly as the achievement of the benefits are subject to factors that we do not and cannot

control.

We expect to incur additional costs related to the U.S. Domestication, including non-recurring costs as well as recurring costs a

result of financial reporting obligations of being a “domestic issuer” as opposed to a “foreign private issuer” in the United

States.

We will incur additional legal, accounting and other expenses that may exceed the expenses we incurred prior to the U.S.

Domestication. The obligations of being a public company in the U.S. require significant expenditures and will place significant

demands on our management and other personnel, including costs resulting from public company reporting obligations under the

Exchange Act, and the rules and regulations regarding corporate governance practices, including those under the Sarbanes-Oxley Act

of 2002 (the “Sarbanes-Oxley Act”), the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, and the listing

requirements of the New York Stock Exchange (“NYSE”). Additionally, as we are retaining a secondary UK listing, we will also need

to continue to comply with certain UK Listing Rules and certain other applicable requirements.

These rules require that we maintain effective disclosure and financial controls and procedures, internal control over financial

reporting and changes in corporate governance practices, among many other complex rules that are often difficult to monitor and

maintain compliance with. While we were subject to many of these requirements prior to the U.S. Domestication, additional legal and

accounting requirements will apply to us following the U.S. Domestication. Our management and other personnel will need to devote

additional time to ensure compliance with all of these requirements and to keep pace with new regulations, otherwise we may fall out

of compliance and risk becoming subject to litigation or being delisted, among other potential problems.

The requirements of being a public company, including additional rules and regulations that we must comply with now that

we are no longer a foreign private issuer, may strain our resources, divert management’s attention, and affect our ability to

attract and retain executive officers and qualified board members.

We are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and

Consumer Protection Act of 2010, the listing requirements of the NYSE and other applicable securities rules and regulations, as well

as certain UK Listing Rules. Compliance with these rules and regulations has increased our legal and financial compliance costs,

making some activities more difficult, time-consuming, and costly, and has increased demand on our systems and resources. The

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Exchange Act requires, among other things, that we file annual reports with respect to our business and results of operations. The

Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control

over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures and internal control over

financial reporting to meet this standard, significant resources and management oversight is required.

Additionally, as of November 21, 2025, we are no longer a foreign private issuer, and we are required to comply with all of the

provisions applicable to a U.S. domestic issuer under the Exchange Act, including filing an annual report on Form 10-K, quarterly

periodic reports and current reports for certain events, complying with the sections of the Exchange Act regulating the solicitation of

proxies, requiring insiders to file public reports of their share ownership and trading activities and insiders being liable for profit from

trades made in a short period of time. We are also no longer exempt from the requirements of Regulation FD promulgated under the

Exchange Act related to selective disclosures. We are also no longer permitted to follow the UK’s rules in lieu of the corporate

governance obligations imposed by the NYSE, and are required to comply with the governance practices required by U.S. domestic

issuers listed on the NYSE. We are also required to comply with all other rules of the NYSE applicable to U.S. domestic issuers. In

addition, we are required to report our financial results under GAAP, including our historical financial results, which have previously

been prepared in accordance with IFRS.

The regulatory and compliance costs associated with the reporting and governance requirements applicable to U.S. domestic issuers

may be significantly higher than the costs we previously incurred as a foreign private issuer. We expect to continue to incur significant

legal, accounting, insurance and other expenses and to expend greater time and resources to comply with these requirements.

Additionally, as a result of the complexity involved in complying with the rules and regulations applicable to public companies, our

management’s attention may be diverted from other business concerns, which could harm our business, results of operations and

financial condition. In addition, the pressures of operating a public company may divert management’s attention to delivering short-

term results, instead of focusing on long-term strategy. In addition, we may need to develop our reporting and compliance

infrastructure and may face challenges in complying with the new requirements applicable to us. If we fall out of compliance, we risk

becoming subject to litigation or being delisted, among other potential problems.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 1C. Cybersecurity

We face various cybersecurity risks due to the threat and sophistication of cybercrime. A cybersecurity breach, incident, or failure of

our IT systems could disrupt our businesses, put employees or others at risk, result in the disclosure of confidential information,

damage our reputation, and create significant financial and legal exposure for DEC.

Governance

Our Chief Information Security Officer oversees our cybersecurity program. He is responsible for creating and executing the

cybersecurity strategy that is aligned with our technology posture while also accountable for the detection, mitigation and remediation

of cybersecurity incidents. Our Chief Information Security Officer has over 25 years of experience in the oil and gas industry with

numerous leadership positions from digital transformation to cybersecurity at large E&P companies and in consulting. Our

Information Security Management Team, which includes certain members of the Senior Leadership Team including the Chief

Financial Officer, Chief Operating Officer, Chief Information Officer, Head of Internal Audit, Chief Information Security Officer,

Chief Legal and Risk Officer, meets at least once a quarter to discuss cybersecurity issues, risks and strategies.

The Audit Committee of the Board of Directors provides oversight of our cybersecurity risk management efforts, and receives regular

reports from our Information Security Management Team on information security matters, including assessing risks, efforts to

improve our network security systems and enhanced employee trainings. The membership of this committee is adequately trained and

educated to provide proper oversight over the cybersecurity program utilizing the National Institute of Standards and Technology

framework.

Risk Management & Strategy

Our Information Security Management Team engages in robust processes for assessing and overseeing cybersecurity risks. The

Information Security Team uses advanced network security detection with regular threat testing to detect cybersecurity threats and is

responsible for controlling and protecting our confidential information. They are responsible for testing our cybersecurity crisis

management and business continuity teams including conducting tabletop exercises biennially. The Information Security Team

oversees our IT Security Policy, which includes measures to protect against cyber-attacks, and updates it on an annual basis. They also

regularly engage with key technology partners and suppliers to ensure potentially vulnerable systems are identified and secured. In

addition, we have robust mandatory employee training, phishing simulations, and e-learning sessions delivered quarterly by our digital

security team.

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Through the date of this report, there were no cybersecurity incidents that have materially affected or are reasonably likely to

materially affect the Company or our strategy, financial condition, or results of operations. However, the scope and impact of any

future incident cannot be predicted. Refer to Item 1A. Risk Factors of this Annual Report on Form 10-K for more information on our

cybersecurity related risks.

Item 2. Properties

Information regarding our properties is included in Item 1. Business and in Supplemental Natural Gas & Oil Information in Part II.

Item 8.

Item 3. Legal Proceedings

We are a party to various routine legal proceedings, disputes and claims arising in the ordinary course of our business, including those

that arise from interpretation of federal and state laws and regulations affecting the crude oil and natural gas exploration and

development industry, personal injury claims, title disputes, royalty disputes, contract claims, contamination claims relating to crude

oil and natural gas exploration and development and environmental claims, including claims involving assets previously sold to third

parties and no longer part of our current operations. While the ultimate outcome of the pending proceedings, disputes or claims, and

any resulting impact on us, cannot be predicted with certainty, we believe that none of these matters, if ultimately decided adversely,

will have a material adverse effect on our financial condition, results of operations or cash flows.

Disclosure of certain environmental matters is required when a governmental authority is a party to the proceedings and the

proceedings involve potential monetary sanctions that we reasonably believe could exceed a specified threshold. Pursuant to Item 103

of Regulation S-K, we have elected to apply a threshold of $1.0 million for purposes of determining whether disclosure of any such

proceedings is required. Applying this threshold, we are not aware of any such proceedings.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Market and Stockholders

Our common stock is traded on the New York Stock Exchange under the symbol DEC. In the United Kingdom, our common stock is

traded on the London Stock Exchange. As of February 25, 2026, there were 160 holders of record of our common stock.

Equity Compensation Plan Information

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

Repurchases of Common Stock

Following are our monthly share repurchases of common stock for the quarter ended December 31, 2025:

Period	Total Number of Shares<br><br>Purchased(a)	Average Price Paid Per<br><br>Share(a)	Total Number of Shares<br><br>Purchased as Part of<br><br>Publicly Announced Plans<br><br>or Programs	Maximum Number of<br><br>Shares That May Yet Be<br><br>Purchased Under the<br><br>Plans or Programs
October	358,236	$13.86	358,236	4,312,612
November	747,720	$14.16	126,791	4,185,821
December	1,482,842	$14.23	1,415,549	2,770,272
Total	2,588,798	$14.08	1,900,576

(a)Inclusive of shares repurchased by the Employee Benefit Trust (“EBT”). Refer to Note 11 in the Notes to the Consolidated

Financial Statements for additional information.

All repurchases of common stock were made using cash on hand and liquidity at the time of purchase. Our repurchases of common

stock may occur through open market purchases, private transactions, or pursuant to a Rule 10b5-1 trading plan.

At the 2025 Annual General Meeting on April 9, 2025, our stockholders approved a stock repurchase program authorizing the

Company to repurchase up to a maximum of 8,099,015 shares. This stock repurchase program (the “2025 Repurchase Program”)

commenced upon approval and authorized the repurchase of common stock until the conclusion of the 2026 Annual General Meeting

of the Company or June 30, 2026, whichever is earlier.

On February 25, 2026, the Board approved a stock repurchase program (the “2026 Repurchase Program”) authorizing the Company to

repurchase up to 7,800,000 shares, representing approximately 10% of the Company’s issued shares (including those held by the EBT)

as of February 25, 2026. The 2026 Repurchase Program replaces the 2025 Repurchase Program and authorizes the repurchase of

common stock through March 1, 2027. Repurchases of common stock under the program may be made, from time to time, in privately

negotiated transactions, in open market transactions, or by other means, including through trading plans intended to qualify under Rule

10b-18 and/or Rule 10b5-1 of the U.S. Securities Exchange Act of 1934, as amended. The amount and timing of any repurchases

made under the program will be in the Company’s sole discretion and will depend on a variety of factors, including legal

requirements, market conditions, other investment opportunities, available liquidity, and the prevailing market price of the common

stock. The program does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and the

program may be suspended or discontinued at any time at the Company’s discretion.

Dividends

The declaration and payment of dividends are determined by our Board of Directors, subject to applicable laws and contractual

restrictions. While we have a recent history of paying regular quarterly dividends of $0.29 per share, future dividends are not

guaranteed and may vary in amount or be discontinued at any time.

Dividends are waived on shares held in the EBT. Refer to Note 11 in the Notes to the Consolidated Financial Statements for additional

information.

Our ability to pay dividends is subject to certain restrictions under our Credit Facility and other debt agreements. Refer to Note 15 in

the Notes to the Consolidated Financial Statements for additional information.

The payment of future dividends will depend on a number of factors, including our financial condition, results of operations, cash

requirements, and other considerations deemed relevant by the Board of Directors.

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Recent Sales of Unregistered Securities

On March 14, 2025, the Company issued 21,194,213 shares of common stock in connection with its acquisition of Maverick Natural

Resources.

On November 24, 2025, the Company issued 3,718,209 shares of common stock in connection with its acquisition of Canvas Energy

Inc.

The issuance of these shares were made in reliance on the exemption from the registration requirements of the Securities Act of 1933,

as amended, provided by Section 4(a)(2) thereof as a transaction by an issuer not involving a public offering.

Stock Performance Graph

The following graph compares the cumulative Total Shareholder Return (“TSR”) on our common stock with the cumulative total

return of the Russell 3000 Index and the 2025 Self-Constructed Peer Group for the five-year period ended December 31, 2025. The

graph assumes $100 invested on December 31, 2020, in each of our common stock, the Russell 3000 Index, and the 2025 Self-

Constructed Peer Group, and that all dividends were reinvested.

1099511628343

TSR is based on a $100 investment on December 31, 2020 and assumes that dividends were reinvested on the day of issuance.

		2020	2021	2022	2023	2024	2025
Diversified Energy Company, Inc.		$100.00	$93.07	$100.47	$63.18	$76.28	$73.98
Russell 3000 Index		$100.00	$124.00	$98.61	$122.23	$151.47	$174.97
2025 Self-Constructed Peer Group	(a)	$100.00	$160.70	$242.30	$243.23	$336.91	$350.63

(a)The 2025 Self-Constructed Peer Group includes the following companies: BKV Corporation, CNX Resources Corporation,

Gulfport Energy Corporation, Infinity Natural Resources, Inc., Mach Natural Resources LP, Northern Oil and Gas, Inc., Range

Resources Corporation, EQT Corporation, Expand Energy Corporation, Antero Resources Corporation, and Comstock

Resources, Inc.

Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the

Consolidated Financial Statements and the notes thereto included in this report. Unless the context otherwise indicates, references to

“Diversified,” the “Company,” “our,” “we” and “us” (i) for periods until the completion of the U.S. Domestication, refer to

Diversified Energy Company PLC and its consolidated subsidiaries, collectively, and (ii) for periods at or after the completion of the

U.S. Domestication, refer to Diversified Energy Company and its consolidated subsidiaries, collectively. For certain industry specific

terms used in this Annual Report on Form 10-K, please refer to the Glossary of Terms.

In this discussion and analysis of financial condition and results of operations, we address topics such as acquisitions, tax matters,

derivatives, stockholders’ equity, asset retirement obligations, and debt. For more detailed information on these areas, refer to Notes

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3, 4, 8, 11, 13, and 15 within the Notes to the Consolidated Financial Statements. These notes provide comprehensive disclosures and

explanations that support the analysis presented in this section.

Market Conditions

Our business was influenced by a range of external factors in 2025, including commodity price volatility, geopolitical developments,

regulatory changes, and evolving supply and demand dynamics. As a U.S. domestic energy producer focused primarily on natural gas,

we benefited from strong LNG export demand and colder-than-average weather, which supported an average Henry Hub price of

approximately $3.43 per MMBtu for the year. Prices fluctuated from an average high of $4.42 per MMBtu in December to an average

low of $2.84 per MMBtu in October. Year-end inventories were above the five-year average, contributing to price stability despite

ongoing global tensions.

Geopolitical conflicts, such as the Russia-Ukraine war and instability in the Middle East and Venezuela, continued to disrupt global

energy flows and underscored the strategic importance of U.S. energy production and exports. Domestically, policy shifts created a

more favorable operating environment, although new tariffs on imported energy equipment and materials introduced some uncertainty

for the industry. Our vertically integrated model helped insulate us from direct impacts, and our hedging program played a key role in

mitigating commodity price risk and supporting cash flow stability.

We also monitored inflationary pressures and supply chain challenges, which affected operating costs across the industry. Despite

ongoing market volatility and policy uncertainty, we remain focused on optimizing our asset base, managing costs, and enhancing

operational efficiency. Our integrated model and strategic positioning continue to enable us to navigate market fluctuations and

capitalize on long-term opportunities in the natural gas and oil sector.

Results of Operations for the Year Ended December 31, 2025 Compared to the Year Ended December 31,

2024

Production Volumes

	For the Year Ended December 31,
	2025	2024	Change	% Change
Net production
Natural gas (MMcf)	295,723	244,298	51,425	21%
NGLs (MBbls)	8,821	5,980	2,841	48%
Oil (MBbls)	7,935	1,568	6,367	406%
Total production (MMcfe)	396,259	289,586	106,673	37%
Average daily production (MMcfepd)	1,086	791	295	37%
% Natural gas (Mcfe basis)	75%	84%

The increase in production volumes for the year ended December 31, 2025 compared to the year ended December 31, 2024 was

primarily related to the Maverick and Canvas acquisitions in 2025, as well as full year production for Oaktree, Crescent Pass, and East

Texas II acquisitions completed in 2024, partially offset by normal production declines.

Commodity Pricing

Commodity prices fluctuate due to a variety of factors we can neither control nor predict, including increased production in excess of

demand of natural gas, NGLs or oil, weather conditions, political and economic events, and competition from other energy sources.

These factors impact supply and demand, which in turn determine the sales prices for our production. In addition to these factors, the

prices we realize for our production are affected by our derivative activities and commodity trades by non-physical trading entities, as

well as locational differences in market prices, including basis differentials. We will continue to evaluate the commodity price

environment and adjust the pace of our activity in order to maintain appropriate liquidity and financial flexibility.

The following table summarizes our average realized sales prices and benchmark prices for the periods presented:

	For the Year Ended December 31,
	2025	2024	Change	% Change
Average realized sales prices (before derivative settlements)
Natural gas (Mcf)	$2.81	$1.90	$0.91	48%
NGLs (Bbls)	23.57	25.17	(1.60)	(6%)
Oil (Bbls)	63.10	74.71	(11.61)	(16%)
Total (Mcfe)	$3.88	$2.53	$1.35	53%

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	For the Year Ended December 31,
---	---	---	---	---
	2025	2024	Change	% Change
Average realized sales prices (after derivative settlements)
Natural gas (Mcf)	$2.80	$2.57	$0.23	9%
NGLs (Bbls)	23.34	24.32	(0.98)	(4%)
Oil (Bbls)	66.80	69.54	(2.74)	(4%)
Total (Mcfe)	$3.94	$3.05	$0.89	29%
Average benchmark prices
Henry Hub (Mcf)	$3.43	$2.27	$1.16	51%
Mont Belvieu (Bbls)	35.03	38.16	(3.13)	(8%)
WTI (Bbls)	64.81	75.72	(10.91)	(14%)

Commodity Revenue

The following table reconciles the change in commodity revenue (excluding the impact of hedges settled in cash) by reflecting the

effect of changes in volume and in the underlying prices:

(In thousands)	Natural Gas	NGLs	Oil	Total
Commodity revenue for the year ended December 31, 2024	$464,600	$150,513	$117,146	$732,259
Volume increase (decrease)	97,708	71,508	475,679	644,895
Price increase (decrease)	267,939	(14,153)	(92,119)	161,667
Net increase (decrease)	365,647	57,355	383,560	806,562
Commodity revenue for the year ended December 31, 2025	$830,247	$207,868	$500,706	$1,538,821

Commodity revenue of $1,539 million for the year ended December 31, 2025 increased $807 million, or 110%, compared to $732

million for the year ended December 31, 2024. The increase in commodity revenue was primarily related to the 53% increase in

average realized sales prices, excluding the impact of derivatives settled in cash, and the 37% increase in sold volumes primarily due

to acquisitions as discussed above.

Commodity Derivatives

To manage our cash flows in a volatile commodity price environment, we utilize derivative hedging contracts that allow us to fix the

per unit sales prices for our production. As of December 31, 2025, approximately 80% of our production was fixed through derivative

hedging contracts over the next twelve months. The tables below set forth the commodity hedge impact on commodity revenue,

excluding and including cash received for commodity hedge settlements:

(In thousands, except per unit<br><br>data)	For the Year Ended December 31, 2025
	Natural Gas		NGLs		Oil		Total Commodity
	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
		per Mcf		per Bbl		per Bbl		per Mcfe
Excluding hedge impact	$830,247	$2.81	$207,868	$23.57	$500,706	$63.10	$1,538,821	$3.88
Commodity hedge impact	(3,683)	(0.01)	(1,998)	(0.23)	29,390	3.70	23,709	0.06
Including hedge impact	$826,564	$2.80	$205,870	$23.34	$530,096	$66.80	$1,562,530	$3.94	(In thousands, except per unit<br><br>data)	For the Year Ended December 31, 2024
---	---	---	---	---	---	---	---	---
	Natural Gas		NGLs		Oil		Total Commodity
	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
		per Mcf		per Bbl		per Bbl		per Mcfe
Excluding hedge impact	$464,600	$1.90	$150,513	$25.17	$117,146	$74.71	$732,259	$2.53
Commodity hedge impact	164,452	0.67	(5,055)	(0.85)	(8,108)	(5.17)	151,289	0.52
Including hedge impact	$629,052	$2.57	$145,458	$24.32	$109,038	$69.54	$883,548	$3.05

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Gain (Loss) on Derivatives

The table below sets forth the impact of settlements and fair value adjustments on derivatives for the periods presented:

	For the Year Ended December 31,
(In thousands)	2025	2024	$ Change	% Change
Net gain (loss) on commodity derivatives settlements	$23,709	$151,289	$(127,580)	(84%)
Net gain (loss) on interest rate swaps	135	190	(55)	(29%)
Total gain (loss) on settled derivatives(a)	$23,844	$151,479	$(127,635)	(84%)
Gain (loss) on fair value adjustments of unsettled derivatives(b)	193,843	(189,030)	382,873	(203%)
Total gain (loss) on derivatives	$217,687	$(37,551)	$255,238	(680%)

(a)Represents the cash settlement of derivatives that settled during the period.

(b)Represents the change in fair value of derivatives net of removing the carrying value of derivatives that settled during the period.

The change in this metric was primarily related to an increase in the value of unsettled derivatives, which had a gain of $194 million in

2025 compared to a loss of $189 million in 2024, a change of $383 million, as a result of decreases along the forward commodity

curve. This change was partially offset by a $128 million decrease in gains on settled derivatives as a result of increased commodity

pricing.

Operating Expenses

	For the Year Ended December 31,
(In thousands, except per unit data)	2025	Per<br><br>Mcfe	2024	Per<br><br>Mcfe	Total Change		Per Mcfe<br><br>Change
Lease operating expenses	$457,593	$1.15	$231,651	$0.80	$225,942	98%	$0.35	44%
Production taxes	86,709	0.22	36,043	0.12	50,666	141%	0.10	83%
Midstream operating expenses	79,185	0.20	72,098	0.25	7,087	10%	(0.05)	(20%)
Transportation expenses	115,267	0.29	90,461	0.31	24,806	27%	(0.02)	(6%)
Accretion of asset retirement obligation	48,607	0.12	28,464	0.10	20,143	71%	0.02	20%
General and administrative expense	167,626	0.42	129,745	0.45	37,881	29%	(0.03)	(7%)
Depreciation, depletion and amortization	412,506	1.04	291,995	1.01	120,511	41%	0.03	3%
(Gain) loss on oil and gas property and equipment	(73,368)	(0.19)	(26,069)	(0.09)	(47,299)	181%	(0.10)	111%
Total operating expenses	1,294,125	3.25	854,388	2.95	439,737	51%	0.30	10%

Lease Operating Expense (“LOE”): LOE includes costs incurred to maintain producing properties. Such costs include direct and

contract labor, repairs and maintenance, water hauling, compression, automobile, insurance, and materials and supplies expenses.

The increase in LOE was driven by the acquisitions of Maverick and Canvas. Specifically, the increase in LOE per Mcfe was

primarily related to a greater exposure to liquids production. Areas with higher liquids output tend to incur elevated operating costs,

although they also benefit from higher realized prices. In 2025, the Company’s liquids production grew by 122% compared to 2024,

primarily driven by the acquisitions of Maverick and Canvas.

Production Taxes: Production taxes include severance and property taxes. Severance taxes are generally paid on produced natural

gas, NGLs and oil production at fixed rates established by federal, state, or local taxing authorities. Property taxes are generally

based on the taxing jurisdictions’ valuation of our natural gas and oil properties and midstream assets.

The increase in production taxes and production taxes per Mcfe was primarily related to an increase in severance and property taxes as

a result of an increase in revenue due to higher commodity prices and the additional value of added oil revenue, as well as additional

property taxes on assets acquired during the year.

Midstream Operating Expense: Midstream operating expenses are costs incurred to operate our owned midstream assets inclusive of

employee and benefit expenses.

The decrease in midstream operating expense per Mcfe was primarily related to maintaining a consistent level of midstream assets

while increasing overall production in 2025, following the acquisitions of Summit, Maverick, and Canvas. By keeping midstream

operations relatively unchanged and expanding production volumes, the per unit cost of midstream operations declined.

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Transportation Expense: Transportation expenses are costs incurred from third-party systems to gather, process and transport our

natural gas, NGLs and oil.

The increase in transportation expense was driven by the acquisitions of Maverick and Canvas. The decrease in transportation expense

per Mcfe was primarily related to additional liquids production. Transportation costs are primarily associated with the movement of

natural gas volumes. Following the acquisitions of Maverick and Canvas, the proportion of liquids in the Company’s overall

production mix has risen significantly. Specifically, the liquids share increased to 25% in 2025 from 16% in 2024.

Accretion of Asset Retirement Obligation (“Accretion”): Accretion represents the change in the carrying amount of the asset

retirement obligation (“ARO”) over time. This expense reflects the gradual recognition of the future costs associated with retiring

natural gas and oil wells.

The increase in accretion was primarily related to the expanded obligation as a result of the Summit, Maverick, and Canvas

acquisitions during 2025, as well as normal revisions.

General & Administrative Expense (“G&A”): G&A includes overhead, including payroll and benefits for our corporate staff, costs of

maintaining our headquarters, costs of managing our operations, franchise taxes, audit and other professional fees, legal compliance,

equity compensation, and non-recurring costs primarily related to acquisitions.

The increase in G&A was the result of the increase in scale, including increased headcount, due to the Summit, Maverick, and Canvas

acquisitions. The decrease in G&A per Mcfe was primarily related to recognizing administrative synergies and leveraging our existing

infrastructure, which offset the acquisition-related increases.

Depreciation, Depletion & Amortization Expense (“DD&A”): DD&A expenses are non-cash charges that allocate the cost of assets

and natural resources over their useful lives, reflecting their wear and tear, usage, or consumption.

The increase in DD&A was primarily related to an increase in our DD&A rate, as well as a 37% increase in production over the

period. The increase in production and the DD&A rate was due to the Summit, Maverick, and Canvas acquisitions, as these led to an

increase in our depreciable base.

Gain (Loss) on Natural Gas and Oil Properties and Equipment: Gains and (losses) on natural gas and oil properties and equipment

represent the difference between cash proceeds and recorded basis of sales of natural gas and oil properties and equipment.

The increase in this metric was primarily related to increased acreage sales, as we strategically pursue the divestiture of select non-

core, undeveloped acreage within our operating portfolio. In 2025, we recognized a gain of $95 million from acreage sales compared

to $27 million in 2024. Additionally, the disposal of various property, plant and equipment in the normal course of business resulted in

a loss on natural gas and oil properties and equipment of $22 million in 2025, compared to $0.9 million in 2024.

Other Income (Expense)

	For the Year Ended December 31,
(In thousands)	2025	2024	$ Change	% Change
Interest expense	$(209,967)	$(136,801)	$(73,166)	53%
Loss on debt extinguishment	(26,971)	(16,377)	(10,594)	65%
Other income (expense)	3,270	2,338	932	40%
Total other income (expense)	$(233,668)	$(150,840)	$(82,828)	55%

Interest Expense

	For the Year Ended December 31,
(In thousands)	2025	2024	$ Change	% Change
Interest incurred
Borrowings	$216,132	$138,829	$77,303	56%
Other	1,432	554	878	158%
Total interest incurred	217,564	139,383	78,181	56%
LESS: Capitalized interest	7,597	2,582	5,015	194%
Interest expense	$209,967	$136,801	$73,166	53%

The increase in interest expense was primarily related to the issuance of the ABS X Notes, the assumption of the Maverick ABS Notes

as a result of the Maverick acquisition, the issuance of the Nordic Bonds, and the issuance of the ABS XI Notes in connection with the

Canvas acquisition. The increase was partially offset by lower outstanding balances on our existing ABS structures.

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As of December 31, 2025 and 2024, total borrowings were $3.0 billion and $1.7 billion, respectively. For the year ended

December 31, 2025, the weighted average interest rate on borrowings was 7.61% compared to 7.37% for the year ended December 31,

As of December 31, 2025, 73% of our borrowings resided in non-recourse, fixed-rate, hedge-protected, amortizing structures

compared to 83% as of December 31, 2024.

Loss on Debt Extinguishment

In February 2025, the proceeds from the ABS X Notes were used to repay the outstanding principal of the ABS I & II Notes and Term

Loan I, retiring these from our outstanding debt and resulting in a loss on debt extinguishment of $27 million. In 2024, the loss on debt

extinguishment was primarily driven by the use of proceeds from the ABS VIII Notes to repay the outstanding principal of the ABS

III & V Notes, retiring these from our outstanding debt and resulting in a loss on debt extinguishment of $11 million.

Income Tax Benefit (Expense)

The differences between the statutory U.S. federal income tax rate and the effective tax rates are summarized as follows:

	For the Year Ended December 31,
(in thousands)	2025		2024
U.S. federal statutory tax rates	$(63,283)	21.0%	$52,067	21.0%
State and local income tax, net of federal (national) income tax effect	(12,558)	4.2%	9,201	3.7%
Foreign tax effects
Statutory tax rate difference between United Kingdom and United States	(3,586)	1.2%	(3,109)	(1.3)%
Equity in earnings of foreign subsidiary	(18,825)	6.2%	(16,324)	(6.6)%
Nontaxable dividend income	25,777	(8.6)%	21,681	8.7%
Other foreign tax effects	(2,408)	0.8%	(2,432)	(1.0)%
Tax credits
Marginal well credits	106,319	(35.3)%	91,831	37.0%
Nontaxable or nondeductible items
Other nondeductible items	(244)	0.1%	(906)	(0.3)%
Other adjustments
Other adjustments to deferred taxes	9,358	(3.1)%	(7,164)	(2.8)%
Income tax benefit (expense) / Effective tax rate(a)	$40,550	(13.5)%	$144,845	58.4%

(a)The impact and the presentation of the federal tax credits on our effective tax rate can be positive or negative based on the

Company’s annual pre-tax income or loss.

The effective tax rates for the years ended December 31, 2025 and 2024 were (13.5%) and 58.4%, respectively. The effective tax rates

can be materially impacted by the recognition of the marginal well tax credit available to qualified producers as reflected in our 2025

effective tax rate. The federal government provides these credits to incentivize companies to continue operating lower-output wells

during periods of low prices. This support helps sustain production, preserve the jobs associated with these operations, and ensures

that communities continue to receive state and local tax income. Such revenue is vital for funding schools, law enforcement, social

initiatives, and other essential public services.

State and local income taxes are more than 50% comprised of Oklahoma and West Virginia.

The provision for income taxes in the Consolidated Statement of Operations is summarized below:

	For the Year Ended December 31,
(In thousands)	2025	2024	$ Change	% Change
Income (loss) before taxation	$301,349	$(247,938)	$549,287	(222%)
Effective tax rate	(13.5%)	58.4%
Income tax benefit (expense)	$40,550	$144,845	$(104,295)	(72%)

Tax benefit of $41 million for the year ended December 31, 2025 decreased $104 million, or 72%, compared to a benefit of $145

million for the year ended December 31, 2024. The change in this metric was primarily related to the change in the income or loss

before taxation and a change in the effective tax rate.

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Results of Operations for the Year Ended December 31, 2024 Compared to the Year Ended December 31,

2023

Production Volumes

	For the Year Ended December 31,
	2024	2023	Change	% Change
Net production
Natural gas (MMcf)	244,298	256,378	(12,080)	(5%)
NGLs (MBbls)	5,980	5,832	148	3%
Oil (MBbls)	1,568	1,377	191	14%
Total production (MMcfe)	289,586	299,632	(10,046)	(3%)
Average daily production (MMcfepd)	791	821	(30)	(4%)
% Natural gas (Mcfe basis)	84%	86%

The decrease in production volumes for the year ended December 31, 2024 compared to the year ended December 31, 2023 was

primarily related to the sale of our equity interest in DP Lion Equity Holdco in December 2023 along with normal declines partially

offset by increased production as a result of the Oaktree, Crescent Pass, and East Texas II acquisitions in 2024.

Commodity Pricing

The following table summarizes our average realized sales prices and benchmark prices for the periods presented:

	For the Year Ended December 31,
	2024	2023	$ Change	% Change
Average realized sales prices (before derivative settlements)
Natural gas (Mcf)	$1.90	$2.17	$(0.27)	(12%)
NGLs (Bbls)	25.17	24.23	0.94	4%
Oil (Bbls)	74.71	75.46	(0.75)	(1%)
Total (Mcfe)	$2.53	$2.68	$(0.15)	(6%)
Average realized sales prices (after derivative settlements)
Natural gas (Mcf)	$2.57	$2.86	$(0.29)	(10%)
NGLs (Bbls)	24.32	26.05	(1.73)	(7%)
Oil (Bbls)	69.54	68.44	1.10	2%
Total (Mcfe)	$3.05	$3.27	$(0.22)	(7%)
Average benchmark prices
Henry Hub (Mcf)	$2.27	$2.74	$(0.47)	(17%)
Mont Belvieu (Bbls)	38.16	34.11	4.05	12%
WTI (Bbls)	75.72	77.62	(1.90)	(2%)

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Commodity Revenue

The following table reconciles the change in commodity revenue (excluding the impact of derivatives settled in cash) by reflecting the

effect of changes in volume and in the underlying prices:

(In thousands)	Natural Gas	NGLs	Oil	Total
Commodity revenue for the year ended December 31, 2023	$557,167	$141,321	$103,911	$802,399
Volume increase (decrease)	(26,214)	3,586	14,413	(8,215)
Price increase (decrease)	(66,353)	5,606	(1,178)	(61,925)
Net increase (decrease)	(92,567)	9,192	13,235	(70,140)
Commodity revenue for the year ended December 31, 2024	$464,600	$150,513	$117,146	$732,259

Commodity revenue of $732 million for the year ended December 31, 2024 decreased $70 million, or 9%, compared to $802 million

for the year ended December 31, 2023. The decrease in commodity revenue was primarily related to the 6% decrease in average

realized sales prices, excluding the impact of derivatives settled in cash, and the 3% decrease in sold volumes.

Commodity Derivatives

As of December 31, 2024, approximately 86% of our production was fixed through derivative hedging contracts over the next twelve

months. The tables below set forth the commodity derivative impact on commodity revenue, excluding and including cash received for

commodity derivative settlements:

	For the Year Ended December 31, 2024
	Natural Gas		NGLs		Oil		Total Commodity
(In thousands, except per unit<br><br>data)	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
		per Mcf		per Bbl		per Bbl		per Mcfe
Excluding hedge impact	$464,600	$1.90	$150,513	$25.17	$117,146	$74.71	$732,259	$2.53
Commodity hedge impact	164,452	0.67	(5,055)	(0.85)	(8,108)	(5.17)	151,289	0.52
Including hedge impact	$629,052	$2.57	$145,458	$24.32	$109,038	$69.54	$883,548	$3.05	For the Year Ended December 31, 2023
---	---	---	---	---	---	---	---	---
	Natural Gas		NGLs		Oil		Total Commodity
(In thousands, except per unit<br><br>data)	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $	Revenue	Realized $
		per Mcf		per Bbl		per Bbl		per Mcfe
Excluding hedge impact	$557,167	$2.17	$141,321	$24.23	$103,911	$75.46	$802,399	$2.68
Commodity hedge impact	177,139	0.69	10,594	1.82	(9,669)	(7.02)	178,064	0.59
Including hedge impact	$734,306	$2.86	$151,915	$26.05	$94,242	$68.44	$980,463	$3.27

Gain (Loss) on Derivatives

The table below sets for the impact of settlements and fair value adjustments on derivatives for the periods presented:

	For the Year Ended December 31,
(In thousands)	2024	2023	$ Change	% Change
Net gain (loss) on commodity derivatives settlements	$151,289	$178,064	$(26,775)	(15%)
Net gain (loss) on interest rate swaps	190	(2,722)	2,912	(107%)
Gain (loss) on foreign currency hedges	—	(521)	521	(100%)
Total gain (loss) on settled derivatives(a)	$151,479	$174,821	$(23,342)	(13%)
Gain (loss) on fair value adjustments of unsettled derivatives(b)	(189,030)	905,695	(1,094,725)	(121%)
Total gain (loss) on derivatives	$(37,551)	$1,080,516	$(1,118,067)	(103%)

(a)Represents the cash settlement of derivatives that settled during the period.

(b)Represents the change in fair value of derivatives net of removing the carrying value of derivatives that settled during the period.

The change in this metric was primarily related to losses of $189 million stemming from fair value adjustments on unsettled

derivatives, which were influenced by an increase along the forward commodity curve. The losses were offset by $151 million in gains

Table of Contents	Form 10-K	Diversified Energy Company

incurred from settled derivative contracts, as commodity market prices dropped below the predetermined thresholds set in our

derivative arrangements.

Operating Expenses

	For the Year Ended December 31,
(In thousands, except per unit data)	2024	Per<br><br>Mcfe	2023	Per<br><br>Mcfe	Total Change		Per Mcfe<br><br>Change
Lease operating expenses	$231,651	$0.80	$213,078	$0.71	$18,573	9%	$0.09	13%
Production taxes	36,043	0.12	61,474	0.21	(25,431)	(41%)	(0.09)	(43%)
Midstream operating expenses	72,098	0.25	71,307	0.24	791	1%	0.01	4%
Transportation expenses	90,461	0.31	96,218	0.32	(5,757)	(6%)	(0.01)	(3%)
Accretion of asset retirement obligation	28,464	0.10	23,903	0.08	4,561	19%	0.02	25%
General and administrative expense	129,745	0.45	128,626	0.43	1,119	1%	0.02	5%
Depreciation, depletion and amortization	291,995	1.01	273,316	0.91	18,679	7%	0.10	11%
(Gain) loss on oil and gas property and equipment	(26,069)	(0.09)	(28,124)	(0.09)	2,055	(7%)	—	—%
Total operating expenses	$854,388	$2.95	$839,798	$2.81	$14,590	2%	$0.14	5%

Lease Operating Expense (“LOE”): LOE includes costs incurred to maintain producing properties. Such costs include direct and

contract labor, repairs and maintenance, water hauling, compression, automobile, insurance, and materials and supplies expenses.

The increase in LOE per Mcfe was primarily related to the Oaktree, Crescent Pass, and East Texas II acquisitions in 2024.

Specifically, these acquisitions resulted in a greater exposure to liquids production, which tend to incur elevated operating costs.

Production Taxes: Production taxes include severance and property taxes. Severance taxes are generally paid on produced natural

gas, NGLs and oil production at fixed rates established by federal, state, or local taxing authorities. Property taxes are generally

based on the taxing jurisdictions’ valuation of our natural gas and oil properties and midstream assets.

The decrease in production taxes per Mcfe was primarily related to a decrease in severance and property taxes as a result of a decrease

in revenue due to lower production and commodity prices, as well as lower valuations for property taxes experienced during the year.

Midstream Operating Expense: Midstream operating expenses are costs incurred to operate our owned midstream assets inclusive of

employee and benefit expenses.

The increase in midstream operating expense per Mcfe was primarily related to growth in our midstream operations due to Central

Region expansion through the acquisitions of Oaktree, Crescent Pass, and East Texas II.

Transportation Expense: Transportation expenses are costs incurred from third-party systems to gather, process and transport our

natural gas, NGLs and oil.

The decrease in transportation expense per Mcfe was primarily related to decreases in commodity price-linked components of third-

party midstream rates and costs.

Accretion of Asset Retirement Obligation (“Accretion”): Accretion represents the change in the carrying amount of the asset

retirement obligation (“ARO”) over time. This expense reflects the gradual recognition of the future costs associated with retiring

natural gas and oil wells.

The increase in accretion was primarily related to the inclusion of assets from the Oaktree, Crescent Pass, and East Texas II

acquisitions, along with normal declines in production from mature wells.

General & Administrative Expense (“G&A”): G&A includes overhead, including payroll and benefits for our corporate staff, costs of

maintaining our headquarters, costs of managing our operations, franchise taxes, audit and other professional fees, legal compliance,

equity compensation, and non-recurring costs primarily related to acquisitions.

The increase in G&A per MCFe was primarily related to additional administrative costs and professional services to support our

ongoing growth through acquisitions. Additionally, we also experienced increased costs associated with litigation expense. These

increases were partially offset by a reduction in legal and consulting services.

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Depreciation, Depletion & Amortization Expense (“DD&A”): DD&A expenses are non-cash charges that allocate the cost of assets

and natural resources over their useful lives, reflecting their wear and tear, usage, or consumption.

The increase in DD&A was primarily related to an increase in our DD&A rate, which was partially offset by a 3% decrease in

production over the period. The increase in our DD&A rate was due to the decrease in our estimated proved reserves relative to our

depreciable base, driven primarily by changes in commodity prices year-over-year as well as the sale of equity interest in DP Lion

Equity Holdco LLC in December 2023. The decrease in proved reserves was partially offset by the acquisition of the Oaktree,

Crescent Pass, and East Texas II assets in 2024.

Gain (Loss) on Natural Gas and Oil Properties and Equipment: Gains and (losses) on natural gas and oil properties and equipment

represents the difference between cash proceeds and recorded basis of sales of natural gas and oil properties and equipment.

The change in this metric was primarily related to non-core acreage and asset sales. In 2024, we recognized a gain of $27 million from

acreage sales compared to $24 million in 2023. This increase was offset by the disposal of various property, plant and equipment in

the normal course of business, which resulted in a loss on natural gas and oil properties and equipment of $0.9 million in 2024,

compared to a gain of $4.6 million in 2023.

Other Income (Expense)

	For the Year Ended December 31,
(In thousands)	2024	2023	$ Change	% Change
Gain (loss) on sale of equity interest	—	11,065	(11,065)	(100%)
Interest expense	(136,801)	(130,859)	(5,942)	5%
Loss on debt extinguishment	(16,377)	—	(16,377)	100%
Other income (expense)	2,338	385	1,953	507%
Total other income (expense)	$(150,840)	$(119,409)	$(31,431)	26%

Gain (Loss) on Sale of Equity Interest

The change in this metric is related to the divestiture of 80% of the equity ownership in DP Lion Equity Holdco LLC to outside

investors, which generated cash proceeds of $30 million. The consideration exceeded the fair value of the Company’s portion of the

assets and liabilities divested resulting in a gain on sale of the equity interest of $11 million.

Interest Expense

	For the Year Ended December 31,
(In thousands)	2024	2023	$ Change	% Change
Interest incurred
Borrowings	$138,829	$133,142	$5,687	4%
Other	554	606	(52)	(9%)
Total interest incurred	139,383	133,748	5,635	4%
LESS: Capitalized interest	2,582	2,889	(307)	(11%)
Interest expense	$136,801	$130,859	$5,942	5%

The increase in interest expense was primarily related to interest on the new ABS IX Notes, Oaktree Seller’s Note, and Term Loan II.

The increase was partially offset by lower outstanding balances on our existing ABS structures.

As of December 31, 2024 and 2023, total borrowings were $1.7 billion and $1.3 billion, respectively. For the year ended

December 31, 2024, the weighted average interest rate on borrowings was 7.37% compared to 6.03% for the year ended December 31,

As of December 31, 2024, 83% of our borrowings resided in fixed-rate, hedge-protected, amortizing structures compared to

87% as of December 31, 2023.

Loss on Debt Extinguishment

The change in this metric was primarily related to losses recognized on the early retirement of debt in 2024. During the year, we

repaid the ABS III and ABS V notes using proceeds from new ABS VIII issuance, resulting in a loss of $10.6 million. We also repaid

the ABS Facility Warehouse Notes using proceeds from the ABS IX issuance, resulting in a loss of $1.6 million. Additionally, the

amendment and expansion of Term Loan II led to a further loss of $2.5 million. The amendment to the Credit Facility also resulted in

a loss of $1.6 million

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Other Income (Expense)

The change in this metric was primarily related to $1.1 million in dividend distributions received from our investment in DP Lion

Equity Holdco during 2024, whereas no such distributions were received in 2023.

Income Tax Benefit (Expense)

The differences between the statutory U.S. federal income tax rate and the effective tax rates are summarized as follows:

For the Year Ended December 31,
(in thousands)	2024		2023
U.S. federal statutory tax rates	$52,067	21.0%	$(207,810)	21.0%
State and local income tax, net of federal (national) income tax effect	9,201	3.7%	(29,698)	3.0%
Foreign tax effects
Statutory tax rate difference between United Kingdom and United States	(3,109)	(1.3)%	(3,270)	0.3%
Equity in earnings of foreign subsidiary	(16,324)	(6.6)%	(27,241)	2.8%
Nontaxable dividend income	21,681	8.7%	32,357	(3.3)%
Tax credits
Marginal well credits	91,831	37.0%	—	—%
Changes in valuation allowances	—	—%	1,504	(0.2)%
Nontaxable or nondeductible items
Other nondeductible items	(906)	(0.3)%	(2,039)	0.3%
Other adjustments
Other adjustments to deferred taxes	(7,164)	(2.8)%	(1,282)	0.1%
Income tax benefit (expense) / Effective tax rate(a)	$144,845	58.4%	$(239,184)	24.2%

(a)The impact and the presentation of the federal tax credits on our effective tax rate can be positive or negative based on the

Company’s annual pre-tax income or loss.

The effective tax rates for the years ended December 31, 2024 and 2023 were 58.4% and 24.2%, respectively. The effective tax rate

can be materially impacted by the recognition of the marginal well tax credit available to qualified producers as reflected in our 2024

effective tax rate. A marginal well tax credit was not available for the 2023 tax year. The federal government provides these credits to

incentivize companies to continue operating lower-output wells during periods of low prices. This support helps sustain production,

preserve the jobs associated with these operations, and ensures that communities continue to receive state and local tax income. Such

revenue is vital for funding schools, law enforcement, social initiatives, and other essential public services.

State and local income taxes are more than 50% comprised of Oklahoma and West Virginia.

The provision for income taxes in the Consolidated Statement of Operations is summarized below:

	For the Year Ended December 31,
(In thousands)	2024	2023	$ Change	% Change
Income (loss) before taxation	$(247,938)	$989,573	$(1,237,511)	(125%)
Effective tax rate	58.4%	24.2%
Income tax benefit (expense)	$144,845	$(239,184)	$384,029	(161%)

Tax benefit of $145 million for the year ended December 31, 2024 changed $384 million, or 161%, compared to an expense of $239

million for the year ended December 31, 2024. The change in this metric was primarily related to the change in the income or loss

before taxation and a change in the effective tax rate.

Liquidity and Capital Resources

Overview

Our primary sources of liquidity are cash generated from operating activities and available capacity under our Credit Facility. As of

December 31, 2025, we had approximately $335 million of liquidity, consisting of $30 million of cash on hand and $305 million of

availability under our Credit Facility. As of February 25, 2026 we had approximately $577 million of liquidity, consisting of $31

million of cash on hand and $546 million of availability under our Credit Facility.

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When we acquire assets, we typically complement our Credit Facility with long-term, fixed-rate, fully-amortizing, asset-backed debt

secured by certain natural gas and oil assets. The asset-backed debt is non-recourse back to the Company. This financing strategy

aligns with the long-life nature of our assets, offering us lower borrowing rates and a clear path to reduce leverage through scheduled

principal payments. For larger acquisitions that require greater capital outlays, we have in the past and may in the future raise funds

through equity offerings to maintain an appropriate leverage profile.

We closely monitor our working capital to ensure it remains sufficient for business operations, as well as for payment of dividends to

shareholders and repurchases of common stock. Alongside managing working capital, we take a disciplined approach to controlling

operating costs and allocating capital resources. This approach ensures that capital investments generate returns that support our

strategic initiatives.

Capital expenditures were $185 million for the year ended December 31, 2025, compared to $52 million for the year ended

December 31, 2024. The increase in capital expenditures was primarily related to the development of new wells via a non-operated

development agreement that came with the undeveloped locations acquired in the Maverick acquisition. We expect to meet our capital

expenditure needs for the foreseeable future from our operating cash flows and our existing cash and cash equivalents. Our future

capital requirements will depend on several factors, including the pace of our growth, fluctuations in commodity prices, and future

acquisitions.

The majority of our capital expenditures are directed towards upstream and midstream operations, including pipelines and

compression. The remaining expenditures focus on production optimization, technology, plugging requirements, fleet, reducing

emissions, and, when prudent, development activities aimed at replacing production. Our strategy to acquire and operate mature wells

with shallow decline rates allows us to avoid the large capital expenditures associated with drilling and completion activities of

development focused companies.

Looking ahead, we aim to create stable cash flows by maintaining our hedging strategy and capitalizing on market opportunities to

enhance the hedged commodity prices of our production. We plan to preserve our strategic advantages through purposeful growth,

supported by a disciplined capital expenditure program. We believe this approach will help ensure we secure low-cost financing for

acquisitive growth while maintaining appropriate leverage and sufficient liquidity.

With respect to other known current obligations, we believe that our sources of liquidity and capital resources will be sufficient to

meet our existing business needs for at least the next 12 months. However, our ability to satisfy our working capital requirements, debt

service obligations, and planned capital expenditures will depend upon our future operating performance, which will be affected by

prevailing economic conditions in the natural gas and oil industry and other financial and business factors, some of which are beyond

our control.

Liquidity

	As of December 31,
(In thousands)	2025	2024	2023
Cash and cash equivalents	$29,697	$5,990	$3,753
Available borrowings under the Credit Facility(a)	304,912	86,690	134,817
Liquidity	$334,609	$92,680	$138,570

(a)Represents available borrowings under the Credit Facility of $340 million as of December 31, 2025 less outstanding letters of

credit of $35 million as of such date. Represents available borrowings under the Credit Facility of $101 million as of

December 31, 2024 less outstanding letters of credit of $14 million as of such date. Represents available borrowings under the

Credit Facility of $146 million as of December 31, 2023 less outstanding letters of credit of $11 million as of such date.

Debt

As of December 31, 2025, 2024, and 2023, we had $3.0 billion, $1.7 billion and $1.3 billion in total debt outstanding, respectively.

Asset Retirement Obligations

As of December 31, 2025, 2024, and 2023, we had $864 million, $619 million and $463 million in total asset retirement obligations on

a discounted basis, respectively.

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Cash Flows

	For the Year Ended December 31,
(In thousands)	2025	2024	$ Change	% Change
Net cash provided by operating activities	$464,619	$220,650	$243,969	111%
Net cash (used in) investing activities	(820,168)	(266,762)	(553,406)	207%
Net cash provided by financing activities	448,400	58,366	390,034	668%
Net change in cash, cash equivalents and restricted cash	$92,851	$12,254	$80,597	658%

Net Cash Provided by Operating Activities

The change in net cash provided by operating activities was primarily related to an increase in production, as a result of current year

acquisitions, and higher prices for the natural gas, NGL, and oil volumes sold.

Net Cash (Used in) Investing Activities

The change in net cash used in investing activities was primarily related to the acquisitions of Summit, Maverick, and Canvas in the

current year, in addition to increased drilling capital spend related to participating in the development of certain non-operated wells

acquired with Maverick. These increases were partially offset by increased cash proceeds from the sale of undeveloped acreage.

Net Cash Provided by Financing Activities

The increase in net cash provided by financing activities was primarily related to an increase in ABS activity during the year,

associated with both acquisitions and refinancings, as well as proceeds from the April Nordic Bonds issuance and the February equity

issuance. These increases were partially offset by cash outflows related to hedge modifications associated with the ABS refinancings.

	For the Year Ended December 31,
(In thousands)	2024	2023	$ Change	% Change
Net cash provided by operating activities	$220,650	$291,431	$(70,781)	(24%)
Net cash (used in) investing activities	(266,762)	(246,714)	(20,048)	8%
Net cash provided by (used in) financing activities	58,366	(67,440)	125,806	187%
Net change in cash, cash equivalents and restricted cash	$12,254	$(22,723)	$34,977	154%

Net Cash Provided by Operating Activities

The change in net cash provided by operating activities was primarily related to lower prices for the natural gas, NGL, and oil volumes

sold.

Net Cash (Used in) Investing Activities

The change in net cash used in investing activities was primarily related to a net increase in cash outflows for acquisitions, divestitures

and disposal activity, which was partially offset by a decrease in cash outflows for capital expenditures, due to decreased development

activity in 2024.

Net Cash Provided by (Used in) Financing Activities

The increase in net cash provided by (used in) financing activities was primarily related to an increase in ABS activity during the year,

associated with both acquisitions and refinancings, which provided net proceeds. Also contributing to the increase was a reduction in

dividends paid in 2024. Partially offsetting these increases was a decrease in equity proceeds as a result of the 2023 equity issuance.

Off-Balance Sheet Arrangements

We may enter into off-balance sheet arrangements and transactions that give rise to material off-balance sheet obligations. As of

December 31, 2025 and December 31, 2024, our material off-balance sheet arrangements and transactions include operating service

arrangements of $371 million and letters of credit outstanding against our Credit Facility of $35 million. Refer to Contractual

Obligations for additional information.

There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably

likely to materially affect our liquidity or availability of capital resources.

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Contractual Obligations

We have various contractual obligations in the normal course of our operations and financing activities. Significant contractual

obligations as of December 31, 2025 were as follows:

(In thousands)	2026	2027	2028	2029	2030	Thereafter	Total
Recorded contractual obligations
Accounts payable	$81,814	$—	$—	$—	$—	$—	$81,814
Accrued liabilities	193,742	—	—	—	—	—	193,742
Borrowings	236,553	217,426	197,691	969,696	253,467	1,110,412	2,985,245
Operating leases	2,191	680	337	344	351	298	4,201
Finance leases	26,560	22,135	17,354	11,922	4,497	272	82,740
Asset retirement obligation(a)	26,476	28,356	25,724	51,076	19,445	3,484,077	3,635,154
Other liabilities(b)	118,477	26,869	—	—	—	—	145,346
Off-Balance Sheet contractual obligations
Firm transportation(c)	58,590	35,432	26,118	20,613	8,358	221,534	370,645
Total contractual obligations	$744,403	$330,898	$267,224	$1,053,651	$286,118	$4,816,593	$7,498,887

(a)Represents our asset retirement obligation on an undiscounted basis. On a discounted basis the liability is $889 million as of

December 31, 2025 as presented in the Consolidated Balance Sheets.

(b)Represents taxes payable, deferred tax liability, and other current and noncurrent liabilities.

(c)Represents reserved capacity to transport gas from production locations through pipelines to the ultimate sales meters.

For more detailed information on asset retirement obligations, leases, debt, accounts payable and accrued liabilities, and other

liabilities, refer to Notes 13, 14, 15, 16, and 17 within the Notes to the Consolidated Financial Statements.

Litigation and Regulatory Proceedings & Environmental Matters

For Information regarding legal proceedings and environmental matters refer to Note 19 to the Notes to the Consolidated Financial

Statements.

Critical Accounting Estimates & Judgments

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions. The accounting

estimates and assumptions that involve a significant level of estimation uncertainty and have or are reasonably likely to have a

material impact on our financial condition or results of operations are discussed below.

For discussion regarding our significant accounting policies, refer to Note 2 in the Notes to the Consolidated Financial Statements for

additional information regarding our significant accounting policies, estimates, and judgments.

Natural Gas and Oil Reserves

Estimates of proved natural gas and oil reserves are used in calculating DD&A of proved natural gas and oil property costs, the present

value of estimated future net revenues, estimates of future taxable income used in assessing the realizability of deferred tax assets, and

the estimated timing of cash outflows underlying asset retirement obligations. There are numerous uncertainties inherent in the

estimation of proved natural gas and oil reserves and in the projection of future rates of production.

The process of estimating proved natural gas and oil reserves requires that our independent and internal reserve engineers exercise

judgment on the future production rates. The accuracy of any reserve estimate is a function of the quality of data available and of

engineering and geological interpretation and judgment. In addition, estimates of reserves may be revised based on actual production,

results of subsequent exploration and development activities, recent commodity prices, operating costs and other factors. These

revisions could materially affect our financial statements. The volatility of commodity prices results in increased uncertainty inherent

in these estimates and assumptions. Changes in natural gas, oil or NGL prices could result in actual results differing significantly from

our estimates. See Supplemental Natural Gas & Oil Information included in Item 8 of Part II of this report for further information.

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Impairment of Proved Properties

We assess our proved natural gas and oil properties for impairment on an asset group basis whenever events and circumstances

indicate that there could be a possible decline in the recoverability of the net book value of such property. We estimate the expected

future net cash flows of our proved natural gas and oil properties and compare these undiscounted cash flows to the net book value of

the proved natural gas and oil properties to determine if the net book value is recoverable. If the net book value exceeds the estimated

undiscounted future net cash flows, we will recognize an impairment to reduce the net book value of the proved natural gas and oil

properties to fair value. The assumptions used to determine fair value include, but are not limited to, future commodity prices, future

production estimates, operating costs, and discount rates, which are based on a weighted average cost of capital. Fair value estimates

are based on projected financial information which we believe to be reasonably likely to occur, as of the date that the impairment is

measured.

Business Combinations

We account for business combinations using the acquisition method, which is the only method permitted under FASB ASC Topic 805,

Business Combinations and involves the use of significant judgment. Under the acquisition method of accounting, a business

combination is accounted for at a purchase price based on the fair value of the consideration given. The assets and liabilities acquired

are measured at their fair values, and the purchase price is allocated to the assets and liabilities based upon these fair values. The

excess, if any, of the consideration given to acquire an entity over the net amounts assigned to its assets acquired and liabilities

assumed is recognized as goodwill. The excess, if any, of the fair value of assets acquired and liabilities assumed over the cost of an

acquired entity is recognized immediately to earnings as a gain on bargain purchase.

The Company’s principal assets are its natural gas and oil properties, which are accounted for under the successful efforts accounting

method. The Company determines the fair value of acquired proved natural gas and oil properties based on the discounted future net

cash flows expected to be generated from these assets. Discounted cash flow models by operating area are prepared using the

estimated future revenues and operating costs for all proved developed properties and undeveloped properties comprising the proved

reserves. Significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) future

production volumes based on estimated reserves, (ii) future operating and development costs, (iii) future commodity prices escalated

by an inflationary rate after five years, adjusted for differentials, and (iv) a market-based weighted average cost of capital by operating

area. The Company utilizes NYMEX strip pricing, adjusted for differentials, to value the reserves. The NYMEX strip pricing inputs

used are classified as Level 1 fair value assumptions and all other inputs are classified as Level 3 fair value assumptions. The discount

rates utilized are derived using a weighted average cost of capital computation, which includes an estimated cost of debt and equity for

market participants with similar geographies and asset development type by operating area. Additionally, the fair value of unproved oil

and gas properties is determined using a market approach, which considers recent comparable transactions for similar assets. More

information regarding conclusions reached with respect to this judgment is included in Note 2 to the Notes to the Consolidated

Financial Statements.

Income Taxes

The amount of income taxes recorded requires interpretations of complex rules and regulations of federal and state tax jurisdictions.

We recognize current tax expense based on estimated taxable income for the current period and the applicable statutory tax rates. We

routinely assess potential uncertain tax positions and, if required, estimate and establish accruals for such amounts. We have

recognized deferred tax assets and liabilities for temporary differences, operating losses and other tax carryforwards. In assessing the

need for a valuation allowance or adjustments to existing valuation allowances, we consider a variety of positive and negative

evidence, which may include a projection of income exclusive of existing timing differences. Our judgment regarding the realizability

of deferred tax assets is thus partially affected by estimates of future financial results.

Management monitors company-specific, natural gas and oil industry and worldwide economic factors and assesses the likelihood that

our net deferred tax assets will be utilized prior to their expiration. Refer to Note 4 in the Notes to the Consolidated Financial

Statements for additional discussion.

Asset Retirement Obligations

We accrue a liability for asset retirement obligations based on an estimate of the amount and timing of settlement. For oil and gas

wells, the fair value of our plugging and abandonment obligations is recorded at the time the obligation is incurred, which is typically

at the time the well is drilled.

Calculating our asset retirement obligations is a "critical accounting estimate" because we must assess the expected amount and timing

of asset retirement obligation settlement. In addition, we must determine the estimated present value of future liabilities. Future results

of operations for any quarterly or annual period could be materially affected by changes in our assumptions. If the expected amount

and timing of our asset retirement obligations change, we will be required to adjust the carrying value of our liabilities in future

periods. An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can

materially affect our estimates. Refer to Note 13 in the Notes to the Consolidated Financial Statements for additional discussion.

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Recently Issued Accounting Pronouncements

Refer to Note 2 in the Notes to the Consolidated Financial Statements for information regarding recent accounting pronouncements

applicable to our Consolidated Financial Statements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

The primary objective of the following information is to provide forward-looking quantitative and qualitative information about our

potential exposure to market risk. The term “market risk” refers to the risk of loss arising from adverse changes in natural gas, NGLs

and oil prices, as well as interest rates. These disclosures are not meant to be precise indicators of expected future losses, but rather

indicators of reasonably possible losses. This forward-looking information provides indicators of how we view and manage our

ongoing market risk exposures.

Commodity Price Risk

Our revenues are primarily derived from the sale of natural gas, NGLs, and oil production, subjecting us to commodity price risk.

Commodity prices for natural gas, NGLs and oil can be volatile and may fluctuate due to relatively small changes in supply, weather

conditions, economic conditions, and government actions. For the year ended December 31, 2025, our natural gas, NGLs, and oil

revenue was $830 million, $208 million, and $501 million, respectively. Based on production, natural gas, NGLs and oil revenue for

the year ended December 31, 2025 would have increased or decreased by approximately $83 million, $21 million, and $50 million,

respectively, for each 10% increase or decrease in prices.

To mitigate the risk of fluctuations in commodity prices, we enter into derivatives. The total volumes hedged through the use of these

instruments vary from period to period. Generally our objective is to hedge approximately 60% to 80% of anticipated production

volumes for the next 12 months, at least 50% for months 13 to 24, and a minimum of 30% for months 25 to 36. For additional

information regarding derivatives, refer to Note 8 in the Notes to the Consolidated Financial Statements.

By removing price volatility from a significant portion of our expected production through 2028, we have mitigated, but not

eliminated, the potential effects of changing prices on operating cash flow for those periods. While these derivative contracts help

mitigate the negative effects of falling commodity prices, they also limit the benefits we would receive from increases in commodity

prices.

As of December 31, 2025, the fair value of our natural gas derivatives was a net liability of $494 million, NGLs derivatives were in a

net asset position of $34 million, and our oil derivatives were in a net asset position of $99 million. For the year ended December 31,

2025, a 10% fluctuation in commodity prices would have a corresponding impact of approximately $49 million, $3 million, and $10

million on natural gas, NGLs and oil derivatives, respectively.

Interest Rate Risk

We are subject to market risk exposure related to changes in interest rates. Our borrowings primarily consist of fixed-rate amortizing

notes and a variable rate Credit Facility as illustrated below.

	As of December 31, 2025
(in thousands)	Borrowings	Interest Rate(a)
ABS Notes, Nordic Bonds, & other(b)	$2,193,566	7.72%
Credit Facility	$485,400	7.04%

(a)The interest rate on the ABS Notes, Nordic Bonds, and other notes payable represents the weighted average fixed rate of the

notes, while the interest rate presented for the Credit Facility represents the floating rate as of December 31, 2025.

(b)Includes $23 million in notes payable issued by a third party financial institution in November 2024 collateralized by two natural

gas processing plants and various natural gas compressors and related support equipment in the Central Region, as of

December 31, 2025.

For additional information regarding the ABS notes, Nordic Bonds, and Credit Facility, refer to Note 15 in the Notes to the

Consolidated Financial Statements.

For the year ended December 31, 2025, a 100 basis point adjustment in the borrowing rate for the Credit Facility would result in a

corresponding effect on interest expense of approximately $5 million. This represents a reasonably possible change in interest rate

risk.

We strive to maintain a prudent balance of floating and fixed-rate borrowing exposure, particularly during uncertain market

conditions. As part of our risk mitigation strategy, we occasionally enter into swap arrangements to adjust our exposure to floating or

fixed interest rates, depending on changes in the composition of borrowings in our portfolio. Consequently, the total principal hedged

through the use of derivatives varies from period to period.

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As of December 31, 2025, the fair value of our interest rate swaps represents a liability of $0.1 million. For additional information

regarding derivatives, refer to Note 8 in the Notes to the Consolidated Financial Statements.

Counterparty & Customer Credit Risk

We are exposed to counterparty and customer credit risk from the hedging and sale of our natural gas, NGLs and oil.

Our derivative instruments expose us to our counterparties’ credit risk. To mitigate this risk, we only enter into commodity contracts

with counterparties that are highly rated or deemed by us to have acceptable credit strength and competence. Counterparty non-

performance risk is considered in the valuation of our derivative instruments, but has not had an impact on the value of our derivatives.

We also attempt to limit our exposure to non-performance by any single counterparty. As of December 31, 2025, our commodity

contracts derivative instruments were spread among 13 counterparties.

For additional information regarding derivatives, refer to Note 8 in the Notes to the Consolidated Financial Statements

Accounts receivable from customers represent amounts due for the purchase of these commodities, and their collectability depends on

the financial condition of each customer. We review the financial condition of customers before extending credit and generally do not

require collateral to support their accounts receivable. As of December 31, 2025, we had no customers that comprised over 10% of our

total accounts receivable from customers. Net of the applicable allowance for credit losses, our accounts receivable from customers

were $347 million as of December 31, 2025.

The Company is also exposed to credit risk from joint interest owners, which are entities that own a working interest in the properties

operated by the Company. Joint interest receivables are classified under accounts receivable, net, in the Consolidated Statement of

Financial Position. The Company has the ability to withhold future revenue payments to recover any non-payment of joint interest

receivables. As of December 31, 2025, our joint interest receivables, net of the applicable allowance for credit losses, were $61

million.

Accounts receivable are current, and the Company believes these net receivables are collectible. For additional information regarding

accounts receivable, refer to Note 9 in the Notes to the Consolidated Financial Statements.

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Item 8. Financial Statements and Supplementary Data

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID238)	55
Consolidated Financial Statements	57
Consolidated Balance Sheets	57
Consolidated Statements of Comprehensive Income (Loss)	58
Consolidated Statements of Changes in Stockholders' Equity	59
Consolidated Statements of Cash Flows	60
Notes to the Financial Statements	61
Supplemental Natural Gas & Oil Information (Unaudited)	96

Table of Contents	Form 10-K	Diversified Energy Company

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of Diversified Energy Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Diversified Energy Company and its subsidiaries (the "Company")

as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, of changes in stockholders’

equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively

referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as

of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of

Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of

the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the

period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in

our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31,

2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over

financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s

Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the

Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We

are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules

and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits

to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to

error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the

consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such

procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial

statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well

as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting

included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and

testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included

performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable

basis for our opinions.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded Canvas

Energy Inc. (Canvas) from its assessment of internal control over financial reporting as of December 31, 2025 because it was acquired

by the Company during 2025. We have also excluded Canvas from our audit of internal control over financial reporting. Canvas is a

wholly-owned subsidiary whose total assets and revenues represent approximately 9% and 1%, respectively, of the related

consolidated financial statement amounts as of and for the year ended December 31, 2025.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of

financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting

principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the

maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the

company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in

accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding

prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect

on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Table of Contents	Form 10-K	Diversified Energy Company

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements

that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are

material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The

communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a

whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or

on the accounts or disclosures to which it relates.

The Impact of Proved Developed Natural Gas, Oil, and Natural Gas Liquids (NGL) Reserves on Natural Gas and Oil Properties, Net

As described in Notes 2 and 6 to the consolidated financial statements, the Company's natural gas and oil properties, net balance was

$4.5 billion as of December 31, 2025, and the related depreciation, depletion and amortization expense for the year ended December

31, 2025 was $339.2 million, both of which substantially related to proved developed natural gas, oil, and NGL reserves. Natural gas

and oil properties are accounted for using the successful efforts method of accounting. Depletion of capitalized costs for proved

natural gas, oil and NGL reserves is calculated using the unit-of-production method. Leasehold costs are depleted over total proved

reserves in the relevant area, while costs associated with production and development wells are depleted over proved developed

producing reserves. In estimating proved natural gas, oil and NGL reserves, management depends on the interpretation and judgment

of engineering and production data, as well as the use of certain economic data such as commodity prices, operating expenses, capital

expenditures, and taxes. As disclosed by management, the Company’s reserves estimates are generally based on extrapolation of

historical production trends. The Company's internal staff of petroleum engineers and geoscience professionals work with the third-

party reserve engineers (together referred to as "management's specialists").

The principal considerations for our determination that performing procedures relating to the impact of proved developed natural gas,

oil and NGL reserves on natural gas and oil properties, net is a critical audit matter are (i) the significant judgment by management,

including the use of management's specialists, when developing the estimates of proved developed natural gas, oil and NGL reserves,

which are derived using historical production volumes and (ii) a high degree of auditor judgment, subjectivity, and effort in

performing procedures and evaluating audit evidence related to the data, specifically historical production volumes, methods, and

assumptions used by management and its specialists in developing the estimates of proved developed natural gas, oil and NGL

reserves.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion

on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's

estimates of proved developed natural gas, oil and NGL reserves. The work of management's specialists was used in performing the

procedures to evaluate the reasonableness of the estimates of proved developed natural gas, oil and NGL reserves. As a basis for using

this work, the specialists' qualifications were understood and the Company's relationship with the specialists was assessed. The

procedures performed also included (i) evaluating the methods and assumptions used by the specialists; (ii) testing the completeness

and accuracy of the data used by the specialists related to historical production volumes; and (iii) evaluating the specialists' findings

related to estimated future production volumes by comparing the estimate to relevant historical and current period production volumes,

as applicable.

/s/ PricewaterhouseCoopers LLP

Birmingham, Alabama

February 26, 2026

We have served as the Company’s auditor since 2020.

Table of Contents	Consolidated Balance Sheets	Diversified Energy Company
	As of December 31,
---	---	---
(In thousands, except par and share data)	2025	2024
ASSETS
Current assets:
Cash and cash equivalents	$29,697	$5,990
Restricted cash	21,750	11,426
Accounts receivable, net	408,399	234,421
Derivatives	153,150	33,759
Prepaid expenses and other current assets	37,166	18,668
Total current assets	$650,162	$304,264
Noncurrent assets:
Natural gas and oil properties (successful efforts method):
Proved natural gas and oil properties	$5,808,908	$3,807,670
Unproved natural gas and oil properties	19,804	7,266
Accumulated depletion	(1,320,953)	(981,715)
Natural gas and oil properties, net	4,507,759	2,833,221
Property, plant, and equipment, net	446,022	425,763
Restricted cash	93,663	34,843
Deferred tax assets	287,135	271,212
Other assets	184,218	87,507
Total assets	$6,168,959	$3,956,810
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$81,814	$35,013
Accrued liabilities	193,742	95,366
Revenue to be distributed	240,125	172,309
Current portion of long-term debt, net	236,553	209,463
Derivatives	155,959	163,676
Other current liabilities	167,501	101,285
Total current liabilities	$1,075,694	$777,112
Noncurrent liabilities:
Asset retirement obligations	$863,841	$619,185
Long-term debt, net	2,715,461	1,495,468
Derivatives	440,567	608,869
Other liabilities	78,406	44,219
Total liabilities	$5,173,969	$3,544,853
Commitments and contingencies (Note 19)
Stockholders' equity:
Common stock ($0.01 par value; 350,000,000 shares authorized; 76,979,625 and<br><br>50,649,844 shares issued and outstanding)	$769	$14,595
Additional paid in capital	1,491,719	1,145,889
Accumulated other comprehensive income (loss)	(583)	(935)
Retained earnings (accumulated deficit)	(507,847)	(759,471)
Total stockholders' equity attributable to DEC	$984,058	$400,078
Noncontrolling interests	10,932	11,879
Total stockholders' equity	$994,990	$411,957
Total liabilities and stockholders' equity	$6,168,959	$3,956,810

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents	Consolidated Statements of Comprehensive Income (Loss)	Diversified Energy Company
	For the Year Ended December 31,
---	---	---	---
(In thousands, except share and per share data)	2025	2024	2023
Revenue
Natural gas	$830,247	$464,600	$557,167
NGLs	207,868	150,513	141,321
Oil	500,706	117,146	103,911
Total commodity revenue	$1,538,821	$732,259	$802,399
Gain (loss) on derivatives	217,687	(37,551)	1,080,516
Midstream	40,492	32,535	30,565
Other	32,142	30,047	35,300
Total revenue	$1,829,142	$757,290	$1,948,780
Operating expense
Lease operating expense	$(457,593)	$(231,651)	$(213,078)
Production taxes	(86,709)	(36,043)	(61,474)
Midstream operating expense	(79,185)	(72,098)	(71,307)
Transportation expense	(115,267)	(90,461)	(96,218)
Accretion of asset retirement obligation	(48,607)	(28,464)	(23,903)
General and administrative expense	(167,626)	(129,745)	(128,626)
Depreciation, depletion and amortization	(412,506)	(291,995)	(273,316)
Gain (loss) on natural gas and oil properties and equipment	73,368	26,069	28,124
Total operating expense	$(1,294,125)	$(854,388)	$(839,798)
Income (loss) from operations	$535,017	$(97,098)	$1,108,982
Other income (expense)
Gain (loss) on sale of equity interest	$—	$—	$11,065
Interest expense	(209,967)	(136,801)	(130,859)
Loss on debt extinguishment	(26,971)	(16,377)	—
Other income (expense)	3,270	2,338	385
Income (loss) before taxation	$301,349	$(247,938)	$989,573
Income tax benefit (expense)	40,550	144,845	(239,184)
Net income (loss)	$341,899	$(103,093)	$750,389
Other comprehensive income (loss)	352	(1,822)	(270)
Total comprehensive income (loss)	$342,251	$(104,915)	$750,119
Net income (loss) attributable to:
DEC	$341,115	$(104,365)	$748,706
Noncontrolling interest	784	1,272	1,683
Net income (loss)	$341,899	$(103,093)	$750,389
Earnings (loss) per share attributable to DEC
Basic	$4.67	$(2.17)	$15.87
Diluted	$4.58	$(2.17)	$15.76
Weighted average shares outstanding
Basic	72,969,687	48,031,916	47,165,380
Diluted	74,478,592	48,031,916	47,514,521

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents	Consolidated Statements of Changes in Stockholders’ Equity	Diversified Energy Company
	Common Stock
---	---	---	---	---	---	---	---	---
(In thousands, except share data)	Shares	Amount	Additional<br><br>Paid in<br><br>Capital	Accumulated<br><br>Other<br><br>Comprehensive<br><br>Income (Loss)	Retained<br><br>Earnings<br><br>(Accumulated<br><br>Deficit)	Total<br><br>Stockholders'<br><br>Equity<br><br>Attributable<br><br>to DEC	Noncontrolling<br><br>Interest	Total<br><br>Stockholders<br><br>' Equity
Balance as of January 1, 2023	41,446,773	$12,336	$927,062	$1,157	$(1,145,173)	$(204,618)	$14,964	$(189,654)
Net income (loss)	—	—	—	—	748,706	748,706	1,683	750,389
Other comprehensive income (loss)	—	—	—	(270)	—	(270)	—	(270)
Issuances of common stock	6,756,451	1,555	155,233	—	—	156,788	—	156,788
Repurchases of common stock	(646,762)	(161)	(10,887)	—	—	(11,048)	—	(11,048)
Share-based compensation	—	—	6,037	—	(2,990)	3,047	—	3,047
Dividends declared	—	—	567	—	(168,041)	(167,474)	—	(167,474)
Distributions to noncontrolling<br><br>interest owners	—	—	—	—	—	—	(4,043)	(4,043)
Balance as of December 31, 2023	47,556,462	$13,730	$1,078,012	$887	$(567,498)	$525,131	$12,604	$537,735
Net income (loss)	—	—	—	—	(104,365)	(104,365)	1,272	(103,093)
Other comprehensive income (loss)	—	—	—	(1,822)	—	(1,822)	—	(1,822)
Issuances of common stock	4,731,412	1,185	54,518	—	—	55,703	—	55,703
Repurchases of common stock	(1,638,030)	(320)	(20,809)	—	—	(21,129)	—	(21,129)
Share-based compensation	—	—	10,003	—	(3,744)	6,259	—	6,259
Dividends declared	—	—	24,165	—	(83,864)	(59,699)	—	(59,699)
Distributions to noncontrolling<br><br>interest owners	—	—	—	—	—	—	(1,997)	(1,997)
Balance as of December 31, 2024	50,649,844	$14,595	$1,145,889	$(935)	$(759,471)	$400,078	$11,879	$411,957
Net income (loss)	—	—	—	—	341,115	341,115	784	341,899
Other comprehensive income (loss)	—	—	—	352	—	352	—	352
Issuances of common stock	33,666,817	7,657	416,468	—	—	424,125	—	424,125
Repurchases of common stock	(7,337,036)	(1,153)	(99,063)	—	—	(100,216)	—	(100,216)
Share-based compensation	—	—	12,615	—	(4,486)	8,129	—	8,129
Dividends declared	—	—	(4,520)	—	(85,005)	(89,525)	—	(89,525)
Distributions to noncontrolling<br><br>interest owners	—	—	—	—	—	—	(1,731)	(1,731)
U.S. Domestication	—	(20,330)	20,330	—	—	—	—	—
Balance as of December 31, 2025	76,979,625	$769	$1,491,719	$(583)	$(507,847)	$984,058	$10,932	$994,990

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents	Consolidated Statements of Cash Flows	Diversified Energy Company
	For the Year Ended December 31,
---	---	---	---
(In thousands)	2025	2024	2023
Cash flows from operating activities:
Net income (loss)	$341,899	$(103,093)	$750,389
Adjustments to reconcile net income (loss) to net cash provided<br><br>by operating activities:
Depreciation, depletion and amortization	412,506	291,995	273,316
Accretion of asset retirement obligations	48,607	28,464	23,903
Income tax (benefit) expense	(40,550)	(144,845)	239,184
(Gain) loss on derivatives	(217,687)	37,551	(1,080,516)
Cash proceeds (payments) on settlement of derivatives	23,844	151,479	174,821
Settlement of asset retirement costs	(28,088)	(8,375)	(5,961)
(Gain) loss on natural gas and oil properties and equipment	(73,368)	(26,069)	(28,124)
(Gain) loss on sale of equity interest	—	—	(11,065)
Loss on early retirement of debt	26,971	16,377	—
Derivative modifications	—	—	26,686
Non-cash share-based compensation	10,398	8,286	6,494
Other	15,729	15,536	16,005
Changes in working capital:
Accounts receivable, net	2,594	(18,645)	107,274
Other assets	(8,753)	(7,799)	4,452
Accounts payable	(16,966)	(17,523)	(38,328)
Other liabilities	(32,517)	(2,689)	(167,099)
Net cash provided by operating activities	$464,619	$220,650	$291,431
Cash flows from investing activities:
Consideration for business acquisitions, net of cash acquired	$(329,709)	$—	$—
Consideration for asset acquisitions, net of cash acquired	(477,445)	(282,335)	(262,329)
Proceeds from divestitures	171,586	68,723	92,487
Capital expenditures	(184,600)	(52,100)	(74,252)
Deferred consideration payments	—	(1,050)	(2,620)
Net cash (used in) investing activities	$(820,168)	$(266,762)	$(246,714)
Cash flows from financing activities:
Repayment of borrowings	$(2,433,296)	$(1,653,489)	$(1,547,912)
Proceeds from borrowings	3,172,533	1,844,768	1,537,231
Prepayment charge on early retirement of debt	—	(1,752)	—
Debt issuance costs	(35,166)	(20,267)	(13,776)
Hedge modifications associated with ABS Notes	(171,134)	—	(6,376)
Proceeds from equity issuance, net	117,468	—	156,788
Proceeds from lease modifications	—	8,568	—
Principal element of lease payments	(15,816)	(12,473)	(10,263)
Dividends to stockholders	(85,005)	(83,864)	(168,041)
Distributions to noncontrolling interest owners	(1,731)	(1,996)	(4,043)
Repurchases of common stock (stock repurchase program)	(76,753)	(15,901)	(11,048)
Repurchases of common stock by the EBT, net	(22,700)	(5,228)	—
Net cash provided by (used in) financing activities	$448,400	$58,366	$(67,440)
Net change in cash, cash equivalents and restricted cash	92,851	12,254	(22,723)
Cash, cash equivalents and restricted cash, beginning of period	52,259	40,005	62,728
Cash, cash equivalents and restricted cash, end of period	$145,110	$52,259	$40,005
Cash and cash equivalents	29,697	5,990	3,753
Restricted cash	115,413	46,269	36,252
Total cash, cash equivalents and restricted cash	$145,110	$52,259	$40,005

The accompanying notes are an integral part of the Consolidated Financial Statements.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Index to the Notes to the Consolidated Financial Statements

Note 1 - Nature of the Business	61	Note 13 - Asset Retirement Obligations	84
Note 2 - Summary of Significant Accounting Policies	61	Note 14 - Leases	85
Note 3 - Acquisitions & Divestitures	68	Note 15 - Borrowings	86
Note 4 - Income Tax	71	Note 16 - Accounts Payable & Accrued Liabilities	92
Note 5 - Earnings (Loss) Per Share	74	Note 17 - Other Liabilities	92
Note 6 - Natural Gas & Oil Properties	75	Note 18 - Fair Value	93
Note 7 - Property, Plant & Equipment	75	Note 19 - Commitments & Contingencies	94
Note 8 - Derivatives	76	Note 20 - Supplemental Cash Flow Information	95
Note 9 - Accounts Receivable	80	Note 21 - Supplemental Quarterly Financial Information	95
Note 10 - Other Assets	81	Note 22 - Subsequent Events	95
Note 11 - Stockholders' Equity	81	Supplemental Natural Gas & Oil Information (Unaudited)	96
Note 12 - Compensation Plans	82

Note 1 - Nature of the Business

Diversified Energy Company, a Delaware corporation, and its wholly owned subsidiaries (collectively, the “Company”) is an

independent energy company engaged in the production, transportation and marketing of natural gas, oil and NGLs. The Company’s

assets are located in the United States within the following geographical operating areas:

•Appalachian Region, which spans Ohio, Pennsylvania, Virginia, West Virginia, Kentucky, Tennessee and Alabama;

•Central Region, which includes Texas, Oklahoma, New Mexico, Louisiana and Arkansas;

•Other, which includes Florida and Wyoming.

The Company is incorporated in the United States. Previously, the Company operated as a public limited company under UK law,

with its shares listed on the London Stock Exchange (“LSE”) since 2017. In December 2023, the Company’s shares were also

admitted to trading on the New York Stock Exchange (NYSE) under the ticker “DEC.” Following the Company’s U.S. Domestication,

its principal trading market is now the NYSE, although its shares continue to be listed on the LSE under the Equity Shares

(International Commercial Companies Secondary Listing) category.

On November 21, 2025, Diversified Energy Company PLC, a public company limited by shares, incorporated under the laws of

England and Wales, completed the U.S. Domestication, which was approved by the shareholders of Diversified Energy Company

PLC, resulting in Diversified Energy Company, a Delaware corporation, becoming our publicly traded parent company (the “U.S.

Domestication”). Diversified Energy Company PLC’s stockholders and the High Court of Justice of England and Wales approved the

scheme of arrangement effecting the U.S. Domestication. Effective after the close of market trading on November 21, 2025, all issued

and outstanding common stock of Diversified Energy Company PLC were exchanged on a one-for-one basis for newly issued shares

of corresponding common stock of Diversified Energy Company, and all issued and outstanding equity awards of Diversified Energy

Company PLC were assumed by Diversified Energy Company and were converted into rights to acquire Diversified Energy Company

shares of common stock on the same terms. The common stock of Diversified Energy Company began trading on November 24, 2025

(the first trading day following the U.S. Domestication), and the Company’s trading symbol on NYSE remained unchanged as “DEC.”

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United

States (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany balances and

transactions have been eliminated in consolidation. Noncontrolling interests in subsidiaries are presented as a separate component of

equity in the Consolidated Financial Statements.

Use of Estimates

The preparation of the Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and

assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the

date of the Consolidated Financial Statements, as well as the reported amounts of revenues and expenses during the reporting period.

Actual results could differ from those estimates.

Significant estimates include the quantities of proved natural gas and oil reserves. Reservoir engineering is a subjective process, and

there are numerous uncertainties inherent in estimating quantities of proved reserves. The accuracy of any reserves estimate depends

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

on the quality of available data and the interpretation and judgment of engineering and geological information. As a result, actual

quantities recovered may differ from estimated reserves.

Other items subject to estimates and assumptions include valuation of assets acquired and liabilities assumed in a business

combination, the carrying amounts of natural gas and oil properties, property, plant and equipment, the valuation of certain

derivatives, asset retirement obligations, and valuation allowances for deferred income tax assets, among others. Management believes

these estimates are reasonable, however, actual results could differ from these estimates.

Segment Reporting

In accordance with ASC 280, Segment Reporting, the Company establishes operating segments based on the components of the

business that are regularly reviewed by the chief executive officer, who serves as the chief operating decision maker (“CODM”), for

the purposes of allocating resources and assessing performance. The CODM evaluates the Company’s operations in a consolidated and

complementary manner, with a focus on vertical integration and margin improvement. As of December 31, 2025, the Company

considered each of the operating areas in aggregate to represent a single reportable segment due to the similar nature of the exploration

and production business across the Company.

The CODM uses consolidated net income (loss), for purposes of allocating resources and in assessing the Company’s operating

performance. Additionally, the CODM is regularly provided information on lease operating expense, transportation expense,

production taxes, and general and administrative expense, which are significant segment expenses. Other segment items primarily

consist of depreciation, depletion and amortization, interest expense, and income tax expense (benefit). The Company’s significant

segment expenses and other segment items are derived from, and can be found within the Consolidated Statements of Comprehensive

Income (Loss).

The measure of segment assets is total assets as reported on the Consolidated Balance Sheets. As of December 31, 2025 and 2024 the

Company’s total assets were $6.2 billion and $4.0 billion, respectively. Additionally, in analyzing company performance, the CODM

reviews capital expenditures. During the years ended December 31, 2025, 2024 and 2023, the Company’s capital expenditures were

$185 million, $52 million, and $74 million, respectively.

Cash and Cash Equivalents

Cash and cash equivalents consist of highly liquid investments with an original maturity of three months or less. The Company maintains cash

balances at financial institutions, which at times may exceed federally insured limits. The Company has not experienced any losses in such

accounts and believes it is not exposed to any significant credit risk related to cash and cash equivalents.

Restricted Cash

The Company classifies cash as restricted when its withdrawal or use is limited by contractual or regulatory requirements. Restricted

cash consists of amounts held on deposit for specific purposes and is not available for general corporate use. Restricted cash is

presented as either a current or noncurrent asset, based on the expected timing of the related obligations.

Restricted cash includes:

•Amounts held as collateral for surety bonds or required by state agencies for well abandonment obligations.

•Cash reserves required for interest payments and fees related to the Company’s asset-backed securitizations, which are

managed by an independent indenture trustee.

The Company does not include restricted cash in cash and cash equivalents, as these funds are not available for immediate use.

	As of
(in thousands)	December 31, 2025	December 31, 2024
Cash restricted by asset-backed securitizations	$98,681	$45,880
Other restricted cash	16,732	389
Total restricted cash	$115,413	$46,269
Classified as:
Current asset	$21,750	$11,426
Noncurrent asset	93,663	34,843
Total	$115,413	$46,269

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Business Combinations and Asset Acquisitions

The Company accounts for business combinations and asset acquisitions in accordance with ASC 805, Business Combinations. For

each transaction, management evaluates whether the acquired set of assets and activities constitutes a business by first applying the

screen test. If substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets,

the transaction is accounted for as an asset acquisition. If the screen test is not met, the Company performs an evaluation to determine

if the minimum required inputs and processes exist in order to be accounted for as a business combination.

For business combinations, the acquisition method is applied, and identifiable assets acquired and liabilities assumed are generally

recognized at their acquisition-date fair values. The excess of the purchase price over the fair value of net identifiable assets is

recorded as goodwill; if the fair value of net assets exceeds the purchase price, a gain on bargain purchase is recognized in earnings

after reassessment. Noncontrolling interests are measured at fair value. Transaction costs are expensed as incurred.

For asset acquisitions, the purchase price, including transaction costs, is allocated to the acquired assets and liabilities based on relative

fair values. Goodwill is not recognized, and any excess of net asset value over purchase price is not recorded as a gain. Changes in

contingent consideration are generally recognized as adjustments to the asset basis.

The determination and allocation of fair values, as well as the assessment of whether an acquisition constitutes a business, require

significant management judgment and the use of estimates, including valuation techniques, discount rates, and assumptions about

future cash flows. For business combinations, provisional fair value amounts may be adjusted during the measurement period, not to

exceed one year from the acquisition date, if new information becomes available.

Inventory

Inventory consists primarily of natural gas and materials and supplies used in the Company’s operations. Inventory is stated at the

lower of cost or net realizable value, with cost determined using the weighted average cost method. Net realizable value represents the

estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

As of December 31, 2025 and 2024, inventory balances were not material to the Consolidated Financial Statements and are included

within “other current assets” on the Consolidated Balance Sheets.

Accounts Receivable

Accounts receivable primarily consist of receivables from sales of natural gas and oil production delivered to purchasers and

receivables due from joint interest owners on properties the Company operates.

Accounts receivable are stated at amounts due from joint interest owners or purchasers, net of an allowance for expected credit losses.

The Company evaluates the financial condition of customers before extending credit and does not typically require collateral. The

allowance for credit losses is determined using the Current Expected Credit Losses (“CECL”) model, which considers historical loss

experience, current economic conditions, and reasonable forecasts of future conditions. The Company reviews the adequacy of the

allowance regularly and adjusts it as necessary. Adjustments to the allowance are recognized in the Consolidated Statement of

Operations.

As of December 31, 2025 and 2024, the Company recorded an allowance for credit losses of $36 million and $16 million,

respectively. Refer to Note 9 for additional information.

Borrowings

Borrowings are initially recognized at the fair value of proceeds received, net of directly attributable transaction costs. Subsequently,

borrowings are carried at amortized cost, with transaction costs, discounts, and premiums amortized over the term of the borrowings

using the effective interest method. Interest expense is recognized in the Consolidated Statements of Comprehensive Income (Loss)

based on the effective interest rate applicable to each class of borrowing. Refer to Note 15 for additional information.

Derivatives

The Company utilizes derivatives, such as swaps and collars, to manage risks associated with commodity price volatility and the

resulting unpredictability of cash flows. These contracts are settled financially each month and do not involve physical delivery of

commodities. Management is responsible for the oversight and application of the Company’s derivative accounting policies.

Derivative contracts are initially recognized at fair value on the contract date and remeasured to fair value at each reporting date in

accordance with U.S. GAAP. Derivatives reflected as current in the consolidated balance sheets represent the estimated fair value of

derivatives scheduled to settle over the next 12 months based on market prices/rates as of the respective balance sheet dates. Cash

settlements of derivatives are generally classified as operating cash flows unless the derivatives are deemed to contain, for accounting

purposes, a significant financing element at contract inception, in which case these cash settlements are classified as financing cash

flows in the accompanying consolidated statements of cash flows. Netting of derivative assets and liabilities is applied at each

reporting date when a legal right of offset exists under a master netting arrangement. All changes in fair value are recognized in the

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Consolidated Statements of Comprehensive Income (Loss) under gain (loss) on derivatives in the period incurred. None of the

Company’s derivatives are designated as hedging instruments under ASC 815.

All derivatives are classified as Level 2 instruments under ASC 820, as their valuation relies on observable market inputs other than

quoted prices.

Additional information regarding the fair value of derivatives and the Company’s exposure to commodity price risk is provided in

Note 8.

Natural Gas and Oil Properties

Natural gas and oil properties are accounted for using the successful efforts method of accounting.

Development & Acquisition Costs

Costs incurred to acquire mineral interests in properties, including purchases, leases, and related legal fees, are capitalized when

incurred. Expenditures for the construction, installation or completion of infrastructure facilities, such as platforms, and the drilling

and equipping of development wells, including delineation wells, are capitalized as part of natural gas and oil properties. The initial

cost of an asset includes its purchase price or construction cost, directly attributable costs necessary to bring the asset to operational

status, and the initial estimate of the asset retirement obligations.

Depletion

Depletion of capitalized costs for proved natural gas, oil and NGL reserves is calculated using the unit-of-production method.

Leasehold costs are depleted over total proved reserves in the relevant area, while costs associated with production and development

wells are depleted over proved developed producing reserves.

Fair Value of Acquired Properties

For business combinations, the Company determines the fair value of acquired natural gas and oil properties using the income

approach, which involves estimating future net cash flows based on future production volumes, production and development costs,

and forward commodity prices. These cash flows are discounted using a weighted average cost of capital and appropriate risk factors.

Proved Reserves

Proved reserves are the estimated volumes of natural gas, oil and NGLs that can be economically produced with reasonable certainty

from known reservoirs, given current economic conditions and operating methods.

To estimate these reserves, we depend on the interpretation and judgment of engineering and production data, along with certain

economic data such as commodity prices, operating expenses, capital expenditures, and taxes. Since many factors, assumptions, and

variables involved in estimating proved reserves can change over time, the estimates of natural gas, oil and NGL reserve volumes are

subject to revision.

Impairment of Natural Gas & Oil Properties

The Company reviews its natural gas and oil properties for impairment in accordance with ASC 360. Impairment indicators include

significant or prolonged declines in commodity prices, adverse changes in market conditions, downward revisions of reserve

estimates, or increases in operating costs. When indicators of impairment are present, the Company performs a recoverability test at

the field level by comparing the carrying value of the property to the undiscounted expected future net cash flows. If the carrying

value is not recoverable, an impairment loss is recognized to reduce the asset’s carrying value to its estimated fair value, determined

using discounted future net cash flows. For the years ended December 31, 2025, 2024, and 2023, no impairment losses were recorded.

Impairment losses, when recognized, are reflected in the Consolidated Statements of Comprehensive Income (Loss) within the

appropriate functional category.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, which includes the purchase price and all costs directly attributable to acquiring the asset

and preparing for its intended use. Costs may include installation, delivery, site preparation, and professional fees. Expenditures for major

renewals and improvements that extend the useful life of an asset are capitalized, while maintenance and repairs are expensed as incurred.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, as follows:

	Range in Years
Buildings and leasehold improvements	40
Equipment	5 - 10
Motor vehicles	5
Midstream assets	10 - 15
Other property and equipment	5 - 10

Assets held under finance leases (right-of-use assets) are depreciated over the shorter of the lease term or the estimated useful life of

the underlying asset, in accordance with ASC 842.

Software

The Company capitalizes certain costs incurred in the development or acquisition of software for internal use in accordance with ASC

350-40. Capitalization begins when the preliminary project stage is complete and management has authorized and committed to

funding the software project, and it is probable that the project will be completed and the software will be used as intended.

Capitalized costs include direct costs of materials and services, payroll and payroll-related costs for employees directly associated with

the project, and a reasonable allocation of overhead. Costs incurred during the application development stage are capitalized, while

costs incurred during the preliminary project stage and post-implementation/operation stage, including maintenance and training, are

expensed as incurred.

Software development costs acquired from third parties and controlled by the Company are capitalized when the software is ready for

its intended use. Capitalized software development costs are recorded as property, plant and equipment and depreciated on a straight-

line basis over their estimated useful lives, beginning when the software is placed in service.

The Company depreciates software on a straight-line basis over the estimated useful life of 3 years.

Noncontrolling Interests

Noncontrolling interests represent the portion of equity in subsidiaries not attributable to the Company’s stockholders and are

presented as a separate component of equity in the Consolidated Balance Sheets. The acquisition of a noncontrolling interest in a

subsidiary and the sale of an interest while retaining control are accounted for as transactions within equity and are reported within

noncontrolling interests in the consolidated financial statements.

During the years ended December 31, 2025, 2024 and 2023, the Company recorded net income attributable to noncontrolling interests

of $0.8 million, $1.3 million and $1.7 million, respectively. As of December 31, 2025 and 2024, the noncontrolling interests balance

was $11 million and $12 million, respectively. Distributions to noncontrolling interest owners were $1.7 million, $2.0 million and $4.0

million for the years ended December 31, 2025, 2024 and 2023, respectively. A reconciliation of the beginning and ending balances of

noncontrolling interests is provided in the Consolidated Statements of Changes in Stockholders' Equity.

Leases

The Company accounts for leases in accordance with ASC 842, Leases. At the commencement date of a lease, the Company

recognizes a right-of-use (“ROU”) asset and a lease liability for contracts that convey the right to control the use of an identified asset

for a period of time in exchange for consideration. The lease liability is initially measured at the present value of future lease

payments, discounted using the rate implicit in the lease, or if not readily determinable, the Company’s incremental borrowing rate.

The ROU asset is initially measured at cost, which includes the initial measurement of the lease liability, any lease payments made at

or before commencement, initial direct costs, and an estimate of costs to restore the underlying asset or site, as required by the lease.

Leases are classified as either finance or operating leases at inception. For finance leases, the Company recognizes interest expense on

the lease liability and amortization expense on the ROU asset separately. For operating leases, a single lease expense is recognized on

a straight-line basis over the lease term. The lease liability is subsequently measured at amortized cost, and the ROU asset is

depreciated over the shorter of the lease term or the useful life of the underlying asset. The Company remeasures the lease liability and

adjusts the ROU asset when certain events occur, such as changes in lease term or lease payments. The Company may elect not to

recognize ROU assets and lease liabilities for short-term leases. Refer to Note 14 for additional information.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Asset Retirement Obligations

When a liability exists for the retirement of a well, removal of production equipment, and site restoration at the end of a well’s

productive life, the Company recognizes an asset retirement liability. The amount recognized is the present value of estimated future

net expenditures, determined in accordance with our anticipated retirement plans and local conditions and requirements. The

unwinding of the discount on the decommissioning liability is included as accretion of the decommissioning provision. The cost of the

relevant property, plant and equipment asset is increased by an amount equivalent to the liability and depreciated on a unit of

production basis. The Company recognizes changes in estimates prospectively, with corresponding adjustments to the liability and the

associated noncurrent asset.

The costs associated with asset retirement obligations are inherently uncertain and can fluctuate due to various factors, such as changes

in legal requirements, the development of new restoration techniques, or experiences at other production sites. The expected timing

and amount of these expenditures can also vary, for instance, due to changes in reserves or modifications in laws and regulations or

their interpretation. Consequently, significant estimates and assumptions are necessary to determine the provision for asset retirement.

