--------------------------------------------------------------------------------

$100,000,000

CREDIT AGREEMENT

     

BERRY PETROLEUM COMPANY
as Borrower

and

SOCIETE GENERALE
as Administrative Agent

SG AMERICAS SECURITIES, LLC and BNP PARIBAS SECURITIES CORP.
as Co-Lead Arrangers and Joint Book Runners

BNP PARIBAS
as Documentation Agent

and

CERTAIN FINANCIAL INSTITUTIONS
as Lenders

     

July 30, 2008

 
 

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TABLE OF CONTENTS
 

     
Page
       
ARTICLE I - - Definitions and References
1
 
Section 1.1.
Defined Terms
1
 
Section 1.2.
Exhibits and Schedules; Additional Definitions
21
 
Section 1.3.
Amendment of Defined Instruments
21
 
Section 1.4.
References and Titles
21
 
Section 1.5.
Calculations and Determinations
21
 
Section 1.6.
Joint Preparation; Construction of Indemnities and Releases
22
     
 
ARTICLE II - - The Loans and Letters of Credit
22
 
Section 2.1.
Commitments to Lend; Notes
22
 
Section 2.2.
Requests for New Loans
22
 
Section 2.3.
Continuations and Conversions of Existing Loans
23
 
Section 2.4.
Use of Proceeds
24
 
Section 2.5.
Interest Rates and Fees
24
 
Section 2.6.
Optional Prepayments
25
 
Section 2.7.
Mandatory Prepayments
25
 
Section 2.8.
Decrease in Aggregate Commitment
26
 
Section 2.9.
Obligations of Lenders Several
26
       
ARTICLE III - - Payments to Lenders
26
 
Section 3.1.
General Procedures
26
 
Section 3.2.
Increased Costs
27
 
Section 3.3.
Illegality
28
 
Section 3.4.
Funding Losses
28
 
Section 3.5.
Taxes
29
 
Section 3.6.
Alternative Rate of Interest
30
 
Section 3.7.
Mitigation Obligations; Replacement of Lenders
30
       
ARTICLE IV - - Conditions Precedent to Lending
32
 
Section 4.1.
Documents to be Delivered
32
 
Section 4.2.
Additional Conditions Precedent
35
       
ARTICLE V - - Representations and Warranties
36
 
Section 5.1.
No Default
36
 
Section 5.2.
Organization and Good Standing
36
 
Section 5.3.
Authorization
36
 
Section 5.4.
No Conflicts or Consents
36
 
Section 5.5.
Enforceable Obligations
37
 
Section 5.6.
Initial Financial Statements
37
 
Section 5.7.
Other Obligations and Restrictions
37
 
Section 5.8.
Full Disclosure
37
 
Section 5.9.
Litigation
38
 
Section 5.10.
Labor Disputes and Acts of God
38
 
Section 5.11.
ERISA Plans and Liabilities
38

 
 

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Section 5.12.
Environmental and Other Laws
39
 