These assumptions include the costs to retire the wells, the Company’s retirement plan, an assumed inflation rate, and the discount

rate. Refer to Note 13 for additional information.

Income Tax

The Company makes certain estimates when calculating deferred tax assets and liabilities, as well as income tax expense. These

estimates often require judgment regarding the timing and recognition of differences of revenue and expenses for tax and financial

reporting purposes, as well as the tax basis of our assets and liabilities at the balance sheet date before tax returns are completed.

Additionally, the Company must evaluate the likelihood of recovering or utilizing its deferred tax assets and may record a valuation

allowance against these assets when it is not expected that they will be realized. In determining whether to apply a valuation

allowance, the Company considers evidence such as future taxable income, among other factors. This process involves numerous

judgments and assumptions, including estimates of commodity prices, production, and other operating conditions. If any of these

factors, assumptions, or judgments change, the deferred tax asset could be adjusted, particularly decreasing if it is determined that the

asset is unlikely to be realized. Conversely, a valuation allowance may be reversed if it is determined that the asset is likely to be

realized.

Deferred Income Tax

Deferred tax assets and liabilities arise from temporary differences between the tax bases of assets and liabilities and their carrying

amounts in the Consolidated Financial Statements. Deferred tax is determined using tax rates (and laws) that have been enacted or

substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred

liability is settled.

Deferred tax assets are recognized to the extent that it is probable that the future taxable profit will be available against which the

temporary differences can be utilized. The Company offsets deferred tax assets and liabilities when it has a legally enforceable right to

set off current tax assets against current tax liabilities, provided that the deferred tax assets and liabilities relate to income taxes levied

by the same taxation authority.

Current Income Tax

Current income tax assets and liabilities for the years ended December 31, 2025 and 2024 were measured at the amounts to be

recovered from, or paid to, the taxation authorities. The tax rates (and laws) used to compute these amounts are those enacted or

substantively enacted at the reporting date in the jurisdictions where the Company operates and generates taxable income.

Uncertain Tax Positions

Management periodically evaluates positions taken in tax returns where applicable tax regulation is subject to interpretation and

considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company measures its tax

balances based on either the most likely amount or the expected value, depending on which method better predicts the resolution of the

uncertainty. Refer to Note 4 for additional information.

Revenue Recognition

The Company extracts and sells natural gas, NGLs and oil to a variety of customers. Additionally, the Company offers gathering and

transportation services, as well as asset retirement and other services to third parties.

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized

when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration to which the

Company expects to be entitled in exchange for those goods or services. The Company applies the five-step model to all revenue

streams: (1) Identify the contract(s) with a customer; (2) Identify the performance obligations in the contract; (3) Determine the

transaction price; (4) Allocate the transaction price to the performance obligations; and (5) Recognize revenue when (or as) the

performance obligations are satisfied.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

For commodity revenue, control is typically transferred at the delivery point (e.g., vessel, pipe, sales meter), which is when the

Company satisfies its performance obligation. Revenue is recognized based on the Company’s working interest and the terms of the

relevant contracts. Revenue from gathering, transportation, plugging, and water disposal services is recognized as the services are

performed, based on contractually agreed-upon prices and volumes. Revenue is presented net of sales taxes, excise duties, and similar

levies. The Company assesses whether it is acting as principal or agent in all arrangements and recognizes revenue accordingly.

Disaggregated revenue by major product and service line (including natural gas, NGLs, oil, midstream, and other revenue) is presented

on the face of the Consolidated Statement of Operations. These categories reflect the nature, timing, and uncertainty of revenue and

cash flows and are consistent with how management evaluates the business.

A significant portion of the Company’s accounts receivable stem from sales of natural gas, NGLs and oil. These receivables are

uncollateralized and typically collected within 30 to 60 days.

For the years ended December 31, 2025, 2024 and 2023, no single customer accounted for more than 10% of total revenues.

The Company operates in a single reportable segment, and all revenue is generated in the United States.

Share-Based Payments

The Company accounts for share-based payments in accordance with ASC 718, Compensation—Stock Compensation. All of the

Company’s share-based awards are equity-settled and measured at fair value on the grant date. The Company has three types of share-

based payment awards: RSUs, PSUs, and Options. The fair value of RSUs is measured using the stock price at the grant date. The fair

value of PSUs with market-based conditions is measured using a Monte Carlo simulation model, with inputs including share price at

grant date, expected volatility, expected dividends, risk-free rate of interest, and expected exercise patterns. The fair value of Options

is determined using the Black-Scholes model, with inputs including share price at grant date, exercise price, expected volatility, and

risk-free rate of interest. The grant date fair value of share-based awards is recognized as compensation expense over the requisite

service period, typically the vesting period. For awards with market-based conditions, expense is recognized regardless of whether the

condition is met. The Company accounts for forfeitures as they occur.

Recently Issued Accounting Standards Not Yet Adopted

The following accounting standards have been issued but are not yet effective and have not been applied in these financial statements:

ASU Number	Description	Effective Date	Impact on Financial Statements
ASU 2024-04	Debt—Debt with Conversion and Other Options	January 1, 2026	The Company is assessing the impact, but does<br><br>not expect a material effect.
ASU 2025-01	Income Statement—Reporting Comprehensive<br><br>Income—Expense Disaggregation Disclosures	January 1, 2027	The Company is currently assessing the impact<br><br>on its disclosures.
ASU 2025-05	Measurement of credit losses for accounts<br><br>receivable and contract assets from transactions<br><br>accounted for under Topic 606	January 1, 2026	The Company is assessing the impact, but does<br><br>not expect a material effect.
ASU 2025-06	Accounting for software costs that are accounted<br><br>for under Subtopic 350-40 (internal use<br><br>software)	January 1, 2028	The Company is assessing the impact, but does<br><br>not expect a material effect.
ASU 2025-07	Derivatives scope refinements and scope<br><br>clarification for share-based noncash<br><br>consideration from a customer in a revenue<br><br>contract	January 1, 2027	The Company is assessing the impact, but does<br><br>not expect a material effect.
ASU 2025-11	Interim financial statements and notes prepared<br><br>in accordance with GAAP	January 1, 2029	The Company is assessing the impact, but does<br><br>not expect a material effect.

The Company will adopt these standards on their respective effective dates. Based on preliminary assessment, the Company does not

expect the adoption of these to have a material impact on its consolidated financial statements.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Note 3 - Acquisitions & Divestitures

2025 Acquisitions

Canvas Energy Inc. (“Canvas”) Asset Acquisition

On November 24, 2025, the Company acquired Canvas. The Company determined that substantially all of the fair value of the gross

assets acquired was concentrated in a single asset group; therefore, the transaction was accounted for as an asset acquisition. The

Company paid purchase consideration of $533 million, inclusive of customary purchase price adjustments. The purchase consideration

consisted of the issuance of 3,718,209 new common shares direct to the unitholders of Canvas and $399 million in cash, inclusive of

transaction costs of $13 million. As part of the acquisition, the Company paid off on the acquisition date the $81 million balance

outstanding on Canvas’s credit facility.

Refer to Notes 11 and 15 for additional information regarding stockholders’ equity and debt.

The fair value of the consideration transferred and the allocation to the assets acquired and liabilities assumed based on their relative

fair values as of November 24, 2025 were as follows:

Consideration paid
Cash consideration	$398,534
Fair value of common stock issued(a)	53,951
Payoff of existing credit facility	80,602
Total consideration	$533,087
Net assets acquired
Cash	$51,679
Natural gas and oil properties	553,329
Property, plant and equipment, net	3,097
Other noncurrent assets	773
Accounts receivable, net	22,515
Other current assets	6,323
Asset retirement obligations	(10,963)
Deferred tax liability	(43,118)
Other noncurrent liabilities	(573)
Accounts payable	(8,625)
Other current liabilities	(41,350)
Net assets acquired	$533,087

(a)The fair value of the common stock issued was based on the closing price of the Company’s common stock on November 24, 2025

of $14.51. The fair value of our common stock is a Level 1 input as our stock price is a quoted price in an active market.

Maverick Natural Resources, LLC (“Maverick”) Business Combination

On March 14, 2025, the Company acquired Maverick. The Company determined the transaction did not have a significant

concentration of assets and that it acquired an identifiable set of inputs, processes, and outputs. As a result, the Company concluded

the transaction was a business combination. The Company paid purchase consideration of approximately $666 million, inclusive of

customary purchase price adjustments. The purchase consideration consisted of the issuance of 21,194,213 new common shares direct

to the unitholders of Maverick and $211 million in cash. As part of the acquisition, the Company paid off on the acquisition date the

$202 million balance outstanding on Maverick’s credit facility and assumed $518 million of ABS Maverick Notes outstanding.

Transaction costs associated with the acquisition were $21 million and are included within G&A expense in the Consolidated

Statements of Comprehensive Income (Loss). Refer to Notes 11 and 15 for additional information regarding stockholders’ equity and

debt.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

The fair value of the consideration transferred and the provisional fair value amounts of the assets acquired and liabilities assumed as

of March 14, 2025 were as follows:

Consideration paid
Cash consideration	$210,753
Fair value of common stock issued(a)	253,270
Payoff of existing credit facility	201,533
Total consideration	$665,556
Net assets acquired
Cash	$20,894
Natural gas and oil properties	1,298,477
Property, plant and equipment, net	43,585
Restricted cash	62,048
Other noncurrent assets	28,861
Derivatives, net	4,829
Accounts receivable, net	153,205
Other current assets	14,695
Asset retirement obligations	(179,528)
Borrowings	(518,394)
Other noncurrent liabilities	(38,915)
Accounts payable	(42,967)
Accrued operating expenses	(55,583)
Revenues payable	(44,306)
Other current liabilities	(81,345)
Net assets acquired	$665,556

(a)The fair value of the common stock issued was based on the closing price of the Company’s common stock on March 14, 2025 of

$11.95. The fair value of our common stock is a Level 1 input as our stock price is a quoted price in an active market.

The fair value of the natural gas and oil properties was based on estimated future production volumes, adjusted for risk characteristics

associated with the classification of the acquired reserves, and related future net cash flows discounted using a weighted average cost

of capital. The Company utilized NYMEX strip pricing adjusted for inflation. Management utilized the assistance of a third-party

valuation expert to estimate the fair value of the natural gas and oil properties acquired. The Company considers the discount rate,

commodity pricing, production and operating expense to be the assumptions most sensitive to the fair value of the acquired natural gas

and oil properties and represent Level 3 inputs, other than NYMEX strip pricing which represents a Level 1 input.

The following table summarizes the unaudited pro forma financial information of the Company as if the Maverick acquisition had

occurred on January 1, 2024.

	For the Year Ended December 31,
(in thousands, except per share data)	2025	2024
Revenues	$1,983,732	$1,544,576
Net income (loss)	358,945	(180,495)
Basic earnings (loss) per share	$4.92	$(3.76)
Diluted earnings (loss) per share	$4.82	$(3.76)

The unaudited pro forma information is not necessarily indicative of the operating results that would have occurred, nor is it

necessarily indicative of future operating results of the combined entities.

Summit Natural Resources, LLC (“Summit”) Asset Acquisition

On February 27, 2025, the Company acquired certain upstream assets and related infrastructure within Virginia, West Virginia, and

Alabama of the Appalachian Region from Summit. Given the concentration of assets, this transaction was considered an asset

acquisition rather than a business combination. The Company paid purchase consideration of $42 million, inclusive of transaction

costs of $0.4 million and customary purchase price adjustments, substantially all of which was accounted for as natural gas and oil

properties. The transaction was funded through proceeds from the new ABS X Notes collateralized, in part, by the acquired assets.

Refer to Note 12 for additional information regarding debt.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Other Acquisitions

During the year ended December 31, 2025, the Company acquired certain midstream and upstream assets that are contiguous to its

existing Central Region assets. The Company paid total purchase consideration of $16 million, inclusive of non-cash consideration of

$4 million, customary purchase price adjustments, and transaction costs. Given the concentration of assets, these transactions were

considered asset acquisitions rather than business combinations.

2025 Divestitures

During the year ended December 31, 2025, the Company divested certain non-core undeveloped acreage across its operating footprint

for consideration of $160 million. The consideration received exceeded the carrying amount of the net assets divested resulting in a

gain on natural gas and oil properties and equipment of $95 million. Additionally, the disposal of various property, plant and

equipment in the normal course of business resulted in a loss on natural gas and oil properties and equipment of $22 million.

2024 Acquisitions

East Texas II Asset Acquisition

On October 29, 2024, the Company acquired certain developed producing assets in the East Texas area of the Central Region from a

regional operator (the “Seller”) (altogether, the “East Texas II transaction”). The Company assessed the acquired assets and

determined that this transaction was considered an asset acquisition rather than a business combination. When making this

determination, management concluded that the acquired assets did not meet the definition of a business. The Company paid purchase

consideration of $68 million, inclusive of transaction costs of $1 million and customary purchase price adjustments. The transaction

was funded through a combination of cash consideration of $40 million, drawing from a senior secured bank facility supported by the

acquired assets and existing liquidity, and the issuance of 2,342,445 new shares of common stock direct to the Seller. Refer to Notes

11 and 15 for additional information regarding common stock and debt, respectively.

Crescent Pass Energy (“Crescent Pass”) Asset Acquisition

On August 15, 2024, the Company acquired certain upstream assets and related infrastructure in the East Texas area of the Central

Region from Crescent Pass. The Company assessed the acquired assets and determined that this transaction was considered an asset

acquisition rather than a business combination. When making this determination, management concluded that the acquired assets did

not meet the definition of a business. The Company paid purchase consideration of $98 million, inclusive of transaction costs of $1

million and customary purchase price adjustments. The transaction was funded through a combination of the issuance of 2,249,650

new shares of common stock direct to Crescent Pass and cash consideration of $69 million from the new Term Loan II supported by

the acquired assets. Refer to Notes 11 and 15 for additional information regarding common stock and debt, respectively.

Oaktree Capital Management, L.P. (“Oaktree”) Working Interest Asset Acquisition

On June 6, 2024 the Company acquired Oaktree’s proportionate working interest in previously completed joint acquisitions. The

Company assessed the acquired assets and determined that this transaction was considered an asset acquisition rather than a business

combination. When making this determination, management concluded that the acquired assets did not meet the definition of a

business. The Company paid purchase consideration of $222 million, inclusive of transaction costs of $2 million and customary

purchase price adjustments. As part of this transaction, the Company assumed Oaktree’s proportionate debt of $133 million associated

with the ABS VI Notes. The Company funded the purchase through a combination of existing and expanded liquidity and issued

approximately $83 million in notes payable to Oaktree. Refer to Note 15 for additional information regarding debt.

2024 Divestitures

During the year ended December 31, 2024, the Company divested certain non-core undeveloped acreage across its operating footprint

for consideration of approximately $59 million. The consideration received exceeded the carrying value of the net assets divested

resulting in a gain on natural gas and oil properties and equipment of $26 million.

2023 Acquisitions

Tanos Energy Holdings II LLC (“Tanos II”) Asset Acquisition

On March 1, 2023 the Company acquired certain upstream assets and related infrastructure in the Central Region from Tanos II. Given

the concentration of assets, this transaction was considered an asset acquisition rather than a business combination. When making this

determination management performed an asset concentration test considering the fair value of the acquired assets. The Company paid

purchase consideration of $262 million, inclusive of transaction costs of $1 million and customary purchase price adjustments. The

Company funded the purchase with proceeds from the February 2023 equity raise, cash on hand and existing availability on the Credit

Facility for which the borrowing base was upsized concurrent to the closing of the Tanos II transaction. Refer to Notes 11 and 15 for

additional information regarding the Company’s common stock and borrowings.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

2023 Divestitures

Sale of Equity Interest in DP Lion Equity HoldCo LLC

In November 2023, the Company formed DP Lion Equity Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue Class A and Class B asset-backed securities (collectively “ABS VII”) which are secured by certain upstream

producing assets in Appalachia. The Class A and B asset backed securities were issued in aggregate principal amounts of $142 million

and $20 million, respectively.

In December 2023, the Company divested 80% of the equity ownership in DP Lion Equity Holdco LLC to outside investors,

generating cash proceeds of $30 million. The Company evaluated the remaining 20% interest in DP Lion Equity Holdco LLC and

determined that the governance structure is such that the Company does not have the ability to exercise control, joint control, or

significant influence over the DP Lion Equity Holdco LLC entity. Accordingly, this entity is not consolidated within the Company’s

financial statements.

The consideration exceeded the fair value of the Company’s portion of the assets and liabilities divested resulting in a gain on sale of

the equity interest of $11 million. The Company’s remaining investment in the LLC is accounted for by applying the measurement

alternative under ASC 321, based on which the investment is recorded at cost less any impairment amount, if applicable.

Other 2023 Divestitures

On June 27, 2023, the Company sold certain non-core, non-operated assets within its Central Region for consideration of

approximately $38 million. The divested assets were located in Texas and Oklahoma and consisted of non-operated wells and the

associated leasehold acreage that was acquired as part of the asset acquisition from ConocoPhillips in September 2022.

Additionally, during the year ended December 31, 2023, the Company divested certain non-core undeveloped acreage across its

operating footprint for net consideration of approximately $28 million. The consideration received exceeded the fair value of the net

assets divested resulting in a gain on natural gas and oil properties and equipment of $24 million.

Note 4 - Income Tax

The Company files a consolidated U.S. federal tax return, multiple state tax returns, and a separate UK tax return for Diversified

Energy Company PLC, the former parent company, which will file its final tax return for 2025. Income taxes are provided for the tax

effects of transactions reported in the Consolidated Financial Statements and consist of taxes currently due, plus deferred taxes related

to differences between the basis of assets and liabilities for financial and income tax reporting.

The effective tax rate for December 31, 2025 and 2024 were primarily influenced by the recognition of the federal marginal well tax

credit available to qualified producers. The effective tax rate for December 31, 2023 was primarily impacted by changes in state taxes

due to acquisitions and recurring permanent differences.

For the years ended December 31, 2025, 2024, and 2023, the Company reported tax benefit of $41 million, a benefit of $145 million,

and an expense of $239 million, respectively. The effective tax rate for the year ended December 31, 2025 was (13.5)%, compared to

58.4% and 24.2% for the years ended December 31, 2024 and 2023, respectively.

Marginal well tax credits are offered by the federal government to incentivize companies to maintain production from wells with

lower output, especially during periods of subdued prices, ensuring the continuation of jobs and the generation of state and local taxes

that fund schools, social programs, police, and other vital public services. Internal Revenue Code Section 45I outlines the criteria for

these credits, which are designated for qualifying natural gas output from specific wells. Wells producing under 90 Mcfe daily benefit

from these incentives when natural gas prices in the preceding tax year are comparatively low. The Company has received these

credits due to its collection of conventional wells known for their longevity and slow production decline. These credits were available

for 2025 and 2024 based on commodity pricing in the 2024 and 2023 calendar years, respectively, but were not available for 2023

based on commodity pricing in 2022. The Company utilizes these credits on a first in, first out basis.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

The provision for income taxes in the Consolidated Statements of Comprehensive Income (Loss) is summarized below:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Current income tax benefit (expense)
Federal benefit (expense)	$(2,822)	$18,238	$(7,289)
State benefit (expense)	(11,834)	(1,122)	(5,902)
Foreign - UK benefit (expense)	—	(234)	—
Total current income tax benefit (expense)	$(14,656)	$16,882	$(13,191)
Deferred income tax benefit (expense)
Federal benefit (expense)	$59,267	$118,897	$(200,674)
State benefit (expense)	(4,061)	9,016	(25,460)
Foreign - UK benefit (expense)	—	50	141
Total deferred income tax benefit (expense)	$55,206	$127,963	$(225,993)
Total income tax benefit (expense)	$40,550	$144,845	$(239,184)

The effective tax rates and differences between the statutory U.S. federal income tax rate and the effective tax rates are summarized as

follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Income (loss) before taxation	$301,349	$(247,938)	$989,573
Income tax benefit (expense)	40,550	144,845	(239,184)
Effective tax rate	(13.5%)	58.4%	24.2%			For the Year Ended December 31,
---	---	---	---	---	---	---
(in thousands)	2025		2024		2023
U.S. federal statutory tax rates	$(63,283)	21.0%	$52,067	21.0%	$(207,810)	21.0%
State and local income tax, net of federal (national)<br><br>income tax effect	(12,558)	4.2%	9,201	3.7%	(29,698)	3.0%
Foreign tax effects
Statutory tax rate difference between United Kingdom<br><br>and United States	(3,586)	1.2%	(3,109)	(1.3)%	(3,270)	0.3%
Equity in earnings of foreign subsidiary	(18,825)	6.2%	(16,324)	(6.6)%	(27,241)	2.8%
Nontaxable dividend income	25,777	(8.6)%	21,681	8.7%	32,357	(3.3)%
Other foreign tax effects	(2,408)	0.8%	(2,432)	(1.0)%	(1,705)	0.2%
Tax credits
Marginal well credits	106,319	(35.3)%	91,831	37.0%	—	—%
Changes in valuation allowances	—	—%	—	—%	1,504	(0.2)%
Nontaxable or nondeductible items
Other nondeductible items	(244)	0.1%	(906)	(0.3)%	(2,039)	0.3%
Other adjustments
Other adjustments to deferred taxes	9,358	(3.1)%	(7,164)	(2.8)%	(1,282)	0.1%
Income tax benefit (expense) / Effective tax rate(a)	$40,550	(13.5)%	$144,845	58.4%	$(239,184)	24.2%

(a)The impact and the presentation of the federal tax credits on our effective tax rate can be positive or negative based on the

Company’s annual pre-tax income or loss.

The Company had a net deferred tax asset of $275 million at December 31, 2025, compared to a net deferred tax asset of $263 million

at December 31, 2024. This change was primarily due to the recognition of marginal well credits. The balance sheet presentation

considers the offsetting of deferred tax assets and liabilities within the same tax jurisdiction, where permitted. The overall deferred tax

position in a particular tax jurisdiction determines if a deferred tax balance related to that jurisdiction is presented within deferred tax

assets or liabilities.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

State and local income taxes are more than 50% comprised of Oklahoma.

The table below presents the components of the net deferred tax asset (liability) included in noncurrent assets (liabilities) as of the

periods presented:

	As of December 31,
(in thousands)	December 31, 2025	December 31, 2024
Deferred tax asset
Asset retirement obligations	$210,931	$151,256
Derivatives	127,198	191,512
Allowance for doubtful accounts	4,782	4,099
Net operating loss carryover	27,470	4,425
Valuation allowance	(5,025)	—
Federal tax credits carryover	331,532	233,969
Investment in partnerships	13,261	—
163(j) interest expense limitation	41,634	41,031
Other	16,270	—
Total deferred tax asset	$768,053	$626,292
Deferred tax liability
Amortization and depreciation	$(482,345)	$(333,812)
Investment in partnerships	—	(6,243)
Other	(10,473)	(23,036)
Total deferred tax liability	$(492,818)	$(363,091)
Net deferred tax asset (liability)	$275,235	$263,201
Balance sheet presentation
Deferred tax asset	$287,135	$271,212
Deferred tax liability	(11,900)	(8,011)
Net deferred tax asset (liability)	$275,235	$263,201

In assessing the realizability of deferred tax assets, the Company considers whether it is probable that some or all of the deferred tax

assets will not be realized. The ultimate realization of deferred tax assets depends on generating future taxable income during the

periods in which those temporary differences become deductible or before credits expire. The Company evaluates the scheduled

reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. At this time,

the Company has determined it will have sufficient future taxable income to recognize its deferred tax assets.

The Company’s deferred tax assets and liabilities all originate in the U.S.

For U.S. federal tax purposes, the Company is taxed as a single consolidated entity. The Company’s co-investments with Oaktree and

its investment in the Chesapeake Granite Wash Trust are taxed as partnerships that pass through to the Company’s consolidated return.

The Company is also subject to additional taxes in its previously domiciled jurisdiction of the UK. For the years ended December 31,

2025, 2024, and 2023, the Company incurred a expense of zero, $0.2 million, and zero in the UK, respectively.

The Organization for Economic Cooperation and Development (“OECD”) has proposed model rules for a global minimum tax of 15%

of reported profits (“Pillar Two”) that has been agreed upon in principle by over 140 countries. While the U.S. has not yet enacted

rules implementing Pillar Two, the U.K. has. This is relevant to the Company as it is resident in the U.K. for corporation tax purposes.

The Finance (No. 2) Act 2023 (the “UK Act”) was enacted on July 11, 2023, and implements the OECD’s Base Erosion & Profit

Shifting (“BEPS”) Pillar Two Income Inclusion Rule and a ‘Qualifying Domestic Minimum Top-up Tax’ for accounting periods

beginning on or after December 31, 2023. The UK Act also includes a transitional safe harbor election for accounting periods

beginning on or before December 31, 2026. Although the Pillar Two rules can lead to additional taxes, including taxes on our profits

in the U.S., the Company anticipates qualifying for a transitional safe harbor under the Pillar Two rules. We have undertaken an initial

assessment, and evaluated the impact of these rules, and currently the Company believes it will not have a material impact on its

financial position, results of operations, or cash flows due to the availability of a transitional safe harbor for the year ended December

31, 2025.

The Company had no uncertain tax position liabilities as of December 31, 2025, 2024 or 2023.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

As of December 31, 2025, the Company had U.S. federal net operating loss carryforwards (“NOLs”) of approximately $105 million

after any subject limitations. Additionally, the Company had $109 million U.S. state NOLs.

The Company had U.S. marginal well tax credit carryforwards of approximately $332 million as of December 31, 2025, compared to

$234 million and $163 million as of December 31, 2024 and 2023, respectively. As discussed earlier, marginal well tax credits are

intended to benefit wells producing less than 90 Mcfe per day when market prices for natural gas are relatively low. Due to the low

commodity price environment in 2024, the Company generated federal tax credits of $106,319 for the year ended December 31, 2025.

These tax credits expire between 2040 and 2045.

The Company had no U.S. federal capital loss carryforwards as of December 31, 2025, compared to $14 million and none as of

December 31, 2024 and 2023, respectively. For the year ended December 31, 2025, no capital loss carryforwards expired. The

Company utilized all existing capital loss carryforward in the amount of $14 million in 2025.

The Company completed a Section 382 study through December 31, 2025 in accordance with the Internal Revenue Code of 1986, as

amended. The study concluded that the Company has not experienced an ownership change since the last ownership change on

January 31, 2018. If the Company experiences an ownership change, tax credit carryforwards can be utilized but are limited each year

and could expire before being fully utilized.

The Company is subject to examination by the IRS for tax years 2022 through 2024.

The table below presents the components of the Company’s cash paid for income taxes.

	For the Year Ended
(in thousands)	December 31, 2025
Cash paid (received) for income taxes, net of refunds
Federal income taxes	$926
State income taxes:
Oklahoma	2,002
West Virginia	477
Other	74
State income taxes	2,553
Total cash paid (received) for income taxes, net of refunds	$3,479

(a)Cash paid for income taxes, net of refunds, during the years ended December 31, 2024 and 2023, were $11 million and $8

million, respectively.

Note 5 - Earnings (Loss) Per Share

Basic earnings (loss) per share (“EPS”) is calculated by dividing net income (loss) attributable to common shareholders by the

weighted average number of shares of common stock outstanding during the period, excluding shares held in treasury (if any) and the

Employee Benefit Trust (“EBT”). Diluted EPS reflects the potential dilution that could occur if share-based compensation awards

were exercised or converted into shares, except when their effect would be anti-dilutive. Refer to Note 11 for additional information

regarding the EBT.

The following table presents the reconciliation of the numerators and denominators used in the calculation of basic and diluted EPS for

the periods presented:

	For the Year Ended December 31,
(in thousands, except share and per share data)	2025	2024	2023
Net income (loss) attributable to DEC	$341,115	$(104,365)	$748,706
Weighted average shares outstanding - basic	72,969,687	48,031,916	47,165,380
Dilutive impact of potential shares	1,508,905	—	349,141
Weighted average shares outstanding - diluted	74,478,592	48,031,916	47,514,521
Basic earnings (loss) per share	$4.67	$(2.17)	$15.87
Diluted earnings (loss) per share	$4.58	$(2.17)	$15.76
Potentially dilutive shares(a)	85,106	640,568	54,133

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

(a)Share-based compensation awards excluded from the diluted EPS calculation because their effect would have been anti-dilutive.

Note 6 - Natural Gas & Oil Properties

The following table summarizes the Company's natural gas and oil properties for the periods presented:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Costs
Beginning balance	$3,814,936	$3,184,840	$3,062,847
Additions(a)	2,078,715	674,379	348,234
Disposals(b)	(64,939)	(44,283)	(226,241)
Ending balance	$5,828,712	$3,814,936	$3,184,840
Depletion and impairment
Beginning balance	$(981,715)	$(747,202)	$(530,385)
Depletion expense	(339,238)	(234,513)	(216,817)
Ending balance	$(1,320,953)	$(981,715)	$(747,202)
Net book value	$4,507,759	$2,833,221	$2,437,638

(a)For the year ended December 31, 2025, the Company added $1.9 billion from acquisitions. The remaining changes were

primarily due to development and recurring capital expenditures. In 2024, the Company added $608 million from acquisitions.

The remaining changes were primarily due to recurring capital expenditures. In 2023, the Company added $266 million from

acquisitions. The remaining changes were primarily due to recurring capital expenditures.

(b)For the year ended December 31, 2025, the Company divested $65 million in undeveloped acreage. In 2024, the Company

divested $33 million in undeveloped acreage. In 2023, the Company divested $203 million in natural gas and oil properties

related to the sale of equity interest in DP Lion Equity Holdco LLC and other proved properties and undeveloped acreage

divestitures.

Refer to Note 3 for additional information regarding acquisitions and divestitures.

Note 7 - Property, Plant & Equipment

The following tables summarize the Company’s property, plant and equipment for the periods presented:

	For the Year Ended December 31, 2025
(in thousands)	Buildings and<br><br>Leasehold<br><br>Improvements	Equipment	Motor<br><br>Vehicles	Midstream<br><br>Assets	Other<br><br>Property and<br><br>Equipment	Total
Costs
Beginning balance	$47,458	$32,803	$17,506	$471,671	$71,489	$640,927
Additions(a)	17,243	3,182	125	47,199	17,818	85,567
Disposals	(65)	(1,699)	(2,390)	(11,849)	(8,639)	(24,642)
Ending balance	$64,636	$34,286	$15,241	$507,021	$80,668	$701,852
Accumulated depreciation
Beginning balance	$(4,232)	$(10,875)	$(11,600)	$(150,345)	$(38,112)	$(215,164)
Period changes	(1,308)	(3,703)	(7,785)	(37,844)	(11,192)	(61,832)
Disposals	61	1,578	7,483	10,979	1,065	21,166
Ending balance	$(5,479)	$(13,000)	$(11,902)	$(177,210)	$(48,239)	$(255,830)
Net book value	$59,157	$21,286	$3,339	$329,811	$32,429	$446,022

(a)Of the $86 million in additions for 2025, $61 million was related to acquisitions. Refer to Note 3 for additional information

regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and

gathering systems, as well as vehicle and equipment additions.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company
	For the Year Ended December 31, 2024
---	---	---	---	---	---	---
(in thousands)	Buildings and<br><br>Leasehold<br><br>Improvements	Equipment	Motor<br><br>Vehicles	Midstream<br><br>Assets	Other<br><br>Property and<br><br>Equipment	Total
Costs
Beginning balance	$46,003	$33,314	$20,958	$449,200	$71,645	$621,120
Additions(a)	2,311	3,066	775	22,597	4,492	33,241
Disposals	(856)	(3,577)	(4,227)	(126)	(4,648)	(13,434)
Ending balance	$47,458	$32,803	$17,506	$471,671	$71,489	$640,927
Accumulated depreciation
Beginning balance	$(3,196)	$(9,800)	$(11,517)	$(120,668)	$(33,795)	$(178,976)
Period changes	(1,100)	(3,400)	(2,902)	(29,701)	(8,965)	(46,068)
Disposals	64	2,325	2,819	24	4,648	9,880
Ending balance	$(4,232)	$(10,875)	$(11,600)	$(150,345)	$(38,112)	$(215,164)
Net book value	$43,226	$21,928	$5,906	$321,326	$33,377	$425,763

(a)Of the $33 million in additions for 2024, $2 million was related to acquisitions. Refer to Note 3 for additional information

regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and

gathering systems, as well as vehicle and equipment additions.

	For the Year Ended December 31, 2023
(in thousands)	Buildings and<br><br>Leasehold<br><br>Improvements	Equipment	Motor<br><br>Vehicles	Midstream<br><br>Assets	Other<br><br>Property and<br><br>Equipment	Total
Costs
Beginning balance	$45,876	$31,255	$25,661	$426,935	$61,905	$591,632
Additions(a)	688	4,156	408	22,265	12,035	39,552
Disposals	(561)	(2,097)	(5,111)	—	(2,295)	(10,064)
Ending balance	$46,003	$33,314	$20,958	$449,200	$71,645	$621,120
Accumulated depreciation
Beginning balance	$(2,177)	$(7,980)	$(12,247)	$(92,404)	$(25,584)	$(140,392)
Period changes	(1,045)	(3,749)	(3,594)	(28,264)	(9,893)	(46,545)
Disposals	26	1,929	4,324	—	1,682	7,961
Ending balance	$(3,196)	$(9,800)	$(11,517)	$(120,668)	$(33,795)	$(178,976)
Net book value	$42,807	$23,514	$9,441	$328,532	$37,850	$442,144

(a)Of the $40 million in additions for 2023, $0.2 million was related to acquisitions. Refer to Note 3 for additional information

regarding acquisitions. The remaining additions were related to routine capital projects on the Company’s compressor and

gathering systems, as well as vehicle and equipment additions.

The Company continued to utilize certain fully depreciated assets during the years ended December 31, 2025, 2024 and 2023 with an

original cost basis of $38 million, $29 million and $7 million, respectively.

Note 8 - Derivatives

The Company faces volatility in market prices and basis differentials for natural gas, NGLs and oil, affecting the predictability of its

cash flows from commodity sales. Additionally, the Company’s cash flows related to interest payments on variable rate debt

obligations can be impacted by fluctuations in interest rate markets, depending on its debt structure. To manage these risks, the

Company enters into derivative contracts primarily with major financial institutions and energy trading counterparties. As of

December 31, 2025, these instruments included swaps, collars, basis swaps, and stand-alone put and call options. The Company does

not intend to hold or issue derivative financial instruments for speculative trading purposes and has elected not to designate any of its

derivative instruments for hedge accounting treatment. Below is a description of these instruments:

Swaps:	When the Company sells a swap, it agrees to receive a fixed price for the contract while paying a floating market price<br><br>to the counterparty;

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company
Collars:	Arrangements that include a fixed floor price (purchased put option) and a fixed ceiling price (sold call option) based<br><br>on an index price have no net costs overall. At the contract settlement date, (1) when the index price is higher than the<br><br>ceiling price, the Company pays the counterparty the difference between the index price and ceiling price, (2) when the<br><br>index price is between the floor and ceiling prices, no payments are due from either party, and (3) when the index price<br><br>is below the floor price, the Company will receive the difference between the floor price and the index price.<br><br>Some collar arrangements may also include a sold put option with a strike price below the purchased put option.<br><br>Known as a three-way collar, the structure operates similarly to the standard collar. However, when the index price<br><br>settles below the sold put option, the Company pays the counterparty the difference between the index price and sold<br><br>put option, effectively enhancing realized pricing by the difference between the price of the sold and purchased put<br><br>options;
---	---
Basis<br><br>swaps:	Arrangements that guarantee a price differential for commodities from a specified delivery point. When the Company<br><br>sells a basis swap, it receives a payment from the counterparty if the price differential exceeds the stated terms of the<br><br>contract. Conversely, if the price differential is less than the stated terms, the Company pays the counterparty;
Put<br><br>options:	The Company purchases and sells put options in exchange for a premium. When the Company purchases a put option,<br><br>it receives from the counterparty the excess amount (if any) by which the market price falls below the strike price of<br><br>the put option at the time of settlement. If the market price is above the put option’s strike price, no payment is<br><br>required from either party. Conversely, when the Company sells a put option, it pays the counterparty the excess<br><br>amount (if any) by which the market price falls below the strike price of the put option at the time of settlement. If the<br><br>market price is above the put option’s strike price, no payment is required from either party;
Call<br><br>options:	The Company purchases and sells call options in exchange for a premium. When the Company purchases a call option,<br><br>it receives from the counterparty the excess amount (if any) by which the market price exceeds the strike price of the<br><br>call option at the time of settlement. If the market price is below the call option’s strike price, no payment is required<br><br>from either party. When the Company sells a call option, it pays the counterparty the excess amount (if any) by which<br><br>the market price exceeds the strike price of the call option at the time of settlement. If the market price is below the call<br><br>option’s strike price, no payment is required from either party; and

The Company may elect to enter into offsetting transactions for the above instruments for the purpose of cancelling or terminating

certain positions.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

The following table summarizes the Company's calculated fair value of derivatives as of the reporting date:


(in thousands, except volume data)	Fair Value
Natural gas (Mmbtu)
Swaps	$(410,622)
Two-way collars	22,465
Three-way collars	(3,383)
Stand-alone calls(a)	(84,132)
Basis swaps	(17,176)
Purchased puts	2,170
Sold puts	(3,798)
Total natural gas	$(494,476)
NGLs (MBbls)
Swaps	$36,027
Stand-alone calls	(2,478)
Total NGLs	$33,549
Oil (MBbls)
Swaps	$101,759
Three-way collars	4,017
Sold calls	(6,613)
Total oil	$99,163
Interest
SOFR interest rate swap (5,520 principal hedged, 4.15% fixed-rate)	$90
Total interest	$90
Total fair value of derivatives	$(361,674)

All values are in US Dollars.

(a)Includes future cash settlements for deferred premiums.

Netting of derivative assets and liabilities is applied at each reporting date when a legal right of offset exists under a master netting

arrangement. The Company elected to present these derivative assets and liabilities on a net basis when these conditions are satisfied.

The following table outlines the Company’s net derivatives as of the periods presented:

(in thousands)		As of December 31,
Derivatives	Consolidated Statement of Financial Position	2025	2024
Assets:
Current assets	Derivatives	153,150	33,759
Noncurrent assets	Other assets	$81,702	$28,439
Total assets		$234,852	$62,198
Liabilities
Current liabilities	Derivatives	(155,959)	(163,676)
Noncurrent liabilities	Derivatives	$(440,567)	$(608,869)
Total liabilities		$(596,526)	$(772,545)
Net assets (liabilities):
Net assets (liabilities) - current	Derivatives	$(2,809)	$(129,917)
Net assets (liabilities) - noncurrent	Other assets / Derivatives	(358,865)	(580,430)
Total net assets (liabilities)		$(361,674)	$(710,347)

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

The Company presents the fair value of derivative contracts on a net basis in the Consolidated Statement of Financial Position. Below

is the impact of this presentation on the Company’s recognized assets and liabilities for the specified periods:

	As of December 31, 2025
(in thousands)	Presented without<br><br>Effects of Netting	Effects of Netting	As Presented with<br><br>Effects of Netting
Current assets	$173,771	$(20,621)	$153,150
Noncurrent assets	205,253	(123,551)	81,702
Total assets	$379,024	$(144,172)	$234,852
Current liabilities	(176,580)	20,621	(155,959)
Noncurrent liabilities	(564,118)	123,551	(440,567)
Total liabilities	$(740,698)	$144,172	$(596,526)
Total net assets (liabilities)	$(361,674)	$—	$(361,674)	As of December 31, 2024
---	---	---	---
(in thousands)	Presented without<br><br>Effects of Netting	Effects of Netting	As Presented with<br><br>Effects of Netting
Current assets	$77,801	$(44,042)	$33,759
Noncurrent assets	90,635	(62,196)	28,439
Total assets	$168,436	$(106,238)	$62,198
Current liabilities	(207,483)	43,807	(163,676)
Noncurrent liabilities	(671,300)	62,431	(608,869)
Total liabilities	$(878,783)	$106,238	$(772,545)
Total net assets (liabilities)	$(710,347)	$—	$(710,347)

The Company recorded the following gains (losses) on derivatives in the Consolidated Statement of Operations for the specified

periods:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Net gain (loss) on commodity derivatives settlements	$23,709	$151,289	$178,064
Net gain (loss) on interest rate swaps	135	190	(2,722)
Gain (loss) on foreign currency hedges	—	—	(521)
Total gain (loss) on settled derivatives(a)	$23,844	$151,479	$174,821
Gain (loss) on fair value adjustments of unsettled derivatives(b)	193,843	(189,030)	905,695
Total gain (loss) on derivatives	$217,687	$(37,551)	$1,080,516

(a)Represents the cash settlement of derivatives that were settled during the period.

(b)Represents the change in fair value of derivatives, net of the carrying value of derivatives that were settled during the period.

All derivatives are classified as Level 2 instruments under ASC 820, as their valuation relies on observable market inputs other than

quoted prices.

Commodity Derivative Contract Modifications and Extinguishments

Occasionally, such as during the acquisition of producing assets, the completion of ABS financings, or in response to fluctuating price

environments, the Company may strategically modify, offset, terminate, or expand certain existing hedge positions. These

modifications can involve changes to the volume of production covered by contracts, the swap or strike price of specific derivative

contracts, and other similar aspects of the derivative agreements. The Company manages distinct, long-dated derivative contract

portfolios for its ABS financings and Term Loans. Additionally, the Company maintains a separate derivative contract portfolio for

assets secured by the Credit Facility. These derivative contract portfolios associated with the Company’s ABS financings, Term

Loans, and Credit Facility are presented in the Company’s Statement of Financial Position.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

2025 Modifications and Extinguishments

In February 2025, the Company adjusted portions of its commodity derivative portfolio across its legal entities for approximately

$150 million in connection with the completion of the ABS X financing arrangement. The Company made further adjustments to its

commodity derivative portfolio for approximately $21 million for the retirement of the ABS I and Term Loan I financing

arrangements.

The Company made no modifications in 2024.

2023 Modifications and Extinguishments

In February 2023, the Company sold puts in ABS III for approximately $9 million and replaced them with swaps to maintain the

appropriate level and composition of derivatives at both the legal entity and full-company level. In August 2023, the Company

monetized $9 million in purchased puts associated with its ABS hedge books and transitioned the monetized positions into long-dated

swap agreements. The Company also monetized an additional $8 million in net modifications, primarily comprised of swap

terminations. As these modifications were made in the normal course of business for the year ended December 31, 2023, they are

presented as an operating activity in the Consolidated Statement of Cash Flows.

In November 2023, the Company adjusted portions of its commodity derivative portfolio across its legal entities to ensure that it

maintained the appropriate level and composition at both the legal entity and full-Company level for the completion of the ABS VII

financing arrangement. These portfolio adjustments included novations of certain contracts to the legal entities holding the ABS VII

Notes. The Company paid $6 million for these portfolio adjustments. As these modifications were associated with a borrowing

transaction, these amounts are presented as a financing activity in the Consolidated Statement of Cash Flows. Refer to Note 15 for

additional information regarding ABS financing arrangements.

Note 9 - Accounts Receivable

Accounts receivable include amounts due from customers, entities that purchase the Company’s natural gas, NGLs and oil production,

as well as amounts due from joint interest owners who hold a working interest in the properties operated by the Company. Most of

these accounts receivable are current, and the Company is confident in their collectability. The table below provides a summary of the

Company’s accounts receivable. The fair value approximates the carrying value as of the periods presented:

	As of December 31,
(in thousands)	2025	2024
Commodity receivables(a)	$315,561	$175,058
Other receivables(b)	128,565	75,322
Total accounts receivable	$444,126	$250,380
Allowance for credit losses(c)	(35,727)	(15,959)
Accounts receivable, net	$408,399	$234,421

(a)Includes accrued revenues.

(b)Predominantly comprised of joint interest owner receivables.

(c)The allowance for credit losses mainly pertains to amounts owed by joint interest owners. During the year ended December 31,

2025, the allowance for credit losses increased by $20 million, primarily due to acquired balances from the Maverick and Canvas

acquisitions.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Note 10 - Other Assets

The following table includes details of other assets as of the periods presented:

	As of December 31,
(in thousands)	2025	2024
Prepaid expenses and other current assets
Prepaid expenses	$9,365	$9,077
Inventory	27,801	9,591
Total prepaid expenses and other current assets	$37,166	$18,668
Other noncurrent assets
Intangibles	$3,219	$2,902
Operating right of use assets	3,781	3,213
Financing right of use assets	63,990	32,843
Derivatives	81,702	28,439
Other noncurrent assets(a)	31,526	20,110
Total other noncurrent assets	$184,218	$87,507

(a)Includes the Company’s investment in DP Lion Equity Holdco LLC of $10 million and $6 million as of December 31, 2025 and

2024, respectively. Refer to Notes 3 and 15 for additional information regarding the DP Lion Equity Holdco LLC equity sale.

Note 11 - Stockholders' Equity

The Company is authorized to issue up to 350,000,000 shares of common stock, par value $0.01 per share. As of December 31, 2025

and 2024, the Company had 76,979,625 and 50,649,844 shares of common stock issued and outstanding.

The Company is authorized to issue 30,000,000 shares of preferred stock, par value $0.01 per share. No preferred shares have been

issued or are outstanding.

In November 2025, the Company completed the U.S. Domestication, whereby existing shares of Diversified Energy Company PLC

were exchanged on a one-for-one basis for newly issued shares of corresponding common stock of Diversified Energy Company, and

all issued and outstanding equity awards of Diversified Energy Company PLC were assumed by Diversified Energy Company and

were converted into rights to acquire Diversified Energy Company shares of common stock on the same terms. As a result of the U.S.

Domestication, the par value of the Company’s common stock was changed from £0.20 to $0.01. The impact of this change is

reflected within U.S. Domestication in the Statements of Changes in Equity.

Issuance of Common Stock

In November 2025, the Company issued 3,718,209 new shares of common stock direct to Canvas shareholders to fund a portion of the

Canvas transaction. The total value of the stock consideration was $54 million based on the Company’s stock price on the NYSE on

the closing date of the Canvas transaction.

In March 2025, the Company announced the completion of its previously announced acquisition of Maverick. The transaction was

funded in part through the issuance of 21,194,213 new shares of common stock direct to the unitholders of Maverick. The total value

of the stock consideration was $253 million, excluding transaction costs of $0.4 million, based on the Company’s NYSE stock price

on the closing date of the Maverick transaction.

In February 2025, the Company issued 8,500,000 new shares of common stock at $14.50 per share to raise gross proceeds of $123

million, excluding transaction costs of $6 million. The Company used the net proceeds to repay a portion of the debt incurred in

connection with the Maverick acquisition.

In October 2024, the Company issued 2,342,445 new shares of common stock direct to the Seller to fund a portion of the East Texas II

transaction. The total value of the stock consideration was $27 million based on the Company’s NYSE stock price on the closing date

of the East Texas II transaction.

In August 2024, the Company issued 2,249,650 new shares of common stock direct to Crescent Pass to fund a portion of the Crescent

Pass transaction. The total value of the stock consideration was $28 million based on the Company’s NYSE stock price on the closing

date of the Crescent Pass transaction.

In February 2023, the Company issued 6,422,200 new shares of common stock at $25.34 per share to raise gross proceeds of $163

million. Associated costs of the offering were $6 million. The Company used the proceeds to fund the Tanos II transaction.

For further details related to acquisitions, refer to Note 3 .

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Treasury Stock

The Company’s holdings in its own equity instruments are classified as treasury stock. The consideration paid, along with any directly

attributable incremental costs, is deducted from the Company’s stockholders’ equity until the shares are either cancelled or reissued.

No gain or loss is recognized in the Consolidated Statements of Comprehensive Income (Loss) upon the purchase, sale, issuance, or

cancellation of treasury stock.

Employee Benefit Trust (“EBT”)

In March 2022, the Company established the EBT to benefit its employees. The Company provides funding to the EBT to facilitate the

acquisition of shares. These shares are held in the EBT to fulfill awards and grants under the Company’s 2017 and 2025 Equity

Incentive Plans and the Employee Share Purchase Plan (the “ESPP”). Shares held in the EBT are treated in the same manner as

treasury stock and are thus included in the Consolidated Financial Statements as treasury stock. During the years ended December 31,

2025 and 2024, 1,657,000 and 418,151 shares were acquired by the EBT for approximately $23 million and $5 million, respectively.

As of December 31, 2025, the EBT held a total of 2,048,703 shares. For further details related to share-based compensation, refer to

Note 12 .

Stock Repurchase Program

During the year ended December 31, 2025, the Company repurchased 5,680,036 shares of common stock at an average price of $13.65

per share, amounting to a total of $78 million and representing 7% of common stock issued and outstanding as of December 31, 2025.

During the year ended December 31, 2024, the Company repurchased 1,219,879 shares of common stock at an average price of $13.03

per share, amounting to a total of $16 million and representing 2% of common stock issued and outstanding as of December 31, 2024.

During the year ended December 31, 2023, the Company repurchased 646,762 shares of common stock at an average price of $17.08

per share, amounting to a total of $11 million and representing 1% of common stock issued and outstanding as of December 31, 2023.

The Company has recorded the repurchase of these shares of common stock as a reduction in common stock and additional paid in

capital. All repurchased shares of common stock were cancelled upon repurchase. As of December 31, 2025 and 2024, the par value of

the cancelled shares was retired from common stock in the Consolidated Balance Sheets.

Dividends

Dividends are declared at the discretion of the Board of Directors and are subject to applicable law and contractual restrictions.

Dividends are paid to holders of record as of the record date. Dividends are waived on shares held in the EBT.

In November 2024, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of

$0.29 per share. The dividend was paid on March 31, 2025 to stockholders of record as of the close of business on February 28, 2025.

In April 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.29

per share. The dividend was paid on June 30, 2025 to stockholders of record as of the close of business on May 30, 2025.

In May 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.29 per

share. The dividend was paid on September 30, 2025 to stockholders of record as of the close of business on August 29, 2025.

In August 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of $0.29

per share. The dividend was paid on December 31, 2025 to stockholders of record as of the close of business on December 1, 2025.

In November 2025, the Company’s board of directors declared a cash dividend on the Company’s common stock in the amount of

$0.29 per share. The dividend is payable on March 31, 2026, to stockholders on record as of the close of business on February 27,

2026.

The Company’s ability to pay dividends is subject to certain restrictions under its Credit Facility and other debt agreements, which

may limit dividend payments based on leverage ratios and other financial covenants. Refer to Note 15 for additional information.

Note 12 - Compensation Plans

Equity Incentive Plans

The 2017 Equity Incentive Plan (the “2017 Plan”), as amended through April 9, 2025, authorized and reserved for issuance up to 10%

of the Company’s shares of common stock outstanding, which may be issued upon exercise of vested options or the vesting of RSUs,

PSUs and dividend equivalent units (“DEUs”) that were granted under the Plan. As of November 21, 2025, 3,947,882 shares were

subject to awards outstanding under the 2017 Plan.

On November 21, 2025, the Company adopted the 2025 Equity Incentive Plan (the “2025 Plan”). The 2025 Plan authorized and

reserved for issuance a total of 6,892,551 shares of common stock, consisting of 2,944,669 shares of common stock plus the 3,947,882

shares of common stock subject to awards outstanding under the 2017 Plan as of November 21, 2025 that are not issued because such

award is forfeit, canceled, terminates, expires or otherwise lapses, or is settled in cash or withheld by the Company in satisfaction of

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

the exercise price or tax withholding obligations. As of December 31, 2025, there were 2,889,420 shares of common stock available

for grant under the 2025 Plan.

Upon adoption of the 2025 Plan, no new awards may be granted under the 2017 Plan, and any shares that were previously authorized

and reserved for issuance under the 2017 Plan, but not subject to outstanding awards as of November 21, 2025, are no longer available

for grant. Only shares underlying outstanding awards under the 2017 Plan as of that date may be issued if and when those awards vest

or are exercised. All future equity awards will be made exclusively under the 2025 Plan.

Options Awards

As of December 31, 2025, 2024 and 2023, the number of options outstanding had no aggregate intrinsic value. During the year ended

December 31, 2023, the weighted average exercise price at exercise was $29.86. No options were exercised in the years ended

December 31, 2025 and 2024. As of December 31, 2025, 2024 and 2023, 139,794, 153,631 and 162,108 Options were exercisable,

respectively. As of December 31, 2025, 2024 and 2023, the weighted average remaining contractual life in years was 2.4, 3.4, and 4.6,

respectively. As of December 31, 2025, the Company had no unrecognized share-based compensation expense related to stock

options.

RSU Awards

The following table summarizes restricted stock unit (“RSU”) equity award activity for the respective period presented:

	Number of Shares	Weighted Average<br><br>Grant Date Fair<br><br>Value per Share
Balance as of December 31, 2024	976,222	$15.14
Granted	1,143,571	11.21
Vested	(108,223)	28.68
Forfeited	(40,663)	12.76
Balance as of December 31, 2025	1,970,907	$12.17

During the years ended December 31, 2025, 2024 and 2023, the aggregate intrinsic value at date of vesting was $1.3 million, $0.8

million, and $3.9 million, respectively. As of December 31, 2025, the Company had $13 million of unrecognized share-based

compensation expense related to RSUs that will be recognized over a weighted average period of 1.7 years.

RSUs can vest either on a cliff basis or ratably, depending on the service conditions. The fair value of the Company’s RSUs is

calculated using the closing price of our common stock on the NYSE at the grant date. This value is then expensed uniformly over the

vesting period.

PSU Awards

The following table summarizes performance-based restricted stock unit (“PSU”) equity award activity for the respective period

presented:

	Number of Shares	Weighted Average<br><br>Grant Date Fair<br><br>Value per Share
Balance as of December 31, 2024	965,303	$15.41
Granted	536,884	8.45
Vested	(174,897)	22.43
Forfeited	(20,600)	10.96
Balance as of December 31, 2025	1,306,690	$11.68

During the years ended December 31, 2025, 2024 and 2023, the aggregate intrinsic value at date of vesting was $1.4 million, $0.4

million, and $4.9 million, respectively. As of December 31, 2025, the Company had $5 million of unrecognized share-based

compensation expense related to PSUs that will be recognized over a weighted average period of 1.4 years.

PSUs are subject to cliff vesting based on specific performance criteria evaluated over a three-year period. These criteria include

average adjusted return on equity over three years, measured against pre-established benchmarks. Additionally, the Company’s three-

year TSR is compared to determined benchmarks and the TSR of a selected group of peer companies. Other performance metrics

include the three-year average growth in free cash flow and the reduction in methane intensity over the same period. Depending on the

achievement of these performance targets, the number of units that will vest can vary from 0% to 100% of the initial award.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

The fair value of the Company’s PSUs is determined using a Monte Carlo simulation model as of the grant date. This calculated fair

value is then expensed uniformly over the vesting period. For PSUs granted during the respective periods presented, the inputs to the

Monte Carlo model included the following:

	For the Year Ended December 31,
	2025	2024	2023
Risk-free rate of interest	3.8%	4.0%	3.3%
Volatility(a)	42%	38%	31%
Correlation with comparator group range	0.14 - 0.33	0.02 - 0.32	0.01 - 0.30

(a)Volatility utilizes the historical volatility for the Company’s share price.

Employee Stock Purchase Plan

The Employee Stock Purchase Plan (the “ESPP”), implemented in February 2023, authorized and reserved for issuance 300,000

shares of common stock.

During the year ended December 31, 2025, 40,932 shares were purchased by and issued to ESPP participants. During the year ended

December 31, 2024, 41,330 shares were purchased by and issued to ESPP participants. As of December 31, 2025, 202,606 shares

remain available to be purchased. As of December 31, 2025, the Company had no unrecognized share-based compensation expense

related to the ESPP.

Share-Based Compensation Expense

The following table presents the share-based compensation expense for the respective periods presented:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Options	$—	$49	$292
RSUs	6,665	4,359	2,833
PSUs	3,676	3,827	3,335
ESPP	57	51	34
Total share-based compensation expense	$10,398	$8,286	$6,494

Defined Contribution Plans

The Company has two defined contribution plans (“401(k) Plans”) that are subject to the Employee Retirement Income Security Act

of 1974 (“ERISA”). Both 401(k) Plans allows eligible employees to contribute up to 100% of their base salaries, up to the contribution

limits established under the Internal Revenue Code (“IRC”).

Employee Savings Plan

The Company makes a safe-harbor matching contribution equal to 100% of salary deferrals that do not exceed 7% of compensation.

The Company’s matching contributions to this 401(k) Plan for the years ended December 31, 2025, 2024, and 2023 were $9.5 million,

$7.9 million, and $7.2 million, respectively.

Employee Retirement Plan

The Company makes a non-elective safe-harbor contribution equal to 5% of compensation. In addition, the Company matches 50% of

employee contributions up to the first 4% of compensation. The Company’s safe-harbor non-elective contributions to this 401(k) Plan

for the years ended December 31, 2025, 2024, and 2023 were $0.8 million, $0.8 million, and $0.7 million, respectively. The

Company’s matching contributions to this 401(k) Plan for the years ended December 31, 2025, 2024, and 2023 were each $0.3

million.

Note 13 - Asset Retirement Obligations

The Company records a liability for the present value of the estimated future decommissioning costs associated with its natural gas

and oil properties. Additionally, the Company records a liability for the future decommissioning costs of its production facilities and

pipelines when required by contract, statute, or constructive obligation. For the years ended December 31, 2025, 2024 and 2023, no

state contractual agreements or statutes related to production facilities and pipelines are expected to impose material obligations on the

Company.

In estimating the present value of future decommissioning costs for its natural gas and oil properties, the Company considers several

factors, including the number and state jurisdictions of wells, current decommissioning costs by state and well type, and the

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Company’s retirement plan, which is based on state requirements and the Company’s capacity to retire wells over their productive

lives. The Company’s assumptions are grounded in the current economic environment and are believed to provide a reasonable basis

for estimating the future liability. However, actual decommissioning costs will ultimately depend on future market prices at the time

the decommissioning services are performed. Additionally, the timing of decommissioning will vary based on when the fields cease to

produce economically, which is influenced by future natural gas and oil prices and the retirement schedule. These factors are

inherently uncertain.

The Company incorporates annual inflationary cost increases into its current cost expectations and then discounts the resulting cash

flows using a credit-adjusted risk-free discount rate.

The components of the change in our asset retirement obligations are detailed below for the periods presented:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Balance at beginning of period	$625,621	$468,843	$446,262
Additions(a)	195,923	105,614	3,192
Accretion expense	48,607	28,464	23,903
Asset retirement costs	(23,015)	(7,626)	(5,330)
Disposals(b)	—	—	(10,275)
Revisions(c)	41,562	30,326	11,091
Balance at end of period	$888,698	$625,621	$468,843
Less: Current asset retirement obligations(d)	24,857	6,436	5,402
Noncurrent asset retirement obligations	$863,841	$619,185	$463,441

(a)During the year ended December 31, 2025, $180 million and $11 million of additions relate to the Maverick and Canvas

acquisitions, respectively. During the year ended December 31, 2024, $64 million and $34 million of additions relate to the

Oaktree and Crescent Pass acquisitions, respectively. For further details regarding acquisitions, refer to Note 3.

(b)Disposals are related to the divestiture of natural gas and oil properties. For additional information, refer to Note 6.

(c)Revisions primarily represent changes in the present value of liabilities resulting from changes in estimated costs and economic

lives of producing properties.

(d)The increase in current asset retirement obligations is primarily due to an increase in the number of wells expected to be plugged

in the near term.

Note 14 - Leases

The Company leases office space, vehicles, and equipment under non-cancelable operating and finance leases. Lease terms generally

range from one to six years and may include renewal or termination options. The Company does not have any material subleases,

purchase options, or residual value guarantees. The Company recognizes right-of-use (“ROU”) assets and lease liabilities on the

Consolidated Balance Sheets for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one

year or less are not capitalized.

Short-term lease costs represent the expense recognized for leases where the company has elected the short-term lease exemption

under ASC 842. This exemption allows the Company to expense, rather than capitalize, leases with a term of 12 months or less. The

Company’s short-term leases are primarily associated with compressor rentals and have been included in the Company’s operating

expenses, with a significant portion allocated to LOE.

The components of lease costs and other information related to leases were as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Operating lease costs	$3,946	$1,990	$1,814
Finance lease costs
Amortization of the ROU assets	16,883	11,088	9,293
Interest expense on the lease liabilities	3,887	2,547	1,568
Short-term lease costs	46,346	31,129	30,024
Total lease costs	$71,062	$46,754	$42,699

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Maturities of the Company’s lease liabilities were as follows as of December 31, 2025:

(in thousands)	2026	2027	2028	2029	2030	Thereafter	Total<br><br>Future<br><br>Lease<br><br>Payments	Less:<br><br>Imputed<br><br>Interest	Total<br><br>Lease<br><br>Liabilities
Operating Leases	$2,191	$680	$337	$344	$351	$298	$4,201	$459	$3,742
Finance Leases	26,560	22,135	17,354	11,922	4,497	272	82,740	10,778	71,962	Operating Leases	Finance Leases
---	---	---
Weighted average lease term (years)	3.0	3.7
Weighted average discount rate	6.6%	7.2%

The Company determines the lease term as the non-cancelable period plus any renewal options reasonably certain to be exercised. The

discount rate used to measure lease liabilities is the rate implicit in the lease, if readily determinable. Otherwise, the Company uses its

incremental borrowing rate at the lease commencement date.

For additional information regarding cash paid for lease liabilities and non-cash right-of-use asset additions, refer to the Supplemental

Cash Flow Information in Note 20.

Note 15 - Borrowings

The Company’s borrowings consist of the following amounts (in thousands) as of the reporting periods presented:

					As of December 31,
Instrument	Interest Rate				2025	2024
Credit Facility	7.04%	and	8.63%	respectively)(a)	$485,400	$284,400
Term Loan I, due May 2030	6.50%				—	88,948
Term Loan II, due August 2027	8.83%	(a)			—	83,851
ABS I Note, due January 2037	5.00%				—	80,157
ABS II Notes, due July 2037	5.25%				—	102,431
ABS IV Notes, due February 2037	4.95%				64,560	79,653
ABS VI Notes, due November 2039	7.50%	(b)			191,651	242,010
ABS VIII Notes, due May 2044	7.28%				546,340	585,747
ABS IX Notes, due September 2044	6.89%				67,177	75,316
ABS X Notes, due February 2045	7.07%				488,369	—
ABS XI Notes, due November 2045	6.61%				400,000	—
ABS Maverick Notes, due December 2038	9.10%				412,244	—
Nordic Bonds, due April 2029	9.75%				300,000	—
Other miscellaneous borrowings(c)					29,504	113,060
Total borrowings					$2,985,245	$1,735,573
Less: Current portion of long-term debt					(236,553)	(209,463)
Less: Deferred financing costs					(31,616)	(22,426)
Plus: Market premiums					8,133	—
Less: Original issue discounts					(9,748)	(8,216)
Total noncurrent borrowings, net					$2,715,461	$1,495,468

(a)Represents the variable interest rate as of period end.

(b)Includes $133 million for the assumption of Oaktree’s proportionate share of the ABS VI debt as part of the Oaktree transaction

as of December 31, 2024. Refer to Note 3 for additional information regarding the Oaktree transaction.

(c)Includes $76 million in notes payable issued as part of the consideration in the Oaktree transaction as of December 31, 2024.

Includes $23 million and $30 million in notes payable issued by a third party financial institution in November 2024,

collateralized by two natural gas processing plants and various natural gas compressors and related support equipment in the

Central Region, as of December 31, 2025 and 2024, respectively. Refer to Note 3 for additional information regarding the

Oaktree acquisition.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Credit Facility

The Company maintains a Credit Facility with a lending syndicate, the borrowing base for which is redetermined semi-annually or as

needed. The Company’s wholly owned subsidiary, DP RBL Co LLC, serves as the borrower under the Credit Facility. The borrowing

base is primarily determined by the value of the natural gas and oil properties that serve as collateral for the lending arrangement, and

it may fluctuate due to changes in collateral, which can result from acquisitions or the establishment of ABS, term loans, or other

lending structures.

In March 2025, in connection with the close of the Maverick acquisition, the Company amended and restated the credit agreement

governing its Credit Facility. The amendment and restatement extended the maturity of the Credit Facility to March 2029 and

increased the borrowing base to $900 million, primarily resulting from the additional collateral acquired in the Maverick acquisition.

The Company utilized the proceeds from the upsized borrowing base to fund a portion of the Maverick acquisition and repay the

outstanding principal on Term Loan II. Refer to Note 3 for additional information regarding acquisitions. During the semi-annual

redetermination in October 2025, the borrowing base was reduced to $825 million.

The Credit Facility has an interest rate of SOFR plus an additional spread ranging from 2.75% to 3.75% based on utilization. Interest

payments on the Credit Facility are paid on a quarterly basis. Available borrowings under the Credit Facility were $305 million as of

December 31, 2025, which considers the impact of $35 million in letters of credit issued to certain vendors.

Term Loan I

In May 2020, the Company acquired DP Bluegrass LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary, to facilitate

a securitized financing agreement for $160 million, structured as a secured term loan (the “Term Loan I”). The Company issued Term

Loan I at a 1% discount, resulting in net proceeds of $158 million, which were used to fund the 2020 Carbon and EQT acquisitions.

Term Loan I is secured by certain producing assets acquired in connection with these acquisitions.

Term Loan I accrued interest at an annual rate of 6.50% and had a maturity date of May 2030. Both interest and principal payments on

Term Loan I were made on a monthly basis.

In February 2025, Term Loan I was repaid and retired from the Company’s outstanding debt.

Term Loan II

In August 2024, the Company formed DP Yellow Jacket Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary to enter into a securitized financing agreement for a $60 million term loan and a $5 million revolving loan for a total

borrowing base of $65 million (the “Term Loan II”). The proceeds from Term Loan II were used, in part, to fund the Crescent Pass

acquisition. For additional information regarding acquisitions, refer to Note 3.

In October 2024, the Company amended the Term Loan II and expanded the term loan to $83 million and the revolving loan to $12

million for a total borrowing base of $95 million. This amendment was accounted for as an extinguishment, which resulted in a loss of

$2 million, recorded in loss on early retirement of debt in the Consolidated Statements of Comprehensive Income (Loss). The

expanded borrowing capacity was used to fund a portion of the East Texas II acquisition, and the acquired assets additionally

collateralized the expanded Term Loan II.

The Term Loan II was secured by the Crescent Pass and East Texas II assets and carried an interest at SOFR plus an additional spread

ranging from 3.75% to 4.75% and was payable quarterly. The term loan was subject to fixed amortization with monthly principal

payments of $0.5 million beginning in February 2025 and escalating to $1 million beginning in July 2025 with the remaining unpaid

principal balance due upon maturity in August 2027. The Term Loan II was to be prepaid if the Company received cash in connection

with an issuance of equity interest or ABS monetization.

In March 2025, the Term Loan II was repaid and retired from the Company’s outstanding debt.

ABS I Notes

In November 2019, the Company formed Diversified ABS LLC (“ABS I”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue BBB- rated asset-backed securities with a total principal amount of $200 million at par (the “ABS I Notes”). The

ABS I Notes were secured by specific upstream producing assets in the Appalachian Region owned by the Company. At the time of

the agreement, 85% of the natural gas production from these assets was hedged through long-term derivative contracts. The ABS I

Notes carried an annual interest rate of 5% and had a legal final maturity date of January 2037, with an amortizing maturity date of

December 2029. Both interest and principal payments on the ABS I Notes were made on a monthly basis.

In February 2025, the ABS I Notes were repaid and retired from the Company’s outstanding debt.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

ABS II Notes

In April 2020, the Company formed Diversified ABS Phase II LLC (“ABS II”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue BBB- rated asset-backed securities with a total principal amount of $200 million (the “ABS II Notes”). The ABS II

Notes were issued at a 2.775% discount. The Company used the net proceeds of $184 million, net of discount, capital reserve

requirement, and debt issuance costs, to reduce the outstanding balance on its Credit Facility. The ABS II Notes were secured by

specific upstream producing assets in the Appalachian Region owned by the Company. At the time of the agreement, 85% of the

natural gas production from these assets was hedged through long-term derivative contracts. The ABS II Notes carried an annual

interest rate of 5.25% and had a legal final maturity date of July 2037, with an amortizing maturity date of September 2028. Both

interest and principal payments on the ABS II Notes were made on a monthly basis.

In February 2025, the ABS II Notes were repaid and retired from the Company’s outstanding debt.

ABS III Notes

In February 2022, the Company formed Diversified ABS III LLC (“ABS III”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $365 million at par (the “ABS III Notes”). The

ABS III Notes were secured by certain upstream producing and midstream assets in the Appalachian Region owned by the Company.

The ABS III Notes carried an interest rate of 4.875% and had a legal final maturity date of April 2039, with an amortizing maturity

date of November 2030. Both interest and principal payments on the ABS III Notes were made on a monthly basis.

In May 2025, the ABS III Notes were repaid and retired from the Company’s outstanding debt.

ABS IV Notes

In February 2022, the Company formed Diversified ABS IV LLC (“ABS IV”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $160 million at par (the “ABS IV Notes”). The

ABS IV Notes are secured by a portion of the upstream producing assets acquired through the Blackbeard acquisition. The ABS IV

Notes carry an annual interest rate of 4.95% and have a legal final maturity date of February 2037, with an amortizing maturity date of

September 2030. Both interest and principal payments on the ABS IV Notes are made on a monthly basis.

ABS V Notes

In May 2022, the Company formed Diversified ABS V LLC (“ABS V”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue BBB rated asset-backed securities with a total principal amount of $445 million at par value (the “ABS V Notes”).

The ABS V Notes were secured by a majority of the Company’s remaining upstream assets in the Appalachian Region that were not

included in previous ABS transactions. The ABS V Notes carried an annual interest rate of 5.78% and had a legal final maturity date

of May 2039, with an amortizing maturity date of December 2030. Both interest and principal payments on the ABS V Notes were

made on a monthly basis.

In May 2025, the ABS V Notes were repaid and retired from the Company’s outstanding debt.

ABS VI Notes

In October 2022, the Company formed Diversified ABS VI LLC (“ABS VI”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue, jointly with Oaktree, BBB+ rated asset-backed securities with a total principal amount of $460 million. The

Company’s share amounted to $236 million before fees, reflecting its 51.25% ownership interest in the collateral assets (the “ABS VI

Notes”). The ABS VI Notes were issued at a 2.63% discount and are primarily secured by the upstream assets jointly acquired with

Oaktree in the Tapstone acquisition. The Company recorded its proportionate share of the ABS VI Notes in its Consolidated Balance

Sheets. In June, 2024, as part of the Oaktree acquisition, the Company assumed Oaktree’s proportionate debt of $133 million

associated with the ABS VI Notes. For additional details regarding the Oaktree transaction, refer to Note 3.

The ABS VI Notes carry an annual interest rate of 7.50% and have a legal final maturity date of November 2039, with an amortizing

maturity date of October 2031. Both interest and principal payments on the ABS VI Notes are made on a monthly basis.

ABS VII Notes

In November 2023, the Company formed DP Lion Equity Holdco LLC (“ABS VII”), a limited-purpose, bankruptcy-remote, wholly-

owned subsidiary, to issue Class A and Class B asset-backed securities (the “Class A Notes,” Class B Notes,” and collectively the

“ABS VII Notes”). These notes are secured by certain upstream producing assets in the Appalachia Region. The Class A Notes, rated

BBB+, were issued with a total principal amount of $142 million, while the Class B Notes, rated BB-, were issued with a total

principal amount of $20 million. The Class A Notes carry an annual interest rate of 8.243% and have a legal final maturity date of

November 2043, with an amortizing maturity date of February 2034. The Class B Notes carry an annual interest rate of 12.725% and

have a legal final maturity date of November 2043, with an amortizing maturity date of August 2032. Both interest and principal

payments on the Class A and Class B Notes are made on a monthly basis.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

In December 2023, the Company divested 80% of the equity ownership in ABS VII to outside investors, generating cash proceeds of

$30 million. Upon evaluating the remaining 20% interest in ABS VII, the Company determined that the governance structure does not

allow it to exercise control, joint control, or significant influence over the entity. Consequently, ABS VII is not consolidated within the

Company’s financial statements. The Company’s remaining investment in ABS VII, initially valued at $8 million was accounted for at

fair value in accordance with ASC 321, Investments – Equity Securities, with changes in fair value recognized in net income.

ABS VIII Notes

In May 2024, the Company formed Diversified ABS VIII LLC (“ABS VIII”), a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary, to issue Class A-1 and Class A-2 asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” and collectively the

“ABS VIII Notes”). The Class A-1 Notes, rated A, were issued with a total principal amount of $400 million, while the Class A-2

Notes, rated BBB+, were issued with a total principal amount of $210 million. The proceeds from these issuances were used to repay

the outstanding principal of the ABS III & ABS V notes, effectively retiring those notes from the Company’s outstanding debt.

Consequently, ABS III and ABS V were dissolved. The ABS VIII Notes are secured by the collateral that previously secured the ABS

III and ABS V notes, which includes certain upstream producing and midstream assets in the Appalachian Region owned by the

Company, and the remaining upstream assets in the Appalachian Region that were not securitized by previous ABS transactions.

The Class A-1 Notes carry an annual interest rate of 7.076%, while the Class A-2 Notes carry an annual interest rate of 7.670%. These

notes have a legal final maturity date of May 2044, with an amortizing maturity date of March 2033. Both interest and principal

payments on the ABS VIII Notes are made on a monthly basis.

ABS IX Notes

In June 2024, the Company formed DP Mustang Holdco LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary (“ABS

IX,” formerly “ABS Facility Warehouse”), to secure a bridge loan facility (the “ABS Facility Warehouse Notes”). The initial draw on

the ABS Facility Warehouse Notes amounted to $71 million, which included $66 million in net proceeds, $3 million in restricted cash

interest reserve, and $2 million in debt issuance costs. The ABS Facility Warehouse Notes were secured by certain producing assets

that previously collateralized the Credit Facility. It carried an interest rate of SOFR plus an additional 3.75% and had a legal final

maturity date of May 2029. Both interest and principal payments on the ABS Facility Warehouse Notes were made on a monthly

basis.

In September 2024, the Company issued Class A and Class B asset-backed securities (the “Class A Notes,” “Class B Notes,” and

collectively the “ABS IX Notes”) with a total principal amount of $77 million. The Class A Notes were issued with a total principal

amount of $71 million, while the Class B Notes were issued with a total principal amount of $6 million. The proceeds from these

issuances were used to repay the outstanding principal of the ABS Facility Warehouse Notes, effectively retiring it from the

Company’s outstanding debt and resulting in a loss on the early retirement of debt amounting to $2 million. The Class A Notes carry

an annual interest rate of 6.555% and have an amortizing maturity date of December 2034. The Class B Notes carry an annual interest

rate of 11.235% and have an amortizing maturity date of September 2030. Both interest and principal payments on the ABS IX Notes

are made on a monthly basis.

ABS X Notes

In February 2025, the Company formed Diversified ABS Phase X LLC, a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary (“ABS X”), to issue Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,”

“Class B Notes,” and collectively the “ABS X Notes”) with a total principal amount of $530 million. The Class A-1 Notes, rated A-,

were issued with a total principal amount of $200 million. The Class A-2 Notes, rated BBB, were issued with a total principal amount

of $240 million. The Class B Notes, rated BB-, were issued with a total principal amount of $90 million. The proceeds from these

issuances were used to repay the outstanding principal of the ABS I Notes, ABS II Notes, and Term Loan I, effectively retiring those

notes from the Company’s outstanding debt. The ABS X Notes are secured by certain upstream producing assets in the Appalachian

Region owned by the Company, including those that previously collateralized the ABS I Notes, ABS II Notes, and Term Loan I.

Excess proceeds from the issuance of the Notes were used to fund the Summit acquisition and for general corporate purposes. Refer to

Note 4 for additional information regarding acquisitions.

The Class A-1 Notes carry an annual interest rate of 5.945%. The Class A-2 Notes carry an annual interest rate of 6.751%. The Class

B Notes carry an annual interest rate of 10.398%. These notes have a legal final maturity date of February 2045. Both interest and

principal payments on the ABS X Notes are made on a monthly basis.

ABS Maverick Notes

In February 2025, the Company formed Maverick ABS Holdings LLC, a limited-purpose, bankruptcy-remote, wholly-owned

subsidiary (“ABS Maverick”), to hold the Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class

A-2 Notes,” “Class B Notes,” and collectively the “ABS Maverick Notes”) assumed as part of the Maverick acquisition. These Notes

had a total principal amount of $640 million upon issuance. The Class A-1 Notes, rated A-, were issued with a total principal amount

of $285 million. The Class A-2 Notes, rated BBB+, were issued with a total principal amount of $260 million. The Class B Notes,

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

rated BB-, were issued with a total principal amount of $95 million. Upon acquisition, the ABS Maverick Notes carried a 1.6% market

premium and are secured by certain upstream producing assets in the Western Anadarko Basin acquired in the Maverick acquisition.

Refer to Note 4 for additional information regarding acquisitions.

The Class A-1 Notes carry an annual interest rate of 8.121%. The Class A-2 Notes carry an annual interest rate of 8.946%. The Class

B Notes carry an annual interest rate of 12.436%. These notes have a legal final maturity date of December 2038. Both interest and

principal payments on the ABS Maverick Notes are made on a monthly basis.

ABS XI Notes

In November 2025, the Company formed DP Keeneland Mile LLC, a limited-purpose, bankruptcy-remote, wholly-owned subsidiary

(“ABS XI”), to issue Class A-1, Class A-2, and Class B asset-backed securities (the “Class A-1 Notes,” “Class A-2 Notes,” “Class B

Notes,” and collectively the “ABS XI Notes”) with a total principal amount of $400 million. The Class A-1 Notes were issued with a

total principal amount of $247 million. The Class A-2 Notes were issued with a total principal amount of $91 million. The Class B

Notes were issued with a total principal amount of $62 million. The proceeds from this issuance were used to fund, in part, the Canvas

acquisition and are secured by certain upstream producing assets acquired.

The Class A-1 Notes carry an annual interest rate of 5.757%. The Class A-2 Notes carry an annual interest rate of 6.547%. The Class

B Notes carry an annual interest rate of 10.129%. These notes have a legal final maturity date of November 2045. Both interest and

principal payments on the ABS XI Notes are made on a monthly basis.

Nordic Bonds

In April 2025, the Company issued the Nordic Bonds, consisting of $300 million of new senior secured notes in the Nordic bond

market at a 2% discount, resulting in net proceeds of $294 million. The proceeds were used to repay existing indebtedness and for

general corporate purposes. The Nordic Bonds mature in April 2029 and bear interest at a fixed rate of 9.75% per annum, payable

semi-annually in arrears. The Bonds are guaranteed by the Company and secured by (i) all of the Company’s U.S. bank accounts, (ii)

the equity interests in Diversified Gas and Oil Company (“DGOC”) as well as DGOC’s equity interests in its direct operating

subsidiaries and (iii) interests in certain intercompany loans.

The Nordic Bonds contain the following financial covenants (i) the leverage ratio shall not exceed 3.5x, (ii) the asset coverage ratio

shall not be less than 1.20 to 1.00, (iii) book equity shall not be less than $500 million, and (iv) liquidity shall not be less than 25% of

the outstanding bonds.

The Nordic Bonds were listed for trading on the Oslo Stock Exchange in October 2025.

Oaktree Seller’s Notes

In June 2024, the Company partially funded the purchase price of the Oaktree acquisition with deferred consideration in the form of an

unsecured seller’s note from Oaktree (the “Oaktree Seller’s Note”). The Company issued $83 million in notes at an annual interest rate

of 8%, with a legal final maturity date of December 2025. Deferred interest and principal payments were scheduled in three

installments: December 2024, June 2025, and December 2025.

In October 2024, the Company modified the terms of the Oaktree Seller’s Note, increasing the rate to 9%, extending the maturity date

to September 2026, and changing the payment schedule to monthly interest and principal payments.

In April 2025, the Company used proceeds from the Nordic Bonds to repay the outstanding principal of the Oaktree Seller’s Note,

thereby retiring the notes from the Company’s outstanding debt. For additional information regarding the Oaktree transaction, refer to

Note 3.

Early Retirement of Debt

In February 2025, the Company used proceeds from the ABS X Notes to repay the outstanding principal of the ABS I & II notes and

Term Loan I, thereby retiring the ABS I & II notes and Term Loan I from the Company’s outstanding debt and resulting in a loss on

the early retirement of debt of $27 million. Concurrently, Diversified ABS Holdings LLC, Diversified ABS Phase II Holdings LLC,

and DP Bluegrass Holdings LLC were dissolved. The ABS X Notes are secured by the collateral previously securing the ABS I & II

notes, along with a portion of the collateral previously securing Term Loan I.

In March 2025, the Company used proceeds from the upsized borrowing base on the amended and restated credit agreement governing

the Credit Facility to repay the outstanding principal on Term Loan II, thereby retiring Term Loan II from the Company’s outstanding

debt and resulting in a loss on the early retirement of debt of $0.2 million.

In May 2024, the Company utilized proceeds from the ABS VIII Notes to repay the outstanding principal of the ABS III & ABS V

notes, thereby retiring these notes from the Company’s outstanding debt. The transaction resulted in a loss on the early retirement of

debt amounting to $11 million. Concurrently, ABS III and ABS V were dissolved. The ABS VIII Notes are secured by the collateral

that previously secured the ABS III & ABS V notes.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Debt Covenants

Credit Facility

The Credit Facility contains certain customary representations and warranties and affirmative and negative covenants, including

covenants relating to: maintenance of books and records; financial reporting and notification; compliance with laws; maintenance of

properties and insurance; and limitations on incurrence of indebtedness, liens, fundamental changes, international operations, asset

sales, making certain debt payments and amendments, restrictive agreements, investments, restricted payments and hedging. The

restricted payment provision governs the Company’s ability to make discretionary payments such as dividends, share repurchases, or

other discretionary payments. DP RBL Co LLC must comply with the following restricted payments test in order to make

discretionary payments (i) leverage is less than 1.5x and borrowing base availability is >20%, or (ii) leverage is between 1.5x and

2.0x, free cash flow must be positive, and borrowing base availability must be >20%; and (iii) when leverage exceeds 2.0x, restricted

payments are prohibited.

Additional covenants require DP RBL Co LLC to maintain a ratio of total debt to EBITDAX of not more than 3.25 to 1.00 and a ratio

of current assets (with certain adjustments) to current liabilities of not less than 1.00 to 1.00 as of the last day of each fiscal quarter.

As of December 31, 2025, the Company was in compliance with all covenants for its Credit Facility.

ABS IV, VI, VIII, IX, X, XI, and Maverick Notes (Collectively, the “ABS Notes”) and the Nordic Bonds

The ABS Notes and Nordic Bonds are governed by a series of covenants and restrictions typical for such transactions, including (i) the

requirement for the issuer to maintain specified reserve accounts to ensure the payment of interest on the ABS Notes and Nordic Bond,

(ii) provisions for optional and mandatory prepayments, specified make-whole payments under certain conditions, (iii) indemnification

payments in the event that the assets pledged as collateral for the ABS Notes and Nordic Bond are found to be defective or ineffective,

(iv) covenants related to recordkeeping, access to information and similar matters, and (v) compliance with all applicable laws and

regulations, including the Employee Retirement Income Security Act (“ERISA”), environmental laws, and the USA Patriot Act (ABS

IV only).

The ABS Notes and Nordic Bonds are also subject to customary accelerated amortization events as outlined in the indenture. These

events include failure to maintain specified debt service coverage ratios, failure to meet certain production metrics, certain change of

control and management termination events, and the failure to repay or refinance the ABS Notes and Nordic Bond on the applicable

scheduled maturity date.

Additionally, the ABS Notes and Nordic Bonds are subject to customary events of default, which include non-payment of required

interest, principal, or other amounts due, failure to comply with covenants within specified time frames, certain bankruptcy events,

breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments.

As of December 31, 2025 the Company was in compliance with all covenants related to the ABS Notes and Nordic Bonds.

Future Maturities

The table below represents the Company’s future maturities of its total borrowings as of December 31, 2025, excluding deferred

financing costs, premiums, and discounts:

(in thousands)	2026	2027	2028	2029	2030	Thereafter	Total debt
Debt maturity	$236,553	$217,426	$197,691	$969,696	$253,467	$1,110,412	$2,985,245

Interest Expense

The table details the Company’s interest expense for each of the periods presented:

	For the Year Ended December 31,
(In thousands)	2025	2024	2023
Interest incurred
Borrowings	$216,132	$138,829	$133,142
Other	1,432	554	606
Total interest incurred	217,564	139,383	133,748
LESS: Capitalized interest	7,597	2,582	2,889
Interest expense	$209,967	$136,801	$130,859

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Fair Value

The table below represents the fair value of the Company’s debt structures as of the periods presented:

	As of December 31,
(in thousands)	2025	2024
Credit Facility(a)	$485,400	$284,400
Term Loans(b)	—	170,128
ABS notes(b)	2,215,749	1,156,858
Nordic Bond(b)	306,088	—
Other miscellaneous borrowings(a)	24,478	107,588
Total fair value of outstanding debt	$3,031,715	$1,718,974

(a)Carrying value approximates fair value.

(b)Fair values are measured using a market approach, based upon market rates, which are Level 2 inputs.

Note 16 - Accounts Payable & Accrued Liabilities

All accounts payable and accrued liabilities are classified as current liabilities and are expected to be settled within one year from the

balance sheet date. These obligations are unsecured, non-interest bearing, and are typically settled in the normal course of business.

The carrying amounts approximate fair value due to the short-term nature of these liabilities. There are no material amounts past due

or in dispute as of the balance sheet date. The table below details the Company’s accounts payable and accrued liabilities as of the

periods presented:

	As of December 31,
(in thousands)	2025	2024
Accounts payable	$81,814	$35,013
Accrued operating expense	67,475	37,573
Accrued compensation expense	31,425	21,730
Accrued capital expenditures	41,670	12,017
Other accrued liabilities	53,172	24,046
Total accounts payable & accrued liabilities	$275,556	$130,379

Note 17 - Other Liabilities

The table below details the Company’s other liabilities as of the periods presented:

	As of December 31,
(in thousands)	2025	2024
Other current liabilities
Taxes payable	$53,722	$33,498
Operating lease liabilities	2,131	1,567
Financing lease liabilities	22,036	12,209
Current portion of ARO	24,857	6,436
Other current liabilities	64,755	47,575
Total other current liabilities	$167,501	$101,285
Other noncurrent liabilities
Operating lease liabilities	$1,611	$1,802
Financing lease liabilities	49,926	29,022
Deferred tax liability	11,900	8,011
Other noncurrent liabilities	14,969	5,384
Total other noncurrent liabilities	$78,406	$44,219

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Note 18 - Fair Value

The fair value of an asset or liability is defined as the price that would be received for an asset or paid to transfer a liability in the

principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the

measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use

of unobservable inputs. To determine fair value, the Company applies a hierarchy that consists of three input levels. The first and

second levels are regarded as observable, while the third is categorized as unobservable. These input levels may be utilized in the

measurement of fair value as outlined below:

Level 1:	Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.
Level 2:	Inputs (other than quoted prices included in Level 1) can include the following:

(1) Observable prices in active markets for similar assets or liabilities;

(2) Prices for identical assets or liabilities in markets that are not active;

(3) Directly observable market inputs for substantially the full term of the asset or liability; and

(4) Market inputs that are not directly observable but are derived from or corroborated by observable market data.

Level 3:	Unobservable inputs which reflect the Company’s best estimates of what market participants would use in pricing the<br><br>asset or liability at the measurement date.

There were no transfers between fair value levels for the year ended December 31, 2025.

Recurring Fair Value Measurements

Derivatives

The Company measures the fair value of its derivatives in accordance with ASC 820, Fair Value Measurement, utilizing valuation

models that incorporate observable market inputs whenever available. These inputs typically include contractual terms, current market

prices, forward price curves for natural gas, liquids, and oil, relevant interest rate yield curves (such as U.S. Treasury and SOFR), and

volatility factors.

Derivatives are classified within the fair value hierarchy based on the observability of the inputs used in the valuation. The Company’s

fixed price swaps are classified as Level 2 and are valued using third-party discounted cash flow models, which rely on NYMEX

futures for natural gas and oil derivatives and OPIS forward curves for NGL derivatives. Interest rate derivatives, also classified as

Level 2, are valued using discounted cash flow models that incorporate contracted notional amounts, market-quoted SOFR yield

curves, and credit-adjusted risk-free rates.

Options, including call options, put options, and collars, are classified as Level 2 and valued using the Black-Scholes option pricing

model. This model incorporates contract terms such as maturity, market parameters including NYMEX and OPIS futures, interest

rates, volatility, and counterparty credit risk. Volatility and other significant inputs are obtained from independent third-party pricing

sources and are subject to monthly verification.

Basis swaps are classified as Level 2 and are valued using third-party models based on forward commodity price curves.

Changes in key inputs, such as volatility, may result in changes to the fair value measurement of the Company’s derivatives.

Assets and liabilities measured at fair value on a recurring basis as of the following periods:

	As of December 31, 2025
(in thousands)	Level 1	Level 2	Level 3
Assets
Derivatives	—	234,852	—
Liabilities
Derivatives	—	(596,526)	—
Total net assets (liabilities)	$—	$(361,674)	$—

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company
	As of December 31, 2024
---	---	---	---
(in thousands)	Level 1	Level 2	Level 3
Assets
Derivatives	—	62,198	—
Liabilities
Derivatives	—	(772,545)	—
Total net assets (liabilities)	$—	$(710,347)	$—

Nonrecurring Fair Value Measurements

Impairment of Proved Natural Gas & Oil Properties

When impairment occurs, the Company estimates the fair value of the impaired proved natural gas and oil properties through a

discounted cash flow method, which incorporates Level 3 inputs that are not directly observable.

Business combinations

The Company assesses the value of acquired proved properties using an income-based approach as of the acquisition date. This

method is classified as a Level 3 fair value estimate due to its reliance on key assumptions, such as anticipated production volumes,

future commodity pricing, operating costs, weighted average cost of capital (the discount rate) and risk adjustments tailored to the

reserve classification.

Financial Instruments Not Measured at Fair Value

The carrying values of cash and cash equivalents, accounts receivable, other current assets, accounts payable, accrued liabilities, and

other current liabilities approximate fair value due to the highly liquid or short-term nature. The Company’s Credit Facility (see Note

15) has a recorded value that approximates fair market value, as it bears interest at a floating rate that approximates a current market

rate.

Note 19 - Commitments & Contingencies

Delivery Commitments

We have contractually agreed to deliver firm quantities of natural gas to various customers, which we expect to fulfill with production

from existing reserves. To ensure we meet these commitments, we regularly monitor our proved developed reserves.

The following table summarizes our total undiscounted commitments, compiled using best estimates based on our sales strategy, as of

December 31, 2025.

	2026	2027	2028	2029	2030	Thereafter	Total
Natural gas (MMcf)	169,054	49,203	25,942	15,727	15,727	275,622	551,275

Litigation and Regulatory Proceedings

The Company is involved in various pending legal issues that have arisen in the ordinary course of business. The Company accrues for

litigation, claims, and proceedings when a liability is both probable and the amount can be reasonably estimated. As of December 31,

2025 and 2024, the Company did not have any material amounts accrued related to litigation or regulatory matters.

For any matters not accrued for, it is not possible to estimate the amount of any additional loss or range of loss that is reasonably

possible. However, based on the nature of the claims, management believes that current litigation, claims, and proceedings are not,

individually or in aggregate, after considering insurance coverage and indemnification, likely to have a material adverse impact on the

Company’s financial position, results of operations, or cash flows.

The Company has no other contingent liabilities that would have a material impact on the Company’s financial position, results of

operations, or cash flows.

Environmental Matters

The Company’s operations are subject to environmental laws and regulations in all the jurisdictions where it operates, and it was in

compliance as of December 31, 2025 and 2024. However, the Company is unable to predict the impact of additional environmental

laws and regulations that may be adopted in the future, including whether they would adversely affect its operations. The Company

can offer no assurance regarding the significance or cost of compliance associated with any new environmental legislation or

regulation once implemented.

Table of Contents	Notes to the Consolidated Statements Financial Statements	Diversified Energy Company

Note 20 - Supplemental Cash Flow Information

The following table summarizes supplemental cash flow information as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Supplemental cash flow information:
Cash paid for interest	$201,310	$123,141	$116,784
Cash paid for income taxes	3,479	11,421	8,260
Cash paid for amounts included in the measurement of operating lease liabilities	3,723	1,990	2,044
Cash paid for amounts included in the measurement of finance lease liabilities	15,816	12,473	10,263
Supplemental disclosure of non-cash transactions:
Issuance of common stock for acquisitions	$307,221	$55,866	$—
Additions to asset retirement obligations	195,923	105,614	3,192
Right-of-use assets obtained in exchange for operating lease liabilities	25,711	—	—
Right-of-use assets obtained in exchange for finance lease liabilities	3,605	—	—

Cash paid for amounts included in the measurement of operating lease liabilities represents total lease payments made during the

period. For finance leases, cash paid for amounts included in the measurement of lease liabilities represents the principal portion of

lease payments. Interest paid on finance leases is included in cash paid for interest.

For additional information regarding income taxes, stockholders’ equity, ARO, leases, and interest, see Notes 4, 11, 13, 14, and 15,

respectively.

Note 21 - Supplemental Quarterly Financial Information (Unaudited)

In connection with the Company’s transition from International Financial Reporting Standards (“IFRS”) to U.S. GAAP, the quarterly

financial information for the fiscal year ended December 31, 2025 has been prepared and presented for the first time on a U.S. GAAP

basis. As all quarterly amounts reflect the application of U.S. GAAP to periods previously reported only on an IFRS basis, the

summarized quarterly financial information below represents the Company’s initial presentation of U.S. GAAP quarterly results.

	For the Three Months Ended
(in thousands, except per share data)	March 31, 2025	June 30, 2025	September 30, 2025	December 31, 2025
Total revenue	$62,515	$600,338	$499,769	$666,520
Income (loss) from operations	(188,112)	291,381	180,883	250,865
Net income (loss) attributable to DEC	(323,197)	297,737	171,115	195,460
EPS
Basic	$(5.52)	$3.77	$2.22	$2.54
Diluted	(5.52)	3.67	2.14	2.48

Note 22 - Subsequent Events

The Company has evaluated subsequent events occurring after December 31, 2025, through February 26, 2026, the date the financial

statements were issued. The following material transactions occurred subsequent to year-end:

Dividends

Subsequent to December 31, 2025, in February 2026, the Company’s board of directors declared a cash dividend on the Company’s

common stock in the amount of $0.29 per share. The dividend is payable on June 30, 2026, to stockholders on record as of the close of

business on May 29, 2026.

Borrowings

Subsequent to December 31, 2025, in February 2026, the Company issued an additional $200 million in Nordic Bonds, increasing the

aggregate principal amount of the outstanding Nordic Bonds to $500 million.

Acquisitions & Divestitures

Subsequent to December 31, 2025, in February 2026, the Company announced that it entered into an agreement to acquire certain

producing properties from Sheridan Production Company for an estimated gross purchase price of $245 million before customary

purchase price adjustments. The transaction is expected to close in the second quarter of 2026.

Table of Contents	Supplemental Natural Gas & Oil Information	Diversified Energy Company

Supplemental Natural Gas & Oil Information (Unaudited)

Estimated Reserves

The process of estimating quantities of “proved” and “proved developed” reserves is very complex, requiring significant subjective

decisions in the evaluation of all available geological, engineering, and economic data for each reservoir. The data for a given

reservoir may also change substantially over time as a result of numerous factors, including additional development activity, evolving

production history, and continual reassessment of the viability of production under varying economic conditions. As a result, revisions

to existing reserves estimates may occur from time to time.

Although every reasonable effort is made to ensure that reserves estimates reported represent the most accurate assessments possible,

the subjective decisions and variances in available data for various reservoirs make these estimates generally less precise than other

estimates included in the financial statement disclosures.

For each of the years ended December 31, 2025, 2024 and 2023, the estimated proved reserves were independently evaluated by our

independent reserves auditors, NSAI, in accordance with petroleum engineering and evaluation standards published by the Society of

Petroleum Evaluation Engineers and definitions and guidelines established by the SEC. Accordingly, the following reserves estimates

are based on existing economic and operating conditions. Reserves estimates are inherently imprecise, and the Company’s reserves

estimates are generally based on extrapolation of historical production trends. Existing economic conditions include prices and costs at

which economic producibility from a reservoir is to be determined. Based on reserve reporting rules, the price is calculated using the

average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted

arithmetic average of the first-day-of-the-month price for each month within the period, unless prices are defined by contractual

arrangements, excluding escalations based upon future conditions. Therefore, the Company’s estimates are expected to change, and

such changes could be material and occur in the near term as future information becomes available.

The following table summarizes the changes in the Company’s net proved reserves for the periods presented, all of which were located

in the U.S.:

	Natural Gas	NGLs	Oil	Total
	(MMcf)	(MBbls)	(MBbls)	(MMcfe)(a)
As of December 31, 2022	4,349,611	101,931	14,830	5,050,177
Revisions of previous estimates(b)	(658,917)	153	(230)	(659,379)
Extensions, discoveries and other additions	712	—	50	1,012
Production	(256,378)	(5,832)	(1,377)	(299,632)
Purchase of reserves in place(c)	105,713	2,592	923	126,803
Sales of reserves in place(d)	(340,697)	(3,143)	(1,580)	(369,035)
As of December 31, 2023	3,200,044	95,701	12,616	3,849,946
Revisions of previous estimates(b)	(212,056)	11,305	6,215	(106,936)
Extensions, discoveries and other additions	897	32	33	1,287
Production	(244,298)	(5,980)	(1,568)	(289,586)
Purchase of reserves in place(c)	151,210	2,413	1,228	173,056
Sales of reserves in place(d)	(178)	—	—	(178)
As of December 31, 2024	2,895,619	103,471	18,524	3,627,589
Revisions of previous estimates(b)	777,934	1,521	1,076	793,516
Extensions, discoveries and other additions	16,341	—	—	16,341
Production	(295,723)	(8,821)	(7,935)	(396,259)
Purchase of reserves in place(c)	1,031,562	68,804	99,485	2,041,296
Sales of reserves in place(d)	—	—	—	—
As of December 31, 2025	4,425,733	164,975	111,150	6,082,483

(a)The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the

ratio of one Bbl of oil or NGLs to six Mcf of natural gas.

(b)During 2025, commodity market pricing increased driving a net upward revision of 793,516 MMcfe. During 2024, commodity

market pricing decreased driving a net downward revision of 106,936 MMcfe. During 2023, commodity market pricing decreased

significantly driving a net downward revision of 659,379 MMcfe.

(c)During 2025, purchases of reserves in place were primarily related to the Canvas, Maverick, and Summit acquisitions. During

2024, purchases of reserves in place were primarily related to the Oaktree, Crescent Pass, and East Texas II acquisitions. During

Table of Contents	Supplemental Natural Gas & Oil Information	Diversified Energy Company

2023,purchases of reserves in place were primarily related to the Tanos II acquisition. For additional information about

acquisitions, refer to Note 3.

(d)During 2025, 2024 and 2023, sales of reserves in place were primarily related to divestitures of non-core assets. For additional

information about divestitures, refer to Note 3.

	Natural Gas	NGLs	Oil	Total
	(MMcf)	(MBbls)	(MBbls)	(MMcfe)(a)
Total proved reserves as of:
December 31, 2022	4,349,611	101,931	14,830	5,050,177
December 31, 2023	3,200,044	95,701	12,616	3,849,946
December 31, 2024	2,895,619	103,471	18,524	3,627,589
December 31, 2025	4,425,733	164,975	111,150	6,082,483
Total proved developed reserves as of:
December 31, 2022	4,340,779	101,931	14,830	5,041,345
December 31, 2023	3,184,499	94,391	12,380	3,825,125
December 31, 2024	2,895,619	103,471	18,524	3,627,589
December 31, 2025	4,224,112	159,025	87,041	5,700,508
Total proved undeveloped reserves as of:
December 31, 2022	8,832	—	—	8,832
December 31, 2023	15,545	1,310	236	24,821
December 31, 2024	—	—	—	—
December 31, 2025	201,621	5,950	24,109	381,975

(a)The basis for converting oil and NGL volumes (MBbls) to natural gas equivalent volumes (MMcfe) is determined by using the

ratio of one Bbl of oil or NGLs to six Mcf of natural gas.

Capitalized Costs Relating to Natural Gas and Oil Producing Activities

Capitalized costs relating to natural gas and oil producing activities and related accumulated depreciation, depletion and amortization

were as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Proved properties	$5,808,908	$3,807,670	$3,176,808
Unproved properties	19,804	7,266	8,032
Total capitalized costs	5,828,712	3,814,936	3,184,840
Less: Accumulated depletion	(1,320,953)	(981,715)	(747,202)
Net capitalized costs	$4,507,759	$2,833,221	$2,437,638

Costs Incurred in Natural Gas and Oil Property Acquisition, Exploration and Development Activities

Costs incurred in natural gas and oil property acquisition, exploration and development activities were as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Proved properties	$1,824,666	$455,514	$76,226
Unproved properties	77,478	13,886	2,356
Total property acquisition costs	1,902,144	469,400	78,582
Total exploration and development costs	92,163	4,587	10,923
Capitalized interest	—	—	—
Total costs	$1,994,307	$473,987	$89,505

Table of Contents	Supplemental Natural Gas & Oil Information	Diversified Energy Company

Results of Operations for Producing Activities

Revenues and expenses related to the production and sale of natural gas, NGLs, and oil were as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Commodity revenue	$1,538,821	$732,259	$802,399
Operating expense	(644,786)	(339,086)	(349,478)
Depreciation, depletion, amortization & accretion	(457,545)	(284,048)	(248,098)
Results of operations	436,490	109,125	204,823
Income tax benefit (expense)	95,155	23,353	(49,567)
Results of operations, net of income tax benefit (expense)	$531,645	$132,478	$155,256

Standardized Measure of Discounted Future Net Cash Flows

The following information has been developed based on natural gas and crude oil reserves and production volumes estimated by the

Company’s engineering staff. While it can be used for some comparisons, it should not be the sole method for evaluating the

Company or its performance. Additionally, the following information may not represent realistic assessments of future cash flows, nor

should the Standardized Measure of Discounted Future Net Cash Flows (the “Standardized Measure”) be viewed as representative of

the current value of the Company.

The Company believes that the following factors should be considered when reviewing the information:

•Future costs and selling prices will differ from those required to be used in these calculations;

•Due to future market conditions and governmental regulations, actual rates of production in future years may vary significantly

from the rate of production assumed in the calculations;

•The selection of a 10% discount rate is arbitrary and may not be a reasonable measure of the relative risk associated with realizing

future net natural gas and oil revenues; and

•Future net cash flows may be subject to different rates of income taxation.

Under the Standardized Measure, future cash inflows were estimated by using the 12-month average index price for the respective

commodity, calculated as the unweighted arithmetic average of the first day of the month price for each month during the year. Prices

used for the Standardized Measure (adjusted for basis and quality differentials) were as follows:

	For the Year Ended December 31,
	2025	2024	2023
Natural gas (Mcf)	$3.09	$1.83	$2.49
NGLs (Bbls)	17.54	20.02	21.59
Oil (Bbls)	64.26	74.76	71.89

Future cash inflows were reduced by estimated future development and production costs based on year-end costs to arrive at net cash

flow before tax. Future income tax expense was computed by applying year-end statutory tax rates to future pretax net cash flows, less

the tax basis of the properties involved and the utilization of available tax carryforwards related to natural gas and oil operations. The

applicable accounting standards require the use of a 10% discount rate.

Management does not solely rely on the following information when making investment and operating decisions. These decisions are

based on a number of factors, including estimates of proved reserves and varying price and cost assumptions that are considered more

representative of a range of anticipated economic conditions. The Standardized Measure is as follows:

Table of Contents	Supplemental Natural Gas & Oil Information	Diversified Energy Company
	For the Year Ended December 31,
---	---	---	---
(in thousands)	2025	2024	2023
Future cash inflows	$23,713,859	$8,600,093	$10,900,742
Future production costs	(10,492,260)	(4,497,171)	(5,345,117)
Future development costs(a)	(5,379,265)	(2,655,256)	(1,937,293)
Future income tax expense	(1,619,405)	(303,892)	(653,216)
Undiscounted future net cash flows(b)	6,222,929	1,143,774	2,965,116
10% annual discount for estimated timing of cash flows(b)	(2,040,445)	253,147	(1,219,580)
Standardized Measure	$4,182,484	$1,396,921	$1,745,536

(a)Includes $3,646 million, $2,465 million and $1,716 million in asset retirement costs for the years ended December 31, 2025, 2024

and 2023, respectively.

(b)For the year ended December 31, 2024, the PV-10 value is higher than the total undiscounted future net cash flows and the 10%

annual discount is positive due to the Company’s estimated future abandonment costs associated with proved reserves. As the

anticipated timing of the majority of these abandonment costs is many years in the future, these costs have a much larger impact

on the undiscounted future net cash flows as compared to their impact when discounting is applied. Due to this fact, as well as

relatively lower 2024 SEC pricing, the undiscounted future net cash flows were lower than the discounted pre-tax PV-10 value for

the year ended December 31, 2024.

Future cash inflows were reduced by estimated future production and development costs based on year-end costs to determine pre-tax

cash inflows. Future income taxes were computed by applying the year-end statutory tax rate to the excess of pre-tax cash inflows over

the Company’s tax basis in the associated proved natural gas and oil properties, after accounting for permanent differences and tax

credits.

Changes in the Standardized Measure were as follows:

	For the Year Ended December 31,
(in thousands)	2025	2024	2023
Standardized Measure, beginning of year	$1,396,921	$1,745,536	$6,743,100
Sales and transfers of natural gas and oil produced, net of<br><br>production costs	(879,252)	(374,104)	(431,629)
Net changes in prices and production costs	1,439,378	(804,229)	(5,850,625)
Extensions, discoveries, and other additions, net of future<br><br>production and development costs	(283,207)	(77,393)	(13,682)
Acquisition of reserves in place	2,869,296	407,175	122,613
Divestiture of reserves in place	—	(27)	(377,097)
Revisions of previous quantity estimates	605,424	(344)	(1,224,544)
Net change in income taxes	(802,115)	199,303	1,688,208
Previously estimated development costs incurred during the year	—	12,676	—
Changes in production rates (timing) and other	(323,138)	56,610	206,646
Accretion of discount	159,177	231,718	882,546
Standardized Measure, end of year	$4,182,484	$1,396,921	$1,745,536

100

Table of Contents	Form 10-K	Diversified Energy Company

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial

Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures, as defined in U.S. Securities Exchange Act of 1934, as amended

(“Exchange Act”) Rule 13a-15(e), that are designed to ensure that information required to be disclosed in our reports filed or

submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and

forms of the SEC, and such information is accumulated and communicated to our management, including our Chief Executive Officer

and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. The Chief Executive Officer and

Chief Financial Officer, with the participation of management, have evaluated the effectiveness of the Company’s disclosure controls

and procedures in relation to Exchange Act Rule 13a-15(b), and have concluded that the Company’s disclosure controls and

procedures were effective as of December 31, 2025.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over

financial reporting is a process, designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, or

persons performing similar functions, and effected by the Company’s board of directors, management and other personnel to provide

reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in

accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those

policies and procedures that:

•Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the

assets of the Company;

•Provide reasonable assurances that transactions are recorded as necessary to permit the preparation of financial statements in

accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made

only in accordance with the authorizations of management and Directors of the Company; and

•Provide reasonable assurance regarding the prevention or timely detection of unauthorized acquisition, use, or disposition of the

Company’s assets that could have a material effect on its financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections

of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in

conditions, or that the degree of compliance with policies and procedures may deteriorate.

Management of the Company evaluated the effectiveness of the Company’s internal control over financial reporting as of

December 31, 2025 based on criteria established in the Internal Control-Integrated Framework (2013), issued by the Committee of

Sponsoring Organizations of the Treadway Commission.

Following this evaluation, management concluded that the Company’s internal control over financial reporting was effective as of

December 31, 2025.

Management’s assessment and conclusion on the effectiveness of the Company’s internal control over financial reporting as of

December 31, 2025 excludes an assessment of the internal control over financial reporting of Canvas Energy, which was acquired in

Canvas Energy is included in our consolidated financial statements and represented approximately 9% of our total assets as of

December 31, 2025 and approximately 1% of our consolidated revenues for the year ended December 31, 2025.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, has been audited by

PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under Item 8

within this Annual Report on Form 10-K.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended December 31, 2025, which materially

affected, or were reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

Our directors and executive officers may from time to time enter into plans or other arrangements for the purchase or sale of our

shares that are intended to satisfy the affirmative defense conditions of Rule 10b5–1(c) or may represent a non-Rule 10b5-1 trading

101

Table of Contents	Form 10-K	Diversified Energy Company

arrangement under the Exchange Act. During the quarter ended December 31, 2025, no such plans or other arrangements were

adopted or terminated.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

We have adopted a Code of Business Conduct & Ethics (the “Code of Conduct”) that applies to all of our and our subsidiaries’

directors, officers, employees, and business partners, including our principal executive, principal financial and principal accounting

officers, or persons performing similar functions. Our Code of Conduct is posted on our website located at https://www.div.energy/

about-us/corporate-governance/. We will satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to,

or waiver from, any provision of the Code of Conduct by disclosing the nature of that amendment or waiver on its website within four

business days following the date of the amendment or waiver.

Item 11. Executive Compensation

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

Item 14. Principal Accountant Fees and Services

The information required by this item is incorporated herein by reference to our definitive proxy statement which will be filed with the

SEC within 120 days after December 31, 2025.

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Table of Contents	Form 10-K	Diversified Energy Company

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)The following documents are filed as part of this Annual Report on Form 10-K:

(1)Financial Statements. Financial statements are listed in the index included in Part II. Item 8. Financial Statements and

Supplementary Data of this Annual Report on Form 10-K.

(2)Financial Statement Schedules. No financial statement schedules are applicable or required.

(3)Exhibits. The exhibits listed in the accompanying Exhibit Index are filed or incorporated by reference as part of this Annual

Report on Form 10-K.

(b)Exhibits. The exhibits required by Item 601 of Regulation S-K are listed in the Exhibit Index, which is incorporated herein by

reference.

Exhibit<br><br>No.			Incorporated by reference			Filed	Furnished
		Description	Form	Exhibit	Filing Date	Herewith	Only
2.1	†	Merger Agreement, dated as of January 24, 2025, by and<br><br>among Maverick Natural Resources, LLC, Diversified<br><br>Energy Company plc, Remington Merger Sub, LLC, and for<br><br>certain provisions therein, Diversified Gas & Oil<br><br>Corporation and EIG Management Company, LLC	6-K<br><br>File No.<br><br>001-41870	99.1	1/27/2025
2.2	†	Agreement and Plan of Merger, dated as of September 8,<br><br>2025, by and among Diversified Production LLC,<br><br>Diversified Energy Company PLC, Corsair Merger Sub,<br><br>Inc., Canvas Energy Inc. and CEI Representative LLC, as<br><br>equityholders’ representative.	6-K<br><br>File No.<br><br>001-41870	99.2	9/9/2025
3.1		Amended and Restated Certificate of Incorporation of<br><br>Diversified Energy Company	8-K<br><br>File No.<br><br>001-41870	3.1	11/24/2025
3.2		Amended and Restated Bylaws of Diversified Energy<br><br>Company	8-K<br><br>File No.<br><br>001-41870	3.2	11/24/2025
4.1		Description of Capital Stock	8-K<br><br>File No.<br><br>001-41870	4.1	11/24/2025
4.2	†	Indenture, dated February 23, 2022, by and between<br><br>Diversified ABS Phase IV LLC, as issuer, and UMB Bank,<br><br>N.A., as indenture trustee and securities intermediary	20FR12B<br><br>File No.<br><br>001-41870	4.28	11/16/2023
4.3	†	Indenture, dated October 27, 2022, among Diversified ABS<br><br>Phase VI LLC, as issuer, Diversified ABS VI Upstream<br><br>LLC and Oaktree ABS VI Upstream LLC, as guarantors and<br><br>UMB Bank, N.A., as indenture trustee and securities<br><br>intermediary	20FR12B<br><br>File No.<br><br>001-41870	4.30	11/16/2023
4.4	†	Indenture, dated November 30, 2023, by and between DP<br><br>Lion Holdco LLC, as issuer and UMB Bank, N.A., as<br><br>indenture trustee and securities intermediary	20FR12B/<br><br>A<br><br>File No.<br><br>001-41870	4.31	12/8/2023
4.5	†	Indenture, dated May 30, 2024, among Diversified ABS<br><br>VIII LLC, as issuer, Diversified ABS III Upstream LLC and<br><br>Diversified ABS V Upstream LLC, as guarantor and UMB<br><br>Bank, N.A., as indenture trustee and securities intermediary	F-1<br><br>File No.<br><br>333-281669	4.8	8/20/2024
4.6	†	Indenture, dated September 19, 2024, among DP Mustang<br><br>Holdco LLC, as issuer, and UMB Bank, N.A., as indenture<br><br>trustee and securities intermediary	20-F<br><br>File No.<br><br>001-41870	4.5	3/17/2025

103

| Table of Contents | Form 10-K | Diversified Energy Company | | --- | --- | --- || Exhibit No. | | | Incorporated by reference | | | Filed | Furnished | | --- | --- | --- | --- | --- | --- | --- | --- | | | | Description | Form | Exhibit | Filing Date | Herewith | Only | | 4.7 | † | Base Indenture, dated as of February 27, 2025, by and among Diversified ABS X LLC, as issuer, Diversified ABS LLC, Diversified ABS Phase II LLC, and Diversified ABS Phase X LLC, as guarantors, and UMB Bank, N.A., as indenture trustee and securities intermediary | 20-F File No. 001-41870 | 4.13 | 3/17/2025 | | | | 4.8 | † | Series 2025-1 Supplement dated February 27, 2025, by and among Diversified ABS X LLC, as issuer, Diversified ABS LLC, Diversified ABS Phase II LLC, and Diversified ABS Phase X LLC, as guarantors, and UMB Bank, N.A., as indenture trustee and securities intermediary | | | | ü | | | 4.9 | † | Indenture, dated as of October 26, 2023, among MNR ABS Issuer I, LLC, as issuer, MNR ABS Agent Corp, as AgentCorp, and UMB Bank, N.A. as indenture trustee, note registrar, paying agent and securities intermediary | | | | ü | | | 4.10 | | Bond Terms for 9.75% Senior Secured Bonds due 2029, dated April 7, 2025, by and between Diversified Gas & Oil Corporation and Nordic Trustee, AS, as bond trustee. | 8-K File No. 001-41870 | 4.1 | 2/10/2026 | | | | 4.11 | | Tap Issue Addendum for 9.75% Senior Secured Bonds due 2029 dated February 5, 2026 by and between Diversified Gas & Oil Corporation and Nordic Trustee, AS, as bond trustee. | 8-K File No. 001-41870 | 4.2 | 2/10/2026 | | | | 4.12 | † | Base Indenture, dated as of November 24, 2025, by and among DP Keeneland Mile LLC, as issuer, DP Ponies LLC, DP Secretariat LLC, DP American Pharoah LLC, DP Seabiscuit LLC and DP Sovereignty LLC, as guarantors, and UMB Bank, N.A., as indenture trustee and securities intermediary | | | | ü | | | 4.13 | † | Series 2025-1 Supplement dated as of November 24, 2025, by and among DP Keeneland Mile LLC, as issuer, DP Ponies LLC, DP Secretariat LLC, DP American Pharoah LLC, DP Seabiscuit LLC and DP Sovereignty LLC, as guarantors, and UMB Bank, N.A., as indenture trustee and securities intermediary | | | | ü | | | 10.2 | † | Registration Rights Agreement dated as of August 15, 2024, between Diversified Energy Company plc and Crescent Pass Energy Holdings, LLC | F-1 File No. 333-281669 | 10.32 | 8/20/2024 | | | | 10.3 | † | Registration Rights Agreement, dated as of March 14, 2025, by and between Diversified Energy Company PLC, the holders set on the signature pages thereto, and, solely for purposes of Section 2.8 therein, Diversified Gas & Oil Corporation. | 20-F File No. 001-41870 | 4.14 | 3/17/2025 | | | | 10.4 | * | Diversified Gas & Oil PLC Amended and Restated 2017 Equity Incentive Plan | S-8 File No. 333-287374 | 4.1 | 5/16/2025 | | | | 10.5 | * | Diversified Energy Company 2025 Equity Incentive Plan | 8-K File No. 001-41870 | 10.1 | 11/24/2025 | | | | 10.6 | * | Diversified Energy Company Amended and Restated Employee Stock Purchase Plan | 8-K File No. 001-41870 | 10.2 | 11/24/2025 | | |

104

105

Table of Contents	Form 10-K	Diversified Energy Company
Exhibit<br><br>No.		Incorporated by reference			Filed	Furnished
---	---	---	---	---	---	---
	Description	Form	Exhibit	Filing Date	Herewith	Only
99.1	Netherland, Sewell & Associates, Inc. estimates of reserves<br><br>and future revenue to the Diversified Energy Company<br><br>(formerly known as Diversified Gas & Oil PLC) interest in<br><br>certain natural gas and oil properties located in the United<br><br>States as of December 31, 2025				ü
101	Interactive Data File. The instance document does not<br><br>appear in the Interactive Data File because its XBRL tags<br><br>are embedded within the Inline XBRL document.
104	Cover Page Interactive Data File (formatted as Inline XBRL<br><br>and contained in Exhibit 101)						*	Management contract or compensatory plan or arrangement.
---	---
†	Certain schedules and attachments have been omitted. The registrant hereby undertakes to provide further information regarding<br><br>such omitted materials to the Securities and Exchange Commission upon request.

Item 16. Form 10-K Summary

Not applicable.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual

Report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on February 26, 2026.

DIVERSIFIED ENERGY COMPANY
(Registrant)
/s/ Rusty Hutson, Jr.
Robert R. “Rusty” Hutson, Jr.
Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on

behalf of the registrant and in the capacities indicated on February 26, 2026.

/s/ Rusty Hutson, Jr.	Chief Executive Officer and Director
Robert R. “Rusty” Hutson, Jr.	(Principal Executive Officer)
/s/ Bradley G. Gray	President and Chief Financial Officer
Bradley G. Gray	(Principal Financial Officer)
/s/ Michael Garrett	SVP & Chief Accounting Officer
Michael Garrett	(Principal Accounting Officer)
/s/ David E. Johnson	Chairman of the Board
David E. Johnson
/s/ Kathryn Z. Klaber	Director
Kathryn Z. Klaber
/s/ Martin K. Thomas	Director
Martin K. Thomas
/s/ David J. Turner, Jr.	Director
David J. Turner, Jr.

Document

Exhibit 4.8

EXECUTION VERSION

SERIES 2025-1 SUPPLEMENT

among DIVERSIFIED ABS X LLC,

as Issuer, DIVERSIFIED ABS LLC,

DIVERSIFIED ABS PHASE II LLC,

and,

DIVERSIFIED ABS PHASE X LLC,

as Guarantors, and

UMB BANK, N.A.,

as Indenture Trustee dated as of February 27, 2025

Series 2025-1 Notes

Exhibit 4.8

TABLE OF CONTENTS

ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE 1

Section 1.01 Definitions. 1

Section 1.02 Rules of Construction 8

ARTICLE II SERIES 2025-1 NOTE DETAILS; FORMS OF SERIES 2025-1 NOTES 8

Section 2.01 Series 2025-1 Note Details. 8

Section 2.02 Delivery of Series 2025-1 Notes 9

Section 2.03 Forms of Series 2025-1 Notes. 9

Section 2.04 Tax Restricted Notes and ERISA Restricted Notes 9

Section 2.05 Principal Distribution Amounts 9

Section 2.06 Excess Amortization Amounts 10

Section 2.07 Funding of the Collection Account 10

Section 2.08 Funding of the Liquidity Reserve Account 10

Section 2.09 Redemption Terms 10

Section 2.10 Additional Terms 10

ARTICLE IIIGENERALPROVISIONS11

Section 3.01 Date of Execution 11

Section 3.02 Notices 11

Section 3.03 Governing Law; Jurisdiction; Waiver of Jury Trial 11

Section 3.04 Severability 11

Section 3.05 Counterparts; Electronic Execution 11

ARTICLEIV APPLICABILITY OFINDENTURE12

Section 4.01 Applicability 12

EXHIBIT A Scheduled Principal Distribution Amounts 1

Exhibit 4.8

SERIES 2025-1 SUPPLEMENT

THIS SERIES 2025-1 SUPPLEMENT (as amended, supplemented or otherwise modified and in effect from time to time, this “Series Supplement”), dated as of February 27, 2025, is among Diversified ABS X LLC, a Delaware limited liability company (the “Issuer”), Diversified ABS LLC, a Pennsylvania limited liability company (“DABS I”), Diversified ABS Phase II LLC, a Pennsylvania limited liability company (“DABS II”), Diversified ABS Phase X LLC, a Pennsylvania limited liability company (“DABS X” and, together with DABS I and DABS II, the “Guarantors” and each a “Guarantor”) and UMB Bank, N.A., as indenture trustee and not in its individual capacity and any successor thereto in such capacity (the “Indenture Trustee”).

RECITALS

WHEREAS, the Issuer has entered into an Indenture, dated as of the date hereof (as the same may be amended, restated, supplemented or otherwise modified and in effect from time to time, the “Indenture”), among the Indenture Trustee, the Securities Intermediary, the Guarantors and the Issuer;

WHEREAS, the Issuer desires to issue $530,000,000 of Series 2025-1 Notes, consisting of (i) $200,000,000 Series 2025-1 Notes, Class A-1 Notes (the “Series 2025-1 Class A-1 Notes”), (ii) $240,000,000 Series 2025-1 Notes, Class A-2 Notes (the “Series 2025-1 Class A-2 Notes” and, together with the Series 2025-1 Class A-1 Notes, the “Series 2025-1 Class A Notes”), and (iii) $90,000,000 Series 2025-1 Notes, Class B Notes (the “Series 2025-1 Class B Notes” and, together with the Series 2025-1 Class A Notes, the “Series 2025-1 Notes”), pursuant to this Series Supplement to the Indenture;

WHEREAS, each of Diversified Holdings and the Guarantors guarantees the punctual payment of the Series 2025-1 Notes pursuant to the terms of the Pledge Agreement;

WHEREAS, the Issuer represents that it has duly authorized the issuance of the Series 2025-1 Notes;

WHEREAS, the Series 2025-1 Notes constitute “Notes” as defined in the

Indenture; and

WHEREAS, the Indenture Trustee has agreed to accept the trusts herein created

upon the terms herein set forth.

NOW, THEREFORE, it is mutually covenanted and agreed as follows:

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Exhibit 4.8

In addition, the following terms have the following meanings in this Series Supplement unless the context clearly requires otherwise:

“Applicable Premium” means with respect to a Series 2025-1 Note at any time, as determined by the Issuer, the excess of:

(a)the present value at such time of (i) 100% of the principal amount of the applicable Note, plus (ii) all required interest payments due on the applicable Note through the Payment Date occurring in March 2028 (excluding accrued but unpaid interest to, but not including, the Redemption Date), whether at the Interest Rate or at the Subsequent Rate of Interest (if applicable) pursuant to Section 2.8(g) of the Indenture, computed using a discount rate equal to the Treasury Rate as of such time, plus 50 basis points discounted to the redemption date on a semi-annual basis (assuming a 360 day year consisting of twelve 30 day months), over

(b)the then Outstanding Principal Balance of such Series 2025-1 Note.

“Change of Control Applicable Premium” means with respect to a Series 2025-1 Note at any time, as determined by the Issuer, the excess of:

(a)the present value at such time of (i) 100% of the principal amount of such Series 2025-1 Note, plus (ii) all required interest payments due on such Series 2025-1 Note through the Payment Date occurring in March 2028 (excluding accrued but unpaid interest to, but not including, the Redemption Date), whether at the Interest Rate or at the Subsequent Rate of Interest (if applicable) pursuant to Section 2.8(g) of the Indenture, computed using a discount rate equal to the Treasury Rate as of such time, plus 100 basis points discounted to the redemption date on a semi-annual basis (assuming a 360 day year consisting of twelve 30 day months), over

(b)the then Outstanding Principal Balance of such Series 2025-1 Note.

“Change of Control Redemption Price” means, with respect to any redemption of Series 2025-1 Notes pursuant to Section 10.1(b) of the Indenture, (i) prior to the Payment Date occurring in March 2028 an amount equal to 100% of the principal amount thereof, plus the Change of Control Applicable Premium, plus accrued and unpaid interest, if any, to, but not including, the Change of Control Redemption Date, and (ii) on or after the Payment Date occurring in March 2028 an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to, but not including, the Redemption Date.

“Closing Date” means February 27, 2025.

“Day Count Convention,” with respect to the Series 2025-1 Notes, has the meaning specified in the table in Section 2.01(a).

“Escrow Agent” means UMB Bank, N.A., not in its individual capacity but solely as escrow agent under the Escrow Agreement.

“Escrow Agreement” means each escrow agreement, dated as of February 26, 2025 by and among the Issuer, Diversified Corp, the Escrow Agent and the purchasers of the Series 2025-1 Notes party thereto.

Exhibit 4.8

“Escrow Funding Date” means the Business Day prior to the Closing Date.

“Final Scheduled Payment Date,” with respect to the Series 2025-1 Notes, has the meaning specified in Section 2.01(c).

“Indenture” has the meaning specified in the preamble hereto.

“Interest Accrual Period” means, with respect to any Payment Date and the Series 2025-1 Notes, the period from, and including, the immediately preceding Payment Date (or, in the case of the initial Payment Date for any Class of the Series 2025-1 Notes, from and including the Escrow Funding Date) to, but excluding, the current Payment Date, calculated on the basis of the applicable Day Count Convention.

“Interest Rate” means, for each Class of the Series 2025-1 Notes, the rate per annum at which interest accrues on such Class as set forth in Section 2.01(a).

“No Rating Agency Declination or Waiver Action” means the obligation to satisfy the Rating Agency Condition in connection with the issuance of Additional Notes pursuant to Section 2.15 of the Indenture.

“Placement Agents” means, with respect to the Series 2025-1 Notes, Barclays Capital Inc., KeyBanc Capital Markets Inc., Legado Capital Advisors, LLC and Mizuho Securities USA LLC, in their respective capacities as placement agents.

“Rating Agency” means, with respect to the Series 2025-1 Notes, means (i) Fitch and (ii) if Fitch does not issue a senior unsecured long-term debt rating, corporate credit rating or issuer rating for the applicable Person or fails to make such rating publicly available, a “nationally recognized statistical rating organization” registered under the Exchange Act, that is consented to by the Majority Noteholders.

“Rating Agency Condition” means, with respect to any transaction or matter and with respect to the Series 2025-1 Notes, a condition that will be satisfied if (i) each Rating Agency then rating the Series 2025-1 Notes shall have been notified in writing at least ten (10) Business Days (or such shorter period that is acceptable to such Rating Agency) prior to such transaction or matter, or promptly thereafter if prior notice is not possible, and (ii) each such Rating Agency notifies the Issuer (which may be in the form of e-mail, press release, posting to its internet website, and a copy of which notice the Issuer will promptly deliver to each Noteholder) that such transaction or matter will not result in a downgrade, qualification or withdrawal of the then-current rating assigned to the Series 2025-1 Notes by such Rating Agency; provided, that other than in connection with a No Rating Agency Declination or Waiver Action, if a Rating Agency Declination is received, the requirement to satisfy the Rating Agency Condition with respect to the applicable Rating Agency and such matter shall not apply; provided, further, that other than in connection with a No Rating Agency Declination or Waiver Action, if a Rating Agency refuses to respond or otherwise does not respond to a request for the satisfaction of the Rating Agency Condition, the requirement to satisfy the Rating Agency Condition shall be waived unless such Rating Agency’s refusal or failure to respond to such request is due to a commercial dispute

Exhibit 4.8

between the Issuer or its Affiliates and such Rating Agency, including, but not limited to, any disagreement regarding such Rating Agency’s fees.

“Rating Agency Declination” means, with respect to any transaction or matter and with respect to any Rating Agency then rating the Series 2025-1 Notes, (x) an indication by such Rating Agency, that it is not the customary procedure of such Rating Agency to provide notification in writing that such transaction or matter will not result in a downgrade, qualification or withdrawal of the then-current rating assigned to the Series 2025-1 Notes by such Rating Agency or (y) a written waiver or acknowledgement from such Rating Agency indicating its decision not to review or declining to review such transaction or the matter for which the satisfaction of the Rating Agency Condition is sought; provided, that any Rating Agency’s refusal to satisfy the Rating Agency Condition due to a commercial dispute between the Issuer or its Affiliates and such Rating Agency, including, but not limited to, any disagreement regarding such Rating Agency’s fees, shall not constitute a Rating Agency Declination; provided, further, that if any Rating Agency shall publicly announce a policy, as a general matter, to no longer review requests for the satisfaction of the Rating Agency Condition, so long as such policy shall remain in effect, any party requesting the satisfaction of the Rating Agency Condition with respect to such Rating Agency shall be required only to deliver written notice to such Rating Agency of any transaction or matter for which the satisfaction of the Rating Agency Condition would have been requested, and such Rating Agency shall thereafter be deemed to have delivered a Rating Agency Declination with respect to such transaction or matter.

“Redemption Price” means, (i) with respect to any redemption of any Class of Series 2025-1 Notes pursuant to Section 10.1(a) of the Indenture (other than in connection with a Change of Control), (a) prior to March 2028, an amount equal to 100% of the principal amount thereof, plus the Applicable Premium, plus accrued and unpaid interest, if any, to, but not including, the Redemption Date, and (b) on or after March 2028, an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any to, but not including, the Redemption Date and (ii) with respect to a Change of Control, the Change of Control Redemption Price.

“Series 2025-1 Class A Outstanding Principal Balance” means, as of any date of determination, the Outstanding Principal Balance of all Series 2025-1 Class A Notes issued pursuant to the Indenture, as the context requires.

“Series 2025-1 Class A Excess Amortization Amount” means, with respect to any Payment Date following the Anticipated Repayment Date of the Notes where the Series 2025-1 Class A-1 Excess Allocation Percentage and the Series 2025-1 Class A-2 Excess Allocation Percentage are not 100%, the amount of Available Funds for such Payment Date remaining after giving effect to the distributions pursuant to the clauses of the Priority of Payments immediately preceding the clause pursuant to which such the Class A Excess Amortization Amount is to be distributed on such Payment Date; provided, that the Series 2025-1 Class A Excess Amortization Amount as of any Payment Date shall not exceed the Series 2025-1 Class A Outstanding Principal Balance of as of such Payment Date (calculated after giving effect to the payments pursuant to the clauses of the Priority of Payments immediately preceding the clause pursuant to which such the Series 2025-1 Class A Excess Amortization Amount is to be distributed on such Payment Date).

Exhibit 4.8

“Series 2025-1 Class A-1 Excess Allocation Percentage” means, as of any date of determination, the greatest of the following percentages, as applicable:

(a)(i) If the Senior DSCR as of the applicable Payment Date is less than 1.45 to 1.00, then 100%, (ii) if the Senior DSCR as of such Payment Date is greater than or equal to 1.45 to 1.00 and less than 1.55 to 1.00, then 50%, or (iii) if the Senior DSCR as of such Payment Date is greater than or equal to 1.55 to 1.00, then 32.5%; or

(b) if the Production Tracking Rate is less than 80%, then 100%, otherwise 32.5%;

(c)(i) if the Senior LTV is greater than 80%, then 100%, and (ii) if the Senior LTV

is greater than 75% but less than or equal to 80%, then 50%, otherwise 32.5%; or

(d) if the Aggregate LTV is greater than 90%, then 100%.

“Series 2025-1 Class A-1 Excess Amortization Amount” means, with respect to any Payment Date, the Class A-1 Excess Allocation Percentage multiplied by the amount of Available Funds for such Payment Date remaining after giving effect to the distributions pursuant to the clauses (A) through (G) of the Priority of Payments on such Payment Date; provided, that the Class A-1 Excess Amortization Amount as of any Payment Date shall not exceed the Series 2025-1 Class A-1 Outstanding Principal Balance as of such Payment Date (calculated after giving effect to the payments pursuant to the clauses (A) through (G) of the Priority of Payments on such Payment Date).

“Series 2025-1 Class A-1 Notes” has the meaning specified in the preamble hereto. “Series 2025-1 Class A-1 Outstanding Principal Balance” means, as of any date

of determination, the outstanding principal amount of the Class A-1 Notes on the Closing Date, less the sum of all amounts distributed to the Class A-1 Noteholders on or prior to such date in respect of principal, including with respect to any redemption of Series 2025-1 Class A-1 Notes.

“Series 2025-1 Class A-1 Principal Distribution Amount” means, as of any Payment Date, the Series 2025-1 Class A-1 Scheduled Principal Distribution Amount plus amounts previously due and unpaid; provided, that the Series 2025-1 Class A-1 Principal Distribution Amount as of any Payment Date shall not exceed the Series 2025-1 Class A-1 Outstanding Principal Balance as of such Payment Date.

“Series 2025-1 Class A-1 Scheduled Principal Distribution Amount” means, as of any date of determination, the amount indicated on Schedule A with respect to such date.

“Series 2025-1 Class A-2 Excess Allocation Percentage” means, as of any date of determination, the greatest of the following percentages, as applicable, only insofar as the Series 2025-1 Class A-1 Notes are no longer outstanding:

(a)(i) If the Senior DSCR as of the applicable Payment Date is less than 1.45 to 1.00, then 100%, (ii) if the Senior DSCR as of such Payment Date is greater than or equal to 1.45

Exhibit 4.8

to 1.00 and less than 1.55 to 1.00, then 50%, or (iii) if the Senior DSCR as of such Payment Date is greater than or equal to 1.55 to 1.00, then 32.5%; or

(b) if the Production Tracking Rate is less than 80%, then 100%, otherwise

32.5%; or

(c)(i) if the Senior LTV is greater than 80%, then 100%, and (ii) if the Senior

LTV is greater than 75% but less than or equal to 80%, then 50%, otherwise 32.5%; or

(d) if the Aggregate LTV is greater than 90%, then 100%.

“Series 2025-1 Class A-2 Excess Amortization Amount” means, with respect to any Payment Date, the Series 2025-1 Class A-2 Excess Allocation Percentage multiplied by the amount of Available Funds for such Payment Date remaining after giving effect to the distributions pursuant to the clauses (A) through (H) of the Priority of Payments on such Payment Date; provided, that the Series 2025-1 Class A-2 Excess Amortization Amount as of any Payment Date shall not exceed the Series 2025-1 Class A-2 Outstanding Principal Balance of all Series 2025-1 Class A-2 Notes as of such Payment Date (calculated after giving effect to the payments pursuant to the clauses (A) through (H) of the Priority of Payments on such Payment Date).

“Series 2025-1 Class A-2 Notes” has the meaning specified in the preamble hereto.

“Series 2025-1 Class A-2 Outstanding Principal Balance” means, as of any date of determination, the outstanding principal amount of the Series 2025-1 Class A-2 Notes on the Closing Date, less the sum of all amounts distributed to the Class A-2 Noteholders on or prior to such date in respect of principal, including with respect to any redemption of Series 2025-1 Class A-2 Notes.

“Series 2025-1 Class A-2 Principal Distribution Amount” means, as of any Payment Date, the Series 2025-1 Class A-2 Scheduled Principal Distribution Amount plus amounts previously due and unpaid; provided, that the Class A-2 Principal Distribution Amount as of any Payment Date shall not exceed the Series 2025-1 Class A-2 Outstanding Principal Balance as of such Payment Date.

“Series 2025-1 Class A-2 Scheduled Principal Distribution Amount” means, as of any date of determination, the amount indicated on Schedule A with respect to such date.

“Series 2025-1 Class B Additional Excess Amortization Amount” means, with respect to any Payment Date, 15% multiplied by the amount of Available Funds for such Payment Date remaining after giving effect to the distributions pursuant to the clauses (A) through (O(3)) of the Priority of Payments on such Payment Date; provided, that the Series 2025-1 Class B Excess Amortization Amount as of any Payment Date shall not exceed the Series 2025-1 Class B Outstanding Principal Balance as of such Payment Date (calculated after giving effect to the payments pursuant to the clauses (A) through (O(3)) of the Priority of Payments on such Payment Date).

Exhibit 4.8

“Series 2025-1 Class B Excess Allocation Percentage” means, as of any date of determination, the greatest of the following percentages, as applicable, only insofar as the Class A-1 Notes and the Class A-2 Notes are no longer outstanding:

(a)(i) If the Aggregate DSCR as of the applicable Payment Date is less than 1.45 to 1.00, then 100%, (ii) if the Aggregate DSCR as of such Payment Date is greater than or equal to 1.45 to

1.00 and less than 1.55 to 1.00, then 50%, or (iii) if the Aggregate DSCR as of such Payment Date is greater than or equal to 1.55 to 1.00, then 32.5%; or

(b)if the Production Tracking Rate is less than 80%, then 100%, otherwise 32.5%; or

(c)if the Aggregate LTV is greater than 80%, then 100%, otherwise 32.5%.

“Series 2025-1 Class B Excess Amortization Amount” means, with respect to any Payment Date, the Series 2025-1 Class B Excess Allocation Percentage multiplied by the amount of Available Funds for such Payment Date remaining after giving effect to the distributions pursuant to the clauses (A) through (L) of the Priority of Payments on such Payment Date; provided, that the Class B Excess Amortization Amount as of any Payment Date shall not exceed the Series 2025-1 Class B Outstanding Principal Balance as of such Payment Date (calculated after giving effect to the payments pursuant to the clauses (A) through (L) of the Priority of Payments on such Payment Date).

“Series 2025-1 Class B Outstanding Principal Balance” means, as of any date of determination, (i) the outstanding principal amount of the Series 2025-1 Class B Notes on the Closing Date, less (ii) the sum of all amounts distributed to the Series 2025-1 Class B Noteholders on or prior to such date in respect of principal, including with respect to any redemption of Series 2025-1 Class B Notes.

“Series 2025-1 Class B Principal Distribution Amount” means, as of any Payment Date, the Class B Scheduled Principal Distribution Amount plus amounts previously due and unpaid; provided, that the Class B Principal Distribution Amount as of any Payment Date shall not exceed the Class B Outstanding Principal Balance as of such Payment Date.

“Series 2025-1 Class B Scheduled Principal Distribution Amount” means, as of any date of determination, the amount indicated on Schedule A with respect to such date.

“Series 2025-1 Class B Notes” has the meaning specified in the preamble hereto. “Series 2025-1 Distribution Account” has the meaning specified in Section

2.10(a).

“Series 2025-1 Notes” has the meaning specified in the preamble hereto. “Treasury Rate” means, in respect of any date of redemption of Notes pursuant to

Exhibit 4.8

Section 10.1 of the Indenture, the yield to maturity as of the time of computation of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 that has become publicly available at least two Business Days prior to the applicable Redemption Date (or, if such Statistical Release is no longer published, any

Exhibit 4.8

publicly available source of similar market data)) most nearly equal to the period from the Redemption Date to March 28, 2028; provided, however, that if the period from the Redemption Date to March 28, 2028, is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used. The Issuer will

(1) calculate the Treasury Rate no later than the second (and no earlier than the fourth) Business Day preceding the applicable Redemption Date and (2) prior to such Redemption Date file with the Indenture Trustee an Officers’ Certificate setting forth the Applicable Premium and the Treasury Rate and showing the calculation of each in reasonable detail.

Section 1.02 Rules of Construction. Unless the context otherwise requires, the rules of construction set forth in Part II of Appendix A to the Indenture are hereby incorporated by reference.

ARTICLE II

SERIES 2025-1 NOTE DETAILS; FORMS OF SERIES 2025-1 NOTES

Section 2.01 Series 2025-1 Note Details.

(a)The aggregate principal amount of the Series 2025-1 Notes which may be initially authenticated and delivered under this Series Supplement shall be divided into Classes designated as “Class A,” and “Class B”, and the Series 2025-1 Class A Notes shall consist of two tranches designated as “Class A-1” and “Class A-2,” in each case, with the respective initial principal balances, Interest Rates and ratings set forth below (except for Series 2025-1 Notes authenticated and delivered upon transfer of, or in exchange for, or in lieu of Notes pursuant to Section 2.5 and Section 2.6 of the Indenture):

Series/Class	Initial Principal<br><br>Balance	Note Form	Interest Rate	Day Count Convention	Rating By<br><br>Fitch
Series 2025-1, Class A-1	$200,000,000	Definitive / Book-Entry	5.945%	30/360	A-
Series 2025-1, Class A-2	$240,000,000	Definitive / Book-Entry	6.751%	30/360	BBB
Series 2025-1, Class B ...	$90,000,000	Definitive / Book-Entry	10.398%	30/360	BB-

(b)The Series 2025-1 Class A-1 Notes and the Series 2025-1 Class A-2 Notes are subject to minimum denominations of $500,000 and integral multiples of $1,000 in excess thereof. The Series 2025-1 Class B Notes are subject to minimum denominations of $3,000,000 and integral multiples of $1,000 in excess thereof.

Exhibit 4.8

The “Final Scheduled Payment Date” for each Class of the Series 2025-1 Notes shall be the Payment Date occurring in February 2045. The “Anticipated Repayment Date” for Series 2025-1 Notes is the Payment Date occurring in February 2030.

Exhibit 4.8

(c)The initial Payment Date will be March 28, 2025. There will be no Series 2025-1 Class A-1 Scheduled Principal Distribution Amount, Series 2025-1 Class A-2 Scheduled Principal Distribution Amount, or Series 2025-1 Class B Scheduled Principal Distribution Amount with respect to the March 2025 Payment Date. The first payment of Series 2025-1 Class A-1 Scheduled Principal Distribution Amount, Series 2025-1 Class A-2 Scheduled Principal Distribution Amount, and Series 2025-1 Class B Scheduled Principal Distribution Amount will occur on the April 2025 Payment Date as set forth on Schedule A. However, payments with respect to principal may occur as a result of the respective Excess Amortization Amounts. The initial Interest Accrual Period for the Series 2025-1 Notes shall consist of 32 days.

Section 2.02 Delivery of Series 2025-1 Notes. Upon the execution and delivery of this Series Supplement, the Issuer shall execute and deliver to the Indenture Trustee an Issuer Order directing the Indenture Trustee to authenticate and deliver the Series 2025-1 Notes, and the Indenture Trustee, upon receipt of such Issuer Order, shall so authenticate and deliver such Notes.

Section 2.03 Forms of Series 2025-1 Notes. The Series 2025-1 Notes shall be in substantially the forms set forth in the Indenture, each with such variations, omissions and insertions as may be necessary. The Series 2025-1 Class A-1 Notes, the Series 2025-1 Class A-2 Notes and the Series 2025-1 Class B Notes may be issued, transferred and held as definitive notes or in book-entry form.

Section 2.04 Tax Restricted Notes and ERISA Restricted Notes. The Series 2025-1 Class B Notes shall be designated as Tax Restricted Notes (and shall accordingly be subject to the transfer restrictions in Sections 2.4(m) and 2.4(n) of the Indenture). No Series 2025-1 Class B Notes shall be sold in offshore transactions in reliance on Regulation S and/or designated as a Regulation S Global Notes. No Series 2025-1 Class B Note or interest therein shall be owned by, and no transfer, sale or other disposition of any Series 2025-1 Class B Note or interest therein may be made to a Person who is other than a “United States person” (within the meaning of Section 7701(a)(30) of the Code) that has provided the Indenture Trustee and the Manager with a properly completed and duly signed IRS Form W-9 (or applicable successor form) in respect of the owner, for U.S. federal income tax purposes, of such Tax Restricted Notes, dated as of the date of such transfer, sale or other disposition, and, for the avoidance of doubt, any such transfer, sale or other disposition shall be subject to the limitations and requirements set forth in Sections 2.4(m) and 2.4(n) of the Indenture. In addition, no Series 2025-1 Class B Notes shall be transferred, sold or otherwise disposed of in an amount that would result in any Noteholder holding Class B Notes in an aggregate amount less than 100% of the minimum denomination of the Series 2025-1 Class B Notes set forth in Section 2.01(b). The Series 2025-1 Class B Notes shall be designated as ERISA Restricted Notes. Accordingly, no Series 2025-1 Class B Note or interest therein shall be owned by, and no transfer, sale or other disposition of any Series 2025-1 Class B Note or interest therein may be made to a Plan.

Section 2.05 Principal Distribution Amounts. The “Principal Distribution Amount” for the Series 2025-1 Class A-1 Notes shall be the “Series 2025-1 Class A-1 Principal Distribution Amount,” the “Principal Distribution Amount” for the Series 2025-1 Class A-2 Notes shall be the “Series 2025-1 Class A-2 Principal Distribution Amount” and the “Principal Distribution Amount” for the Series 2025-1 Class B Notes shall be the “Series 2025-1 Class B Principal Distribution Amount.”

Exhibit 4.8

Section 2.06 Excess Amortization Amounts. The “Excess Amortization Amount” for the Series 2025-1 Class A Notes shall be the “Series 2025-1 Class A Excess Amortization Amount,” the “Excess Amortization Amount” for the Series 2025-1 Class A-1 Notes shall be the “Series 2025-1 Class A-1 Excess Amortization Amount,” the “Excess Amortization Amount” for the Series 2025-1 Class A-2 Notes shall be the “Series 2025-1 Class A-2 Excess Amortization Amount,” and the “Excess Amortization Amount” for the Series 2025-1 Class B Notes shall be the “Series 2025-1 Class B Excess Amortization Amount,” and the “Series 2025-1 Class B Additional Excess Amortization Amount.”

Section 2.07 Funding of the Collection Account. On the Closing Date, the Issuer shall deposit into the Collection Account an amount equal to $0.

Section 2.08 Funding of the Liquidity Reserve Account. On the Closing Date, the Issuer shall deposit into the Liquidity Reserve Account an amount equal to the Liquidity Reserve Account Initial Deposit.

Section 2.09 Redemption Terms. The Series 2025-1 Notes may be redeemed in whole or, in connection with a Permitted Disposition or the application of Excess Hedge Amounts, in part, at the direction of the Issuer on any Redemption Date. For the avoidance of doubt, no Redemption Price shall be paid in connection with principal amounts redeemed solely as a result of the Issuer’s receipt and application of amounts pursuant to Section 8.6(iv) of the Indenture (including any Excess Hedge Amounts).

Section 2.10 Additional Terms.

(a)Distribution Account. The Issuer shall cause to be established and maintained with the Securities Intermediary, in connection with the issuance of the Series 2025-1 Notes, a separate account (which will be a subaccount of the Collection Account) created solely for purposes of making distributions to the Noteholders of the Series 2025-1 Notes (the “Series 2025-1 Distribution Account”).

(b)Default Interest. If the Issuer defaults in a payment of interest on the Series 2025-1 Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) at the Interest Rate plus an additional rate of 2.00% per annum default rate to the Interest Rate, in any lawful manner (“Default Interest”). Such Default Interest will be due and payable on the immediately succeeding Payment Date; provided that no Default Interest shall be payable with respect to the Series 2025-1 Class B Notes until such time as the Series 2025-1 Class B Notes constitute the Controlling Class.

(c)Designated Unpaid Interest Amounts. Any and all accrued interest on the Outstanding Principal Balance of any Series 2025-1 Class B Notes that is not paid in full on any Payment Date shall be paid on a subsequent Payment Date to the extent of Available Funds. The Designated Unpaid Interest Amounts of the Series 2025-1 Class B Notes shall accrue interest at the applicable Interest Rate for the Series 2025-1 Class B Notes.

Exhibit 4.8

Post-ARD Interest. If, on the Anticipated Repayment Date, the Series 2025-1 Notes have not been paid in full, then the Interest Rate applicable to each Class of Series 2025-

Exhibit 4.8

1 Notes shall be increased by 200 basis points over the initial applicable Interest Rate (the “ARD Rate of Interest”). The ARD Rate of Interest will apply from and including the Anticipated Repayment Date up to, and including, the maturity date of the Series 2025-1 Notes.

(d)Class Representative. There shall be no Class Representative with respect to the Series 2025-1 Notes.

ARTICLE III GENERAL PROVISIONS

Section 3.01 Date of Execution. This Series Supplement, for convenience and

for the purpose of reference, is dated as of February 27, 2025.

Section 3.02 Notices. Notices required to be given to the initial Rating Agencies by the Issuer or the Indenture Trustee shall be provided to the following “Rating Agency Contacts”: globalcrosssectorsf@fitchratings.com.

Section 3.03 Governing Law; Jurisdiction; Waiver of Jury Trial. THIS SERIES SUPPLEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPALS THEREOF (OTHER THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW). EACH PARTY HERETO IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR UNITED STATES FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN, THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR IN RELATION TO THIS SERIES SUPPLEMENT. EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SERIES SUPPLEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 3.04 Severability. In case any provision in this Series Supplement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 3.05 Counterparts; Electronic Execution. This Series Supplement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such respective counterparts shall together constitute but one and the same instrument. Delivery of an executed counterpart of this Series Supplement in Portable Document Format (PDF) or by facsimile shall be effective as delivery of a manually executed counterpart of this Series Supplement. The words “execution,” “execute,” “signed,” “signature” and words of like import in or related to any document to be signed in connection with this Series Supplement and the transactions contemplated hereby shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Indenture Trustee, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a

Exhibit 4.8

paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. Each Issuer Party agrees to notify the Indenture Trustee in writing of which electronic signature service it is using in connection with any document delivered to the Indenture Trustee utilizing an electronic signature and to assume all risks arising out of the use electronic signatures and electronic methods to submit communications to the Indenture Trustee, including without limitation the risk of the Indenture Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.

ARTICLE IV APPLICABILITY OF INDENTURE

Section 4.01 Applicability. The provisions of the Indenture are hereby ratified,

approved and confirmed, except as otherwise expressly modified by this Series Supplement and the Indenture as so supplemented by this Series Supplement shall be read, taken and construed as one and the same instrument. The representations, warranties and covenants contained in the Indenture (except as expressly modified herein) are hereby reaffirmed with the same force and effect as if fully set forth herein and made again as of the date hereof.

[SIGNATURE PAGES FOLLOW]

Exhibit 4.8

IN WITNESS WHEREOF, each of the Issuer, the Guarantors and the Indenture Trustee have caused this Series Supplement to be duly executed by their respective officers, thereunto duly authorized, all as of the day and year first above written.

DIVERSIFIED ABS X LLC

By: /s/ Benjamin M. Sullivan

Name: Benjamin M. Sullivan

Title: Senior Executive Vice President, Chief Legal and Risk Officer, and Corporate Secretary

DIVERSIFIED ABS LLC

By: /s/ Benjamin M. Sullivan

Name: Benjamin M. Sullivan

Title: Senior Executive Vice President, Chief Legal and Risk Officer, and Corporate Secretary

DIVERSIFIED ABS PHASE II LLC

By: /s/ Benjamin M. Sullivan

Name: Benjamin M. Sullivan

Title: Senior Executive Vice President, Chief Legal and Risk Officer, and Corporate Secretary

DIVERSIFIED ABS PHASE X LLC

By: /s/ Benjamin M. Sullivan

Name: Benjamin M. Sullivan

Title: Senior Executive Vice President, Chief Legal and Risk Officer, and Corporate Secretary

[Signature Page to Series 2025-1 Supplement]

Exhibit 4.8

UMB BANK, N.A.,

as Indenture Trustee

By: /s/ Michele Voon Name: Michele Voon

[Signature Page to Series 2025-1 Supplement]

Exhibit4.9_Indenture (2025 Form 10-K) Exhibit 4.9

Execution Version

INDENTURE

among

MNR ABS ISSUER I, LLC,

as Issuer

MNR ABS AGENT CORP.,

as AgentCorp

and

UMB BANK, N.A.

as Indenture Trustee, Note Registrar, Paying Agent and Securities Intermediary

Dated as of October 26, 2023

4135-9059-6169.10

TABLE OF CONTENTS

Page

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01Definitions2

ARTICLE II

THE NOTES

Section 2.01Notes3

Section 2.02Registration of Transfer and Exchange of Notes3

Section 2.03Book-Entry Notes9

Section 2.04Mutilated, Destroyed, Lost or Stolen Notes11

Section 2.05Persons Deemed Owner12

Section 2.06Certification by Note Owners12

Section 2.07Notes Issuable in Series12

Section 2.08Payment of Principal and Interest13

Section 2.09Cancellation14

Section 2.10Release of Collateral14

Section 2.11Tax Treatment15

Section 2.12CUSIP and Private Placement Numbers15

Section 2.13Additional Notes16

ARTICLE III

REPRESENTATIONSAND WARRANTIES

Section 3.01Organization and Good Standing17

Section 3.02Authority; No Conflict18

Section 3.03Legal Proceedings; Orders19

Section 3.04Compliance with Laws and Governmental Authorizations19

Section 3.05Compliance with Leases19

Section 3.06Material Liabilities20

Section 3.07Employee Benefit Plans20

Section 3.08Use of Proceeds; Margin Regulations20

Section 3.09Existing Indebtedness; Future Liens20

Section 3.10Foreign Assets Control Regulations, Etc20

Section 3.11Status under Certain Statutes21

Section 3.12Single Purpose Entity22

Section 3.13Solvency22

Section 3.14Security Interest22

ARTICLE IV

COVENANTS

Section 4.01Payment of Principal and Interest22

Section 4.02Maintenance of Office or Agency23

Section 4.03Money for Payments to Be Held on behalf of the Secured Parties23

Section 4.04Compliance With Law23

Section 4.05Insurance23

Section 4.06No Change in Fiscal Year24

Section 4.07Payment of Taxes and Claims24

Section 4.08Existence24

Section 4.09Books and Records24

Section 4.10Performance of Material Agreements24

Section 4.11Maintenance of Lien25

Section 4.12Further Assurances25

Section 4.13Use of Proceeds26

Section 4.14Separateness26

Section 4.15Transactions with Affiliates28

Section 4.16Merger, Consolidation, Etc28

Section 4.17Lines of Business29

Section 4.18Economic Sanctions, Etc29

Section 4.19Liens29

Section 4.20Sale of Assets, Etc29

Section 4.21Permitted Indebtedness29

Section 4.22Amendment to Organizational Documents30

Section 4.23No Loans30

Section 4.24Permitted Investments; Subsidiaries30

Section 4.25Employees; ERISA30

Section 4.26Tax Treatment30

Section 4.27Hedging Requirements31

Section 4.28Replacement of Manager or Back-up Manager32

Section 4.29Manager Failure33

Section 4.30Characterization33

Section 4.31Amendments to Basic Documents33

Section 4.32Operator Account34

ARTICLE V

REMEDIES

Section 5.01Events of Default34

Section 5.02Acceleration of Maturity; Rescission and Annulment37

Section 5.03Collection of Indebtedness and Suits for Enforcement by Indenture

Trustee38

Section 5.04Remedies; Priorities41

Section 5.05Optional Preservation of the Assets42

Section 5.06Limitation of Suits43

Section 5.07Unconditional Rights of Hedge Counterparties and Noteholders to

Receive Principal and Interest43

Section 5.08Restoration of Rights and Remedies44

Section 5.09Rights and Remedies Cumulative44

Section 5.10Delay or Omission Not a Waiver44

Section 5.11Control by Noteholders44

Section 5.12Waiver of Past Defaults45

Section 5.13Undertaking for Costs46

Section 5.14Waiver of Stay or Extension Laws46

Section 5.15Action on Notes46

Section 5.16Performance and Enforcement of Certain Obligations46

ARTICLE VI

THE INDENTURE TRUSTEE

Section 6.01Duties of Indenture Trustee47

Section 6.02Rights of Indenture Trustee49

Section 6.03Individual Rights of Indenture Trustee52

Section 6.04Indenture Trustees Disclaimer52

Section 6.05Notice of Manager Termination Events or Events of Default52

Section 6.06Reports by Indenture Trustee53

Section 6.07Compensation and Indemnity53

Section 6.08Replacement of Indenture Trustee54

Section 6.09Successor Indenture Trustee by Merger55

Section 6.10Appointment of Co-Indenture Trustee or Separate Indenture Trustee56

Section 6.11Eligibility; Disqualification57

Section 6.12Representations and Warranties of the Indenture Trustee57

ARTICLE VII

INFORMATION REGARDING THE ISSUER

Section 7.01Financial and Business Information58

Section 7.02Visitation60

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

Section 8.01Deposit of Collections60

Section 8.02Establishment of Accounts61

Section 8.03Collection of Money66

Section 8.04Permitted Dispositions; Additional Assets66

Section 8.05Reserve Reports72

Section 8.06Distributions74

Section 8.07Liquidity Reserve Account; Operating Expenses80

Section 8.08Statements to Noteholders82

Section 8.09[Reserved.]85

Section 8.10[Reserved.]85

Section 8.11Original Documents85

Section 8.12Equity Contribution Cures85

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 9.01Supplemental Indentures without Consent of Noteholders86

Section 9.02Supplemental Indentures with Consent of Noteholders and Hedge

Counterparties87

Section 9.03Execution of Supplemental Indentures90

Section 9.04Effect of Supplemental Indenture91

Section 9.05Reference in Notes to Supplemental Indentures91

ARTICLE X

REDEMPTION OF NOTES

Section 10.01Redemption91

Section 10.02Form of Redemption Notice91

Section 10.03Notes Payable on Redemption Date92

ARTICLE XI

SATISFACTION AND DISCHARGE

Section 11.01Satisfaction and Discharge of Indenture92

Section 11.02Application of Trust Money94

Section 11.03Repayment of Monies Held by Paying Agent94

ARTICLE XII

MISCELLANEOUS

Section 12.01Compliance Certificates and Opinions, etc94

Section 12.02Form of Documents Delivered to Indenture Trustee95

Section 12.03Acts of Noteholders96

Section 12.04Notices, etc., to Indenture Trustee and Issuer96

Section 12.05Notices to Noteholders; Notices to Hedge Counterparties; Waiver97

Section 12.06Alternate Payment and Notice Provisions98

Section 12.07Effect of Headings and Table of Contents98

Section 12.08Successors and Assigns98

Section 12.09Severability99

Section 12.10Benefits of Indenture99

Section 12.11Legal Holidays99

Section 12.12GOVERNING LAW; CONSENT TO JURISDICTION99

Section 12.13Counterparts; Electronic Execution100

Section 12.14Recording of Indenture100

Section 12.15No Petition101

Section 12.16Waiver of Jury Trial101

Section 12.17Rating Agency Notice101

Section 12.18[Reserved]101

Section 12.19Extinguishment of Obligations101

Section 12.20Agency Agreement Acknowledgment102

APPENDIX ADefinitions

EXHIBIT A-1Form of Rule 144A Global Note

EXHIBIT A-2Form of Regulation S Global Note

EXHIBIT A-3Form of Definitive Note

EXHIBIT B-1Form of Transferor Certificate for Transfers of Beneficial Interests in

Regulation S Global Note for Beneficial Interests in Rule 144A Global

Note

EXHIBIT B-2Form of Transferor Certificate for Transfers of Beneficial Interests in

Rule 144A Global Note for Beneficial Interests in Regulation S Global

Note

EXHIBIT B-3Form of Transferee Certificate for Transfers of Definitive Notes to

Qualified Institutional Buyers

EXHIBIT B-4Form of Transferee Certificate for Transfers of Definitive Notes to

Institutional Accredited Investors

EXHIBIT B-5Form of Transferor Certificate for Transfers of Definitive Notes to

Qualified Institutional Buyers

EXHIBIT B-6Form of Transferor Certificate for Transfers of Definitive Notes to

Institutional Accredited Investors

EXHIBIT CForm of Noteholder Statement

EXHIBIT DP&A Reserve Trigger

THIS INDENTURE dated as of October 26, 2023 (as it may be amended, restated,

supplemented or otherwise modified and in effect from time to time, this Indenture) is entered

into by and among MNR ABS ISSUER I, LLC, a Delaware limited liability company (the

Issuer), MNR ABS AGENT CORP., a Delaware corporation (AgentCorp, and together with

the Issuer, the Restricted Parties), UMB BANK, N.A., a national banking association, as

indenture trustee and not in its individual capacity (in such capacity, the Indenture Trustee), as

note registrar and not in its individual capacity (in such capacity, the Note Registrar), as paying

agent and not in its individual capacity (in such capacity, the Paying Agent) and, as securities

intermediary and not in its individual capacity (the Securities Intermediary).

WHEREAS, the parties hereto have duly authorized the execution and delivery of

this Indenture to provide for the issuance from time to time by the Issuer of one or more Series of

Notes, issuable as provided in this Indenture and the applicable Series Supplement;

WHEREAS, it is hereby agreed between the Restricted Parties and the Indenture

Trustee, on behalf of itself, the Noteholders and the Hedge Counterparties, that in the performance

of any of the agreements of the Issuer herein contained, any obligation the Issuer may thereby

incur for the payment of money shall not be general debt on its part, but shall be secured by and

payable solely from the Collateral, payable in such order of preference and priority as provided

herein;

WHEREAS, each Series will be constituted by this Indenture and a Series

Supplement; and

WHEREAS, the Notes of any Series issued pursuant to this Indenture will be

divided into classes as provided in this Indenture and the applicable Series Supplement;

NOW, THEREFORE, in consideration of the premises and the agreements,

provisions and covenants herein contained, each party hereto agrees as follows:

GRANTING CLAUSE

Each Restricted Party hereby Grants to the Indenture Trustee on the Initial Closing

Date, and on, with respect to any Additional Assets, each date in which a Joinder Supplement

identifying such Additional Asset is entered into after the Initial Closing Date, as Indenture

Trustee, for the benefit of the Holders of the Notes, each Hedge Counterparty and the other Secured

Parties, all of such Restricted Partys right, title and interest, whether now or hereafter acquired,

and wherever located, in and to (a) the Assets identified in the Asset Purchase Agreement entered

into on the Initial Closing Date, any Additional Assets identified in any Joinder Supplement

entered into after the Initial Closing Date, and in each case, all monies received thereon and in

respect thereof as of or after the applicable Effective Time; (b) the Issuer Accounts, the Operator

Account and all funds on deposit therein, and financial assets (as such term is defined in the

Uniform Commercial Code as from time to time in effect), instruments, money, and other property

credited to or on deposit in the Issuer Accounts and the Operator Account, from time to time,

including the Liquidity Reserve Account Initial Deposit, and in all investments and proceeds

thereof (including all income thereon); (c) the Asset Purchase Agreement (including such

2

Restricted Partys right to exercise remedies against the Initial Sellers and any Additional Sellers

with respect to the Assets pursuant to the terms of the Basic Documents); (d) the Operating

Agreement, (e) the Management Services Agreement; (f) the Hedge Agreements; (g) the Back-up

Management Agreement; (h) the Guarantee and Security Agreement; (i) each other Basic

Document to which it is a party; (j) the representations, warranties and covenants contained in each

of the Basic Documents; (k) all accounts, chattel paper, commercial tort claims, deposit accounts,

documents, equity interests (including, with respect to the Issuer, the Issuers equity interests in

AgentCorp), accounts receivable, general intangibles, goods, instruments, investment property,

letter-of-credit rights, letters of credit, money, and oil, gas, and other minerals; and (l) all proceeds

of any and all of the foregoing and all present and future claims, demands, causes of action and

choses in action in respect of any or all of the foregoing and all payments on or under and all

proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including

all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property,

all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks,

deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every

kind and other forms of obligations and receivables, instruments, general intangibles and other

property which at any time constitute all or part of or are included in the proceeds of any of the

foregoing (collectively, the Collateral).

The foregoing Grant is made in trust to secure the Secured Obligations.

The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the Notes,

each Hedge Counterparty and the other Secured Parties, acknowledges such Grant, accepts the

trusts under this Indenture in accordance with the provisions of this Indenture and agrees to

perform its duties required in this Indenture to the end that the interests of the Holders of the Notes,

the Hedge Counterparties and the other Secured Parties may be adequately and effectively

protected.

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01 Definitions. Certain capitalized terms used in this Indenture

shall have the respective meanings assigned to them in Part I of Appendix A attached hereto

or, if not defined therein, as defined in the Asset Purchase Agreement. All references herein

to the Indenture or this Indenture are to this Indenture as it may be amended, restated,

supplemented or otherwise modified from time to time, the exhibits hereto and the capitalized

terms used herein which are defined in such Appendix A. All references herein to Articles,

Sections, subsections and exhibits are to Articles, Sections, subsections and exhibits contained

in or attached to this Indenture unless otherwise specified. All terms defined in this Indenture

shall have the defined meanings when used in any certificate, notice, Note or other document

made or delivered pursuant hereto unless otherwise defined therein. The rules of construction

set forth in Part II of such Appendix A shall be applicable to this Indenture.

3

ARTICLE II

THE NOTES

Section 2.01Notes.

(a)The Notes shall be substantially in the form attached as Exhibit A-1 and Exhibit

A-2, as applicable; provided, that any of the Notes may be issued with appropriate insertions,

omissions, substitutions and variations, and may have imprinted or otherwise reproduced thereon

such legend or legends, not inconsistent with the provisions of this Indenture, as may be required

to comply with any law or with rules or regulations pursuant thereto, or with the rules of any

securities market in which the Notes may be admitted to trading. Unless otherwise specified in the

Series Supplement for a Series of Notes, the Notes shall be issuable in book-entry form and in

accordance with Section 2.03(a), Ownership Interests in the Book-Entry Notes shall initially be

held and transferred through the book-entry facilities of the Depositary; provided, that Notes

purchased by Institutional Accredited Investors that are not Qualified Institutional Buyers will be

delivered in fully registered, certificated form substantially in the form attached as Exhibit A-3

(the Definitive Notes). The Notes shall be issued in minimum denominations specified in the

related Series Supplement.

(b)The Definitive Notes shall be executed by manual signature by an authorized

officer of the Issuer. Definitive Notes bearing the manual signatures of individuals who were at

any time authorized officers of the Issuer shall be entitled to all benefits under this Indenture,

notwithstanding that such individuals or any of them have ceased to hold such offices prior to the

authentication and delivery of such Definitive Notes or did not hold such offices at the date of such

Definitive Notes. The Indenture Trustee shall, upon receipt of an Issuer Order, authenticate and

deliver any Definitive Notes executed by the Issuer for issuance pursuant to this Indenture. No

Definitive Note shall be entitled to any benefit under this Indenture, or be valid for any purpose,

however, unless there appears on such Definitive Note a certificate of authentication substantially

in the form provided for in Exhibit A-3 executed by the Indenture Trustee by the manual signature

of one of its Responsible Officers, and such certificate of authentication upon any Definitive Note

shall be conclusive evidence, and the only evidence, that such Definitive Note has been duly

authenticated and delivered hereunder. All Definitive Notes shall be dated the date of their

authentication.

(c)Subject to Section 2.13, the aggregate principal amount of the Notes which may

be authenticated and delivered under this Indenture shall be unlimited.

Section 2.02Registration of Transfer and Exchange of Notes.

(a)The Issuer may, at its own expense, appoint any Person with appropriate

experience as a securities registrar to act as the note registrar hereunder (the Note Registrar).

The Indenture Trustee initially shall be the Note Registrar for the purpose of registering Notes and

transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall

promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of

4

Note Registrar. The Note Registrar shall be subject to the same standards of care, limitations on

liability and rights to indemnity as the Indenture Trustee and the provisions of Section 6.07 shall

apply to the Note Registrar to the same extent that they apply to the Indenture Trustee and with

the same rights of recovery (other than the prudent person standard after an Event of Default). Any

Note Registrar appointed in accordance with this Section 2.02(a) may at any time resign by giving

at least 30 days advance written notice of resignation to the Indenture Trustee and the Issuer. The

Issuer may at any time terminate the agency of any Note Registrar appointed in accordance with

this Section 2.02(a) by giving written notice of termination to such Note Registrar.

At all times during the term of this Indenture, there shall be maintained at the office

of the Note Registrar a register (the Note Register) in which, subject to such reasonable

regulations as the Note Registrar may prescribe, the Note Registrar shall provide for the

registration of Notes and of transfers and exchanges of Notes as herein provided (or as set forth in

any Series Supplement with respect to the transfer and registration or de-registration of any

Uncertificated Note). The Issuer and the Indenture Trustee shall have the right to inspect the Note

certificate of the Note Registrar as to the information set forth in the Note Register.

(b)No transfer, sale, pledge or other disposition of any Note or interest therein shall

be made unless such transfer, sale, pledge or other disposition is exempt from the registration

and/or qualification requirements of the Securities Act and any applicable state securities laws, or

is otherwise made in accordance with the Securities Act and such state securities laws.

If a transfer of any Note that constitutes a Definitive Note is to be made without

registration under the Securities Act (other than in connection with the initial issuance of a Series

of the Notes or a transfer of a Book-Entry Note to a successor Depositary as contemplated by

Section 2.03(c)), then such transfer shall not be registered by the Note Registrar unless the Note

Registrar receives (and, upon receipt, may conclusively rely upon) either: (i) a certification from

the Noteholder desiring to effect such transfer substantially in the form attached as Exhibit B-5, in

the case of a transfer to a Qualified Institutional Buyer, or Exhibit B-6, in the case of a transfer to

an Institutional Accredited Investor, and a certification from the prospective transferee

substantially in the form attached hereto as Exhibit B-3, in the case of a transfer to a Qualified

Institutional Buyer, or Exhibit B-4, in the case of a transfer to an Institutional Accredited Investor,

or (ii) an Opinion of Counsel to the effect that such transfer may be made without registration

under the Securities Act (which Opinion of Counsel shall not be an expense of the Issuer, the

Indenture Trustee or the Note Registrar in their respective capacities as such), together with the

written certification(s) as to the facts surrounding such transfer from the Noteholder desiring to

effect such transfer and/or such Noteholders prospective transferee on which such Opinion of

Counsel is based.

If a transfer of any interest in a Rule 144A Global Note is to be made without

registration under the Securities Act to a Person who will take delivery of such interest in the form

of an interest in a Regulation S Global Note, then the Note Owner desiring to effect such transfer

shall be required to deliver to the Note Registrar (i) a certification substantially in the form attached

as Exhibit B-2 and (ii) such written orders and instructions as are required under the Applicable

5

Procedures to direct the Indenture Trustee to approve the debit withdrawal of the account of a

Depositary Participant by a denomination of interests in such Rule 144A Global Note, and credit

the account of a Depositary Participant by a denomination of interests in such Regulation S Global

Note, that is equal to the denomination of beneficial interests in the Class of Notes to be transferred.

6

Upon delivery to the Note Registrar of such certification and such orders and instructions, the

Indenture Trustee, subject to and in accordance with the Applicable Procedures, shall reduce the

denomination of the Rule 144A Global Note in respect of the applicable Class of Notes and

increase the denomination of the Regulation S Global Note for such Class by the denomination of

the beneficial interest in such Class specified in such orders and instructions. If a transfer of any

interest in a Rule 144A Global Note is to be made without registration under the Securities Act to

a Person who will take delivery of such interest in the form of an interest in such Rule 144A Global

Note, then the Note Owner desiring to effect such transfer shall be deemed to have represented

and warranted that the certifications set forth in Exhibit B-1 are, with respect to such transfer, true

and correct.

Any interest in a Rule 144A Global Note with respect to any Class of Book-Entry

Notes may be transferred by any Note Owner holding such interest to any Institutional Accredited

Investor (other than a Qualified Institutional Buyer) that takes delivery in the form of a Definitive

Note of the same Class as such Rule 144A Global Note upon delivery to the Note Registrar of

(i)(A) a certification from such Note Owners prospective transferee substantially in the form of

Exhibit B-4, or (B) an Opinion of Counsel to the effect that such transfer may be made without

registration under the Securities Act (which Opinion of Counsel shall not be an expense of the

Issuer, the Indenture Trustee or the Note Registrar in their respective capacities as such), together

with the written certification(s) as to the facts surrounding such transfer from the Noteholder

desiring to effect such transfer and/or such Noteholders prospective transferee on which such

Opinion of Counsel is based, and (ii) such written orders and instructions as are required under the

Applicable Procedures to direct the Indenture Trustee to approve the debit withdrawal of the

account of a Depositary Participant by the denomination of the transferred interests in such Rule

144A Global Note. Upon delivery to the Note Registrar of such certification or Opinion of Counsel

and such orders and instructions, the Indenture Trustee, subject to and in accordance with the

Applicable Procedures, shall reduce the denomination of such Rule 144A Global Note by the

denomination of the transferred interests in such Rule 144A Global Note specified in such orders

and instructions, and shall cause a Definitive Note of the same Class as such Rule 144A Global

Note, and in a denomination equal to the reduction in the denomination of such Rule 144A Global

Note, to be executed, authenticated and delivered in accordance with this Indenture to the

applicable transferee.

Except as provided in the next sentence, on and prior to the Release Date, a

beneficial interest in a Regulation S Global Note for any Class of Book-Entry Notes may be

transferred only to a Person who takes delivery in the form of a beneficial interest in such

Regulation S Global Note. On and prior to the Release Date, a Note Owner holding an interest in

a Regulation S Global Note desiring to effect a transfer to a Person who takes delivery of such

interest in the form of a beneficial interest in the Rule 144A Global Note for such Class of Notes

shall be required to deliver to the Note Registrar (i) a certification substantially in the form attached

as Exhibit B-1 and (ii) such written orders and instructions as are required under the Applicable

Procedures to direct the Indenture Trustee to approve the debit withdrawal of the account of a

Depositary Participant by a denomination of interests in such Regulation S Global Note, and credit

the account of a Depositary Participant by a denomination of interests in such Rule 144A Global

Note, that is equal to the denomination of beneficial interests in the Class of Notes to be transferred.

7

Upon delivery to the Note Registrar of such certification and such orders and instructions, the

Indenture Trustee, subject to and in accordance with the Applicable Procedures, shall reduce the

8

denomination of the Regulation S Global Note in respect of the applicable Class of Notes and

increase the denomination of the Rule 144A Global Note for such Class by the denomination of

the beneficial interest in such Class specified in such orders and instructions. On or prior to the

Release Date, beneficial interests in the Regulation S Global Note for each Class of Book-Entry

Notes may be held only through Euroclear or Clearstream.

None of the Issuer, the Indenture Trustee or the Note Registrar shall be obligated

to register or qualify any Class of Notes under the Securities Act or any other securities law or to

take any action not otherwise required under this Indenture to permit the transfer of any Note or

interest therein without registration or qualification. Any Noteholder or Note Owner desiring to

effect a transfer, sale, pledge or other disposition of any Note or interest therein shall, and does

hereby agree to, indemnify the Parent, Holdings, the Issuer, the Indenture Trustee, the Manager,

the Back-up Manager, and the Note Registrar against any liability that may result if such transfer,

sale, pledge or other disposition is not exempt from the registration and/or qualification

requirements of the Securities Act and any applicable state securities laws or is not made in

accordance with such federal and state laws.

(c)No transfer of any Note or any interest therein shall be made to any Plan or to

any Person who is directly or indirectly acquiring such Note on behalf of, as fiduciary of, as trustee

of, or with the assets of, a Plan, except in each such case, in accordance with the following

provisions of this Section 2.02(c). Any attempted or purported transfer of a Note in violation of

this Section 2.02(c) will be null and void and vest no rights in any purported transferee.

Each purchaser and transferee (and its fiduciary, if applicable) of a Note (other than

an ERISA Restricted Note) is deemed to represent and warrant that either: (i) it is not acquiring

and will not hold such Note (or interest therein) with the assets of a Plan or (ii) the acquisition and

holding of such Note (or interest therein) will not give rise to a nonexempt prohibited transaction

under Section 406 of ERISA or Section 4975 of the Code or result in a violation of any similar

law.

Each purchaser and transferee (and its fiduciary, if applicable) of an ERISA

Restricted Note is deemed to represent and warrant that it is not acquiring and will not hold such

Note (or interest therein) with the assets of a Benefit Plan Investor or Plan subject to a law that is

substantially similar to Title I of ERISA or Section 4975 of the Code.

The Note Registrar shall not register the transfer of a Note that constitutes a Book-

Entry Note to a successor Depositary as contemplated by Section 2.03(c) or the transfer of an

interest in a Book-Entry Note that following such purported transfer will constitute a Definitive

Note unless the Note Registrar has received from the prospective transferee a certification as to

the foregoing, as applicable. It is hereby acknowledged that either of the forms of certification

attached B-3 and Exhibit B-4 is acceptable for purposes of the preceding sentence.

The Note Owner desiring to effect a transfer of an interest in a Book-Entry Note

(other than a transfer of an interest in a Book-Entry Note that following such purported transfer

will constitute a Definitive Note, which transfer shall be subject to the forms of certification

9

attached as Exhibit B-3 and Exhibit B-4 as provided for above) shall obtain from its prospective

transferee a certification that (a) such prospective transferee is not a Plan and is not directly or

indirectly acquiring, holding and subsequently disposing of such Note or any interest in such Note

on behalf of, as fiduciary of, as trustee of, or with assets of, a Plan or (b) the transfer is exempt

from registration requirements under the Securities Act.

(d)Unless an Event of Default has occurred and is continuing, no transfer of any

Note or any interest therein shall be made to any Unpermitted Assignee or to any Person who is

directly or indirectly acquiring such Note on behalf of, as fiduciary of, as trustee of, or with the

assets of, any Unpermitted Assignee. Any attempted or purported transfer of a Note in violation

of this Section 2.02(d) will be null and void and vest no rights in any purported transferee. The

Note Registrar shall not register the transfer of a Note that constitutes a Definitive Note or the

transfer of an interest in a Book-Entry Note that following such purported transfer will constitute

a Definitive Note unless, if no Event of Default has occurred and is continuing, the Note Registrar

has received from the prospective transferee a certification that such prospective transferee is not

an Unpermitted Assignee and is not directly or indirectly acquiring or holding such Note or any

interest in such Note on behalf of, as fiduciary of, as trustee of, or with assets of, an Unpermitted

Assignee.

It is hereby acknowledged that either of the forms of certification attached as

Exhibit B-1 and Exhibit B-2 is acceptable for purposes of the preceding sentence.

(e)If a Person is acquiring a Note as a fiduciary or agent for one or more accounts,

such Person shall be required to deliver to the Note Registrar a certification to the effect that, and

such other evidence as may be reasonably required by the Note Registrar or the Issuer to confirm

that, it has (i) sole investment discretion with respect to each such account and (ii) full power to

make the applicable foregoing acknowledgments, representations, warranties, certifications and/or

agreements with respect to each such account as set forth in subsections (b)

and/or (c), as appropriate, of this Section 2.02.

(f)Subject to the preceding provisions of this Section 2.02, upon surrender for

registration of transfer of any Note at the offices of the Note Registrar maintained for such purpose

(or as set forth in any Series Supplement with respect to the transfer and registration or de-

registration of any Uncertificated Note), one or more new Notes of authorized denominations of

the same Class and Series evidencing a like aggregate principal balance shall (except in the case

of Uncertificated Notes) be executed, authenticated and delivered, in the name of the designated

transferee or transferees, in accordance with Section 2.01(b).

(g)At the option of any Noteholder, its Notes may be exchanged for other Notes

of authorized denominations of the same Class and Series evidencing a like aggregate principal

balance, upon surrender (or de-registration) of the Notes to be exchanged (or deregistered) at the

offices of the Note Registrar maintained for such purpose. Whenever any Notes are so surrendered

for exchange (or de-registration), the Notes which the Noteholder making the exchange (or request

for de-registration) is entitled to receive shall be executed, authenticated and delivered (or

registered in the case of Uncertificated Notes) in accordance with Section 2.01(a) or (b), as

applicable.

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(h)Every Note (other than Uncertificated Notes) presented or surrendered for

transfer or exchange shall (if so required by the Note Registrar) be duly endorsed by, or be

accompanied by a written instrument of transfer in a form satisfactory to, the Note Registrar duly

executed by the Noteholder thereof or his attorney duly authorized in writing, with such signature

guaranteed by an eligible guarantor institution meeting the requirements of the Note Registrar,

which requirements include membership or participation in the Securities Transfer Agent

Medallion Program (STAMP) or such other signature guarantee program as may be

determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance

with the Exchange Act.

(i)No service charge shall be charged to a Holder for any registration of transfer

or exchange of Notes, but the Issuer or the Note Registrar may require payment by such Holder of

a sum sufficient to cover any tax or other governmental charge that may be imposed in connection

with any registration of transfer or exchange of Notes.

(j)All Notes surrendered for transfer and exchange shall be physically canceled

by the Note Registrar, and the Note Registrar shall dispose of such canceled Notes in accordance

with its standard procedures.

(k)None of the Parent, the Manager, the Operator, Holdings, the Issuer, the

Manager, the Back-up Manager, the Indenture Trustee, the Note Registrar or any agent of any of

the foregoing shall have any responsibility for any actions taken or not taken by the Depositary.

(l)The Indenture Trustee and the Note Registrar shall have no responsibility or

obligation to any Person with respect to the accuracy of the books or records, or the acts or

omissions, of the Depositary or its nominee or of any Depositary Participant, with respect to any

Ownership Interest in the Notes or with respect to the delivery to any Person (other than the

Depositary) of any notice (including any notice of prepayment) or the payment of any amount,

under or with respect to the Notes. All notices and communications to be given to the Holders and

all payments to be made to the Holders hereunder shall be given or made only to or upon the order

of the Holders (which shall be the Depositary or its nominee in the case of a Book-Entry Note).

The rights of Note Owners in any Book-Entry Note shall be exercised only through the Depositary

subject to the customary procedures of the Depositary. The Indenture Trustee may rely and shall

be fully protected in relying upon information furnished by the Depositary.

(m)The Indenture Trustee and the Note Registrar shall have no obligation or duty

to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under

this Indenture or under applicable law with respect to any transfer of any Note or any transfer of

any interest in any Book-Entry Note, other than to require delivery of the certificates and other

documentation or evidence as are expressly required by, and to do so if and when expressly

required by, the terms of this Indenture, and to examine the same to determine substantial

compliance on their face to the express requirements of this Indenture. In connection with any

transfer of any Note, the Indenture Trustee and the Note Registrar shall be under no duty to inquire

into the validity, legality and due authorization of such transfer.

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(n)The Note Registrar shall provide to each of the other parties hereto, upon

reasonable written request and at the expense of the requesting party, an updated copy of the Note

(o)[Reserved].

(p)No Tax Restricted Note or interest therein shall be owned by, and no transfer,

sale or other disposition of any Tax Restricted Note or interest therein may be made to a Person

who is other than a U.S. Person that has provided the Indenture Trustee and the Manager with a

properly completed and signed IRS Form W-9 (or applicable successor form). No Tax Restricted

Note shall be sold in offshore transactions in reliance on Regulation S and/or designated as a

Regulation S Note.

(q)Each Noteholder, by its acceptance of a Tax Restricted Note (or beneficial

interest therein), covenants, represents and agrees with the Issuer that (a) the Noteholder is not and

will not become, for U.S. federal, and applicable state and local, income tax purposes, a

partnership, S corporation, or grantor trust (each such entity a flow-through entity) or (b) if the

Noteholder is or becomes a flow-through entity, then (1) none of the direct or indirect beneficial

owners of any of the interests in such flow-through entity has or ever will have more than 50% of

the value of its interest in such flow-through entity attributable to the beneficial interest of such

flow-through entity in such Tax Restricted Notes, other interests (direct or indirect) in the Issuer,

or any interests created under this Indenture and (2) it is not and will not be a principal purpose of

the arrangement involving the flow-through entity's beneficial interest in any Tax Restricted Note

to permit any entity to satisfy the 100-partner limitation of Section 1.7704-1(h)(1)(ii) of the U.S.

Treasury Regulations necessary for such entity not to be classified as a publicly traded partnership

for U.S. federal income tax purposes.

(r)Tax Restricted Notes shall not be sold or transferred to any Person unless (i) the

Note Registrar and the Manager have received on the date of such sale or transfer a Qualifying

Debt Opinion with respect to such Notes or (ii) the restrictions described in Section 2.02(p) shall

have been complied with.

(s)Each transferor of a Tax Restricted Note or an interest therein shall be deemed

to have agreed to deliver to the transferee, with a copy to the Indenture Trustee, prior to the transfer

of such Tax Restricted Note or an interest therein, a properly completed certificate, in a form

reasonably acceptable to the transferee and the Issuer, stating, under penalty of perjury, the

transferors United States taxpayer identification number and that the transferor is not a foreign

person within the meaning of Section 1445(b)(2) and Section 1446(f)(2) of the Code (such

certificate, a Non-Foreign Status Certificate). Each transferor of a Tax Restricted Note or an

interest therein will be deemed to understand that the failure to provide a Non-Foreign Status

Certificate to the transferee may result in withholding on the amount realized on its disposition of

the Tax Restricted Note.

(t)Each Person acquiring a Tax Restricted Note shall comply with the limitations,

representations and covenants set forth in Section 2.02(p)-(s). Any attempted transfer in

contravention of Sections 2.02(p)-(s) will be void ab initio and the purported transferor will

continue to be treated as the owner of the Tax Restricted Note.

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Section 2.03Book-Entry Notes.

13

(a) Each Class and Series of Notes initially issued as Book-Entry Notes shall

initially be issued as one or more Notes registered in the name of the Depositary or its nominee

and, except as provided in Section 2.03(c), transfer of such Notes may not be registered by the

Note Registrar unless such transfer is to a successor Depositary that agrees to hold such Notes for

the respective Note Owners with Ownership Interests therein. Such Note Owners shall hold and,

subject to Sections 2.02(b) and 2.02(c), transfer their respective Ownership Interests in and to such

Notes through the book-entry facilities of the Depositary and, except as provided in

Section 2.03(c), shall not be entitled to Definitive Notes in respect of such Ownership Interests.

Unless otherwise specified in the related Series Supplement, Notes of each Class and Series of

Notes initially sold in reliance on Rule 144A shall be represented by the Rule 144A Global Note

for such Class and Series, which shall be deposited with the DTC Custodian and registered in the

name of Cede & Co. as nominee of the Depositary. Notes of each Class and Series of Notes (other

than Tax Restricted Notes) initially sold in offshore transactions in reliance on Regulation S shall

be represented by the Regulation S Global Note for such Class and Series, which shall be deposited

with the DTC Custodian and registered in the name of Cede & Co. as nominee of the Depositary.

All transfers by Note Owners of their respective Ownership Interests in the Book-Entry Notes shall

be made in accordance with the procedures established by the Depositary Participant or brokerage

firm representing each such Note Owner. Each Depositary Participant shall only transfer the

Ownership Interests in the Book-Entry Notes of Note Owners it represents or of brokerage firms

for which it acts as agent in accordance with the Depositarys normal procedures.

(b)The Issuer, the Indenture Trustee and the Note Registrar shall for all purposes,

including the making of payments due on the Book-Entry Notes, deal with the Depositary as the

authorized representative of the Note Owners with respect to such Notes for the purposes of

exercising the rights of Noteholders hereunder. The rights of Note Owners with respect to the

Book-Entry Notes shall be limited to those established by law and agreements between such Note

Owners and the Depositary Participants and indirect participating brokerage firms representing

such Note Owners. Multiple requests and directions from, and votes of, the Depositary as holder

of the Book-Entry Notes with respect to any particular matter shall not be deemed inconsistent if

they are made with respect to different Note Owners. The Indenture Trustee may establish a

reasonable record date in connection with solicitations of consents from or voting by Noteholders

and shall give notice to the Depositary of such record date.

(c)Notes initially issued in the form of Book-Entry Notes will thereafter be issued

as Definitive Notes to applicable Note Owners or their nominees, rather than to the Depositary or

its nominee, only (i) if the Issuer advises the Indenture Trustee in writing that the Depositary is no

longer willing or able to properly discharge its responsibilities as Depositary with respect to such

Notes and the Issuer is unable to locate a qualified successor or (ii) in connection with the transfer

by a Note Owner of an interest in a Book-Entry Note to an Institutional Accredited Investor that

is not a Qualified Institutional Buyer. Upon the occurrence of the event described in clause (i) of

the preceding sentence, the Indenture Trustee will be required to notify, in accordance with the

Depositarys procedures, all Depositary Participants (as identified in a listing of Depositary

Participant accounts to which each Class and Series of Book-Entry Notes is credited) through the

Depositary of the availability of such Definitive Notes. Upon surrender to the Note Registrar of

any Class of Book-Entry Notes (or any portion of any Class thereof) by the Depositary,

14

accompanied by re-registration instructions from the Depositary for registration of transfer,

Definitive Notes in respect of such Class (or portion thereof) and Series shall be executed and

15

authenticated in accordance with Section 2.01(b) and delivered to the Note Owners identified in

such instructions. None of the Issuer, the Indenture Trustee or the Note Registrar shall be liable

for any delay in the delivery of such instructions and may conclusively rely on, and shall be

protected in relying on, such instructions. Upon the issuance of Definitive Notes for purposes of

evidencing ownership of any Book-Entry Notes, the registered holders of such Definitive Notes

shall be recognized as Noteholders hereunder and, accordingly, shall be entitled directly to receive

payments on, to exercise voting rights with respect to, and to transfer and exchange such Definitive

Notes.

Section 2.04 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated

Note is surrendered to the Indenture Trustee or Note Registrar, or the Indenture Trustee

receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there

is delivered to the Indenture Trustee such security or indemnity as may be required by it to

hold the Issuer and the Indenture Trustee harmless, then, in the absence of notice to the Issuer,

the Note Registrar or the Indenture Trustee that such Note has been acquired by a protected

purchaser, the Issuer shall execute, and upon its request the Indenture Trustee shall

authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or

stolen Note, a replacement Note; provided, that if any such destroyed, lost or stolen Note, but

not a mutilated Note, shall have become or within seven days shall be due and payable, or

shall have been called for redemption, instead of issuing a replacement Note, the Issuer may

pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date

without surrender thereof. If, after the delivery of such replacement Note or payment of a

destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a protected

purchaser of the original Note in lieu of which such replacement Note was issued presents for

payment such original Note, the Issuer and the Indenture Trustee shall be entitled to recover

such replacement Note (or such payment) from the Person to whom it was delivered or any

Person taking such replacement Note from such Person to whom such replacement Note was

delivered or any assignee of such Person, except a protected purchaser, and shall be entitled

to recover upon the security or indemnity provided therefor to the extent of any loss, damage,

cost or expense incurred by the Issuer or the Indenture Trustee in connection therewith.

Upon the issuance of any replacement Note under this Section, the Issuer shall pay

to the Indenture Trustee any reasonable expenses in connection therewith, and the Issuer may

require the payment by the Holder of such Note of a sum sufficient to cover any tax or other

governmental charge that may be imposed in relation thereto and any other reasonable expenses

(including the fees and expenses of the Indenture Trustee) connected therewith in excess of

$10,000 in the aggregate per Noteholder.

Every replacement Note issued pursuant to this Section in replacement of any

mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual

obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any

time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and

proportionately with any and all other Notes duly issued hereunder.

16

The provisions of this Section are exclusive and shall preclude (to the extent lawful)

all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,

lost or stolen Notes.

Section 2.05 Persons Deemed Owner. Prior to due presentment for

registration of transfer of any Note, the Issuer, the Indenture Trustee and any agent of the

Issuer or the Indenture Trustee may, as of the day of determination, treat the Person in whose

name any Note is registered as the owner of such Note for the purpose of receiving payments

of principal of and interest, if any, on such Note and for all other purposes whatsoever,

whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any

agent of the Issuer or the Indenture Trustee shall be affected by notice to the contrary.

Section 2.06Certification by Note Owners.

(a)Each Note Owner is hereby deemed, by virtue of its acquisition of an

Ownership Interest in the Book-Entry Notes, to agree to comply with the transfer requirements set

forth in Section 2.02(c).

(b)To the extent that under the terms of this Indenture, it is necessary to determine

whether any Person is a Note Owner, the Indenture Trustee may conclusively rely on a certificate

of such Person, in such form as shall be reasonably acceptable to the Indenture Trustee, that

specifies the Class, Series and aggregate principal balance of the Book-Entry Note beneficially

owned by such Person.

Section 2.07 Notes Issuable in Series. The Notes of the Issuer may be issued

in one or more Series subject to satisfaction of the applicable conditions set forth in

Section 2.13. Prior to the issuance of Notes of any Series, its Series Supplement shall

establish:

(a)the title of the Notes of such Series (which shall distinguish the Notes of such

Series from Notes of other Series);

(b)any limit upon the aggregate principal balance of the Notes of such Series that

may be authenticated and delivered (other than with respect to Uncertificated Notes, which shall

be registered) under this Indenture (except for Notes authenticated and delivered (or with respect

to Uncertificated Notes, registered) upon registration of transfer of, in exchange for, or in lieu of,

other Notes of such Series pursuant to Section 2.02 or 2.04);

(c)the rate or rates at which the Notes of such Series shall bear interest, if any, or

the method by which such rate shall be determined, the date or dates from which such interest shall

accrue, the Payment Dates on which such interest shall be payable and the record date or dates for

the determination of Holders to whom interest is payable (in each case to the extent such items are

not specified herein or if specified herein, to the extent such items are modified by such Series

Supplement);

(d)whether the Notes of such Series are Uncertificated Notes, Book-Entry Notes

or Definitive Notes; and

17

(e)any other terms of such Series (which terms shall not be inconsistent with the

provisions of this Indenture except to the extent that such Series Supplement also constitutes an

amendment of this Indenture pursuant to Article IX).

The Notes of a Series may have more than one settlement or issue date. The Notes

of each Series will be assigned to one or more Classes and shall satisfy the requirements of

Section 2.13 as of the date of issuance. Notes of any Series bearing the same alphabetical

designation but a different numerical designation shall be paid in the relative payment priority

specified in the related Series Supplement, but the relative payment priority of such Notes

collectively with other Notes bearing the same alphabetical designation in a different Series shall

be determined in accordance with the Applicable Payment Priority.

Section 2.08Payment of Principal and Interest.

(a)On each Payment Date, Note Interest then due on such Payment Date for each

Note of each Class shall be paid in accordance with the Priority of Payments or the Special Priority

of Payments, as applicable. The Note Interest for each Payment Date shall accrue during each

Interest Accrual Period at the applicable Interest Rate with respect to each Series and Class of

Notes with respect to any Class of Notes, on the Outstanding Principal Balance of such Notes

immediately prior to the related Payment Date.