Section 5.13.
Names and Places of Business
39
 
Section 5.14.
Borrower's Subsidiaries
39
 
Section 5.15.
Government Regulation
40
 
Section 5.16.
Solvency
40
 
Section 5.17.
Title to Properties; Licenses
40
 
Section 5.18.
Leases and Contracts; Performance of Obligations
40
 
Section 5.19.
Gas Imbalances, Prepayments
41
 
Section 5.20.
Operation of Mineral Interests
41
 
Section 5.21.
Regulation U
42
       
ARTICLE VI - - Affirmative Covenants of Borrower
42
 
Section 6.1.
Payment and Performance
42
 
Section 6.2.
Books, Financial Statements and Reports
42
 
Section 6.3.
Other Information and Inspections
45
 
Section 6.4.
Notice of Material Events and Change of Address
45
 
Section 6.5.
Maintenance of Properties
46
 
Section 6.6.
Maintenance of Existence and Qualifications
46
 
Section 6.7.
Payment of Trade Liabilities, Taxes, etc
46
 
Section 6.8.
Insurance
46
 
Section 6.9.
Performance on Borrower's Behalf
47
 
Section 6.10.
Interest
47
 
Section 6.11.
Compliance with Agreements and Law
47
 
Section 6.12.
Environmental Matters; Environmental Reviews
47
 
Section 6.13.
Evidence of Compliance
48
 
Section 6.14.
Bank Accounts; Offset
48
 
Section 6.15.
Guaranties of Borrower's Subsidiaries
48
 
Section 6.16.
Mortgaged Property Covenants
48
       
ARTICLE VII - - Negative Covenants of Borrower
49
 
Section 7.1.
Indebtedness
49
 
Section 7.2.
Limitation on Liens
49
 
Section 7.3.
Hedging Contracts
50
 
Section 7.4.
Limitation on Mergers, Issuances of Securities
52
 
Section 7.5.
Limitation on Sales of Property
52
 
Section 7.6.
Limitation on Dividends, Stock Repurchases and Subordinated Debt
53
 
Section 7.7.
Limitation on Acquisitions, Investments; and New Businesses
53
 
Section 7.8.
Limitation on Credit Extensions
54
 
Section 7.9.
Transactions with Affiliates
54
 
Section 7.10.
Prohibited Contracts
54
 
Section 7.11.
Current Ratio
55
 
Section 7.12.
EBITDAX to Total Funded Debt Ratio
55
       
ARTICLE VIII - - Events of Default and Remedies
55
 
Section 8.1.
Events of Default
55
 
Section 8.2.
Remedies
57
 
Section 8.3.
Application of Proceeds After Acceleration
58

 
 

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ARTICLE IX - - Administrative Agent
58
 
Section 9.1.
Appointment and Authority
58
 
Section 9.2.
Exculpation Provisions
58
 
Section 9.3.
Reliance by Administrative Agent
59
 
Section 9.4.
Non-Reliance on Administrative Agent and Other Lenders
59
 
Section 9.5.
Rights as Lender
60
 
Section 9.6.
Sharing of Set-Offs and Other Payments
60
 
Section 9.7.
Investments
60
 
Section 9.8.
Resignation of Administrative Agent
61
 
Section 9.9.
Delegation of Duties
61
 
Section 9.10.
No Other Duties, etc
61
 
Section 9.11.
Administrative Agent May File Proofs of Claim
62
 
Section 9.12.
Guaranty Matters
62
       
ARTICLE X - - Miscellaneous
62
 
Section 10.1.
Waivers and Amendments; Acknowledgments
62
 
Section 10.2.
Survival of Agreements; Cumulative Nature
64
 
Section 10.3.
Notices; Effectiveness; Electronic Communication
64
 
Section 10.4.
Payment of Expenses; Indemnity
65
 
Section 10.5.
Successors and Assigns; Assignments
67
 
Section 10.6.
Confidentiality
69
 
Section 10.7.
Governing Law; Submission to Process
70
 
Section 10.8.
Limitation on Interest
70
 
Section 10.9.
Termination; Limited Survival
70
 
Section 10.10.
Severability
71
 
Section 10.11.
Counterparts; Fax
71
 
SECTION 10.12.
WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC
71
 
Section 10.13.
USA Patriot Act
72

 
 

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Schedules and Exhibits:

Schedule 1
-
 
Lenders Schedule
Schedule 2
-
 
Insurance Schedule
Schedule 3
-
 
Subject Drilling Rigs
Schedule 4
-
 
Addresses of Lenders for Notices
       
Exhibit A
-
 
Promissory Note
Exhibit B
-
 
Borrowing Notice
Exhibit C
-
 
Continuation/Conversion Notice
Exhibit D
-
 
Compliance Certificate
Exhibit E
-
 
Opinion of Counsel for Restricted Persons
Exhibit F
-
 
Assignment and Assumption Agreement

 
 

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CREDIT AGREEMENT
 
 
THIS CREDIT AGREEMENT is made as of July 30, 2008, by and among BERRY PETROLEUM
COMPANY, a Delaware corporation (herein called "Borrower"), SOCIETE GENERALE,
individually and as administrative agent (herein called "Administrative Agent"),
and the Lenders referred to below.
 
Borrower, Lenders, and Administrative Agent hereby agree as follows:
 
 
ARTICLE I - - Definitions and References
 
Section 1.1.       Defined Terms.  As used in this Agreement, each of the
following terms has the meaning given to such term in this Section 1.1 or in the
sections and subsections referred to below:
 
"Act" has the meaning given to such term in Section 10.13.
 
"Adjusted Base Rate" means, for any day, the Base Rate plus the Base Rate Margin
for such day, provided that the Adjusted Base Rate charged by any Person shall
never exceed the Highest Lawful Rate.
 
"Adjusted EBITDAX" means, for any period, EBITDAX for such period adjusted (a)
as permitted and in accordance with Article 11 of Regulation S-X promulgated by
the SEC, and (b) to give effect to any acquisition or divestiture made by
Borrower or any of its Consolidated subsidiaries during such period as if such
transactions had occurred on the first day of such period, regardless of whether
the effect is positive or negative.
 