(i)Other than with respect to the Controlling Class, any

payment of Note Interest which is not available to be paid in accordance with

the Priority of Payments or the Special Priority of Payments, as applicable, on

any Payment Date shall not be considered due and payable for purposes of

the Indenture, and the failure to pay such Note Interest shall not be an Event of

Default. Any such unpaid Note Interest on any Class of Notes shall be added to

the Outstanding Principal Balance of such Notes and shall be payable on the

first Payment Date on which funds are available to be used for such purpose in

accordance with the Priority of Payments or the Special Priority of Payments,

as applicable. Regardless of whether any Class of Notes is the Controlling

Class, to the extent that funds are not available on any Payment Date to pay

previously accrued Note Interest that was deferred at a time when such Class

was not the Controlling Class, such previously accrued Note Interest shall not

be considered due and payable on such Payment Date, and the failure to pay

such previously accrued Note Interest on such Payment Date shall not be an

Event of Default.

(b)Any installment of interest or principal payable on a Note that is punctually paid

or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in

whose name such Note is registered on the Record Date by wire transfer in immediately available

funds to the account designated by such person or nominee, except for the final installment of

principal payable with respect to such Note on a Payment Date or on the applicable Legal Final

Maturity Date (and except for the Optional Redemption Price for any Note called for redemption

pursuant to Section 10.01) which shall be payable as provided in Section 2.08(e).

18

(c)On each Payment Date, any applicable Principal Distribution Amount, any

Excess Amortization Amount or any amount payable following the occurrence and during the

continuance of a Senior Diversion Event will be payable to the Holders of each Class and Series

of Notes entitled thereto, in each case, to the extent of Available Funds for such Payment Date and

in accordance with the Priority of Payments or the Special Priority of Payments, as applicable.

Any Principal Distribution Amount for any Series of Notes will be set forth in the related Series

Supplement.

(d)Prior to the occurrence of an Event of Default and a declaration in accordance

with Section 5.02 that the Notes have become immediately due and payable, the Outstanding

Principal Balance of the Notes of a Series shall be due and payable in full on the applicable Legal

Final Maturity Date. The Indenture Trustee shall notify the Person in whose name a Note is

registered at the close of business on the Record Date preceding the Payment Date on which the

Issuer expects that the final installment of principal of and interest on such Note will be paid. Such

notice shall be mailed or transmitted by first-class mail, postage prepaid, or mailed or transmitted

by email prior to such final Payment Date and shall specify that such final installment will be

payable only upon presentation and surrender of such Note and shall specify the place where such

Note may be presented and surrendered for payment of such installment. Notices in connection

with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.

Section 2.09 Cancellation. All Notes surrendered for payment, registration

of transfer, exchange or redemption shall be delivered to the Indenture Trustee and shall be

promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the

Indenture Trustee for cancellation any Notes previously authenticated and delivered

hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so

delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be

authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section,

except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed

of by the Indenture Trustee in accordance with its standard retention or disposal policy as in

effect at the time unless the Issuer shall direct by an Issuer Order that they be returned to it;

provided, that such Issuer Order is timely and the Notes have not been previously disposed of

by the Indenture Trustee. The Indenture Trustee shall provide notice to each Rating Agency

of all cancelled Notes.

Section 2.10 Release of Collateral. (a) Subject to Section 12.01 and the terms

of the Basic Documents, the Indenture Trustee shall release property from the lien of this

Indenture only in accordance with the terms of the Indenture and upon receipt of (A) an Issuer

Order accompanied by an Officers Certificate of the Issuer, and in the case of a release other

than a Permitted Disposition, an Opinion of Counsel, in each case, stating that the conditions

precedent to such release have been satisfied and (B) in the event the Issuer requests a release

of all or substantially all of the Collateral not otherwise expressly permitted by this Indenture,

prior written consent to such release from each Hedge Counterparty and each Holder of Class

A Notes. With respect to clause (B) in the foregoing sentence, any such release of Collateral

shall require ten (10) Business Days advance written notice from the Issuer to each Hedge

Counterparty and each Noteholder.

19

(b) In connection with the release of any property described above, the Indenture

Trustee shall, pursuant to an Issuer Order, execute instruments prepared by or on behalf of the

Issuer in order to release such property from the lien of this Indenture, or convey the Indenture

Trustees interest in the same, in a manner and under circumstances that are consistent with the

provisions of this Indenture.

Section 2.11Tax Treatment.

(a)The Issuer has entered into this Indenture, and the Notes will be issued, with

the intention that, for all purposes including U.S. federal, state and local income, single business

and franchise Tax and any other Tax imposed on, or measured by, income, the Notes are treated

as indebtedness secured by the Collateral. The Issuer, by entering into this Indenture, each

Noteholder, by its acceptance of a Note, and each holder of a beneficial interest in the Note, by

purchasing or otherwise acquiring an interest in a Note, agree to treat the Notes for all purposes

including U.S. federal, state and local income, single business and franchise Tax and any other

Tax imposed on, or measured by, income as indebtedness (other than those Notes or Ownership

Interests that are, at any time, held by any Section 385 Related Party to the extent that a different

treatment may be required by law or regulation as a result of the relationship between the Issuer

and such Section 385 Related Party or unless otherwise provided in the applicable Series

Supplement).

(b)Each Noteholder, by its acceptance of a Note (or beneficial interest therein),

agrees to provide and shall provide to the Indenture Trustee, the Note Registrar and/or the Issuer

(or other Person responsible for withholding of Taxes) with the Noteholder FATCA Information

and Noteholder Tax Identification Information, and shall update or replace such Noteholder

FATCA Information and Noteholder Tax Identification Information as necessary at any time

required by law or promptly upon request. Further, each Noteholder is deemed to understand,

acknowledge and agree that the Indenture Trustee and the Issuer (or other Person responsible for

withholding of Taxes) have the right to deduct and withhold on payments with respect to a Note

and such amounts deducted or withheld shall be treated as paid to such Noteholder (without any

corresponding gross-up) where the Noteholder or another applicable party fails to comply with the

requirements set forth in the preceding sentence or otherwise establish a complete exemption from

withholding, or the Indenture Trustee or the Issuer (or other Person responsible for withholding of

Taxes) is otherwise required to so withhold under applicable law.

Section 2.12 CUSIP and Private Placement Numbers.The Issuer

shall obtain Private Placement Numbers or CUSIP numbers issued by the CUSIP Service

Bureau with respect to each Class and Series of Notes. The Indenture Trustee shall use such

Private Placement Numbers or CUSIP numbers in notices of redemption as a convenience

to Noteholders; provided, that any such notice may state that no representation is made as to

the correctness of such Private Placement Numbers or CUSIP numbers either as printed

on the Notes or as contained in any notice of a redemption and that reliance may be placed

only on the other identification numbers printed on the Notes and any such redemption shall

not be affected by any defect in or omission of such numbers. The Issuer shall promptly notify

the Indenture Trustee and each Noteholder in writing of any change in such Private

Placement Numbers or CUSIP numbers.

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Section 2.13Additional Notes.

The Issuer may, at any time and from time to time, after the Initial Closing Date

issue additional Notes of a new Series (Additional Notes) in the manner set forth in Section 2.07

pursuant to a Series Supplement, in one or more Classes that may rank (other than with respect to

Class A Notes) senior to, pari passu with, or subordinate to, any Series of Notes that will remain

Outstanding after the issuance of such Additional Notes; provided, that (x) if any Notes (other than

such Additional Notes) will remain Outstanding after the issuance of such Additional Notes (such

existing Notes, the Continuing Notes), then the following conditions shall have been satisfied

with respect to such issuance, or (y) if no Continuing Notes will remain outstanding after giving

effect to such issuance, but any Hedge Counterparties will have outstanding Hedge Agreements,

then the conditions set forth in clause (c)(ii), clauses (d) through (i), and clause (k) shall have been

satisfied with respect to such issuance:

(a)the relative payment priority of such Additional Notes of a particular Class to

the Continuing Notes, if any, of the Class of Notes bearing the same alphabetical Class designation

(regardless of Series or date of issuance) shall be determined in accordance with the Applicable

Payment Priority;

(b)each Rating Agency then rating any Continuing Notes shall have confirmed that

immediately after the issuance of any Additional Notes, its rating of Continuing Notes will be no

lower than its initial rating as of the applicable Closing Date of such Continuing Notes;

(c)such Additional Notes are rated by a Rating Agency and (i) such ratings shall

be no lower than the then-current rating (or its equivalent) assigned by each Rating Agency to the

Continuing Notes (if any) of the same Class and (ii) solely to the extent that such rating of such

Additional Notes is lower than or equal to BB+ by Fitch (or otherwise the equivalent rating by

at least one of by DBRS, Moodys, KBRA or S&P), after giving effect to the issuance thereof, (A)

the sum of the Outstanding Principal Balance of the Additional Notes plus any Continuing Notes

with an equal or lower rating to such Additional Notes is less than or equal to (B) fifteen percent

(15%) of the aggregate Outstanding Amount (determined inclusive of all Additional Notes and

Continuing Notes);

(d)immediately prior to and immediately following such issuance, no Material

Event shall have occurred and be continuing;

(e)such issuance shall not, in the reasonable opinion of the Manager, be reasonably

expected to have a Material Adverse Effect;

(f)no breakage or termination amounts in connection with any Hedge Agreement

are then due and unpaid;

(g)after giving effect to the issuance of such Additional Notes and any concurrent

acquisition of Additional Assets, the following conditions are satisfied as evidenced by

calculations and reasonable supporting information set forth in an Officers Certificate delivered

in connection with such issuance: (1) the Pro Forma Senior DSCR is equal to or greater than 1.35x,

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(2) the Pro Forma Aggregate DSCR is equal to or greater than 1.15x, (3) the Aggregate LTV will

not be greater than 64%, and (4) the Senior LTV will not be greater than 55%;

(h)the Issuer shall have entered into such additional Hedge Agreements as are

required by Section 4.27;

(i)the Key Person Condition and the Tangible Net Worth Test shall be satisfied as

of the date of issuance of such Additional Notes; and;

(j)the Indenture Trustee and each Hedge Counterparty shall have received

certificates and legal opinions substantially of the same scope as those delivered in connection

with those Notes issued as of the Initial Closing Date;

(k)the Issuer and the Indenture Trustee receive an Opinion of Counsel (which

opinion may contain similar assumptions and qualifications as are contained in the Opinion of

Counsel with respect to the tax treatment of the Notes delivered on the Initial Closing Date) to the

effect that the issuance of such Additional Notes will not (i) cause the Issuer to be treated as an

association that is taxable as a corporation, a publicly traded partnership that is taxable as a

corporation, or a taxable mortgage pool that is taxable as a corporation, in each case for U.S.

federal income tax purposes, (ii) cause any of the Continuing Notes of any Outstanding Series

(other than those that are, at any time, held by any Section 385 Related Party) that were

characterized as indebtedness for U.S. federal income tax purposes, as of the applicable Closing

Date, to be characterized as other than indebtedness for U.S. federal income tax purposes and (iii)

will not cause any Continuing Notes of any Outstanding Series to undergo a significant

modification within the meaning of Treasury Regulations Section 1.1001-3;

(l)no breakage or termination amounts (including Over Hedged Payments) are

then owed in connection with any Hedge Agreement;

(m)any other conditions relating to the issuance of Additional Notes set forth in any

Series Supplement for any Outstanding Series of Notes are satisfied; and

(n)the Indenture Trustee shall have received an Officers Certificate of the Issuer

stating that (1) all conditions precedent to the issuance of the Additional Notes under the Indenture

have been satisfied and (2) the representations and warranties of the Maverick Parties under the

Basic Documents are true and correct in all material respects as of the date of such issuance.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

Each Restricted Party represents and warrants as of the Initial Closing Date and as of the

date of issuance of any Additional Notes as follows:

Section 3.01Organization and Good Standing. Each Restricted Party (i) is

duly organized, validly existing, and in good standing under the laws of the State of Delaware,

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(ii) is in good standing under every state in which it is qualified to do business and (iii) has

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full power and authority under its Organizational Documents to conduct its business as it is

now being conducted, and to own or use the properties and assets that it purports to own or

use.

Section 3.02Authority; No Conflict.

(a)The execution, delivery, and performance of this Indenture and the Basic

Documents and the entering into and performance of the Contemplated Transactions have been

duly and validly authorized in accordance with the Organizational Documents of each Restricted

Party, as applicable. This Indenture has been duly executed and delivered by each Restricted Party

and all instruments executed and delivered by such Restricted Party at or in connection with the

applicable Closing Date have been duly executed and delivered by such Restricted Party. This

Indenture constitutes the legal, valid, and binding obligation of each Restricted Party, enforceable

against such Restricted Party in accordance with its terms, except as such enforceability may be

limited by applicable bankruptcy or other similar laws affecting the rights and remedies of

creditors generally and by general principles of equity (regardless of whether such enforceability

is considered in a Proceeding in equity or at law).

(b)Neither the execution and delivery of this Indenture or the other Basic

Documents by any Restricted Party, nor the consummation or performance of the Contemplated

Transactions or Basic Documents by such Restricted Party, shall, directly or indirectly (with or

without notice or lapse of time or both):

(i)contravene, conflict with, or result in a violation of (A)

any provision of the Organizational Documents of such Restricted Party, as

applicable, or (B) any resolution adopted by the board of directors, board of

managers, stockholders, members, or partners of such Restricted Party, as

applicable;

(ii)contravene, conflict with, or result in a violation of, or

give any Governmental Body or other Person the right to notification of or to

challenge any of the transactions contemplated by the Basic Documents, to

terminate, accelerate, or modify any terms of, or to exercise any remedy or

obtain any relief under, any Contract or agreement or any Law or Order to which

such Restricted Party, or any of the Assets, may be subject;

(iii)contravene, conflict with, or result in a violation of any

of the terms or requirements of, or give any Governmental Body the right to

revoke, withdraw, suspend, cancel, terminate, or modify, any Governmental

Authorization that relates to the Assets; or

(iv)result in the imposition or creation of any Encumbrance

or give rise to any breach, right of termination, cancellation, or acceleration

under any of the terms, covenants, conditions, or provisions of, or constitute a

default or a termination event under, any Lease, Contract, note, bond, mortgage,

indenture, license, or other material agreement with respect to any of the Assets,

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other than any Encumbrance or Lien arising in favor of the Indenture Trustee

pursuant to the Basic Documents.

Section 3.03 Legal Proceedings; Orders. There is no pending Proceeding

against any Restricted Party or any of its Affiliates (a) that relates to or may affect any of the

Collateral; or (b) that challenges, or that may have the effect of preventing, delaying, making

illegal, or otherwise interfering with, any of the Contemplated Transactions or the Basic

Documents. To each Restricted Partys Knowledge, (x) no Proceeding of the type referenced

above has been Threatened, (y) there is no Order adversely affecting the use or ownership of

the Collateral to which any Restricted Party, or any of the Collateral, is subject, and (z) there

is no Order or Proceeding restraining, enjoining, or otherwise prohibiting or making illegal

the consummation of the Contemplated Transactions or Basic Documents or which, if

determined adversely to a Restricted Party, could result in a material diminution of the

benefits contemplated by this Indenture, the Basic Documents or the Contemplated

Transactions.

Section 3.04Compliance with Laws and Governmental Authorizations.

(a)The Collateral has been owned in all material respects in accordance with all

Laws (other than Environmental Laws) of all Governmental Bodies having or asserting jurisdiction

relating to the ownership and operation thereof, including the production of all Hydrocarbons

attributable thereto.

(b)All necessary Governmental Authorizations with regard to the ownership of the

Restricted Parties interest in the Assets have been obtained and no violations exist or have been

recorded in respect of such Governmental Authorizations.

(c)Neither the Restricted Parties nor any of their Affiliates have received any

written notice of any violation of any laws or of any Governmental Authorization in connection

with the ownership of the Assets that has not been corrected or settled, and there are no Proceedings

pending or, to the Knowledge of any Maverick Party, Threatened that might result in any material

modification, revocation, termination or suspension of any Governmental Authorization or which

would require any material corrective or remedial action by such Restricted Party or any of its

Affiliates in connection with the Collateral.

Section 3.05 Compliance with Leases. Except as set forth on Schedule 3.05,

each Restricted Party is in compliance in all material respects with each Lease and Mineral

Interest to the extent relating to the Collateral, including all express and implied covenants

thereunder. No written demands or notices of default or non-compliance or dispute (including

those received electronically) with respect to a Lease or Mineral Interest to the extent relating

to the Collateral have been issued to or received by any Restricted Party that remain uncured

or outstanding.

Section 3.06 Material Liabilities. The Restricted Parties do not have any

material liabilities other than Permitted Indebtedness.

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Section 3.07 Employee Benefit Plans. Neither the Restricted Parties nor, to

the extent it would reasonably be expected to have a Material Adverse Effect, any ERISA

Affiliate maintains or has ever maintained any ERISA Plans (including any Non-U.S. Plan)

or has ever had any obligations to make any contribution to a Multiemployer Plan.

Section 3.08 Use of Proceeds; Margin Regulations. The Issuer will apply the

proceeds of the sale of the Notes hereunder (i) to finance a portion of the purchase price of

the Assets, (ii) to fund the Liquidity Reserve Account, (iii) to pay transaction fees and

expenses related to the issuance of the Notes, and (iv) for general limited liability company

purposes. After the Initial Closing Date, subject to the conditions set forth in this Indenture,

the Issuer may also apply the proceeds of the sale of any Additional Notes hereunder to fund

the redemption of any Notes then Outstanding. No part of the proceeds from the sale of the

Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any

margin stock within the meaning of Regulation U of the Board of Governors of the Federal

Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any

securities under such circumstances as to involve the Issuer in a violation of Regulation X of

said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of

said Board (12 CFR 220).

Section 3.09Existing Indebtedness; Future Liens.

(a)The Restricted Parties have no outstanding Indebtedness other than Permitted

Indebtedness. There are no outstanding Liens on any property of either Restricted Party other than

Permitted Liens.

(b)Except for Permitted Liens, the Restricted Parties have not agreed or

consented to cause or permit any of its property, whether now owned or hereafter acquired, to be

subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening

of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to

be subject to a Lien that secures Indebtedness.

(c)Other than the Basic Documents, the Restricted Parties are not a party to, or

otherwise subject to any provision contained in, any instrument evidencing Indebtedness of a

Restricted Party, any agreement relating thereto or any other agreement (including its charter or

any other Organizational Document) which limits the amount of, or otherwise imposes restrictions

on the incurring of, Indebtedness of a Restricted Party.

Section 3.10Foreign Assets Control Regulations, Etc.

(a)Neither Restricted Party nor any Controlled Entity (i) is a Blocked Person,

(ii)has been notified that its name appears or may in the future appear on a State Sanctions List or

(iii)to each Restricted Partys Knowledge, is a target of sanctions that have been imposed by the

United Nations or the European Union.

(b)Neither Restricted Party nor any Controlled Entity (i) has violated or been

found in violation of, or been charged or convicted under, any Trade Control Laws or (ii) has been

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notified that it is, or to its Knowledge is subject to any actions, suits, proceedings, inquiries or

investigations by any Governmental Body with respect to any Trade Control Laws.

(c)No part of the proceeds from the sale of the Notes hereunder:

(i)constitutes or will constitute funds obtained on behalf of

any Blocked Person or will otherwise be used by a Restricted Party or any

Controlled Entity, directly or knowingly indirectly, (A) in connection with any

investment in, or any transactions or dealings with, any Blocked Person,

(B) for any purpose that would cause any Noteholder to be in violation of any

Economic Sanctions Laws, or (C) otherwise in violation of any Economic

Sanctions Laws;

(ii)will be used, directly or knowingly indirectly, in

violation of, or cause any Noteholder to be in violation of, any applicable Anti-

Money Laundering Laws; or

(iii)will be used, directly or knowingly indirectly, in

furtherance of any improper offers, payments, promises to pay, or authorization

of the payment of money or anything else of value to any Person, including any

Governmental Official or commercial counterparty in order to obtain, retain or

direct business or obtain any improper advantage, in each case, in violation of,

or that would cause any Noteholder to be in violation of, any applicable Anti-

Corruption Laws.

(d)Each Restricted Party and its Affiliates maintains procedures and controls

which are reasonably designed (and otherwise comply with applicable Law) to ensure that each

Restricted Party and each Controlled Entity is and will continue to be in compliance with all

applicable Trade Control Laws.

Section 3.11 Status under Certain Statutes. None of the Issuer, AgentCorp,

Holdings nor the pool of Collateral are subject to regulation under the Investment Company

Act of 1940, the Public Utility Holding Company Act of 2005, the ICC Termination Act of

1995, or the Federal Power Act. Neither the Issuer nor Holdings is (i) a commodity pool

as defined in Section 1a(10) of the Commodity Exchange Act or any rule or regulation relating

thereto or any interpretation thereof by the Commodity Futures Trading Commission or (ii) a

financial end-user as defined in either 17 CFR § 23.151 or 12 CFR § 349.2. None of

Holdings, the Issuer or the pool of Collateral is registered or required to be registered as an

investment company under the Investment Company Act of 1940, as amended, pursuant to

Section 3(c)(9) thereof, although additional exclusions or exemptions may be available to the

Issuer. None of the Issuer, Holdings or the transactions contemplated under this Indenture

constitutes a covered fund for purposes of Section 619 of the Dodd-Frank Wall Street

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Reform and Consumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010), also

known as the Volcker Rule.

Section 3.12 Single Purpose Entity. Each Restricted Party (i) has been

formed and organized solely for the purpose of entering into the Basic Documents to which

it is a party, and performing its obligations thereunder (including entering into certain

agreements in connection therewith), (ii) has not engaged in any business unrelated to

clause (i) above, and (iii) does not have any other assets other than those related to its activities

in accordance with clause (i) above.

Section 3.13 Solvency. The Restricted Parties, on a consolidated basis, are

solvent, have capital not unreasonably small in relation to their business or any contemplated

or undertaken transaction and have assets having a value both at fair valuation and at present

fair saleable value greater than the amount required to pay their debts as they become due and

greater than the amount that will be required to pay their probable liability on their existing

debts as they become absolute and matured. No Restricted Party intends to incur, or believes

that it will incur, debts beyond its ability to pay such debts as they become due. No Restricted

Party believes that it will be rendered insolvent by the execution and delivery of, and

performance of its obligations under, this Indenture, the Notes and the other Basic Documents

to which it is a party. No Restricted Party intends to hinder, delay or defraud its creditors by

or through the execution and delivery of, or performance of its obligations under, this

Indenture, the Notes or the other Basic Documents to which it is a party.

Section 3.14 Security Interest. The Indenture together with the Mortgages

and the Guarantee and Security Agreement create in favor of the Indenture Trustee, on behalf of

the Noteholders, the Hedge Counterparties and other Secured Parties, as security for the Secured

Obligations and for the performance of the provisions of this Indenture and the other Basic

Documents, a security interest in or mortgage or deed of trust on all of the right, title, and interest,

whether now owned or hereafter acquired, of the Restricted Parties in, to, and under the Collateral.

Upon the filing of the applicable UCC-1 financing statements and the Mortgages and the execution

and delivery of the Deposit Account Control Agreements, all action has been taken as is necessary

to perfect such security interest or mortgage or deed of trust, and such security interest, mortgage

or deed of trust is of first priority.

ARTICLE IV

COVENANTS

Section 4.01 Payment of Principal and Interest. The Issuer will duly and

punctually pay the principal of and interest, if any, on the Notes in accordance with the terms

of the Notes and this Indenture. Without limiting the foregoing, subject to and in accordance

with the Priority of Payments or the Special Priority of Payments, as applicable, the Manager,

acting on behalf of the Issuer, will cause the Paying Agent on behalf of the Indenture Trustee

to distribute all applicable amounts on deposit in the Collection Account and allocated for

distribution to the Noteholders on a Payment Date pursuant to Article VIII hereof for the

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benefit of the Notes, to the Noteholders. Amounts properly withheld under the Code by any

Person from a payment to any Noteholder of interest and/or principal shall be considered as

29

having been paid by the Issuer to such Noteholder for all purposes of this Indenture. Interest

on the Notes will be calculated on the basis of the applicable Day Count Convention.

Section 4.02 Maintenance of Office or Agency. The Issuer shall maintain an

office or agency where Notes may be surrendered for registration of transfer or exchange, and

where notices and demands to or upon the Issuer in respect of the Notes and this Indenture

may be served. Such office or agency will initially be at Corporate Trust Office of the

Indenture Trustee, and the Issuer hereby initially appoints the Indenture Trustee to serve as

its agent for the foregoing purposes. The Indenture Trustee will give prompt written notice

to the Issuer, the Back-up Manager and each Rating Agency of any change in the location of

any such office or agency. If at any time the Issuer shall fail to maintain any such office or

agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders,

notices and demands may be made or served at the Corporate Trust Office, and the Issuer

hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and

demands; provided that the Indenture Trustee shall not be deemed an agent of the Issuer for

service of process.

Section 4.03 Money for Payments to Be Held on behalf of the Secured

Parties. All payments of amounts due and payable with respect to any Notes and Hedge

Agreements that are to be made from amounts withdrawn from the Collection Account

pursuant to the Priority of Payments or the Special Priority of Payments, as applicable, shall

be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no

amounts so withdrawn from the Collection Account for payments of Notes and under the

Hedge Agreements shall be paid over to the Issuer except as provided in Section 8.06.

Section 4.04 Compliance With Law. Each Restricted Party will comply with

all Laws and regulations to which it is subject (including ERISA, Environmental Laws, and

the USA PATRIOT Act) and will obtain and maintain in effect all licenses, certificates,

permits, franchises and other Governmental Authorizations necessary to the ownership of its

properties or to the conduct of its businesses, in each case, to the extent necessary to ensure

that non-compliance with such Laws, ordinances or governmental rules or regulations or

failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other

Governmental Authorizations would not, individually or in the aggregate, reasonably be

expected to have a Material Adverse Effect.

Section 4.05 Insurance. From and after the Initial Closing Date, each

Restricted Party will maintain (or cause to be maintained), with financially sound and

reputable insurers, insurance with respect to its properties and businesses against such

casualties and contingencies, of such types, on such terms and in such amounts (including

deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect

thereto) as is customary in the case of entities of established reputations engaged in the same

or a similar business and similarly situated, and each Restricted Party shall use commercially

reasonable efforts to within sixty (60) days after the Initial Closing Date, and in any event

within ninety (90) days after the Initial Closing Date shall cause, the Indenture Trustee to be

named as a loss payee (in the case of property insurance) or an additional insured (in the case

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of liability insurance). For the avoidance of doubt, any proceeds received by any Restricted

Party or the Manager for the benefit of a Restricted Party with respect to any claim under such

insurance policy shall be deemed to be Collections with respect to the Collection Period in

which such proceeds are received and deposited into the Collection Account within two (2)

Business Days of receipt. Amounts paid to a Restricted Party or received for the benefit of a

Restricted Party as insurance proceeds shall be deemed Excess Amounts and applied in

accordance with Section 8.06(e) hereof.

Section 4.06 No Change in Fiscal Year. Without the consent of the Majority

Noteholders, each Restricted Party shall not permit its fiscal year to end on a day other than

December 31, change its method of determining fiscal quarters or make, permit any change

in accounting policies or reporting practices except as required by GAAP or change its federal

employer identification number, in each case, except for any such changes which are not

materially adverse to the Noteholders or the Hedge Counterparties.

Section 4.07 Payment of Taxes and Claims. Each of the Restricted Parties

and Holdings will file all U.S. federal, state and any other material Tax returns required to be

filed in any jurisdiction and shall pay and discharge all Taxes shown to be due and payable

on such Tax returns and all other Taxes, assessments, governmental charges, or levies

imposed on them or any of their properties, assets, income or franchises, to the extent the

same have become due and payable and before they have become delinquent and all claims

for which sums have become due and payable that have or might become a Lien on properties

or assets of such Restricted Party or Holdings, provided that such Restricted Party need not

pay any such Tax, assessment, charge, levy or claim if the amount, applicability or validity

thereof is contested in good faith by such Restricted Party on a timely basis via appropriate

proceedings and with adequate reserves established and maintained therefor in accordance

with GAAP.

Section 4.08 Existence. Each Restricted Party will at all times preserve and

keep (i) its limited liability company or corporate existence, as applicable, in full force and

effect and (ii) all foreign qualifications of such Restricted Party and all rights and franchises

of such Restricted Party unless, in the case of clause (ii), to the best of its knowledge after

reasonable investigation such Restricted Party has determined that the termination of or

failure to preserve and keep in full force and effect such right or franchise would not,

individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 4.09 Books and Records. Each Restricted Party will maintain or

cause to be maintained proper books of record and account in conformity with GAAP and all

applicable requirements of any Governmental Body having legal or regulatory jurisdiction

over such Restricted Party. Each Restricted Party will keep or cause to be kept books, records

and accounts which, in reasonable detail, accurately reflect all transactions and dispositions

of assets. Each Restricted Party or one of its Affiliates has devised a system of internal

accounting controls sufficient to provide reasonable assurances that such Restricted Partys

books, records, and accounts accurately reflect all transactions and dispositions of assets, and

such a system shall be maintained.

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Section 4.10 Performance of Material Agreements. From and after the Initial

Closing Date, each Restricted Party will at all times (i) observe and perform all obligations,

covenants and agreements to be performed by it under, and comply with all conditions under,

each material agreement including each Lease to which it is or becomes a party in accordance

with the terms thereof and (ii) subject to the terms of this Indenture, diligently exercise,

enforce, defend and protect its rights under, and take any action required to collect any and

all sums due to it under, each material agreement including each Lease to which it is or

becomes a party. Each Restricted Party shall punctually perform and observe all of its

obligations and agreements contained in this Indenture, the other Basic Documents to which

it is a party and each other instrument and agreement included as part of the Collateral. No

Restricted Party shall take any action or permit any action to be taken by others which would

release any Person from any of such Persons covenants or obligations under the Basic

Documents or under any instrument or agreement included as part of the Collateral or that

would result in the amendment, hypothecation, subordination, assignment, termination or

discharge of, or impair the validity or effectiveness of, any such instrument or agreement,

except as ordered by a bankruptcy or other court or as expressly provided in this Indenture,

the other Basic Documents or such other instrument or agreement.

Section 4.11 Maintenance of Lien. From and after the Initial Closing Date

and for so long as the Notes and Hedge Agreements are outstanding, each Restricted Party

will, at its expense, timely take or cause to be taken all action required to maintain and

preserve the perfection and first priority of the Lien on the Collateral granted under this

Indenture and the Mortgages (subject to Permitted Liens).

Section 4.12 Further Assurances. From time to time each Restricted Party

will perform or cause to be performed any other act as required by Law and will execute or

cause to be executed any and all further instruments that may be required by Law or

reasonably requested by the Indenture Trustee in order to create, perfect and protect the Lien

of the Indenture Trustee on or in the Collateral. Each Restricted Party will promptly do,

execute, acknowledge and deliver, or promptly cause to be done, executed, acknowledged and

delivered, all such further acts, deeds, conveyances, mortgages, assignments, transfers and

assurances as the Majority Noteholders or the Indenture Trustee (at the written direction of

the Majority Noteholders or as directed by an opinion of counsel) or, if the Hedge

Counterparties are the Controlling Securities, the Majority Hedge Counterparties may

reasonably require for the creation, perfection and priority of the Liens being herein provided

for (subject to Permitted Liens). Each Restricted Party will pay or cause to be paid all filing,

registration and recording Taxes and fees incident to such filing, registration and recording,

and all expenses incident to the preparation, execution and acknowledgment of this Indenture,

and of any instrument of further assurance, and all federal or state stamp Taxes and other

Taxes, duties, imposts, assessments and charges arising out of or in connection with the

execution and delivery of this Indenture, the other Basic Documents and such instruments of

further assurance. Each Restricted Party hereby authorizes, but does not obligate, the

Indenture Trustee to file one or more financing or continuation statements, and amendments

thereto, relative to all or any part of the Collateral without the signature of any Restricted

Party. Each Restricted Party acknowledges and agrees, on behalf of itself, that any such

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financing statement may describe the Collateral as all assets, all personal property or all

assets and all personal property of Debtor, whether now owned or existing or hereafter

acquired or arising, wherever located, together with all products and proceeds thereof,

substitutions and replacements therefor, and additions and accessions thereto of the

applicable Person or words of similar effect.

Section 4.13Use of Proceeds. The Issuer shall apply the proceeds of the sale

of the Notes solely as provided in Section 3.08.

Section 4.14Separateness.EachRestrictedPartyherebyrepresents,

warrants, and covenants that since its formation and at all times thereafter that:

(a)Each Restricted Party shall pay its debts and liabilities (including, as applicable,

shared personnel and overhead expenses) solely from its own assets as the same shall become due

and payable except for expenses paid on its behalf pursuant to arms length contractual

arrangements providing for operating, maintenance or administrative expenses.

(b)Each Restricted Party shall observe all limited liability company, corporate or

organizational formalities, maintain books, records, financial statements and bank accounts

separate from those of its Affiliates, except as expressly permitted by this Indenture and the other

Basic Documents. Each Restricted Partys assets shall not be listed as assets on the financial

statement of any other entity except as required by GAAP; provided, that, if any such Restricted

Partys assets shall be listed on the financial statements of any other entity as required by GAAP,

appropriate notation shall be made on any consolidated statements to indicate its separateness from

any Affiliates and to indicate that its assets and credit are not available to satisfy the debt and other

obligations of such Affiliate or any other Person except as otherwise contemplated by the Basic

Documents.

(c)Each Restricted Party shall hold all of its assets in its own name and shall not

commingle its funds and other assets with those of any Affiliate, except for U.S. federal and

applicable state and local income tax purposes in the case of a Restricted Party that is treated as a

disregarded entity for such purposes.

(d)No Restricted Party shall conduct the business of or act on behalf of any other

Person (except as required by the Basic Documents).

(e)Each Restricted Party (i) shall at all times have at least one (1) duly elected

Independent Manager (in the case of the Issuer) or one (1) duly elected Independent Director (in

the case of AgentCorp) and (ii) so long as the Notes or Hedge Agreements remain outstanding,

shall not remove or replace any Independent Manager or Independent Director without Cause and

only after providing the Indenture Trustee, each Noteholder and each Hedge Counterparty with no

less than five (5) Business Days prior written notice of (A) any proposed removal of such

Independent Manager or Independent Director, and (B) the identity of the proposed replacement,

together with a certification that such replacement satisfies the requirements for an Independent

Manager or Independent Director in the organizational documents for such Restricted Party and

this Indenture. No Restricted Party will institute proceedings to be adjudicated bankrupt or

33

insolvent, consent to the institution of bankruptcy or insolvency proceedings against it, or file, or

consent to, a petition seeking reorganization or relief under any applicable federal or state Law

relating to bankruptcy or insolvency, or consent to the appointment of a receiver, liquidator,

assignee, trustee, sequestrator (or other similar official) of such Restricted Party or any substantial

part of its property, or make an assignment for the benefit of creditors, or admit in writing its

inability to pay its debts generally as they become due, or take limited liability company action in

furtherance of any such action without the affirmative vote of at least one (1) duly elected

Independent Manager (in the case of the Issuer) or at least one (1) duly elected Independent

Director (in the case of AgentCorp).

(f)Other than in AgentCorps capacity as agent for the Issuer pursuant to the

Agency Agreement, each Restricted Party will hold itself out to the public and all other Persons

as, a legal entity separate and distinct from any other Person (including any Affiliate), correct any

known misunderstanding regarding its status as a separate entity, conduct business solely in its

own name, and not identify itself as a division of any of its Affiliates or any of its Affiliates as a

division of such Restricted Party (except for tax or accounting purposes). Other than in

AgentCorps capacity as agent for the Issuer pursuant to the Agency Agreement, each Restricted

Party shall conduct and operate its business in its own name.

(g)No Restricted Party shall permit its name to be used by any Affiliate of such

Restricted Party in the conduct of such Affiliates business, and shall not use the name of any

Affiliate in the conduct of such Restricted Partys business except as contemplated by the Agency

Agreement.

(h)Each Restricted Party shall file its own Tax returns, if any, as may be required

under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return

or returns or (2) not treated as a division for Tax purposes of another taxpayer, and, to the extent

there is sufficient cash flow from the Assets to do so, shall pay any Taxes required to be paid by it

under applicable law solely from its own funds.

(i)Each Restricted Party shall maintain its assets, including the Collateral, in such

a manner that it would not be unreasonably costly or difficult to identify, segregate or ascertain its

assets from those of any other Person.

(j)Each Restricted Party shall comply with Section 4.15 hereof.

(k)Other than pursuant to the Agency Agreement, no Restricted Party shall hold

out its credit or assets as being available to satisfy the debts or other obligations of others nor

guarantee the debts or other obligations of any Person.

(l)No Restricted Party shall grant a security interest in its assets to secure the

obligations of any other Person, in each case, except any security interest granted by a Restricted

Party to secure the Secured Obligations as required pursuant to the Basic Documents.

(m)Each Restricted Party intends to maintain, adequate capital in light of its

contemplated business purpose, transactions, and liabilities (provided, that no member of such

34

Restricted Party shall have any obligation to make any contribution of capital to such Restricted

Party).

(n)[Reserved].

(o)No Restricted Party shall, directly or indirectly, engage in any business or

activity other than the actions that are both (i) required or permitted to be performed under its

Organizational Documents and (ii) permitted by the terms of the Basic Documents.

(p)No Restricted Party shall incur any indebtedness, liability, obligation or

expense, or own any assets, other than in each case those that are both (i) necessary to achieve the

purposes set forth under its Organizational Documents and (ii) permitted by the Basic Documents;

(q)No Restricted Party shall make or permit to remain outstanding any loan or

advance to, or own or acquire any stock or securities of, any Person, other than the Issuers

ownership of AgentCorp.

(r)Each Restricted Party shall maintain complete records of all transactions

(including all transactions with any Affiliate).

(s)Each Restricted Party shall comply with all requirements of applicable Law

regarding its operations and shall comply with the provisions of this Indenture and its

Organizational Documents (including, without limitation, all separateness provisions herein and

therein).

(t)The Issuer shall not form, acquire, or hold any Subsidiary other than

AgentCorp, and AgentCorp shall not form, acquire, or hold any Subsidiary.

(u)Each Restricted Party will maintain a sufficient number of employees (if any)

in light of its contemplated business operations and will pay the salaries of its own employees (if

any) only from its own funds.

(v)Each Restricted Party shall use separate stationery, invoices, and checks bearing

its own name.

(w)Each Restricted Party shall comply with each of the assumptions made with

respect to it in any non-consolidation opinion, and the certifications contained in any certificate

referred to therein, delivered by counsel in connection with the transactions contemplated by the

Basic Documents.

Section 4.15 Transactions with Affiliates. No Restricted Party shall enter

into directly or indirectly any contract, agreement or transaction or group of related

transactions (including the purchase, lease, sale or exchange of properties of any kind or the

rendering of any service) with any Affiliate (other than another Restricted Party), except in

the ordinary course of its business pursuant to enforceable agreements on terms which are

intrinsically fair, commercially reasonable and substantially similar to those of an arms-

length transaction with an unrelated third party.

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Section 4.16 Merger, Consolidation, Etc. Neither the Restricted Parties nor

Holdings will enter into a Division or consolidate with or merge with any other Person or

convey, transfer or lease all or substantially all of its assets in a single transaction or series of

transactions to any Person.

Section 4.17 Lines of Business. No Restricted Party shall at any time engage

in any business other than those related to the ownership of the Assets and the transactions

contemplated by this Indenture and the other Basic Documents to which it is a party and other

activities reasonably incidental thereto; provided, that no Restricted Party shall engage in any

business or activity or enter into any contractual arrangement which would (i) subject the

Holders or any Hedge Counterparty to regulation or oversight by any Governmental Body

(other than the Governmental Bodies which regulate insurance companies and, following

foreclosure, regulations applicable to assets held as a result of such foreclosure) or cause the

Holders or any Hedge Counterparty to breach any Law or regulation or guideline of any

Governmental Body or require Holders or any Hedge Counterparty to obtain a consent, waiver

or clarification by any Governmental Body or (ii) cause any of the representations and

warranties of the Restricted Parties contained in any of the Basic Documents to be inaccurate

as of the date made or deemed made.

Section 4.18 Economic Sanctions, Etc. None of the Restricted Parties nor

any Controlled Entity will (a) become (including by virtue of being owned or controlled by a

Blocked Person), own or control a Blocked Person, in violation of any Trade Control Laws

applicable to any party to this Indenture, (b) transact or deal with any Blocked Person that

would cause any party to this Indenture to be in violation of any Trade Control Laws, or (c)

directly or indirectly have any investment in or engage in any dealing or transaction (including

any investment, dealing or transaction involving the proceeds of the Notes) with any Person

if such investment, dealing or transaction (i) would cause any Secured Party or any affiliate

of any such Secured Party to be in violation of any applicable Trade Control Laws, or (ii) is

in violation of any Trade Control Laws.

Section 4.19 Liens. No Restricted Party shall, directly or indirectly, create,

incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien

on or with respect to any of its property or assets (including the Collateral), whether now

owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise

convey any right to receive income or profits, except for Permitted Liens.

Section 4.20 Sale of Assets, Etc. No Restricted Party shall sell, transfer,

convey, assign, exchange or dispose of any of its properties or assets in any single transaction

or series of related transactions of any individual asset, or group of related assets, other than

Permitted Dispositions or to the Initial Sellers or any Additional Sellers, as applicable,

pursuant to Sections 4.02, 4.03 or 5.12 of the Asset Purchase Agreement.

Section 4.21 Permitted Indebtedness. No Restricted Party shall create,

guarantee, assume or suffer to exist, or in any manner be or become liable in respect of, any

Indebtedness of any kind or character, other than the following (such Indebtedness being

referred to as Permitted Indebtedness):

36

(a)Indebtedness owing under this Indenture, the Notes or any other Basic

Document, including the Hedge Agreements;

(b)Operating Expenses;

(c)obligations incurred in the ordinary course of its business specified in

Section 4.17 in an aggregate amount not to exceed $500,000 at any one time; and

(d)other Indebtedness with the prior written consent of the Majority Noteholders;

provided, however, that (i) any such Indebtedness is subordinate in right of payment (and, if such

Indebtedness is secured, is secured by a Lien on the Collateral that is subordinate to the Lien of

the Indenture Trustee) to the obligations owing to the Hedge Counterparties and the Notes in all

respects and (ii) such Indebtedness is subordinate pursuant to documentation reasonably

acceptable to the Majority Hedge Counterparties and the Majority Noteholders.

Section 4.22 Amendment to Organizational Documents. No Restricted Party

shall, nor shall it permit, any party to, amend, modify or otherwise change (i) any special

purpose entity or separateness provisions in its Organizational Documents, (ii) any other

provision of its Organizational Documents, except to the extent such amendment,

modification or change would not reasonably be expected to be materially adverse to the

Secured Parties or result in a Material Adverse Effect (as evidenced by an Officers Certificate

of the Restricted Parties certifying thereto) or (iii) its jurisdiction of organization, its location

of principal place of business or its name, in each case, without the prior written consent of

the Majority Noteholders and the Majority Hedge Counterparties (such consent not be

unreasonably withheld, conditioned or delayed) and provided that all actions have been taken

to maintain the validity, perfection and first priority of the security interest and Lien on the

Collateral granted under this Indenture and the other Basic Documents in favor of the

Indenture Trustee.

Section 4.23 No Loans. No Restricted Party shall, directly or indirectly,

make any loan or advance to any Person, other than Permitted Investments.

Section 4.24 Permitted Investments; Subsidiaries. No Restricted Party shall

make any Investments other than (a) the Issuers owning the entire equity interest in

AgentCorp, (b) any Investment in Permitted Investments of monies in any Issuer Account, (c)

obligations of account debtors to a Restricted Party arising in the ordinary course of business,

and (d) Investments received as consideration from any Permitted Disposition. The Issuer will

not form, acquire or hold any Subsidiaries other than AgentCorp or enter into any partnership

or joint venture, and AgentCorp will not form, acquire or hold any Subsidiaries or enter into

any partnerships or joint ventures.

Section 4.25 Employees; ERISA. No Restricted Party shall maintain any

employees or maintain any ERISA Plan or incur or suffer to exist any obligations to make any

contribution to a Multiemployer Plan.

Section 4.26 Tax Treatment. Neither the Issuer, nor any party otherwise

having the authority to act on behalf of the Issuer, is authorized to, or will, (i) make the election

37

described in U.S. Treasury Regulations Section 301.7701-3(a) to treat the Issuer as an

association taxable as a corporation for U.S. federal income tax purposes, or a similar election

under any U.S. state or local Law, (ii) report to any Governmental Body on a Tax return or

otherwise that the Issuer is a publicly traded partnership or a taxable mortgage pool, in each

case, taxable as a corporation for U.S. federal income tax purposes or (iii) take any other

action that is reasonably likely to cause the Issuer to be treated as an association, publicly

traded partnership or taxable mortgage pool, in each case taxable as a corporation for U.S.

federal income tax purposes. For all U.S. federal, state and local tax purposes, the Issuer has

always been and shall continue to be classified as an entity disregarded from its owner and

shall not be treated as a partnership, a publicly traded partnership treated as a corporation, a

taxable mortgage pool (in whole or in part) taxable as a corporation or as an association

taxable as a corporation. The Issuer will treat the Notes and this Indenture for all purposes

including federal, state and local income, single business and franchise Tax and any other Tax

imposed on or measured by income purposes, as indebtedness secured by the Collateral (other

than those Notes that are, at any time, held by any Section 385 Related Party to the extent that

a different treatment may be required by law or regulation as a result of the relationship

between the Issuer and such Party or unless otherwise provided in the applicable Series

Supplement).

Section 4.27Hedging Requirements.

(a)On the Initial Closing Date, the Issuer shall enter into and thereafter maintain

one or more Hedge Agreements and Hedging Transactions thereunder (including by way of

assignment and novation from the Maverick Parties to the Issuer) which establish a minimum price

level, to hedge at least (i) NYMEX Henry Hub: 85% of projected natural gas Hydrocarbon

production from the Assets through the five year anniversary of the Initial Closing Date, (ii)

NYMEX WTI: 85% of projected crude oil Hydrocarbon production from the Assets through the

five year anniversary of the Initial Closing Date, (iii) NGLs: 85% of projected natural gas liquid

Hydrocarbon production from the Assets through the three year anniversary of the Initial Closing

Date, and (iv) Gas Basis: 85% of projected natural gas Hydrocarbon production from the Assets

through the three year anniversary of the Initial Closing Date, and on or prior to each Quarterly

Determination Date, the Issuer will be required to add hedges, as needed, to maintain hedging on

at least 85% of projected production for each of natural gas, oil, NGLs, and gas basis volumes for

the lesser of (a) 24 months immediately following such Quarterly Determination Date (but not

prior to the dates specified above) and (b) the months remaining until the projected maturity of

each of the Class A and Class B Notes calculated using the most recent Reserve Report (the

Minimum Hedging Threshold).

(b)The Issuer (or the person or entity selling the Issuers production) may enter

into fixed price production sale agreements for the portion of its production that is not subject to

Hedging Transactions, but may not enter into Hedging Transactions or fixed price production sale

agreements if the combination of both would exceed 100% of its projected Hydrocarbon

production from the Assets, determined separately for natural gas, crude oil, natural gas liquids

and gas basis. Additionally, if at any time the aggregate projected Hydrocarbon production from

the Assets covered by Hedging Transactions or fixed price production sale agreements exceeds

38

100% of projected Hydrocarbon production of the then producing Assets for any monthly period

as set forth in the most recently delivered Reserve Report (determined separately for natural gas,

crude oil, natural gas liquids and gas basis), then the Issuer within ten (10) Business Days after

such occurrence shall, take corrective steps to eliminate such over-hedging in any such monthly

period by terminating an appropriate portion of Hedging Transactions (or fixed price production

sale agreements), or entering into offsetting hedge positions that have the same effect or any

combination of the foregoing (such required actions, the Over Hedged Requirement).

(c)The Issuer shall not enter into any amendment to any Hedge Agreements if after

giving effect thereto, the requirements of this Section 4.27 would not be satisfied, and the Issuer

shall not be a party to any swap, derivative or other similar agreement, including without limitation,

any Hedge Agreement, for speculative purposes.

(d)The Issuer shall not early terminate or unwind any Hedge Agreement, or any

Hedging Transactions thereunder, other than (i) in accordance with Section 4.27(b), (ii) in the

Issuers discretion in connection with an Event of Default or Termination Event with respect

to the Hedge Counterparty under a Hedge Agreement where such Hedge Counterparty is the

Defaulting Party or sole Affected Party, as applicable or (iii) as a result of a good faith

determination by the Issuer or Manager that such Hedge Counterparty or Hedge Agreement should

be replaced or terminated, but not solely to recognize a gain and concurrently enter into a

replacement Hedge Agreement in order to satisfy the requirements of this Section 4.27 at a lower

strike price, provided, for the avoidance of doubt, that the Issuer remains subject to its obligations

to maintain compliance with the hedging requirements set forth in Section 4.27(a), 4.27(b) and any

supplemental indenture, in connection with any early termination or unwind of any Hedge

Agreement. Any amounts received by the Issuer in connection with any termination of a Hedge

Agreement or a Hedging Transaction thereunder (an Issuer Hedge Termination Receipt) shall

be either (A) promptly, and in any event within five (5) Business Days, be applied to the acquisition

of a replacement Hedge Agreement or (B) to the extent not applied pursuant to clause (A),

transferred to the Collection Account for treatment as Available Funds and applied in accordance

with the Priority of Payments provided that, to the extent that an amount up to such Issuer Hedge

Termination Receipt would otherwise be distributed to the Issuer pursuant to clause (xix) of the

Priority of Payments (after application of clauses (i) through (xviii) inclusive of the Priority of

Payments), then such amount (up to such Issuer Hedge Termination Receipt) shall be treated as an

Excess Amount and applied in accordance with Section 8.06(e). For the avoidance of doubt, any

determination of Excess Amounts owing pursuant to the foregoing proviso (and paid pursuant to

Section 8.06(e)) shall be determined after giving effect to amounts owing pursuant to clauses (i)

through (xviii) (inclusive) of the Priority of Payments on the applicable Payment Date.

Section 4.28Replacement of Manager or Back-up Manager.

(a)In the event that the Manager shall be terminated or shall resign in accordance

with the terms of the Management Services Agreement, the Issuer shall use commercially

reasonable efforts to appoint a replacement manager reasonably satisfactory to the Majority

Noteholders in accordance with the terms of the Management Services Agreement; provided that

if a Material Event has occurred and is continuing, the Majority Noteholders shall appoint the

successor Manager, which successor Manager shall be reasonably acceptable to the Majority

39

Hedge Counterparties. The Issuer shall appoint a replacement manager with the consent of the

Majority Noteholders (such consent not to be unreasonably withheld, conditioned, or delayed) as

soon as reasonably practicable, and notify the Noteholders, each Hedge Counterparty and Back-

up Manager in writing of such appointment; provided that if the Issuer shall not have appointed a

replacement manager within thirty (30) days following delivery of notice of any such resignation

or termination, as applicable, other than as a result of the failure of the Majority Noteholders to

have reasonably consented, the Majority Noteholders shall have the right to appoint the

replacement manager with the consent of the Issuer (such consent not to be unreasonably withheld,

conditioned, or delayed).

(b)In the event that the Back-up Manager shall resign, be terminated or otherwise

removed, the Issuer shall appoint a replacement back-up manager with the consent of the Majority

Noteholder (such consent not to be unreasonably withheld, conditioned, or delayed) as soon as

reasonably practicable, and notify the Noteholders and each Hedge Counterparty of such

appointment; provided that if the Issuer shall not have appointed a replacement back-up manager

within thirty (30) days following delivery of notice of any such resignation, termination or

removal, other than as a result of the failure of the Majority Noteholders to have reasonably

consented, the Majority Noteholders shall have the right to appoint the replacement back-up

manager with the consent of the Issuer (such consent not to be unreasonably withheld, conditioned,

or delayed).

Section 4.29 Manager Failure. If any Material Event shall arise from the

failure of the Manager to perform any of its duties or obligations under the Management

Services Agreement, the Issuer shall take all reasonable steps available to it to remedy such

failure, including any such reasonable steps as directed to take by the Majority Noteholders.

Section 4.30 Characterization. The Restricted Parties shall characterize (i)

the transfer of the Assets pursuant to the Asset Purchase Agreement for all purposes as an

absolute transfer of legal and beneficial ownership, including on all relevant books, records,

financial statements and other applicable documents, other than for U.S. federal and

applicable state and local income tax and accounting purposes and (ii) the Grant of the

Collateral by the Restricted Parties under this Indenture as a pledge for U.S. federal income

tax purposes and for financial accounting purposes.

Section 4.31 Amendments to Basic Documents. Without derogating from

the assignment granted to the Indenture Trustee under this Indenture or the rights of the

Indenture Trustee hereunder, each Restricted Party agrees that it shall not, (a) terminate,

amend, waive, supplement or otherwise modify any of, or consent to the assignment

(including any partial assignment) by any party of, the Basic Documents to which it is a party

(other than this Indenture) and (b) to the extent that such Restricted Party has the right to

consent to any termination, waiver, amendment, supplement or other modification of, or any

assignment (including any partial assignment) by any party of, any Basic Document to which

it is not a party, give such consent, in each case, unless, (i) the Rating Agency Condition with

respect thereto has been satisfied, (ii) if the rights of the Hedge Counterparties would be

materially and adversely affected by such termination, amendment, waiver, supplement or

other modification (including, but not limited to, modifications to the definition of Permitted

40

Encumbrances as defined in the Asset Purchase Agreement whereby the rights of the Hedge

Counterparties would be adversely affected in any material respect by such amendment), the

Issuer or Manager shall have obtained the consent of the Majority Hedge Counterparties with

respect thereto, and (iii) as evidenced by an Opinion of Counsel delivered to the Indenture

Trustee, (A) such termination, amendment, waiver, supplement or other modification or such

assignment, as applicable, is authorized and permitted under the terms of the other Basic

Documents, and (B) all conditions precedent thereto, as applicable, including this Section

4.31, have been satisfied and (C) such termination, amendment, waiver, supplement or other

modification or such assignment, as applicable (I) will not cause the Issuer to become treated

as an association that is taxable as a corporation, a publicly traded partnership that is taxable

as a corporation or a taxable mortgage pool that is taxable as a corporation, in each case for

U.S. federal income tax purposes, and (II) will not cause any of the Notes of any Outstanding

Series (other than those that are, at any time, held by any Section 385 Related Party) that were

characterized as indebtedness for U.S. federal income tax purposes, as of the applicable

Closing Date, to be characterized as other than indebtedness for U.S. federal income tax

purposes, and, in the case of (I) and (II) above, such opinion may contain similar assumptions

and qualifications as are contained in the Opinion of Counsel with respect to the tax treatment

of the Notes delivered on the Initial Closing Date. Notwithstanding the foregoing, a Restricted

Party may amend, modify, waive, supplement or agree to any amendment, modification,

supplement or waiver of the terms of this Indenture or any Series Supplement thereto in

accordance with Section 2.07 and Article IX hereof, but subject to any other conditions set

forth in Section 2.07 and Article IX hereof applicable thereto and under any of the other Basic

Documents.

Section 4.32 Operator Account. The Issuer shall cause the Operator Account

to at all times be subject to a Deposit Account Control Agreement. The Issuer will not,

directly or indirectly, create, incur, assume or permit to exist any Lien on the Operator

Account other than Permitted Liens.

ARTICLE V

REMEDIES

Section 5.01Events of Default.

(a)Event of Default, wherever used herein, means any one of the following

events (whatever the reason for such Event of Default and, subject to Sections 5.01(a)(vii) and

(a)(viii) whether it shall be voluntary or involuntary or be effected by operation of Law or pursuant

to any judgment, decree or order of any court or any order, rule or regulation of any administrative

or governmental body):

(i)the failure to pay all amounts due and owing on the

Notes of a Series in full by the applicable Legal Final Maturity Date or the

failure to pay when due and as required to be paid under this Indenture, any

amount of principal; provided, that the failure of the Issuer to pay any optional

41

payments of principal on the Notes, Principal Distribution Amounts or Excess

Amortization Amounts, in each case, for which funds are not available in

accordance with the Priority of Payments or the Special Priority of Payments,

as applicable, is not an Event of Default;

(ii)default in the payment of interest on any Payment Date

on the Controlling Class of Notes when the same becomes due and payable, and

such default shall continue for a period of two (2) Business Days;

(iii)a failure by the Issuer to comply with (A) Section

7.01(c)(i) or Section 7.01(c)(ii) which failure continues for three (3) Business

Days, or (B) Section 4.27(d) which failure with respect to clause (B) continues

for five (5) Business Days, or (C) to deliver the financial statements required

pursuant to Section 7.01(a) and (b) which failure continues for ten (10) Business

Days;

(iv)default by any Seller in the payment of any amount

under the Asset Purchase Agreement when the same becomes due and payable

by such Seller, and such default shall continue for a period of thirty (30) days or

a breach by any Seller of a material covenant under the Asset Purchase

Agreement and such breach shall continue for a period of thirty (30) days;

provided, that no breach will be deemed to exist to the extent that the Asset

Purchase Agreement sets forth an express remedy for the applicable covenant

and the applicable Seller has satisfied its obligations to provide such remedy;

(v)the failure to maintain a Senior IO DSCR of at least

1.20x as calculated on any Quarterly Determination Date;

(vi)default in the observance or performance of any

covenant or agreement of any Maverick Party made in any Basic Document to

which it is a party in any material respect (provided that if such covenant or

agreement contains a materiality qualifier, then the materiality qualifier in this

clause (vi) shall be of no effect) (other than a covenant or agreement, a default

in the observance or performance of which is specifically addressed elsewhere

in these Events of Default), or any representation or warranty of any Maverick

Party made in any Basic Document to which it is a party or in any certificate or

other writing delivered pursuant to or in connection with the Indenture proving

to have been incorrect in any material respect (provided that if such

representation or warranty contains a materiality qualifier, then the materiality

qualifier in this clause (vi) shall be of no effect) as of the time when the same

shall have been made, and such default shall continue or not be cured, or the

circumstance or condition in respect of which such representation or warranty

was incorrect shall not have been eliminated or otherwise cured, for a period of

thirty (30) days after the earlier of (i) Knowledge of a Maverick Party of such

default or incorrect representation or warranty or (ii) receipt by the Issuer and

the applicable Maverick Party from the Indenture Trustee or receipt by the

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Issuer, the applicable Maverick Party and a Responsible Officer of the Indenture

Trustee from a Noteholder or a Hedge Counterparty, a written notice specifying

such default or incorrect representation or warranty and requiring it to be

remedied;

(vii)the filing of a decree or order for relief by a court

having jurisdiction in the premises in respect of any Maverick Party or any

substantial part of the Collateral in an involuntary case under any applicable

federal or state bankruptcy, insolvency or other similar law now or hereafter in

effect, or appointing a receiver, liquidator, assignee, custodian, trustee,

sequestrator or similar official of a Maverick Party or for any substantial part

of the Collateral, or ordering the winding-up or liquidation of a Maverick

Partys affairs, and such decree or order shall remain unstayed and in effect

for a period of sixty (60) consecutive days;

(viii)the commencement by a Maverick Party of a voluntary

case under any applicable federal or state bankruptcy, insolvency or other

similar law now or hereafter in effect, or the consent by a Maverick Party to the

entry of an order for relief in an involuntary case under any such law, or the

consent by a Maverick Party to the appointment or taking possession by a

receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official

of a Maverick Party or for any substantial part of the Collateral, or the making

by a Maverick Party of any general assignment for the benefit of creditors, or

the failure by a Maverick Party generally to pay its debts as such debts become

due, or the taking of any action by a Maverick Party in furtherance of any of the

foregoing;

(ix)the failure of the Indenture Trustee, for the benefit of

the Noteholders, the Hedge Counterparties and the other Secured Parties, to

have a valid first-priority perfected security interest in any portion of the

Collateral in an aggregate amount which exceeds 2% of the PV-10 of the

Assets at such time (as reflected in the most recently delivered Reserve

Report);

(x)the Issuer shall become an association, a publicly traded

partnership or a taxable mortgage pool, that is, in each case, taxable as a

corporation for U.S. federal income tax purposes, or AgentCorp shall be treated

for U.S. federal income tax purposes as the owner of more than a de minimis

amount of the Collateral to which it holds legal title pursuant to the Agency

Agreement;

(xi)the filing of a non-appealable judgment, decree or order

for relief by a court having jurisdiction in the premises in respect of the Issuer,

AgentCorp or Holdings in excess of $500,000 or the Parent in excess of

$3,000,000 and, in each case, not discharged, satisfied or stayed within thirty

(30) days;

43

(xii)the adoption in final form of a statute, rule or regulation

by a competent legislative or governmental rule-making body that becomes

effective following the earliest Closing Date of any Outstanding Series of

Notes, or the entry of a final, non-appealable judgment of a court of competent

jurisdiction that is rendered following the earliest Closing Date of any

Outstanding Series of Notes, which in either case, has a Material Adverse

Effect;

(xiii)an ERISA or tax lien is created that secures a due and

unpaid payment obligation of the Issuer or Holdings in excess of $500,000;

(xiv)any of the Manager, Operator, the Back-up Manager or

the Indenture Trustee shall be terminated, removed or resign, and is not

otherwise replaced, appointed or engaged (except as the result of an act or

omission of the Noteholders, the Hedge Counterparties or the Indenture

Trustee) within sixty (60) days of any such resignation, removal or termination

with a replacement satisfactory to the Majority Noteholders and the Majority

Hedge Counterparties (such consent to a replacement not to be unreasonably

withheld or conditioned);

(xv)the Issuer, AgentCorp, Holdings or the pool of

Collateral is required to be registered as an investment company under the

Investment Company Act;

(xvi)if no Notes are Outstanding, (A) an Event of Default or

Termination Event under any Hedge Agreement has occurred (whether

occurring prior to or after such time as no Notes are Outstanding), (B) an Early

Termination Date under any such Hedge Agreement has been designated in

connection therewith, or (C) any amounts remain unpaid in connection with any

such Early Termination Date; or

(xvii)a Change of Control that is not a Permitted Change of

Control or has not been approved by the Majority Noteholders.

(b)The Issuer shall deliver to (1) a Responsible Officer of the Indenture Trustee,

(2) each Noteholder, (3) each Hedge Counterparty, (4) the Back-up Manager, and (5) each Rating

Agency, within three (3) Business Days after Knowledge of the occurrence thereof, written notice

in the form of an Officers Certificate of any event which with the giving of notice and the lapse

of time would become an Event of Default under clause (a) above, its status and what action the

Issuer is taking or proposes to take with respect thereto.

(c)Notwithstanding the foregoing, a breach of any covenant or agreement or

representation or warranty referred to under clause (a)(vi) above shall not constitute an Event of

Default after such thirty (30) day period if (x) the defaulting party has commenced in a diligent

manner a cure of such breach and (y) such remedial action could not reasonably have been

expected to fully cure such breach within such 30 days, but could reasonably be expected to be

44

implemented and fully cure such breach within an additional thirty (30) days (but in no event shall

the total cure period exceed a total of sixty (60) days); provided, that, an Event of Default pursuant

to clause (a)(vi) above shall be deemed to occur upon the earlier of (i) the expiration of such cure

period if such breach or misrepresentation shall not have been cured on or prior to such date, and

(ii) the date, if any, as of which it is determined that such breach or misrepresentation is not capable

of being cured within such cure period. Upon the occurrence of any such event, the Issuer shall

not be relieved from using its best efforts to perform its obligations in a timely manner in

accordance with the terms of this Indenture, and the Issuer shall provide the Indenture Trustee (if

such delay or failure is a result of a delay or failure by the Issuer), the Noteholders, the Hedge

Counterparties and the Back-up Manager prompt notice of such failure or delay by it, together

with a description of its efforts to so perform its obligations.

Section 5.02 Acceleration of Maturity; Rescission and Annulment. If an

Event of Default has occurred and is continuing, then and in every such case the Indenture

Trustee at the written direction of the Majority Noteholders or the Majority Noteholders may

declare all the Notes to be immediately due and payable, by a notice in writing to the Issuer

and AgentCorp (and to a Responsible Officer of the Indenture Trustee if given by

Noteholders) (a copy of which shall be provided by the Issuer to each Noteholder, each Hedge

Counterparty, the Manager, the Back-up Manager and each Rating Agency), and upon any

such declaration the unpaid principal amount of such Notes, together with accrued and unpaid

interest thereon through the date of acceleration, shall become immediately due and payable;

provided, that upon the occurrence of an Event of Default specified in Section 5.01(a)(vii) or

(viii) all the Notes shall be automatically deemed to be immediately due and payable and upon

such event the unpaid principal of such Notes, together with accrued and unpaid interest

thereon through the date of such Event of Default specified in Section 5.01(a)(vii) or (viii),

shall become immediately due and payable, in each case, without notice, declaration or

demand by the Indenture Trustee or the Noteholders, all of which are hereby waived by the

Issuer.

At any time after such declaration of acceleration of maturity has been made and

before a judgment or decree for payment of the money due has been obtained by the Indenture

Trustee as hereinafter in this Article V provided, the Majority Noteholders, by written notice to

the Issuer, AgentCorp and a Responsible Officer of the Indenture Trustee (a copy of which shall

be provided by the Issuer to each Hedge Counterparty, the Manager, the Back-up Manager and

each Rating Agency), may rescind and annul such declaration and its consequences if:

(i)the Issuer or AgentCorp has paid or deposited with the

Indenture Trustee a sum sufficient to pay:

(A)all payments of principal of and interest on all Notes and all

other amounts that would then be due hereunder or upon such Notes if the

Event of Default giving rise to such acceleration had not occurred; and

(B)all sums paid or advanced by the Indenture Trustee hereunder

and the reasonable compensation, expenses, disbursements and advances of

the Indenture Trustee and its agents and counsel; and

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(ii)all Events of Default, other than the nonpayment of the

principal of the Notes that has become due solely by such acceleration, have

been cured or waived as provided in Section 5.12.

No such rescission shall affect any subsequent default or impair any right

consequent thereto.

Section 5.03Collection of Indebtedness and Suits for Enforcement by

Indenture Trustee.

(a)The Issuer covenants that if (i) an Event of Default specified in

Section 5.01(a)(i) has occurred and is continuing or (ii) an Event of Default specified in

Section 5.01(a)(ii) has occurred and is continuing, the Issuer will, upon demand of the Indenture

Trustee, pay to the Indenture Trustee, for the benefit of the Noteholders, the Hedge Counterparties

and the other Secured Parties, (1) the whole amount then due and payable on such Notes for

principal and interest, with interest on the overdue principal and, to the extent payment at such rate

of interest shall be legally enforceable, on overdue installments of interest at the rate borne by the

Notes, (2) any amounts due and payable by the Issuer under the Hedge Agreements, including any

termination amounts and any other amounts owed thereunder and, in addition thereto, (3) such

further amount as shall be sufficient to cover the reasonable, documented and out of pocket costs

and expenses of collection, including the reasonable compensation, expenses, disbursements and

advances of the Indenture Trustee and its agents and counsel, and all other amounts due and owing

to the Indenture Trustee pursuant to Section 6.07.

(b)In case the Issuer shall fail forthwith to pay such amounts upon such demand,

the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding

for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment

or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and

Hedge Agreements and collect in the manner provided by Law out of the property of the Issuer or

other obligor upon such Notes and Hedge Agreements, wherever situated, the monies adjudged or

decreed to be payable.

(c)If an Event of Default occurs and is continuing, the Indenture Trustee may, as

more particularly provided in Section 5.04, proceed to protect and enforce its rights and the rights

of the Noteholders, the Hedge Counterparties and the other Secured Parties, by such appropriate

Proceedings as the Indenture Trustee may deem necessary to protect and enforce any such rights,

whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of

the exercise of any power granted herein, or to enforce any other proper remedy or legal or

equitable right vested in the Indenture Trustee by this Indenture or by Law.

(d)In case there shall be pending, relative to the Issuer or any other obligor upon

the Notes or any Person having or claiming an ownership interest in the Collateral, Proceedings

under Title 11 of the United States Code or any other applicable federal or state bankruptcy,

insolvency or other similar Law, or in case a receiver, assignee or trustee in bankruptcy or

reorganization, or liquidator, sequestrator or similar official shall have been appointed for or taken

possession of the Issuer or its property or such other obligor or Person, or in case of any other

46

comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the

creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of

whether the principal of any Notes shall then be due and payable as therein expressed or by

declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any

demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention

in such Proceedings or otherwise:

(i)to file and prove a claim or claims for (A) the whole

amount of principal and interest owing and unpaid in respect of the Notes and

(B) any amounts owned and unpaid with respect to any of the Hedge

Agreements and to file such other papers or documents as may be necessary or

advisable in order to have the claims of the Indenture Trustee (including any

claim for reasonable compensation to the Indenture Trustee and each

predecessor Indenture Trustee, and their respective agents, attorneys and

counsel, and for reimbursement of all expenses and liabilities incurred, and all

advances made, by the Indenture Trustee and each predecessor Indenture

Trustee, except as a result of gross negligence or willful misconduct) and of the

Noteholders and the Hedge Counterparties allowed in such Proceedings;

(ii)unless prohibited by applicable Law and regulations, to

vote on behalf of the Holders of Notes and the Hedge Counterparties in any

election of a trustee, a standby trustee or Person performing similar functions in

any such Proceedings;

(iii)to collect and receive any monies or other property

payable or deliverable on any such claims and to distribute all amounts received

with respect to the claims of the Noteholders, the Hedge Counterparties and the

other Secured Parties and of the Indenture Trustee on their behalf; and

(iv)to file such proofs of claim and other papers or

documents as may be necessary or advisable in order to have the claims of the

Indenture Trustee or the Noteholders, the Hedge Counterparties and the other

Secured Parties allowed in any Proceedings relative to the Issuer, its creditors

and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is

hereby authorized by each of such Noteholders, the Hedge Counterparties and the other Secured

Parties to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall

consent to the making of payments directly to such Noteholders, the Hedge Counterparties or the

other Secured Parties, to pay to the Indenture Trustee such amounts as shall be sufficient to cover

reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their

respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all

advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result

of gross negligence or willful misconduct.

(e)Nothing herein contained shall be deemed to authorize the Indenture Trustee to

authorize or consent to or vote for or accept or adopt on behalf of any Noteholder or any Hedge

47

Counterparty any plan of reorganization, arrangement, adjustment or composition affecting the

Notes or the rights of any Holder thereof or the Hedge Agreements or the rights of any Hedge

Counterparty thereof, or to authorize the Indenture Trustee to vote in respect of the claim of any

Noteholder or any Hedge Counterparty in any such proceeding except, as aforesaid, to vote for the

election of a trustee in bankruptcy or similar Person.

(f)All rights of action and of asserting claims under this Indenture, or under any

of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes

or the production thereof in any trial or other Proceedings relative thereto, and any such action or

Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an

express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements

and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their

respective agents and attorneys, shall be for the ratable benefit of the Noteholders, the Hedge

Counterparties and the other Secured Parties.

(g)In any Proceedings brought by the Indenture Trustee (and also any Proceedings

involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall

be a party), the Indenture Trustee shall be held to represent all the Noteholders, the Hedge

Counterparties and other Secured Parties, and it shall not be necessary to make any Noteholder,

Hedge Counterparty or other Secured Party a party to any such Proceedings (for the avoidance of

doubt, the Noteholders and the Hedge Counterparties may initiate certain proceedings consistent

with their rights pursuant to Section 5.07).

Section 5.04Remedies; Priorities.

(a)If an Event of Default shall have occurred and be continuing, the Indenture

Trustee may, or at the written direction of the Majority Noteholders (subject to the terms hereof)

shall, with notice to each Hedge Counterparty, do one or more of the following (subject to

Section 5.05):

(i)declare the entire unpaid principal amount of the Notes,

all interest accrued and unpaid there on and all other amounts payable under

this Indenture and the other Basic Documents to become immediately due and

payable in accordance with Section 5.02;

(ii)institute Proceedings in its own name and as trustee of

an express trust for the collection of all amounts then payable on the Notes and

the Hedge Agreements (including any termination payments and any other

amounts owed thereunder or under the other Basic Documents) or under this

Indenture with respect thereto, whether by declaration or otherwise, enforce any

judgment obtained and collect from the Issuer and any other obligor upon such

Notes monies adjudged due;

(iii)institute Proceedings from time to time for the complete

or partial foreclosure of this Indenture with respect to the Collateral;

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(iv)exercise any remedies of a secured party under the UCC

and take any other appropriate action to protect and enforce the rights and

remedies of the Indenture Trustee and the Noteholders, the Hedge

Counterparties and the other Secured Parties, including, for the avoidance of

doubt, the exercise of any remedies available under the Basic Documents; and

(v)sell the Collateral or any portion thereof or rights or

interest therein, at one or more public or private sales called and conducted in

any manner permitted by Law; provided, that the Indenture Trustee may not sell

or otherwise liquidate the Collateral following an Event of Default, other than

an Event of Default described in Section 5.01(a)(i) or 5.01(a)(ii), unless (A) the

Majority Noteholders consent thereto, (B) the proceeds of such sale or

liquidation distributable to the Noteholders and the Hedge Counterparties are

sufficient to discharge in full all amounts then due and unpaid upon such Notes

for principal and interest and all amounts then due under the Hedge Agreements

or that would be due and payable if the Hedge Agreements were terminated on

the date of such sale (including any breakage or termination amounts and any

other amounts owed thereunder (or, based on a reasonable determination made

by the applicable Hedge Counterparty, that would be due and payable if the

Hedge Agreements were terminated on the date of such sale)) or (C) the

Indenture Trustee determines that the Collateral will not continue to provide

sufficient funds for the payment of principal of and interest on the Notes as they

would have become due if the Notes had not been declared immediately due

and payable, and the Indenture Trustee obtains the consent of 100% of the

Outstanding Amount of the Notes. In determining such sufficiency or

insufficiency with respect to clauses (A), (B) and (C), the Indenture Trustee

may, but need not, obtain and rely upon an opinion of an Independent

investment banking or accounting firm of national reputation as to the feasibility

of such proposed action and as to the sufficiency of the Collateral for such

purpose. The Indenture Trustee shall give written notice of the retention of the

Collateral to each Rating Agency.

(b)If the Indenture Trustee collects any money or property pursuant to this

Article V, it shall within two (2) Business Days after receipt and identification thereof deposit such

money or property to the Collection Account as Collections to be applied pursuant to Article VIII

hereof.

The Indenture Trustee may fix a record date and payment date for any payment to

the Noteholders, Hedge Counterparties and other Secured Parties pursuant to this Section. At least

15 days before such record date, the Issuer shall overnight mail to each Noteholder, each Hedge

Counterparty, the Indenture Trustee and the other Secured Parties a notice that states the record

date, the payment date and the amount to be paid.

The Indenture Trustee shall incur no liability as a result of any sale (whether public

or private) of the Collateral or any part thereof pursuant to this Section 5.04 that is conducted in a

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commercially reasonably manner. Each Restricted Party and each Secured Party hereby waives

any claim against the Indenture Trustee arising by reason of the fact that the price at which the

Collateral may have been sold at such sale (whether public or private) was less than the price that

might have been obtained otherwise, even if the Indenture Trustee accepts the first offer received

and does not offer the Collateral to more than one offeree, so long as such sale is conducted in a

commercially reasonable manner. Each Restricted Party and each Secured Party hereby agrees that

in respect of any sale of the Collateral pursuant to the terms hereof, the Indenture Trustee is

authorized to comply with any limitation or restriction in connection with such sale as it may be

advised by counsel is necessary in order to avoid any violation of applicable Law, or in order to

obtain any required approval of the sale or of the purchaser by any governmental authority or

official, and the Issuer and the Noteholders further agree that such compliance shall not, in and of

its self, result in such sale being considered or deemed not to have been made in a commercially

reasonable manner, nor shall the Indenture Trustee be liable or accountable to the Issuer or any

Noteholders for any discount allowed by reason of the fact that the Collateral or any part thereof

is sold in compliance with any such limitation or restriction.

Section 5.05 Optional Preservation of the Assets. If the Notes have been

declared to be immediately due and payable under Section 5.02 following an Event of Default

and such declaration and its consequences have not been rescinded and annulled, the Indenture

Trustee may, but need not, elect to maintain possession of the Collateral. In the event that the

Indenture Trustee elects to maintain possession of the Collateral, the Indenture Trustee shall

provide written notice of such election to the Rating Agencies. It is the desire of the parties

hereto and the Noteholders, the Hedge Counterparties and the other Secured Parties that there

be at all times sufficient funds for the payment of the Secured Obligations, and the Indenture

Trustee shall take such desire into account when determining whether or not to maintain

possession of the Collateral. In determining whether to maintain possession of the Collateral,

the Indenture Trustee may, but need not, obtain (at the expense of the Issuer) and rely upon

an opinion of an Independent investment banking or accounting firm of national reputation as

to the feasibility of such proposed action and as to the sufficiency of the Collateral for such

purpose.

Section 5.06 Limitation of Suits. No Holder of any Note shall have any right

to institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the

appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i)such Holder has previously given written notice to the

Indenture Trustee of a continuing Event of Default;

(ii)the Majority Noteholders have consented to or made

written request to the Indenture Trustee to institute such Proceeding in respect

of such Event of Default in its own name as Indenture Trustee hereunder;

(iii)such Holder or Holders have offered to the Indenture

Trustee indemnity reasonably satisfactory to it against the costs, expenses and

liabilities to be incurred in complying with such request;

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(iv)the Indenture Trustee for sixty (60) days after its receipt

of such notice, request and offer of indemnity has failed to institute such

Proceedings; and

(v)no direction inconsistent with such written request has

been given to the Indenture Trustee during such sixty (60) day period by the

Majority Noteholders.

It is understood and intended that no one or more Holders of Notes shall have any

right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to

affect, disturb or prejudice the rights of any other Noteholders, the Hedge Counterparties and the

other Secured Parties or to obtain or to seek to obtain priority or preference over any other Holders,

the Hedge Counterparties and the other Secured Parties or to enforce any right under this Indenture,

except in the manner herein provided.

Section 5.07 Unconditional Rights of Hedge Counterparties and Noteholders

to Receive Principal and Interest and Payment of Other Obligations. Notwithstanding any

other provisions in this Indenture, (a) the Holder of any Note shall have the right, which is

absolute and unconditional, to receive payment of the principal of and interest, if any, on such

Note on or after the respective due dates thereof expressed in such Note or in this Indenture

(or, in the case of redemption, on or after the Redemption Date), (b) each Hedge Counterparty

shall have the right, which is absolute and unconditional, to receive payment of any

obligations of the Issuer under the Hedge Agreements (including the termination amounts and

any other amounts owed thereunder) on or after the respective due dates thereof expressed in

the applicable Hedge Agreement or in this Indenture and (c) each Holder and Hedge

Counterparty shall have the right to institute suit for the enforcement of any such payment,

and such right shall not be impaired without the consent of such Holder or the Hedge

Counterparties.

Section 5.08 Restoration of Rights and Remedies. If the Indenture Trustee,

any Hedge Counterparty or any Noteholder has instituted any Proceeding to enforce any right

or remedy under this Indenture and such Proceeding has been discontinued or abandoned for

any reason or has been determined adversely to the Indenture Trustee, to such Hedge

Counterparty or to such Noteholder, then and in every such case the Issuer, AgentCorp, the

Indenture Trustee, the Hedge Counterparties and the Noteholders shall, subject to any

determination in such Proceeding, be restored severally and respectively to their former

positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Hedge

Counterparties and the Noteholders shall continue as though no such Proceeding had been

instituted.

Section 5.09 Rights and Remedies Cumulative. No right or remedy herein

conferred upon or reserved to the Indenture Trustee, to the Hedge Counterparties, to the

Noteholders or to the other Secured Parties is intended to be exclusive of any other right or

remedy, and every right and remedy shall, to the extent permitted by Law, be cumulative and

in addition to every other right and remedy given hereunder or now or hereafter existing at

Law or in equity or otherwise. The assertion or employment of any right or remedy hereunder,

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or otherwise, shall not prevent the concurrent assertion or employment of any other

appropriate right or remedy.

Section 5.10 Delay or Omission Not a Waiver. No delay or omission of the

Indenture Trustee, any Holder of any Note, any Hedge Counterparty or any other Secured

Party to exercise any right or remedy accruing upon any Default or Event of Default shall

impair any such right or remedy or constitute a waiver of any such Default or Event of Default

or an acquiescence therein. Every right and remedy given by this Article V or by Law to the

Indenture Trustee, to the Hedge Counterparties, to the Noteholders or to the other Secured

Parties may be exercised from time to time, and as often as may be deemed expedient, by the

Indenture Trustee, by the Hedge Counterparties, by the Noteholders or by the other Secured

Parties, as the case may be.

Section 5.11 Control by Noteholders. The Majority Noteholders shall have

the right to direct the time, method and place of conducting any Proceeding for any remedy

available to the Indenture Trustee with respect to the Notes or exercising any trust or power

conferred on the Indenture Trustee; provided, that:

(i)such direction shall not be in conflict with any rule of

law or with this Indenture;

(ii)such rights shall be subject to the express terms of

Section 5.04(a)(v);

(iii)if the conditions set forth in Section 5.05 have been

satisfied and the Indenture Trustee elects to retain the Collateral pursuant to

such Section, then any written direction to the Indenture Trustee by Holders of

Notes representing less than 100% of the Controlling Class to sell or liquidate

the Collateral shall be of no force and effect;

(iv)the Indenture Trustee may take any other action deemed

proper by the Indenture Trustee that is not inconsistent with such direction; and

(v)the Majority Noteholders (or such other percentage of

Noteholders expressly authorized to direct the Indenture Trustee in writing

hereunder) have offered to the Indenture Trustee indemnity satisfactory to it

against the costs, expenses and liabilities to be incurred in complying with such

direction.

Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the

Indenture Trustee need not take any action that it determines might involve it in liability or might

adversely affect the rights of any Noteholders not consenting to such action or the rights of any

Hedge Counterparties.

Section 5.12 Waiver of Past Defaults. Prior to the declaration of the

acceleration of the maturity of the Notes as provided in Section 5.02, the Majority Noteholders

may waive any past Default or Event of Default and its consequences except a Default or

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Event of Default (a) in payment of principal of or interest on any of the Notes, (b) arising

under any Hedge Agreement, (c) in respect of a covenant or provision hereof which cannot

be modified or amended without the consent of the Holder of each Note, or (d) occurring as

a result of an event specified in Section 5.01(a)(vii) or 5.01(a)(viii). In the case of any such

waiver, the Issuer, AgentCorp, the Indenture Trustee, the Holders of the Notes, the Hedge

Counterparties and the other Secured Parties shall be restored to their former positions and

rights hereunder, respectively; but no such waiver shall extend to any subsequent or other

Default or Event of Default or impair any right consequent thereto.

Upon any such waiver, such Default or Event of Default shall cease to exist and be

deemed to have been cured and not to have occurred, and any Event of Default arising therefrom

shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture;

but no such waiver shall extend to any subsequent or other Default or Event of Default or impair

any right consequent thereto. The Indenture Trustee shall promptly give written notice of any such

waiver to each Rating Agency.

Section 5.13 Undertaking for Costs. All parties to this Indenture agree, and

each Holder of a Note by such Holders acceptance thereof shall be deemed to have agreed,

that any court may in its discretion require, in any suit for the enforcement of any right or

remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken,

suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of

an undertaking to pay the costs of such suit, and that such court may in its discretion assess

reasonable costs, including reasonable attorneys fees and reasonable, documented and out of

pocket expenses, against any party litigant in such suit, having due regard to the merits and

good faith of the claims or defenses made by such party litigant; but the provisions of this

Section shall not apply to (a) any suit instituted by the Indenture Trustee or (b) any suit

instituted by any Noteholder (including the Majority Noteholders) for the enforcement of the

payment of principal of or interest on any Note on or after the respective due dates expressed

in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption

Date).

Section 5.14 Waiver of Stay or Extension Laws. The Issuer covenants (to the

extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any

manner whatsoever claim or take the benefit or advantage of, any stay or extension Law

wherever enacted, now or at any time hereafter in force, that may affect the covenants or the

performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby

expressly waives all benefit or advantage of any such Law, and covenants that it will not

hinder, delay or impede the execution of any power herein granted to the Indenture Trustee,

but will suffer and permit the execution of every such power as though no such Law had been

enacted.

Section 5.15 Action on Notes or Hedge Agreements. The Indenture

Trustees right to seek and recover judgment on the Notes, the Hedge Agreements or under

this Indenture shall not be affected by the seeking, obtaining or application of any other relief

under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or

remedies of the Indenture Trustee, the Noteholders, the Hedge Counterparties or the other

53

Secured Parties shall be impaired by the recovery of any judgment by the Indenture Trustee

against the Issuer or by the levy of any execution under such judgment upon any portion of

the Collateral or upon any of the assets of the Issuer. Any money or property collected by the

Indenture Trustee shall be applied in accordance with Section 5.04(b).

Section 5.16Performance and Enforcement of Certain Obligations.

(a)At the Managers expense, the Issuer shall take all such lawful action as the

Indenture Trustee, at the direction of the Majority Noteholders, shall request to compel or secure

the performance and observance by any of the Maverick Parties of such entitys obligations to the

Issuer or AgentCorp under or in connection with any of the Basic Documents, and to exercise any

and all rights, remedies, powers and privileges lawfully available to the Issuer under or in

connection with any of the Basic Documents to the extent and in the manner directed by the

Indenture Trustee, at the written direction of the Majority Noteholders, including but not limited

to the transmission of notices of default under the Management Services Agreement on the part of

the Manager thereunder, claims for indemnification by the Issuer against any Seller under the Asset

Purchase Agreement and the institution of legal or administrative actions or proceedings to compel

or secure performance by the Manager of its obligations under the Management Services

Agreement and by any Seller of its obligations under the Asset Purchase Agreement.

(b)If an Event of Default has occurred and is continuing, the Indenture Trustee

may, and at the direction (which direction shall be in writing) of the Majority Noteholders shall,

exercise all rights, remedies, powers, privileges and claims of the Issuer or AgentCorp against any

Maverick Party under or in connection with the Basic Documents, including but not limited to the

right or power to take any action to compel or secure performance or observance by the Manager,

of its obligations to the Issuer under the Management Services Agreement or by any Seller, of its

obligations to the Issuer under the Asset Purchase Agreement, and to give any consent, request,

notice, direction, approval, extension or waiver under the Management Services Agreement or the

Asset Purchase Agreement or the other Basic Documents, as the case may be, and any right of the

Issuer to take such action shall be suspended.

ARTICLE VI

THE INDENTURE TRUSTEE

Section 6.01Duties of Indenture Trustee.

(a)If an Event of Default has occurred and is continuing, the Indenture Trustee

shall exercise the rights and powers vested in it by this Indenture and use the same degree of care

and skill in their exercise as a prudent person would exercise or use under the circumstances in the

conduct of such persons own affairs.

(b)Except as directed in writing by the Majority Noteholders, any other percentage

of Noteholders required hereby or during the continuance of an Event of Default:

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(i)the Indenture Trustee undertakes to perform such duties

and only such duties as are specifically set forth in this Indenture and the other

Basic Documents to which it is a party and no implied covenants or obligations

shall be read into this Indenture or such other Basic Documents against the

Indenture Trustee; and

(ii)in the absence of gross negligence or willful

misconduct on its part, the Indenture Trustee may conclusively rely, as to the

truth of the statements and the correctness of the opinions expressed therein,

upon certificates or opinions furnished to the Indenture Trustee and

conforming to the requirements of this Indenture; however, in the case of

certificates or opinions specifically required by any provision of this Indenture

to be furnished to it, the Indenture Trustee shall examine the certificates and

opinions to determine whether or not they conform on their face to the

requirements of this Indenture (but need not confirm or investigate the accuracy

of any mathematical calculations or other facts stated therein).

(c)The Indenture Trustee may not be relieved from liability for its own grossly

negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i)this paragraph does not limit the effect of paragraph (b)

of this Section 6.01;

(ii)the Indenture Trustee shall not be liable for any error of

judgment made in good faith by the Indenture Trustee unless it is proved that

the Indenture Trustee was negligent in ascertaining the pertinent facts; and

(iii)the Indenture Trustee shall not be liable with respect to

any action it takes or omits to take in good faith in accordance with a direction

received by it pursuant to Section 5.11.

(d)Every provision of this Indenture that in any way relates to the Indenture

Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section.

(e)The Indenture Trustee shall not be liable for interest on any money received by

it except as the Indenture Trustee may agree in writing with the Issuer.

(f)Money held on behalf of the Noteholders by the Indenture Trustee need not be

segregated from other funds except to the extent required by law or the terms of this Indenture or

the Management Services Agreement.

(g)No provision of this Indenture shall require the Indenture Trustee to expend or

risk its own funds or otherwise incur financial liability in the performance of any of its duties

hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to

believe that repayment of such funds or indemnity satisfactory to it against such risk or liability is

not reasonably assured to it, and none of the provisions contained in this Indenture shall in any

event require the Indenture Trustee to perform, or be responsible for the performance of, any of

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the obligations of the Manager or the Back-up Manager under this Indenture or the Basic

Documents.

(h)The Indenture Trustee shall have no duty (i) to see to any recording, filing, or

depositing of this Indenture or any agreement referred to herein or any financing statement or

continuation statement evidencing a security interest, or to see to the maintenance of any such

recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof or

otherwise to monitor the perfection, continuation of perfection or the sufficiency or validity of any

security interest related to the Collateral, (ii) to see to any insurance or (iii) subject to the other

provisions of this Indenture and the Basic Documents, to see to the payment or discharge of any

tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with

respect to, assessed or levied against, any part of the Collateral.

(i)The Indenture Trustee shall not be charged with knowledge of any Material

Event or breach of representation or warranty unless either (1) a Responsible Officer of the

Indenture Trustee shall have actual knowledge of such Material Event or breach of representation

or warranty or (2) written notice of such Material Event or breach of representation or warranty

shall have been given to a Responsible Officer of the Indenture Trustee in accordance with the

provisions of this Indenture. For the avoidance of doubt, receipt by the Indenture Trustee of a

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Payment Date Report shall not constitute actual knowledge of any breach of representation or

warranty.

(j)The Indenture Trustee is hereby directed to execute and deliver the Back-up

Management Agreement and each Deposit Account Control Agreement in connection with the

execution and delivery of this Indenture.

Section 6.02Rights of Indenture Trustee.

(a)The Indenture Trustee may conclusively rely on any document believed by it to

be genuine and to have been signed or presented by the proper person.

(b)Before the Indenture Trustee acts or refrains from acting, it may require an

Officers Certificate of the Issuer or an Opinion of Counsel. The Indenture Trustee shall not be

liable for any action it takes or omits to take in good faith in reliance on an Officers Certificate or

Opinion of Counsel.

(c)The Indenture Trustee may execute any of the trusts or powers hereunder or

perform any duties hereunder either directly or by or through agents or attorneys or a custodian or

nominee, and the Indenture Trustee shall not be responsible for any misconduct or negligence on

the part of, or for the supervision of, any such agent, attorney, custodian or nominee appointed

absent gross negligence or willful misconduct by it hereunder.

(d)The Indenture Trustee shall not be liable for any action it takes or omits to take

in good faith which it believes to be authorized or within its rights or powers; provided, that the

Indenture Trustees conduct does not constitute gross negligence or willful misconduct.

(e)The Indenture Trustee may consult with counsel (which may be counsel to the

Issuer, the Noteholders and/or the Hedge Counterparties), accountants and other experts of its own

selection, and the advice or opinion of such counsel, accountants and other experts with respect to

legal or other matters relating to this Indenture and the Notes shall be full and complete

authorization and protection from liability in respect to any action taken, omitted or suffered by it

hereunder in good faith and in accordance with the advice or opinion of such counsel, accountants

and other experts.

(f)The Indenture Trustee shall be under no obligation to exercise any of the rights

or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder

or in relation hereto or to honor the request or direction of any of the Noteholders pursuant to this

Indenture, unless such Noteholders shall have offered to the Indenture Trustee security or

indemnity satisfactory to it against the reasonable costs, expenses, disbursements, advances and

liabilities which might be incurred by it, its agents and its counsel in compliance with such request

or direction.

(g)The Indenture Trustee shall not be bound to make any investigation into the

facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice,

request, consent, order, approval, bond or other paper or document (including electronic

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communications), unless requested in writing to do so by the Holders of Notes representing at least

25% of the Outstanding Principal Balance of any Class of Notes or, if the Hedge Counterparties

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constitute the Controlling Class at such time, then the Controlling Class; provided, that if the

payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely

to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee,

not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this

Indenture, the Indenture Trustee may require indemnity satisfactory to the Indenture Trustee in its

reasonable discretion against such cost, expense or liability as a condition to taking any such

action.

(h)The right of the Indenture Trustee to perform any discretionary act enumerated

in this Indenture or any other Basic Document to which it is a party shall not be construed as a

duty or obligation, and the Indenture Trustee shall not be answerable under this Indenture or any

other Basic Document to which it is a party for anything other than its gross negligence or willful

misconduct in the performance of such act.

(i)The rights, privileges, protections, immunities and benefits given to the

Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and

shall be enforceable by, the Indenture Trustee in each of its capacities hereunder, and each agent,

custodian and other Person employed to act hereunder. In connection with its actions under any

other Basic Document to which it is a party, the Indenture Trustee shall also be afforded all of the

rights, privileges, protections, immunities and benefits given to it herein, including, without

limitation, its right to be indemnified, as if set forth in full therein, mutatis mutandis.

(j)In no event shall the Indenture Trustee be responsible or liable for any failure

or delay in the performance of its obligations hereunder arising out of or caused by, directly or

indirectly, forces beyond its control, including, without limitation, any act or provision of any

present or future law or regulation or governmental authority, strikes, work stoppages, epidemics,

pandemics or quarantines, acts of war or terrorism, civil or military disturbances, nuclear or natural

catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or

computer (hardware or software) systems and services, or the unavailability of the Federal Reserve

Bank wire or telex or other wire or communication facility; it being understood that the Indenture

Trustee shall use reasonable efforts which are consistent with accepted practices in the banking

industry to resume performance as soon as practicable under the circumstances.

(k)In no event shall the Indenture Trustee be liable (i) for special, consequential,

indirect or punitive damages (including lost profits), (ii) for the acts or omissions of its nominees,

correspondents, clearing agencies or securities depositories and (iii) for the acts or omissions of

brokers or dealers even if the Indenture Trustee has been advised of the likelihood of such loss or

damage and regardless of the form of action.

(l)In no event shall the Indenture Trustee be liable for the failure to perform its

duties hereunder if such failure is a direct or proximate result of another partys failure to perform

its obligations hereunder.

(m)In no event shall the Indenture Trustee be under any obligation (i) to monitor,

determine or verify the unavailability or cessation of any applicable floating rate benchmark, or

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whether or when there has occurred, or to give notice to any other transaction party of the

occurrence of, any benchmark transition event or benchmark replacement date, (ii) to select,

determine or designate any alternative reference rate or benchmark replacement, or other successor

or replacement benchmark index, or whether any conditions to the designation of such a rate have

been satisfied, or (iii) to select, determine or designate any benchmark replacement adjustment, or

other modifier to any replacement or successor index, or (iv) to determine whether or what

benchmark replacement conforming changes are necessary or advisable, if any, in connection with

any of the foregoing. The Indenture Trustee shall not be liable for (i) any determination, decision

or election made by any Person in connection with any floating rate benchmark applicable to any

Notes, or (ii) any inability, failure or delay on its part to perform any of its duties set forth in this

Indenture as a result of the unavailability of the of any floating rate benchmark applicable to any

Notes or the absence of a designated successor or replacement benchmark index, including as a

result of any inability, delay, error or inaccuracy on the part of any Person in providing any

direction, instruction, notice or information required or contemplated by the terms of this Indenture

and reasonably required for the performance of such duties. No benchmark replacement

conforming changes that materially and adversely affect the duties, immunities or protections of

the Indenture Trustee shall be effective without the prior written consent of the Indenture Trustee.

(n)The Indenture Trustee shall not have any obligation to monitor the compliance

by the Issuer of its obligations under or with respect to any Hedge Agreement. In the event that

the Issuer is deemed to be a commodity pool, the Indenture Trustee shall not be deemed to be a

commodity pool operator.

(o)As to any fact or matter the manner of ascertainment of which is not specifically

described herein, the Indenture Trustee shall be entitled to receive and may for all purposes hereof

conclusively rely on a certificate, signed by a Responsible Officer of any duly authorized Person,

as to such fact or matter, and such certificate shall constitute full protection to the Indenture Trustee

for any action taken or omitted to be taken by it in good faith reliance thereon.

(p)Any Opinion of Counsel requested by the Indenture Trustee shall be an expense

of the party requesting the Indenture Trustee to act or refrain from acting or otherwise may be an

expense of the Issuer.

(q)The Indenture Trustee or its Affiliates are permitted to receive additional

compensation that could be deemed to be in the Indenture Trustees economic self-interest for (i)

serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-

custodian, (ii) using Affiliates to effect transactions in certain investments (if directed) and (iii)

effecting transactions in certain investments (if directed). Such compensation shall not be

considered an amount that is reimbursable or payable to the Indenture Trustee as part of the

compensation hereunder.

(r)Neither the Indenture Trustee nor the Issuer shall be responsible for the acts or

omissions of the other, it being understood that this Indenture shall not be construed to render them

partners, joint venturers or agents (unless expressly set forth herein) of one another.

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(s)The Indenture Trustee shall not have any obligation or liability to take any

action or to refrain from taking any action hereunder that requires written direction in the absence

of such written direction as provided hereunder.

(t)The Indenture Trustee shall not be required to give any bond or surety with

respect to the execution of the trust created hereby or the powers granted hereunder.

(u)The Indenture Trustee may, from time to time, request that the Issuer deliver a

certificate (upon which the Indenture Trustee may conclusively rely) setting forth the names of

individuals and/or titles of officers authorized at such time to take specified actions pursuant to

this Indenture or any other Basic Document together with a specimen signature of such authorized

officers; provided, however, that from time to time, the Issuer may, by delivering to the Indenture

Trustee a revised certificate, change the information previously provided by it pursuant to this

Section 6.02(u), but the Indenture Trustee shall be entitled to conclusively rely on the then current

certificate until receipt of a superseding certificate.

(v)Except for notices, reports and other documents expressly required to be

furnished to the Holders or the Hedge Counterparties by the Indenture Trustee hereunder, the

Indenture Trustee shall not have any duty or responsibility to provide any Holder with any

information concerning the transaction contemplated hereby, the Issuer, the servicer or any other

parties to any other Basic Document which may come into the possession of the Indenture Trustee

or any of its officers, directors, employees, representatives or attorneys in fact.

(w)If at any time the Indenture Trustee is served with any arbitral, judicial or

administrative order, judgment, award, decree, writ or other form of arbitral, judicial or

administrative process which in any way affects this Indenture, the Notes, the Collateral or any

part thereof or funds held by it (including, but not limited to, orders of attachment or garnishment

or other forms of levies or injunctions), it shall be authorized to comply therewith in any manner

as it or its legal counsel of its own choosing deems appropriate; and if the Indenture Trustee

complies with any such arbitral, judicial or administrative order, judgment, award, decree, writ or

other form of arbitral, judicial or administrative process, the Indenture Trustee shall not be liable

to any of the parties hereto or to any other person or entity even though such order, judgment,

award, decree, writ or process may be subsequently modified or vacated or otherwise determined

to have been without legal force or effect.

Section 6.03 Individual Rights of Indenture Trustee. The Indenture Trustee

in its individual or any other capacity may become the owner or pledgee of Notes and may

otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were

not Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent

may do the same with like rights. However, the Indenture Trustee must comply with

Sections 6.11 and 6.12.

Section 6.04 Indenture Trustees Disclaimer. The Indenture Trustee shall not

be responsible for and makes no representation as to the validity or adequacy of this Indenture

or the Notes, it shall not be accountable for the Issuers use of the proceeds from the Notes,

and it shall not be responsible for any statement of the Issuer in the Indenture or in any

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document issued in connection with the sale of the Notes or in the Notes other than the

Indenture Trustees certificate of authentication.

Section 6.05 Notice of Manager Termination Events or Events of Default.

Unless provided by Issuer (or the Manager on its behalf) on an earlier date, if a Manager

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Termination Event, Material Event, Default or Event of Default occurs and is continuing and

if it is actually known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee

shall mail to each Noteholder, each Hedge Counterparty, the Back-up Manager and each

Rating Agency notice of the Manager Termination Event, Material Event, Default or Event

of Default within five (5) days after receipt of such actual knowledge.

Section 6.06 Reports by Indenture Trustee. The Indenture Trustee shall

make available within a reasonable period of time after the end of each calendar year to each

Noteholder and each Hedge Counterparty such information furnished to the Indenture Trustee

as may be required to enable such Holder or such Hedge Counterparty to prepare its U.S.

federal, state and local income Tax returns. On or before each Payment Date, the Indenture

Trustee will post a copy of the statement or statements provided to the Indenture Trustee

pursuant to Sections 8.08 hereof with respect to the applicable Payment Date on its internet

website promptly following its receipt thereof, for the benefit of the Noteholders, the Hedge

Counterparties and Rating Agencies, and upon written request provide a copy thereof to each

Hedge Counterparty and the Rating Agencies. The Indenture Trustee will post copies of the

items provided to the Indenture Trustee pursuant to Section 7.01 hereof and the Reserve

Report provided pursuant to Section 8.05 hereof on its internet website promptly following

its receipt thereof (provided that within three (3) Business Days of posting, the Indenture

Trustee will provide email notice of such posting), for the benefit of the Noteholders, Hedge

Counterparties, the Back-up Manager and Rating Agencies, and upon written request provide

a copy thereof to each Hedge Counterparty, Noteholder, Back-up Manager and the Rating

Agencies. The Indenture Trustees internet website shall initially be located at

www.debtx.com. The Indenture Trustee may change the way the statements and

information are posted or distributed in order to make such distribution more convenient

and/or accessible for such Noteholders, the Hedge Counterparties, the Rating Agencies and

the Back-up Manager and the Indenture Trustee shall provide on the website timely and

adequate notification to all parties regarding any such change. As of the date hereof, the

Indenture Trustees website will automatically issue an email notification to any Noteholder,

Hedge Counterparty, Rating Agency or Back-up Manager who has registered access and

activated notification of any posting of information to such website. Each Noteholder, Hedge

Counterparty, Rating Agency and Back-up Manager shall be responsible for its own

registration for such website and the Indenture Trustee shall not have any obligation to

monitor any Noteholders, Hedge Counterpartys, Rating Agencys or Back-up Managers

registration status. The Indenture Trustee shall not have any liability in connection with its

website failing to automatically deliver the email notifications referenced in this Section 6.06

absent gross negligence or willful misconduct on its part.

Section 6.07 Compensation and Indemnity. The Issuer shall pay to the

Indenture Trustee from time to time reasonable compensation for its services as agreed

between the Issuer and the Indenture Trustee in writing from time to time. The Indenture

Trustees compensation shall not be limited by any law on compensation of a trustee of an

express trust. The Issuer shall reimburse the Indenture Trustee for all reasonable and

documented out-of-pocket expenses incurred or made by it, including costs of collection, in

addition to the compensation for its services. Such expenses shall include the reasonable and

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documented compensation and expenses, disbursements and advances of the Indenture

Trustees agents, counsel, accountants and experts; provided, that reimbursement for expenses

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and disbursements of any legal counsel to the Indenture Trustee may be subject to any

limitations separately agreed upon in writing before the date hereof between the Manager and

the Indenture Trustee. The Issuer shall indemnify the Indenture Trustee for, and hold it and

its officers, directors, employees, representatives and agents harmless against any and all loss,

liability, claim, damage or expense (including reasonable and documented legal and

consulting fees and expenses and including, without limitation, any legal fees, costs and

expenses incurred in connection with any enforcement (including any action, claim or suit

brought) by the Indenture Trustee of any indemnification or other obligation of the Issuer)

incurred by it in connection with the administration of this Indenture and the performance of

its duties hereunder, including with respect to any Environmental Liabilities, compliance with

Environmental Laws and the generation, use, presence or release of Hydrocarbons or

Hazardous Substances. The Indenture Trustee, to the extent not prohibited by court order or

operation of law, shall notify the Issuer promptly of any claim of which the Indenture Trustee

has received written notice for which it may seek indemnity. Failure by the Indenture Trustee

to so notify the Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer shall

defend any such claim, and the Indenture Trustee may have separate counsel in connection

with the defense of any such claim and the Issuer shall pay the fees and expenses of such

counsel. The Issuer need not reimburse any expense or indemnify against any loss, liability

or expense incurred by the Indenture Trustee through the Indenture Trustees own gross

negligence or willful misconduct.

The Issuers payment obligations to the Indenture Trustee pursuant to this Section

shall survive the resignation or removal of the Indenture Trustee and the discharge of this

Indenture. When the Indenture Trustee incurs fees or expenses after the occurrence of a Default

specified in Section 5.01(a)(vii) or 5.01(a)(viii) with respect to the Issuer, the expenses are

intended to constitute expenses of administration under Title 11 of the United States Code or any

other applicable federal or state bankruptcy, insolvency or similar law.

Section 6.08 Replacement of Indenture Trustee. No resignation or removal

of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become

effective until the acceptance of appointment by the successor Indenture Trustee pursuant to

this Section 6.08. The Indenture Trustee may resign at any time with thirty days prior written

notice by so notifying the Issuer (with a copy to each Rating Agency, the Hedge

Counterparties, the Noteholders and the Back-up Manager). If such resignation is voluntary

and for reasons other than a change in law, regulation or eligibility to act in such capacity,

then the resigning Indenture Trustee shall bear all costs and expenses of locating and

procuring the written acceptance by a qualified successor Indenture Trustee. The Majority

Noteholders with the consent of the Majority Hedge Counterparties (such consent not to be

unreasonably withheld, conditioned or delayed) may remove the Indenture Trustee with 30

days prior written notice by so notifying the Indenture Trustee, the Hedge Counterparties and

Holdings and may appoint a successor Indenture Trustee. The Issuer shall remove the

Indenture Trustee if:

(i)the Indenture Trustee fails to comply with Section 6.11;

(ii)the Indenture Trustee is adjudged bankrupt or insolvent;

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(iii)a receiver or other public officer takes charge of the Indenture

Trustee or its property; or

(iv)the Indenture Trustee otherwise becomes incapable of acting.

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture

Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring

Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee meeting the

requirements of Section 6.11, with the consent of the Majority Noteholders and Majority Hedge

Counterparties (in either case, such consents not to be unreasonably withheld, conditioned or

delayed), and shall notify each Rating Agency and Back-up Manager of such appointment;

provided, that if a Material Event has occurred and is continuing or if the Issuer has not appointed

a replacement Indenture Trustee within thirty (30) days of the resignation or removal of the

Indenture Trustee other than as a result of the failure of the Majority Noteholders or the Majority

Hedge Counterparties to have reasonably consented, the Majority Noteholders shall appoint the

successor Indenture Trustee with the consent of the Majority Hedge Counterparties (such consent

not to be unreasonably withheld, conditioned, or delayed).

A successor Indenture Trustee shall deliver a written acceptance of its appointment

to the retiring Indenture Trustee, the Back-up Manager, each Noteholder, each Hedge Counterparty

and the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall

become effective, and the successor Indenture Trustee shall have all the rights, powers and duties

of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice

of its succession to Noteholders and each Hedge Counterparty. The retiring Indenture Trustee

shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture

Trustee.

If a successor Indenture Trustee does not take office within 30 days after the retiring

Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Majority

Noteholders may, at the expense of the Issuer, petition any court of competent jurisdiction for the

appointment of a successor Indenture Trustee.

If the Indenture Trustee fails to comply with Section 6.11, any Noteholder or any

Hedge Counterparty may petition any court of competent jurisdiction for the removal of the

Indenture Trustee and the appointment of a successor Indenture Trustee.

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section,

the Issuers and the Managers obligations under Section 6.07 shall continue for the benefit of the

retiring Indenture Trustee.

Section 6.09 Successor Indenture Trustee by Merger. If the Indenture

Trustee consolidates with, merges or converts into, or transfers all or substantially all its

corporate trust business or assets to, another corporation or banking association, the resulting,

surviving or transferee corporation or banking association without any further act shall be the

successor Indenture Trustee; provided, that such corporation or banking association shall be

otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall provide

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Holdings, each Hedge Counterparty and each Rating Agency with prior written notice of any

such transaction (with a copy of such notice to the Back-up Manager).

In case at the time such successor or successors by merger, conversion or

consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of

the Notes shall have been authenticated but not delivered, any such successor to the Indenture

Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such

Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated,

any successor to the Indenture Trustee may authenticate such Notes either in the name of any

predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such

cases such certificates shall have the full force which it is anywhere in the Notes or in this

Indenture.

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Trustee.

Section 6.10Appointment of Co-Indenture Trustee or Separate Indenture

(a)Notwithstanding any other provisions of this Indenture, at any time, for the

purpose of meeting any legal requirement of any jurisdiction in which any part of the Collateral

may at the time be located, the Indenture Trustee shall have the power and may execute and deliver

all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate

trustee or separate trustees, of all or any part of any Restricted Party, and to vest in such Person or

Persons, in such capacity and for the benefit of the Noteholders, each Hedge Counterparty and the

other Secured Parties, such title to the Collateral, or any part hereof, and, subject to the other

provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture

Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be

required to meet the terms of eligibility as a successor trustee under Section 6.11 and no notice to

Noteholders of the appointment of any co-trustee or separate trustee shall be required under

Section 6.08 hereof.

(b)Every separate trustee and co-trustee shall, to the extent permitted by law, be

appointed and act subject to the following provisions and conditions:

(i)all rights, powers, duties and obligations conferred or

imposed upon the Indenture Trustee shall be conferred or imposed upon and

exercised or performed by the Indenture Trustee and such separate trustee or

co-trustee jointly (it being understood that such separate trustee or co-trustee is

not authorized to act separately without the Indenture Trustee joining in such

act), except to the extent that under any law of any jurisdiction in which any

particular act or acts are to be performed the Indenture Trustee shall be

incompetent or unqualified to perform such act or acts, in which event such

rights, powers, duties and obligations (including the holding of title to the

Collateral or any portion thereof in any such jurisdiction) shall be exercised and

performed singly by such separate trustee or co-trustee, but solely at the

direction of the Indenture Trustee;

(ii)no trustee hereunder shall be personally liable by reason

of any act or omission of any other trustee hereunder; and

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(iii)the Indenture Trustee may at any time accept the

resignation of or remove any separate trustee or co-trustee.

(c)Any notice, request or other writing given to the Indenture Trustee shall be

deemed to have been given to each of the then separate trustees and co-trustees, as effectively as

if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer

to this Indenture and the conditions of this Article VI. Each separate trustee and co-trustee, upon

its acceptance of the trusts conferred, shall be vested with the estates or property specified in its

instrument of appointment, either jointly with the Indenture Trustee or separately, as may be

provided therein, subject to all the provisions of this Indenture, specifically including every

provision of this Indenture relating to the conduct of, affecting the liability of, or affording

protection to, the Indenture Trustee. Every such instrument shall be filed with the Indenture

Trustee.

(d)Any separate trustee or co-trustee may at any time constitute the Indenture

Trustee, its agent or attorney-in-fact with full power and authority, to the extent not prohibited by

law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any

separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its

estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture

Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

Section 6.11 Eligibility; Disqualification. The Indenture Trustee shall have

a combined capital and surplus of at least $500,000,000 as set forth in its most recent

published annual report of condition, and the issuer rating of the Indenture Trustee shall be

rated at least A- (or equivalent) by Fitch and one other Rating Agency to the extent that Fitch

rates the Notes, and otherwise, an equivalent rating by at least two Rating Agencies.

Section 6.12 Representations and Warranties of the Indenture Trustee. The

Indenture Trustee hereby makes the following representations and warranties on which the

Issuer, the Hedge Counterparties and Noteholders shall rely:

(a)the Indenture Trustee is a national banking association duly organized and

validly existing under the laws of the jurisdiction of its formation;

(b)the Indenture Trustee has full power, authority and legal right to execute,

deliver, and perform this Indenture and shall have taken all necessary action to authorize the

execution, delivery and performance by it of this Indenture;

(c)the execution, delivery and performance by the Indenture Trustee of this

Indenture (i) shall not violate any provision of any law or regulation governing the banking and

trust powers of the Indenture Trustee or any order, writ, judgment or decree of any court, arbitrator,

or governmental authority applicable to the Indenture Trustee or any of its assets, (ii) shall not

violate any provision of the corporate charter or by-laws of the Indenture Trustee and (iii) shall

not violate any provision of, or constitute, with or without notice or lapse of time, a default under,

or result in the creation or imposition of any lien on any properties included in the Collateral

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pursuant to the provisions of any mortgage, indenture, contract, agreement or other undertaking to

which it is a party, which violation, default or lien could reasonably be expected to have a

materially adverse effect on the Indenture Trustees performance or ability to perform its duties

under this Indenture or on the transactions contemplated in this Indenture;

(d)no consent, license, approval or authorization of, or filing or registration with,

any governmental authority, bureau or agency is required to be obtained that has not been obtained

by the Indenture Trustee in connection with the execution, delivery or performance by the

Indenture Trustee of the Basic Documents; and

(e)this Indenture has been duly executed and delivered by the Indenture Trustee

and constitutes the legal, valid and binding agreement of the Indenture Trustee, enforceable in

accordance with its terms.

ARTICLE VII

INFORMATION REGARDING THE ISSUER

Section 7.01Financial and Business Information.

(a)Quarterly Statements. The Issuer shall deliver to the Indenture Trustee, within

ninety (90) days after the end of each quarterly fiscal period in each fiscal year of each of the Issuer

and MNR (excluding the end of such fiscal year), commencing with the fiscal quarter of the Issuer

and MNR ending March 31, 2024, duplicate copies of the following reports; provided, that upon

receipt of such reports, the Indenture Trustee shall promptly make them available to Noteholders,

the Hedge Counterparties and the Back-up Manager on the Indenture Trustees internet website:

(i)an unaudited consolidated balance sheet of each of the

Issuer and MNR as at the end of such fiscal quarter, and

(ii)unaudited consolidated statements of income, changes

in shareholders equity and cash flows of the Issuer and MNR for such quarter

and (in the case of the second and third quarters) for the portion of the fiscal

year ending with such quarter, in each case setting forth, starting with the fiscal

quarter ended March 31, 2024, in comparative form the figures for the

corresponding periods in the previous fiscal year, all in reasonable detail,

prepared in accordance with GAAP applicable to quarterly financial statements

generally, and certified by a Senior Financial Officer of the Issuer or MNR, as

applicable, as fairly presenting, in all material respects, the financial position of

the companies being reported on and their results of operations and cash flows,

subject to changes resulting from year-end adjustments.

(b)Annual Statements. The Issuer shall deliver to the Indenture Trustee, within

one hundred twenty (120) days after the end of each fiscal year of MNR, commencing with the

fiscal year of the Issuer ending December 31, 2024, and commending with the fiscal year of MNR

ending December 31, 2023, duplicate copies of the following reports, prepared by a firm of

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Independent certified public accountants of nationally recognized standing; provided, that upon

receipt of such reports, the Indenture Trustee shall promptly make them available to Noteholders,

the Hedge Counterparties and the Back-up Manager on the Indenture Trustees internet website:

(i)audited consolidated balance sheet of each of the Issuer

and MNR and their respective consolidated subsidiaries as at the end of such

fiscal year, and

(ii)audited consolidated statements of income, changes in

shareholders equity and cash flows of each of the Issuer and MNR and their

respective consolidated subsidiaries for such fiscal year, all in reasonable detail,

prepared in accordance with GAAP applicable to annual financial statements

generally, and certified by a Senior Financial Officer of the Issuer or MNR, as

applicable, as fairly presenting, in all material respects, the financial position of

the companies being reported on and their results of operations and cash flows,

subject to changes resulting from year-end adjustments.

(c)Notice of Material Events. The Issuer shall deliver to a Responsible Officer of

the Indenture Trustee, with a copy to each Rating Agency, Hedge Counterparty and the Back-up

Manager, promptly, and in any event within five (5) Business Days after a Responsible Officer of

the Maverick Party receives written notice of, or otherwise becomes aware of, the existence of (i)

any Material Event, (ii) any breach or default under any Basic Document that could reasonably be

expected to be adverse in any material respect to the Noteholders or the Hedge Counterparties, (iii)

any event that could reasonably be expected to cause a Material Adverse Effect or (iv) information

that any Person has given any notice or taken any action with respect to a claimed Default

hereunder, an Officers Certificate (with a copy to each Rating Agency) specifying the nature and

period of existence and what action the Issuer is taking or proposes to take with respect thereto.

The Issuer shall, at the Issuers expense (in accordance with the Priority of Payments or the Special

Priority of Payments, as applicable), promptly provide the Indenture Trustee, the Manager (or

Back-up Manager), the Hedge Counterparties and the Rating Agencies with such additional

information as any such party may reasonably request from time to time in connection with the

matters so reported, and the actions so taken or contemplated to be taken.

(d)Notices from Governmental Body. The Issuer shall deliver to the Indenture

Trustee, with a copy to each Hedge Counterparty, promptly, and in any event within ten (10) days

of receipt thereof, copies of any material notice to the Issuer from any Governmental Body (with

a copy to each Rating Agency, the Hedge Counterparties and the Back-up Manager) relating to

any order, ruling, statute or other Law or regulation.

(e)Notices under Material Agreement. The Issuer shall deliver, or cause the

Manager to deliver, to the Indenture Trustee, with a copy to each Hedge Counterparty, Rating

Agency and the Back-up Manager, promptly, and in any event within ten (10) days after delivery

or receipt by the Issuer, copies of all notices of termination, default or event of default, suspension

of performance or any force majeure event given or received pursuant to or in respect of any

material agreement to which it is a party or any other material notices or documents given or

received pursuant to or in respect of any material agreement to which it is a party.

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(f)Payment Date Compliance Certificates. On or before the second (2nd) Business

Day prior to each Payment Date, the Issuer shall deliver to the Indenture Trustee, each Hedge

Counterparty, the Back-up Manager and each Rating Agency rating any Notes, an Officers

Certificate to the effect that, except as provided in a notice delivered pursuant to Section 7.01(c),

no Material Event has occurred and is continuing (each, a Payment Date Compliance

Certificate).

(g)Annual AUP. The Issuer shall engage the Verification Agent (such engagement

in the case of the Back-up Manager to be in the sole discretion of the Back-up Manager) to perform

an agreed upon procedures audit (an AUP) for purposes of confirming all calculations included

in each Payment Date Report, an agreed-upon sample of Payment Date Reports and with respect

to the calculations included in certificates delivered in connection with each acquisition of

Additional Assets and each Permitted Disposition, in each case, for each twelve-month period,

with the first such period commencing on January 1, 2024, and ending on December 31, 2024. The

Verification Agent shall be required to complete each such AUP within 120 days of each such

twelve-month period. The Issuer shall provide such AUP to the Indenture Trustee, who shall make

such AUP available to the Noteholders, each Hedge Counterparty and the Back-up Manager (to

the extent such AUP is not provided by the Back-up Manager).

Section 7.02Visitation.

(a)If no Default or Event of Default then exists, the Issuer shall permit the

representatives of each Noteholder to visit and inspect the offices or properties of the Maverick

Parties, to examine all its books of account, records, reports and other papers, to make copies and

extracts therefrom, and to discuss its affairs, finances and accounts, all at such times as may be

reasonably requested in writing; provided, however, that each Noteholder shall use reasonable

efforts to coordinate its visit with the visits of other noteholders; provided, further, in no event

shall the Issuer be required to permit the representatives of a Noteholder to visit more than one (1)

time in any twelve-month period pursuant to this Section 7.02(a). Any visits contemplated by this

Section 7.02(a) shall be at the expense of the Issuer.

(b)If a Default or Event of Default exists, the Issuer shall permit the representatives

of each Noteholder, at the expense of the Issuer, upon reasonable prior notice, to visit and inspect

the offices or properties of the Maverick Parties, to examine all its books of account, records,

reports and other papers, to make copies and extracts therefrom, and to discuss its affairs, finances

and accounts, including speaking with the Maverick Parties accountants, all at such times as may

be reasonably requested and as often as may be reasonably requested. Any visits contemplated by

this Section 7.02(b) shall be at the expense of the Issuer and not limited in number.

ARTICLE VIII

ACCOUNTS, DISBURSEMENTS AND RELEASES

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Section 8.01 Deposit of Collections. The Issuer shall remit, and in the event

any Collections are received by any Affiliate of the Issuer, including the Manager, if

applicable, shall remit or cause such Affiliate to remit, to the Operator Account within two

(2) Business Days of receipt and identification thereof all Collections received with respect

to the Assets (other than the net proceeds from any Hedge Agreement). The Issuer shall remit

all net proceeds received from any Hedge Agreement and the proceeds of permitted Collateral

dispositions to the Collection Account within two (2) Business Days of receipt and

identification. The Issuer shall cause the Operator to direct Collections deposited in the

Operator Account to be transferred subsequently to the Collection Account in accordance with

the terms of the Indenture, the Operating Agreement and the Management Services

Agreement. Notwithstanding anything contained herein to the contrary, the Indenture Trustee

and the Paying Agent shall be authorized to accept instructions from the Manager (which shall

be in writing) on behalf of the Issuer on a monthly basis regarding withdrawals or order

transfers of funds from the Collection Account, to the extent such funds have been mistakenly

deposited into the Collection Account (including without limitation funds representing

amounts due and payable on assets not part of the Assets). In the case of any withdrawal or

transfer pursuant to the foregoing sentence, the Manager, on behalf of the Issuer, shall provide

the Hedge Counterparties, the Indenture Trustee and the Paying Agent with notice of such

withdrawal or transfer, together with reasonable supporting details regarding such withdrawal

or transfer and the mistaken deposit related thereto, on such date of withdrawal to be delivered

by the Manager, on behalf of the Issuer (or in such earlier written notice as may be required

by the Indenture Trustee from the Manager, on behalf of the Issuer, from time to time).

Notwithstanding anything therein to the contrary, the Indenture Trustee and the Paying Agent

shall be entitled to make withdrawals or order transfers of funds from the Collection Account,

in the amount of all reasonable and appropriate out-of-pocket costs and expenses incurred by

the Indenture Trustee or the Paying Agent in connection with any misdirected funds described

in the second foregoing sentence.

Section 8.02Establishment of Accounts.

(a)(i) The Issuer, for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties, shall cause to be established and

maintained with the Securities Intermediary a non-interest bearing trust account on

behalf of the Indenture Trustee and in the name of the Indenture Trustee an Eligible

Account (which shall include any subaccounts of the Collection Account created

pursuant to any supplemental indenture) (the Collection Account) (including any

subaccount opened for the purpose of distributions by the Paying Agent), bearing a

designation clearly indicating that the funds deposited therein are held for the benefit

of the Noteholders, each Hedge Counterparty and the other Secured Parties.

(ii)The Issuer, for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties, shall cause to be established and

maintained with the Securities Intermediary a non-interest bearing trust account on

behalf of the Indenture Trustee and in the name of the Indenture Trustee an Eligible

Account (the Holdback Account), bearing a designation clearly indicating that the

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funds deposited therein are held for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties. The Issuer shall deposit into the Holdback

Account all Holdback Amounts determined under the Asset Purchase Agreement and

any other amounts as provided in Sections 4.02 and 4.03 of the Asset Purchase

Agreement. The Indenture Trustee shall release to the applicable Seller or the Issuer,

as applicable, amounts from the Holdback Account in accordance with a Joint Direction

delivered to the Indenture Trustee. Amounts released to the Issuer from the Holdback

Account shall be deemed Excess Amounts and applied in accordance with Section

8.06(e). Amounts in the Holdback Account will be invested in the same manner as the

Issuer Accounts as provided in Section 8.02(b).

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(iii)The Issuer, for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties, shall cause to be established and

maintained with the Securities Intermediary a non-interest bearing trust account on

behalf of the Indenture Trustee and in the name of the Indenture Trustee an Eligible

Account (the Excess Amount Trust Account), bearing a designation clearly

indicating that the funds deposited therein are held for the benefit of the Noteholders,

each Hedge Counterparty and the other Secured Parties. The Indenture Trustee and the

Paying Agent shall be authorized to accept instructions (which shall be in writing) from

the Manager on behalf of the Issuer regarding withdrawals or transfers of funds from

the Excess Amount Trust Account in connection with any reinvestment of funds in

accordance with clause (i)(y)(C) of the definition of Excess Amounts. In connection

with any such withdrawal or transfer, the Manager, on behalf of the Issuer, shall provide

the Hedge Counterparties, the Indenture Trustee, the Back-up Manager, and the Paying

Agent with reasonable supporting details regarding such reinvestment on the date of

such withdrawal or transfer. The Manager shall direct the Paying Agent in writing to

transfer amounts remaining on deposit in the Excess Amount Trust Account following

expiration of the 365-day reinvestment period (or earlier if the Manager on behalf of

the Issuer provides the Indenture Trustee notice of its intent not to reinvest such

proceeds), specified in the definition of Excess Amounts to the Collection Account

within two (2) Business Days following the expiration of such 365-day period, and

such transferred amounts shall constitute Excess Amounts ; provided that either of

the Paying Agent or the Indenture Trustee shall be permitted to transfer such amounts

following the expiration of the 365-day reinvestment period in the absence of such

direction from the Manager. The Issuer shall provide, within two (2) Business Days of

the end of such reinvestment period, the Indenture Trustee written notice of the

expiration of any such reinvestment period. Notwithstanding the foregoing, in the event

that the Available Funds for a Payment Date are not sufficient to make the full amount

of the payments and deposits required pursuant to Sections 8.06(b)(i) through (xx) on

such Payment Date, the Manager shall instruct the Paying Agent on behalf of the

Indenture Trustee in accordance with the related Payment Date Report to withdraw

from the Excess Amount Trust Account on such Payment Date an amount equal to the

lesser of (i) such shortfall or (ii) the amount then on deposit in the Excess Amount Trust

Account, and pay or deposit such amount according to the priorities set forth in Sections

8.06(b)(i) through (xx) (such transferred amount, the Excess Amount Trust Account

Draw Amount).

(iv)The Issuer, for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties, shall cause to be established and

maintained with the Securities Intermediary a non-interest bearing trust account on

behalf of the Indenture Trustee and in the name of the Indenture Trustee an Eligible

Account (the Liquidity Reserve Account), bearing a designation clearly indicating

that the funds deposited therein are held for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties.

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(v)The Issuer, for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties, shall cause to be established and

maintained with the Securities Intermediary a non-interest bearing trust account on

behalf of the Indenture Trustee and in the name of the Indenture Trustee an Eligible

Account (the P&A Reserve Account), bearing a designation clearly indicating that

the funds deposited therein are held for the benefit of the Noteholders, each Hedge

Counterparty and the other Secured Parties. On each Payment Date on and after the

occurrence of a P&A Reserve Trigger with respect to the Issuers most recently

completed fiscal year, Available Funds shall be deposited into the P&A Reserve

Account in an amount equal to the P&A Reserve Amount pursuant to Section 8.06.

Amounts then on deposit in the P&A Reserve Account shall be deposited into the

Collection Account, where they will be considered part of Available Funds and

distributed on such Payment Date, pursuant to Section 8.06. On the Closing Date the

P&A Reserve Account shall be unfunded. Following the payment in full of the Secured

Obligations, any amounts remaining on deposit in the P&A Reserve Account shall be

distributed to the Issuer free and clear of the lien of this Indenture upon written direction

to the Indenture Trustee by the Manager.

(b)Funds on deposit in each of the (i) Collection Account, (ii) the Excess Amount

Trust Account, (iii) Liquidity Reserve Account, and (iv) the P&A Reserve Account (collectively,

the Issuer Accounts) shall be invested by the Securities Intermediary on behalf of the Indenture

Trustee in Permitted Investments selected by the Manager. In absence of written direction from

the Manager, such funds shall remain uninvested. All such Permitted Investments shall be held

by the Securities Intermediary on behalf of the Indenture Trustee for the benefit of the Noteholders,

each Hedge Counterparty and the other Secured Parties; provided, that on each Payment

Determination Date all interest and other Investment Earnings on funds on deposit in the Issuer

Accounts shall be deposited into the Collection Account and shall be deemed to constitute a portion

of Available Funds for the related Payment Date. Other than as permitted by the Majority

Noteholders (with prompt notice to the Hedge Counterparties), funds on deposit in the Issuer

Accounts shall be invested in Permitted Investments that will mature (A) not later than the

Business Day immediately preceding the next Payment Date or (B) on or before 10:00 a.m. on

such next Payment Date if such investment is held in the corporate trust department of the

institution with which the applicable Issuer Account is then maintained and is invested either (i)

in a time deposit of the Indenture Trustee with a credit rating of at least BBB by Fitch or the

equivalent rating by at least one of the other Rating Agencies (such account being maintained

within the corporate trust department of the Indenture Trustee), or (ii) in the Indenture Trustees

common trust fund so long as such fund has a credit rating in one of the generic rating categories

that signifies investment grade of at least one of the Rating Agencies; and provided that Permitted

Investments shall be available for redemption and use by the Indenture Trustee on the relevant

Payment Date. In no event shall the Indenture Trustee, the Securities Intermediary or the Paying

Agent be held liable for investment losses in Permitted Investments pursuant to this

Section 8.02(b), except in its capacity as obligor thereunder.

(c)(i) The Indenture Trustee shall possess all right, title and interest in all funds on

deposit from time to time in the Issuer Accounts and in all proceeds thereof (including all income

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thereon) and all such funds, investments, proceeds and income shall be part of the Collateral. The

Issuer Accounts shall be under the sole dominion and control of the Indenture Trustee for the

benefit of the Noteholders, each Hedge Counterparty and the other Secured Parties. If, at any time,

any of the Issuer Accounts ceases to be an Eligible Account, the Paying Agent on behalf of the

Indenture Trustee shall within thirty (30) days establish a new Issuer Account as an Eligible

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Account and shall transfer any cash and/or any investments to such new Issuer Account. The

Indenture Trustee, Paying Agent or the other Person holding the Issuer Accounts as provided in

this Section 8.02(c)(i) shall be the Securities Intermediary. On the date hereof, the Securities

Intermediary is UMB Bank, N.A. If the Securities Intermediary shall be a Person other than the

Indenture Trustee or the Paying Agent on its behalf, the Issuer shall obtain the express written

agreement of such Person to the obligations of the Securities Intermediary set forth in this

Section 8.02.

(ii)The Securities Intermediary agrees, by its acceptance hereof, that:

(A)The Issuer Accounts are securities accounts within the meaning of

Section 8-501 of the New York UCC and are accounts to which Financial Assets

will be credited.

(B)All securities or other property underlying any Financial Assets credited

to the Issuer Accounts shall be registered in the name of the Securities Intermediary,

indorsed to the Securities Intermediary or in blank or credited to another securities

account maintained in the name of the Securities Intermediary and in no case will

any Financial Asset credited to any of the Issuer Accounts be registered in the name

of the Issuer, payable to the order of the Issuer or specially indorsed to the Issuer

except to the extent the foregoing have been specially indorsed to the Securities

Intermediary or in blank.

(C)All property delivered to the Securities Intermediary pursuant to this

Indenture will be promptly credited to the appropriate Issuer Account.

(D)Each item of property (whether investment property, Financial Asset,

security, instrument or cash) credited to an Issuer Account shall be treated as a

financial asset within the meaning of Section 8-102(a)(9) of the New York UCC.

(E)If at any time the Securities Intermediary shall receive any order from

the Indenture Trustee directing transfer or redemption of any Financial Asset

relating to the Issuer Accounts or any other entitlement order, the Securities

Intermediary shall comply with such entitlement order without further consent by

the Issuer or any other Person.

(F)The Issuer Accounts shall be governed by the Laws of the State of New

York, regardless of any provision in any other agreement. For purposes of the

UCC, New York shall be deemed to be the Securities Intermediarys jurisdiction

and the Issuer Accounts (as well as the securities entitlements (as defined in Section

8-102(a)(17) of the UCC) related thereto) shall be governed by the Laws of the

State of New York.

(G)The Securities Intermediary has not entered into, and until the

termination of this Indenture will not enter into, any agreement with any other

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person relating to the Issuer Accounts and/or any Financial Assets credited thereto

pursuant to which it has agreed to comply with entitlement orders (as defined in

Section 8-102(a)(8) of the New York UCC) of such other person and the Securities

Intermediary has not entered into, and until the termination of this Indenture will

not enter into, any agreement with the Issuer or the Indenture Trustee purporting to

limit or condition the obligation of the Securities Intermediary to comply with

entitlement orders as set forth in Section 8.02(c)(ii)(E) hereof.

(H)Except for the claims and interest of the Indenture Trustee and of the

Issuer in the Issuer Accounts, the Securities Intermediary knows of no claim to, or

interest in, the Issuer Accounts or in any Financial Asset credited thereto. If any

other person asserts any lien, encumbrance or adverse claim (including any writ,

garnishment, judgment, warrant of attachment, execution or similar process)

against the Issuer Accounts or in any Financial Asset carried therein, the Securities

Intermediary will promptly notify the Indenture Trustee and the Issuer thereof.

(I)The Securities Intermediary will promptly send or make available

copies of all statements, confirmations and other correspondence concerning the

Issuer Accounts and/or any Issuer Account Property simultaneously to each of the

Manager and the Indenture Trustee.

(J)The Securities Intermediary (A) shall be a corporation or national bank

that in the ordinary course of its business maintains securities accounts for others

and is acting in that capacity hereunder (B) shall not be an Affiliate of the Issuer,

shall be subject to supervision or examination by United States federal or state

authority, (E) shall have a rating of at least Baa1 or better by Moodys, A- or

better by S&P, and A- or better by Fitch (if such entity is rated by Fitch) and (F)

shall be an Eligible Institution.

(K)The Securities Intermediary shall treat the Indenture Trustee as entitled

to exercise the rights that comprise each financial asset credited to any Issuer

Account.

(L)The Securities Intermediary shall not change the name or the account

number of any Issuer Account without the prior written consent of the Indenture

Trustee.

(M)The Securities Intermediary shall not be a party to any

agreement that is inconsistent with this Indenture, or that limits or conditions any

of its obligations under this Indenture. The Securities Intermediary shall not take

any action inconsistent with the provisions of this Indenture applicable to it.

(N)Each item of property credited to each Issuer Account shall not be

subject to, and the Securities Intermediary hereby waives, any security interest, lien,

claim, encumbrance, or right of setoff in favor of the Securities Intermediary or

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anyone claiming through the Securities Intermediary (other than the Indenture

Trustee).

(O)For purposes of Article 8 of the UCC, the jurisdiction of the Securities

Intermediary with respect to the Collateral shall be the State of New York.

(P)It is the intent of the Indenture Trustee and the Issuer that each Issuer

Account shall be a securities account on behalf of the Indenture Trustee for the

benefit of the Noteholders, each Hedge Counterparty and the other Secured Parties

and not an account of the Issuer.

(iii)The Manager shall have the power to instruct the Paying Agent on

behalf of the Indenture Trustee in writing to make withdrawals and payments from the

Issuer Accounts for the purpose of permitting the Manager to carry out its respective

duties under the Management Services Agreement (including, without limitation, the

payment of any Operating Expenses) or hereunder or permitting the Indenture Trustee

to carry out its duties under the Indenture; provided, that the Indenture Trustee shall

have no responsibility for monitoring the Managers duties and shall rely exclusively

on such written direction to determine if a withdrawal or payment should be made.

Section 8.03 Collection of Money. Except as otherwise expressly provided

herein, the Indenture Trustee may demand payment or delivery of, and shall receive and

collect, directly and without intervention or assistance of any fiscal agent or other

intermediary, all money and other property payable to or receivable by the Indenture Trustee

pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it

as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any

default occurs in the making of any payment or performance under any agreement or

instrument that is part of the Collateral, the Indenture Trustee may take such action, and will

take any such reasonable action as it is directed in writing to take by the Majority Noteholders,

as may be appropriate to enforce such payment or performance, including the institution and

prosecution of appropriate Proceedings. Any such action shall be without prejudice to any

right to claim a Default or Event of Default under this Indenture and any right to proceed

thereafter as provided in Article V.

Section 8.04Permitted Dispositions; Additional Assets.

(a)The Issuer or AgentCorp (in its capacity as agent and nominee of Issuer) may

sell, transfer or otherwise dispose of Collateral (each, a Permitted Disposition) at any time so

long as the following conditions are satisfied, as certified by the Manager:

(i)the purchase price paid for such Collateral is equal to

the fair market value of such Collateral at the time of such disposition (as

reasonably determined by the Issuer or the Manager in good faith);

(ii)the consideration for such Collateral shall be for cash or

cash equivalents;

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(iii)during the first Annual Period, the aggregate amount of

Collateral (based on aggregate PV-10 value) sold may not exceed 2% of the

PV-10 of the Collateral as of the Closing Date; thereafter, the aggregate amount

of Collateral (based on aggregate PV-10 value) sold may not exceed 15% of

PV-10 of the Collateral as of the Closing Date;

(iv)to the extent that any Collateral is sold or otherwise

disposed of to any Affiliate of Parent, the aggregate amount of Collateral sold

or otherwise disposed of to any Affiliate of Parent during any Annual Period

may not exceed 2% of the PV-10 of the Collateral at the beginning of such

Annual Period (as reflected in the then-current Reserve Report) and at any time

the aggregate amount of the Collateral disposed of to an Affiliate of Parent since

the Closing Date may not exceed 5% of the PV-10 of the Collateral as of the

Closing Date;

(v)the Concentration Limits are satisfied after giving effect

to such disposition, or, if such Concentration Limit was not satisfied

immediately prior to such disposition, the level of compliance with such limit

is maintained or improved after giving effect to such disposition;

(vi)(A) the Pro Forma Senior DSCR will be greater than

the greater of 1.50x and the then-current Senior DSCR prior to such disposition

(up to a maximum of 1.75x, (B) the Pro Forma Aggregate DSCR will be

greater than the greater of 1.35x and the then-current Aggregate DSCR prior

to such disposition (up to a maximum of 1.50x), (C) the Aggregate LTV will

not be greater than the lesser of 65% and the then-current Aggregate LTV prior

to such disposition, (D) the Senior LTV will not be greater than the lesser of

55% and the then-current Senior LTV prior to such disposition and (E) the

Issuer shall be in compliance with its hedging requirements, in each case, on a

pro forma basis after giving effect to such sale, any concurrent acquisition of

Additional Assets and the application of the proceeds from such sale to (x) the

repayment of Notes and (y) the payment of any breakage or termination

amounts owed to Hedge Counterparties resulting from any partial termination

of any hedging transactions in order to comply with the hedging requirements

set forth in Section 4.27 or any applicable Series Supplement;

(vii)such disposition shall not reasonably be expected to

result in a withdrawal or downgrading of any rating on any Notes from their

rating then in effect;

(viii)immediately prior to and immediately following such

disposition, and the application of proceeds therefrom to the repayment of the

Notes or any required hedge termination payments, as applicable, no Material

Event shall have occurred and be continuing, including the Issuers compliance

with Section 4.27(b);

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(ix)the proceeds of any disposition of Collateral have been

deposited in the Collection Account for application in accordance with the

Priority of Payments or Special Priority of Payments, as applicable, and shall

be sufficient (together with other funds available for such purpose in accordance

with the Priority of Payments or Special Priority of Payments, as applicable) to

pay any breakage or termination amounts (including interest thereon) owing to

any Hedge Counterparty as a result of any termination of Hedging Transactions

in connection with such disposition on the Payment Date immediately

succeeding such termination of Hedging Transactions and designation of the

payment date (as specified under the applicable Hedge Agreement) where such

Early Termination Amount (as defined in and determined under the applicable

Hedge Agreement) is owing;

(x)the Issuer shall have demonstrated the share of the

proceeds of any disposition of Collateral payable to the Noteholders and shall

prepay the Notes in an aggregate amount equal to the Release Price, which

Release Price shall be allocated to each Class of Notes pro rata based on their

respective Outstanding Principal Balances and among the Series of Notes

comprising each Class in accordance with the Applicable Payment Priority;

(xi)(1) if the PV-10 of the Collateral disposed of through

such disposition, individually or together with the PV-10 of the Collateral

disposed of through any related disposition, exceeds 5% of the PV-10 of the

Collateral at the beginning of the relevant Annual Period (as reflected in the

most recently delivered Reserve Report), then (i) the Issuer shall have agreed

to deliver (or cause the Manager to deliver) an updated Reserve Report within

forty-five (45) days after such disposition, and (2) if the PV-10 of the

Collateral disposed of through such disposition, individually or together with

the PV-10 of the Collateral disposed of through any related disposition since

the Closing Date or the last confirmation from the Rating Agency pursuant to

this clause (k)(2), exceeds 5% of the PV-10 of the Collateral as of the

Effective Date, then the Rating Agency shall have confirmed that such

disposition shall not result in a withdrawal or downgrading of any rating on the

Notes from their rating then in effect;

(xii)delivery by the Issuer, or the Manager on Issuers

behalf, of an updated amortization schedule for each Class and Series of Notes

subject to a Principal Distribution Amount, which shall be updated to decrease

the amounts indicated for each Payment Date at least 3 months after the date of

the relevant disposition of Collateral by a fractional percentage equal to the

quotient of (x) the aggregate prepayment of such Class and Series of Notes in

connection with such disposition divided by (y) the Outstanding Principal

Balance of such Class and Series immediately prior to such prepayment;

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(xiii)the disposition will be under a form of conveyance

(which shall include a special warranty of title by, through or under the Issuer

and/or AgentCorp, as applicable, but not otherwise) in the form attached as

Exhibit D-1 or Exhibit D-2 to the Asset Purchase Agreement, as applicable,

under which the purchaser will assume all liabilities and obligations with

respect to or related

to the applicable disposed Collateral arising during or with respect to the period

from and after the effective time of such conveyance;

(xiv)delivery to the Issuer and the Indenture Trustee an

Opinion of Counsel to the effect that such disposition of Collateral would not

cause any of the Notes of any Outstanding Series to undergo a significant

modification within the meaning of Treasury Regulations Section 1.1001-3;

(xv)no selection procedures that could reasonably be

expected to be materially adverse to the Noteholders or the Hedge

Counterparties were used in selecting such Collateral;

(xvi)the Key Person Condition and the Tangible Net Worth

Test shall be satisfied as of the date of any such Permitted Disposition of

Collateral;

(xvii)any other conditions relating to the disposition of

Assets set forth in any Series Supplement for any Outstanding Series of Notes

are satisfied;

(xviii)the Issuer has provided ten (10) Business Days prior

written notice of such disposition to the Hedge Counterparties; and

(xix)delivery to the Indenture Trustee of an Officers

Certificate certifying the above-conditions (other than with respect to (A) clause

(ix), which may be satisfied substantially contemporaneously with the delivery

of such certificate, (B) clause (x), which shall be satisfied pursuant to the

Priority of Payments and (C) clause (xi), which shall be satisfied within the time

period specified therein) have been satisfied.

(b)The net proceeds of a Permitted Disposition shall be distributed in accordance

with the Priority of Payments, provided, that the Issuer shall prepay the Notes in an aggregate

amount equal to the Release Price, which Release Price shall be allocated (i) to each Class of Notes

pro rata based on their respective Outstanding Principal Balances and (ii) among the Series of

Notes comprising each Class in accordance with the Applicable Payment Priority. In connection

with the required prepayment of Notes following a Permitted Disposition, any prepayment

premium shall be determined in accordance with the related Series Supplement. In connection

with any prepayment of the Notes from proceeds of a Permitted Disposition, the Issuer, or the

Manager on behalf of the Issuer, shall deliver an updated amortization schedule for each Class and

Series of Notes subject to a Principal Distribution Amount. Such updated schedule shall reflect a

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decrease in the amounts indicated for each Payment Date at least three (3) months after the date of

such prepayment by a fractional percentage equal to the quotient of (x) the aggregate prepayment

of such Class and Series of Notes in connection with such disposition divided by (y) the

Outstanding Principal Balance of such Class and Series immediately prior to such prepayment.

Provided, however, that with respect to any Permitted Dispositions that, together with prior

Permitted Dispositions executed since the previous adjustment to the amortization schedule, relate

to less than 2% of the PV-10 of the Collateral, in the sole discretion of the Issuer, the Issuer may

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elect to not adjust the amortization schedule of such Notes. Any adjustment or non-adjustment to

the amortization schedule should not in the reasonable judgment of the Issuer have a material

adverse effect on the Noteholders. For the avoidance of doubt, in no event shall the Issuer adjust

the amortization schedule of such Notes to extend the maturity date of such Notes beyond the Final

Scheduled Payment Date for such Notes.

(c)The net proceeds of a Permitted Disposition (together with other funds available

for such purpose in accordance with the Priority of Payments) shall be sufficient to pay any

breakage or termination amounts (including any interest thereon) owing to any Hedge

Counterparty as a result of any termination of Hedging Transactions in connection with such

Permitted Disposition on the first Payment Date occurring after all such Hedging Transactions

have been terminated.

The Issuer shall promptly notify the Back-up Manager in writing of the sale, assignment, transfer

or other disposition of any Collateral.

(d)From time to time, the Issuer or AgentCorp (in its capacity as agent and

nominee of the Issuer) may acquire Additional Assets as additional Collateral for the Secured

Obligations, and upon the consummation of such addition in accordance with the following

conditions, any Additional Asset so added shall constitute Collateral for all purposes; provided,

that in connection with each such acquisition, the following conditions are satisfied and the Issuer

shall not acquire any Additional Assets except in accordance with the following conditions:

(i)such Additional Asset shall satisfy the Eligibility

Criteria and the Collateral, taken as a whole, giving pro forma effect to the

applicable Additional Assets, meets the Concentration Limits at the time of

such addition;

(ii)such acquisition shall not, in the reasonable opinion of

the Manager, be reasonably expected to have a Material Adverse Effect;

(iii)the PV-10 of such Additional Assets is positive, and the

absolute value of the PV-10 of any Additional Assets with a negative or zero

PV-10 does not exceed five percent (5%) of the PV-10 of the simultaneously

contributed Additional Assets

(iv)each Rating Agency shall have confirmed that such

addition will not result in a downgrade or withdrawal of its then-current rating

of the Notes or, if any Rating Agency does not as a matter of policy provide

such confirmations, the Rating Agency Condition shall have been satisfied with

respect to such Rating Agency;

(v)immediately prior to and immediately following such

addition, no Material Event (except to the extent that such addition of

Additional Assets counted against the available amount of Equity Contribution

Cures would cure any of the foregoing) shall have occurred and be continuing;

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(vi)(A) if the PV-10 of the Additional Assets added through

such addition, individually or together with the PV-10 of the Additional Assets

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added through any related addition, exceeds 5% of the PV-10 of the Assets at

the beginning of the relevant Annual Period (as reflected in the most recently

delivered Reserve Report), then the Issuer shall have agreed to deliver (or cause

the Manager to deliver) an updated Reserve Report within forty-five (45) days

after such addition and (B) in addition to the obligation under clause (A) above,

if an addition of Additional Assets shall occur concurrently with an Additional

Note issuance, then the Issuer shall deliver (or cause the Manager to deliver) to

the Secured Parties prior to the addition of Additional Assets reasonable

supporting documentation for the PV-10 value ascribed to such Additional

Assets with such documentation affirming the Issuers compliance with the

terms and conditions for an Additional Notes issuance;

(vii)such Additional Asset is being transferred to the Issuer

or AgentCorp (in its capacity as agent and nominee of the Issuer) by a Seller

pursuant to the Asset Purchase Agreement, subject to the requirements and

deliverables specified thereunder;

(viii)the Indenture Trustee and the Hedge Counterparties

shall have received Opinions of Counsel with respect to the Additional Assets,

as reasonably requested, which opinions (i) are consistent with (or are delivered

as supplements to) the legal opinions delivered on the Initial Closing Date and

address any features specific to the applicable Additional Assets as needed

(provided that any Governmental Body Opinions shall be subject to the Opinion

Threshold);

(ix)no selection procedures that could reasonably be

expected to be materially adverse to the Noteholders or the Hedge

Counterparties were used in selecting such Additional Assets for purchase;

(x)the Issuer shall have reimbursed the Indenture Trustee

for all third-party out-of-pocket costs and expenses incurred by the Indenture

Trustee in relation to such addition;

(xi)delivery to the Issuer and the Indenture Trustee an

Opinion of Counsel to the effect that such addition of Collateral would not cause

any of the Notes of any Outstanding Series to undergo a significant

modification within the meaning of Treasury Regulations Section 1.1001-3;

(xii)immediately following (or contemporaneously with) the

addition of Additional Assets, the Issuer shall have adjusted its Hedge

Agreements to the extent required by Section 4.27;

(xiii)the PV-10 of the aggregated amount of Additional

Assets added not in connection with the issuance of Additional Notes, together

with the aggregate amount of all Equity Contribution Cures shall not exceed

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ten percent (10%) of the aggregate principal balance of all Notes issued on or

prior to the date of acquisition;

(xiv)a true sale or true contribution legal opinion from

Kirkland & Ellis LLP or another nationally recognized law firm acceptable to

the Indenture Trustee in its sole discretion, with respect to such Additional

Assets shall be delivered to the Indenture Trustee, the Noteholders and the

Hedge Counterparties, in substantially the same form delivered as of the

Closing Date with respect to the Initial Assets or, if not in such form, in form

reasonably satisfactory to the Issuer, the Indenture Trustee, the Majority

Noteholders, and the Hedge Counterparties;

(xv)a recordable release in a form reasonably acceptable to

the Issuer of any trust, mortgages, financing statements, fixture filings and

security agreements, in each case, securing indebtedness for borrowed money

made by such Additional Seller or its Affiliates affecting the Additional Assets

(including corresponding authorizations to file UCC-3 termination statement

releases in all applicable jurisdictions);

(xvi)delivery of applicable lien releases and counterpart

deeds of trust, precautionary deeds of trust, and UCC-1s or UCC-3s, as

applicable, to perfect liens over such Additional Assets;

(xvii)with respect to any transaction involving a PV-10 value

in excess of $5,000,000, delivery by the Issuer or the Manager of a title report

from a third party title company demonstrating title coverage with respect to not

less than 80% of such Additional Assets;

(xviii)the Key Person Condition and the Tangible Net Worth

Test shall be satisfied as of the date of any such acquisition of Additional Assets;

(xix)any such other applicable requirements as specified in a

Series Supplement; and

(xx)the Manager shall have delivered an Officers

Certificate to the Indenture Trustee confirming compliance with the

requirements of this Section 8.04(d) (other than with respect to clause (vi),

which may be satisfied within the time period specified therein).

In no event shall the Indenture Trustee be responsible for the determinations in this

Section 8.04(d), and the Indenture Trustee shall rely exclusively on the foregoing Officers

Certificate of the Manager in making withdrawals and distributions pursuant to this

Section 8.04(d). The Issuer shall be promptly notified the Back-up Manager in writing of the

addition of any Additional Assets.

Section 8.05 Reserve Reports. The Issuer or the Manager on its behalf, shall

deliver to the Indenture Trustee, the Back-up Manager, each Hedge Counterparty and each

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Rating Agency (a) an updated Reserve Report within ninety (90) days after each calendar year

end and June 30 of each calendar year (the June 30 Reserve Report may, at the option of the

Manager, be either an audited or a rolling forward of the PV-10 value from the most recent

Reserve Report unless the Senior DSCR as of the most recent Quarterly Determination Date

is less than 1.25x, in which case, such June 30 Reserve Report shall be audited) and (b) an

updated Reserve Report within forty-five (45) days after any Permitted Dispositions or

combination of related Permitted Dispositions of an aggregate amount of Assets exceeding

5% of the PV-10 of the Assets as of the Closing Date or within forty-five (45) days an

acquisition of additional Assets the PV-10 of which Additional Assets added through such

addition, individually or together with the PV-10 of the Additional Assets added through any

related addition, exceeds 5% of the PV-10 of the Assets at the beginning of the relevant

Annual Period (as reflected in the most recently delivered Reserve Report), then the Issuer

shall have agreed to deliver (or cause the Manager to deliver) an updated Reserve Report

within forty-five (45) days after such addition, and, to the extent the Issuer, or the Manager

on the Issuers behalf, in its sole discretion obtains an updated Reserve Report prior to any

otherwise scheduled semi-annually updated Reserve Report, the Issuer, or the Manager on the

Issuers behalf, will be required to deliver each such updated Reserve Report to such person

and to the Indenture Trustee promptly upon its receipt thereof, and the Indenture Trustee will

post copies of the Reserve Report on its website promptly following its receipt thereof, for

the benefit of the Noteholders, the Hedge Counterparties and the Rating Agencies. The

Reserve Report shall be prepared by or under the supervision of the Chief Financial Officer

(or similarly titled position) of the Manager, who shall certify such Reserve Report to be true

and accurate and to have been prepared in accordance with the procedures used in the

immediately preceding Reserve Report (and, with respect to the first Reserve Report delivered

by the Issuer under this Agreement, the APA Reserve Report), and each Reserve Report

required to be delivered within ninety (90) days after each December 31 of each calendar year

shall have been audited and, at the option of the Manager, the Reserve Report required to be

delivered with ninety (90) days after each June 30 may be a roll forward or audited, by the

petroleum engineer that audited the Reserve Report delivered in connection with the execution

of this Indenture or another reputable third party independent petroleum engineer reasonably

acceptable to the Majority Noteholders. With the delivery of each Reserve Report, the Issuer

shall provide to the Indenture Trustee, the Back-up Manager, each Hedge Counterparty, and

each Rating Agency a certificate from a Responsible Officer of the Manager certifying that to

the best of its knowledge after reasonable investigation the information contained in the

Reserve Report and any other information delivered in connection therewith is true and

correct in all material respects, each Restricted Party owns good and defensible title to the

Assets held by such Restricted Party and evaluated in such Reserve Report, such Assets are

free of all Liens except for Permitted Liens and that, to the extent there has been a change in

the Net Revenue Interest (as defined in the Asset Purchase Agreement) or Working Interest

(as defined in the Asset Purchase Agreement), that change is identified in an exhibit to the

certificate, or in each case, if the Manager has knowledge that prevents it from making any of

the foregoing certifications, such certificate shall describe the details thereof. With the

delivery of each Reserve Report, the Issuer shall provide to the Indenture Trustee, the Back-

up Manager, the Hedge Counterparties, and each Rating Agency a report that shows any

change, set forth to the eighth decimal place, in the Net Revenue Interest (as defined in the

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Asset Purchase Agreement) relating to the prior year or Working Interest (as defined in the

Asset Purchase Agreement) relating to the prior year with respect to any Well from the Net

Revenue Interest or Working Interest provided in the previous Reserve Report, and except to

the extent already included in a report under this Section 8.05. The Indenture Trustee shall

promptly make any such Reserve Reports, certificates and other reports delivered pursuant to

this Section 8.05 available to the Noteholders and the Hedge Counterparties by posting any

such Reserve Report or other reports delivered pursuant to this Section 8.05 to its internet

website referenced in Section 6.06 hereof. During the fiscal year following any fiscal year

for which the P&A Expense Amount exceeds the P&A Reserve Trigger Amount, such

updated Reserve Report shall include a separate schedule identifying the estimated net capital

expenditures associated with plugging and abandonment liabilities with respect to the Assets.

Section 8.06Distributions.

(a)On or prior to the close of business on each Payment Determination Date, the

Issuer shall cause the Manager to calculate all amounts required to be withdrawn from the

Collection Account and paid pursuant to the Priority of Payments or Special Priority of Payments,

and shall provide or cause the Manager to provide such calculation to the Paying Agent on behalf

of the Indenture Trustee as set forth in the Payment Date Report.

(b)Except as otherwise provided in clause (d) below, on each Payment Date, the

Issuer, or the Manager on the Issuers behalf, shall instruct the Paying Agent on behalf of the

Indenture Trustee in writing (based solely on the information contained in the Payment Date

Report delivered on the related Payment Determination Date pursuant to this Section 8.06) to apply

all Available Funds for payments of the following amounts in the following order of priority (the

Priority of Payments):

(i)first, pro rata and pari passu, (A) to the Indenture Trustee,

(x) the fees of the Indenture Trustee with respect to such Payment Date and any

accrued and unpaid fees of the Indenture Trustee with respect to prior Payment

Dates, plus (y) any Administrative Expenses or other expenses and/or

indemnities payable to the Indenture Trustee; provided that, in no event shall

the cumulative aggregate amount paid to the Indenture Trustee pursuant to the

immediately preceding clause (A) exceed $350,000 in any calendar year;

provided, further, that any amounts in excess of $350,000 which are unpaid

pursuant to the cap herein or pursuant to clause (xvii) below shall remain due

and owing to the Indenture Trustee and payable in the following year and each

subsequent year thereafter until repaid in full; provided, further, that following

the occurrence and during the continuation of an Event of Default, no such cap

shall apply, and (B) to the Back-Up Manager, the Back-Up Management Fee

for such Payment Date and any accrued and unpaid Back-Up Management Fees

with respect to prior Payment Dates, plus any Administrative Expenses payable

to the Back-Up Manager; provided that, in no event shall the cumulative

aggregate amount paid pursuant to the immediately preceding clause (B) exceed

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(i) $150,000 in any calendar year during which the Back-Up Manager does not

perform any Warm Back-Up Management Duties or Hot Back-Up Management

Duties, (ii) $800,000 in any calendar year during which the Back-Up Manager

does not perform any Hot Back-Up Management Duties, but does perform

Warm Back-Up Management Duties and (iii) $1,300,000 in any calendar year

during which the Back-Up Manager does perform Hot Back-Up Management

Duties; provided, further, that during any period that the Back-Up Manager is

required to provide Warm Back-Up Management Duties or Hot Back-Up

Management Duties, the Majority Noteholders may approve a further increase

of the amounts set forth in clauses (ii) or (iii) above solely in order to take

account of any additional increased fees and expenses associated with the

provision of such services; provided, further that any amounts in excess of the

dollar amounts set forth in this clause (B) which are unpaid pursuant to the caps

herein or pursuant to clause (xvii) below shall remain due and owing to the

Back-Up Manager and payable in the following year and each subsequent year

thereafter until repaid in full; and second, to the Class Representative of the

Controlling Class, if any, any Administrative Expenses payable to such Class

Representative; provided that, in no event shall the cumulative aggregate

amount of Administrative Expenses paid to the Class Representative of the

Controlling Class exceed $15,000 in any calendar year;

(ii)first, to pay Successor Manager Transition Expenses, if

any, and second, to the Manager, the Management Fee with respect to such

Payment Date and any accrued and unpaid Management Fees with respect to

prior Payment Dates, plus any unpaid Direct Expenses and Administrative

Expenses payable to the Manager; provided that, in no event shall the

cumulative aggregate amount of Administrative Expenses and Direct Expenses

paid pursuant to this clause (ii) exceed in any calendar year 0.50% of the

cumulative initial principal amount of all Notes issued by the Issuer under the

Indenture prior to such Payment Date;

(iii)pro rata and pari passu, (A) to the Hedge

Counterparties, pro rata, any ordinary course settlement payments due and

payable by the Issuer under the Hedge Agreements (other than any breakage or

termination amounts (but including any interest on such termination amounts)

or Over Hedged Payments) and (B) to the Class A Noteholders of each Series,

the Note Interest (other than additional default interest) on the Class A Notes

for such Payment Date, in each case, in accordance with the Applicable

Payment Priority;

(iv)to the Liquidity Reserve Account, the amount required

to cause the balance in the Liquidity Reserve Account to equal the Liquidity

Reserve Account Target Amount;

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(v)to the Hedge Counterparties, pro rata, any Over Hedged

Payments (including any due and unpaid interest on such Over Hedged

Payments);

(vi)pro rata and pari passu (A) to the Hedge Counterparties,

pro rata, any breakage or termination amounts due and payable by the Issuer

under the Hedge Agreements as a result of Failure to Pay or Bankruptcy, in

each case, where the Issuer is the Defaulting Party (as defined in the

applicable Hedge Agreement) and (B) to the Holders of Class A Notes, as

payment of principal of such Notes, any applicable Principal Distribution

Amount for such Notes with respect to such Payment Date (including any

shortfall existing from a prior Payment Date), in accordance with the Applicable

Payment Priority;

(vii)during the continuance of a Senior Diversion Event, to

the Class A Noteholders of each Series, all remaining amounts until the

Outstanding Principal Balance of the Class A Notes shall have been reduced to

zero, in accordance with the Applicable Payment Priority;

(viii)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, the Note Interest

(other than additional default interest) on such Class of Notes for such

Payment Date, in accordance with the Applicable Payment Priority;

(ix)to the Class A Noteholders of each Series, the Excess

Amortization Amount (if any) with respect to the Class A Notes of such Series,

in accordance with the Applicable Payment Priority;

(x)to the Class A Noteholders of each Series, first (x) the

Optional Redemption Price (if any) for the Class A Notes with respect to such

Payment Date and then, (y) any other payments of principal of the Class A

Notes (including as a result of the receipt of any Release Price, Excess Amounts

or any other principal payments due and payable to the Class A Notes) that are

due and payable and remain unpaid as of such Payment Date, in each case, in

accordance with the Applicable Payment Priority;

(xi)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, as payment of

principal of such Notes, the applicable Principal Distribution Amount for such

Notes with respect to such Payment Date, in accordance with the Applicable

Payment Priority;

(xii)pro rata and pari passu, (A) to the Holders of each Class

of Notes (other than the Class A Notes), in direct order of alphabetical

designation, the Excess Amortization Amount for such Notes with respect to

such Payment Date, in accordance with the Applicable Payment Priority and

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(B) to the Hedge Counterparties, pro rata, any amounts including breakage or

termination amounts due and payable by the Issuer under the Hedge

Agreements but not paid above;

(xiii)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, (1) first, the

Optional Redemption Price (if any) for such Notes with respect to such

Payment Date and (2) second, any other payments of principal of such Notes

(including as a result of the receipt of any Release Price, Excess Amounts or

any other principal payments due and payable to such Class of Notes) that are

due and payable and remain unpaid as of such Payment Date, in each case, in

accordance with the Applicable Payment Priority;

(xiv)if a P&A Reserve Trigger has occurred, to the P&A

Reserve Account, the amount necessary to cause the balance in the P&A

Reserve Account to equal the P&A Reserve Amount;

(xv)pro rata and pari passu, (A) to the Class A Noteholders

of each Series, pro rata, any remaining amounts (including additional default

interest) owed under the Basic Documents, in accordance with the Applicable

Payment Priority and (B) to the Hedge Counterparties, pro rata, any remaining

amounts owed to the Hedge Counterparties under the Basic Documents;

(xvi)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, any remaining

amounts (including additional default interest) owed to such Noteholders under

the Basic Documents, in accordance with the Applicable Payment Priority;

(xvii)to the Indenture Trustee and the Back-Up Manager, any

amounts owed but not paid in accordance with clause (i) above;

(xviii)pro rata and pari passu, to (1) the Manager, any

amounts owed but not paid in accordance with clause (ii) above, including

amounts unpaid and owing from prior Payment Dates, and (2) the Operator,

any Operating Expense in excess of the Operating Expense Limit, including

amounts owing from prior Payment Dates; and

(xix)to the Issuer, any remaining Available Funds, free and

clear of the lien of the Indenture; provided that during the continuance of any

event or condition that, with notice, the lapse of time, or both, would constitute

a Material Event, any remaining amounts shall remain on deposit in the

Collection Account for application in accordance with the Priority of Payments

or Special Priority of Payments, as applicable, on the following Payment Date;

provided further that any remaining Available Funds that would otherwise be

available for distribution to the Issuer pursuant to this clause (xix) may, at the

direction of the Issuer (or the Manager on its behalf), be retained in the

Collection Account or another account of the Issuer designated by the Issuer for

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such purpose for application in accordance with the Priority of Payments or

Special Priority of Payments, as applicable, on the following Payment Date.

(c)Notwithstanding the foregoing, if following the end of a Collection Period the

amount on deposit in the Collection Account as set forth in a written direction delivered to the

Indenture Trustee on or before the related Payment Determination Date will equal or exceed the

sum of the amounts required to be paid on the related Payment Date pursuant to clauses (i) and (ii)

of the Priority of Payments on such Payment Date and there will be amounts available to be paid

to the Hedge Counterparties pursuant to clause (iii)(A) of the Priority of Payments on such related

Payment Date, upon the Issuers written directions to the Indenture Trustee, the pro rata amount

that will be payable to the Hedge Counterparties pursuant to clause (iii)(A) on such related

Payment Date may be withdrawn from the Collection Account and paid on a Business Day by the

Indenture Trustee to the Hedge Counterparties in advance of such Payment Date in accordance

with such written directions. Prior to any such withdrawal, the Issuer or the Manager (on the

Issuers behalf) will be required to deliver an Officers Certificate to the Indenture Trustee setting

forth the amounts and calculations described in the immediately preceding sentence. The Indenture

Trustee will be provided written notice not less than two (2) Business Days prior to the date of any

such withdrawal.

(d)On each Payment Date (a) as of which the Notes have been accelerated as a

result of an Event of Default, (b) on which an Optional Redemption in whole of the Notes is

scheduled to occur or (c) is on or after Final Scheduled Payment Date for any outstanding Series

or Class of Notes, in each case as specified solely in the Payment Date Report, Available Funds

and all amounts in the Collection Account (excepting any Required Hedge Holdback Amounts),

the P&A Reserve Account, the Liquidity Reserve Account, and the Excess Amount Trust Account

shall be distributed by the Paying Agent on behalf of the Indenture Trustee (based solely on the

information contained in the Payment Date Report delivered on the related Payment Determination

Date pursuant to Section 8.08) in the following order and priority of payments (the Special

Priority of Payments):

(i)all payments required, and in the order required, by

Sections 8.06(b)(i) and 8.06(b)(ii), in each case without giving effect to the

provisos and any fee cap or expense caps stated therein;

(ii)first, (A) pro rata and pari passu, (1) to each Hedge

Counterparty, pro rata, any ordinary course settlement payments due and

payable by the Issuer under the related Hedge Agreements (other than any

breakage or termination amounts, but including any interest on such breakage

or termination amounts and Over Hedged Payments, but including interest on

those amounts) and (2) to the Class A Noteholders of each Series, the Note

Interest (other than additional default interest) on the Class A Notes for such

Payment Date, in accordance with the Applicable Payment Priority, and then,

(B) pro rata and pari passu, (1) to the Class A Noteholders of each Series, the

Outstanding Principal Balance of the Class A Notes until the Outstanding

Principal Balance of the Class A Notes shall have been reduced to zero, plus in

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the case of an Optional Redemption in whole of the Notes, the applicable Make-

Whole Amount for the Class A Notes, if any, in each case, in accordance with

the Applicable Payment Priority and (2) to the Hedge Counterparties, pro rata,

any breakage or termination payments or other amounts (including Over

Hedged Payments) due and payable by the Issuer to the Hedge Counterparties

under the related Hedge Agreements;

(iii)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, (A) first the Note

Interest (other than additional default interest) on such Class of Notes for such

Payment Date, in accordance with the Applicable Payment Priority, and then,

(B) second, the Outstanding Principal Balance of such Class of Notes until the

Outstanding Principal Balance of such Class of Notes shall have been reduced

to zero, plus in the case of an Optional Redemption in whole of the Notes,

the applicable

Make-Whole Amount for such Notes, if any, in each case, in accordance with

the Applicable Payment Priority;

(iv)pro rata and pari passu, (A) to the Class A Noteholders

of each Series, any remaining amounts (including additional default interest)

owed to the Class A Noteholders under the Basic Documents, in accordance

with the Applicable Payment Priority and (B) to the Hedge Counterparties, pro

rata, any remaining amounts due to the Hedge Counterparties under the

applicable Basic Documents;

(v)to the Holders of each Class of Notes (other than the

Class A Notes), in direct order of alphabetical designation, any remaining

amounts (including additional default interest) owed to such Noteholders under

the Basic Documents, in accordance with the Applicable Payment Priority;

(vi)pro rata and pari passu, to the Indenture Trustee, the

Back-up Manager, the Manager and the Operator, any amounts owed but not

paid in accordance with clause (A) above and any Operating Expense in excess

of the Operating Expense Limit, including amounts owing from prior Payment

Dates; and

(vii)to the Issuer, all remaining amounts, free and clear of

the lien of this Indenture.

(e)Notwithstanding the foregoing, if a Maverick Party other than the Issuer pays

any amounts to the Issuer (i) with respect to any matters arising out of or relating to a breach of

contract or indemnification obligation under any Basic Document or (ii) under Sections 4.02, 4.03

or 5.12 of the Asset Purchase Agreement, those amounts less, with respect to subclause (i), the

sum of (A) any amounts paid or payable by the Issuer to any third parties as of the time of receipt

with respect to the applicable breach or indemnification obligation and (B) any amounts reinvested

by the Issuer (including to cure or remedy any breach or liability) to the extent permitted by the

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Basic Documents, shall be paid to the Noteholders in a redemption of the Notes in accordance with

the Priority of Payments (with such amounts treated as Excess Amounts for such purpose, which

Excess Amounts shall be allocated in accordance with Section 8.06(g)). In addition, any amounts

released from the Holdback Account to the Issuer for application in accordance with this Section

8.06(e) pursuant to Section 8.02(a)(ii) shall be paid to the Noteholders in a redemption of the Notes

in accordance with the Priority of Payments, with such amounts treated as Excess Amounts for

such purpose and allocated in accordance with Section 8.06(g).

(f)Notwithstanding the foregoing, if Available Collections on deposit in the

Collection Account as set forth in a written direction delivered to the Indenture Trustee on or

before the related Payment Determination Date will equal or exceed the sum of the amounts

required to be paid on the related Payment Date pursuant to clause (i) above on such Payment Date

and there will be amounts available to be paid to the Hedge Counterparties pursuant to clause

(ii)(A)(1) or (iii)(B)(2) above on such related Payment Date, upon the Issuers written directions

to the Indenture Trustee, the pro rata amount that will be payable to the Hedge Counterparties

pursuant to clause (ii)(A)(1) or (iii)(B)(2) on such Payment Date (which for the avoidance of doubt,

shall not exceed the amount that would be available to be paid to such Hedge Counterparties on

such related Payment Date in light of the amount of funds then available) may be withdrawn from

the Collection Account and paid by the Indenture Trustee to the Hedge Counterparties in advance

of such Payment Date in accordance with such written directions. Prior to any such withdrawal,

the Issuer or the Manager (on the Issuers behalf) will be required to deliver an Officers Certificate

to the Indenture Trustee setting forth the amounts and calculations described in the immediately

preceding sentence. The Indenture Trustee will be provided written notice not less than two (2)

Business Days prior to the date of any such withdrawal.

(g)If any Excess Amount is received by the Issuer, the Issuer shall effect an

Optional Redemption of the then most senior Class of Notes Outstanding without premium or

penalty (and, for the avoidance of doubt, without any Make-Whole Amount), on the Payment Date

immediately following the Collection Period in which such Excess Amount was received by the

Issuer, which amounts shall be paid to the Holders of such Class of Notes pursuant to clause (x)

or (xiii), as applicable, of the Priority of Payments and shall be for an aggregate principal amount

of such Class of Notes equal to the least of (x) the aggregate Excess Amount received by the Issuer

during such Collection Period (provided that, notwithstanding anything to the contrary in the

definition of Excess Amount, such Excess Amount shall be calculated after giving effect to any

corresponding hedge termination payments required to be made in connection with the receipt of

such Excess Amount in order to comply with Section 4.27, regardless of if the related hedge

termination payments are being made on the related Payment Date (such unpaid hedge termination

amounts, the Required Hedge Holdback Amounts), (y) the amount of Available Funds

remaining after application of amounts paid on such Payment Date pursuant to clauses (i) through

(ix) or (xii), as applicable, of the Priority of Payments, inclusive (provided that such Available

Funds shall be calculated after giving effect to any Required Hedge Holdback Amounts), and (z)

the Outstanding Principal Balance of such Class of Notes on such Payment Date after application

of amounts paid on such Payment Date pursuant to clauses (i) through (ix) or (xii), as applicable,

of the Priority of Payments, inclusive. If the Payment Date on which such Optional Redemption

of the relevant Class of Notes is scheduled to occur (a) is after the date on which such Class of

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Notes has been accelerated as a result of an Event of Default, (b) is the Payment Date on which

such Class of Notes would be redeemed in whole pursuant to the provisions of the Special Priority

of Payments or (c) is on or after the Final Scheduled Payment Date, in each case as specified solely

in the Payment Date Report delivered on or before the related Payment Determination Date, then

distributions shall be made on such Payment Date pursuant to the Special Priority of Payments;

provided that in the instance of such Optional Redemption occurring on a Payment Date where the

Special Priority of Payments applies, such distribution shall be calculated after giving effect to any

Required Hedge Holdback Amounts, with such Required Hedge Holdback Amounts retained in

the Collection Account for application on the following Payment Date. For the avoidance of doubt,

any redemption consummated in connection with the receipt of Excess Amounts shall not be

subject to any Make-Whole Amount.

Section 8.07Liquidity Reserve Account; Operating Expenses.

(a)On the Initial Closing Date, the Issuer shall cause an amount not less than the

Liquidity Reserve Account Initial Deposit to be deposited by the Paying Agent on behalf of the

Indenture Trustee into the Liquidity Reserve Account.

(b)On any Payment Date on which the Priority of Payments (and not the Special

Priority of Payments) applies, to the extent that amounts on deposit in the Liquidity Reserve

Account exceed the Liquidity Reserve Account Target Amount after giving effect to all

payments under clauses (i) through (iii) of the Priority of Payments from Available Funds available

for distribution in accordance with the Priority of Payments (on a pro forma basis and after giving

effect to any withdrawals from the Liquidity Reserve Account) on such Payment Date (such

excess, the Liquidity Reserve Excess Amount), the Manager shall instruct the Paying Agent on

behalf of the Indenture Trustee to withdraw the Liquidity Reserve Excess Amount from the

Liquidity Reserve Account and transfer such amount to the Collection Account for application as

Available Funds in accordance with the Priority of Payments, in each case, as specified in the

related Payment Date Report.

(c)On any Payment Date on which the Priority of Payments (and not the Special

Priority of Payments) applies, the Manager shall instruct the Paying Agent on behalf of the

Indenture Trustee to withdraw from the Liquidity Reserve Account the lesser of (1) the excess of

the aggregate amount required to be paid in accordance with clauses (i) through (iii) of the

Priority of Payments over the amount of Available Funds with respect to such Payment Date

available for distribution in accordance with the Priority of Payments (on a pro forma basis and

without giving effect to any withdrawals from the Liquidity Reserve Account), and (2) the amount

then on deposit in the Liquidity Reserve Account (such amount, the Liquidity Reserve Draw

Amount) and will transfer the Liquidity Reserve Draw Amount to the Collection Account, in each

case, as specified in the related Payment Date Report. In addition, on any Payment Date on which

the Special Priority of Payments applies, amounts shall be withdrawn from the Liquidity Reserve

Account and applied as provided in the Special Priority of Payments, as set forth in the Payment

Date Report.

(d)Upon two (2) Business Days prior written notice, the Manager may direct the

Paying Agent in writing to, and the Paying Agent on behalf of the Indenture Trustee shall on a

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Business Day, withdraw from the Collection Account and/or the Liquidity Reserve Account (not

to exceed the Liquidity Reserve Excess Amount) and pay to the applicable payee (as instructed in

writing by the Manager) amounts equal to any Operating Expenses (including expenses for AFE

Operations) in accordance with the provisions of the Management Services Agreement and subject

to applicable expense caps, subject to the following conditions:

(i)the Manager shall have certified to the Indenture

Trustee that it reasonably believes that, after giving effect to all withdrawals

and deposits to be made on such date, the Available Funds on deposit in the

Collection Account will be sufficient to pay the aggregate amount required to

be paid in accordance with clauses (i) through (iii) of the Priority of Payments

on the immediately succeeding Payment Date;

(ii)if any proposed Operating Expenses consist of expenses

for AFE Operations in an amount in excess of $350,000, the Indenture Trustee

(at the direction of the Manager) shall notify the Noteholders and each Hedge

Counterparty in writing of such proposed expenditure at least five (5) Business

Days prior to the date of the proposed payment of such expenditures, and such

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payment may only be made in the absence of the objection by the Majority

Noteholders to such payment within such five (5) Business Day period; and

(iii)if any proposed Operating Expenses consist of expenses

relating to the acquisition of AFE Additional Interests, the Indenture Trustee (at

the direction of the Manager) shall notify the Noteholders and each Hedge

Counterparty in writing of such proposed expenditure, and such payment may

only be made with the written consent of the Majority Noteholders;

in each case, provided that in no event shall the Paying Agent or the Indenture Trustee be

responsible for any of the foregoing determinations and each of the Paying Agent and the Indenture

Trustee shall be entitled to rely exclusively on the written direction of the Manager in making

withdrawals and distributions, pursuant to this Section 8.07(d).

(e)Following the payment in full of the aggregate Outstanding Principal Balance

of the Notes benefiting from the Liquidity Reserve Account and termination or expiration of all

Hedge Agreements and payment in full of all obligations due and payable in connection therewith

(including any early termination amounts due thereunder) and of all other amounts owing or to be

distributed hereunder to Noteholders and Hedge Counterparties, any amount remaining on deposit

in the Liquidity Reserve Account shall be distributed to the Issuer free and clear of the lien of this

Indenture upon written direction to the Indenture Trustee by the Manager.

Section 8.08 Statements to Noteholders. On or prior to the close of business

on each Payment Determination Date, the Issuer or the Manager on its behalf shall provide to

the Indenture Trustee for the Indenture Trustee to post on its internet website pursuant to

Section 6.06, a statement substantially in the form of Exhibit C, setting forth at least the

following information as to the Notes, to the extent applicable:

(a)the amount and breakdown of types of Collections received in the Collection

Account with respect to the related Collection Period, including from a Permitted Disposition, and

the amount and source of any Excess Amounts;

(b)the amounts to be distributed pursuant to the Priority of Payments, the Special

Priority of Payments for the related Collection Period and Sections 8.06(c), (e) and (f);

(c)confirmation of compliance with the terms of the Indenture and the other Basic

Documents by the Maverick Parties (or disclosure of any known non-compliance);

(d)reports received or prepared by the Manager in respect of the Hedge

Agreements, along with a summary of the Hedge Agreements currently in place, including

volumes and percentage of production that is hedged relative to the volumes set forth in the most

recently delivered Reserve Report;

(e)the amount of Administrative Expenses, Direct Expense and indemnity

payments paid to each party during the most recent Collection Period;

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(f)the amount of any fees paid to the Indenture Trustee, the Manager or the Back-

up Manager with respect to the related Collection Period;

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(g)if any, the amount of any payment (including termination payments) paid to the

Hedge Counterparties with respect to the related Collection Period;

(h)the amount deposited in or withdrawn from the Liquidity Reserve Account on

such Payment Determination Date, the amount on deposit in the Liquidity Reserve Account after

giving effect to such deposit or withdrawal and the Liquidity Reserve Account Target Amount for

such Payment Date;

(i)the amount of the Principal Distribution Amount for each Class of Notes with

respect to such Payment Determination Date, the amount of any shortfall in any Principal

Distribution Amount for such Payment Date or remaining unpaid amount from a prior Payment

Date, the amount, if any, of the Excess Amortization Amount and any amounts payable upon the

occurrence and during the continuance of a Senior Diversion Event for each applicable Class of

Notes with respect to such Payment Determination Date, and the change in such amounts from the

preceding Payment Date;

(j)the Note Interest due for each Class of Notes with respect to such Payment Date;

(k)the amount of the Aggregate DSCR, PV-10, Aggregate LTV, Production

Tracking Rate, Securitized Net Cash Flow, Senior DSCR, Senior IO DSCR and Senior LTV, in

each case with respect to the related Collection Period;

(l)the amounts on deposit in each Issuer Account and the Liquidity Reserve

Excess Amount;

(m)(i) the amounts withdrawn from the Operator Account by Operator during the

related Collection Period (excluding any such amounts withdrawn by Operator in accordance with

the Operating Agreement to pay any Burdens payable to Third Parties during such Collection

Period with respect to the Assets), including the payees of all such amounts, and (ii) the amounts

retained in the Operator Account as of the end of the related Collection Period for the payment of

future expenses;

(n)amounts due and owing and paid to any Noteholders under the related Note

Purchase Agreement or any other Basic Document;

(o)the Tangible Net Worth as of the most recent semi-annual calculation date

therefor;

(p)identification of any Assets repurchased by a Maverick Party pursuant to the

Asset Purchase Agreement;

(q)a listing of all Permitted Indebtedness outstanding as of such date;

(r)the amount of any expenses incurred to participate in AFE Operations and AFE

Additional Interests during the related Collection Period;

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(s)a brief description of any material claims of Title Failures believed by the

Manager to be reasonably likely to result in Title Failure or other material claims asserted under

the Asset Purchase Agreement during the applicable Collection Period, all amounts received by

the Issuer pursuant to any indemnification obligation, or to cure any breach of contract, by any

Maverick Party under any Basic Document or in connection with any material claims of Title

Failures believed by the Manager to be reasonably likely to result in Title Failure or other material

claims asserted under the Asset Purchase Agreement, including all Excess Amounts, and any

material amounts paid by the Issuer to any third parties in respect of matters that are the subject of

the applicable breach or indemnification obligation and any material amounts reinvested by the

Issuer in connection with its permitted business to cure or remedy any breach or liability;

(t)on a quarterly basis, any change, set forth to the fourth decimal place, in the Net

Revenue Interest (as defined in the Asset Purchase Agreement) or Oil and Gas Interest (as defined

in the Asset Purchase Agreement) with respect to any Well from the Net Revenue Interest or Oil

and Gas Interest reflected in the most recent Reserve Report, except to the extent already expressly

identified in a report under this Section 8.08;

(u)reasonably detailed information regarding any Title Failure (as defined in the

Asset Purchase Agreement as in effect on the date hereof) occurring during the applicable period

and all documentation with respect to any actions, claims, or Proceedings under the Asset

Purchase Agreement;

(v)any material Environmental Liability of which a Maverick Party obtained

Knowledge since the most recent report delivered under this Section 8.08;

(w)the filing or commencement of, or the threat in writing of, any action, suit,

investigation, arbitration or proceeding by or before any arbitrator or Governmental Body against

Issuer, or any material adverse development in any action, suit, proceeding, investigation or

arbitration (whether or not previously disclosed), that, in either case, could reasonably be expected

to result in liability in excess of $100,000; and

(x)a listing of any Additional Assets acquired by the Issuer in the related Collection

Period pursuant to Section 8.04(d) (other than in connection with the issuance of Additional Notes

where such information has already been provided), along with all documentation delivered in

connection therewith (which documentation will be posted separately to the Indenture Trustees

internet website and will not be included directly in the statement);

(y)all documentation delivered in connection with any Permitted Dispositions

during the related Collection Period, including identification of the Asset, sale price, dates, PV-10

and the Release Price related thereto and the application of the Release Price hereunder (which

documentation will be posted separately to the Indenture Trustees internet website and will not

be included directly in the statement);

(z)the amount deposited in or withdrawn from the P&A Reserve Account on such

Payment Determination Date, the amount on deposit in the P&A Reserve Account after giving

effect to such deposit or withdrawal and the P&A Reserve Amount for such Payment Date;

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(aa) on an annual basis, on the Payment Determination Date occurring in March

such report shall include the aggregate P&A Expense Amount for the preceding year and the

excess, if any, of the P&A Expense Amount in excess of the P&A Reserve Trigger; and

(bb) all reports, including any greenhouse gas or other emissions reports,

received or prepared by the Manager in respect of the Oil and Gas Portfolio or the Hedge

Agreements.

Further, on or prior to the close of business on each Payment Determination Date, the Operator

shall deliver to the Issuer and Indenture Trustee, for the Indenture Trustee to post on its internet

website pursuant to Section 6.06, a certificate of an authorized officer of Operator certifying that

(a) the applicable Monthly Remittance Amount with respect to the applicable Remittance Date

included all Production Proceeds that were contemplated to be included in such Monthly

Remittance Amount pursuant to Section 8.3 of the Operating Agreement and (b) all costs, expenses

or other amounts that were accounted for in reducing the amount of such Monthly Remittance

Amount were permitted under Section 8.3 of the Operating Agreement to be taken into account in

determining such Monthly Remittance Amount.

Deliveries pursuant to this Section 8.08 or any other Section of this Indenture may be delivered

by electronic mail.

Section 8.09[Reserved.]

Section 8.10[Reserved.]

Section 8.11 Original Documents.

The Indenture Trustee agrees to hold any assignments of mortgage or deeds of

trust that are part of the Collateral received by it. The Indenture Trustee shall keep such documents

in its possession separate and apart from all other property that it is holding in its possession and

from its own general assets. The Indenture Trustee shall keep records showing that it is holding

such documents pursuant to this Indenture. Such documents shall be released by the Indenture

Trustee to or at the direction of the Issuer upon the satisfaction and discharge of this Indenture.

Section 8.12 Equity Contribution Cures.

On any date, the Parent may, but is not required to, directly or indirectly contribute

equity to the Issuer (any such equity contribution, an Equity Contribution Cure) by (a) depositing

cash into the Collection Account and/or (b) contributing Additional Assets to the Issuer or by

transferring Additional Assets to AgentCorp; provided, that (i) as of any date of determination, the

aggregate amount of all Equity Contribution Cures together with the aggregated amount of

Additional Assets added not in connection with the issuance of Additional Notes shall not exceed

ten percent (10%) of the initial principal balance of all Notes issued by the Issuer under this

Indenture (and each related Series Supplement) as of such date and (ii) Equity Contribution Cures

shall be made no more frequently than twice (in aggregate) per calendar year. Any Equity

Contribution Cure shall be deemed a capital contribution from the Parent to Holdings and from

Holdings to the Issuer, shall be reflected on the books and records of Parent, Holdings, and the

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Issuer as such, and shall otherwise be made in accordance with applicable organizational

formalities.

ARTICLE IX

SUPPLEMENTAL INDENTURES

Section 9.01Supplemental Indentures without Consent of Noteholders and

the Hedge Counterparties.

(a)Without the consent of the Noteholders or the Hedge Counterparties, the Issuer,

AgentCorp and the Indenture Trustee, when authorized by an Issuer Order, may enter into an

indenture or indentures supplemental hereto, in form satisfactory to the Indenture Trustee for any

of the following purposes:

(i)to correct any typographical error or cure any

ambiguity, or to cure, correct or supplement any defective or inconsistent

provision in this Indenture, any Series Supplement or any Notes;

(ii)to conform any provision of any Series Supplement

relating to a Series of Notes or any Notes of any Series to the description thereof

contained in the offering memorandum, if any, relating to the Notes of such

Series;

(iii)to convey, transfer, assign, mortgage or pledge any

property to the Indenture Trustee (on behalf of the Noteholders and the Hedge

Counterparties) as security for the Secured Obligations;

(iv)to modify this Indenture, any Series Supplement or any

Notes as required or made necessary by any change in applicable law;

(v)to add to the covenants of the Issuer or any other party

for the benefit of the Noteholders and the Hedge Counterparties, or to

surrender any right or power conferred upon the Issuer in this Indenture or any

Series Supplement to issue a Series of Notes pursuant to a Series Supplement

in accordance with this Indenture;

(vi)to comply with any requirements imposed by the Code;

(vii)to prevent the Issuer, AgentCorp, the Noteholders or the

Indenture Trustee from being subject to taxes (including, without limitation,

withholding taxes), fees or assessments, or to reduce or eliminate any such

taxes, fees or assessments; or

(viii)to evidence and provide for the acceptance of

appointment by a successor indenture trustee.

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For any supplemental indenture pursuant to this Section 9.01, no such supplemental

indenture shall be effective unless (i) the Rating Agency Condition shall have been satisfied

with respect thereto and (ii) the Issuer has furnished to the Indenture Trustee, the Noteholders

and the Hedge Counterparties, at the Issuers expense, (a) the opinions of Counsel required

under Section 9.03 and (b) an Officers Certificate certifying that such action, will not

materially and adversely affect the interest of any Noteholders or any Hedge Counterparties.

Promptly after the execution by the Issuer and the Indenture Trustee of any

supplemental indenture pursuant to this Section 9.01, the Indenture Trustee, by posting to its

internet website, shall transmit to the Holders of the Notes, the Hedge Counterparties, the

Back-up Manager and each Rating Agency then rating the Notes a notice and copy of such

amendment (to be provided by the Issuer).

Section 9.02Supplemental Indentures with Consent of Noteholders and

Hedge Counterparties.

(a)The Issuer, AgentCorp and the Indenture Trustee, when authorized by an Issuer

Order, may, with (i) the consent of the Majority Noteholders (by an Act of the Noteholders

delivered to each Restricted Party and the Indenture Trustee), (ii) the consent of the Majority

Hedge Counterparties if the rights of the Hedge Counterparties would be materially and adversely

affected, and (iii) if requested by a Noteholder of any Class or Series of Notes from whom consent

is required, written confirmation from each Rating Agency then rating any Notes that no immediate

withdrawal or reduction with respect to its then-current rating of any Class of rated Notes will

occur as a result or, if any Rating Agency has delivered (x) an indication that it is not the customary

procedure of such Rating Agency to provide notification in writing that such amendment will not

result in a downgrade, qualification or withdrawal of the then-current rating assigned to the Notes

by such Rating Agency or (y) a written waiver or acknowledgement from such Rating Agency

indicating its decision not to review or declining to review such transaction or the matter for which

the written confirmation of its rating on Notes is sought, then this requirement shall be deemed

satisfied with respect to such Rating Agency; provided, that no such supplemental indenture shall:

(x) without the consent of the Holder of each Outstanding Note affected thereby:

(i)change the Legal Final Maturity Date or the Final

Scheduled Payment Date of any Series of Notes or the date of payment of any

installment of principal of or interest on any Note, or reduce the principal

amount thereof, the Interest Rate thereon or the Optional Redemption Price with

respect thereto (other than any adjustment to any amortization schedule in any

Series Supplement in connection with a partial prepayment of the related Series

and Class of Notes), change the provisions of this Indenture relating to the

application of collections on, or the proceeds of the sale of, the Collateral to

payment of principal of or interest on the Notes, or change any place of payment

where, or the coin or currency in which, any Note or the interest thereon is

payable, or impair the right to institute suit for the enforcement of the provisions

of this Indenture requiring the application of funds available therefor, as

provided in Article V, to the payment of any such amount due on the Notes on

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or after the respective due dates thereof (or, in the case of redemption, on or

after the Redemption Date);

(ii)reduce the percentage needed of the Majority

Noteholders, the Controlling Class, the consent of the Holders of which is

required for any such supplemental indenture, the consent of the Holders of

which is required for any waiver of compliance with certain provisions of this

Indenture or certain defaults hereunder and their consequences provided for in

this Indenture, or the number of percentage of Noteholders required for any

direction or action under the Basic Documents;

(iii)modify or alter the provisions of the provisos to the

definition of the term Outstanding;

(iv)modify or alter the definitions of the terms Affiliate,

Aggregate DSCR, Aggregate LTV, Available Funds, Basic

Documents, Excess Allocation Percentage, Controlling

Class, Default,

Event of Default, Liquidity Reserve Account Target Amount, Majority

Noteholders, Manager Termination Event, Material Event, Optional

Redemption Price, Permitted Disposition, Permitted Indebtedness,

Permitted Lien, Production Tracking Rate, PV-10, Rapid

Amortization Event, Reserve Report, Securitized Net Cash

Flow, Senior Diversion Event, Senior DSCR, Senior IO DSCR

or Senior LTV;

(v)reduce the percentage of the Majority Noteholders or

the Controlling Class required to direct the Indenture Trustee to direct the

Issuer to sell or liquidate the Collateral pursuant to Section 5.04;

(vi)modify any provision of this Section 9.02 except to

increase any percentage specified herein or to provide that certain additional

provisions of this Indenture or the Basic Documents cannot be modified or

waived without the consent of the Holder of each Outstanding Note affected

thereby;

(vii)modify Section 8.06, Section 9.01 or Article XI, or

modify any of the provisions of this Indenture in such manner as to affect the

calculation of the amount of any payment of interest or principal due on any

Note on any Payment Date (including the calculation of any of the individual

components of such calculation) or to affect the rights of the Holders of Notes

to the benefit of any provisions for the mandatory redemption of the Notes

contained herein;

(viii)permit the creation of any lien ranking prior to or on a

parity with the lien of this Indenture with respect to any part of the Collateral

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or, except as otherwise permitted or contemplated herein, terminate the lien of

this Indenture on any property at any time subject hereto or deprive the Holder

of any Note of the security provided by the lien of this Indenture; or

(ix)except as provided in Section 5.04(a)(v), modify any

provision to provide for the liquidation of the Assets when the proceeds of such

sale would be insufficient to repay in full the Outstanding Principal Amount of

the Notes and any outstanding obligations under the Hedge Agreements.

(y)without the consent of each Hedge Counterparty affected thereby:

(i)change the provisions of this Indenture relating to the

application of collections on, or the proceeds of the sale of, the Collateral to

payment of amounts due and owing under any Hedge Agreement, or impair the

right to institute suit for the enforcement of the provisions of this Indenture

requiring the application of funds available therefor, as provided in Article V,

to the payment of any such amount due and owing under any Hedge Agreement;

(ii)reduce the percentage of the aggregate mark-to-market

exposure under the Hedge Agreements the consent of the Hedge Counterparties

of which is required for any such supplemental indenture, or the consent of

which is required for any waiver of compliance with certain provisions of this

Indenture or certain defaults hereunder and their consequences provided for in

this Indenture;

(iii)modify or alter the definitions of the terms Basic

Documents, Hedge Agreements, Hedge Counterparty, Hedge

Counterparty Rating Requirement, Hedge Counterparty Rights Agreement,

Majority Hedge Counterparties, or Secured Parties;

(iv)modify Section 2.10 (release of collateral), Section 2.13

(additional notes), Section 4.08 (existence), Section 4.19 (liens), Section 4.20

(asset sales), Section 4.27 (hedging requirements), Section 4.31 (amendments

to basic documents), Section 8.04 (permitted dispositions, additional assets),

Section 8.06 (distributions), Section 9.02 (amendments with consent), Section

10.01 (redemptions), or Section 11.01 (satisfaction and discharge), in each case,

in any way adverse to the Hedge Counterparties;

(v)permit the creation of any lien ranking prior to or on a

parity with the lien of this Indenture with respect to any part of the Collateral

or, except as otherwise permitted or contemplated herein, terminate the lien of

this Indenture on any property at any time subject hereto or deprive any Hedge

Counterparty of the security provided by the lien of this Indenture; or

(vi)except as provided in Section 5.4(a)(v), modify any

provision to provide for the liquidation of the Assets when the proceeds of such

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sale would be insufficient to repay in full the Outstanding Principal Amount of

the Notes and any outstanding obligations under the Hedge Agreements.