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any day during any
Interest Period therefor, the rate per annum equal to the sum of (a) the
Eurodollar Margin for such day plus (b) the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by Administrative Agent to be
equal to the quotient obtained by dividing (i) the Eurodollar Rate for such
Eurodollar Loan for such Interest Period by (ii) 1 minus the Reserve Requirement
for such Eurodollar Loan for such Interest Period, provided that no Adjusted
Eurodollar Rate charged by any Person shall ever exceed the Highest Lawful
Rate.  The Adjusted Eurodollar Rate for any Eurodollar Loan shall change
whenever the Eurodollar Margin or the Reserve Requirement changes.
 
"Administrative Agent" means SociEtE GEnErale, as Administrative Agent
hereunder, and its successors in such capacity.
 
"Administrative Questionnaire" means an Administrative Questionnaire in a form
supplied by Administrative Agent.
 
"Affiliate" means, as to any Person, each other Person that directly or
indirectly (through one or more intermediaries or otherwise) controls, is
controlled by, or is under common control with, such Person.  A Person shall be
deemed to be "controlled by" any other Person if such other Person possesses,
directly or indirectly, power

 
 

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(a)           to vote 10% or more of the Equity Interests in such Person (on a
fully diluted basis) having ordinary voting power for the election of directors
or similar managing group; or
 
(b)           to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
 
"Aggregate Commitment" means the aggregate amount of the Commitments of the
Lenders; provided that in no event shall the Aggregate Commitment exceed the
Maximum Credit Amount.
 
"Agreement" means this Credit Agreement.
 
"Applicable Lending Office" means, with respect to each Lender, such Lender's
Domestic Lending Office in the case of Base Rate Loans and such Lender's
Eurodollar Lending Office in the case of Eurodollar Loans.
 
"Approved Fund" means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

"Assignment and Assumption" means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.5), and accepted by Administrative Agent, in
substantially the form of Exhibit F or any other form approved by Administrative
Agent.
 
"Availability" means on any day during the Commitment Period, the unused portion
of the Aggregate Commitment, determined for such day by deducting the Facility
Usage from the Aggregate Commitment.
 
"Base Rate" means, for any day, the rate per annum equal to the higher of (a)
the Federal Funds Rate for such day plus one-half of one percent (0.5%) and (b)
the Prime Rate for such day.  Any change in the Base Rate due to a change in the
Prime Rate or the Federal Funds Rate shall be effective on the effective date of
such change in the Prime Rate or Federal Funds Rate.  As used in this
definition, "Prime Rate" means, at any time, the per annum rate of interest most
recently announced within Societe Generale at its principal office in New York,
New York as its Prime Rate, with the understanding that Societe Generale's Prime
Rate is one of its base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Societe Generale may designate.  Each change in
the Prime Rate will be effective on the day the change is announced within
Societe Generale.
 
"Base Rate Loan" means a Loan which does not bear interest at the Adjusted
Eurodollar Rate.

 
2

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"Base Rate Margin" means on any day (a) on or before October 13, 2008, 4.00% per
annum, and (b) after October 13, 2008, 4.50% per annum.
 
"Borrowing" means (a) a borrowing of new Loans of a single Type, and in the case
of Eurodollar Loans, with the same Interest Period, pursuant to Section 2.2, or
(b) a Continuation or Conversion of existing Loans into a single Type (and, in
the case of Eurodollar Loans, with the same Interest Period) pursuant to Section
2.3.
 
"Borrowing Notice" means a written or telephonic request, or a written
confirmation, made by Borrower which meets the requirements of Section 2.2.
 
"Business Day" means a day, other than a Saturday or Sunday, on which commercial
banks are open for business with the public in New York, New York.  Any Business
Day in any way relating to Eurodollar Loans (such as the day on which an
Interest Period begins or ends) must also be a day on which, in the judgment of
Administrative Agent, significant transactions in dollars are carried out in the
interbank eurocurrency market.
 
"Capital Lease" means 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.
 
"Capital Lease Obligation" means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which should, in accordance with GAAP, appear as a liability on
the balance sheet of such Person.
 
"Capital Markets Event" means (a) the consummation by Borrower of a public or
private offering of any of its Equity Interest or (b) the issuance by Borrower
of any high yield public or private notes in any amount.
 