Notwithstanding anything to the contrary in this Indenture, a Series Supplement

entered into for the purpose of issuing Additional Notes the issuance of which complies with the

provisions of Sections 2.07 and 2.13 shall not require the consent of any Noteholder or Hedge

Counterparty.

(b)The Indenture Trustee shall rely exclusively on an Officers Certificate of the

Issuer and an Opinion of Counsel to determine whether any such action would require the consent

of the Majority Noteholders, the consent of all of the Noteholders or the consent of any Hedge

Counterparty. The Indenture Trustee shall not be liable for reliance on such Officers Certificate

or Opinion of Counsel.

(c)Promptly after the execution by the Issuer, AgentCorp and the Indenture

Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall transmit

to the Holders of the Notes, the Hedge Counterparties, the Back-up Manager and each Rating

Agency a notice (to be provided by the Issuer) setting forth in general terms the substance of such

supplemental indenture and a copy of such supplemental indenture. Any failure of the Indenture

Trustee to transmit such notice, or any defect therein, shall not, however, in any way impair or

affect the validity of any such supplemental indenture.

Section 9.03 Execution of Supplemental Indentures. In executing, or

permitting the additional trusts created by, any supplemental indenture permitted by this

Article IX or the modification thereby of the trusts created by this Indenture, the Indenture

Trustee shall be provided with and, subject to Sections 6.01 and 6.02, shall be fully protected

in relying upon, and no such supplemental indenture or amendment shall be effective unless

the Issuer and the Indenture Trustee shall have first received, an Opinion of Counsel stating

that the execution of such supplemental indenture (i) is authorized or permitted by this

Indenture and that all conditions precedent under this Indenture for the execution of the

supplemental indenture have been complied with, (ii) will not cause the Issuer to become

treated as an association that is taxable as a corporation, a publicly traded partnership that is

taxable as a corporation or a taxable mortgage pool that is taxable as a corporation, in each

case for U.S. federal income tax purposes, (iii) will not cause any of the Notes of any

Outstanding Series (other than those that are, at any time, held by any Section 385 Related

Party) that were characterized as indebtedness for U.S. federal income tax purposes, as of the

applicable Closing Date, to be characterized as other than indebtedness for U.S. federal

income tax purposes, and (iv) will not cause any of the Notes of any Outstanding Series to

undergo a significant modification within the meaning of Treasury Regulations Section

1.1001-3, and, in the case of (ii) and (iii) above, which opinion may contain similar

assumptions and qualifications as are contained in the Opinion of Counsel with respect to the

tax treatment of the Notes delivered on the Initial Closing Date. The Indenture Trustee may,

but shall not be obligated to, enter into any such supplemental indenture that affects the

Indenture Trustees own rights, duties, liabilities or immunities under this Indenture or

otherwise. The Indenture Trustee shall notify each Rating Agency of the execution of any

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supplemental indentures. In addition to the foregoing, no provision of this Indenture nor any

other Basic Document nor any terms thereof may be amended, modified, supplemented or

waived without the Back-up Manager's consent if such amendment, modification, supplement

or waiver could reasonably be expected to increase the Back-up Managers duties, obligations

or liabilities, or adversely affect the Back-up Managers rights, remedies, indemnifications

protections or immunities under the Indenture or any other Basic Document. No such

amendment, modification, supplement or waiver of any provision of the Indenture or the Basic

Documents shall be effective without the consent of the Back-up Manager.

Section 9.04 Effect of Supplemental Indenture. Upon the execution of any

supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be

deemed to be modified and amended in accordance therewith with respect to the Notes

affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities

and immunities under this Indenture of the Indenture Trustee, the Issuer, the Hedge

Counterparties and the Holders of the Notes shall thereafter be determined, exercised and

enforced hereunder subject in all respects to such modifications and amendments, and all the

terms and conditions of any such supplemental indenture shall be and be deemed to be part of

the terms and conditions of this Indenture for any and all purposes.

Section 9.05 Reference in Notes to Supplemental Indentures. If the Issuer or

the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion

of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared

and executed by the Issuer and authenticated and delivered by the Indenture Trustee in

exchange for Outstanding Notes.

ARTICLE X

REDEMPTION OF NOTES

Section 10.01 Redemption. To the extent so provided in the related Series

Supplement, each Series of Notes will be subject to redemption in whole or, in connection

with a Permitted Disposition or application of Excess Amounts, in part, at the direction of the

Issuer on any Payment Date (such date, a Redemption Date). If any Series of Outstanding

Notes, or some portion thereof, are to be redeemed pursuant to this Section, the Issuer shall

furnish notice of such direction to the Indenture Trustee (with a copy to the Back-up Manager)

not later than ten (10) days prior to such Redemption Date and the Issuer shall deposit by

10:00 a.m. New York City time on the Redemption Date with the Indenture Trustee the

Optional Redemption Price of the Notes to be redeemed, whereupon all such Notes shall be

due and payable on the Redemption Date upon the furnishing of a notice complying with

Section 10.02 to each Holder of the Notes.

Section 10.02 Form of Redemption Notice. Notice of redemption under

Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid,

mailed or transmitted by email or posted on its internet website or otherwise delivered not

later than ten (10) days prior to the applicable Redemption Date (or within two (2) Business

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Days following receipt of the Issuers notice in Section 10.01 above, whichever is later) to

each Noteholder affected thereby and each Hedge Counterparty, as of the close of business

on the Record Date preceding the applicable Redemption Date, at such Holders address

appearing in the Note Register. A copy of such notice will be provided to each Rating Agency

and the Back-up Manager by the Indenture Trustee.

All notices of redemption shall state:

(a)the Redemption Date;

(b)the Optional Redemption Price;

(c)the Class or Classes of Notes to be redeemed; and

(d)the place where such Notes are to be surrendered for payment of the Optional

Redemption Price (which shall be the office or agency of the Issuer to be maintained as provided

in Section 4.02).

Notice of redemption of the Notes shall be given by the Indenture Trustee in the

name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein,

to any Holder of any Note shall not impair or affect the validity of the redemption of any other

Note.

Notwithstanding the foregoing, the foregoing satisfaction and discharge of the

Indenture only applies to the Notes and the Noteholders subject to the terms in this Article X. The

Indenture shall not terminate and cease to be of further effect with respect to any of the Hedge

Counterparties or any of the Hedge Agreements until and unless all of the Hedge Agreements have

terminated and all payments thereunder, including the termination value, have been paid in full.

Section 10.03 Notes Payable on Redemption Date. The Notes or portions

thereof to be redeemed shall, following notice of redemption as required by Section 10.02, on

the Redemption Date become due and payable at the Optional Redemption Price and (unless

the Issuer shall default in the payment of the Optional Redemption Price) no interest shall

accrue on the Optional Redemption Price for any period after the date to which accrued

interest is calculated for purposes of calculating the Optional Redemption Price. On or before

such Redemption Date (but in any event no later than 10:00 a.m. (New York City time) on

the Redemption Date), Issuer shall cause the aggregate Optional Redemption Price to be

deposited to the Collection Account, and such amount shall be paid in accordance with

Section 8.06.

ARTICLE XI

SATISFACTION AND DISCHARGE

Section 11.01 Satisfaction and Discharge of Indenture. This Indenture shall

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cease to be of further effect with respect to the Notes except as to (i) rights of registration of

transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights

of Noteholders to receive payments of principal thereof and interest thereon,

(iv) Sections 4.01, 4.02, 4.03, 4.04, 4.08, 4.14 and 4.18, (v) the rights, obligations and

immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee

under Section 6.07 and the obligations of the Indenture Trustee under Section 11.02) and

(vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited

with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on demand

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of and at the expense of the Issuer, shall execute proper instruments acknowledging

satisfaction and discharge of this Indenture with respect to the Notes, when:

(A)either:

(1)all Notes theretofore authenticated and delivered (other than

(i) Notes that have been destroyed, lost or stolen and that have been replaced

or paid as provided in Section 2.06 and (ii) Notes for whose payment money

has theretofore been deposited in trust or segregated and held in trust by the

Issuer and thereafter repaid to the Issuer or discharged from such trust, as

provided in Section 4.03) have been delivered to the Indenture Trustee for

cancellation; or

(2)all Notes not theretofore delivered to the Indenture Trustee for

cancellation:

(I)have become due and payable, or

(II)are to be called for redemption within one year under

arrangements satisfactory to the Indenture Trustee for the giving of

notice of redemption by the Indenture Trustee in the name, and at

the expense, of the Issuer,

and the Issuer, in the case of (I) or (II) above, has irrevocably

deposited or caused to be irrevocably deposited with the Indenture

Trustee cash or direct obligations of or obligations guaranteed by

the United States of America (which will mature prior to the date

such amounts are payable), in trust for such purpose, in an amount

sufficient to pay and discharge the entire indebtedness on such Notes

not theretofore delivered to the Indenture Trustee for cancellation

when due to the applicable Legal Final Maturity Date or

Redemption Date (if Notes shall have been called for redemption

pursuant to Section 10.01), as the case may be;

(B)the Issuer has paid or caused to be paid all other sums payable

by the Issuer hereunder and under each other Basic Document; and

(C)the Issuer has delivered to the Indenture Trustee an Officers

Certificate, an Opinion of Counsel and, each meeting the applicable

requirements of Section 12.01(a) and, subject to Section 12.02, each stating

that all conditions precedent herein provided for relating to the satisfaction

and discharge of this Indenture have been complied with.

Notwithstanding the foregoing, the foregoing satisfaction and discharge of the Indenture

only applies to the Notes and the Noteholders subject to the terms in this Article XI. The Indenture

shall not terminate and cease to be of further effect with respect to any of the Hedge Counterparties

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or any of the Hedge Agreements until and unless all of the Hedging Transactions have terminated

and all payments under the Hedge Agreements, including the termination value, have been paid in

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full. At any time that all Notes are no longer Outstanding, the Hedge Counterparties shall be

entitled to exercise any rights and remedies set forth herein and in the Basic Documents otherwise

afforded to the Noteholders or Majority Noteholders.

Section 11.02 Application of Trust Money. All monies deposited with the

Indenture Trustee pursuant to Section 11.01 hereof shall be held on behalf of the Noteholders

and applied by it, in accordance with the provisions of the Notes and this Indenture, to the

payment, either directly or through any Paying Agent, as the Indenture Trustee may

determine, (i) to the Holders of the particular Notes for the payment or redemption of which

such monies have been deposited with the Indenture Trustee, of all sums due and to become

due thereon for principal and interest and (ii) to each Hedge Counterparty, of all sums, if any,

due or to become due to such Hedge Counterparty under and in accordance with the Hedge

Agreements; but such monies need not be segregated from other funds except to the extent

required herein or in the Management Services Agreement or required by Law.

Section 11.03 Repayment of Monies Held by Paying Agent. In connection

with the satisfaction and discharge of this Indenture with respect to the Notes, all monies then

held by any Paying Agent other than the Indenture Trustee under the provisions of this

Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the Indenture

Trustee to be held and applied according to Section 4.03 and thereupon such Paying Agent

shall be released from all further liability with respect to such monies.

ARTICLE XII

MISCELLANEOUS

Section 12.01 Compliance Certificates and Opinions, etc.

(a)Upon any application or request by the Issuer to the Indenture Trustee to take

any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee

(i) an Officers Certificate stating that all conditions precedent, if any, provided for in this

Indenture relating to the proposed action have been complied with, and (ii) an Opinion of Counsel

stating that in the opinion of such counsel all such conditions precedent, if any, have been complied

with, except that, in the case of any such application or request as to which the furnishing of such

documents is specifically required by any provision of this Indenture, no additional certificate or

opinion need be furnished.

Every certificate or opinion with respect to compliance with a condition or covenant

provided for in this Indenture shall include:

(1)a statement that each signatory of such certificate or opinion has

read or has caused to be read such covenant or condition and the definitions

herein relating thereto;

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(2)a brief statement as to the nature and scope of the examination

or investigation upon which the statements or opinions contained in such

certificate or opinion are based;

(3)a statement that, in the opinion of each such signatory, such

signatory has made such examination or investigation as is necessary to

enable such signatory to express an informed opinion as to whether or not

such covenant or condition has been complied with; and

(4)a statement as to whether, in the opinion of each such signatory, such

condition or covenant has been complied with.

Section 12.02 Form of Documents Delivered to Indenture Trustee. In any case

where several matters are required to be certified by, or covered by an opinion of, any

specified Person, it is not necessary that all such matters be certified by, or covered by the

opinion of, only one such Person, or that they be so certified or covered by only one document,

but one such Person may certify or give an opinion with respect to some matters and one or

more other such Persons as to other matters, and any such Person may certify or give an

opinion as to such matters in one or several documents.

Any certificate or opinion of an authorized officer of the Issuer may be based,

insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel,

unless such officer knows, or in the exercise of reasonable care should know, that the certificate

or opinion or representations with respect to the matters upon which such officers certificate or

opinion is based are erroneous. Any such certificate of an authorized officer or Opinion of Counsel

may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or

representations by, an officer or officers of the Manager or the Issuer, stating that the information

with respect to such factual matters is in the possession of the Manager or the Issuer, unless such

counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or

representations with respect to such matters are erroneous.

Where any Person is required to make, give or execute two or more applications,

requests, consents, certificates, statements, opinions or other instruments under this Indenture, they

may, but need not, be consolidated and form one instrument.

Whenever in this Indenture, in connection with any application or certificate or

report to the Indenture Trustee, it is provided that the Issuer shall deliver any document as a

condition of the granting of such application, or as evidence of the Issuers compliance with any

term hereof, it is intended that the truth and accuracy, at the time of the granting of such application

or at the effective date of such certificate or report (as the case may be), of the facts and opinions

stated in such document shall in such case be conditions precedent to the right of the Issuer to have

such application granted or to the sufficiency of such certificate or report. The foregoing shall not,

however, be construed to affect the Indenture Trustees right to rely upon the truth and accuracy

of any statement or opinion contained in any such document as provided in Article VI.

Section 12.03 Acts of Noteholders.

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(a)Any request, demand, authorization, direction, notice, consent, waiver or other

action provided by this Indenture to be given or taken by Noteholders may be embodied in and

evidenced by one or more instruments of substantially similar tenor signed by such Noteholders

in person or by agents duly appointed in writing; and except as herein otherwise expressly provided

such action shall become effective when such instrument or instruments are delivered to the

Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or

instruments (and the action embodied therein and evidenced thereby) are herein sometimes

referred to as the Act of the Noteholders signing such instrument or instruments. Proof of

execution of any such instrument or of a writing appointing any such agent shall be sufficient for

any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture

Trustee and the Issuer, if made in the manner provided in this Section.

(b)The fact and date of the execution by any person of any such instrument or

writing may be proved in any manner that the Indenture Trustee deems sufficient.

(c)The ownership of Notes shall be proved by the Note Register.

(d)Any request, demand, authorization, direction, notice, consent, waiver or other

action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration

thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered

to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of

such action is made upon such Note.

Section 12.04 Notices, etc., to Indenture Trustee and Issuer. Any request,

demand, authorization, direction, notice, consent, waiver or act of Noteholders or Hedge

Counterparties or other documents provided or permitted by this Indenture shall be in writing

and if such request, demand, authorization, direction, notice, consent, waiver or act of

Noteholders or Hedge Counterparties is to be made upon, given or furnished to or filed with:

(i)the Indenture Trustee by any Noteholder or by the

Issuer or by any Hedge Counterparty shall be sufficient for every purpose

hereunder if made, given, furnished or filed in writing (which may be made

via e-mail transmission, pdf or overnight delivery) to or with a Responsible

Officer of the Indenture Trustee at its Corporate Trust Office, or

(ii)any Restricted Party by the Indenture Trustee or by any

Noteholder or by any Hedge Counterparty shall be sufficient for every purpose

hereunder if in writing and sent by e-mail, in each case with a copy to follow

via first-class mail, postage prepaid to the Issuer (c/o each other Restricted

Party, as applicable) addressed to: MNR ABS ISSUER I, LLC, at 1000 Main

Street, Suite 2900, Houston, TX 77002, Attention: General Counsel, E-mail:

legal.confidential@mavresources.com with a copy to Kirkland & Ellis LLP,

609 Main Street, Suite 4500, Houston, Texas 77009, Attention: Chad M. Smith,

P.C. and Isaac Bate, E-mail:chad.smith@kirkland.com and

isaac.bate@kirkland.com, or at any other address previously furnished in

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writing to the Indenture Trustee by the Issuer or the Manager. The Issuer shall

promptly transmit any notice received by it from the Noteholders to the

Indenture Trustee.

(iii)the Manager by the Indenture Trustee, by the Issuer, or

by any Noteholder or any Hedge Counterparty shall be sufficient for every

purpose hereunder if in writing and sent by facsimile or e-mail, in each case

with a copy to follow via first-class mail, postage prepaid to the Issuer addressed

to: Maverick Natural Resources II, LLC, at 1000 Main Street, Suite 2900,

Houston, TX 77002, Attention:General Counsel, E-mail:

legal.confidential@mavresources.com with a copy to Kirkland & Ellis LLP,

609 Main Street, Suite 4500, Houston, Texas 77009, Attention: Chad M. Smith,

P.C. and Isaac Bate, E-mail:chad.smith@kirkland.com and

isaac.bate@kirkland.com, or at any other address previously furnished in

writing to the Indenture Trustee by the Manager. The Manager shall promptly

transmit any notice received by it from the Noteholders to the Indenture Trustee.

The Issuers obligation to deliver or provide any demand, delivery, notice,

communication or instruction to any Person shall be satisfied by the Issuer making such demand,

delivery, notice, communication or instruction and posting such demand, delivery, notice,

communication or instruction to the Indenture Trustees investor reporting website, or such other

website or distribution service or provider as the Issuer shall designate by written notice to the other

parties; provided, that any demand, delivery, notice, communication or instruction to the Indenture

Trustee shall be provided at its Corporate Trust Office in accordance with Section 12.04(i) hereof.

The Indenture Trustee shall promptly transmit (which may be via electronic mail)

or make available on the Indenture Trustees investor reporting website any material notice

received by it from the Noteholders to the Issuer, the Hedge Counterparties, the Back-up Manager

and the Manager.

Section 12.05 Notices to Noteholders; Notices to Hedge Counterparties;

Waiver.

(a)Where this Indenture provides for notice to Noteholders of any event, such

notice shall be sufficiently given (unless otherwise herein expressly provided) if posted to the

Indenture Trustees investor reporting website, by electronic transmission or in writing and mailed,

first-class, postage prepaid to each Noteholder affected by such event, at such Holders address as

it appears on the Note Register, not later than the latest date, and not earlier than the earliest date,

prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail,

neither the failure to mail such notice nor any defect in any notice so mailed to any particular

Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any

notice that is mailed in the manner herein provided shall conclusively be presumed to have been

duly given.

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(b)Where this Indenture provides for notice to Hedge Counterparties of any event,

such notice shall be sufficiently given (unless otherwise herein expressly provided) if posted to the

Indenture Trustees investor reporting website, by electronic transmission or in writing and mailed,

first-class, postage prepaid to each Hedge Counterparty affected by such event, at such Hedge

Counterpartys address as it appears in the Hedge Agreement to which such Hedge Counterparty

is a party, not later than the latest date, and not earlier than the earliest date, prescribed for the

giving of such notice. In any case where notice to Hedge Counterparties is given by mail, neither

the failure to mail such notice nor any defect in any notice so mailed to any particular Hedge

Counterparties shall affect the sufficiency of such notice with respect to other Hedge

Counterparties, and any notice that is mailed in the manner herein provided shall conclusively be

presumed to have been duly given.

Where this Indenture provides for notice in any manner, such notice may be waived

in writing by any Person entitled to receive such notice, either before or after the event, and such

waiver shall be the equivalent of such notice.

In case, by reason of the suspension of regular mail service as a result of a strike,

work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders

when such notice is required to be given pursuant to any provision of this Indenture, then any

manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to

be a sufficient giving of such notice.

Whenever an action is required to be taken by the Majority Noteholders under the

terms of any of the Basic Documents, the Issuer shall promptly deliver to the Indenture Trustee

(and shall comply with the reasonable requests of the Back-up Manager to so deliver) a request for

approval setting forth such action, and the Indenture Trustee shall provide the Noteholders with a

copy of such request pursuant to the provisions of this Section 12.05, soliciting such consent. The

Indenture Trustee shall provide the Back-up Manager and the Issuer with the approval of the

Majority Noteholders promptly after receipt thereof. If the Indenture Trustee has not received

consent of the Majority Noteholders within thirty (30) days of soliciting such consent, it shall

promptly notify the Back-up Manager and Issuer of such failure to receive consent by such date.

Section 12.06 Alternate Payment and Notice Provisions. Notwithstanding any

provision of this Indenture or any of the Notes to the contrary, the Issuer may enter into any

agreement with any Holder of a Note providing for a method of payment, or notice by the

Indenture Trustee or any Paying Agent to such Holder, that is different from the methods

provided for in this Indenture for such payments or notices. The Issuer will furnish to the

Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause

payments to be made and notices to be given in accordance with such agreements.

Section 12.07 Effect of Headings and Table of Contents. The Article and

Section headings herein and the Table of Contents are for convenience only and shall not

affect the construction hereof.

Section 12.08 Successors and Assigns. All covenants and agreements in this

Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so

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expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its

successors, co-trustees and agents.

Section 12.09 Severability. In case any provision in this Indenture or in the

Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the

remaining provisions shall not in any way be affected or impaired thereby.

Section 12.10 Benefits of Indenture. Nothing in this Indenture or in the Notes,

express or implied, shall give to any Person, other than the parties hereto and their successors

hereunder, and the Noteholders, each Hedge Counterparty and any other party secured

hereunder, and any other Person with an ownership interest in any part of the Collateral, any

benefit or any legal or equitable right, remedy or claim under this Indenture. Each Hedge

Counterparty and the Back-up Manager shall be a third-party beneficiary to this Indenture,

but only to the extent this it has any rights expressly specified herein. The Issuer hereby

assigns to the Indenture Trustee the representations, warranties, covenants and agreements of

which the Issuer is a beneficiary, including the right to enforce all such representations,

warranties, covenants and agreements directly against the maker thereof.

Section 12.11 Legal Holidays. In any case where the date on which any

payment is due shall not be a Business Day, then notwithstanding any other provision of the

Notes or this Indenture, but subject to any provision for a particular Series set forth in the

related Series Supplement, payment need not be made on such date, but may be made on the

next succeeding Business Day with the same force and effect as if made on the date on which

nominally due, and no additional interest with respect to the amount due on the related

Payment Date shall accrue for the period from and after any such nominal date.

Section 12.12 GOVERNING LAW; CONSENT TO JURISDICTION. THIS

INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE

STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE

CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE NEW

YORK GENERAL OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND

REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN

ACCORDANCE WITH SUCH LAWS; PROVIDED THAT ANY MATTERS THAT

RELATE TO REAL PROPERTY SHALL BE GOVERNED BY THE LAWS OF THE

STATE WHERE SUCH PROPERTY IS LOCATED. EACH PARTY TO THIS

INDENTURE AND EACH NOTEHOLDER BY PURCHASING A NOTE AND EACH

HEDGE COUNTERPARTY SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY

LEGAL ACTION OR PROCEEDING RELATING TO THIS INDENTURE, OR FOR

RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF,

TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE

STATE OF NEW YORK SITTING IN NEW YORK COUNTY, THE COURTS OF THE

UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND

APPELLATE COURTS FROM ANY THEREOF. EACH PARTY (a) CONSENTS TO

SUBMIT ITSELF TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR SUCH

ACTIONS OR PROCEEDINGS, (b) AGREES THAT IT WILL NOT ATTEMPT TO DENY

OR DEFEAT SUCH PERSONAL JURISDICTION BY MOTION OR OTHER REQUEST

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FOR LEAVE FROM ANY SUCH COURT, AND (c) AGREES THAT IT WILL NOT

BRING ANY SUCH ACTION OR PROCEEDING IN ANY COURT OTHER THAN SUCH

COURTS. EACH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS

PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE AND

IRREVOCABLE JURISDICTION AND VENUE OF THE AFORESAID COURTS AND

WAIVES ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY

AGREES TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT RENDERED

THEREBY IN CONNECTION WITH SUCH ACTIONS OR PROCEEDINGS. A COPY

OF ANY SERVICE OF PROCESS SERVED UPON THE PARTIES SHALL BE MAILED

BY REGISTERED MAIL TO THE RESPECTIVE PARTY EXCEPT THAT, UNLESS

OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH

COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY

AGENT APPOINTED BY A PARTY REFUSES TO ACCEPT SERVICE, EACH PARTY

AGREES THAT SERVICE UPON THE APPROPRIATE PARTY BY REGISTERED

MAIL SHALL CONSTITUTE SUFFICIENT SERVICE. NOTHING HEREIN SHALL

AFFECT THE RIGHT OF A PARTY TO SERVE PROCESS IN ANY OTHER MANNER

PERMITTED BY LAW.

Section 12.13 Counterparts; Electronic Execution. This Indenture and any

Series Supplement may be executed in any number of counterparts, each of which so executed

shall be deemed to be an original, but all such counterparts shall together constitute but one

and the same instrument. Delivery of an executed counterpart of a signature page of this

Indenture or any Series Supplement by telecopy, e-mail, pdf or any other electronic means

(e.g., Docusign or tif) shall be effective as delivery of a manually executed counterpart of

this Indenture or such Series Supplement. The

words delivery, execute, execution,

signed, signature and words of like import in any document executed in connection

herewith shall be deemed to include electronic signatures, the electronic matching of

assignment terms and contract formations on electronic platforms or the keeping of records

in electronic form, each of which shall be of the same legal effect, validity or enforceability

as a manually executed signature, physical delivery thereof or the use of a paper-based

recordkeeping system, as the case may be, to the extent and as provided for in any applicable

law, including the Federal Electronic Signatures in Global and National Commerce Act, the

New York State Electronic Signatures and Records Act or any other similar state laws based

on the Uniform Electronic Transactions Act; provided, that notwithstanding anything

contained herein to the contrary, the parties hereto are under no obligation to agree to accept

electronic signatures in any form or in any format unless expressly agreed to by the parties

hereto pursuant to procedures approved by the parties hereto; provided, further, that without

limiting the foregoing, upon the request of any party hereto, any electronic signature shall be

promptly followed by a manually executed counterpart. The Issuer agrees to notify the

Indenture Trustee in writing of which electronic signature service it is using in connection

with any document delivered to the Indenture Trustee utilizing an electronic signature and to

assume all risks arising out of the use electronic signatures and electronic methods to submit

communications to the Indenture Trustee, including without limitation the risk of the

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Indenture Trustee acting on unauthorized instructions, and the risk of interception and misuse

by third parties.

Section 12.14 Recording of Indenture. If this Indenture is subject to recording

in any appropriate public recording offices, such recording is to be effected by the Issuer and

at its expense accompanied by an Opinion of Counsel to the effect that such recording is

necessary either for the protection of the Noteholders or any other Person secured hereunder

or for the enforcement of any right or remedy granted to the Indenture Trustee under this

Indenture.

Section 12.15 No Petition. The Indenture Trustee, by entering into this

Indenture, each Noteholder, by accepting a Note, and each Note Owner, by accepting an

Ownership Interest in a Global Note, hereby covenant and agree that they will not at any time

institute against the Issuer or Holdings, or join in any institution against the Issuer or Holdings

of, any involuntary bankruptcy, reorganization, arrangement, insolvency or liquidation

proceedings, or other proceedings under any United States federal or state bankruptcy or

similar law, in connection with any obligations relating to this Indenture, any Series

Supplement, the Notes or any of the other Basic Documents.

Section 12.16 Waiver of Jury Trial. EACH OF THE ISSUER,

AGENTCORP, EACH NOTEHOLDER AND THE INDENTURE TRUSTEE HEREBY

IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY

APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL

PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, ANY SERIES

SUPPLEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 12.17 Rating Agency Notice.

In addition to the information and reports specifically required to be provided to

each Rating Agency pursuant to the terms of this Indenture, the Issuer shall, upon written request,

provide to each Rating Agency all information or reports delivered to the Indenture Trustee

hereunder and such additional information as each Rating Agency may from time to time

reasonably request. Any request, demand, authorization, direction, order, notice, consent, waiver

or act of the Noteholders or other documents provided or permitted by this Indenture, to be made

upon, given or furnished to, or filed with each Rating Agency shall be sufficient for every purpose

hereunder (unless otherwise herein expressly provided) if in writing to the applicable Rating

Agency Contact.

Section 12.18 [Reserved].

Section 12.19 Extinguishment of Obligations.

Notwithstanding any other provision of this Indenture or any Series Supplement,

the obligations of each Restricted Party under the Notes, this Indenture and each Series Supplement

are limited recourse obligations of such Restricted Party payable solely from the Collateral. Other

than in connection with activities that constitute fraud, no recourse shall be had against any officer,

12

director, employee, shareholder, authorized person or incorporator of the Restricted Parties or any

of their respective Affiliates, or their respective successors or assigns for any amounts payable

under the Notes, this Indenture or any Series Supplement, except as provided in the Guarantee and

Security Agreement. It is understood that the foregoing provisions of this paragraph shall not

(i) prevent recourse to the Collateral for the sums due or to become due under any security,

instrument or agreement which is part of the Collateral or (ii) constitute a waiver, release or

discharge of any indebtedness or obligation evidenced by the Notes or secured by this Indenture

until such Collateral has been realized. It is further understood that the foregoing provisions of this

paragraph shall not limit the right of any Person to name any Restricted Party as a party defendant

in any proceeding or in the exercise of any other remedy under the Notes, this Indenture or any

Series Supplement, so long as no judgment in the nature of a deficiency judgment or seeking

personal liability shall be asked for or (if obtained) enforced against any such Person.

Section 12.20 Agency Agreement Acknowledgment.

Notwithstanding anything to the contrary in this Indenture, pursuant to the Agency

Agreement, (a) AgentCorp, as the agent and nominee of Issuer, holds legal title to certain

Collateral, including the portion of the Collateral that constitute interests in federal leases (the

Federal Lease Assets) solely for the benefit of Issuer and (b) AgentCorp (in its capacity as agent

and nominee of the Issuer) is providing a guarantee with respect to the Notes for which the Federal

Lease Assets serve as Collateral.

[SIGNATURE PAGES FOLLOW]

Indenture (Maverick<br><br>AHS)

IN WITNESS WHEREOF, the Issuer, AgentCorp, the Indenture Trustee and the

Securities Intermediary have caused this Indenture to be duly executed by their respective officers,

thereunto duly authorized all as of the day and year first above written.

MNR ABS ISSUER I, LLC

/s/ John M. Brawley

Name: John M. Brawley

Title:Executive Vice President and

Chief Financial Officer

MNR ABS AGE T CORP.

By: /s/ John M. Brawley

Name: John M. Brawley

Title: Executive Vice President and Chief

Financial Officer

UMB BANK, N.A.,

not in its individual capacity but solely as Indenture

Trustee, Note Registrar, Paying Agent and Securities

Intermediary

By:

Name: Michele Yoon

Title:Vice President

Indenture (Maverick<br><br>ABS)

IN WITNESS WHEREOF, the Issuer, AgentCorp, the Indenture Trustee and the

Securities Intermediary have caused this Indenture to be duly executed by their respective

officers, thereunto duly authorized, all as of the day and year first above written.

MNR ABS ISSUER I, LLC

By:

Name: John M. Brawley

Title: Executive Vice President and

Chief Financial Officer

MNR ABS AGENT CORP.

By:

Name: John M. Brawley

Title: Executive Vice President and

Chief Financial Officer

UMB BANK, N.A.,

not in its individual capacity but solely as Indenture

Trustee, Note Registrar, Paying Agent and

Securities Intermediary

By:/s/ Michele Voon

Name: Michele Voon

Title: Vice President

App. A-2

APPENDIX A

PART I - DEFINITIONS

All terms used in this Appendix shall have the defined meanings set forth in this Part I when used

in the Basic Documents, unless otherwise defined therein.

Accredited Investor has the meaning specified in Exhibit B of the Indenture.

Act of the Noteholders has the meaning specified in Section 12.03(a) of the Indenture.

Additional Asset means any asset acquired by the Issuer after the Initial Closing Date in

accordance with Section 8.04(d) of the Indenture. For the avoidance of doubt, for any purposes in

the Indenture where value is ascribed to any Additional Assets as of their transfer to the Issuer,

such Additional Assets shall be given the PV-10 value assigned to them pursuant to the applicable

reserve report delivered under the Asset Purchase Agreement with respect to their transfer to the

Issuer.

Additional Interest Election has the meaning specified in the Management Services

Agreement.

Additional Notes has the meaning specified in Section 2.13 of the Indenture.

Additional Seller means any Subsidiary of the Parent that becomes a party to the Asset

Purchase Agreement as a seller after the Initial Closing Date.

Administrative Expenses means, with respect to any Payment Date, the unpaid expenses

of the Restricted Parties consisting of out-of-pocket costs and expenses and indemnification

amounts payable or reimbursable pursuant to the Basic Documents to the Indenture Trustee, the

Manager, any Rating Agency, the Back-Up Manager, the Class Representative of the Controlling

Class and any independent director and any third-party service provider to the Issuer (including,

without limitation, insurance premiums related to the Collateral), but not including any fees

payable or expenses reimbursable to any third party (other than insurance premiums related to the

Collateral) in relation to the operation of the Oil & Gas Portfolio or transportation or marketing of

Hydrocarbons therefrom.

AFE means, any proposal regarding joint operations, proposed Wells costs, Well

elections, or requests for authorization for expenditure, including capital expenditures (as such

term is defined in accordance with GAAP), in each case, pursuant to the terms of the applicable

operating, unitization, or communitization agreements or pooling orders.

AFE Additional Interests means, with respect to any AFE Operation in which the

Manager, on behalf of the Restricted Parties, has made an Additional Interest Election, the

ownership interests acquired by the Restricted Parties as a result of participating in such AFE

Operation.

AFE Operations has the meaning specified in the Management Services Agreement.

App. A-3

Affiliate means, with respect to any specified Person, any other Person Controlling or

Controlled by or under common control with such specified Person. With respect to the Restricted

Parties, this definition shall exclude the Independent Manager or Independent Director (as the case

may be), such Persons Affiliates and any other special-purpose vehicle to which the Independent

Manager or Independent Director (as applicable) is or will be providing administrative services,

as a result solely of the Independent Manager or Independent Director (as applicable) acting in

such capacity or capacities.

Agency Agreement means that certain Agency Agreement, dated as of the Initial Closing

Date, among MNR, as tax owner, the Issuer, as principal, and AgentCorp, as agent, as amended,

restated supplemented or otherwise modified from time to time.

AgentCorp means MNR ABS Agent Corp., a Delaware corporation.

Aggregate DSCR means, with respect to any Quarterly Determination Date beginning

with the Quarterly Determination Date occurring in June 2024, an amount equal to the quotient of

(a) the aggregate Securitized Net Cash Flow with respect to the six (6) immediately preceding

Collection Periods, divided by (b) the sum of (i) without duplication, the aggregate Note Interest

on the Notes of each Class and Series for each of such six (6) immediately preceding Payment

Dates and any unpaid interest on such Notes as of the Payment Date six (6) months prior to such

Quarterly Determination Date plus (ii) the aggregate Principal Distribution Amount for the Notes

of each Class and Series for each of such six (6) immediately preceding Payment Dates plus (iii)

any unpaid Principal Distribution Amounts for the Notes of each Class and Series as of the

Payment Date six (6) months prior to such Quarterly Payment Date. The calculation of the

Aggregate DSCR shall include Additional Assets and Additional Notes beginning with the first

Quarterly Determination Date after the date of the acquisition of such Additional Assets or

issuance of such Additional Notes. During the period which the Additional Assets have been

owned by the Issuer for fewer than six (6) Collection Periods or the Additional Notes have been

outstanding for fewer than six (6) Collection Periods, such calculation will include the Additional

Assets and Additional Notes from the related Effective Time and the Closing Date, respectively,

as applicable.

Aggregate LTV means, with respect to each Semi-Annual Determination Date,

beginning with the Semi-Annual Determination Date in December 2024, will be an amount equal

to (a) the excess of (x) the aggregate Outstanding Principal Balance of the Notes (net of any then-

existing receivables, to the extent they have reduced the PV-10) as of such date of determination

over (y) the amount then on deposit in the Collection Account divided by (b) the PV-10 as of such

date of determination less any Excess Concentration Amounts. The Aggregate LTV shall be

determined on an semi-annual basis; provided that if the PV-10 shall have been re-calculated

subsequent to the most recent semi-annual determination thereof as a result of the Manager having

obtained an updated Reserve Report prior to any otherwise scheduled semi-annual updated

Reserve Report (as described in the definition of PV-10 below), then the Aggregate LTV shall

be re-calculated giving effect to such re-calculation of the PV-10 and on the basis of the then

current amounts specified in the preceding clause (a).

Annual Determination Date means the Payment Determination Date in the month of

December, beginning in December 2024.

App. A-4

Annual Period means (i) initially, the period from (and including) the Initial Closing

Date to (but excluding) the first Annual Determination Date and (ii) thereafter, each successive

period from and including any Annual Determination Date to (but excluding) the immediately

succeeding Annual Determination Date; provided, that with respect to any Annual Period that is

less than twelve (12) calendar months, any numerical limitations associated with such Annual

Period shall be prorated.

Anti-Corruption Laws means any law or regulation in any U.S. or relevant non-U.S.

jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt

Practices Act of 1977 and the U.K. Bribery Act 2010.

Anti-Money Laundering Laws means any law or regulation in any U.S. or relevant non-

U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other

money laundering predicate crimes, including the U.S. Currency and Foreign Transactions

Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

APA Reserve Report means that certain Initial Reserve Report dated on or about October

26, 2023, prepared by Cinco Energy Management Group with respect to the Initial Assets, and

(ii) the Reserve Report delivered with the applicable Joinder Supplement, with respect to any

Additional Asset.

Applicable Payment Priority means the following:

(a)each Class of Notes will be pari passu in right of payment of interest with other Notes of

that Class, regardless of Series.

(b)other than during the continuance of an Event of Default, (i) Class A-1 Notes will be pari

passu with other Class A-1 Notes and senior to other Class A Notes in right of payment of

Principal Distribution Amounts, and (ii) all Class A Notes will be pari passu in right of

payment of Class A Excess Amortization Amounts and amounts paid pursuant to clause

(vii) of the Priority of Payments;

(c)other than during the continuance of an Event of Default, Notes of a Class from a Series

with an earlier issuance date will be senior in right of payment of amounts other than

interest to Notes of that Class from a Series with a later issuance date; and

(d)during the continuance of an Event of Default, each Class of Notes will be pari passu in

right of payment of all amounts, including, for the avoidance of doubt, payments of interest,

with other Notes of that Class, regardless of Series.

Applicable Procedures means, with respect to any transfer or transaction involving a

Regulation S Global Note or beneficial interest therein, the rules and procedures of the Depositary,

Euroclear and Clearstream, as the case may be, for such Global Note, in each case to the extent

applicable to such transaction and as in effect from time to time.

Approval Percentage means, with respect to any action, waiver, consent or amendment

under or with respect to any Basic Document, a faction, expressed as a percentage, (a) the

numerator of which is the sum of the Outstanding Principal Amount of the Notes of all Noteholders

App. A-5

of the Controlling Class approving or consenting to such action, waiver, consent or amendment

and (b) the denominator of which is the sum of the Voting Amounts for each Class of each Series

of the Controlling Class.

Approved Area means (i) each of Hansford, Hemphill, Lipscomb, Ochiltree, Roberts and

Wheeler Counties, Texas, and Beckham, Custer, Ellis, Roger Mills, Washita and Woodward

Counties, Oklahoma, and (ii) each county directly adjacent to a county listed in clause (i).

Assets means the Initial Assets and any Additional Assets.

Asset Purchase Agreement means the Asset Purchase Agreement, dated as of the Initial

Closing Date, among the Issuer, AgentCorp, the Initial Sellers and each Additional Seller, as the

same may be amended, supplemented or otherwise modified from time to time in accordance with

the terms thereof.

Assumed Liabilities has the meaning specified in the Asset Purchase Agreement.

AUP has the meaning specified in Section 7.01 of the Indenture.

Available Funds means, with respect to any Payment Date, (a) the amount of Collections

received and deposited into the Operator Account in the related or any prior Collection Period

related to the Production Month related to such Payment Date or any prior Production Month, net

of expenses, and deposited in to and available for withdrawal from the Collection Account prior

to the applicable Payment Determination Date and, without duplication, (b) the Liquidity Reserve

Draw Amount, (c) Liquidity Reserve Excess Amount, (d) any Equity Contribution Cure (in the

form of cash and available for distribution on the related Payment Date), (e) amounts transferred

from the P&A Reserve Account to the Collection Account on the related Payment Determination

Date, (f) all Excess Amounts received by or released to the Issuer during the related Collection

Period, (g) all net proceeds of permitted Collateral dispositions (other than Required Hedge

Holdback Amounts until application thereof pursuant to Section 8.06), and (h) any amount retained

on the preceding Payment Date in accordance with clause (xix) of the Priority of Payments.

Back-up Management Agreement means the Back-up Management Agreement, dated as

of the Initial Closing Date, among the Issuer, the Manager, the Indenture Trustee and the Back-up

Manager, as the same may be amended, supplemented or otherwise modified from time to time in

accordance with the terms thereof.

Back-up Management Fee means the fee payable to the Back-up Manager for services

rendered during each Collection Period, determined pursuant to Section 4.1 of the Back-up

Management Agreement.

Back-up Manager means Opportune LLP, a Texas limited liability partnership, in its

capacity as back-up manager under the Back-up Management Agreement, and any successor

thereunder.

Barrel of Oil Equivalent or BOE means the volumetric equivalent of six Mcf of

wellhead natural gas or one bbl of oil, natural gas liquids and condensates.

App. A-6

Basic Documents means the Indenture, each Series Supplement, the Notes, the Operating

Agreement (including the Gas Balancing Agreement), the Management Services Agreement, the

Back-Up Management Agreement, the Asset Purchase Agreement, the Issuer LLC Agreement, the

Holdings LLC Agreement, AgentCorps Organizational Documents, the Guarantee and Security

Agreement, the Agency Agreement, the Series 2023-1 Note Purchase Agreement, each other Note

Purchase Agreement, each Escrow Agreement, each Novation Agreement, each Hedge

Agreement, each Hedge Counterparty Rights Agreement, each Deposit Account Control

Agreement, each Mortgage, each Precautionary Mortgage, the Instruments of Conveyance, the

Crude Handling Agreement, the Gas Transportation Agreement and other documents and

certificates delivered in connection therewith.

Benefit Plan Investor means an employee benefit plan as defined in Section 3(3) of the

ERISA, that is subject to Title I of ERISA, a plan as defined in and subject to Section 4975 of

the Code or an entity deemed to hold plan assets of the foregoing.

Blocked Person means (a) any Person who is designated on an Economic Sanctions

Laws-related list of designated Persons maintained by the United States, the United Nations

Security Council, the European Union, any Member State of the European Union, or the United

Kingdom (including, without limitation, the list of Specially Designated Nationals and Blocked

Persons published by OFAC), (b) any Person operating, located, organized or resident in, a

Sanctioned Jurisdiction, (c) any Person otherwise the subject or target of any Economic Sanctions

Laws, including any Person controlled by, acting on behalf of, or owned, directly or indirectly, by

(individually or in the aggregate) any Person or Persons described in the foregoing clause (a) or

(b).

Book-Entry Notes means any Note registered in the name of the Depositary or its

nominee.

Burdens has the meaning specified in the Operating Agreement.

Business Day means any day other than (i) a Saturday or a Sunday or (ii) a day on which

banking institutions or trust companies in the State of New York or the State in which the

Corporate Trust Office of the Indenture Trustee are located and are required or authorized by law,

regulation or executive order to be closed.

Capital Lease means, at any time, a lease with respect to which the lessee is required

concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance

with GAAP.

Cause means, with respect to an Independent Manager or Independent Director, as

applicable, (i) acts or omissions by such Independent Manager or Independent Director that

constitute willful disregard of, or bad faith or gross negligence with respect to, such Independent

Managers duties under the Issuer LLC Agreement or such Independent Directors duties under

the Organizational Documents of AgentCorp, as applicable, (ii) that such Independent Manager or

Independent Director has engaged in or has been charged with, or has been convicted of, fraud or

other acts constituting a crime under any law applicable to such Independent Manager or

Independent Director, (iii) that such Independent Manager or Independent Director is unable to

App. A-7

perform his or her duties as Independent Manager or Independent Director, as the case may be,

due to death, disability or incapacity, (iv) that such Independent Manager or Independent Director

no longer meets the definition of Independent Manager or Independent Director, (v) the failure of

such Independent Manager or Independent Director to perform his or her duties as Independent

Manager or Independent Director, as the case may be, in a timely manner, or (vi) a material

increase in fees charged by the Independent Manager or Independent Director.

Change of Control has the meaning specified in the Management Services Agreement.

Class means, collectively, all of the Notes bearing the same alphabetical designation and,

if applicable, numerical class designation and having the same payment terms. The respective

Classes of Notes are designated under Series Supplements.

Class A Noteholder means any Holder of a Class A Note.

Class A Notes means the Notes of any Series designated as Class A Notes in the related

Series Supplement.

Class B Noteholder means any Holder of a Class B Note.

Class B Notes means the Notes of any Series designated as Class B Notes in the related

Series Supplement.

Class Representative means, with respect to any Class or Series of Notes, as specified in

the related Series Supplement.

Clearstream means Clearstream Banking S.A.

Closing Date means (i) the Initial Closing Date and (ii) the date of issuance of any

Additional Notes, as applicable.

Code means the Internal Revenue Code of 1986, as amended from time to time, and the

Treasury Regulations promulgated thereunder.

Collateral has the meaning specified in the Granting Clause of the Indenture.

Collection Account means the account designated as such, established and maintained

pursuant to Section 8.02(a)(i) of the Indenture.

Collection Period means, with respect to any Payment Date, the period from and

including the first day of the calendar month immediately preceding the calendar month in which

such Payment Date occurs (or with respect to the initial Payment Date, from but excluding the

Effective Date), to and including the last day of the calendar month immediately preceding the

calendar month in which such Payment Date occurs.

Collections means all payments received by or on behalf of the Issuer with respect to the

Collateral, including hedge payments. Collections received by the Operator, the Manager or any

of their respective Affiliates shall be remitted to the Collection Account (as defined below) net of

App. A-8

Operating Expenses in accordance with the Operating Agreement; provided that, commencing

with the first Payment Date following the first anniversary of the Closing Date, during any

Operating Expense Suspension Event, the Operator shall only be permitted to net Operating

Expenses in an amount not to exceed the Operating Expense Limit. Operating Expenses chargeable

to the Issuers or Agent Corps account in excess of the Operating Expense Limit shall be owing

to the Operator and shall be payable in accordance with clause (xviii) of the Priority of Payments.

Any rights of the Operator as against the Issuer and AgentCorp, as non-operators, under the

Operating Agreement with respect to any non-payment resulting from the application of the

Operating Expense Limit will be waived.

Commission means the U.S. Securities and Exchange Commission.

Commodity Hedges means any swap, forward, future or derivative transaction or option

or similar arrangement entered into pursuant to a Hedge Agreement, in each case, whether

exchange-traded, over-the-counter or otherwise, involving, or settled by reference to, one or

more rates, commodities, pricing indices or other measures of economic or financial pricing risk

or value in respect of crude oil, natural gas or any other Hydrocarbons. For the avoidance of doubt,

Commodity Hedges shall include any forward transaction or production sale agreement, in either

case, that has the effect of fixing the price to be received for the production of crude oil, natural

gas or any other Hydrocarbons.

Concentration Limits means limitations satisfied on any specified date of determination

if, in the aggregate, the Oil and Gas Portfolio held (or in relation to a proposed acquisition of

Additional Assets, proposed to be held) by the Issuer complies with the following requirements

(or, if not in compliance, the relevant requirements must be maintained or improved after giving

effect to such acquisition):

(a)no single Well and Assets related to that Well comprise more than 3% of the pro forma

(including the applicable Additional Assets) consolidated PV-10 of the Oil and Gas Portfolio,

(b)the five (5) Wells and Assets related to those Wells that individually comprise the

largest portion of the pro forma (including the applicable Additional Assets) consolidated PV-10

of the Oil and Gas Portfolio collectively comprise no more than 5% of the PV-10 of the Oil and

Gas Portfolio,

(c)the twenty-five (25) Wells and Assets related to those Wells that individually comprise

the largest portion of the pro forma (including the applicable Additional Assets) consolidated

PV-10 of the Oil and Gas Portfolio collectively comprise no more than 20% of the PV-10 of the

Oil and Gas Portfolio,

(d)there are no Wells or Assets outside the Approved Area,

(e)Wellbores operated by persons other than (i) Maverick or its affiliates or (ii)

Mewbourne, in each case, collectively comprise no more than 15% of the pro forma (including the

applicable Additional Assets) consolidated PV-10 of the Oil and Gas Portfolio,

App. A-9

(f)Wellbores operated by Mewbourne collectively comprise no more than 30% of the

pro forma (including the applicable Additional Assets) consolidated PV-10 of the Oil and

Gas

Portfolio, minus the percentage then operated by persons other than (i) Maverick or its affiliates or

(ii)Mewbourne pursuant to clause (e) above,

(g)Wells and Assets located on Bureau of Land Management, federal or tribal lands

collectively comprise no more than 7.5% of the pro forma (including the applicable Additional

Assets) consolidated PV-10 of the Oil and Gas Portfolio, and

(h)natural gas liquids comprise no more than 30% of the production volume and oil

comprises no more than 35% of the production volume, in each case, of the Oil and Gas Portfolio

on a BOE basis.

Consent Period has the meaning specified in the Asset Purchase Agreement.

Contemplated Transactions means the transactions contemplated under the Basic

Documents.

Continuing Notes has the meaning specified in Section 2.13 of the Indenture.

Contracts has the meaning specified (i) with respect to the Initial Assets, in the definition

of Initial Assets under the Asset Purchase Agreement and (ii) with respect to any Additional

Assets, in the definition of Assets under the applicable Joinder Supplement.

Control 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 the ownership of voting

securities, by contract or otherwise, and the terms Controlled and Controlling shall have

meanings correlative to the foregoing.

Controlled Entity means (a) any of the Issuers or AgentCorps respective Controlled

Affiliates and (b) Holdings and its Controlled Affiliates.

Controlling Class means, as of any date of determination, the senior-most Outstanding

Class of Notes (i.e., the Class with the highest alphabetical designation), without regard to

allocation to a particular Series (i.e., the Class A Notes, while the Class A Notes are Outstanding,

followed by the Class B Notes, while the Class B Notes are Outstanding and no Class A Notes are

Outstanding, etc.); provided that if no Notes are Outstanding, but Hedge Counterparties have

Hedging Transactions outstanding (or any unpaid amounts due to them), such Hedge

Counterparties shall constitute the Controlling Class for so long as such Hedge Counterparties

have any outstanding Hedge Agreements (or unpaid amounts due to them).

Corporate Trust Office means (i) the principal office of the Indenture Trustee at which

at any particular time the Indenture shall be administered, which office at the date of execution of

the Indenture is located at UMB Bank, N.A., 100 William Street, Suite 1850, New York, NY

10038, Attn: Rosemary Cabrera, E-Mail: Rosemary.Cabrera@umb.com, (ii) for purposes of

transfers and exchanges of Notes pursuant to the Indenture, UMB Bank, N.A., 928 Grand Blvd.

App. A-10

9th Floor, Kansas City, MO 64106, Attn: Corporate Trust Dept, Bond Operations,, or (iii) at such

other address or electronic mail address as the Indenture Trustee may designate from time to time

by notice to the Noteholders and the Issuer, or the principal corporate trust office of any successor

Indenture Trustee at the address or electronic mail address designated by such successor Indenture

Trustee by notice to the Noteholders and the Issuer.

Crude Handling Agreement has the meaning specified in the Asset Purchase Agreement

Customary Post-Closing Consent has the meaning specified in the Asset Purchase

Agreement.

Day Count Convention means, with respect to Notes of any Class and Series, as specified

in the related Series Supplement.

DBRS means DBRS, Inc.

Default means any occurrence that is, or with notice or the lapse of time or both would

become, an Event of Default.

Definitive Notes means has the meaning specified in Section 2.01(a)(i) of the Indenture.

Deposit Account Control Agreement means that certain Blocked Account Control

Agreement, dated as of the date hereof, among UMB Bank, N.A., as Secured Party, JPMorgan

Chase Bank, N.A., as Bank, and the Operator, and each other account control agreement entered

into with respect to the Operator Account and approved in writing by the Majority Noteholders,

and any account control agreement entered into in respect of any of the Issuer Accounts for the

purpose of evidencing the Indenture Trustees security interest in such account.

Depositary and DTC means The Depository Trust Company, or any successor

Depositary hereafter named as contemplated by Section 2.03(c).

Depositary Participants means a broker, dealer, bank or other financial institution or

other Person for whom from time to time the Depositary effects book-entry transfers and pledges

of securities deposited with the Depositary.

Designated Rating Agency means Fitch, Inc., Moodys Investors Service, Inc., Standard

& Poors Ratings Services, a Standard & Poors Financial Services LLC business, DBRS, Inc. or

Kroll or (a) any other credit rating agency that is recognized as a nationally recognized statistical

rating organization by the Commission and approved in writing by the Majority Noteholders, so

long as, in each case, any such credit rating agency described in clause (a) or (b) above continues

to be a nationally recognized statistical rating organization recognized by the Commission and is

approved as a Credit Rating Provider (or other similar designation) by the NAIC.

Direct Expenses has the meaning specified in the Management Services Agreement.

Division means a division under Delaware law (or any comparable event under a

different jurisdiction's laws) of the assets, liabilities and/or obligations of a Person (the Dividing

Person) among two or more Persons (whether pursuant to a plan of division or similar

App. A-11

arrangement), which may or may not include the Dividing Person and pursuant to which the

Dividing Person may or may not survive.

DTC Custodian means the Indenture Trustee, in its capacity as custodian of any Series

or Class of Global Notes for DTC.

Economic Sanctions Laws means economic or financial sanctions, requirements, or trade

embargoes imposed, administered, or enforced from time to time by (a) the U.S. government,

including without limitation, those administered by OFAC and the U.S. Department of State, (b)

His Majestys Treasury of the United Kingdom, (c) the European Union or any European Union

member state, (d) the United Nations Security Council, or (e) any other relevant sanctions

authority.

Effective Date means the date on which the Effective Time occurs.

Effective Time has the meaning specified in the Asset Purchase Agreement or the

applicable related Joinder Supplement, as applicable.

Eligible Account means (a) a segregated account with an Eligible Institution or (b) a

segregated trust account with the corporate trust department of a depository institution, organized

under the laws of the United States of America or any one of the states thereof or the District of

Columbia (or any domestic branch of a foreign bank), having corporate trust powers and acting as

trustee for funds deposited in such account, so long as any of the securities of such depository

institution shall have a credit rating in one of the generic rating categories that signifies investment

grade of an NRSRO.

Eligible Institution means:

(a)the corporate trust department of the Indenture Trustee; or

(b)a depository institution or trust company organized under the laws of the United

States of America or any one of the states thereof, or the District of Columbia (or any domestic

branch of a foreign bank), which at all times (i) has (A) a long-term unsecured debt or issuer rating

of at least A- by Fitch if Fitch is then rating any of the Notes, or if Fitch is not then rating any

Notes, at least A- by Fitch or such other rating and rating agency that is acceptable to the

Majority Noteholders or (B) a certificate of deposit or short-term issuer rating of at least F1+ by

Fitch if Fitch is then rating any of the Notes, or if Fitch is not then rating any of the Notes, at least

F1+ by Fitch or such other rating and rating agency that is acceptable to the Majority

Noteholders, and (ii) the deposits of which are insured by the FDIC.

Eligibility Criteria means the following requirements:

(a)non-operated or operated upstream assets producing oil, gas or natural gas liquids (an

any appurtenant midstream infrastructure, if applicable),

(b)to the extent Additional Assets include properties for which the Seller takes its

production in kind, they will also include adequate midstream assets and contract rights for the

Issuer to transport and process its production,

App. A-12

(c)denominated in U.S. dollars,

(d)located in the contiguous United States (i.e., excluding Alaska and Hawaii) and in an

Approved Area,

(e)with respect to wells included in any Additional Assets in a single acquisition or a series

of related acquisitions, a minimum of nine (9) months for each well and a minimum of seven years

on average for all wells that are a part of the Collateral on a pro forma basis (including the

applicable Additional Assets) between (i) the commencement of production from each such well

to (ii) the proposed transfer date of such well to the Issuer,

(f)aggregate PV-10 of all assets to be included as Additional Assets is positive, and

(g)no wells located on federal or tribal lands if such associated value comprises greater

than 7.5% of the PV-10 of the Additional Assets, unless (A) consents from the applicable

landowner(s) have been obtained, or (B) if such wells are operated by Persons other than the Issuer

and such wells comprise greater than 2% of the PV-10 of the sum of the Additional Assets and the

then-current Oil and Gas Portfolio, then a Governmental Body Opinion is provided in connection

with the transfer of the Additional Assets.

Encumbrance has the meaning specified in the Asset Purchase Agreement.

Environmental Laws has the meaning specified in the Asset Purchase Agreement.

Environmental Liabilities has the meaning specified in the Asset Purchase Agreement.

Equity Contribution Cure has the meaning specified in Section 8.12 of the Indenture.

ERISA means the U.S. Employee Retirement Income Security Act of 1974, as amended.

ERISA Affiliate means any trade or business (whether or not incorporated) that is treated

as a single employer together with the Issuer under Section 414 of the Code.

ERISA Plan means an employee benefit plan (as defined in section 3(3) of ERISA)

subject to Title I of ERISA that is or, within the preceding five years, has been established or

maintained, or to which contributions are or, within the preceding five years, have been made or

required to be made by the Issuer or any ERISA Affiliate or with respect to which the Issuer or

any ERISA Affiliate may have any liability.

ERISA Restricted Notes means the Notes of any Series designated as ERISA Restricted

Notes in the related Series Supplement.

Escrow Agent if applicable, as specified in the related Series Supplement.

Escrow Agreement if applicable, as specified in the related Series Supplement.

Escrow Funding Date if applicable, as specified in the related Series Supplement.

Euroclear means the Euroclear System.

App. A-13

Event of Default has the meaning specified in Section 5.01(a) of the Indenture.

Excess Allocation Percentage means:

(x)for each Series of Class A Notes, (a) with respect to any Payment Date

occurring prior to Excess Allocation Starting Date for such Series, if, as of such Payment

Date, (i) if no Senior Diversion Event or Rapid Amortization Event is continuing, 0%, and

(y)if a Senior Diversion Event or Rapid Amortization Event is continuing, 100%; and (b)

with respect to any Payment Date on or after Excess Allocation Starting Date for such

Series, 100%;

(ii) for each Series of Class B Notes, (a) with respect to any Payment Date

occurring prior to Excess Allocation Starting Date for such Series, (x) if, as of such

Payment Date, (i) the Aggregate DSCR is greater than or equal to 1.05x, (ii) the Production

Tracking Rate is greater than or equal to 85.0%, (iii) the Aggregate LTV is less than (x)

prior to twenty-four (24) months since the issuance of the most recent Series of Class B

Notes, 70%, (y) between twenty-four (24) and thirty-six months since the issuance of the

most recent Series of Class B Notes, 60%, and (z) at any other time when clauses (x) and

(z)do not apply, 50%, and (iv) no Rapid Amortization Event is then continuing, then 0%,

otherwise 100%; and (b) with respect to any Payment Date occurring on or after the Excess

Allocation Starting Date for such Series, 100%; and

(iii)with respect to any Additional Notes (other than Class A Notes or Class B

Notes), as specified in the related Series Supplement for such Additional Notes.

Excess Amortization Amount means, with respect to any Payment Date and any Series

or Class of Notes, the product of (i) the Series Allocation Percentage for such Series, (ii) the Excess

Allocation Percentage for such Class of such Series, and (iii) the Available Funds for such Payment

Date remaining after giving effect to the distributions in clauses (i) through (viii) of the Priority of

Payments on such Payment Date; provided, that the Excess Amortization Amount as of any

Payment Date shall not exceed the Outstanding Principal Balance of such Series or Class of Notes

as of such Payment Date (calculated after giving effect to the payments on such Payment Date

contemplated by clauses (i) through (viii) of the Priority of Payments).

Excess Amounts means, with respect to any Payment Date, without duplication, the sum

of (i) (x) all amounts received during the related Collection Period by the Issuer pursuant to any

indemnification obligation, or to cure any breach of contract, by any counterparty to any Basic

Document less (y) the sum of (A) any amounts paid by the Issuer to any third parties in respect of

matters that are the subject of the applicable breach or indemnification obligation, (B) any amount

immediately paid or reinvested by the Issuer in connection with its permitted business to cure or

remedy any breach or liability subject to the terms and conditions of the Basic Documents and (C)

any amounts reasonably expected be paid or reinvested by the Issuer in connection with its

permitted business to cure or remedy any breach or liability subject to the terms and conditions of

the Basic Documents within 365 days after receipt thereof and that are deposited in the Excess

Amount Trust Account from which the Issuer may fund such reinvestments during such period;

provided that (1) any such amounts not so reinvested within 365 days shall, within two (2) Business

Days of the expiration of such 365-day period, be deposited in the Collection Account and shall

App. A-14

constitute Excess Amounts, and (2) any such amounts required to be withdrawn from the Excess

Amount Trust Account on any Payment Date pursuant to Section 8.02(a)(iii) of the Indenture shall

be applied in accordance with the Priority of Payments on such Payment Date; (ii) any Title Failure

Amounts; (iii) amounts payable by a Seller on account of a repurchase of Collateral by the Seller

pursuant to the Asset Purchase Agreement; (iv) amounts payable by the Manager on account of

repurchase of Collateral by the Manager pursuant to the Management Services Agreement; (v) all

insurance proceeds payable in respect of the Collateral; (vi) any amounts received by the Issuer in

connection with any termination of a Hedge Agreement that would otherwise be distributed to the

Issuer in accordance with the Priority of Payments.

Excess Amount Trust Account means the account designated as such, established and

maintained pursuant to Section 8.02(a)(iii) of the Indenture.

Excess Concentration Amounts means, as of any date of determination, the sum, without

duplication, of the PV-10 of the Oil and Gas Portfolio that exceeds one or more Concentration

Limits.

Exchange Act means the U.S. Securities Exchange Act of 1934, as amended.

Executive Officer means, with respect to any company, the Chief Executive Officer,

Chief Operating Officer, Chief Financial Officer, President, any Executive Vice President, Vice

President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer of such company; and

with respect to any partnership, any general partner thereof.

FATCA means Sections 1471 through 1474 of the Code and any current or future

regulations or official interpretations thereof (including any revenue ruling, revenue procedure,

notice or similar guidance issued by the U.S. Internal Revenue Service thereunder as a

precondition to relief or exemption from taxes under such Sections, regulations and

interpretations), any agreements entered into pursuant to Code Section 1471(b)(1), any

intergovernmental agreements, treaties or conventions entered into in connection with any of the

foregoing and any fiscal or regulatory legislation, rules or generally accepted practices adopted

pursuant to any such intergovernmental agreements, treaties or conventions and any amendments

made to any of the foregoing after the date of the Indenture.

FDIC means the Federal Deposit Insurance Corporation.

Final Scheduled Payment Date means, with respect to any Class and Series of Notes, if

any, as specified in the related Series Supplement.

Financial Asset has the meaning given such term in Article 8 of the UCC. As used

herein, the Financial Asset related to a security entitlement is the Financial Asset in which the

entitlement holder (as defined in the New York UCC) holding such security entitlement has the

rights and property interest specified in the New York UCC.

Fitch means Fitch Ratings, Inc.

GAAP means generally accepted accounting principles as in effect in the United States.

App. A-15

Gas Balancing Agreement has the meaning specified in the Asset Purchase Agreement.

Gas Transportation Agreement has the meaning specified in the Asset Purchase

Agreement

Global Notes means, collectively, the Rule 144A Global Notes and the Regulation S

Global Notes.

Governmental Authorization means any approval, consent, license, permit, registration,

variance, exemption, waiver or other authorization issued, granted, given or otherwise made

available by or under the authority of any Governmental Body or pursuant to any Law.

Governmental Body means any (a) nation, state, county, city, town, village, district or

other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government;

(c)governmental or quasi-governmental authority of any nature (including any governmental

agency, branch, department, official or entity and any court or other tribunal); (d) multinational

organization or body or (e) body exercising, or entitled to exercise, any administrative, executive,

judicial, legislative, police, regulatory or taxing authority or power of any nature.

Governmental Body Opinion means has the meaning specified in the Asset Purchase

Agreement.

Governmental Official means any governmental official or employee, employee of any

government-owned or government-controlled entity, political party, official of a political party,

candidate for political office, official of any public international organization or anyone else acting

in an official capacity.

Governmental Rule means with respect to any Person, any law, rule, regulation,

ordinance, order, code, treaty, judgment, decree, directive, guideline, policy or similar form of

decision of any Governmental Body binding on such Person.

Grant means mortgage, pledge, bargain, warrant, alienate, remise, release, convey,

assign, transfer, create, grant a lien upon and a security interest in, grant a right of set-off against,

deposit, set over and confirm pursuant to the Indenture. A Grant of any item of Collateral or of

any other property shall include all rights, powers and options (but none of the obligations) of the

granting party thereunder, including the immediate and continuing right to claim for, collect,

receive and give receipt for principal and interest payments in respect of such item of Collateral

and all other monies payable thereunder, to give and receive notices and other communications, to

make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the

name of the granting party or otherwise, and generally to do and receive anything that the granting

party is or may be entitled to do or receive thereunder or with respect thereto.

Guaranty means, with respect to any Person, any obligation (except the endorsement in

the ordinary course of business of negotiable instruments for deposit or collection) of such Person

guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other

Person in any manner, whether directly or indirectly, including obligations incurred through an

agreement, contingent or otherwise, by such Person:

App. A-16

(a)to purchase such indebtedness or obligation or any property constituting

security therefor;

(b)to advance or supply funds (i) for the purchase or payment of such

indebtedness or obligation or (ii) to maintain any working capital or other balance sheet

condition or any income statement condition of any other Person or otherwise to advance

or make available funds for the purchase or payment of such indebtedness or obligation;

(c)to lease properties or to purchase properties or services primarily for the

purpose of assuring the owner of such indebtedness or obligation of the ability of any other

Person to make payment of the indebtedness or obligation; or

(d)otherwise to assure the owner of such indebtedness or obligation against loss

in respect thereof.

In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the

indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be

direct obligations of such obligor.

Guarantee and Security Agreement means the Guarantee and Security Agreement, dated

as of the Initial Closing Date, made by Holdings and AgentCorp in favor of the Indenture Trustee,

as the same may be amended, supplemented or otherwise modified from time to time in accordance

with the terms thereof.

Hazardous Substance has the meaning specified in the Asset Purchase Agreement.

Hedge Agreements means each ISDA Master Agreement and related Schedule to the

ISDA Master Agreement and Credit Support Annex to the Schedule (if any) and any confirmation

between the Issuer and a Hedge Counterparty, which such Hedge Agreements with each Hedge

Counterparty shall reflect the Hedge Counterparty Rating Requirements, including collateral

posting and assignment to, or guaranty from, counterparty satisfying the Hedge Counterparty

Rating Requirements.

Hedge Counterparty means each counterparty to the Issuer under a Hedge Agreement if,

at the time such Hedge Counterparty enters into such Hedge Agreement with or is novated to the

Issuer, such Hedge Counterparty satisfies the Hedge Counterparty Rating Requirements at the time

such Hedge Counterparty enters into such Hedge Agreement with or is novated to the Issuer,

including Citizens Bank, National Association, J. Aron & Company LLC, and JPMorgan Chase

Bank, N.A.; and such counterparty shall remain a Hedge Counterparty for so long as any Hedging

Transactions to which they are a party remain outstanding or any obligations remain outstanding

to such counterparty under its Hedge Agreement.

Hedge Counterparty Rating Requirements means (i) as of the date upon which any

Person first enters into a Hedge Agreement with the Issuer, such Person (or such Persons Credit

Support Provider (as defined in the Hedge Agreement)) has a senior unsecured debt rating no less

than A- (or its equivalent) (or, with respect to Citizens Bank, National Association, including

any Credit Support Provider, BBB+) by at least two of Fitch, Moodys and S&P, and (ii) at any

time thereafter, such Person (or such Persons Credit Support Provider) maintains a senior

App. A-17

unsecured debt rating no less than BBB (or its equivalent) (or, with respect to J. Aron &

Company LLC, including their Credit Support Provider, BBB-) by at least two of Fitch, Moodys

and S&P; provided that if at any time such Persons (or such Persons Credit Support

Providers)

senior unsecured debt rating falls below BBB+ (or its equivalent) by at least two of Fitch,

Moodys or S&P, it shall comply with the collateral posting requirements specified in the Hedge

Agreement.

Hedge Counterparty Rights Agreement means, each Hedge Counterparty Rights

Agreement among Issuer, the Indenture Trustee and a Hedge Counterparty, as may be amended

and supplemented from time to time.

Hedging Transactions means one or more transactions entered into pursuant to a Hedge

Agreement.

Holdback Account has the meaning specified in Section 8.02(a)(ii) of the Indenture.

Holdback Amount has the meaning specified in the Asset Purchase Agreement.

Holder or Noteholder means the Person in whose name a Note is registered on the

Note Register.

Holdings means MNR ABS Holdings I, LLC, a Delaware limited liability company, or

its successors.

Holdings LLC Agreement means the Amended and Restated Limited Liability Company

Agreement of Holdings, dated as of the Initial Closing Date, as the same may be amended,

supplemented or otherwise modified from time to time in accordance with the terms thereof.

Hot Back-Up Management Duties has the meaning specified in the Back-up

Management Agreement.

Hydrocarbons means oil, gas, casinghead gas, drip gasoline, natural gasoline,

condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons, minerals and all products

refined or separated therefrom (whether or not such item is in liquid or gaseous form), including

all crude oils, condensates and natural gas liquids at atmospheric pressure and all gaseous

hydrocarbons (including wet gas, dry gas and residue gas) or any combination thereof, and any

minerals, products, or substances produced in association therewith.

Indebtedness means, with respect to any Person, at any time, without duplication,

(a)its liabilities for borrowed money;

(b)its liabilities for the deferred purchase price of property acquired by such

Person (excluding accounts payable arising in the ordinary course of business, but

including all liabilities created or arising under any conditional sale or other title retention

agreement with respect to any such property);

App. A-18

(c)(i) all liabilities appearing on its balance sheet in accordance with GAAP in

respect of Capital Leases and (ii) all liabilities which would appear on its balance sheet in

accordance with GAAP in respect of Synthetic Leases assuming such Synthetic Leases

were accounted for as Capital Leases;

(d)all liabilities for borrowed money secured by any Lien with respect to any

property owned by such Person (whether or not it has assumed or otherwise become liable

for such liabilities);

(e)all its liabilities in respect of letters of credit or instruments serving a similar

function issued or accepted for its account by banks and other financial institutions

(whether or not representing obligations for borrowed money);

(f)the aggregate termination payments due under any swap or hedging agreement

of such Person; and

(g)any Guaranty of such Person with respect to liabilities of a type described in

any of clauses (a) through (f) hereof.

Indebtedness of any Person shall include all obligations of such Person of the character described

in clauses (a) through (g) to the extent such Person remains legally liable in respect thereof

notwithstanding that any such obligation is deemed to be extinguished under GAAP.

Indenture means the Indenture, dated as of the Initial Closing Date, among the Issuer,

AgentCorp, the Indenture Trustee, the Note Registrar, the Paying Agent, and the Securities

Intermediary, as the same may be amended, supplemented or otherwise modified from time to

time in accordance with the terms thereof.

Indenture Trustee means UMB Bank, N.A., not in its individual capacity but solely as

Indenture Trustee under the Indenture, or any successor Indenture Trustee under the Indenture.

Independent means, when used with respect to any specified Person, that the Person (a) is

in fact independent of the Issuer, any other obligor on the Notes, Holdings and any Affiliate of any

of the foregoing Persons, (b) does not have any direct financial interest or any material indirect

financial interest in the Issuer, any such other obligor, Holdings or any Affiliate of any of the

foregoing Persons and (c) is not connected with the Issuer, any such other obligor, Holdings or

any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter,

trustee, partner, director or person performing similar functions.

Independent Director has the meaning set forth in the Organizational Documents of

AgentCorp.

Independent Manager means an individual who has prior experience as an independent

director, independent manager or independent member with at least three years of employment

experience and who is provided by Citadel SPV LLC, Corporation Service Company, CT

Corporation, Global Securitization Services, LLC, Lord Securities Corporation, National

Registered Agents, Inc., Stewart Management Company, Wilmington Trust Company or, if none

of those companies is then providing professional independent directors, another nationally

App. A-19

recognized company (with consent of the Majority Noteholders), in each case, that is not an

Affiliate of the Issuer and that provides professional independent directors and other corporate

services in the ordinary course of its business, and which individual is duly appointed as an

Independent Manager and is not, and has never been, and will not while serving as Independent

Manager be, any of the following:

(i)a member (other than a special member), partner, equity holder, manager,

director, officer or employee of the Issuer, Holdings or any of their respective equity

holders or Affiliates (other than as an independent director or independent manager of the

Issuer or an Affiliate of the Issuer);

(ii)a creditor, supplier or service provider (including provider of professional

services) to the Issuer, or any of its equity holders or Affiliates (other than a nationally

recognized company that routinely provides professional independent directors and other

corporate services to the Issuer or any of its equity holders or Affiliates in the ordinary

course of its business);

(iii)a family member of any such member, partner, equity holder, manager,

director, officer, employee, creditor, supplier or service provider; or

(iv)a Person that controls (whether directly, indirectly or otherwise) any of the

Person described in clause (i), (ii) or (iii) above.

Initial Assets has the meaning specified in the Asset Purchase Agreement.

Initial Closing Date means October 26, 2023.

Initial Purchasers means, with respect to any Series of Notes, as specified in the related

Series Supplement.

Initial Sellers has the meaning specified in the Asset Purchase Agreement.

Institutional Accredited Investor means an accredited investor within the meaning of

paragraph (1), (2), (3) or (7) of Rule 501(a) of Regulation D of the Securities Act or an entity

owned entirely by other entities that fall within such paragraphs.

Instruments of Conveyance has the meaning specified in the Asset Purchase Agreement.

Interest Accrual Period means, with respect to any Payment Date, unless otherwise

specified with respect to a Series or Class of Notes in the related Series Supplement, the period

from, and including, the immediately preceding Payment Date up to, but excluding, the current

Payment Date (or, in the case of the initial Payment Date for a Series of Notes, from and including

the related Escrow Funding Date, if applicable, for the related Notes and, if the Escrow Funding

Date is not applicable for any such Notes, the related Closing Date for such Notes) to, but

excluding, the current Payment Date, calculated on the basis of the applicable Day Count

Convention.

Interest Rate means, with respect to any Series and Class of Notes, the per annum fixed

or floating rate at which such Notes accrue interest, as specified in the related Series Supplement.

App. A-20

Interim Successor Manager has the meaning set forth in the Back-up Management

Agreement.

Investment Earnings means, with respect to any Payment Date, the investment earnings

(net of losses and investment expenses) on amounts on deposit in the Issuer Accounts to be

deposited into the Collection Account on such Payment Date pursuant to Section 8.02(b) of the

Indenture.

Investments means all investments, in cash or by delivery of property made, directly or

indirectly in any Person, whether by acquisition of shares of capital stock, Indebtedness or other

obligations or securities or by loan, advance, capital contribution or otherwise.

Issuer means MNR ABS Issuer I, LLC, a Delaware limited liability company.

Issuer Account Property means the Issuer Accounts, all amounts and investments held

from time to time in any Issuer Account (whether in the form of deposit accounts, Physical

Property, book-entry securities, uncertificated securities or otherwise), including the Liquidity

Reserve Account, and all proceeds of the foregoing.

Issuer Accounts has the meaning specified in Section 8.02(b) of the Indenture.

Issuer LLC Agreement means the Amended and Restated Limited Liability Company

Agreement of the Issuer, dated as of the Initial Closing Date, as the same may be amended,

supplemented or otherwise modified from time to time in accordance with the terms thereof.

Issuer Order means a written order or request signed in the name of the Issuer by any

one of its authorized officers and delivered to the Indenture Trustee.

Joinder Supplement has the meaning specified in the Asset Purchase Agreement.

Joint Direction means a joint written instruction executed by the Issuer and one or more

Additional Sellers directing the release of amounts from the Holdback Account as provided in

Section 8.02(a)(ii) of the Indenture, which shall include, for any amounts to be released to any

Additional Seller, wire transfer instructions for the delivery of such amounts to such Additional

Seller.

Knowledge means, with respect to a Maverick Party, the actual knowledge (following

reasonable inquiry of direct reports) of any Executive Officer or employee with the title of

Director or higher of such entity.

Key Person Condition means a condition that is satisfied with respect to any issuance of

Additional Notes, permitted collateral disposition or acquisition of Additional Assets, if at least

two of Chris Heinson, John Brawley and Rick Gideon are substantially involved in the

management or governance of the Parent both immediately prior to and immediately after such

event.

Lands has the meaning specified (i) with respect to the Initial Assets, in the definition of

Initial Assets under the Asset Purchase Agreement and (ii) with respect to any Additional Assets,

in the definition of Assets under the applicable Joinder Supplement.

App. A-21

Law means any applicable United States or foreign, federal, state, regional or local

statute, law, code, rule, treaty, convention, order, decree, injunction, directive, determination or

other requirement and, where applicable, any legally binding interpretation thereof by a

Governmental Body having jurisdiction with respect thereto or charged with the administration or

interpretation thereof (including, without limitation, any Governmental Rule).

Lease Rights has the meaning specified (i) with respect to the Initial Assets, in the

definition of Initial Assets under the Asset Purchase Agreement and (ii) with respect to any

Additional Assets, in the definition of Assets under the applicable Joinder Supplement.

Leases has the meaning specified (i) with respect to the Initial Assets, in the definition

of Initial Assets under the Asset Purchase Agreement and (ii) with respect to any Additional

Assets, in the definition of Assets under the applicable Joinder Supplement.

Legal Final Maturity Date means, with respect to any Class and Series of Notes, as

specified in the related Series Supplement.

Legal Requirement means any federal, state, local, municipal, foreign, international,

multinational or other law, Order, code, constitution, ordinance, or rule, including rules of common

law, other rule, regulation, statute, treaty, or other legally enforceable directive or requirement.

Lien means a security interest, lien, charge, pledge, equity or encumbrance of any kind.

Liquidity Reserve Account means the account designated as such, established and

maintained pursuant to Section 8.02(a)(iv) of the Indenture.

Liquidity Reserve Account Initial Deposit means cash or Permitted Investments having

a value of $23,520,725.00.

Liquidity Reserve Account Target Amount means, as of any date of determination, six

(6) months of Note Interest with respect to all outstanding Class A Notes (or if no Class A Notes

are outstanding, all outstanding Class B Notes) and senior transaction fees, subject to a floor of

40% of the Liquidity Reserve Account Initial Deposit.

Liquidity Reserve Draw Amount has the meaning specified in Section 8.07(c) of the

Indenture.

Liquidity Reserve Excess Amount has the meaning specified in Section 8.07(b) of the

Indenture.

Majority Hedge Counterparties means, at any time, Hedge Counterparties representing

greater than fifty percent (50%) of the aggregate Mark-to-Market of all outstanding Hedging

Transactions under Hedge Agreements at such time (calculated in the aggregate for each Hedge

Counterparty), but if no Hedge Counterparty has any positive Mark-to-Market to the Issuer, then

Hedge Counterparties representing greater than fifty percent (50%) of the aggregate notional

amounts (calculated on a Barrel of Oil Equivalent basis) of all outstanding Hedging Transactions

under Hedge Agreements at such time.

App. A-22

Majority Noteholders means, as of any date of determination and with respect to any

request for any action, waiver, consent or amendment under or with respect to any Basic

Document, an Approval Percentage with respect to the holders of the Controlling Class of greater

than fifty percent (50%); provided, further, that for so long as the Hedge Counterparties constitute

the Controlling Class, the Majority Noteholders will mean the Majority Hedge Counterparties.

Make-Whole Amount means, in connection with a redemption of the Notes of any Series

pursuant to Section 10.01 of the Indenture, the premium (if any) specified in the related Series

Supplement.

Management Fees has the meaning specified in the Management Services Agreement.

Management Services Agreement means the Management Services Agreement, dated as

of the Initial Closing Date, among the Manager, the Issuer and AgentCorp, as the same may be

amended, supplemented or otherwise modified from time to time in accordance with the terms

thereof.

Manager means Maverick Services, LLC, a Delaware limited liability company, in its

capacity as manager under the Management Services Agreement, and any successor thereunder.

Manager Termination Event has the meaning specified in the Management Services

Agreement.

Mark-to-Market means, as to any Hedge Counterparty, the amount that would be owed

to such Hedge Counterparty by the Issuer or to the Issuer by such Hedge Counterparty, based on

the daily mark provided to the Issuer by such Hedge Counterparty for all outstanding Hedging

Transactions pursuant to Part 23 of the Commodity Futures Trading Commissions Regulations;

provided that, upon early termination of any Hedging Transactions, Mark-to-Market for any such

terminated Hedging Transactions shall mean the Early Termination Amount(s) (as defined in the

Hedge Agreement) owed to such Hedge Counterparty or to the Issuer pursuant to the relevant

Hedge Agreement. For the purposes of defining Majority Hedge Counterparty consent, only

amounts owed by the Issuer to such Hedge Counterparty shall be included.

Material means, with respect to any Person, material in relation to the business,

operations, affairs, financial condition, assets or properties of such Person.

Material Adverse Effect means any event, occurrence, fact, condition or change that has

a material adverse effect on (a) the business, operations, affairs, assets, properties, financial

condition or results of operation of the Issuer or the Collateral, individually, or any Maverick Party

(individually or collectively), (b) the validity, priority or enforceability of the liens on the

Collateral, taken as a whole, (c) the ability of any Maverick Party to perform any material

obligation under any Basic Document to which it is a party, (d) the ability of the Indenture Trustee

to enforce the obligations of any Maverick Party under the Basic Documents to which such person

is a party in any material respect, (e) the validity or enforceability of any of the Basic Documents

against the Maverick Parties or (f) the ability of the Issuer to make payments on the Notes or satisfy

its payment obligations under any of the Hedge Agreements.

App. A-23

Material Event means a Default, Event of Default, Senior Diversion Event, Rapid

Amortization Event or Manager Termination Event.

Mineral Interests has the meaning specified (i) with respect to the Initial Assets, in the

definition of Initial Assets under the Asset Purchase Agreement and (ii) with respect to any

Additional Assets, in the definition of Assets under the applicable Joinder Supplement.

Maverick Party means each of the Issuer, AgentCorp, Holdings, each Seller, the Parent,

the Operator and the Manager.

Mewbourne means Mewbourne Oil Company (or its affiliates or, to the extent such

successors are oil and gas operators with creditworthiness and operational expertise reasonably

comparable to Mewbourne Oil Company as of the Closing Date, its successors).

MNR means Maverick Natural Resources, LLC, a Delaware limited liability company,

or its successors.

Monthly Remittance Amount has the meaning set forth in the Operating Agreement.

Moodys means Moodys Investors Service, Inc.

Morningstar means Morningstar Credit Ratings, LLC.

Mortgages means each Mortgage, Line of Credit, Assignment, Security Agreement,

Fixture Filing and Financing Statement, from the Issuer and AgentCorp to the Indenture Trustee

and each Deed of Trust, Mortgage, Line of Credit, Assignment, Security Agreement, Fixture Filing

and Financing Statement, from the Issuer and AgentCorp to the Indenture Trustee.

Multiemployer Plan means any ERISA Plan that is a multiemployer plan (as such term

is defined in section 4001(a)(3) of ERISA).

NAIC means the National Association of Insurance Commissioners.

Non-Foreign Status Certificate has the meaning specified in Section 2.02(r) of the

Indenture.

Non-U.S. Plan means any plan, fund or other similar program that (a) is established or

maintained outside the United States of America by Holdings or the Issuer primarily for the benefit

of employees of Holdings or the Issuer residing outside the United States of America, which plan,

fund or other similar program provides, or results in, retirement income, a deferral of income in

contemplation of retirement or payments to be made upon termination of employment, and (b) is

not subject to ERISA or the Code.

Note Interest means, with respect to any Payment Date and to the Notes of a Class and

Series, an amount equal to the sum of (i) the interest accrued thereon during the Interest Accrual

Period at the applicable Interest Rate (which Interest Rate may be fixed or floating and shall be set

forth in the related Series Supplement for such Series and Class of Notes) on the Outstanding

Principal Balance thereof plus (ii) any accrued and unpaid Note Interest thereon from prior

App. A-24

Payment Dates, together with, to the extent permitted by law, interest thereon at such Interest Rate

during the Interest Accrual Period, calculated on the basis of the applicable Day Count Convention.

Note Owner means, with respect to any Book-Entry Note, the Person who is the

beneficial owner of such Note as reflected on the books of the Depositary, a Depositary Participant

or an indirect participating brokerage firm for which a Depositary Participant acts as agent.

Note Purchase Agreement means, with respect to any Series of Notes, each purchase

agreement related to the sale by the Issuer or its Affiliates of all or any portion of a Class of Note

of such Series of Notes, as the same may be amended, supplemented or otherwise modified from

time to time in accordance with the terms thereof.

Note Register has the meaning specified in Section 2.02(a) of the Indenture.

Note Registrar has the meaning specified in Section 2.02(a) of the Indenture.

Noteholder means the Person in whose name a Note is registered in the Note Register.

Noteholder FATCA Information means, with respect to any Noteholder, information

sufficient to eliminate the imposition of, or determine the amount of, U.S. withholding tax under

FATCA.

Noteholder Tax Identification Information means, with respect to any Noteholder,

properly completed and signed tax certifications (generally, in the case of U.S. federal income tax,

IRS Form W-9 (or applicable successor form) in the case of a person that is a U.S. Person or the

appropriate IRS Form W-8 (or applicable successor form)) as well as other relevant information if

the Noteholder desires to claim the portfolio interest exemption in the case of a person that is not

a U.S. Person.

Notes means the notes issued by the Issuer pursuant to the Indenture and the Series

Supplements.

Novation Agreement means each agreement by and among the Issuer, a transferor and a

Hedge Counterparty pursuant to which hedging transactions are novated to the Issuer and become

subject to the related Hedge Agreement between the Issuer and such Hedge Counterparty.

NRSRO means any nationally recognized statistical rating agency recognized as such by

the Commission and acceptable to the SVO.

OFAC means the Office of Foreign Assets Control of the U.S. Department of the

Treasury.

OFAC Sanctions Program means any comprehensive economic or trade sanction that

OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may

be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.

Officers Certificate means, in the case of the Issuer, a certificate signed by any

authorized officer of the Issuer, under the circumstances described in, and otherwise complying

App. A-25

with, the applicable requirements of Section 12.01 of the Indenture, and delivered to the Indenture

Trustee (unless otherwise specified, any reference in the Indenture to an Officers Certificate shall

be to an Officers Certificate of any authorized officer of the Issuer), and in the case of Holdings

or the Manager, a certificate signed by the president, a vice president, a treasurer, an assistant

treasurer, a secretary or an assistant secretary of Holdings or the Manager, as appropriate.

Oil and Gas Portfolio means, as of any date of determination, the Assets then held by the

Issuer (including, for the avoidance of doubt, any Additional Assets).

Operating Agreement means the Operating Agreement, dated as of the Initial Closing

Date, between the Operator, the Issuer and AgentCorp (as the same may be amended,

supplemented or otherwise modified from time to time in accordance with the terms thereof),

including the related recording supplement.

Operating Expense Limit means, as of any date of determination, 80% of the sum of the

aggregate proceeds of the sale of Hydrocarbons from the Oil & Gas Portfolio, the aggregate of the

Equity Contribution Cures (in the form of cash), if any, deposited in the Collection Account, and

the net proceeds of any Hedge Agreement received by or on behalf of the Issuer or AgentCorp,

over the 12 immediately preceding Collection Periods.

Operating Expense Suspension Event means, as of any date of determination, if (i) the

aggregate Operating Expenses over the 12 immediately preceding Collection Periods exceeds (ii)

the Operating Expense Limit with respect to such 12 immediately preceding Collection Periods.

Operating Expenses has the meaning set forth in the Operating Agreement.

Operator means Unbridled Resources, LLC, a Delaware limited liability company, in its

capacity as operator under the Operating Agreement, and any successor thereunder.

Operator Account means that certain deposit account in the name of the Operator and

held at the Operator Account Bank, or any successor deposit account that has been approved in

writing by the Majority Noteholders, into which the revenues generated from the Assets are

deposited, which shall be subject to a blocked account control agreement or deposit account control

agreement, as applicable, at all times, in favor of the Indenture Trustee for the benefit of the

Secured Parties.

Operator Account Bank means an Eligible Institution at which the Operator Account is

located.

Opinion of Counsel means one or more written opinions of counsel who may, except as

otherwise expressly provided in the Indenture and except for any opinion rendered with respect to

a tax matter under the Indenture, be an employee of or counsel to the Restricted Parties or the

Manager and who shall be satisfactory to the addressees of such opinion, and which opinion or

opinions, if addressed to the Indenture Trustee, shall comply with any applicable requirements of

Section 12.01 of the Indenture and shall be in form and substance satisfactory to the Indenture

Trustee.

Opinion Threshold means has the meaning specified in the Asset Purchase Agreement.

App. A-26

Optional Redemption means the redemption of the Notes by the Issuer in accordance

with Section 10.01 of the Indenture.

Optional Redemption Price means, in connection with a redemption of Notes of any

Class and Series pursuant to Section 10.01 of the Indenture, the price specified in the related Series

Supplement for Notes of such Class.

Order means any award, decision, injunction, judgment, order, ruling, subpoena or

verdict entered, issued, made or rendered by any court, administrative agency or other

Governmental Body or by any arbitrator.

Organizational Documents means, with respect to any entity, (a) in the case of a

corporation, the articles or certificate of incorporation (or the equivalent of such items under state

law) and the bylaws of such corporation, (b) in the case of a limited liability company, the

certificate or articles of existence or formation and the operating agreement of such limited liability

company, (c) in the case of a limited partnership, the certificate of formation and the limited

partnership agreement of such limited partnership and the Organizational Documents of the

general partner of such limited partnership and (d) any documents equivalent to the foregoing

under the law of the state where such entity was organized or formed.

Outstanding means, as of any date of determination, all Notes that have been

authenticated and delivered under the Indenture, except:

(a)Notes that have been cancelled by the Note Registrar or delivered to the Note

Registrar for cancellation;

(b)Notes or portions thereof the payment for which money in the necessary

amount has been deposited with the Indenture Trustee or any Paying Agent in trust for the

Holders of such Notes (provided, that if such Notes are to be redeemed, notice of such

redemption has been duly given or waived pursuant to the Indenture or provision for such

notice or waiver has been made which is satisfactory to the Indenture Trustee); and

(c)Notes in exchange for or in lieu of which other Notes have been authenticated

and delivered pursuant to the Indenture, unless proof satisfactory to the Indenture Trustee

is presented that any such Notes are held by a protected purchaser;

provided, that in determining whether the Controlling Class or the Majority Noteholders have

given any request, demand, authorization, direction, notice, consent or waiver hereunder or under

any Basic Document, Notes owned by any Affiliate of a Maverick Party shall be disregarded and

deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be

protected in relying upon any such request, demand, authorization, direction, notice, consent or

waiver, only Notes that a Responsible Officer of the Indenture Trustee has actual knowledge are

so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be

regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the

pledgees right so to act with respect to such Notes and that the pledgee is not an Affiliate of a

Maverick Party.

App. A-27

Outstanding Amount means, as of any date of determination, the aggregate principal

amount of all Notes then Outstanding.

Outstanding Principal Balance means, as of any date of determination, with respect to

any Class and/or Series of Notes, the aggregate unpaid principal balance of all Outstanding Notes

of such Class and/or Series.

Over Hedged Payments means the amount, if any, required to be paid by the Issuer

pursuant to the termination, disposition, novation, restructuring or other modification in whole or

in part, of any Hedge Agreement in order to maintain compliance with the Over Hedged

Requirement.

Over Hedged Requirement has the meaning specified in Section 4.27 of the Indenture.

Ownership Interest means, with respect to any Note, any ownership or security interest

in such Note of the Holder thereof and any other interest therein, whether direct or indirect, legal

or beneficial, as owner or as pledgee.

P&A Reserve Account means the account designated as such, established and

maintained pursuant to Section 8.02(a)(v) of the Indenture.

P&A Expense Amount means, for any fiscal year, the actual net aggregate amount of

plugging and abandonment expenses attributable to the Operated Wellbores and the Non-Operated

Wellbores (calculated net to the Issuers right, title and interest in and to the applicable Operated

Wellbores and the Non-Operated Wellbores).

P&A Reserve Account means an account established on or before the Closing Date and

maintained by the Securities Intermediary in the name of the Issuer, in trust for the benefit of the

Noteholders and each Hedge Counterparty.

P&A Reserve Amount means (i) at any time for which the most recent determination of

the P&A Expense Amount for the prior calendar year resulted in a P&A Reserve Trigger, two

times the amount by which the P&A Expense Amount exceeded the P&A Reserve Trigger for the

prior calendar year and (ii) any other time, $0.

P&A Reserve Trigger means the occurrence of, as of the first Payment Date following

the determination of the P&A Expense Amount for the prior fiscal year, the P&A Expense Amount

for such prior fiscal year exceeding the amounts set forth on Exhibit D

Parent means Maverick Natural Resources II, LLC, a Delaware limited liability

company, or its successors.

Paying Agent means the Indenture Trustee or any other Person that meets the eligibility

standards for the Indenture Trustee specified in Section 6.11 of the Indenture, and is authorized by

the Issuer to make payments to and distributions from the Collection Account, including payments

of principal of or interest on the Notes on behalf of the Issuer.

Payment Date means the 15th day of each calendar month beginning in January 2024 or,

if such day is not a Business Day, the immediately following Business Day.

App. A-28

Payment Date Report means a certificate of the Manager delivered pursuant to

Section 8.06(a) of the Indenture.

Payment Determination Date means, with respect to any Payment Date, two (2) Business

Days immediately preceding such Payment Date.

Permitted Change of Control has the meaning specified in the Management Services

Agreement.

Permitted Disposition means any sale, transfer or other disposition of Collateral

satisfying the conditions set forth in Section 8.04 of the Indenture

Permitted Indebtedness has the meaning specified in Section 4.21 of the Indenture.

Permitted Investments means:

(i)direct obligations of the United States of America or any agency thereof, or shares of

money market funds that invest solely in such obligations,

(ii)obligations fully guaranteed by the United States of America and certificates of deposit

issued by, or bankers acceptances of, or time deposits, demand deposits or overnight deposits

with, any bank, trust company or national banking association incorporated or doing business

under the laws of the United States of America or one of the states thereof having combined capital

and surplus and retained earnings of at least $300,000,000,

(iii)commercial paper of companies, banks, trust companies or national banking

associations incorporated or doing business under the laws of the United States of America or one

of the states thereof and in each case having a rating assigned to such commercial paper by S&P

or Moodys (or, if neither such organization shall rate such commercial paper at any time, by any

nationally recognized rating organization in the United States of America) equal to the highest

rating assigned by such organizations,

(iv)money market funds which (a) invest primarily in obligations of the United States of

America or any agency thereof, corporate bonds, certificates of deposit, commercial paper rated

AAAmmf or better by Fitch and P-1 or better by Moodys, repurchase agreements, time

deposits, bankers acceptances, municipal bonds and floating rate and variable rate securities and

(b) have a rating assigned to such fund by Moodys, or Fitch equal to AAAmmf or AAA/

V-1+, respectively, or better, and

(v)such other investments as the Majority Noteholders may approve from time to time.

In no event shall any investment be eligible as a Permitted Investment unless the final maturity

or date of return of such investment is thirty (30) days or less from the date of purchase thereof.

Permitted Liens has the meaning specified for the term Permitted Encumbrances under

the Asset Purchase Agreement and liens securing indebtedness permitted pursuant to Section

4.21(d) of the Indenture.

App. A-29

Person means any individual, corporation, limited liability company, estate, partnership,

joint venture, association, joint stock company, trust (including any beneficiary thereof),

unincorporated organization or government or any agency or political subdivision thereof.

Physical Property means instruments within the meaning of Section 9-102(a)(47) of the

UCC and certificated securities within the meaning of Section 8-102 of the UCC.

Placement Agent(s) means, with respect to any Series of Notes, as specified in the related

Series Supplement.

Plan means (i) a Benefit Plan Investor (ii) any other plan or (iii) any entity deemed to

hold plan assets of the foregoing.

Precautionary Mortgage means each Mortgage, line-of-credit Mortgage, assignment,

security agreement, fixture filing and financing statement, from the applicable Seller, as

mortgagor, to the Issuer, as mortgagee.

Principal Distribution Amount means, with respect to any Class and Series of Notes, as

specified in the related Series Supplement.

Priority of Payments has the meaning specified in Section 8.06(b) of the Indenture.

Proceeding means any suit in equity, action at law or other judicial or administrative

proceeding.

Production Month means, with respect to each Payment Date, the period from and

including the first day of the calendar month third preceding the calendar month in which such

Payment Date occurs (or with respect to the initial Payment Date, from but excluding the Effective

Date), to and including the last day of the calendar month third preceding the calendar month in

which such Payment Date occurs.

Production Proceeds has the meaning set forth in the Operating Agreement.

Production Tracking Rate means, as of any Quarterly Determination Date, beginning

with the Quarterly Determination Date in June 2024, an amount equal to the quotient of (a) the

aggregate Hydrocarbon production volume with respect to the Oil and Gas Portfolio (calculated

on a BOE basis) reported during the six (6) calendar months immediately preceding such Quarterly

Determination Date divided by (b) the aggregate Hydrocarbon production volume with respect to

the Oil and Gas Portfolio (calculated on a BOE basis) projected in the most recent Reserve Report

with respect to such six (6) immediately preceding calendar months; provided, that the calculation

of the Production Tracking Rate shall exclude any Additional Assets until the first Quarterly

Determination Date that is at least six (6) months after the date of acquisition of such Additional

Assets by the Issuer.

Pro Forma Aggregate DSCR means the projected Aggregate DSCR calculation as of the

Payment Determination Date occurring in the Payment Determination Date occurring at least six

(6) calendar months following the date of the issuance of the relevant Additional Notes or

Permitted Disposition of Collateral. The Pro Forma Aggregate DSCR shall be based on six (6)

calendar months of projected Securitized Net Cash Flow and debt service on the Notes after giving

App. A-30

effect to the Additional Assets and Additional Notes or Permitted Disposition, as applicable, with

such projected Securitized Net Cash Flow calculated (a) by reference to the net projected cash

flows from the Oil and Gas Portfolio categorized as proved, developed and producing based upon

the Reserve Report most recently delivered, (b) in a manner substantially similar to the calculation

of PV-10 as though such Payment Determination Date was a Quarterly Determination Date, (c) by

excluding any Assets that have been disposed of prior to such determination date, and (d) by

excluding any Additional Assets for which a reserve report as required by the Asset Purchase

Agreement covering such Additional Assets as of a date no more than six (6) months prior to the

determination date is not available.

Pro Forma Senior DSCR means the projected Senior DSCR calculation as of the

Payment Determination Date occurring in the Payment Determination Date occurring at least six

(6) calendar months following the date of the issuance of the relevant Additional Notes or

Permitted Disposition of Collateral. The Pro Forma Senior DSCR shall be based on six (6) calendar

months of projected Securitized Net Cash Flow and debt service on the Notes after giving effect

to the Additional Assets and Additional Notes or Permitted Disposition of Collateral, with such

projected Securitized Net Cash Flow calculated (a) by reference to the net projected cash flows

from the Oil and Gas Portfolio categorized as proved, developed and producing based upon the

Reserve Report most recently delivered, (b) in a manner substantially similar to the calculation of

PV-10 as though such Payment Determination Date was a Quarterly Determination Date, (c) by

excluding any Assets that have been disposed of prior to such determination date, and (d) by

excluding any Additional Assets for which a reserve report as required by the Asset Purchase

Agreement covering such Additional Assets as of a date no more than six (6) months prior to the

determination date is not available.

PV-10 means, as of any date of determination, the value based on the most recent

Reserve Report delivered pursuant to Section 8.05 of the Indenture consisting of the discounted

present value (using a 10.0% discount rate) of the sum of (i) the net projected cash flows from the

Oil and Gas Portfolio categorized as proved, developed and producing, calculated as of such date

of determination, as (x) the sum of revenues based on (1) projected Hydrocarbon production at

current WTI, Henry Hub or the applicable strip prices for natural gas liquids (as reported from

time to time by CME Group/NYMEX) and (2) all other projected revenue line items recognized

(or that will be recognized) on the financial statements of the Restricted Parties, minus

(y) projected severance taxes, ad valorem taxes, operating expenses, workover expenses and other

deductions, in each case, calculated on a monthly basis (or less frequently if the most recently

delivered Reserve Report does not break down by month for such time period), and projected

plugging and abandonment expenses (net to the Oil & Gas Portfolio) plus (ii) the positive or

negative aggregate Mark-to-Market determined as of such date of determination of all Hedging

Transactions; provided, that on each Semi-Annual Determination Date, the PV-10 will be re-

calculated using the most recently delivered Reserve Report pursuant to the Indenture, adjusting

for current strip prices and the current positive or negative aggregate Mark-to-Market determined

as of such date of determination of all Commodity Hedges and excluding any production volumes

and associated revenues and expenses that were projected for Collection Periods preceding such

Semi-Annual Determination Date.

App. A-31

Qualified Institutional Buyer means a qualified institutional buyer within the meaning

of such term as set forth in Rule 144A(a)(1) under the Securities Act.

Qualifying Debt Opinion means an opinion, based on customary representations,

covenants and undertakings by the Issuer and its Affiliates, from nationally-recognized tax counsel

to the effect that the Notes, or a Series or Class of Notes, will be properly characterized as debt for

U.S. federal income tax purposes, subject to customary assumptions and qualifications.

Quarterly Determination Date means (i) initially, the Payment Determination Date in the

month of June 2024 and (ii) thereafter, the Payment Determination Dates in the months of March,

June, September and December of each calendar year.

Rapid Amortization Event means the occurrence and continuation of any of (i) an Event

of Default under the Indenture or (ii) Manager Termination Event under the Management Services

Agreement.

Rating Agency means, with respect to any action or event in regards to a Series of Notes,

the rating agency or agencies specified as such in the Series Supplement for such Series.

Rating Agency Condition means, with respect to any transaction or matter in regards to

Notes of any Class and Series, a condition that is satisfied:

(i)if Rating Agency Condition (or an analogous term) is defined in the Series

Supplement for such Series, when such condition as defined therein has been satisfied; and

(ii)if Rating Agency Condition (or an analogous term) is not defined in the

Series Supplement for such Series, when each Rating Agency then rating such Notes shall

have received ten (10) Business Days (or such shorter period as shall be acceptable to such

Rating Agency) prior written notice of such transaction or matter, and shall not have

notified the Issuer that such transaction or matter will result in a downgrade or withdrawal

of the then-current rating of such Rating Agency of such Notes.

Rating Agency Contact means, with respect to the Notes issued on the Initial Closing

Date, globalcrosssectorsf@fitchratings.com, and with respect to any other Rating Agency and

Series of Notes, the contact details specified for such Rating Agency in the related Series

Supplement.

Record Date means, with respect to a Payment Date or Redemption Date, the last day of

the immediately preceding calendar month.

Redemption Date has the meaning specified in Section 10.01 of the Indenture.

Regulation S means Regulation S promulgated under the Securities Act and any

successor provision thereto.

Regulation S Global Note means, with respect to any Series and Class of Notes, a single

global Note, in definitive, fully registered form without interest coupons, representing such Notes

offered and sold outside the United States in reliance on Regulation S, which Note bears a

Regulation S Legend.

App. A-32

Regulation S Legend means, with respect to any Series and Class of Notes, a legend

generally to the effect that such Notes may not be offered, sold, pledged or otherwise transferred

in the United States or to a U.S. Person prior to the date that is 40 days following the later of the

commencement of the initial offering of such Notes and the Closing Date for such Notes, except

pursuant to an exemption from the registration requirements of the Securities Act.

Related Fund means, with respect to any Noteholder, any fund or entity that (a) invests

in securities or bank loans and (b) is advised or managed by such Noteholder, the same investment

advisor as such Noteholder or by an affiliate of such Noteholder or such investment advisor.

Release Date means, with respect to any Series and Class of Notes, the date that is 40

days following the later of (i) the Closing Date for such Notes and (ii) the commencement of the

initial offering of such Notes in reliance on Regulation S.

Release Price means, with respect to any disposition, an amount equal to (a) if the

Special Priority of Payments is not in effect, the product of (i) a fraction, the numerator of which

is the aggregate Outstanding Principal Balance of the Notes, and the denominator of which is the

PV-10 of the Collateral (as reflected in the then-current Reserve Report), (ii) the PV-10

attributable to the Collateral disposed of (as reflected in the then-current Reserve Report), and

(iii) the applicable Release Price Multiplier or (b) if the Special Priority of Payments is in effect,

100% of the net proceeds of such disposition.

Release Price Multiplier means:

(a)with respect to the first 5% of the PV-10 attributable to the Collateral disposed of in

the aggregate in Permitted Dispositions, including such Permitted Disposition, 1.10;

(b)with respect to the subsequent 5.01-10% of the PV-10 attributable to the Collateral

disposed of in the aggregate in Permitted Dispositions, including such Permitted Disposition, 1.15;

and

(c)with respect to the subsequent 10.01-15% of the PV-10 attributable to the Collateral

disposed of in the aggregate in Permitted Dispositions, including such Permitted Disposition, 1.25.

Remittance Date has the meaning set forth in the Operating Agreement.

Required Hedge Holdback Amounts has the meaning specified in Section 8.06 of the

Indenture.

Reserve Report means (i) initially, the APA Reserve Report and (ii) upon delivery of the

updated Reserve Report required with respect to the Assets pursuant to Section 8.05 of the

Indenture, a Reserve Report in form and substance substantially similar to the APA Reserve Report

(as adjusted for new information), setting forth as of the date of such updated report the oil and

gas reserves of the Restricted Parties, together with a projection of the rate of production and future

net income, Taxes, Operating Expenses and capital expenditures with respect to the Assets as of

such date, which report shall be based on good faith and reasonable economic assumptions

provided by the Manager; contain customary assumptions, qualifications and exclusions, and to

App. A-33

the extent required to be audited by the Indenture, audited by the petroleum engineer that audited

the Reserve Report delivered in connection with the execution of the Indenture or another reputable

third party independent petroleum engineer reasonably acceptable to the Majority Noteholders.

Responsible Officer means, (x) with respect to the Indenture Trustee, any officer within

the Corporate Trust Office of the Indenture Trustee, including any vice president, assistant vice

president, assistant secretary, senior associate, associate, trust officer or any other officer,

employee or other person of the Indenture Trustee customarily performing functions similar to

those performed by any of the above-designated officers and, with respect to each, having direct

responsibility for the administration of the Indenture and, with respect to a particular matter, any

other officer to whom such matter is referred because of such other officers knowledge of and

familiarity with a particular subject, (y) with respect to the Restricted Parties, any officer, including

any president, vice president, secretary or any other officer performing functions similar to those

performed by such officers, and (z) with respect to Holdings or any Seller, any officer, including

any president, vice president, secretary or any other officer performing functions similar to those

performed by such officers.

Restricted Parties and Restricted Party have the meanings specified in the preamble to

the Indenture.

Retained Liabilities has the meaning specified in the Asset Purchase Agreement.

Rule 144A means Rule 144A promulgated under the Securities Act and any successor

provision thereto.

Rule 144A Global Note means, with respect to any Series and Class of Notes, a single

global Note, in definitive, fully registered form without interest coupons, representing such Notes,

which Note does not bear a Regulation S Legend.

Sanctioned Jurisdiction means any country, region, or territory that is, or whose

government is, the subject or target of any subject to comprehensive embargo under Economic

Sanctions Laws (including, as of the date hereof, Cuba, Iran, North Korea, Syria, the Crimea region

of Ukraine, the so-called Donetsk Peoples Republic and the so-called Luhansk Peoples

Republic).

Section 385 Related Party means the Issuer (or any entity treated as the Issuer for U.S.

federal income tax purposes), a member of an expanded group that includes the Issuer (or any

entity treated as the Issuer for U.S. federal income tax purposes) or with respect to which the Issuer

is a controlled partnership or that would include the Issuer if the Issuer were a corporation or a

controlled partnership with respect to such an expanded group, in each case within the meaning

of Treasury Regulations under Section 385 of the Code.

Secured Obligations means, without duplication, any and all amounts owing or to be

owing by the Issuer: (a) to any Noteholder under any of the Notes or any of the other Basic

Documents, including, without limitation, (i) all payment of principal of, and interest on each Note

and the Indenture (including, without limitation, interest accruing after the filing of any bankruptcy

or similar petition or the commencement of any insolvency, receivership or similar proceeding,

App. A-34

regardless of whether such interest is allowed in such proceeding or after the filing of such

petition), (ii) all other amounts payable by the Issuer under the Notes and the other Basic

Documents and (iii) the punctual and faithful performance, keeping, observance, and fulfilment

by the Issuer of all of the agreements, conditions, covenants, and obligations of the Issuer contained

in the Notes and the other Basic Documents; (b) to any Hedge Counterparties under any applicable

Hedge Agreements (including any termination payments and any amounts owed or owing

thereunder); (c) to the Secured Parties under the Basic Documents; and (d) all renewals, extensions

and/or rearrangements of any of the above, in each case, equally and ratably without prejudice,

priority or distinction, and to secure compliance with the provisions of the Indenture, all as

provided in the Indenture.

Secured Parties shall mean, collectively, the Indenture Trustee, the Back-up Manager,

the Noteholders, and the Hedge Counterparties, and Secured Party means any of them

individually.

Securities Act means the U.S. Securities Act of 1933, as amended.

Securities Intermediary has the meaning specified in Section 8.02(c)(i) of the Indenture.

Securitized Net Cash Flow means, with respect to any Collection Period, (a) the sum of

(i) the Available Collections for such Collection Period and the aggregate amount of Equity

Contribution Cures, if any, deposited into the Collection Account and available for distribution on

the related Payment Date and (ii) the net proceeds from the Hedge Agreements received by the

Issuer with respect to the related Payment Date, in excess of amounts payable pursuant to

clause (iii) of the Priority of Payments, minus (b) the amounts payable pursuant to clauses (i) and

(ii) of the Priority of Payments with respect to the related Payment Date.

Sellers means, collectively, the Initial Sellers and each Additional Seller.

Semi-Annual Determination Date means the Payment Determination Date in each June

and December, commencing in December 2024, or if any such day is not a Business Day, the next

succeeding Business Day.

Senior Diversion Event means an event that will be continuing as of any Payment Date

for so long as:

(i)the Senior DSCR as of such Payment Date is less than 1.25x,

(ii)the Production Tracking Rate as of such Payment Date is less than 80%,

(iii)the Senior LTV is greater than (x) prior to twenty-four (24) months since the issuance

of the most recent Series of Class A Notes, 65%, (y) between twenty-four (24) and thirty-six (36)

months since the issuance of the most recent series of Class A Notes, 55%, or (z) at any other time

when clauses (x) and (y) do not apply, 50%, or

(iv)to the extent that Mewbourne is operator with respect to more than 20% of the PV-10

of the Collateral, (x) the commencement and continuation by Mewbourne of a voluntary case under

any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in

App. A-35

effect, or the consent by Mewbourne to the entry of an order for relief in an involuntary case under

any such law, or the making by Mewbourne of any general assignment for the benefit of creditors,

or the continuing failure by Mewbourne generally to pay its debts as such debts become due, or

the continued taking of any action by Mewbourne in furtherance of any of the foregoing; and (y)

Mewbourne is in continuing, material and uncured default of its payment obligations to the

applicable Maverick Party:

provided, that a Senior Diversion Event shall be deemed to be cured as of any Quarterly

Determination Date on which none of the foregoing events are continuing.

Senior DSCR means, as of any Quarterly Determination Date, beginning with the

Quarterly Determination Date occurring in June 2024, an amount equal to the quotient of (a) the

Securitized Net Cash Flow for each of the six (6) immediately preceding Collection Periods,

divided by (b) the sum of (i) without duplication, the aggregate Note Interest on the Class A Notes

of each Series for each of such six (6) immediately preceding Payment Dates and any unpaid Note

Interest for such Class A Notes as of the Payment Date six (6) months prior to such Quarterly

Determination Date plus (ii) the aggregate Principal Distribution Amount for such Class A Notes

for each of such six (6) immediately preceding Payment Dates plus (iii) any unpaid Principal

Distribution Amounts for such Class A Notes as of the Payment Date six (6) months prior to such

Quarterly Determination Date. The calculation of the Senior DSCR shall include Additional Assets

and Additional Notes beginning with the first Quarterly Determination Date after the date of the

acquisition of such Additional Assets or issuance of such Additional Notes. During the period

which the Additional Assets have been owned by the Issuer for fewer than six (6) Collection

Periods or the Additional Notes have been outstanding for fewer than six (6) Collection Periods,

such calculation will include the Additional Assets and Additional Notes from the related Effective

Time and the Closing Date, respectively, as applicable.

Senior Financial Officer means, with respect to the Issuer or Holdings, the manager, the

chief financial officer, the principal accounting officer, the treasurer or the comptroller (or any

other officer holding a title or role similar to any of the foregoing) of the Issuer or Holdings, as

applicable.

Senior IO DSCR means, as of any Quarterly Determination Date, beginning with the

Quarterly Determination Date occurring in June 2024, an amount equal to the quotient of (a) the

Securitized Net Cash Flow for each of the six (6) immediately preceding Collection Periods,

divided by (b) the aggregate Note Interest with respect to the Class A Notes of each Series for each

of the six (6) immediately preceding Collection Periods. Any unpaid Note Interest as of any prior

Payment Dates shall not be included when calculating the Senior IO DSCR. The calculation of the

Senior IO DSCR shall include Additional Assets and Additional Notes beginning with the first

Quarterly Determination Date after the Closing Date of the acquisition of such Additional Assets

or issuance of such Additional Notes. During the period which the Additional Assets have been

owned by the Issuer for fewer than six (6) Collection Periods or the Additional Notes have been

outstanding for fewer than six (6) Collection Periods, such calculation will include the Additional

Assets and Additional Notes from the related Effective Time and the Closing Date, respectively,

as applicable.

App. A-36

Senior LTV means, as of any Semi-Annual Determination Date, beginning with the

Semi-Annual Determination Date in 2024, an amount equal to the quotient of (a) the excess of (x)

the Outstanding Principal Balance of the Class A Notes (net of any then-existing receivables, to

the extent they have reduced the PV-10) as of such date of determination over (y) the amount then

on deposit in the Collection Account divided by (b) the PV-10 as of such date of determination

minus any Excess Concentration Amounts. The Senior LTV shall be determined on an semi-

annual basis; provided that if the PV-10 shall have been re-calculated as a result of an updated

Reserve Report being obtained prior to any otherwise scheduled annually updated Reserve Report

(as described in the definition of PV-10), then the Senior LTV shall be re-calculated giving effect

to such re-calculation of the PV-10 and on the basis of the then-current amounts specified in the

preceding clause (a).

Series means a series of Notes issued pursuant to the Indenture and the related Series

Supplement.

Series 2023-1 Note Purchase Agreement means the Series 2023-1 Note Purchase

Agreement, dated as of the Initial Closing Date, among the Maverick Parties and the Series

2023-1 Purchasers, as the same may be amended, supplemented or otherwise modified from time

to time in accordance with the terms thereof.

Series 2023-1 Purchaser or Series 2023-1 Purchasers means the purchasers listed on

Schedule B to the Series 2023-1 Note Purchase Agreement.

Series Allocation Percentage means for each Series, the percentage calculated as of the

most recent Closing Date equal to the quotient of (a) the Outstanding Principal Balance of such

Series and (b) the aggregate Outstanding Principal Balance of all Series. Once a Series has been

repaid in full, the Series Allocation Percentage for each Outstanding Series shall be increased on

a pro rata basis such that the sum of the Series Allocation Percentages for each Outstanding Series

shall equal 100%. The Series Allocation Percentage for all Series shall be recalculated upon the

issuance of Additional Notes.

Series Supplement means a supplement to the Indenture pursuant to which a Series of

Notes is issued.

Special Priority of Payments has the meaning specified in Section 8.06(d) of the

Indenture.

Standard & Poors or S&P means S&P Global Ratings, a division of S&P Global Inc.

State means any one of the 50 states of the United States of America or the District of

Columbia.

Subsidiary means, as to any Person, any other Person in which such first Person or one

or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient

equity or voting interests to enable it or them (as a group) ordinarily, in the absence of

contingencies, to elect a majority of the directors (or Persons performing similar functions) of such

second Person, and any partnership or joint venture if more than a 50% interest in the profits or

App. A-37

capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person

and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily

take major business actions without the prior approval of such Person or one or more of its

Subsidiaries). Unless the context otherwise clearly requires, any reference to a Subsidiary is a

reference to a Subsidiary of the Issuer.

Successor Manager Transition Expenses means all costs and expenses incurred by a

successor Manager or Interim Successor Manager in connection with the termination, removal,

resignation and/or replacement of the Manager under the Management Services Agreement.

SVO means the Securities Valuation Office of the NAIC.

Synthetic Lease means, at any time, any lease (including leases that may be terminated

by the lessee at any time) of any property (a) that is accounted for as an operating lease under

GAAP and (b) in respect of which the lessee retains or obtains ownership of the property so leased

for U.S. federal income tax purposes, other than any such lease under which such Person is the

lessor.

Tangible Net Worth has the meaning specified in the Management Services Agreement.

Tangible Net Worth Test means, as of any Quarterly Determination Date, the Tangible

Net Worth of Parent is at least $50 million.

Tax or Taxes means all present or future taxes, levies, imposts, duties, deductions,

withholdings (including backup withholding), assessments, fees or other charges imposed by any

taxing authority, including any interest, additions to tax or penalties applicable thereto.

Tax Restricted Notes means Notes for which the Issuer does not receive a Qualifying

Debt Opinion (a) at the time the Series or Class of such Notes is issued, or (b) to the extent the

Notes are held by a Section 385 Related Party at any time, when such Notes are transferred by

such Section 385 Related Party to another person (it being understood that such Series or Class

that does not receive a Qualifying Debt Opinion at the time such Series or Class of Notes is issued

will be designated as Tax Restricted Notes in the Series Supplement for such Series or Class).

Threatened means, with respect to any claim, Proceeding, dispute, action or other matter,

a demand or statement has been made (orally or in writing) to the Issuer, Holdings, or any of the

Issuers or Holdings officers, directors or employees, that would lead a prudent Person to

conclude that such a claim, Proceeding, dispute, action or other matter is likely to be asserted,

commenced, taken or otherwise pursued in the future.

Title Failure Amount has the meaning specified in the Asset Purchase Agreement.

Trade Control Laws means those Laws (a) regulating the export, reexport, transfer,

disclosure or provision of commodities, software, technology, or imposing trade control

restrictions on countries, individuals or entities, including but not limited to the Export Control

Reform Act of 2018 (Public Law Public Law 115-232--Title XVII, Subtitle B), the Export

App. A-38

Administration Regulations (15 C.F.R. Parts 730-774), the Arms Export Control Act (Public Law

90-629), and the International Traffic in Arms Regulations (22 C.F.R. Parts 120-130), authorizing

or related to Economic Sanctions Laws (including but not limited to the International Emergency

Economic Powers Act (Public Law 95-223) and the Trading With the Enemy Act (50 U.S.C. App.

§§ 1-44)), (b) any other export and import control and customs Laws administered by a U.S. or

non-U.S. Governmental Authority, (c) Anti-Corruption Laws, and (d) Anti-Money Laundering

Laws.

Transfer Taxes has the meaning specified in the Asset Purchase Agreement.

Treasury Regulations means regulations, including proposed or temporary regulations,

promulgated under the Code. References herein to specific provisions of proposed or temporary

regulations shall include analogous provisions of final Treasury Regulations or other successor

Treasury Regulations.

UCC means, unless the context otherwise requires, the Uniform Commercial Code, as in

effect in the relevant jurisdiction, as amended from time to time.

Uncertificated Notes has the meaning specified in Section 2.01(a)(i) of the Indenture.

Unpermitted Assignee means, other than any Affiliate or Related Fund of a Noteholder

purchasing Notes at original issuance or during the existence of an Event of Default, any Person

for which owning operated, non-operated and/or mineral interests in oil and gas reserves is its

primary business; provided, for the avoidance of doubt, that passive investment by a Person in

companies engaged in such operations will not cause such Person to be deemed to be an

Unpermitted Assignee.

USA PATRIOT Act means United States Public Law 107-56, Uniting and Strengthening

America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA

PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations

promulgated thereunder from time to time in effect.

U.S. Person means a United States person as defined under Section 7701(a)(30) of the

Code.

Verification Agent the Back-up Manager or, in the event the Back-up Manager is

unavailable or declines to accept such engagement in its sole discretion, an accounting firm of

nationally recognized standing.

Voting Amount means, with respect to any Class of any Series, the amount specified in

the related Series Supplement for Notes of such Class.

Warm Back-Up Management Duties has the meaning specified in the Back-up

Management Agreement.

Warm Trigger Event means the occurrence of a Senior Diversion Event for two

consecutive Quarterly Determination Dates or a Rapid Amortization Event, and a Warm Trigger

Event shall be deemed to be no longer continuing if no Senior Diversion Event has been in effect

App. A-39

for two consecutive Quarterly Determination Dates and no Rapid Amortization Event is

continuing.

Well Facilities has the meaning specified (i) with respect to the Initial Assets, in the

definition of Initial Assets under the Asset Purchase Agreement and (ii) with respect to any

Additional Assets, in the definition of Assets under the applicable Joinder Supplement.

Wells has the meaning specified (i) with respect to the Initial Assets, in the definition of

Initial Assets under the Asset Purchase Agreement and (ii) with respect to any Additional Assets,

in the definition of Assets under the applicable Joinder Supplement.

App.<br><br>A-40

PART II - RULES OF CONSTRUCTION

(a)Accounting Terms. As used in this Appendix or the Basic Documents,

accounting terms which are not defined, and accounting terms which are partly defined, herein or

therein shall have the respective meanings given to them under GAAP. To the extent that the

definitions of accounting terms in this Appendix or the Basic Documents are inconsistent with the

meanings of such terms under GAAP, the definitions contained in this Appendix or the Basic

Documents will control.

(b)Hereof, etc. The words hereof, herein and hereunder and words of

similar import when used in this Appendix or any Basic Document will refer to this Appendix or

such Basic Document as a whole and not to any particular provision of this Appendix or such Basic

Document; and Section, Schedule and Exhibit references contained in this Appendix or any Basic

Document are references to Sections, Schedules and Exhibits in or to this Appendix or such Basic

Document unless otherwise specified. The word or is not exclusive.

(c)Use of related. As used in this Appendix and the Basic Documents, with

respect to any Payment Date, the related Payment Determination Date, the related Collection

Period and the related Record Date will mean the Payment Determination Date, the Collection

Period and the Record Date, respectively, immediately preceding such Payment Date.

(d)Amendments. Any agreement or instrument defined or referred to in the Basic

Documents, or in any instrument or certificate delivered in connection therewith, shall mean such

agreement or instrument as from time to time amended, modified or supplemented, and includes

references to all attachments thereto and instruments incorporated therein.

(e)Number and Gender. Each defined term used in this Appendix or the Basic

Documents has a comparable meaning when used in its plural or singular form. Each gender-

specific term used in this Appendix or the Basic Documents has a comparable meaning whether

used in a masculine, feminine or gender-neutral form.

(f)Including. Whenever the term including (whether or not that term is followed

by the phrase but not limited to, without limitation or words of similar effect) is used in this

Appendix or the Basic Documents in connection with a listing of items within a particular

classification, that listing will be interpreted to be illustrative only and will not be interpreted as a

limitation on, or exclusive listing of, the items within that classification.

(g)UCC References. References to sections or provisions of Article 9 of the UCC

in any of the Basic Documents shall be deemed to be automatically updated to reflect the successor,

replacement or functionally equivalent sections or provisions of Revised Article 9, Secured

Transactions (2000) at any time in any jurisdiction which has made such revised article effective.

(h)Designations. Whenever the phrase in direct order of alphabetical

designation, highest alphabetical designation or a similar phrase is used herein, it shall be

construed to mean beginning with the letter A and ending with the letter Z; whenever the

App.<br><br>A-41

phrase direct order of numerical designation or a similar phrase is used herein, it shall be

construed to mean beginning with the number 1 and ending with the highest applicable number.

Exhibit4.12_Base Indenture (2025 Form 10-K) Exhibit 4.12

EXECUTION VERSION

____________________________________________________________________

BASE INDENTURE

by and among

DP KEENELAND MILE LLC,

as Issuer,

DP PONIES LLC,

DP SECRETARIAT LLC,

DP AMERICAN PHAROAH LLC,

DP SEABISCUIT LLC

and

DP SOVEREIGNTY LLC,

as Guarantors,

and

UMB BANK, N.A.,

as Indenture Trustee and Securities Intermediary

Dated as of November 24, 2025

____________________________________________________________________________

i

TABLE OF CONTENTS

Page

Article I<br><br>DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . .	2
Section 1.1Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Article II<br><br>THE NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Section 2.1Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Section 2.2[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Section 2.3Form of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Section 2.4Transfer Restrictions on Notes . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Section 2.5Registration; Registration of Transfer and Exchange . . . . . . . . .	12
Section 2.6Mutilated, Destroyed, Lost or Stolen Notes . . . . . . . . . . . . . . . .	14
Section 2.7Persons Deemed Owner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Section 2.8Payment of Principal and Interest; Defaulted Interest . . . . . . . . .	15
Section 2.9Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Section 2.10Release of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Section 2.11Definitive Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Section 2.12Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Section 2.13CUSIP and Private Placement Numbers . . . . . . . . . . . . . . . . . . .	18
Section 2.14Notes Issuable in Series . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Section 2.15Additional Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Section 2.16Certification by Note Owners. . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Article III<br><br>REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Section 3.1Organization and Good Standing . . . . . . . . . . . . . . . . . . . . . . . .	21
Section 3.2Authority; No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Section 3.3Legal Proceedings; Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Section 3.4Compliance with Laws and Governmental Authorizations . . . . .	22
Section 3.5Title to Property; Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Section 3.6Vesting of Title to the Assets . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Section 3.7Compliance with Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Section 3.8Material Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Section 3.9Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	23
Section 3.10Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . .	23
Section 3.11Existing Indebtedness; Future Liens . . . . . . . . . . . . . . . . . . . . . .	23
Section 3.12Foreign Assets Control Regulations, Etc. . . . . . . . . . . . . . . . . . .	23
Section 3.13Status under Certain Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Section 3.14Single Purpose Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
ii
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Section 3.15Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
---	---
Section 3.16Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Article IV<br><br>COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Section 4.1Payment of Principal and Interest . . . . . . . . . . . . . . . . . . . . . . . .	25
Section 4.2Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . .	25
Section 4.3Money for Payments to Be Held on behalf of the Noteholders<br><br>and Hedge Counterparties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Section 4.4Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25
Section 4.5Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Section 4.6No Change in Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Section 4.7Payment of Taxes and Claims . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Section 4.8Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Section 4.9Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Section 4.10Performance of Material Agreements . . . . . . . . . . . . . . . . . . . . .	26
Section 4.11Maintenance of Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Section 4.12Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Section 4.13Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Section 4.14Separateness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Section 4.15Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	29
Section 4.16Merger, Consolidation, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.17Lines of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.18Economic Sanctions, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.19Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.20Sale of Assets, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.21Permitted Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
Section 4.22Amendment to Organizational Documents . . . . . . . . . . . . . . . . .	31
Section 4.23No Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
Section 4.24Permitted Investments; Subsidiaries . . . . . . . . . . . . . . . . . . . . . .	31
Section 4.25Employees; ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
Section 4.26Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	31
Section 4.27Replacement of Manager, Back-Up Manager and Operator . . . .	32
Section 4.28Hedge Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32
Section 4.29Amendments to Basic Documents . . . . . . . . . . . . . . . . . . . . . . . .	35
Article V<br><br>REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
Section 5.1Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
Section 5.2Acceleration of Maturity; Rescission and Annulment . . . . . . . .	38
Section 5.3Collection of Indebtedness and Suits for Enforcement by<br><br>Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	39
Section 5.4Remedies; Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
Section 5.5Optional Preservation of the Assets . . . . . . . . . . . . . . . . . . . . . . .	42
iii
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Section 5.6Limitation of Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	43
---	---
Section 5.7Unconditional Rights of Hedge Counterparties and Noteholders<br><br>to Receive Principal, Interest, and Payments of Other<br><br>Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	43
Section 5.8Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . .	44
Section 5.9Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . .	44
Section 5.10Delay or Omission Not a Waiver . . . . . . . . . . . . . . . . . . . . . . . .	44
Section 5.11Control by Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
Section 5.12Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
Section 5.13Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
Section 5.14Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . . . . . . .	45
Section 5.15Action on Notes or Hedge Agreements . . . . . . . . . . . . . . . . . . . .	45
Section 5.16Performance and Enforcement of Certain Obligations . . . . . . . .	45
Article VI<br><br>THE INDENTURE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	46
Section 6.1Duties of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	46
Section 6.2Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
Section 6.3Individual Rights of Indenture Trustee . . . . . . . . . . . . . . . . . . . .	51
Section 6.4Indenture Trustee’s Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . .	51
Section 6.5Notice of Material Manager Defaults . . . . . . . . . . . . . . . . . . . . .	51
Section 6.6Reports by Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . .	51
Section 6.7Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Section 6.8Replacement of Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . .	53
Section 6.9Successor Indenture Trustee by Merger . . . . . . . . . . . . . . . . . . .	54
Section 6.10Appointment of Co-Indenture Trustee or Separate Indenture<br><br>Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	54
Section 6.11Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	55
Section 6.12Representations and Warranties of the Indenture Trustee . . . . . .	55
Article VII<br><br>INFORMATION REGARDING THE ISSUER . . . . . . . . . . . . . . . . . . . . . . . . .	56
Section 7.1Financial and Business Information . . . . . . . . . . . . . . . . . . . . . .	56
Section 7.2Visitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
Article VIII<br><br>ACCOUNTS, DISBURSEMENTS AND RELEASES . . . . . . . . . . . . . . . . . . .	58
Section 8.1Deposit of Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	58
Section 8.2Establishment of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	59
Section 8.3Collection of Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	63
Section 8.4Asset Disposition Proceeds; Additional Assets . . . . . . . . . . . . . .	63
Section 8.5Asset Valuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	66
Section 8.6Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	67
Section 8.7Liquidity Reserve Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	73
iv
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Section 8.8Statements to Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	73
---	---
Section 8.9[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
Section 8.10[Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
Section 8.11Original Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
Article IX<br><br>SUPPLEMENTAL INDENTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
Section 9.1Supplemental Indentures with Consent of Noteholders and<br><br>Hedge Counterparties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
Section 9.2Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . .	78
Section 9.3Effect of Supplemental Indenture . . . . . . . . . . . . . . . . . . . . . . . .	78
Section 9.4Reference in Notes to Supplemental Indentures . . . . . . . . . . . . .	79
Article X<br><br>REDEMPTION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	79
Section 10.1Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	79
Section 10.2Form of Redemption Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . .	79
Section 10.3Notes Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . .	80
Article XI<br><br>SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	80
Section 11.1Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . .	80
Section 11.2Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
Section 11.3Repayment of Monies Held by Paying Agent . . . . . . . . . . . . . . .	82
Article XII<br><br>MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
Section 12.1Compliance Certificates and Opinions, etc. . . . . . . . . . . . . . . . .	82
Section 12.2Form of Documents Delivered to Indenture Trustee . . . . . . . . . .	82
Section 12.3Acts of Noteholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	83
Section 12.4Notices, etc., to Indenture Trustee and Issuer . . . . . . . . . . . . . . .	84
Section 12.5Notices to Noteholders and Hedge Counterparties; Waiver . . . .	85
Section 12.6Alternate Payment and Notice Provisions . . . . . . . . . . . . . . . . . .	85
Section 12.7Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . .	86
Section 12.8Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
Section 12.9Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
Section 12.10Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
Section 12.11Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
Section 12.12GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
Section 12.13Counterparts; Electronic Signature . . . . . . . . . . . . . . . . . . . . . . .	87
Section 12.14Recording of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
Section 12.15No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
Section 12.16Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
Section 12.17Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
v
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Section 12.18Rating Agency Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
---	---
Section 12.19Rule 17g-5 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	88
Section 12.20Extinguishment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . .	89

SCHEDULE A–Schedule of Assets

SCHEDULE 3.3–Schedule of Legal Proceedings and Orders

SCHEDULE 3.4(b)– Schedule of Compliance with Laws and Governmental

Authorizations

SCHEDULE 3.9–Schedule of Employee Benefit Plans

EXHIBIT A-1–Form of Rule 144A Global Note

EXHIBIT A-2–Form of Regulation S Global Note

EXHIBIT A-3–[Reserved]

EXHIBIT A-4–Form of Definitive Term Note

EXHIBIT B-1–Form of Transferor Certificate for Transfers of Beneficial Interests in

Regulation S Global Note for Beneficial Interests in Rule 144A Global

Note

EXHIBIT B-2–Form of Transferor Certificate for Transfers of Beneficial Interests in

Rule 144A Global Note for Beneficial Interests in Regulation S Global

Note

EXHIBIT B-3–Form of Transferee Certificate for Transfers of Definitive Notes to

Qualified Institutional Buyers

EXHIBIT B-4–Form of Transferee Certificate for Transfers of Definitive Notes to

Institutional Accredited Investors

EXHIBIT B-5–Form of Transferor Certificate for Transfers of Definitive Notes to

Qualified Institutional Buyers

EXHIBIT B-6–Form of Transferor Certificate for Transfers of Definitive Notes to

Institutional Accredited Investors

EXHIBIT C–Form of Statement to Noteholders

THIS INDENTURE dated as of November 24, 2025 (as it may be amended and

supplemented from time to time, this “Indenture”) is among DP Keeneland Mile LLC, a

Delaware limited liability company (the “Issuer”), DP Ponies LLC, a Pennsylvania limited

liability company (“DABS XI Subco”), DP Secretariat LLC, a Pennsylvania limited liability

company (“DP Secretariat”), DP American Pharoah LLC, a Pennsylvania limited liability

company (“DP American Pharoah”), DP Seabiscuit LLC, a Pennsylvania limited liability

company (“DP Seabiscuit”) and DP Sovereignty LLC, a Pennsylvania limited liability company

(“DP Sovereignty” and, together with DABS XI Subco, DP Secretariat, DP American Pharoah

and DP Seabiscuit, the “Initial Guarantors” and, the Initial Guarantors together with any other

subsidiary of the Issuer or the Initial Guarantors that becomes a party hereto after the date hereof

(an “Additional Guarantor”), the “Guarantors” and each a “Guarantor”), and UMB Bank, N.A., a

national banking association, as indenture trustee and not in its individual capacity (the

“Indenture Trustee”) and as Securities Intermediary (as defined herein).

WHEREAS, the parties hereto have duly authorized the execution and delivery of this

Indenture to provide for the issuance from time to time by the Issuer of one or more Series of

Notes, issuable as provided in this Indenture and the applicable Series Supplement;

WHEREAS, it is hereby agreed between the Issuer Parties and the Indenture Trustee, on

behalf of itself, the Noteholders and the Hedge Counterparties, that in the performance of any of

the agreements of the Issuer herein contained, any obligation the Issuer may thereby incur for the

payment of money shall be payable in such order of preference and priority as provided herein;

WHEREAS, each Series will be constituted by this Indenture and a Series Supplement;

and

WHEREAS, the Notes of any Series issued pursuant to this Indenture will be divided into

classes as provided in this Indenture and the applicable Series Supplement;

NOW, THEREFORE, in consideration of the premises and the agreements, provisions

and covenants herein contained, each party hereto agrees as follows for the benefit of the other

parties hereto and for the equal and ratable benefit of the Secured Parties:

GRANTING CLAUSE

The Issuer and the Guarantors (collectively, the “Issuer Parties” and each, an “Issuer

Party”) hereby Grant to the Indenture Trustee on the Initial Closing Date, and on, with respect to

any Additional Assets, each date in which an Additional Transfer Agreement identifying such

Additional Asset is entered into after the Initial Closing Date, as Indenture Trustee for the benefit

of the Secured Parties, all of the Issuer Parties’ right, title and interest, whether now or hereafter

acquired, and wherever located, in and to, as applicable (a) the Initial Assets, any Additional

Assets identified in any Additional Transfer Agreement entered into after the Initial Closing

Date, and in each case, all monies received thereon and in respect thereof after the applicable

Cutoff Date; (b) the Issuer Accounts and Hedge Collateral Accounts (but, as to the Hedge

Collateral Accounts, only for the benefit of the Secured Parties who are Hedge Counterparties)

and all funds on deposit in, and “financial assets” (as such term is defined in the UCC as from

2

time to time in effect), instruments, money, and other property credited to or on deposit in the

Issuer Accounts and Hedge Collateral Accounts, from time to time, including the Liquidity

Reserve Account Initial Deposit, and in all investments and proceeds thereof (including all

income thereon); (c) the Management Services Agreement; (d) the Hedge Agreements; (e) the

Joint Operating Agreement; (f) the Back-Up Management Agreement; (g) the Transfer

Agreement and any Additional Transfer Agreement; (h) the Pledge Agreement; (i) each other

Basic Document to which it is a party; (j) all accounts, chattel paper, commercial tort claims,

deposit accounts, documents, general intangibles, goods, instruments, investment property, letter-

of-credit rights, letters of credit, money, and oil, gas, and other minerals; (k) all proceeds of any

and all of the foregoing insofar as relating to the Assets and all present and future claims,

demands, causes of action and choses in action in respect of any or all of the foregoing insofar as

relating to the Assets and all payments on or under and all proceeds of every kind and nature

whatsoever in respect of any or all of the foregoing insofar as relating to the Assets, including all

proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property,

all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks,

deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every

kind and other forms of obligations and receivables, instruments, general intangibles and other

property which at any time constitute all or part of or are included in the proceeds of any of the

foregoing; (l) all limited liability company interests in the Issuer Parties, including, without

limitation: (i) all transferable interests, as such term is defined in the Pennsylvania Uniform

Limited Liability Company Act of 2016, and limited liability company interests as defined under

the Delaware Limited Liability Company Act; (ii) all governance rights, including, without

limitation, all rights to vote, consent to action, and otherwise participate in the management of

the business and affairs of each Issuer Party; and (iii) all informational rights, including, without

limitation, all rights to receive notices, company records, Tax records and all other information

related to each Issuer Party; and (m) all proceeds of any and all of the foregoing (collectively, the

“Collateral”).

The foregoing Grant is made in trust to secure the payment of principal of and interest on,

and any other amounts owing in respect of, the Notes and payments owed or owing to the Hedge

Counterparties under the applicable Hedge Agreements (including any termination payments and

any other amounts owed thereunder), equally and ratably without prejudice, priority or

distinction, and to secure compliance with the provisions of this Indenture, all as provided in this

Indenture.

The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the Notes and

each Hedge Counterparty, acknowledges such Grant, and accepts the trusts under this Indenture

in accordance with the provisions of this Indenture and agrees to perform its duties required in

this Indenture.

Article I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1Definitions.

3

Certain capitalized terms used in this Indenture shall have the respective meanings

assigned to them in Part I of Appendix A attached hereto. All references herein to “the

Indenture” or “this Indenture” are to this Indenture as it may be amended, restated, amended and

restated, supplemented or otherwise modified from time to time, the exhibits hereto and the

capitalized terms used herein which are defined in such Appendix A. All references herein to

Articles, Sections, subsections and exhibits are to Articles, Sections, subsections and exhibits

contained in or attached to this Indenture unless otherwise specified. All terms defined in this

Indenture shall have the defined meanings when used in any certificate, notice, Note or other

document made or delivered pursuant hereto unless otherwise defined therein. The rules of

construction set forth in Part II of such Appendix A shall be applicable to this Indenture.

Article II

THE NOTES

Section 2.1Notes.

(a)[Reserved].

(b)Term Notes.

(i)The Term Notes shall be substantially in the form attached

as Exhibit A-1 (or in the form attached to the related Series Supplement) and

Exhibit A-2 (or in the form attached to the related Series Supplement), as

applicable; provided, that any of the Term Notes may be issued with appropriate

insertions, omissions, substitutions and variations, and may have imprinted or

otherwise reproduced thereon such legend or legends, not inconsistent with the

provisions of this Indenture, as may be required to comply with any law or with

rules or regulations pursuant thereto, or with the rules of any securities market in

which the Term Notes may be admitted to trading. Unless otherwise specified in

the Series Supplement for a Series of Term Notes, the Term Notes shall be

issuable in book-entry form and in accordance with Section 2.3(a), Ownership

Interests in the Book-Entry Notes shall initially be held and transferred through

the book-entry facilities of the Depository; provided, that Term Notes purchased

by Institutional Accredited Investors that are not Qualified Institutional Buyers

will be delivered in fully registered, certificated form substantially in the form

attached as Exhibit A-4 (or in the form attached to the related Series Supplement)

(the “Definitive Term Notes”). The Term Notes shall be issued in minimum

denominations specified in the related Series Supplement.

(ii)The Definitive Term Notes shall be executed by manual

signature by an authorized officer of the Issuer. Definitive Term Notes bearing the

manual signatures of individuals who were at any time authorized officers of the

Issuer shall be entitled to all benefits under this Indenture, notwithstanding that

such individuals or any of them have ceased to hold such offices prior to the

authentication and delivery of such Definitive Term Notes or did not hold such

offices at the date of such Definitive Term Notes. The Indenture Trustee shall,

upon receipt of an Issuer Order, authenticate and deliver any Definitive Notes

executed by the Issuer for issuance pursuant to this Indenture. No Definitive Term

Note shall be entitled to any benefit under this Indenture, or be valid or obligatory

for any purpose, however, unless there appears on such Definitive Term Note a

certificate of authentication substantially in the form provided for in Exhibit A-4

(or in the form attached to the related Series Supplement) executed by the

4

Indenture Trustee by the manual signature of one of its Responsible Officers, and

such certificate of authentication upon any Definitive Term Note shall be

conclusive evidence, and the only evidence, that such Definitive Term Note has

been duly authenticated and delivered hereunder. All Definitive Term Notes shall

be dated the date of their authentication.

(c)The terms of the Notes set forth in the applicable Exhibit A are part of the

terms of this Indenture. Subject to Section 2.14, the aggregate principal amount of the Notes

which may be authenticated and delivered under this Indenture shall be unlimited. Without

limiting the generality of the foregoing, the Issuer Order shall specify whether the Notes shall be

issuable as Definitive Notes or as Book-Entry Notes.

Section 2.2[Reserved].

Section 2.3Form of Notes.

(a)Each Class and Series of Term Notes initially issued as Book-Entry Notes

shall initially be issued as one or more Notes registered in the name of the Depository or its

nominee and, except as provided in Section 2.3(c), transfer of such Notes may not be registered

by the Note Registrar unless such transfer is to a successor Depository that agrees to hold such

Notes for the respective Note Owners with Ownership Interests therein. Such Note Owners shall

hold and, subject to Sections 2.4(e) through 2.4(j), transfer their respective Ownership Interests

in and to such Notes through the book-entry facilities of the Depository and, except as provided

in Section 2.3(c), shall not be entitled to Definitive Notes in respect of such Ownership Interests.

Unless otherwise specified in the related Series Supplement, Term Notes of each Class and

Series of Notes initially sold in reliance on Rule 144A shall be represented by the Rule 144A

Global Note for such Class and Series, which shall be deposited with the DTC Custodian and

registered in the name of Cede & Co. as nominee of the Depository. Term Notes of each Class

and Series of Notes (other than Tax Restricted Notes) initially sold in offshore transactions in

reliance on Regulation S shall be represented by the Regulation S Global Note for such Class and

Series, which shall be deposited with the DTC Custodian and registered in the name of Cede &

Co. as nominee of the Depository. All transfers by Note Owners of their respective Ownership

Interests in the Book-Entry Notes shall be made in accordance with the procedures established

by the Depository Participant or brokerage firm representing each such Note Owner. Each

Depository Participant shall only transfer the Ownership Interests in the Book-Entry Notes of

Note Owners it represents or of brokerage firms for which it acts as agent in accordance with the

Depository’s normal procedures.

(b)The Issuer, the Indenture Trustee and the Note Registrar shall for all

purposes, including the making of payments due on the Book-Entry Notes, deal with the

Depository as the authorized representative of the Note Owners with respect to such Notes for

the purposes of exercising the rights of Noteholders hereunder. The rights of Note Owners with

respect to the Book-Entry Notes shall be limited to those established by law and agreements

between such Note Owners and the Depository Participants and indirect participating brokerage

firms representing such Note Owners. Multiple requests and directions from, and votes of, the

Depository as holder of the Book-Entry Notes with respect to any particular matter shall not be

deemed inconsistent if they are made with respect to different Note Owners. The Issuer may

establish a reasonable record date in connection with solicitations of consents from or voting by

Noteholders and shall give notice to the Depository of such record date.

(c)Subject to the restrictions on transfer under this Indenture and the Notes,

in addition to clause (h) below, Term Notes initially issued in the form of Book-Entry Notes will

thereafter be issued as Definitive Notes to applicable Note Owners or their nominees, rather than

to the Depository or its nominee, in connection with the transfer (in accordance with the

applicable DTC procedures) by a Note Owner of an interest in a Book-Entry Note to an

Institutional Accredited Investor that is not a Qualified Institutional Buyer.

5

(d)The Indenture Trustee, the Note Registrar, the Paying Agent, the Back-Up

Manager and the Diversified Companies shall have no responsibility or liability for any actions

taken or not taken by the Depository.

(e)For purposes of any provision of this Indenture requiring or permitting

actions with the consent of, or at the direction of, Noteholders evidencing a specified percentage

of the Outstanding Principal Balance of Outstanding Notes, such direction or consent may be

given by Noteholders (acting through the Depository and the Depository Participants) owning

interests in or security entitlements to Notes evidencing the requisite percentage of principal

amount of Notes. The Depository will be deemed to represent those Noteholders only if it has

received instructions to that effect from Noteholders and/or the Depository’s participants owning

or representing, the required percentage of the beneficial interest of the Notes and has delivered

the instructions to the Indenture Trustee.

(f)The Issuer in issuing Notes may use “CUSIP” numbers (if then generally

in use) or “Private Placement Numbers”, and, if so, the Indenture Trustee shall use “CUSIP”

numbers or “Private Placement Numbers” in notices of redemption as a convenience to

Noteholders; provided that any such notice may state that no representation is made as to the

correctness of such numbers either as printed on the Notes or as contained in any notice of a

redemption and that reliance may be placed only on the other identification numbers printed on

the Notes, and any such redemption shall not be affected by any defect in or omission of such

numbers. The Issuer will promptly notify the Indenture Trustee and each Noteholder in writing

of any change in the “CUSIP” numbers or “Private Placement Numbers”.

(g)Transfers of Global Notes only to Depository Nominees. Notwithstanding

any other provisions of this Section 2.3 or of Section 2.4, and subject to the provisions of clause

(h) below, unless the terms of a Global Note expressly permits such Global Note to be exchanged

in whole or in part for individual Notes, a Global Note may be transferred, in whole but not in

part and in the manner provided in Section 2.4, only to a nominee of the Depository for such

Global Note, or to the Depository, or a successor Depository for such Global Note selected or

approved by the Issuer, or to a nominee of such successor Depository.

(h)Limited Right to Receive Definitive Notes. Except under the limited

circumstances described below, Noteholders of beneficial interests in Global Notes will not be

entitled to receive Definitive Notes. With respect to issued Notes:

(i)If at any time the Depository for a Global Note notifies the Issuer

that it is unwilling or unable to continue to act as Depository for such Global Note, the

Issuer will appoint a successor Depository with respect to such Global Note. If a

successor Depository for such Global Note is not appointed by the Issuer within ninety

(90) days after the Issuer receives such notice or becomes aware of such ineligibility, the

Issuer will execute, and the Indenture Trustee or its agent will, in accordance with

Section 2.4 and with the Issuer Order delivered to the Indenture Trustee or its agent under

Section 2.4 requesting the authentication and delivery of individual Notes of such Series

or Class in exchange for such Global Note, will authenticate and deliver, individual Notes

of such Class of like tenor and terms in an aggregate initial Note balance equal to the

initial Note balance of the Global Note in exchange for such Global Note.

(ii)The Issuer may at any time and in its sole discretion determine that

the Notes of any Class or portion thereof issued or issuable in the form of one or more

Global Notes will no longer be represented by such Global Note or Notes. In such event

the Issuer will execute, and the Indenture Trustee or its agent in accordance with

Section 2.4 and with an Officer’s Certificate delivered to the Indenture Trustee or its

agent for the authentication and delivery of individual Notes in exchange in whole or in

6

part for such Global Note, will authenticate and deliver individual Notes of like tenor and

terms in definitive form in an aggregate initial Note balance equal to the initial Note

balance of such Global Note or Notes representing such portion thereof in exchange for

such Global Note or Notes.

(iii)If specified by the Issuer pursuant to Sections 2.1 and 2.4 with

respect to Notes issued or issuable in the form of a Global Note, the Depository for such

Global Note may surrender such Global Note in exchange in whole or in part for

individual Notes of like tenor and terms in definitive form on such terms as are

acceptable to the Issuer and such Depository. Thereupon the Issuer will execute, and the

Indenture Trustee or its agent will, in accordance with Section 2.1 and with the Issuer

Order delivered to the Indenture Trustee or its agent under Section 2.1, authenticate and

deliver, without service charge, (A) to each Person specified by such Depository a new

Note or Notes of like tenor and terms and of any authorized denomination as requested by

such Person in an aggregate initial Note balance equal to the initial Note balance of the

portion of the Global Note or Notes specified by the Depository and in exchange for such

Person’s beneficial interest in the Global Note; and (B) to such Depository a new Global

Note of like tenor and terms and in an authorized denomination equal to the difference, if

any, between the initial Note balance of the surrendered Global Note and the aggregate

initial Note balance of Notes delivered to the Noteholders thereof.

(iv)If any Event of Default has occurred with respect to such Global

Notes, and Noteholders evidencing more than 50% of the Global Notes (measured by

voting interests) advise the Indenture Trustee and the Depository that a Global Note is no

longer in the best interest of the Noteholders, the applicable Holder of Global Notes may,

at the direction of the applicable beneficial owners, exchange the beneficial interests in

such Notes for Definitive Notes in accordance with the exchange provisions herein.

(v)In any exchange provided for in any of the preceding four

paragraphs, the Issuer will execute and the Indenture Trustee or its agent will, in

accordance with Section 2.1 and with the Issuer Order delivered to the Indenture Trustee

or its agent under Section 2.1, authenticate and deliver Definitive Notes in definitive

registered form in authorized denominations. Upon the exchange of the entire initial

Note balance of a Global Note for Definitive Notes, such Global Note will be canceled by

the Indenture Trustee or its agent. Except as provided in the preceding paragraphs, Notes

issued in exchange for a Global Note pursuant to this Section will be registered in such

names and in such authorized denominations as the Depository for such Global Note,

pursuant to instructions from its direct or indirect participants or otherwise, will instruct

the Indenture Trustee or the Note Registrar. The Indenture Trustee or the Note Registrar

will deliver such Notes to the Persons in whose names such Notes are so registered.

(i) Whenever any notice or other communication is required to be given to

Noteholders with respect to which Book-Entry Notes have been issued, unless and until

Definitive Notes will have been issued to the related Noteholders, the Indenture Trustee will give

all such notices and communications to the applicable Depository, and shall have no obligation

to report directly to such Noteholders.

Section 2.4Transfer Restrictions on Notes.

(a)No transfer of any Note or any interest therein (including, without

limitation, by pledge or hypothecation) shall be made except in compliance with the restrictions

on transfer set forth in this Section 2.4 (including the applicable legend to be set forth on the face

of each Note as provided in the Exhibits to this Indenture). Any resale, pledge or other transfer of

7

any of the Notes contrary to the restrictions set forth above and elsewhere in this Indenture shall

be deemed void ab initio by the Issuer and Indenture Trustee.

(b)Notwithstanding anything to the contrary contained herein, each Note and

this Indenture may be amended or supplemented to modify the restrictions on and procedures for

resale and other transfers of the Notes to reflect any change in applicable Law or regulation (or

the interpretation thereof). Each Noteholder shall, by its acceptance of such Note, have agreed to

any such amendment or supplement.

(c)As of the date of this Indenture, the Notes have not been registered under

the Securities Act and will not be listed on any exchange. No Note shall be transferred or

assigned, and no interest in any Note shall be transferred or assigned, unless the Noteholder and

the transferee or assignee, as applicable, comply with the terms and conditions of this Section

2.4. No transfer of a Note shall be made unless such transfer is made pursuant to an effective

registration statement under the Securities Act and any applicable state securities Laws or is

exempt from the registration requirements under the Securities Act and such state securities

Laws. Except in a transfer to Diversified or by Diversified to an Affiliate thereof, in the event

that a transfer is to be made in reliance upon an exemption from the Securities Act and state

securities Laws, in order to assure compliance with the Securities Act and such Laws, the

Noteholder desiring to effect such transfer and such Noteholder’s prospective transferee shall

each certify to the Issuer, the Indenture Trustee and Diversified in writing the facts surrounding

the transfer in substantially the forms set forth in applicable transferor certificate in the forms

attached hereto as the applicable Exhibits B (the “Transferor Certificate”) and the applicable

transferee certificate in the forms attached to this Indenture. Each Noteholder desiring to effect

such a transfer shall, by its acceptance of such Note, have agreed to indemnify the Issuer, the

Indenture Trustee and Diversified (in any capacity) against any liability that may result if the

transfer is not so exempt or is not made in accordance with federal and state securities Laws.

(d)Subject to the other terms and provisions hereof, any Noteholder may at

any time grant to any participant participations in all or part of the payments due to it, and its

rights under this Indenture and the Note Purchase Agreement, in a minimum amount that is not

less than the minimum denominations set forth in the related Series Supplement. No participant

shall be entitled to receive any amount in excess of the amount the participating Noteholder

would be entitled to receive hereunder or any of the other Basic Documents. In connection with

any such transfer to a participant, such Noteholder, at its sole discretion but subject to the

provisions of the Note Purchase Agreement, shall be entitled to distribute to any participant any

information furnished to such Noteholder pursuant to the Note Purchase Agreement or the

Indenture so long as the participant holds a participation or similar interest in the obligation due

to such Noteholder in respect of the Noteholder’s respective Note. Each Noteholder, by

acceptance of a Note, acknowledges and agrees that any such participation will not alter or affect

in any way whatsoever such Noteholder’s direct obligations hereunder or under the Note

Purchase Agreement and that, other than as set forth in this Section 2.4(d), none of the Issuer, the

Indenture Trustee, the Manager or any other Person shall have any obligation to have any

communication or relationship whatsoever with any participant of such Noteholder in order to

enforce the obligations of such Noteholder hereunder and under the Note Purchase Agreement.

Each Noteholder shall provide prior written notice to the Issuer and Diversified in writing of the

identity and interest of each participant upon any such participation. Such Noteholder shall

provide the Issuer and Diversified with respect to each participant appropriately executed copies

of the forms required by this Section 2.4 and Section 2.12 with respect to itself and the related

participant, treating the participant as though it were a Noteholder, and including any

amendments and resubmissions, (A) prior to or promptly after any such participation and

(B) upon the occurrence of any event which would require the amendment or resubmission of

any such form previously provided hereunder. Any participation shall be subject to the

Noteholder’s compliance with, and causing the participant to comply with, the restrictions on

8

transfer of Notes set forth herein as though a participant were a Noteholder, and the purchaser

acknowledgements set forth herein, as though such participant were a Noteholder.

Notwithstanding anything herein to the contrary, neither the Indenture Trustee nor the Note

Registrar shall have any duty to monitor, record or register any participation in a Note or any

transfer of such participation, and regardless of whether the Indenture Trustee or Note Registrar

has knowledge of such a participation, the Indenture Trustee and the Note Registrar shall be

entitled to deal solely with the Noteholders for all purposes under this Indenture.

(e)If a transfer of any Note that constitutes a Definitive Note is to be made

without registration under the Securities Act (other than in connection with the initial issuance of

a Series of the Notes or a transfer of a Book-Entry Note to a successor Depository as

contemplated by Section 2.3(c)), then such transfer shall not be registered by the Note Registrar

unless the Note Registrar receives (and, upon receipt, may conclusively rely upon) either: (i) a

certification from the Noteholder desiring to effect such transfer substantially in the form

attached as Exhibit B-5, in the case of a transfer to a Qualified Institutional Buyer, or Exhibit

B-6, in the case of a transfer to an Institutional Accredited Investor, and a certification from the

prospective transferee substantially in the form attached hereto as Exhibit B-3, in the case of a

transfer to a Qualified Institutional Buyer, or Exhibit B-4, in the case of a transfer to an

Institutional Accredited Investor, or (ii) an Opinion of Counsel to the effect that such transfer

may be made without registration under the Securities Act (which Opinion of Counsel shall not

be an expense of the Issuer, the Indenture Trustee or the Note Registrar in their respective

capacities as such), together with the written certification(s) as to the facts surrounding such

transfer from the Noteholder desiring to effect such transfer and/or such Noteholder’s

prospective transferee on which such Opinion of Counsel is based.

(f)If a transfer of any interest in a Rule 144A Global Note is to be made

without registration under the Securities Act to a Person who will take delivery of such interest

in the form of an interest in a Regulation S Global Note, then the Note Owner desiring to effect

such transfer shall be required to deliver to the Note Registrar (i) a certification substantially in

the form attached as Exhibit B-2 and (ii) such written orders and instructions as are required

under the Applicable Procedures to direct the Indenture Trustee to approve the debit withdrawal

of the account of a Depository Participant by a denomination of interests in such Rule 144A

Global Note, and credit the account of a Depository Participant by a denomination of interests in

such Regulation S Global Note, that is equal to the denomination of beneficial interests in the

Class of Notes to be transferred. Upon delivery to the Note Registrar of such certification and

such orders and instructions, the Indenture Trustee, subject to and in accordance with the

Applicable Procedures, shall reduce the denomination of the Rule 144A Global Note in respect

of the applicable Class of Notes and increase the denomination of the Regulation S Global Note

for such Class by the denomination of the beneficial interest in such Class specified in such

orders and instructions. If a transfer of any interest in a Rule 144A Global Note is to be made

without registration under the Securities Act to a Person who will take delivery of such interest

in the form of an interest in such Rule 144A Global Note, then the Note Owner desiring to effect

such transfer shall be deemed to have represented and warranted that the certifications set forth

in Exhibit B-1 are, with respect to such transfer, true and correct.

(g)Any interest in a Rule 144A Global Note with respect to any Class of

Book-Entry Notes may be transferred by any Note Owner holding such interest to any

Institutional Accredited Investor (other than a Qualified Institutional Buyer) that takes delivery

in the form of a Definitive Note of the same Class as such Rule 144A Global Note upon delivery

to the Note Registrar of (i)(A) a certification from such Note Owner’s prospective transferee

substantially in the form of Exhibit B-4, or (B) an Opinion of Counsel to the effect that such

transfer may be made without registration under the Securities Act (which Opinion of Counsel

shall not be an expense of the Issuer, the Indenture Trustee or the Note Registrar in their

respective capacities as such), together with the written certification(s) as to the facts

9

surrounding such transfer from the Noteholder desiring to effect such transfer and/or such

Noteholder’s prospective transferee on which such Opinion of Counsel is based, and (ii) such

written orders and instructions as are required under the Applicable Procedures to direct the

Indenture Trustee to approve the debit withdrawal of the account of a Depository Participant by

the denomination of the transferred interests in such Rule 144A Global Note. Upon delivery to

the Note Registrar of such certification or Opinion of Counsel and such orders and instructions,

the Indenture Trustee, subject to and in accordance with the Applicable Procedures, shall reduce

the denomination of such Rule 144A Global Note by the denomination of the transferred

interests in such Rule 144A Global Note specified in such orders and instructions, and shall

cause a Definitive Note of the same Class as such Rule 144A Global Note, and in a

denomination equal to the reduction in the denomination of such Rule 144A Global Note, to be

executed, authenticated and delivered in accordance with this Indenture to the applicable

transferee.

(h)Except as provided in the next sentence, on and prior to the Release Date,

a beneficial interest in a Regulation S Global Note for any Class of Book-Entry Notes may be

transferred only to a Person who takes delivery in the form of a beneficial interest in such

Regulation S Global Note. On and prior to the Release Date, a Note Owner holding an interest in

a Regulation S Global Note desiring to effect a transfer to a Person who takes delivery of such

interest in the form of a beneficial interest in the Rule 144A Global Note for such Class of Notes

shall be required to deliver to the Note Registrar (i) a certification substantially in the form

attached as Exhibit B-1 and (ii) such written orders and instructions as are required under the

Applicable Procedures to direct the Indenture Trustee to approve the debit withdrawal of the

account of a Depository Participant by a denomination of interests in such Regulation S Global

Note, and credit the account of a Depository Participant by a denomination of interests in such

Rule 144A Global Note, that is equal to the denomination of beneficial interests in the Class of

Notes to be transferred. Upon delivery to the Note Registrar of such certification and such orders

and instructions, the Indenture Trustee, subject to and in accordance with the Applicable

Procedures, shall reduce the denomination of the Regulation S Global Note in respect of the

applicable Class of Notes and increase the denomination of the Rule 144A Global Note for such

Class by the denomination of the beneficial interest in such Class specified in such orders and

instructions. On or prior to the Release Date, beneficial interests in the Regulation S Global Note

for each Class of Book-Entry Notes may be held only through Euroclear or Clearstream.

(i)None of the Issuer, the Indenture Trustee or the Note Registrar shall be

obligated to register or qualify any Class of Notes under the Securities Act or any other securities

law or to take any action not otherwise required under this Indenture to permit the transfer of any

Note or interest therein without registration or qualification. Any Noteholder or Note Owner

desiring to effect a transfer, sale, pledge or other disposition of any Note or interest therein shall,

and does hereby agree to, indemnify Diversified Holdings, the Issuer, the Indenture Trustee, the

Manager, the Back-Up Manager, and the Note Registrar against any liability that may result if

such transfer, sale, pledge or other disposition is not exempt from the registration and/or

qualification requirements of the Securities Act and any applicable state securities laws or is not

made in accordance with such federal and state laws.

(j)No transfer of any Note or any interest therein shall be made to any Plan

or to any Person who is directly or indirectly acquiring such Note on behalf of, as fiduciary of, as

trustee of, or with the assets of, a Plan, except in each such case, in accordance with the

following provisions of this Section 2.4(j). Any attempted or purported transfer of a Note or any

interest therein in violation of this Section 2.4(j) will be null and void and vest no rights in any

purported transferee.

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Each purchaser and transferee (and its fiduciary, if applicable) of a Note (other than an

ERISA Restricted Note) or any interest therein is deemed to represent and warrant that either: (i)

it is not acquiring and will not hold such Note (or interest therein) with the assets of a Plan or (ii)

the acquisition and holding of such Note (or interest therein) will not give rise to a nonexempt

prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or result in a

violation of any Similar Law.

Each purchaser and transferee (and its fiduciary, if applicable) of an ERISA Restricted

Note or any interest therein is deemed to represent and warrant that it is not acquiring and will

not hold such Note (or interest therein) with the assets of a Plan.

The Note Registrar shall not register the transfer of a Note that constitutes a Definitive

Note or the transfer of an interest in a Book-Entry Note that following such purported transfer

will constitute a Definitive Note unless the Note Registrar has received from the prospective

transferee a certification as to the foregoing, as applicable. It is hereby acknowledged that either

of the forms of certification attached as Exhibit B-3 and Exhibit B-4 is acceptable for purposes of

the preceding sentence.

The Note Owner desiring to effect a transfer of an interest in a Book-Entry Note (other

than a transfer of an interest in a Book-Entry Note that following such purported transfer will

constitute a Definitive Note, which transfer shall be subject to the forms of certification attached

as Exhibit B-3 and Exhibit B-4 as provided for above) shall obtain from its prospective transferee

a certification that (a) such prospective transferee is not a Plan and is not directly or indirectly

acquiring, holding and subsequently disposing of such Note or any interest in such Note on

behalf of, as fiduciary of, as trustee of, or with assets of, a Plan or (b) the transfer is exempt from

registration requirements under the Securities Act.

It is hereby acknowledged that either of the forms of certification attached as Exhibit B-1

and Exhibit B-2 is acceptable for purposes of the preceding sentence.

(k)[Reserved].

(l)If a Person is acquiring a Note as a fiduciary or agent for one or more

accounts, such Person shall be required to deliver to the Note Registrar a certification to the

effect that, and such other evidence as may be reasonably required by the Note Registrar or the

Issuer to confirm that, it has (i) sole investment discretion with respect to each such account and

(ii) full power to make the applicable foregoing acknowledgments, representations, warranties,

certifications and/or agreements with respect to each such account as set forth in subsections (e)

through (j), as appropriate, of this Section 2.4.

(m) With respect to Tax Restricted Notes, each purchaser (and any

transferees, successors and assigns thereof) represents and agrees on its own behalf and on behalf

of any beneficial owner for which it is purchasing such Tax Restricted Notes (including, for the

avoidance of doubt and to the extent applicable, its sole regarded Tax owner) that as of the date

of acquisition of such Tax Restricted Notes, it is and will remain a “United States person” within

the meaning of Section 7701(a)(30) of the Code and will deliver a properly completed and duly

signed IRS Form W-9 (or applicable successor form) in respect of the owner, for U.S. federal

income Tax purposes, of such Tax Restricted Notes, dated as of the date of the acquisition of

such Tax Restricted Notes, to the Manager (or its agent) and the Indenture Trustee. Such

11

purchaser (and its respective transferees) further agrees that no transfer, sale or other disposition

of the Tax Restricted Notes (or any interest therein) will be effective, and no such transfer, sale

or other disposition will be recognized, unless the applicable transferee party (or, if, for U.S.

federal income Tax purposes, such transferee party is a disregarded entity, its sole regarded Tax

owner) is a "United States person" within the meaning of Section 7701(a)(30) of the Code that

delivers a properly completed and duly signed IRS Form W-9 (or applicable successor form) in

respect of the owner, for U.S. federal income Tax purposes, of such Tax Restricted Notes, dated

as of the date of such transfer, sale or other disposition, to the Manager (or its agent) and the

Indenture Trustee. Any transfer in violation of this clause (m) shall be null and void ab initio.

(n)With respect to Tax Restricted Notes:

(i)Each purchaser (and any transferees, successors and assigns

thereof) represents and agrees on its own behalf and on behalf of any beneficial

owner for which it is purchasing such Tax Restricted Notes (including, for the

avoidance of doubt and to the extent applicable, its sole regarded Tax owner) that

as of the date of acquisition of such Tax Restricted Notes, (I) the purchaser or

beneficial owner of such Tax Restricted Notes is not and, so long as such person

is a beneficial owner of such Tax Restricted Notes, will not become a partnership,

Subchapter S corporation or grantor trust, in each case, for U.S. federal (and

applicable state and local) income Tax purposes (each such entity a “flow-through

entity”) or (II) if such purchaser or beneficial owner is or becomes a flow-through

entity, then (x) none of the direct or indirect beneficial owners of any interest in

such flow-through entity has or ever will have more than 50% of the value of its

interest in such flow-through entity attributable to the beneficial interest of such

flow-through entity in the combined value of the Tax Restricted Notes, any other

interest (direct or indirect) in the Issuer or any interest created under this

Indenture or (y) it is not and will not be a principal purpose of the arrangement

involving the beneficial interest of such flow-through entity in any Tax Restricted

Notes to permit any entity to satisfy the 100-partner limitation of Treasury

Regulations Section 1.7704-1(h)(1)(ii) necessary for such entity not to be

classified as a publicly traded partnership for U.S. federal income Tax purposes;

(ii)Each purchaser (and any transferees, successors and assigns

thereof) will deliver to the Indenture Trustee, Issuer and the Manager on its own

behalf and on behalf of any beneficial owner for which it is purchasing such Tax

Restricted Notes (including, for the avoidance of doubt and to the extent

applicable, its sole regarded Tax owner) a letter of representation in the form of

the applicable Exhibit B hereto representing to the Issuer, Manager and the

Indenture Trustee that either (I) for so long as it holds such Tax Restricted Notes

(or a beneficial interest therein), it is not, and will not acquire such Tax Restricted

Notes or interest therein on behalf of a beneficial owner (including, for the

avoidance of doubt and to the extent applicable, its sole regarded Tax owner) that

is classified for U.S. federal income Tax purposes as a flow-through entity, or (II)

if such purchaser or beneficial owner (or regarded owner, as applicable) is or

becomes a flow-through entity, then (x) none of the direct or indirect beneficial

owners of any interest in such flow-through entity has or ever will have more than

50% of the value of its interest in such flow-through entity attributable to the

beneficial interest of such flow-through entity in the combined value of the Tax

Restricted Notes, any other interest (direct or indirect) in the Issuer or any interest

created under this Indenture and (y) it is not and will not be a principal purpose of

the arrangement involving the beneficial interest of such flow-through entity in

any Tax Restricted Note to permit any entity to satisfy the 100 partner limitation

12

of Treasury Regulations Section 1.7704-1(h)(1)(ii) necessary for such entity not to

be classified as a publicly traded partnership for U.S. federal income Tax

purposes;

(iii)Each purchaser (and any transferees, successors and assigns

thereof) will deliver a letter of representation on its own behalf and on behalf of

any beneficial owner for which it is purchasing such Tax Restricted Notes

(including, for the avoidance of doubt and to the extent applicable, its sole

regarded Tax owner) to the Indenture Trustee, Manager and the Issuer

representing in the form of the applicable Exhibit B hereto to the Issuer, Manager

and the Indenture Trustee that it will not sell, transfer, assign, participate, pledge

or otherwise dispose of or cause to be marketed any Tax Restricted Notes (or any

interest therein), (1) on or through an “established securities market” within the

meaning of Section 7704(b)(1) of the Code and Treasury Regulations Section

1.7704-1(b), including without limitation, an interdealer quotation system that

regularly disseminates firm buy or sell quotations, or (2) in an amount that would

result in any Noteholder holding Tax Restricted Notes in an aggregate amount

less than 100% of the minimum denomination of the Tax Restricted Notes or

purchase or enter into any financial instrument or contract that the value of which

is determined by reference in whole or in part to any Tax Restricted Note;

(iv)Tax Restricted Notes shall not be sold or transferred to any Person

unless (i) the Note Registrar and the Manager have received on the date of such

sale or transfer a qualifying Debt Opinion with respect to such Notes or (ii) the

restrictions described in Section 2.4(m) shall have been complied with; and

(v)Each transferor of a Tax Restricted Note or an interest therein shall

be deemed to have agreed to deliver to the transferee, with a copy to the Indenture

Trustee, prior to the transfer of such Tax Restricted Note or an interest therein, a

properly completed certificate, in a form reasonably acceptable to the transferee

and the Issuer, stating, under penalty of perjury, the transferor’s United States

taxpayer identification number and that the transferor is not a foreign person

within the meaning of Section 1445(b)(2) and Section 1446(f)(2) of the Code

(such certificate, a “Non-Foreign Status Certificate”).

(vi)Each transferor of a Tax Restricted Note or an interest therein shall

be deemed to have understood and agreed that the failure to provide a Non-

Foreign Status Certificate to the transferee may result in withholding on the

amount realized on its disposition of the Tax Restricted Note.

(vii)Each Person acquiring a Tax Restricted Note shall comply with the

limitations, representations and covenants set forth in Section 2.4(m) and this

Section 2.4(n). Any transfer in violation of this clause (n) shall be null and void

ab initio, and the purported transferor will continue to be treated as the owner of

the Tax Restricted Note.

Section 2.5Registration; Registration of Transfer and Exchange.

(a)The Issuer shall cause a note registrar (the “Note Registrar”) to keep a

Notes and the registration of transfers of Notes. All Notes shall be maintained in “registered

form” under Treasury Regulations Section 5f.103-1(c), proposed Treasury Regulations Section

1.163-5 and any applicable temporary, final or other successor regulations. The name and

address of each Holder of the Notes, each transfer thereof and the name and address of each

13

transferee of one or more Notes shall be recorded in such Note Register, together with the

principal amount (and stated interest) of the Notes owing to the Holder of the Notes. Prior to due

presentment for registration of transfer, the person in whose name any Note shall be registered

shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Note

Registrar shall not be affected by any notice or knowledge to the contrary. No transfer shall be

effective unless recorded in the Note Register. The Indenture Trustee initially shall be the Note

Registrar for the purpose of registering Notes and transfers of Notes as herein provided. Upon

any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects

not to make such an appointment, assume the duties of Note Registrar. Any attempted or

purported transfer of a Note in violation of this Section 2.5(a) will be null and void and vest no

rights in any purported transferee.

(b)If a Person other than the Indenture Trustee is appointed by the Issuer as

Note Registrar, the Issuer will give the Indenture Trustee and the Noteholders prompt written

notice of the appointment of such Note Registrar and of the location, and any change in the

location, of the Note Register, and the Indenture Trustee shall have the right to inspect the Note

the right to rely upon a certificate executed on behalf of the Note Registrar by an Executive

Officer thereof as to the names and addresses of the Holders of the Notes and the principal

amounts and number of such Notes; provided that, upon the reasonable request of any

Noteholder, the Note Registrar and the Indenture Trustee shall provide a copy of such certificate

to such Noteholder.

(c)Upon surrender for registration of transfer of any Note at the office or

agency of the Issuer to be maintained as provided in Section 4.2, the Issuer shall execute, and the

Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee,

in the name of the designated transferee or transferees, one or more new Notes in any authorized

denominations, of a like aggregate principal amount.

(d)At the option of any Noteholder, its Notes may be exchanged for other

Notes of authorized denominations of the same Class and Series evidencing a like aggregate

principal balance, upon surrender (or de-registration) of the Notes to be exchanged (or

deregistered) at the offices of the Note Registrar maintained for such purpose. Whenever any

Notes are so surrendered for exchange (or de-registration), the Notes which the Noteholder

making the exchange (or request for de-registration) is entitled to receive shall be executed,

authenticated and delivered in accordance with Section 2.1(b).

(e)All Notes issued upon any registration of transfer or exchange of Notes

shall be the valid obligations of the Issuer, evidencing the same debt, and entitled to the same

benefits under this Indenture, as the Notes surrendered upon such registration of transfer or

exchange.

(f)Every Note presented or surrendered for transfer or exchange shall (if so

required by the Note Registrar) be duly endorsed by, or be accompanied by a written instrument

of transfer in a form satisfactory to, the Note Registrar duly executed by the Noteholder thereof

or his attorney duly authorized in writing, with such signature guaranteed by an “eligible

guarantor institution” meeting the requirements of the Note Registrar, which requirements

include membership or participation in the Securities Transfer Agent Medallion Program

(“STAMP”) or such other “signature guarantee program” as may be determined by the Note

Registrar in addition to, or in substitution for, STAMP.

(g)No service charge shall be made to a Holder for any registration of transfer

or exchange of Notes, but the Issuer or the Note Registrar may require payment by such Holder

of a sum sufficient to cover any Tax or other governmental charge that may be imposed in

14

connection with any registration of transfer or exchange of Notes, other than exchanges pursuant

to Section 2.6 not involving any transfer.

(h)The preceding provisions of this Section 2.5 notwithstanding, the Issuer

shall not be required to make and the Note Registrar need not register transfers or exchanges of

Notes selected for redemption or of any Note for a period of fifteen (15) days preceding the due

date for any payment with respect to the Note.

(i)Any purported transfer of a Note not in accordance with this Section 2.5

shall be null and void and shall not be given effect for any purpose whatsoever.

(j)Transfers of Ownership Interests in Global Notes. Transfers of beneficial

interests in a Global Note representing Book-Entry Notes may be made only in accordance with

the rules and regulations of the Depository and the transfer restrictions contained in the legend on

such Global Note and exchanges or transfers of interests in a Global Note may be made only in

accordance with the following:

(i)General Rules Regarding Transfers of Global Notes. Subject to

clauses (i) and (ii) of this Section 2.5(j), transfers of a Global Note representing Book-

Entry Notes shall be limited to transfers of such Global Note in whole, but not in part, to

nominees of the Depository or to a successor of the Depository or such successor’s

nominee.

(ii)Global Note to Definitive Note. Subject to Section 2.3(i), an

owner of a beneficial interest in a Global Note deposited with or on behalf of a

Depository may at any time transfer such interest for a Definitive Note, upon provision to

the Indenture Trustee, the Issuer and the Note Registrar of a Transferor Certificate.

(k)Notwithstanding anything herein to the contrary, the Indenture Trustee shall not be

responsible for ascertaining whether any transfer complies with, or for otherwise monitoring or

determining compliance with, the requirements or terms of the Securities Act, applicable state

securities laws, ERISA, the Code or any other applicable Law.

Section 2.6Mutilated, Destroyed, Lost or Stolen Notes.

(a)If (i) any mutilated Note is surrendered to the Indenture Trustee or Note

Registrar, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or

theft of any Note, and (ii) there is delivered to the Indenture Trustee such security or indemnity

as may be required by it to hold the Issuer and the Indenture Trustee harmless, then, in the

absence of notice to the Issuer, the Note Registrar or the Indenture Trustee that such Note has

been acquired by a protected purchaser, the Issuer shall execute, and upon its request the

Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated,

destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such

destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven (7)

days shall be due and payable, or shall have been called for redemption, instead of issuing a

replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so due or payable

or upon the Redemption Date without surrender thereof. If, after the delivery of such

replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the

preceding sentence, a protected purchaser of the original Note in lieu of which such replacement

Note was issued presents for payment such original Note, the Issuer and the Indenture Trustee

shall be entitled to recover such replacement Note (or such payment) from the Person to whom it

was delivered or any Person taking such replacement Note from such Person to whom such

replacement Note was delivered or any assignee of such Person, except a protected purchaser,

and shall be entitled to recover upon the security or indemnity provided therefor to the extent of

15

any loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in connection

therewith.

(b)Upon the issuance of any replacement Note under this Section 2.6, the

Issuer shall pay to the Indenture Trustee any reasonable expenses in connection therewith, and

the Issuer may require the payment by the Holder of such Note of a sum sufficient to cover any

Tax or other governmental charge that may be imposed in relation thereto and any other

reasonable expenses (including the fees and expenses of the Indenture Trustee) connected

therewith.

(c)Every replacement Note issued pursuant to this Section 2.6 in replacement

of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual

obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at

any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally

and proportionately with any and all other Notes duly issued hereunder.

(d)The provisions of this Section 2.6 are exclusive and shall preclude (to the

extent lawful) all other rights and remedies with respect to the replacement or payment of

mutilated, destroyed, lost or stolen Notes.

Section 2.7Persons Deemed Owner. Prior to due presentment for registration

of transfer of any Note, the Issuer, the Guarantors, the Indenture Trustee, the Note Registrar and

any agent of the Issuer, the Guarantors, the Indenture Trustee or the Note Registrar may, as of

the day of determination, treat the Person in whose name any Note is registered as the owner of

such Note for the purpose of receiving payments of principal of and interest, if any, on such Note

and for all other purposes whatsoever, whether or not such Note be overdue, and none of the

Issuer, the Guarantors, the Indenture Trustee, the Note Registrar or any agent of the Issuer, the

Guarantors, the Indenture Trustee, the Note Registrar shall be affected by notice or knowledge to

the contrary.

Section 2.8Payment of Principal and Interest; Defaulted Interest.

(a)The Notes shall accrue interest during the related Interest Accrual Period

at the Interest Rate, and such interest shall be payable on each Payment Date in accordance with

the priorities set forth in Section 8.6. At any time at which the Class B Notes are not the

Controlling Class, to the extent provided in the applicable Series Supplement, any and all

accrued interest on the Outstanding Principal Balance of any Series of Class B Notes that is not

paid on any Payment Date (any such amounts, the “Designated Unpaid Interest Amount”) shall

be deferred and paid on a subsequent Payment Date to the extent of Available Funds. Unless

otherwise specified in the related Series Supplement for a Series, Note Interest for each Payment

Date shall accrue during each Interest Accrual Period at the applicable Interest Rate with respect

to each Series and Class of Notes with respect to any Class of Term Notes, on the Outstanding

Principal Balance of such Term Notes as of the preceding Payment Date (after giving effect to all

payments of principal made on the preceding Payment Date). Unless otherwise provided in the

applicable Series Supplement, no interest (including Default Interest) will accrue on any

outstanding Designated Unpaid Interest Amount.

(b)Any installment of interest or principal payable on a Note that is

punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid

to the Person in whose name such Note is registered on the Record Date by wire transfer in

immediately available funds to the account designated by such person or nominee and except for

the final installment of principal payable with respect to such Note on a Payment Date or on the

applicable Final Scheduled Payment Date (and except for the Redemption Price or Change of

Control Redemption Price, as applicable, for any Note called for redemption pursuant to

Section 10.1) which shall be payable as provided below.

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(c)On each Payment Date, any applicable Principal Distribution Amount or

any Excess Amortization Amount will be payable to the Holders of each Class and Series of

Notes entitled thereto, in each case, to the extent of Available Funds for such Payment Date and

in accordance with the Priority of Payments or the Special Priority of Payments, as applicable.

Any Principal Distribution Amount for any Series of Term Notes will be set forth in the related

Series Supplement.

(d)Prior to the occurrence of an Event of Default and a declaration in

accordance with Section 5.2 that the Notes have become immediately due and payable, the

Outstanding Principal Balance of the Notes of a Series shall be payable in full on the applicable

Final Scheduled Payment Date and, to the extent of funds available therefor, in installments on

the Payment Dates (if any) preceding the Final Scheduled Payment Date, in the amounts and in

accordance with the Priority of Payments set forth in Section 8.6(i).

(e)Notwithstanding the foregoing, the entire unpaid principal amount of the

Notes shall be due and payable, if not previously paid, on the date on which an Event of Default

shall have occurred and be continuing, and either (i) the Indenture Trustee (at the direction of the

Majority Noteholders) or the Majority Noteholders have declared the Notes to be immediately

due and payable in the manner provided in Section 5.2 or (ii) such Event of Default arises as a

result of an event set forth in Section 5.1(a)(iv) or (v). In such case, principal shall be paid in

accordance with the priorities set forth in Section 8.6(ii). The Indenture Trustee shall notify the

Person in whose name a Note is registered at the close of business on the Record Date preceding

the Payment Date on which the Issuer expects that the final installment of principal of and

interest on such Note will be paid. Such notice shall be mailed or transmitted by email prior to

such final Payment Date and shall specify that such final installment will be payable only upon

presentation and surrender of such Note and shall specify the place where such Note may be

presented and surrendered for payment of such installment. Notices in connection with

redemptions of Notes shall be mailed to Noteholders as provided in Section 10.2.

(f)[Reserved].

(g)[Reserved].

Notwithstanding any other provision herein or in any related Series Supplement, other

than with respect to the Class A Notes, unless otherwise specified in the related Series

Supplement for a Series, any payment of Note Interest which is not available to be paid in

accordance with the Priority of Payments or the Special Priority of Payments, as applicable, on

any Payment Date, including Designated Unpaid Interest Amounts, shall not be considered “due

and payable” for purposes of the Indenture, and the failure to pay such Note Interest shall not be

an Event of Default (other than with respect to the Class A Notes). To the extent specified in the

related Series Supplement for a Series, any such unpaid Note Interest on any Class of Notes shall

be added to the Outstanding Principal Balance of such Notes and shall be payable on the first

Payment Date on which funds are available to be used for such purpose in accordance with the

Priority of Payments or the Special Priority of Payments, as applicable. Regardless of whether

any Class of Notes is the Controlling Class, to the extent that funds are not available on any

Payment Date to pay previously accrued Note Interest that was deferred at a time when such

Class was not the Controlling Class, such previously accrued Note Interest shall not be

considered “due and payable” on such Payment Date, and the failure to pay such previously

accrued Note Interest on such Payment Date shall not be an Event of Default.

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Section 2.9Cancellation. All Notes surrendered for payment, registration of

transfer, exchange or redemption shall be delivered to the Indenture Trustee and shall be

promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture

Trustee for cancellation any Notes previously authenticated and delivered hereunder which the

Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be

promptly cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in

exchange for any Notes cancelled as provided in this Section 2.9, except as expressly permitted

by this Indenture. All cancelled Notes may be held or disposed of by the Indenture Trustee in

accordance with its standard retention or disposal policy as in effect at the time unless the Issuer

shall direct by an Issuer Order that they be returned to it; provided, that such Issuer Order is

timely and the Notes have not been previously disposed of by the Indenture Trustee. The

Indenture Trustee shall provide notice to each Rating Agency of all cancelled Notes.

Section 2.10Release of Collateral. Subject to Section 12.1 and the terms of the

Basic Documents, and other than any distribution to the Issuer pursuant to Section 8.6(i)(V),

Section 8.6(ii)(H) or Section 8.7(d), the Indenture Trustee shall release property from the lien of

this Indenture only in accordance with the terms of this Indenture and upon receipt of (i) an

Issuer Request accompanied by an Officer’s Certificate of the Issuer stating that such release is

permitted by the terms of this Indenture and that the conditions precedent to such release have

been satisfied and (ii) in the event the Issuer requests a release of all or substantially all of the

Collateral, a written consent to such release from each Hedge Counterparty and each Holder.

With respect to clause (ii) in the foregoing sentence, any release of Collateral shall require 10

Business Days advance written notice from the Issuer to each Holder and each Hedge

Counterparty.

Section 2.11Definitive Notes. Upon the issuance of Definitive Notes, the

Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

Section 2.12Tax Treatment.

(a)The Issuer has entered into this Indenture, and the Notes will be issued,

with the intention that, for all purposes, including purposes of U.S. federal, state and local

income, single business and franchise Tax and any other Tax imposed on, or measured by,

income, the Notes shall be treated as indebtedness secured by the Collateral. The Issuer, by

entering into this Indenture, each Noteholder, by its acceptance of a Note, and each holder of a

beneficial interest in the Note, by purchasing or otherwise acquiring an interest in a Note, agree

to treat this Indenture and the Notes (other than Notes held by any equity holder of the Issuer

(including any entity whose separate existence from the Issuer or the equity holder of the Issuer

is disregarded for U.S. federal income Tax purposes), any other persons who are members of an

“expanded group” with the Issuer within the meaning of the Treasury Regulations under Section

385 of the Code, to the extent that a treatment other than as indebtedness may be required by law

or regulation as a result of the relationship between the Issuer and such Person, but only so long

as such Notes are held by such person, or as otherwise required by a change in law or a final

determination pursuant to Section 1313 of the Code) for all purposes, including purposes of U.S.

federal, state and local income, single business and franchise Tax and any other Tax imposed on,

or measured by, income, as indebtedness of the Issuer, and not as an equity interest in the Issuer.

(b)Each Noteholder, by its acceptance of a Note (or an interest therein),

agrees to provide and shall provide to the Indenture Trustee, the Note Registrar and/or the Issuer

(or other Person responsible for withholding of Taxes) with the Noteholder FATCA Information

and Noteholder Tax Identification Information, and shall update or replace such Noteholder

FATCA Information and Noteholder Tax Identification Information as necessary at any time

required by law or promptly upon request.

(c)Each Noteholder, by its acceptance of a Note (or an interest therein),

understands, acknowledges and agrees that the Indenture Trustee and the Issuer (or other Person

responsible for withholding of Taxes) have the right to deduct and withhold on payments with

respect to a Note and such amounts deducted or withheld shall be treated as paid to such

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Noteholder (without any corresponding gross-up) where the Noteholder or another applicable

party fails to comply with the requirements set forth in Section 2.12(b) or otherwise establish a

complete exemption from withholding, or the Indenture Trustee or the Issuer (or other Person

responsible for withholding of Taxes) is otherwise required to so withhold under applicable law.

Section 2.13CUSIP and Private Placement Numbers. The Issuer shall obtain

“CUSIP” numbers or “Private Placement Numbers” with respect to each Class and Series of

Notes. The Indenture Trustee shall use “CUSIP” numbers or “Private Placement Numbers” in

notices of redemption as a convenience to Noteholders; provided, that any such notice may state

that no representation is made as to the correctness of such “CUSIP” numbers or “Private

Placement Numbers” either as printed on the Notes or as contained in any notice of a redemption

and that reliance may be placed only on the other identification numbers printed on the Notes

and any such redemption shall not be affected by any defect in or omission of such numbers. The

Issuer will promptly notify the Indenture Trustee in writing of any change in the “CUSIP”

numbers or “Private Placement Numbers.”

Section 2.14Notes Issuable in Series. The Notes of the Issuer may be issued in

one or more Series subject to satisfaction of the applicable conditions set forth in Section 2.15.

Prior to the issuance of Notes of any Series, its Series Supplement shall establish:

(a)the title of the Notes of such Series (which shall distinguish the Notes of

such Series from Notes of other Series);

(b)any limit upon the aggregate principal balance of the Notes of such Series

that may be authenticated and delivered under this Indenture upon registration of transfer of, in

exchange for, or in lieu of, other Notes of such Series pursuant to Section 2.5 or 2.6);

(c)the rate or rates at which the Notes of such Series shall bear interest, if

any, or the method by which such rate shall be determined, the date or dates from which such

interest shall accrue, the Payment Dates on which such interest shall be payable and the record

date or dates for the determination of Holders to whom interest is payable (in each case to the

extent such items are not specified herein or if specified herein, to the extent such items are

modified by such Series Supplement);

(d)whether the Notes of such Series are Book-Entry Notes or Definitive

Notes; and

(e)any other terms of such Series (which terms shall not be inconsistent with

the provisions of this Indenture except to the extent that such Series Supplement also constitutes

an amendment of this Indenture pursuant to Article IX).

The Notes of a Series may have more than one settlement or issue date. The Notes

of each Series will be assigned to one or more Classes and shall satisfy the requirements of

Section 2.15 as of the date of issuance. Notes of any Series bearing the same alphabetical

designation but a different numerical designation shall be paid in the relative payment priority

specified in the related Series Supplement, but the relative payment priority of such Notes

collectively with other Notes bearing the same alphabetical designation in a different Series shall

be determined in accordance with the Applicable Payment Priority.

Section 2.15Additional Notes.

(a)The Issuer may, at any time and from time to time, after the Initial Closing

Date issue additional Notes of a new Series (“Additional Notes”) in the manner set forth in

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Section 2.14 pursuant to a Series Supplement, in one or more Classes that may rank (i) (other

than with respect to Class A-1 Notes, but subject to and not in conflict with the payment priority

for Hedge Agreements on the Initial Closing Date) senior to, (ii) (including with respect to the

Class A-1 Notes, but subject to and not in conflict with the payment priority for Hedge

Agreements on the Initial Closing Date) pari passu with, or (iii) (including with respect to the

Class A-1 Notes, but subject to and not in conflict with the payment priority for Hedge

Agreements on the Initial Closing Date) subordinate to, any Series of Notes that will remain

Outstanding after the issuance of such Additional Notes; provided, that (x) if any Notes (other

than such Additional Notes) will remain Outstanding after the issuance of such Additional Notes

(such existing Notes, the “Continuing Notes”), then the following conditions shall have been

satisfied with respect to such issuance, or (y) if no Continuing Notes will remain outstanding

after giving effect to such issuance, but any Hedge Counterparties will have outstanding Hedge

Agreements, then the conditions set forth in clauses (d) through (f), (h), (i), (l) and (m) shall have

been satisfied with respect to such issuance:

(a)the relative payment priority of such Additional Notes of a particular Class

to the Continuing Notes, if any, of the Class of Notes bearing the same alphabetical Class

designation (regardless of Series or date of issuance) shall be determined in accordance with the

Applicable Payment Priority, although such Class of Notes may have other characteristics

different than the Continuing Notes;

(b)each applicable Rating Agency then rating any Series of Continuing Notes

that will remain outstanding after giving effect to such issuance shall have confirmed that

immediately after such issuance its rating of such Notes will be no lower than its initial rating of

such Notes;

(c)if the Additional Notes will be rated by any Rating Agency then rating any

Continuing Notes of the same Class, the rating assigned by such Rating Agency to such

Additional Notes shall be no lower than the then-current rating assigned by such Rating Agency

to such Class of Continuing Notes;

(d)immediately prior to and following such issuance, no Material Event has

occurred and is continuing, other than a Material Event cured by any related addition of Assets in

connection with such issuance of Additional Notes;

(e)such issuance shall not, in the reasonable opinion of the Manager, be

reasonably expected to have a Material Adverse Effect,

(f)after giving effect to the issuance of such Additional Notes and any

concurrent acquisition of Additional Assets, the following conditions are satisfied as evidenced

by calculation and reasonable supporting information set forth in an Officer’s Certificate

delivered to the Indenture Trustee in connection with such issuance: (A) the Pro Forma Senior

DSCR will be greater than 2.00 to 1.00; (B) the Pro Forma Aggregate DSCR will be greater than

1.50 to 1.00; (C) the Pro Forma Senior LTV will not be greater than 65%, and (D) the Pro Forma

Aggregate LTV will not be greater than 75%; provided that, for purposes of clarity, such pro

forma calculations shall be made without giving effect to any “holiday” or testing exclusions

applicable under this Indenture;

(g)such Additional Notes may not have a Final Scheduled Payment Date

earlier than the Final Scheduled Payment Date of any Outstanding Series of Notes or an

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Anticipated Repayment Date earlier than the Anticipated Repayment Date of any Outstanding

Series of Notes;

(h)[reserved];

(i)the Issuer shall have entered into such additional Hedge Agreements as are

necessary to comply with the hedging requirements set forth in this Indenture and any related

Series Supplement;

(j)the Issuer and the Indenture Trustee receive an Opinion of Counsel (which

opinion may contain similar assumptions and qualifications as are contained in the Opinion of

Counsel with respect to the Tax treatment of the Notes delivered on the Initial Closing Date) to

the effect that the issuance of such Additional Notes (including, for the avoidance of doubt, to

the extent entered into in connection therewith, any Series Supplement or amendment to a Basic

Document) (A) will not cause the Issuer or any of its subsidiaries to be treated as a corporation,

association, publicly traded partnership, taxable mortgage pool, or other entity, in each case,

taxable as a corporation for U.S. federal income Tax purposes, (B) will not cause any Notes of

any Outstanding Series (other than those that are, at any time, held by any Section 385 Related

Party) that were characterized as indebtedness for U.S. federal income Tax purposes, as of the

applicable Closing Date, to be characterized as other than indebtedness for U.S. federal income

Tax purposes, and (C) either (1) should not cause any Notes of any Outstanding Series to

undergo a “significant modification” within the meaning of Treasury Regulations Section

1.1001-3 or (2) will not cause any Notes of any Outstanding Series to undergo a “significant

modification” within the meaning of Treasury Regulations Section 1.1001-3 that would result in

any adverse U.S. federal income tax consequence to any Holder thereof (assuming such Holder

is a “United States person” (within the meaning of Section 7701(a)(30) of the Code) and is not

exempt from U.S. federal income taxation (including under Section 501 of the Code));

(k)any other conditions relating to the issuance of Additional Notes set forth

in any Series Supplement for any Outstanding Series of Notes are satisfied;

(l)no breakage or termination amounts are then due and unpaid in connection

with any Hedge Agreement (including amounts arising from prior reductions in the notional

amount under the related Hedge Agreements in order to maintain compliance with this

Indenture); and

(m)the Indenture Trustee receives an Officer’s Certificate of the Issuer stating

that (1) all conditions precedent to the issuance of the Additional Notes under the Indenture have

been satisfied or waived and (2) the representations and warranties of the Diversified Parties

under the Basic Documents are true and correct in all material respects as of the date of such

issuance.

Section 2.16Certification by Note Owners.

(a)Each Note Owner is hereby deemed, by virtue of its acquisition of an

Ownership Interest in the Book-Entry Notes, to agree to comply with the transfer requirements

set forth in Section 2.4(j).

(b)To the extent that under the terms of this Indenture, it is necessary to

determine whether any Person is a Note Owner, the Indenture Trustee may conclusively rely on a

certificate of such Person, in such form as shall be reasonably acceptable to the Indenture

Trustee, that specifies the Class, Series and aggregate principal balance of the Book-Entry Note

beneficially owned by such Person.

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Article III

REPRESENTATIONS AND WARRANTIES

The Issuer represents and warrants as of the Initial Closing Date and as of the date of

issuance of any Additional Notes as follows:

Section 3.1Organization and Good Standing.

(a)The Issuer (i) is duly organized, validly existing, and in good standing

under the Laws of the State of Delaware and (ii) has full power and authority under its

Organizational Documents to conduct its business as it is now being conducted, and to own or

use the properties and assets that it purports to own or use.

(b)Each Guarantor (i) is duly organized, validly existing, and in good

standing under the Laws of the State of Pennsylvania and (ii) has full power and authority under

its Organizational Documents to conduct its business as it is now being conducted, and to own or

use the properties and assets that it purports to own or use.

Section 3.2Authority; No Conflict.

(a)The execution, delivery, and performance of this Indenture and the Basic

Documents and the performance of the Contemplated Transactions have been duly and validly

authorized in accordance with the Organizational Documents of each of the Issuer Parties, as

applicable.

(b)This Indenture has been duly executed and delivered by the Issuer Parties

and all instruments executed and delivered by any of the Issuer Parties at or in connection with

the Closing have been duly executed and delivered by such Issuer Parties.

(c)This Indenture constitutes the legally valid and binding obligation of the

Issuer Parties, enforceable against the Issuer Parties in accordance with its terms, except as such

enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium

and or other similar Laws affecting the rights and remedies of creditors generally and by general

principles of equity (regardless of whether such enforceability is considered in a Proceeding in

equity or at Law).

(d)Neither the execution and delivery of this Indenture or the instruments

executed in connection herewith by the Issuer Parties nor the consummation or performance of

any of the Contemplated Transactions or Basic Documents by the Issuer Parties shall, directly or

indirectly (with or without notice or lapse of time or both):

(i)contravene, conflict with, or result in a violation of (A) any

provision of the Organizational Documents of the Issuer Parties, as applicable, or

(B) any resolution adopted by the board of directors, board of managers,

stockholders, members, or partners of the Issuer Parties, as applicable;

(ii)in any material respect, contravene, conflict with, or result in a

violation of, or give any Governmental Body or other Person the right to

notification of or to challenge any of the Contemplated Transactions or Basic

Documents, to terminate, accelerate, or modify any terms of, or to exercise any

remedy or obtain any relief under, any Contract or agreement or any Law or Order

to which any of the Issuer Parties, or any of the Assets, may be subject;

22

(iii)in any material respect, contravene, conflict with, or result in a

violation of any of the terms or requirements of, or give any Governmental Body

the right to revoke, withdraw, suspend, cancel, terminate, or modify, any

Governmental Authorization that relates to the Assets; or

(iv)result in the imposition or creation of any Encumbrance or give

rise to any right of termination, cancellation, or acceleration under any of the

terms, conditions, or provisions of any Lease, Contract, note, bond, mortgage,

indenture, license, or other material agreement with respect to any of the Assets,

other than any Encumbrance or Lien arising in favor of the Indenture Trustee

pursuant to the Basic Documents.

Section 3.3Legal Proceedings; Orders. Except as set forth on Schedule 3.3

hereto, (a) there is no pending Proceeding against any of the Issuer Parties or any of its

Affiliates (i) that relates to or may affect any of the Assets that could reasonably be expected to

have a Material Adverse Effect; or (ii) that challenges, or that may have the effect of preventing,

delaying, making illegal, or otherwise materially interfering with, any of the Contemplated

Transactions or Basic Documents, and (b) to the Issuer Parties’ Knowledge, (x) no Proceeding

of the type referenced above has been Threatened, (y) there is no Order adversely affecting the

use or ownership of the Assets to which any of the Issuer Parties, or any of the Assets, is

subject, and (z) there is no Order or Proceeding restraining, enjoining, or otherwise prohibiting

or making illegal the consummation of the Contemplated Transactions or Basic Documents or

which could reasonably be expected to result in a material diminution of the benefits

contemplated by this Indenture or the Contemplated Transactions or Basic Documents.

Section 3.4Compliance with Laws and Governmental Authorizations.

(a)The Assets have been owned in all material respects in accordance with all

Laws of all Governmental Bodies having or asserting jurisdiction relating to the ownership and

operation thereof, including the production of Hydrocarbons attributable thereto.

(b)Except as set forth on Schedule 3.4(b) hereto, to the Knowledge of the

Diversified Companies, all necessary Governmental Authorizations with regard to the ownership

of any of the Issuer Parties’ interest in the Assets have been obtained and no violations exist or

have been recorded in respect of such Governmental Authorizations.

(c)None of the Issuer Parties nor any of their Affiliates have received any

written notice of any violation of any Laws in any material respect or of any Governmental

Authorization in connection with the ownership of the Assets that has not been corrected or

settled, and there are no Proceedings pending or, to the Issuer Parties’ Knowledge, threatened

that might result in any material modification, revocation, termination or suspension of any

Governmental Authorization or which would require any material corrective or remedial action

by any of the Issuer Parties or any of its Affiliates.

Section 3.5Title to Property; Leases. Each Issuer Party has good and sufficient

title to its properties that individually or in the aggregate are material, including all such

properties purported to have been acquired by each Issuer Party, in each case free and clear of

Liens other than Permitted Liens.

Section 3.6Vesting of Title to the Assets. Title to the Assets is vested in the

Guarantors, and each Guarantor will have valid legal and beneficial title thereto, in each case

subject to no prior Lien, mortgage, security interest, pledge, adverse claim, charge or other

encumbrance, other than the Permitted Liens. Prior to the transfers contemplated by the Asset

Vesting Documents, each Guarantor had valid legal and beneficial title to the applicable Assets

and had not assigned to any Person any of its right, title or interest in any such Assets, other than

in connection with any Liens that are being released on or before the applicable Closing Date or

any Permitted Liens.

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Section 3.7Compliance with Leases. Each Guarantor is in compliance in all

material respects with each Lease to the extent relating to an Asset, including all express and

implied covenants thereunder. No material written demands or notices of default or non-

compliance or dispute (including those received electronically) with respect to a Lease to the

extent relating to an Asset have been issued to or received by a Guarantor that remain uncured or

outstanding.

Section 3.8Material Indebtedness. None of the Issuer Parties has any material

Indebtedness other than Permitted Indebtedness.

Section 3.9Employee Benefit Plans. Except as set forth on Schedule 3.9

hereto, neither any of the Issuer Parties nor, to the extent it would reasonably be expected to have

a Material Adverse Effect, any ERISA Affiliate maintains or has ever maintained any Plans

(including any Non-U.S. Plan) or has ever had any direct obligation to make any contribution to

a Multiemployer Plan.

Section 3.10Use of Proceeds; Margin Regulations. On the Initial Closing Date,

the Issuer will apply the proceeds of the sale of the Notes hereunder (a) to acquire the Initial

Assets by acquiring 100% of the transferable interests and limited liability company interests of

the Guarantors, as applicable, (b) to fund the Liquidity Reserve Account in an amount equal to

the Liquidity Reserve Account Initial Deposit, (c) to pay transaction costs associated with the

issuance of the Notes and the acquisition of the Initial Assets, and (d) other general corporate

purposes (including dividend payments to Diversified Holdings for further distribution to

Diversified). After the Initial Closing Date, subject to the conditions set forth in this Indenture,

the Issuer may also apply the proceeds of the sale of any Additional Notes hereunder to fund the

redemption of any Notes then Outstanding or for any other permissible purposes. No part of the

proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose

of buying or carrying any margin stock within the meaning of Regulation U of the Board of

Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying

or trading in any Securities under such circumstances as to involve any of the Issuer Parties in a

violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a

violation of Regulation T of said Board (12 CFR 220).

Section 3.11Existing Indebtedness; Future Liens.

(a)None of the Issuer Parties has, and has never had, any outstanding

Indebtedness other than Permitted Indebtedness. There are no outstanding Liens on any property

of any of the Issuer Parties other than Permitted Liens.

(b)Except for Permitted Liens, none of the Issuer Parties has, at any time,

agreed or consented to cause or permit any of its property, whether now owned or hereafter

acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future

(upon the happening of a contingency or otherwise) any of its property, whether now owned or

hereafter acquired, to be subject to a Lien that secures Indebtedness.

(c)Other than the Basic Documents, none of the Issuer Parties is a party to, or

otherwise subject to any provision contained in, any instrument evidencing Indebtedness of any

of the Issuer Parties, any agreement relating thereto or any other agreement (including its charter

or any other Organizational Document) which limits the amount of, or otherwise imposes

restrictions on the incurring of, Indebtedness of any of the Issuer Parties.

Section 3.12Foreign Assets Control Regulations, Etc.

(a)Neither any of the Issuer Parties nor any Controlled Entity (i) is a Blocked

Person, (ii) has been notified that its name appears (or may in the future appear) on a State

Sanctions List or (iii) to any Issuer Party’s Knowledge, is a target of sanctions that have been

imposed by the United Nations or the European Union.

(b)None of the Issuer Parties nor any Controlled Entity (i) is in violation, has

been found in violation of, or has been charged or convicted under, any applicable U.S.

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Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to any

Issuer Party’s Knowledge, is under investigation by any Governmental Body for possible

violation of any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or

Anti-Corruption Laws.

(c)No part of the proceeds from the sale of the Notes hereunder:

(i)constitutes or will constitute funds obtained on behalf of any

Blocked Person or will otherwise be used by any Issuer Party or any Controlled

Entity, directly or knowingly indirectly, (A) in connection with any investment in,

or any transactions or dealings with, any Blocked Person in violation of U.S.

Economic Sanctions Laws, (B) for any purpose that would cause any Purchaser to

be in violation of any U.S. Economic Sanctions Laws, or (C) otherwise in

violation of any U.S. Economic Sanctions Laws;

(ii)will be used, directly or knowingly indirectly, in violation of, or

cause any Purchaser to be in violation of, any applicable Anti-Money Laundering

Laws; or

(iii)will be used, directly or knowingly indirectly, for the purpose of

making any improper payments, including bribes, to any Governmental Official

or commercial counterparty in order to obtain, retain or direct business or obtain

any improper advantage, in each case which would be in violation of, or cause

any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

(d)Each of the Issuer Parties and its Affiliates have established procedures

and controls which they reasonably believe are adequate (and otherwise comply with applicable

Law) to ensure that each of the Issuer Parties and each Controlled Entity is and will continue to

be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering

Laws and Anti-Corruption Laws.

Section 3.13Status under Certain Statutes. None of the Issuer Parties is subject

to regulation under the Investment Company Act, the Public Utility Holding Company Act of

2005, the ICC Termination Act of 1995, or the Federal Power Act. As to the Issuer and each of

the Guarantors, (i) neither the Issuer nor any of the Guarantors is (A) a “commodity pool” as

defined in Section 1a(10) of the Commodity and Exchange Act or any rule or regulation relating

thereto or any interpretation thereof by the Commodity Futures Trading Commission or (B) a

“financial end user,” as defined in either 17 CFR §23.151 or 12 CFR §349.2, and (ii) each of the

Issuer and the Guarantors is an “eligible contract participant” as such term is defined in the

Commodity and Exchange Act, and will, in the future, maintain such status as to all Hedge

Agreements outstanding with any one or more of the Hedge Counterparties until all Obligations

thereunder have been fully performed. None of the Issuer, the Guarantors or the transaction

contemplated under the Basic Documents constitutes a “covered fund” for purposes of Section

619 of The Dodd-Frank Wallstreet Reform and Consumer Protection Act, otherwise known as

the “Volcker Rule.”

Section 3.14Single Purpose Entity. Each Issuer Party (i) has been formed and

organized for limited purposes, including entering into the Basic Documents to which it is a

party, and performing its obligations thereunder (including entering into certain agreements in

connection therewith), and (ii) does not have any other assets other than those related to its

activities in accordance with clause (i) above.

Section 3.15Solvency. Each Issuer Party is solvent, has capital not

unreasonably small in relation to its business or any contemplated or undertaken transaction and

has assets having a value both at fair valuation and at present fair saleable value greater than the

amount required to pay its debts as they become due and greater than the amount that will be

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required to pay its probable liability on its existing debts as they become absolute and matured.

None of the Issuer Parties intends to incur, or believes that it will incur, debts beyond its ability

to pay such debts as they become due. None of the Issuer Parties believes that it will be rendered

insolvent by the execution and delivery of, and performance of its obligations under, this

Indenture, the Notes and the other Basic Documents to which it is a party. None of the Issuer

Parties intends to hinder, delay or defraud its creditors by or through the execution and delivery

of, or performance of its obligations under, this Indenture, the Notes or the other Basic

Documents to which it is a party.

Section 3.16Security Interest. The Indenture, together with the Pledge

Agreement and the Mortgages, creates in favor of the Indenture Trustee, as security for the

payment of principal of and interest on, and any other amounts owed or owing in respect of, the

Notes and the Hedge Agreements (including any termination payments and any other amounts

owed or owing thereunder) and for the performance of the provisions of this Indenture, a security

interest in or mortgage or deed of trust on all of the right, title, and interest, whether now owned

or hereafter acquired, of each Issuer Party (and, in the case of the Collateral subject to the Pledge

Agreement, Diversified Holdings) in, to, and under the Collateral. Upon the filing of the

applicable UCC-1 financing statements and the Mortgages, all action has been taken as is

necessary to perfect such security interest or mortgage or deed of trust, and such security interest,

mortgage or deed of trust is of first priority subject in each case to Permitted Liens.

Article IV

COVENANTS

Section 4.1Payment of Principal and Interest. The Issuer will duly and

punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of

the Notes and this Indenture. Without limiting the foregoing, subject to and in accordance with

Section 8.6, the Indenture Trustee shall distribute all amounts on deposit in the Collection

Account and allocated for distribution to the Noteholders on a Payment Date pursuant to Article

VIII hereof for the benefit of the Notes, to the Noteholders. Amounts properly withheld under the

Code by any Person from a payment to any Noteholder of interest and/or principal shall be

considered as having been paid by the Issuer to such Noteholder for all purposes of this

Indenture.

Section 4.2Maintenance of Office or Agency. The Issuer will maintain in the

United States, an office or agency where Notes may be surrendered for registration of transfer or

exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this

Indenture may be served. Such office or agency will initially be at Corporate Trust Office of the

Indenture Trustee, and the Issuer hereby initially appoints the Indenture Trustee to serve as its

agent for the foregoing purposes. The Indenture Trustee will give prompt written notice to the

Issuer, the Back-Up Manager and each Rating Agency of any change in the location of any such

office or agency. If at any time the Issuer shall fail to maintain any such office or agency or shall

fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and

demands may be made or served at the Corporate Trust Office, and the Issuer hereby appoints

the Indenture Trustee as its agent to receive all such surrenders, notices and demands; provided,

that the Indenture Trustee shall not be deemed an agent of the Issuer for service of process.

Section 4.3Money for Payments to Be Held on behalf of the Noteholders and

Hedge Counterparties. All payments of amounts due and payable with respect to any Notes and

Hedge Agreements that are to be made from amounts withdrawn from the Collection Account

pursuant to Section 8.6 shall be made on behalf of the Issuer by the Indenture Trustee or by

another Paying Agent, and no amounts so withdrawn from the Collection Account for payments

of Notes and Hedge Agreements shall be paid over to the Issuer except as provided in Section

8.6.

Section 4.4Compliance With Law. Each of the Issuer Parties will comply with

all Laws and regulations to which it is subject (including ERISA, Environmental Laws, and the

USA PATRIOT Act) and will obtain and maintain in effect all licenses, certificates, permits,

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franchises and other Governmental Authorizations necessary to the ownership of its properties or

to the conduct of its businesses, in each case to the extent necessary to ensure compliance in all

material respects with such Laws, ordinances or governmental rules or regulations and

requirements to obtain or maintain in effect such licenses, certificates, permits, franchises and

other governmental authorizations.

Section 4.5Insurance. From and after the Initial Closing Date, each of the

Issuer Parties will maintain (or cause to be maintained), with financially sound and reputable

insurers, insurance with respect to its properties and businesses against such casualties and

contingencies, of such types, on such terms and in such amounts (including deductibles, co-

insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is

customary in the case of entities of established reputations engaged in the same or a similar

business and similarly situated, and, within thirty (30) days after the Initial Closing Date, each of

the Issuer Parties shall cause the Indenture Trustee to be named as a loss payee or an additional

insured. For the avoidance of doubt, any proceeds received by any of the Issuer Parties or the

Manager for the benefit of any of the Issuer Parties with respect to any claim under such

insurance policy shall be deemed to be Collections with respect to the Collection Period in which

such proceeds are received and promptly, but in any event within two (2) Business Days,

deposited into the Collections Account.

Section 4.6No Change in Fiscal Year. Without the consent of the Majority

Noteholders, each of the Issuer Parties shall not (i) permit its fiscal year to end on a day other

than December 31, (ii) change its method of determining fiscal quarters or make or permit any

change in accounting policies or reporting practices, except as required by or in accordance with

IFRS, or, to the extent Diversified Corp or its direct or indirect parent prepares its financial

statements in accordance with GAAP, in accordance with GAAP, or (iii) change its federal

employer identification number, except, in each case, for any such changes that are not

materially adverse to the Holders or the Hedge Counterparties.

Section 4.7Payment of Taxes and Claims. Each of the Issuer Parties will file

all U.S. federal, state and any other material Tax returns required to be filed in any jurisdiction

and to pay and discharge all Taxes shown to be due and payable on such returns and all other

material Taxes imposed on them or any of their properties, assets, income or franchises, to the

extent the same have become due and payable and before they have become delinquent and all

claims for which sums have become due and payable that have or might become a Lien on

properties or assets of the Issuer or any of its Subsidiaries; provided, that the applicable Issuer

Party need not pay any such Tax if the amount, applicability or validity thereof is contested by

such Issuer Party on a timely basis in good faith and by appropriate proceedings by the Issuer

Party, and such Issuer Party has established adequate reserves therefor in accordance with GAAP

on the books of such Issuer Party.

Section 4.8Existence. Subject to Section 4.17, each of the Issuer Parties will at

all times preserve and keep (i) its limited liability company existence in full force and effect and

(ii) all foreign qualifications of the Issuer Party and all rights and franchises of the Issuer Party.

Section 4.9Books and Records. Each of the Issuer Parties will maintain or

cause to be maintained proper books of record and account in conformity with IFRS, or, to the

extent Diversified Corp or its direct or indirect parent prepares its financial statements in

accordance with GAAP, in accordance with GAAP, and all applicable requirements of any

Governmental Body having legal or regulatory jurisdiction over the Issuer Party. Each of the

Issuer Parties will keep or cause to be kept books, records and accounts that, in reasonable detail,

accurately reflect all transactions and dispositions of assets. The Issuer or one of its Affiliates has

devised a system of internal accounting controls sufficient to provide reasonable assurances that

each of the Issuer Parties’ books, records, and accounts accurately reflect all transactions and

dispositions of assets, and such a system shall be maintained.

Section 4.10Performance of Material Agreements. From and after the Initial

Closing Date, each of the Issuer Parties will at all times in all material respects (i) observe and

perform all obligations, covenants and agreements to be performed by it under, and comply with

all conditions under, each material agreement including each Lease to which it is or becomes a

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party in accordance with the terms thereof and (ii) subject to the terms of this Indenture,

diligently exercise, enforce, defend and protect its rights under, and take any action required to

collect any and all sums due to it under, each material agreement including each Lease to which

it is or becomes a party. None of the Issuer Parties shall take any action or permit any action to

be taken by others which would release any Person from any of such Person’s covenants or

obligations under the Basic Documents or under any instrument or agreement included as part of

the Collateral or that would result in the amendment, hypothecation, subordination, termination

or discharge of, or impair the validity or effectiveness of, any such instrument or agreement,

except (i) such amendment, hypothecation, subordination, termination or discharge in the

ordinary course of business or that does not have a material detriment to the value of the

Collateral or (ii) as expressly provided in this Indenture, the other Basic Documents or such other

instrument or agreement or as ordered by a bankruptcy or other court.

Section 4.11Maintenance of Lien. From and after the Initial Closing Date and

for so long as the Notes and Hedge Agreements are outstanding, each of the Issuer Parties will, at

its expense, timely take or cause to be taken all action required to maintain and preserve the

perfection and first priority of the Lien on the Collateral granted under this Indenture, the Pledge

Agreement and the Mortgages (subject to Permitted Liens).

Section 4.12Further Assurances. From time to time the Issuer Parties will

perform or cause to be performed any other act as required by Law and will execute or cause to

be executed any and all further instruments that may be required by Law or reasonably necessary

(or reasonably requested by the Indenture Trustee) in order to create, perfect and protect the Lien

of the Indenture Trustee on or in the Collateral. The Issuer Parties will promptly do, execute,

acknowledge and deliver, or cause to be promptly done, executed, acknowledged and delivered,

all such further acts, deeds, conveyances, mortgages, assignments, transfers and assurances as the

Indenture Trustee or any Noteholder may reasonably require for the creation, perfection and

priority of the Liens being herein provided for (subject to Permitted Liens). The Issuer Parties

will pay or cause to be paid all filing, registration and recording Taxes and fees incident to such

filing, registration and recording, and all expenses incident to the preparation, execution and

acknowledgment of this Indenture, and of any instrument of further assurance, and all federal or

state stamp Taxes and other Taxes arising out of or in connection with the execution and delivery

of this Indenture, the other Basic Documents and such instruments of further assurance (other

than, for the avoidance of doubt, any income (or similar) Taxes). Each Issuer Party hereby

authorizes, but does not obligate, the Indenture Trustee to file one or more financing or

continuation statements, and amendments thereto, relative to all or any part of the Collateral

without the signature of the Issuer. Each Issuer Party acknowledges and agrees, on behalf of

itself, that any such financing statement may describe the Collateral as “all assets”, “all personal

property” or “all assets and all personal property of Debtor, whether now owned or existing or

hereafter acquired or arising, wherever located, together with all products and proceeds thereof,

substitutions and replacements therefor, and additions and accessions thereto” of the applicable

Person or words of similar effect as may be required by the Indenture Trustee.

Section 4.13Use of Proceeds. The Issuer shall apply the proceeds of the sale of

the Notes solely as provided in Section 3.10.

Section 4.14Separateness.

(a)The Issuer Parties will pay their debts and liabilities (including, as

applicable, shared personnel, overhead expenses and any compensation due to its Independent

manager or member) from their assets as the same shall become due and payable, except for

expenses paid on its behalf pursuant to arm’s length contractual arrangements providing for

operating, maintenance or administrative services.

(b)Each Issuer Party will observe all limited liability company or

organizational formalities, maintain books, records, financial statements and bank accounts

separate from those of its Affiliates, except as permitted by this Indenture and the other Basic

Documents. None of the Issuer’s or any of its Subsidiaries’ assets will be listed as assets on the

financial statement of any other entity except as required by IFRS, or, to the extent Diversified

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Corp or its direct or indirect parent prepares its financial statements in accordance with GAAP,

as required by GAAP; provided, however, that appropriate notation shall be made on any

consolidated statements to indicate its separateness from any Affiliates and to indicate that its

assets and credit are not available to satisfy the debt and other obligations of such Affiliate or any

other Person except as otherwise contemplated by the Basic Documents.

(c)Each Issuer Party will be, and at all times will hold itself out to the public

as, a legal entity separate and distinct from any other entity (including any Affiliate) and the

Issuer will conduct and operate its business and in its own name, except for U.S. federal and

applicable state and local income Tax purposes if the Issuer is treated as a “disregarded entity”

for such purposes.

(d)Other than as contemplated in the Joint Operating Agreement and the

other Basic Documents, each Issuer Party will hold all of its assets in its own name and will not

commingle its funds and other assets with those of any Affiliate, except for U.S. federal and

applicable state and local income Tax purposes if the Issuer is treated as a “disregarded entity”

for such purposes.

(e)The Issuer Parties will not conduct the business of or act on behalf of any

other Person (except as required by the Basic Documents).

(f)Each Issuer Party (i) will at all times have at least one (1) duly elected

Independent manager or member and (ii) so long as the Notes and Hedge Agreements remain

outstanding, shall not remove or replace any Independent manager or member without cause and

only after providing the Indenture Trustee, each Noteholder and each Hedge Counterparty with

no less than three (3) days’ prior written notice of (A) any proposed removal of such Independent

manager or member, and (B) the identity of the proposed replacement, together with a

certification that such replacement satisfies the requirements for an Independent manager or

member in the organizational documents for the applicable Issuer Party and this Indenture. No

Issuer Party will institute proceedings to be adjudicated bankrupt or insolvent, consent to the

institution of bankruptcy or insolvency proceedings against it, or file, or consent to, a petition

seeking reorganization or relief under any applicable federal or state Law relating to bankruptcy

or insolvency, or consent to the appointment of a receiver, liquidator, assignee, trustee,

sequestrator (or other similar official) of such Issuer Party or any substantial part of its property,

or make an assignment for the benefit of creditors, or admit in writing its inability to pay its debts

generally as they become due, or take limited liability company action in furtherance of any such

action without the affirmative vote of at least one (1) duly elected Independent manager or

member; provided, however, irrespective of such affirmative vote, the occurrence of any of the

foregoing is subject to Section 5.1(a)(iv), Section 5.1(a)(v), and any other terms herein or any of

the Basic Documents.

(g)Each Issuer Party will be, and at all times will hold itself out to the public

and all other Persons as, a legal entity separate and distinct from any other Person (including any

Affiliate), correct any known misunderstanding regarding its status as a separate entity, conduct

business solely in its own name, and not identify itself as a division of any of its Affiliates or any

of its Affiliates as a division of any Issuer Party (except for U.S. federal and applicable state and

local income Tax purposes in the case of an Issuer Party that is treated as a “disregarded entity”

for such purposes). Each Issuer Party will conduct and operate its business and in its own name.

(h)Each Issuer Party will not permit its name to be used by any of its Affiliate

in the conduct of such Affiliate’s business, and will not use the name of any Affiliate in the

conduct of its business.

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(i)Each Issuer Party will file its own Tax returns, if any, as may be required

under applicable Law, to the extent it is (1) not part of a consolidated group filing a consolidated

return or returns or (2) not treated as a division or disregarded entity for Tax purposes of another

taxpayer, and pay any Taxes required to be paid under applicable Law.

(j)Each Issuer Party will maintain its assets, including the Collateral, in such

a manner that it would not be costly or difficult to identify, segregate or ascertain its assets from

those of any other Person.

(k)Subject to Section 4.15, each Issuer Party will maintain an arm’s length

relationship with its Affiliates, and not enter into any transaction with any Affiliate unless such

transaction is (i) on such terms and conditions (including terms relating to amounts paid

thereunder) as would be generally available if such business transaction were with an entity that

was not an Affiliate in comparable transactions, and (ii) pursuant to enforceable agreements.

(l)Each Issuer Party will not hold out its credit or assets as being available to

satisfy the obligations of others nor guarantee the obligation of any Person.

(m)Each Issuer Party will maintain adequate capital in light of its

contemplated business purpose, transactions, and liabilities (provided, that no member of the

Issuer shall have any obligation to make any contribution of capital to the Issuer).

(n)Each Issuer Party will not grant a security interest in its assets to secure

the obligations of any other Person.

(o)Each Issuer Party will not, directly or indirectly, engage in any business or

activity other than the actions that are both (i) required or permitted to be performed under

Section 3.1 of its limited liability company agreement and (ii) permitted by the terms of the Basic

Documents.

(p)Each Issuer Party will not incur any indebtedness, liability, obligation, or

expense, or own any assets, other than in each case those that are both (i) necessary to achieve

the purposes set forth in Section 3.1 of its limited liability company agreement and (ii) permitted

by the Basic Documents;

(q)Each Issuer Party will not make or permit to remain outstanding any loan

or advance to, or own or acquire any stock or securities of, any Person, other than as permitted

by the Basic Documents;

(r)Each Issuer Party will maintain complete records of all transactions

(including all transactions with any Affiliate);

(s)Each Issuer Party will comply with all requirements of applicable Law

regarding its operations and shall comply with the provisions of this Indenture and its

Organizational Documents; and

(t)Other than the Guarantors, the Issuer will not form, acquire, or hold any

Subsidiary. No Guarantor will form, acquire or hold any Subsidiary.

Section 4.15Transactions with Affiliates. The Issuer Parties will not enter into

directly or indirectly any transaction or group of related transactions (including the purchase,

lease, sale or exchange of properties of any kind or the rendering of any service) with any

Affiliate, except as contemplated by the Basic Documents and except in the ordinary course and

pursuant to the reasonable requirements of the Issuer’s business and upon fair and reasonable

30

terms no less favorable to the applicable Issuer Party than would be obtainable in a comparable

arm’s length transaction with a Person not an Affiliate.

Section 4.16Merger, Consolidation, Etc. Other than the transactions

contemplated on the Initial Closing Date, none of the Issuer Parties will consolidate with or

merge with any other Person or convey, transfer or lease all or substantially all of its assets in a

single transaction or series of transactions.

Section 4.17Lines of Business. None of the Issuer Parties will at any time

engage in any business other than those related to the ownership of the Assets and the

transactions contemplated by this Indenture and the other Basic Documents to which it is a party

and other activities reasonably incidental thereto; provided, however, that none of the Issuer

Parties shall engage in any business or activity or enter into any contractual arrangement (other

than any business or activity in which the Issuer is engaged on the Initial Closing Date) that

would (i) subject the Holders or any Hedge Counterparty to regulation or oversight by any

Governmental Body (other than the Governmental Bodies which regulate companies engaged in

the oil and gas industry, insurance companies and, following foreclosure, regulations applicable

to assets held as a result of such foreclosure) or cause the Holders or any Hedge Counterparty to

breach any Law or regulation or guideline of any Governmental Body or require Holders or any

Hedge Counterparty to obtain a consent, waiver or clarification by any Governmental Body or

(ii) cause any of the representations and warranties of any of the Issuer Parties contained in any

of the Basic Documents to be inaccurate as of the date made or deemed made.

Section 4.18Economic Sanctions, Etc. None of the Issuer Parties nor any

Controlled Entity will (a) become (including by virtue of being owned or controlled by a

Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any

investment in or engage in any dealing or transaction (including any investment, dealing or

transaction involving the proceeds of the Notes) with any Person if such investment, dealing or

transaction (i) would cause any Noteholder, any Hedge Counterparty or any affiliate of such

Holder or any Hedge Counterparty to be in violation of, or subject to sanctions under, any

applicable U.S. Economic Sanctions Laws, Anti-Corruption Laws or Anti-Money Laundering

Laws, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions Laws.

Section 4.19Liens. None of the Issuer Parties will, directly or indirectly, create,

incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on

or with respect to any of its property or assets (including the Collateral), whether now owned or

held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey

any right to receive income or profits, except for Permitted Liens.

Section 4.20Sale of Assets, Etc. None of the Issuer Parties will sell, transfer,

convey, assign, exchange or dispose of any of its properties or assets in any single transaction or

series of related transactions of any individual asset, or group of related assets, other than

Permitted Dispositions; provided, however, that in the event any Permitted Disposition could

reasonably be expected to have a Material Adverse Effect on any Hedge Counterparty or any

Noteholder or the Noteholders, the Issuer shall obtain the prior written consent of each such

Hedge Counterparty and Noteholder to such Permitted Disposition.

Section 4.21Permitted Indebtedness. None of the Issuer Parties will create,

guarantee, assume or suffer to exist, or in any manner be or become liable in respect of, any

Indebtedness of any kind or character, other than the following (such Indebtedness being

referred to as “Permitted Indebtedness”):

(a)Indebtedness owing under this Indenture, the Notes or any other Basic

Document, including the Hedge Agreements;

(b)Operating Expenses;

(c)obligations incurred in the ordinary course of its business specified in

Section 4.17 in an aggregate amount not to exceed $1,000,000 in the aggregate for all Issuer

Parties at any one time; and

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(d)other Indebtedness with the prior written consent of the Majority

Noteholders; provided, however, any such Indebtedness is subordinate to the Hedge

Counterparties and Holders, in all respects.

Section 4.22Amendment to Organizational Documents. None of the Issuer

Parties will, or will permit any Person to, amend, modify or otherwise change (i) any material

provision of the Organizational Documents of any Issuer Party, as applicable, except to the

extent such amendment, modification or change would not be materially adverse to the Secured

Parties as stated in an Officer’s Certificate of the Issuer or (ii) its jurisdiction of organization, its

location of principal place of business or its name, in each case, without the prior written consent

of the Majority Noteholders and the Majority Hedge Counterparties (such consent not to be

unreasonably withheld, conditioned or delayed) and unless all actions have been taken to

maintain the perfection and first-priority of the security interest in the Collateral in favor of the

Indenture Trustee; provided, however, that each Issuer Party may amend, modify or otherwise

change any provision of the Issuer Party’s Organizational Documents to: (i) cure any ambiguity,

(ii) correct or supplement any provision in a manner consistent with the intent of the Issuer

Party’s Organizational Documents and the other Basic Documents or (iii) otherwise amend,

modify or change any immaterial provision of the Issuer Party’s Organizational Documents, in

each case, without obtaining the consent of the Noteholders or the Hedge Counterparties, but

with delivery of an Officer’s Certificate to the Indenture Trustee stating that such amendment is

so permitted under one or more of the foregoing clauses (i)-(iii) of this proviso. Notwithstanding

the foregoing, no amendment, modification, or change to any Organizational Document shall be

made if such amendment, modification, or change would result in the liens granted under this

Indenture or any other Basic Document becoming unperfected or otherwise adversely affect the

priority or enforceability of such liens.

Section 4.23No Loans. Each of the Issuer Parties will not, directly or indirectly,

make any loan or advance to any Person, other than Permitted Investments.

Section 4.24Permitted Investments; Subsidiaries. Each of the Issuer Parties will

not make any Investments other than (a) any Investment in Permitted Investments of monies in

any Issuer Account and (b) obligations of account debtors to the Issuer arising in the ordinary

course of business, and (c) Investments received as consideration from any Permitted

Disposition. Without limiting the generality of the foregoing, each of the Issuer Parties will not

create any Subsidiaries (other than the Issuer’s ownership of the Guarantors) or enter into any

partnership or joint venture.

Section 4.25Employees; ERISA. Each of the Issuer Parties will not maintain

any employees or maintain any Plan or incur or suffer to exist any direct obligation to make any

contribution to a Multiemployer Plan.

Section 4.26Tax Treatment. None of the Issuer Parties, nor any party otherwise

having the authority to act on behalf of an Issuer Party, is authorized to, or will, make the

election described in U.S. Treasury Regulations Section 301.7701-3(a) to treat any Issuer Party

as an association taxable as a corporation for U.S. federal income Tax purposes, or a similar

election under any U.S. state or local Law, or take any other action that would reasonably be

expected to cause any Issuer Party to be treated as an association taxable as a corporation for

U.S. federal income Tax purposes. The Issuer will treat the Notes (other than Notes held by any

equity holder of the Issuer (including any entity whose separate existence from the Issuer or the

equity holder of the Issuer is disregarded for U.S. federal income Tax purposes), any other

persons who are members of an “expanded group” with the Issuer within the meaning of the

Treasury Regulations under Section 385 of the Code, but only so long as such Notes are held by

such person, or as otherwise required by a change in law or a final determination pursuant to

Section 1313 of the Code) and this Indenture as indebtedness, and not as an equity interest in the

Issuer, for all purposes (including U.S. federal, state and local income Tax purposes). For all

U.S. federal and applicable state and local income Tax purposes, the Issuer has always been and

shall continue to be classified as an entity disregarded from its regarded Tax owner and shall not

be treated as a partnership (for the avoidance of doubt, treating the Class B Notes as debt for this

32

purpose), a publicly traded partnership treated as a corporation, a taxable mortgage pool (in

whole or in part) taxable as a corporation or as an association taxable as a corporation.

Section 4.27Replacement of Manager, Back-Up Manager and Operator. In the

event that the Manager shall be terminated due to a Material Manager Default or Event of

Default have occurred or is continuing, the Majority Noteholders will have the right but not the

obligation to appoint, a replacement manager as soon as reasonably practicable, but in any event

within thirty (30) days following such delivery of notice of termination and notify the Issuer of

such appointment. In the event that the Manager shall resign, the Issuer shall appoint a

replacement manager with the consent of the Majority Noteholder (such consent not to be

unreasonably withheld, conditioned, or delayed) as soon as reasonably practicable, but in any

event within thirty (30) days following such delivery of notice of any such resignation and notify

the Noteholders of such appointment; provided that if the Issuer shall not have appointed a

replacement manager by the end of such thirty (30) day period other than as a result of the failure

of the Majority Noteholders to have reasonably consented, the Majority Noteholders may have

the right to appoint the replacement manager with the consent of the Issuer (such consent not to

be unreasonably withheld, conditioned, or delayed). In the event that the Back-Up Manager shall

resign, be terminated or otherwise removed, the Issuer shall appoint a replacement back-up

manager with the consent of the Majority Noteholder (such consent not to be unreasonably

withheld, conditioned, or delayed) as soon as reasonably practicable, but in any event within

thirty (30) days following such delivery of notice of any such resignation, termination or removal

and notify the Noteholders of such appointment; provided that if the Issuer shall not have

appointed a replacement back-up manager by the end of such thirty (30) day period other than as

a result of the failure of the Majority Noteholders to have reasonably consented, the Majority

Noteholders may have the right to appoint the replacement back-up manager with the consent of

the Issuer (such consent not to be unreasonably withheld, conditioned, or delayed).

Section 4.28Hedge Agreements.

(a)Natural Gas Hedging. The Issuer shall enter into on or prior to the Initial

Closing Date, and thereafter maintain until the earlier of (i) the five-year anniversary of the

Initial Closing Date and (ii) the redemption of the Notes in accordance with Article X, swaps,

options, collars or other non-speculative Hedge Agreements (the “Natural Gas Hedge Period”)

with an aggregate notional volume of (and fixing price exposure relative to the NYMEX spot

price with respect to) at least 85% (provided that the Issuer shall endeavor to maintain a floor of

at least 85%) but, at all times, including after the Natural Gas Hedge Period, no more than 95%

of the projected natural gas output from the Issuer’s (together with its Subsidiary’s) Assets for

each month classified as “proved, developed and producing” and as described in the Reserve

Report (the “Natural Gas Hedge Percentage”); provided that such hedging arrangements shall be

adjusted at the end of each annual fiscal period following the Initial Closing Date (beginning

with the annual fiscal period ending December 31, 2027) to the extent necessary to maintain such

hedging period on a rolling basis for a period that is at least sixty (60) months from the end of

such annual fiscal period. The Issuer may comply with these hedge requirements by way of (1)

an initial hedging strategy consisting of one or more swap transactions and/or swaptions which

establish a minimum price level, (2) a hedging strategy consisting of long put transactions or

other options transactions which establish a minimum price level and (3) mitigating basis risk of

the applicable natural gas output from the Issuer’s (together with its Subsidiaries’) Assets

described in the Reserve Report on a twenty four (24) month rolling basis from the end of each

fiscal quarter; provided, however, that, in all cases such hedging arrangements shall be based on

a Reserve Report updated on at least a semi-annual basis; provided, however, that, in each case,

the Issuer shall not enter into or maintain any Hedge Agreements for purposes of speculation or

investment; provided, however, nothing shall prevent Issuer from novating hedges to maintain

compliance with the terms set forth herein even in cases where such novated hedges may differ

from prevailing market prices, provided further, (i) for the avoidance of doubt, the foregoing

shall not prohibit Issuer from selling call options or swaptions and (ii) the Issuer’s compliance

with the 95% limit in the Natural Gas Hedge Percentage shall be determined without giving

effect to any offsetting or similar Hedge Agreements that would otherwise result in a position

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that is opposite and equivalent to all or a portion of an existing Hedge Agreement (including any

transaction thereunder). Neither the Issuer, nor any party otherwise having authority to act on

behalf of the Issuer, is authorized to, or will, enter into an amendment to any Hedge Agreement

without providing each Rating Agency at least ten (10) Business Days’ prior written notice

thereof; provided that Rating Agency notice shall not be required (other than in accordance with

the Hedge Agreements and other Basic Documents) and nothing in this sentence shall restrict the

Issuer (i) from entering into Hedge Agreements during and after the Natural Gas Hedge Period

(excluding the entry into any offsetting Hedge Agreements described in the proviso of the

immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order

to maintain compliance with the terms set forth herein; or (ii) from optimizing, novating,

transferring, rolling or terminating Hedge Agreements, provided further that the Natural Gas

Hedge Percentage and the requirement to maintain the basis hedges under clause (3) is satisfied

at all times until the redemption of the Notes in accordance with Article X.

(b)Natural Gas Liquids Hedging. The Issuer shall enter into on or prior to the

Initial Closing Date, and thereafter maintain until the earlier of (i) the four-year anniversary of

the Initial Closing Date or (ii) the redemption of the Notes in accordance with Article X, swaps,

options, collars or other non-speculative Hedge Agreements (the “NGL Hedge Period”) with an

aggregate notional volume of (and fixing the price exposure with respect to) at least 85%

(provided that the Issuer shall endeavor to maintain a floor of at least 85%) but, at all times,

including after the NGL Hedge Period, no more than 95% of the projected natural gas liquids

output from the Issuer’s (together with its Subsidiaries’) Assets for each month, classified as

“proved, developed and producing” and as described in the Reserve Report (the “NGL Hedge

Percentage”), based on a Reserve Report updated on at least a semi-annual basis; provided that

such hedging arrangements shall be adjusted at the end of each annual fiscal period following the

Initial Closing Date (beginning with the annual fiscal period ending December 31, 2027) to the

extent necessary to maintain such hedging period on a rolling basis for a period that is at least

thirty six (36) months from the end of such annual fiscal period. The Issuer shall not, in each

case, enter into or maintain any Hedge Agreements for purposes of speculation or investment;

provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit Issuer from

selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit in the NGL

Hedge Percentage shall be determined without giving effect to any offsetting or similar Hedge

Agreements that would otherwise result in a position that is opposite and equivalent to all or a

portion of an existing Hedge Agreement (including any transaction thereunder). Neither the

Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or

will, enter into an amendment to any Hedge Agreement without providing each Rating Agency at

least ten (10) Business Days’ prior written notice thereof; provided that nothing in this sentence

shall restrict the Issuer (i) from entering into Hedge Agreements during and after the NGL Hedge

Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the

immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order

to maintain compliance with the terms set forth; or (ii) from optimizing, novating, transferring,

rolling or terminating Hedge Agreements, provided further that the NGL Hedge Percentage is

satisfied at all times until the redemption of the Notes in accordance with Article X.

(c)Oil Hedging. The Issuer shall enter into on or prior to the Initial Closing

Date, and thereafter maintain until the earlier of (i) the four-year anniversary of the Initial

Closing Date or (ii) the redemption of the Notes in accordance with Article X, swaps, options,

collars or other non-speculative Hedge Agreements (the “Oil Hedge Period”) with an aggregate

notional volume of (and fixing the price exposure with respect to) at least 85% (provided that the

Issuer shall endeavor to maintain a floor of at least 85%) but, at all times, including after the Oil

Hedge Period, no more than 95% of the projected oil output from the Issuer’s Assets for each

month classified as “proved, developed and producing” and as described in the Reserve Report

(the “Oil Hedge Percentage”); provided that such hedging arrangements shall be adjusted at the

end of each annual fiscal period following the Initial Closing Date (beginning with the annual

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fiscal period ending December 31, 2027) to the extent necessary to maintain such hedging period

on a rolling basis for a period that is at least forty eight (48) months from the end of such annual

fiscal period. The Issuer may comply with these hedge requirements by way of an initial hedging

strategy consisting of one or more NYMEX-WTI swap transactions and/or swaptions which

establish a minimum price level and mitigating basis risk of the applicable oil output from the

Issuer’s (together with its Subsidiaries’) Assets described in the Reserve Report on a twenty four

(24) month rolling basis from the end of each fiscal quarter, based on a Reserve Report updated

on at least a semi-annual basis; provided, however, that, in each case, the Issuer shall not enter

into or maintain any Hedge Agreements for purposes of speculation or investment; provided,

however, nothing shall prevent Issuer from novating hedges to maintain compliance with the

terms set forth herein even in cases where such novated hedges may differ from prevailing

market prices, provided further, (i) for the avoidance of doubt, the foregoing shall not prohibit

Issuer from selling call options or swaptions and (ii) the Issuer’s compliance with the 95% limit

in the Oil Hedge Percentage shall be determined without giving effect to any offsetting or similar

Hedge Agreements that would otherwise result in a position that is opposite and equivalent to all

or a portion of an existing Hedge Agreement (including any transaction thereunder). Neither the

Issuer, nor any party otherwise having authority to act on behalf of the Issuer, is authorized to, or

will, enter into an amendment to any Hedge Agreement without providing each Rating Agency at

least ten (10) Business Days’ prior written notice thereof; provided that nothing in this sentence

shall restrict the Issuer (i) from entering into Hedge Agreements during and after the Oil Hedge

Period (excluding the entry into any offsetting Hedge Agreements described in the proviso of the

immediately preceding sentence) or terminating Hedge Agreements, in part or in whole, in order

to maintain compliance with the terms set forth herein; or (ii) from optimizing, novating,

transferring, rolling or terminating Hedge Agreements; provided that the Oil Hedge Percentage

and the requirement to maintain the basis hedges is satisfied at all times until the redemption of

the Notes in accordance with Article X.

(d)Hedge Terminations. The Issuer Parties shall not terminate, unwind or

materially reduce the notional amount of any Hedge Agreement other than (i) in the Issuer’s

discretion in connection with an “Event of Default” (where the relevant Hedge Counterparty is

the “Defaulting Party”) or “Termination Event” (where the Issuer is a party permitted to

terminate pursuant to the terms of the relevant Hedge Agreement) under a Hedge Agreement, as

applicable or (ii) as a result of a good faith determination by the Issuer Party or Manager that

such Hedge Counterparty or Hedge Agreement should be replaced, terminated or reduced, but

not primarily to generate a profit, recognize a gain or mitigate losses, provided, for the avoidance

of doubt, that the Issuer remains subject to its obligations to maintain compliance with the

hedging requirements set forth in Section 4.28(a), Section 4.28(b) and Section 4.28(c) and any

supplemental indenture, in connection with any early termination or unwind of any Hedge

Agreement. Any amounts received by the Issuer in connection with any termination of a Hedge

Agreement (an “Issuer Hedge Termination Receipt”) shall be either (A) promptly, and in any

event within five (5) Business Days, applied to the acquisition of a replacement Hedge

Agreement or (B) to the extent not applied pursuant to clause (A), transferred to the Collection

Account at the direction of the Issuer for treatment as Available Funds and applied in accordance

with the Priority of Payments; provided that, to the extent an amount up to such Issuer Hedge

Termination Receipt would otherwise be distributed to the Issuer pursuant to clause (V) of the

Priority of Payments (after application of clauses (A) through (U) inclusive of the Priority of

Payments), then such amount (up to such Issuer Hedge Termination Receipt) (such amount, the

“Excess Hedge Amount”) shall be applied in accordance with Section 8.6(iv). For the avoidance

of doubt, any determination of the amounts owing pursuant to the foregoing proviso (and paid

pursuant to Section 8.6(iv)) shall be determined after giving effect to amounts owing pursuant to

clauses (A) through (U) (inclusive) of the Priority of Payments on the applicable Payment Date.

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(e)Except for the Issuer’s requirement to maintain compliance with the 95%

limit as it relates to the Natural Gas Hedge Percentage, the NGL Hedge Percentage and the Oil

Hedge Percentage (collectively, the “Maximum Hedge Requirement”), failure of the Issuer

Parties to comply with any other provision of this Section 4.28 shall not be an Event of Default.

Any such failures (other than the Issuer’s failure to maintain compliance with the Maximum

Hedge Requirement, which shall constitute an Event of Default in accordance with the terms of

this Indenture) shall constitute a Rapid Amortization Event, in each case, if not remedied within

10 Business Days after knowledge by the Issuer Parties or notice from the Secured Parties of

such event.

Section 4.29Amendments to Basic Documents.So long as any of the Hedge

Agreements are outstanding, notwithstanding anything else herein or in any Basic Document, the

Issuer Parties shall not without the prior written consent of the Majority Hedge Counterparties

amend, supplement, waive or modify any of the Basic Documents in any material adverse

respect. Notwithstanding the foregoing, an issuance of Additional Notes which complies with the

provisions of Sections 2.14 and 2.15, including the entry into any supplemental indenture or

Series Supplement, and any amendment, supplement, waiver or modification of any Series

Supplement or supplemental indenture which complies with the provisions of Sections 2.14

and 2.15 as applied to such amendment, supplement, waiver or modification shall not require the

consent of any Hedge Counterparties. In the event of any conflict between this Section 4.29 and

Section 9.1, provisions of Section 9.1 shall control.

Article V

REMEDIES

Section 5.1Events of Default.

(a)“Event of Default,” wherever used herein, means any one of the following

events (whatever the reason for such Event of Default and, subject to Sections 5.1(a)(iv) and

5.1(a)(v), whether it shall be voluntary or involuntary or be effected by operation of Law or

pursuant to any judgment, decree or order of any court or any order, rule or regulation of any

administrative or governmental body):

(i)the failure to pay the Notes in full by the applicable Final

Scheduled Payment Date;

(ii)default in the payment of interest on the Controlling Class of Notes

when the same becomes due and payable that continues unremedied for two (2)

Business Days;

(iii)default in the observance or performance of any covenant or

agreement of any Diversified Party made in any Basic Document to which it is a

party (other than (x) a covenant or agreement, a default in the observance or

performance of which is specifically dealt with elsewhere in this Section 5.1(a) or

(y) a default in the observance or performance of any covenant or agreement of

the Manager under the Management Services Agreement or the Operator under

the Operating Agreement which has not caused and is not expected to cause a

material negative impact on the Issuer’s cash flows or the Issuer’s ability to meet

its obligations hereunder), or any representation or warranty of any Diversified

Party made in any Basic Document (in each case other than a breach of any

representation or warranty of the Manager under the Management Services

Agreement or the Operator under the Operating Agreement for which a breach

would result in the termination of the Manager or removal of the Operator, as

applicable, which is specifically addressed in clause (xv) below) to which it is a

party or in any certificate or other writing delivered pursuant hereto or in

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connection herewith proving to have been incorrect in any material respect as of

the time when the same shall have been made, and such default shall continue or

not be cured, or the circumstance or condition in respect of which such

representation or warranty was incorrect shall not have been eliminated or

otherwise cured, for a period of thirty (30) days (subject to Section 5.1(c) below)

after the earlier of (i) Knowledge of a Diversified Company of such default or

incorrect representation or warranty or (ii) receipt by the Issuer and a Responsible

Officer of the Indenture Trustee from a Noteholder or a Hedge Counterparty, a

written notice specifying such default or incorrect representation or warranty and

requiring it to be remedied and stating that such notice is a notice of Default

hereunder, delivered by registered or certified mail;

(iv)the filing of a decree or order for relief by a court having

jurisdiction in the premises in respect of the Issuer, Diversified Holdings or the

Guarantors or any substantial part of the Collateral in an involuntary case under

any applicable federal or state bankruptcy, insolvency or other similar Law now

or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,

trustee, sequestrator or similar official of the Issuer, Diversified Holdings or the

Guarantors or for any substantial part of the Collateral, or ordering the winding-up

or liquidation of any such parties’ affairs, and such decree or order shall remain

unstayed and in effect for a period of sixty (60) consecutive days;

(v)the commencement by any of the Issuer, Diversified Holdings or

the Guarantors of a voluntary case under any applicable federal or state

bankruptcy, insolvency or other similar Law now or hereafter in effect, or the

consent by any of the Issuer, Diversified Holdings or the Guarantors to the entry

of an order for relief in an involuntary case under any such Law, or the consent by

the Issuer, Diversified Holdings or the Guarantors to the appointment or taking

possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or

similar official of the Issuer, Diversified Holdings or the Guarantors or for any

substantial part of the Collateral, or the making by the Issuer, Diversified

Holdings or the Guarantors of any general assignment for the benefit of creditors,

or the failure by the Issuer, Diversified Holdings or the Guarantors generally to

pay its debts as such debts become due, or the taking of any action by the Issuer,

Diversified Holdings or the Guarantors in furtherance of any of the foregoing;

(vi)the failure of the Issuer or the Guarantors to cause the Indenture

Trustee, for the benefit of the Secured Parties, to have a valid first-priority

perfected security interest in any portion of the Collateral (subject to Permitted

Liens) by no later than the time under which filings are required under Section

2(g) of the Management Services Agreement as in effect on the Initial Closing

Date; provided, that it will not be an Event of Default under this clause(a)(vi) if

the value of all of the Collateral for which the Indenture Trustee does not have a

valid first-priority perfected security interest in any portion of the Collateral

(subject to Permitted Liens) is equal to or less than 1% of the aggregate principal

amount of Outstanding Notes;

(vii)other than as contemplated by Section 5.1(a)(vi), the failure of the

Indenture Trustee, for the benefit of the Secured Parties, to have a valid first-

priority perfected security interest in any portion of the Collateral (subject to

Permitted Liens) that is not cured within ten (10) days of the earlier of (i)

Knowledge of a Diversified Company of such failure or (ii) receipt by the Issuer

from the Indenture Trustee a written notice specifying such failure and requiring it

to be remedied and stating that such notice is a notice of Default hereunder,

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delivered by registered or certified mail; provided, that it will not be an Event of

Default under this clause(a)(vii) if the value of all of the Collateral for which the

Indenture Trustee does not have a valid first-priority perfected security interest

(subject to Permitted Liens) is equal to or less than 1% of the aggregate principal

amount of Outstanding Notes;

(viii)the Issuer or any of its subsidiaries shall become a corporation,

association, publicly traded partnership, taxable mortgage pool, or any other

entity, in each case, taxable as a corporation for U.S. federal income Tax

purposes;

(ix)the filing of non-appealable decrees or orders for relief by a court

having jurisdiction in the premises in respect of the Issuer, Diversified Holdings

or Guarantors in excess of $500,000 in aggregate and not discharged, satisfied or

stayed within thirty (30) days;

(x)the adoption in final form of a statute, rule or regulation by a

competent legislative or governmental rule-making body that becomes effective

following the Closing Date of any Outstanding Series of Notes, or the entry of a

final, non-appealable judgment of a court of competent jurisdiction that is

rendered following the Closing Date of any Outstanding Series of Notes, which

has a Material Adverse Effect on (a) the validity or enforceability of any of the

Basic Documents, or (b) the ability of the Issuer to make payments on the Notes

or its obligations under any of the Hedge Agreements;

(xi)an ERISA or Tax lien is created that secures the payment of money

shall be rendered against the Issuer or any of the Guarantors in excess of

$500,000;

(xii)any of the Issuer, Diversified Holdings, the Guarantors or the

Collateral is required to be registered as an “investment company” under the

Investment Company Act;

(xiii)any transactions under any Hedge Agreements remain outstanding

as of the date that all principal and interest upon the Notes are paid in full,

excluding only any Hedge Agreements for which the Hedge Counterparty

thereunder has agreed in writing to accept cash collateral or other security

immediately prior to the date of such payment in full;

(xiv)the failure of the Notes to be redeemed upon the occurrence of a

Change of Control as required by Section 10.1(b); or

(xv)any of the Manager, the Operator, the Indenture Trustee or the

Back-Up Manager shall be terminated, removed or resign, and a replacement

manager, operator, indenture trustee or back-up manager satisfactory to the

Majority Noteholders shall not have been engaged within sixty (60) days

following any such resignation or termination; provided, however, that, with

respect to the Indenture Trustee, only the termination or removal of the Indenture

Trustee without a replacement indenture trustee being engaged within sixty (60)

days following any such termination or removal shall constitute an Event of

Default hereunder and no resignation or recusal by the Indenture Trustee itself

shall constitute an Event of Default.

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(b)The Issuer shall deliver to (1) a Responsible Officer of the Indenture

Trustee, (2) each Noteholder, (3) each Hedge Counterparty and (4) the Back-Up Manager, and

(5) each Rating Agency, within five (5) Business Days after the occurrence thereof, written

notice in the form of an Officer’s Certificate of any event that with the giving of notice and the

lapse of time could become an Event of Default under clause (a)(iii) above, its status and what

action the Issuer is taking or proposes to take with respect thereto.

(c)Notwithstanding the foregoing, a breach of any covenant or agreement or

representation or warranty of the Issuer referred to under clause (a)(iii) above shall not constitute

an Event of Default after such thirty (30) day period (and the notice described under clause (b)

above need not be delivered) if (x) the Issuer has commenced in a diligent manner a cure of such

breach and (y) such remedial action could not reasonably have been expected to fully cure such

breach within such thirty (30) days, but could reasonably be expected to be implemented and

fully cure such breach within an additional thirty (30) days (but in no event shall the total cure

period exceed a total of ninety (90) days). Upon the occurrence of any such event, each of the

Issuer and the Indenture Trustee, as applicable, shall not be relieved from using its best efforts to

perform its obligations in a timely manner in accordance with the terms of this Indenture and the

Issuer or the Indenture Trustee, as applicable, shall provide the Indenture Trustee (if such delay

or failure is a result of a delay or failure by the Issuer), the Noteholders, the Hedge

Counterparties and the Back-Up Manager prompt notice of such failure or delay by it, together

with a description of its efforts to so perform its obligations.

Section 5.2Acceleration of Maturity; Rescission and Annulment. If an Event

of Default should occur and be continuing, then and in every such case the Indenture Trustee at

the written direction of the Majority Noteholders (subject to the Indenture Trustee’s

indemnification rights set forth herein) or the Majority Noteholders may declare all the Notes to

be immediately due and payable, by a notice in writing to the Issuer (and to a Responsible

Officer of the Indenture Trustee if given by Noteholders) (a copy of which shall be provided by

the Issuer to each Hedge Counterparty, the Back-Up Manager and each Rating Agency), and

upon any such declaration the unpaid principal amount of such Notes, together with accrued and

unpaid interest thereon through the date of acceleration, shall become immediately due and

payable; provided, that upon the occurrence of an Event of Default specified in Section 5.1(a)(iv)

or (v) all the Notes shall be automatically deemed to be immediately due and payable and upon

such event the unpaid principal of such Notes, together with accrued and unpaid interest thereon

through the date of such Event of Default specified in Section 5.1(a)(iv) or (v), shall become

immediately due and payable, in each case, without notice, declaration or demand by the

Indenture Trustee or the Noteholders, all of which are hereby waived by the Issuer.

At any time after such declaration of acceleration of maturity has been made and before a

judgment or decree for payment of the money due has been obtained by the Indenture Trustee as

provided hereinafter in this Article V, the Majority Noteholders, by written notice to the Issuer

and a Responsible Officer of the Indenture Trustee (with a copy to each Hedge Counterparty, the

Back-Up Manager and each Rating Agency), may rescind and annul such declaration and its

consequences if:

(i)the Issuer has paid or deposited with the Indenture Trustee a sum

sufficient to pay:

(A)all payments of principal of and interest on all Notes and all

other amounts that would then be due hereunder or upon such Notes if the

Event of Default giving rise to such acceleration had not occurred; and

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(B)all sums paid or advanced by the Indenture Trustee

hereunder and the reasonable compensation, expenses, disbursements and

advances of the Indenture Trustee and its agents and counsel; and

(ii)all Events of Default, other than the nonpayment of the principal of

the Notes that has become due solely by such acceleration, have been cured or

waived as provided in Section 5.12.

No such rescission shall affect any subsequent default or impair any right or any exercise

of remedies consequent thereto nor shall such rescission in and of itself serve as a waiver of any

of the Events of Default.

Section 5.3Collection of Indebtedness and Suits for Enforcement by Indenture

Trustee.

(a)The Issuer covenants that if (i) an Event of Default specified in

Section 5.1(a)(i) has occurred and is continuing or (ii) an Event of Default specified in

Section 5.1(a)(ii) has occurred and is continuing, the Issuer will, upon demand of the Indenture

Trustee, pay to the Indenture Trustee, for the benefit of the Secured Parties, as applicable, (1) the

whole amount then due and payable on such Notes for principal and interest, with interest on the

overdue principal and, to the extent payment at such rate of interest shall be legally enforceable,

on overdue installments of interest at the rate borne by the Notes, (2) any amounts due and

payable by the Issuer under the Hedge Agreements, including any termination amounts and any

other amounts owed thereunder, and, in addition thereto, and (3) such further amount as shall be

sufficient to cover the costs and expenses of collection, including the reasonable compensation,

expenses, disbursements and advances of the Indenture Trustee and its agents and counsel, and

all other amounts due and owing to the Indenture Trustee pursuant to Section 6.7.

(b)In case the Issuer shall fail forthwith to pay such amounts upon such

demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a

Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding

to judgment or final decree, and may enforce the same against the Issuer or other obligor upon

such Notes and Hedge Agreements and collect in the manner provided by Law out of the

property of the Issuer or other obligor upon such Notes and Hedge Agreements, wherever

situated, the monies adjudged or decreed to be payable.

(c)If an Event of Default occurs and is continuing, the Indenture Trustee

may, as more particularly provided in Section 5.4, proceed to protect and enforce its rights and

the rights of the Noteholders and the Hedge Counterparties, by such appropriate Proceedings as

the Indenture Trustee may deem necessary to protect and enforce any such rights, whether for the

specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of

any power granted herein, or to enforce any other proper remedy or legal or equitable right

vested in the Indenture Trustee by this Indenture or by Law.

(d)In case there shall be pending, relative to the Issuer or any other obligor

upon the Notes or any Person having or claiming an ownership interest in the Collateral,

Proceedings under Title 11 of the United States Code or any other applicable federal or state

bankruptcy, insolvency or other similar Law, or in case a receiver, assignee or trustee in

bankruptcy or reorganization, or liquidator, sequestrator or similar official shall have been

appointed for or taken possession of the Issuer or its property or such other obligor or Person, or

in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon

the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture

Trustee, irrespective of whether the principal of any Notes shall then be due and payable as

therein expressed or by declaration or otherwise and irrespective of whether the Indenture

40

Trustee shall have made any demand pursuant to the provisions of this Section 5.3, shall be

entitled and empowered, by intervention in such Proceedings or otherwise:

(i)to file and prove a claim or claims (A) for the whole amount of

principal and interest owing and unpaid in respect of the Notes and (B) any

amounts owed and unpaid with respect to any of the Hedge Agreements and to

file such other papers or documents as may be necessary or advisable in order to

have the claims of the Indenture Trustee (including any claim for reasonable

compensation to the Indenture Trustee and each predecessor Indenture Trustee,

and their respective agents, attorneys and counsel, and for reimbursement of all

expenses and liabilities incurred, and all advances made, by the Indenture Trustee

and each predecessor Indenture Trustee, except as a result of gross negligence or

willful misconduct of the Indenture Trustee), the Noteholders and of the Hedge

Counterparties allowed in such Proceedings;

(ii)unless prohibited by applicable Law and regulations, to vote as

directed in writing by the Holders of Notes and the Hedge Counterparties in any

election of a trustee, a standby trustee or Person performing similar functions in

any such Proceedings;

(iii)to collect and receive any monies or other property payable or

deliverable on any such claims and to distribute all amounts received with respect

to the claims of the Noteholders, the Hedge Counterparties and the Indenture

Trustee on their behalf; and

(iv)to file such proofs of claim and other papers or documents as may

be necessary or advisable in order to have the claims of the Indenture Trustee, the

Holders of Notes and the Hedge Counterparties allowed in any Proceedings

relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is

hereby authorized by each of such Noteholders and Hedge Counterparties to make payments to

the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of

payments directly to such Noteholders or the Hedge Counterparties, to pay to the Indenture

Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture

Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel,

and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee

and each predecessor Indenture Trustee except as a result of gross negligence or willful

misconduct of such party.

(e)Nothing herein contained shall be deemed to authorize the Indenture

Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder or

any Hedge Counterparty any plan of reorganization, arrangement, adjustment or composition

affecting the Notes or the rights of any Holder thereof or the Hedge Agreements or the rights of

any Hedge Counterparty thereof, or to authorize the Indenture Trustee to vote in respect of the

claim of any Noteholder or any Hedge Counterparty in any such proceeding except, as aforesaid,

to vote for the election of a trustee in bankruptcy or similar Person.

(f)All rights of action and of asserting claims under this Indenture, or under

any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the

Notes or the production thereof in any trial or other Proceedings relative thereto, and any such

action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as

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trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses,

disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee

and their respective agents and attorneys, shall be for the ratable benefit of the Secured Parties.

(g)In any Proceedings brought by the Indenture Trustee (and also any

Proceedings involving the interpretation of any provision of this Indenture to which the Indenture

Trustee shall be a party), the Indenture Trustee shall be held to represent all the Holders of the

Notes and the Hedge Counterparties, and it shall not be necessary to make any Noteholder or any

Hedge Counterparty a party to any such Proceedings.

Section 5.4Remedies; Priorities.

(a)If an Event of Default shall have occurred and be continuing, the Indenture

Trustee may, or at the written direction of the Majority Noteholders (subject to the terms hereof)

shall, do one or more of the following (subject to Section 5.5):

(i)institute Proceedings in its own name and as trustee of an express

trust for the collection of all amounts then payable on the Notes and the Hedge

Agreements (including any termination payments and any other amounts owed

thereunder) or under this Indenture with respect thereto, whether by declaration or

otherwise, enforce any judgment obtained and collect from the Issuer and any

other obligor upon such Notes monies adjudged due;

(ii)institute Proceedings from time to time for the complete or partial

foreclosure of this Indenture with respect to the Collateral;

(iii)exercise any remedies of a secured party under the UCC and take

any other appropriate action to protect and enforce the rights and remedies of the

Indenture Trustee, the Holders of the Notes and the Hedge Counterparties,

including, for the avoidance of doubt, the exercise of any remedies available

under the Basic Documents; and

(iv)sell the Collateral or any portion thereof or rights or interest

therein, at one or more public or private sales called and conducted in any manner

permitted by Law; provided, however, that the Indenture Trustee may not sell or

otherwise liquidate the Collateral following an Event of Default, other than an

Event of Default described in Section 5.1(a)(i) or (ii), unless (A) the Majority

Noteholders consent thereto (provided that the sale or liquidation of the Collateral

as a result of an Event of Default described in Section 5.1(a)(iii) (with regard to a

default in the observance or performance of any covenant or agreement of the

Manager under the Management Services Agreement or the Operator under the

Operating Agreement), (xiv) or (xv) shall also require the unanimous vote of all

Noteholders of each Class of Notes as to which the proceeds of such sale or

liquidation will not be sufficient to discharge in full all amounts then due and

unpaid upon such Class of Notes for principal and interest), (B) the proceeds of

such sale or liquidation distributable to the Secured Parties are sufficient to

discharge in full all amounts then due and unpaid upon such Notes for principal

and interest and all amounts then due under the Hedge Agreements or that would

be due and payable to the Hedge Counterparties if the Hedge Agreements were

terminated on the date of such sale (including any termination payments and any

other amounts due thereunder or that would be due and payable to the Hedge

Counterparties if the Hedge Agreements were terminated on the date of such sale)

or (C) the Indenture Trustee determines that the Collateral will not continue to

provide sufficient funds for the payment of principal of and interest on the Notes

as they would have become due if the Notes had not been declared immediately

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due and payable, and the Indenture Trustee obtains the consent of one hundred

percent (100%) of the Outstanding Notes; provided, that a sale under clause (A)

or (C) will not be permitted unless the proceeds of such sale or liquidation

distributable to the Secured Parties are sufficient to discharge in full all amounts

then due under the Hedge Agreements or that would be due and payable if the

Hedge Agreements were terminated on the date such sale (including any

termination payments and any other amounts owed thereunder or that would be

due and payable if the Hedge Agreements were terminated on the date of such

sale). In determining such sufficiency or insufficiency with respect to clauses (A),

(B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an

opinion of an Independent investment banking or accounting firm of national

reputation as to the feasibility of such proposed action and as to the sufficiency of

the Collateral for such purpose.

(b)If the Indenture Trustee collects any money or property pursuant to this

Article V, it shall promptly after receipt thereof deposit such money or property to the Collection

Account as Collections to be applied pursuant to Article VIII hereof.

If the Indenture Trustee collects any money or property pursuant to this Article V, the

Indenture Trustee may fix a record date and payment date for any payment to Noteholders and

any Hedge Counterparty pursuant to this Section 5.4. At least fifteen (15) days before such

record date, the Issuer shall mail, by overnight mail, to each Noteholder (or transmit

electronically, to the extent Notes are held in book-entry form) and each Hedge Counterparty and

the Indenture Trustee a notice that states the record date, the payment date and the amount to be

paid.

The Indenture Trustee shall incur no liability as a result of any sale (whether public or

private) of the Collateral or any part thereof pursuant to this Section 5.4 that is conducted in a

commercially reasonably manner. Each of the Issuer and the Noteholders hereby waives any

claim against the Indenture Trustee arising by reason of the fact that the price at which the

Collateral may have been sold at such sale (whether public or private) was less than the price that

might have been obtained otherwise, even if the Indenture Trustee accepts the first offer received

and does not offer the Collateral to more than one offeree, so long as such sale is conducted in a

commercially reasonable manner. Each of the Issuer and the Noteholders hereby agree that in

respect of any sale of the Collateral pursuant to the terms hereof, the Indenture Trustee is

authorized to comply with any limitation or restriction in connection with such sale as it may be

advised by counsel is necessary in order to avoid any violation of applicable Law, or in order to

obtain any required approval of the sale or of the purchaser by any governmental authority or

official, and the Issuer and the Noteholders further agree that such compliance shall not, in and

of its self, result in such sale being considered or deemed not to have been made in a

commercially reasonable manner, nor shall the Indenture Trustee be liable or accountable to the

Issuer or any Noteholders for any discount allowed by reason of the fact that the Collateral or

any part thereof is sold in compliance with any such limitation or restriction.

Section 5.5Optional Preservation of the Assets. If the Notes have been

declared to be immediately due and payable under Section 5.2 following an Event of Default and

such declaration and its consequences have not been rescinded and annulled, the Indenture

Trustee may, but need not, elect to maintain possession of the Collateral. In the event that the

Indenture Trustee elects to maintain possession of the Collateral, the Indenture Trustee shall

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provide written notice of such election to each such Rating Agency. It is the desire of the parties

hereto, the Secured Parties that there be at all times sufficient funds for the payment of principal

of and interest on the Notes and payment of any amounts due under the Hedge Agreements

(including any termination payments and any other amounts owed thereunder), and the Indenture

Trustee shall take such desire into account when determining whether or not to maintain

possession of the Collateral. In determining whether to maintain possession of the Collateral, the

Indenture Trustee may, but need not, obtain (at the expense of the Issuer) and rely upon an

opinion of an Independent investment banking or accounting firm of national reputation as to the

feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

Section 5.6Limitation of Suits. No Holder of any Note shall have any right to

institute any Proceeding, judicial or otherwise, with respect to this Indenture, or for the

appointment of a receiver or trustee, or for any other remedy hereunder, unless:

(i)such Holder has previously given written notice to the Indenture

Trustee of a continuing Event of Default;

(ii)the Majority Noteholders have consented to or made written

request to the Indenture Trustee to institute such Proceeding in respect of such

Event of Default in its own name as Indenture Trustee hereunder;

(iii)such Holder or Holders have offered to the Indenture Trustee

indemnity reasonably satisfactory to it against the costs, expenses and liabilities to

be incurred in complying with such request;

(iv)the Indenture Trustee for sixty (60) days after its receipt of such

notice, request and offer of indemnity has failed to institute such Proceedings; and

(v)no direction inconsistent with such written request has been given

to the Indenture Trustee during such sixty (60) day period by the Majority

Noteholders.

It is understood and intended that no one or more Holders of Notes shall have any right in

any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect,

disturb or prejudice the rights of any other Holders of Notes or any Hedge Counterparties

(provided, however, that the Indenture Trustee shall not have an affirmative obligation to

determine whether any such direction affects, disturbs or prejudices the rights of any other

Holders of Notes or any Hedge Counterparties), or to obtain or to seek to obtain priority or

preference over any other Holders or any Hedge Counterparties, or to enforce any right under

this Indenture, except in the manner herein provided.

Section 5.7Unconditional Rights of Hedge Counterparties and Noteholders to

Receive Principal, Interest, and Payments of Other Obligations. Notwithstanding any other

provisions in this Indenture, (a) the Holder of any Note shall have the right, which is absolute

and unconditional, to receive payment of the principal of and interest, if any, on such Note on or

after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case

of redemption, on or after the Redemption Date), (b) each Hedge Counterparty shall have the

right, which is absolute and unconditional, to receive payment of any obligations of the Issuer

under the Hedge Agreements (including the termination amounts and any other amounts owed

thereunder) on or after the respective due dates thereof expressed in the applicable Hedge

Agreement or in this Indenture, and (c) each Noteholder and each Hedge Counterparty shall have

the right to institute suit for the enforcement of any such payment or return Posted Collateral, and

such right shall not be impaired without the consent of such Holder or the Hedge Counterparties.

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Section 5.8Restoration of Rights and Remedies. If the Indenture Trustee, any

Noteholder or any Hedge Counterparty has instituted any Proceeding to enforce any right or

remedy under this Indenture and such Proceeding has been discontinued or abandoned for any

reason or has been determined adversely to the Indenture Trustee, to such Noteholder or to such

Hedge Counterparty, then and in every such case the Issuer, the Indenture Trustee, the

Noteholders and the Hedge Counterparties shall, subject to any determination in such

Proceeding, be restored severally and respectively to their former positions hereunder, and

thereafter all rights and remedies of the Indenture Trustee, the Noteholders and the Hedge

Counterparties shall continue as though no such Proceeding had been instituted.

Section 5.9Rights and Remedies Cumulative. No right or remedy herein

conferred upon or reserved to the Indenture Trustee, to the Noteholders or to the Hedge

Counterparties is intended to be exclusive of any other right or remedy, and every right and

remedy shall, to the extent permitted by Law, be cumulative and in addition to every other right

and remedy given hereunder or now or hereafter existing at Law or in equity or otherwise. The

assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the

concurrent assertion or employment of any other appropriate right or remedy.

Section 5.10Delay or Omission Not a Waiver. No delay or omission of the

Indenture Trustee, any Holder of any Note or any Hedge Counterparty to exercise any right or

remedy accruing upon any Default or Event of Default shall impair any such right or remedy or

constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every

right and remedy given by this Article V or by Law to the Indenture Trustee, to the Noteholders

or to the Hedge Counterparties may be exercised from time to time, and as often as may be

deemed expedient, by the Indenture Trustee, by the Noteholders or by the Hedge Counterparties,

as the case may be.

Section 5.11Control by Noteholders. The Majority Noteholders shall have the

right to direct the time, method and place of conducting any Proceeding for any remedy available

to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on

the Indenture Trustee; provided, that:

(i)such direction shall not be in conflict with any rule of Law or with

this Indenture;

(ii)such rights shall be subject to the express terms of

Section 5.4(a)(iv);

(iii)if the conditions set forth in Section 5.5 have been satisfied and the

Indenture Trustee elects to retain the Collateral pursuant to such Section, then any

written direction to the Indenture Trustee by Holders of Notes representing less

than one hundred percent (100%) of the Outstanding Principal Balance of the

Notes to sell or liquidate the Collateral shall be of no force and effect;

(iv)the Indenture Trustee may take any other action deemed proper by

the Indenture Trustee that is not inconsistent with such direction; and

(v)the Majority Noteholders have offered to the Indenture Trustee

indemnity satisfactory to it against the costs, expenses and liabilities to be

incurred in complying with such direction.

Notwithstanding the rights of Noteholders set forth in this Section 5.11, subject to Section 6.1,

the Indenture Trustee need not take any action that it determines might involve it in liability or

might adversely affect the rights of any Noteholders not consenting to such action or the rights of

any Hedge Counterparties.

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Section 5.12Waiver of Past Defaults. Prior to the declaration of the acceleration

of the maturity of the Notes as provided in Section 5.2, the Majority Noteholders may waive any

past Default or Event of Default and its consequences except a Default or Event of Default (a) in

payment of principal of or interest on any of the Notes, (b) arising under any Hedge Agreement,

the consent of the Holder of each Note, or (d) occurring as a result of an event specified in

Section 5.1(a)(iv) or (v). In the case of any such waiver, the Issuer, the Indenture Trustee, the

Holders of the Notes and the Hedge Counterparties shall be restored to their former positions and

rights hereunder, respectively; but no such waiver shall extend to any subsequent or other

Default or Event of Default or impair any right consequent thereto.

Upon any such waiver, such Default or Event of Default shall cease to exist and be

deemed to have been cured and not to have occurred, and any Event of Default arising therefrom

shall be deemed to have been cured and not to have occurred, for every purpose of this

Indenture; but no such waiver shall extend to any subsequent or other Default or Event of

Default or impair any right consequent thereto. The Indenture Trustee shall promptly give

written notice of any such waiver to each Rating Agency.

Section 5.13Undertaking for Costs. All parties to this Indenture agree, and each

Holder of a Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any

court may in its discretion require, in any suit for the enforcement of any right or remedy under

this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or

omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking

to pay the costs of such suit, and that such court may in its discretion assess reasonable costs,

including reasonable attorneys’ fees and reasonable expenses, against any party litigant in such

suit, having due regard to the merits and good faith of the claims or defenses made by such party

litigant; but the provisions of this Section 5.13 shall not apply to (a) any suit instituted by the

Indenture Trustee, (b) any suit instituted by any Noteholder, or group of Noteholders, in each

case holding Notes evidencing in the aggregate more than 10% of the Outstanding Principal

Balance or (c) any suit instituted by any Noteholder for the enforcement of the payment of

principal of or interest on any Note on or after the respective due dates expressed in such Note

and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

Section 5.14Waiver of Stay or Extension Laws. The Issuer covenants (to the

extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any

manner whatsoever claim or take the benefit or advantage of, any stay or extension Law

wherever enacted, now or at any time hereafter in force, that may affect the covenants or the

performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby

expressly waives all benefit or advantage of any such Law, and covenants that it will not hinder,

delay or impede the execution of any power herein granted to the Indenture Trustee, but will

suffer and permit the execution of every such power as though no such Law had been enacted.

Section 5.15Action on Notes or Hedge Agreements. The Indenture Trustee’s

right to seek and recover judgment on the Notes or the Hedge Agreements or under this

Indenture shall not be affected by the seeking, obtaining or application of any other relief under

or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of

the Indenture Trustee, the Noteholders or the Hedge Counterparties shall be impaired by the

recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any

execution under such judgment upon any portion of the Collateral or upon any of the assets of

the Issuer or any of its Subsidiaries. Any money or property collected by the Indenture Trustee

shall be applied in accordance with Section 5.4(b).

Section 5.16Performance and Enforcement of Certain Obligations.

(a)The Issuer shall take all such lawful action as the Indenture Trustee, at the

direction of the Majority Noteholders, shall request to compel or secure the performance and

observance by the Manager of its obligations to the Issuer under or in connection with the

46

Management Services Agreement, by any of the Diversified Parties of its obligations under or in

connection with the Asset Vesting Documents, and to exercise any and all rights, remedies,

powers and privileges lawfully available to the Issuer under or in connection with the

Management Services Agreement or by any of the Issuer Parties under the Asset Vesting

Documents to the extent and in the manner directed by the Indenture Trustee, at the direction of

the Majority Noteholders, including the transmission of notices of default under the Management

Services Agreement on the part of the Manager thereunder, claims for indemnification by the

Issuer against any of the Diversified Parties under the Asset Vesting Documents, and the

institution of legal or administrative actions or proceedings to compel or secure performance by

the Manager of its obligations under the Management Services Agreement, and by any of the

Diversified Parties of its obligations under the Asset Vesting Documents.

(b)If an Event of Default has occurred and is continuing, the Indenture

Trustee may, and at the direction (which direction shall be in writing) of the Majority

Noteholders, shall, (subject to the terms hereof) exercise all rights, remedies, powers, privileges

and claims of the Issuer against the Manager under or in connection with the Management

Services Agreement, or against any of the Diversified Parties under or in connection with the

Asset Vesting Documents, including the right or power to take any action to compel or secure

performance or observance by the Manager, of its obligations to the Issuer under the

Management Services Agreement or by any of the Diversified Parties, of its obligations to the

Issuer under the Asset Vesting Documents, and to give any consent, request, notice, direction,

approval, extension or waiver under the Management Services Agreement, the Asset Vesting

Documents, and any right of any of the Issuer Parties to take such action shall be suspended.

Article VI

THE INDENTURE TRUSTEE

Section 6.1Duties of Indenture Trustee.

(a)If an Event of Default has occurred and is continuing, the Indenture

Trustee shall exercise the rights and powers vested in it by this Indenture and use the same

degree of care and skill in their exercise as a prudent person would exercise or use under the

circumstances in the conduct of such person’s own affairs.

(b)Except as directed in writing by the Majority Noteholders or any other

percentage of Noteholders required hereby, the Indenture Trustee undertakes to perform such

duties and only such duties as are specifically set forth in this Indenture and the other Basic

Documents to which it is a party (and no implied covenants or obligations shall be read into this

Indenture or such other Basic Documents against the Indenture Trustee). In the absence of gross

negligence or willful misconduct on its part, the Indenture Trustee may conclusively rely upon

certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of

this Indenture, as to the truth of the statements and the correctness of the opinions expressed

therein; however, in the case of certificates or opinions specifically required by any provision of

this Indenture to be furnished to it, the Indenture Trustee shall examine the certificates and

opinions to determine whether or not they conform on their face to the requirements of this

Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or

other facts stated therein).

(c)The Indenture Trustee may not be relieved from liability for its own

grossly negligent action, its own grossly negligent failure to act or its own willful misconduct,

except that:

(i)this paragraph does not limit the effect of paragraph (b) of this

Section 6.1;

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(ii)the Indenture Trustee shall not be liable for any error of judgment

made in good faith by the Indenture Trustee unless it is proved that the Indenture

Trustee was grossly negligent in ascertaining the pertinent facts; and

(iii)the Indenture Trustee shall not be liable with respect to any action

it takes or omits to take in good faith in accordance with a direction received by it

pursuant to Section 5.11.

(d)Every provision of this Indenture that in any way relates to the Indenture

Trustee is subject to this Section 6.1 and Section 6.2.

(e)The Indenture Trustee shall not be liable for interest on any money

received by it except as the Indenture Trustee may agree in writing with the Issuer.

(f)Money held on behalf of the Noteholders by the Indenture Trustee need

not be segregated from other funds except to the extent required by Law or the terms of this

Indenture or the Management Services Agreement.

(g)No provision of this Indenture shall require the Indenture Trustee to

expend or risk its own funds or otherwise incur financial liability in the performance of any of its

duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable

grounds to believe that repayment of such funds or indemnity satisfactory to it against such risk

or liability is not reasonably assured to it, and none of the provisions contained in this Indenture

shall in any event require the Indenture Trustee to perform, or be responsible for the performance

of, any of the obligations of the Manager or the Back-Up Manager under this Indenture or the

Basic Documents.

(h)The Indenture Trustee shall have no duty (i) to see to any recording, filing,

or depositing of this Indenture or any agreement referred to herein or any financing statement or

continuation statement evidencing a security interest, or to see to the maintenance of any such

recording or filing or depositing or to any re-recording, refiling or redepositing of any thereof or

otherwise to monitor the perfection, continuation of perfection or the sufficiency or validity of

any security interest related to the Collateral, (ii) to see to any insurance or (iii) subject to the

other provisions of this Indenture and the Basic Documents, to see to the payment or discharge of

any Tax, assessment, or other governmental charge or any lien or encumbrance of any kind

owing with respect to, assessed or levied against, any part of the Collateral.

(i)The Indenture Trustee shall not be charged with knowledge of any

Default, Event of Default, Material Manager Default or breach of representation or warranty

unless either (1) a Responsible Officer of the Indenture Trustee shall have actual knowledge of

such Default, Event of Default, Material Manager Default or breach of representation or

warranty or (2) written notice of such Default, Event of Default, Material Manager Default or

breach of representation or warranty shall have been given to a Responsible Officer of the

Indenture Trustee in accordance with the provisions of this Indenture. For the avoidance of

doubt, receipt by the Indenture Trustee of a Payment Date Report shall not constitute actual

knowledge of any breach of representation or warranty.

Section 6.2Rights of Indenture Trustee.

(a)The Indenture Trustee may conclusively rely on any document believed by

it to be genuine and to have been signed or presented by the proper person.

(b)Before the Indenture Trustee acts or refrains from acting, it may require an

Officer’s Certificate of the Issuer or an Opinion of Counsel. The Indenture Trustee shall not be

48

liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate

or Opinion of Counsel.

(c)The Indenture Trustee may execute any of the trusts or powers hereunder

or perform any duties hereunder either directly or by or through agents or attorneys or a

custodian or nominee, and the Indenture Trustee shall not be responsible for any misconduct or

negligence on the part of, or for the supervision of, any such agent, attorney, custodian or

nominee appointed absent gross negligence or willful misconduct.

(d)The Indenture Trustee shall not be liable for any action it takes or omits to

take in good faith which it believes to be authorized or within its rights or powers; provided, that

the Indenture Trustee’s conduct does not constitute gross negligence or willful misconduct.

(e)The Indenture Trustee may consult with counsel, accountants and other

experts of its own selection (which may include counsel to the Issuer, the Noteholders and/or the

Hedge Counterparties), and the advice or opinion of such counsel, accountants and other experts

with respect to legal or other matters relating to this Indenture and the Notes shall be full and

complete authorization and protection from liability in respect to any action taken, omitted or

suffered by it hereunder in good faith and in accordance with the advice or opinion of such

counsel, accountants and other experts.

(f)The Indenture Trustee shall be under no obligation to exercise any of the

rights or powers vested in it by this Indenture or to institute, conduct or defend any litigation

hereunder or in relation hereto or to honor the request or direction of any of the Noteholders

pursuant to this Indenture, unless such Noteholders shall have offered to the Indenture Trustee

security or indemnity satisfactory to it against the reasonable costs, expenses, disbursements,

advances and liabilities which might be incurred by it, its agents and its counsel in compliance

with such request or direction.

(g)The Indenture Trustee shall not be bound to make any investigation into

the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report,

notice, request, consent, order, approval, bond or other paper or document (including electronic

communications), unless requested in writing to do so by the Holders of Notes representing the

Majority Noteholders; provided, that if the payment within a reasonable time to the Indenture

Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such

investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture

Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may

require indemnity satisfactory to the Indenture Trustee in its reasonable discretion against such

cost, expense or liability as a condition to taking any such action. In no event shall the Indenture

Trustee have any responsibility to monitor Diversified’s compliance with or be charged with

knowledge of the Credit Risk Retention Rules, nor shall it be liable to any Noteholder or any

party whatsoever for violation of such rules or requirements or such similar provisions now or

hereafter in effect.

(h)The right of the Indenture Trustee to perform any discretionary act

enumerated in this Indenture or any other Basic Document to which it is a party shall not be

construed as a duty or obligation, and the Indenture Trustee shall not be answerable under this

Indenture or any other Basic Document to which it is a party for anything other than its gross

negligence or willful misconduct in the performance of such act.

(i)The rights, privileges, protections, immunities and benefits given to the

Indenture Trustee, including, without limitation, its right to be indemnified, are extended to, and

shall be enforceable by, the Indenture Trustee in each of its capacities hereunder, and each agent,

custodian and other Person engaged by the Indenture Trustee to act hereunder. In connection

49

with its actions under any other Basic Document to which it is a party, the Indenture Trustee

shall also be afforded all of the rights, privileges, protections, immunities and benefits given to it

herein, including, without limitation, its right to be indemnified, as if set forth in full therein,

mutatis mutandis.

(j)In no event shall the Indenture Trustee be responsible or liable for any

failure or delay in the performance of its obligations hereunder arising out of or caused by,

directly or indirectly, forces beyond its control, including, without limitation, any act or

provision of any present or future law or regulation or governmental authority, strikes, work

stoppages, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes

or acts of God, epidemics, pandemics, quarantines, and interruptions, loss or malfunctions of

utilities, communications or computer (hardware or software) systems and services, or the

unavailability of the Federal Reserve Bank wire or telex or other wire or communication facility;

it being understood that the Indenture Trustee shall use reasonable efforts which are consistent

with accepted practices in the banking industry to resume performance as soon as practicable

under the circumstances.

(k)In no event shall the Indenture Trustee be liable (i) for special,

consequential, indirect or punitive damages (including lost profits), (ii) for the acts or omissions

of its nominees, correspondents, clearing agencies or securities depositories and (iii) for the acts

or omissions of brokers or dealers even if the Indenture Trustee has been advised of the

likelihood of such loss or damage and regardless of the form of action.

(l)In no event shall the Indenture Trustee be liable for the failure to perform

its duties hereunder if such failure is a direct or proximate result of another party’s failure to

perform its obligations hereunder.

(m)As to any fact or matter the manner of ascertainment of which is not

specifically described herein, the Indenture Trustee shall be entitled to receive and may for all

purposes hereof conclusively rely on a certificate, signed by an officer of any duly authorized

Person, as to such fact or matter, and such certificate shall constitute full protection to the

Indenture Trustee for any action taken or omitted to be taken by it in good faith reliance thereon.

(n)Any Opinion of Counsel requested by the Indenture Trustee shall be an

expense of the party requesting the Indenture Trustee to act or refrain from acting or otherwise

shall be an expense of the Issuer.

(o)The Indenture Trustee or its Affiliates are permitted to receive additional

compensation that could be deemed to be in the Indenture Trustee’s economic self-interest for (i)

serving as investment adviser, administrator, shareholder servicing agent, custodian or sub-

custodian, (ii) using Affiliates to effect transactions in certain investments (if directed) and (iii)

effecting transactions in certain investments (if directed). Such compensation shall not be

considered an amount that is reimbursable or payable to the Indenture Trustee as part of the

compensation hereunder.

(p)Neither the Indenture Trustee nor the Issuer shall be responsible for the

acts or omissions of the other, it being understood that this Indenture shall not be construed to

render them partners, joint venturers or agents (unless expressly set forth herein) of one another.

(q)The Indenture Trustee shall not have any obligation or liability to take any

action or to refrain from taking any action hereunder that requires written direction in the

absence of such written direction as provided hereunder.

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(r)The Indenture Trustee shall not be required to give any bond or surety

with respect to the execution of the trust created hereby or the powers granted hereunder.

(s)The Indenture Trustee may, from time to time, request that the Issuer

deliver a certificate (upon which the Indenture Trustee may conclusively rely) setting forth the

names of individuals and/or titles of officers authorized at such time to take specified actions

pursuant to this Indenture or any other Basic Document together with a specimen signature of

such authorized officers; provided, however, that from time to time, the Issuer may, by

delivering to the Indenture Trustee a revised certificate, change the information previously

provided by it pursuant to this Section 6.2(s), but the Indenture Trustee shall be entitled to

conclusively rely on the then current certificate until receipt of a superseding certificate.

(t)Except for notices, reports and other documents expressly required to be

furnished to the Holders or the Hedge Counterparties by the Indenture Trustee hereunder, the

Indenture Trustee shall not have any duty or responsibility to provide any Holder with any

information concerning the transaction contemplated hereby, the Issuer, the servicer or any other

parties to any other Basic Document which may come into the possession of the Indenture

Trustee or any of its officers, directors, employees, representatives or attorneys in fact.

(u)The Indenture Trustee and the Note Registrar shall have no responsibility

or obligation to any Person with respect to the accuracy of the books or records, or the acts or

omissions, of the Depository or its nominee or of any Depository Participant, with respect to any

Ownership Interest in the Notes or with respect to the delivery to any Person (other than the

Depository) of any notice (including any notice of prepayment) or the payment of any amount,

under or with respect to the Notes. All notices and communications to be given to the Holders

and all payments to be made to the Holders hereunder shall be given or made only to or upon the

order of the Holders (which shall be the Depository or its nominee in the case of a Book-Entry

Note). The rights of Note Owners in any Book-Entry Note shall be exercised only through the

Depository subject to the customary procedures of the Depository. The Indenture Trustee may

rely and shall be fully protected in relying upon information furnished by the Depository.

(v)The Indenture Trustee and the Note Registrar shall have no obligation or

duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed

under this Indenture or under applicable law with respect to any transfer of any Note or any

transfer of any interest in any Book-Entry Note, other than to require delivery of the certificates

and other documentation or evidence as are expressly required by, and to do so if and when

expressly required by, the terms of this Indenture, and to examine the same to determine

substantial compliance on their face to the express requirements of this Indenture. In connection

with any transfer of any Note, the Indenture Trustee and the Note Registrar shall be under no

duty to inquire into the validity, legality and due authorization of such transfer.

(w)The Indenture Trustee shall not have any obligation to monitor the

compliance by the Issuer of its obligations under or with respect to any Hedge Agreement.

(x)In no event shall the Indenture Trustee be under any obligation (i) to

monitor, determine or verify the unavailability or cessation of any applicable floating rate

benchmark, or whether or when there has occurred, or to give notice to any other transaction

party of the occurrence of, any benchmark transition event or benchmark replacement date, (ii) to

select, determine or designate any alternative reference rate or benchmark replacement, or other

successor or replacement benchmark index, or whether any conditions to the designation of such

a rate have been satisfied, or (iii) to select, determine or designate any benchmark replacement

adjustment, or other modifier to any replacement or successor index, or (iv) to determine whether

or what benchmark replacement conforming changes are necessary or advisable, if any, in

connection with any of the foregoing. The Indenture Trustee shall not be liable for (i) any

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determination, decision or election made by any Person in connection with any floating rate

benchmark applicable to any Notes, or (ii) any inability, failure or delay on its part to perform

any of its duties set forth in this Indenture as a result of the unavailability of the of any floating

rate benchmark applicable to any Notes or the absence of a designated successor or replacement

benchmark index, including as a result of any inability, delay, error or inaccuracy on the part of

any Person in providing any direction, instruction, notice or information required or

contemplated by the terms of this Indenture and reasonably required for the performance of such

duties. No benchmark replacement conforming changes that materially and adversely affect the

duties, immunities or protections of the Indenture Trustee shall be effective without the prior

written consent of the Indenture Trustee.

(y)If at any time the Indenture Trustee is served with any arbitral, judicial or