"Cash Equivalents" means Investments in:
 
(a)           marketable obligations, maturing within twelve months after
acquisition thereof, issued or unconditionally guaranteed by the United States
of America or an instrumentality or agency thereof and entitled to the full
faith and credit of the United States of America;
 
(b)           demand deposits, and time deposits (including certificates of
deposit) maturing within twelve months from the date of deposit thereof, with
any office of any Lender or with a domestic office of any national or state bank
or trust company which is organized under the Laws of the United States of
America or any state therein, which has capital, surplus and undivided profits
of at least $500,000,000, and whose long term certificates of deposit are rated
at least A2 by Moody's or A by S & P;
 
(c)           repurchase obligations with a term of not more than seven days for
underlying securities of the types described in subsection (a) above entered
into with any commercial bank meeting the specifications of subsection (b)
above;
 
(d)           open market commercial paper, maturing within 270 days after
acquisition thereof, which are rated at least P-1 by Moody's or A-1 by S & P;
and

 
3

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(e)           money market or other mutual funds substantially all of whose
assets comprise securities of the types described in subsections (a) through (d)
above.
 
"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
 
"Change of Control" means the occurrence of either of the following events: (a)
any Person or two or more Persons acting as a group shall acquire beneficial
ownership (within the meaning of Rule 13d-3 of the SEC under the Securities Act
of 1934, as amended, and including holding proxies to vote for the election of
directors other than proxies held by Borrower's management or their designees to
be voted in favor of Persons nominated by Borrower's Board of Directors) of 30%
or more of the outstanding voting securities of Borrower, measured by voting
power (including both common stock and any preferred stock or other equity
securities entitling the holders thereof to vote with the holders of common
stock in elections for directors of Borrower) or (b) one-third or more of the
directors of Borrower shall consist of Persons not nominated by Borrower's Board
of Directors (not including as Board nominees any directors which the Board is
obligated to nominate pursuant to shareholders agreements, voting trust
arrangements or similar arrangements).
 
"Closing Date" means the date on which all of the conditions precedent set forth
in Section 4.1 and Section 4.2 shall have been satisfied or waived.
 
"Commitment" means, for each Lender, the obligation of such Lender to make Loans
to Borrower in an aggregate amount not exceeding the amount set forth on the
Lenders Schedule or as set forth in any Assignment and Assumption relating to
any assignment that has become effective pursuant to Section 10.5, as such
amount may be modified from time to time pursuant to the terms hereof; provided
that no Lender's Commitment shall ever exceed such Lender's Percentage Share of
the Aggregate Commitment.
 
"Commitment Fee Rate" means, on any day, 0.50% per annum.
 
"Commitment Period" means the period from and including the Closing Date until
the Maturity Date (or, if earlier, the day on which the obligations of Lenders
to make Loans hereunder have been terminated or the Notes first become due and
payable in full).
 
"Compliance Certificate" means a compliance certificate in the form of the
attached Exhibit D signed by the Chief Financial Officer, Treasurer or
Controller of Borrower.
 
"Consolidated" refers to the consolidation of any Person, in accordance with
GAAP, with its properly consolidated subsidiaries.  References herein to a
Person's Consolidated financial statements, financial position, financial
condition, liabilities, etc. refer to the consolidated financial statements,
financial position, financial condition, liabilities, etc. of such Person and
its properly consolidated subsidiaries.

 
4

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"Continuation" shall refer to the continuation pursuant to Section 2.3 hereof of
a Eurodollar Loan as a Eurodollar Loan from one Interest Period to the next
Interest Period.
 
"Continuation/Conversion Notice" means a written or telephonic request, or a
written confirmation, made by Borrower which meets the requirements of Section
2.3.
 
"Conversion" shall refer to a conversion pursuant to Section 2.3 or ARTICLE III
of one Type of Loan into another Type of Loan.
 
"Core Acquisitions and Investments" means (i) acquisitions of Mineral Interests
and acquisitions of assets used in the producing, drilling, transportation,
processing, refining or marketing of petroleum products that are related to
Borrower's producing Mineral Interests, and (ii) acquisitions of or Investments
in Persons engaged primarily in the business of acquiring, developing and
producing Mineral Interests or transporting, processing, refining or marketing
petroleum products that are related to Borrower's producing Mineral Interests;
provided that with respect to any acquisition or Investment described in this
clause (ii), either (A) immediately after making such acquisition or Investment,
Borrower shall own at least fifty-one percent (51%) of the Equity Interests of
such Person, measured by voting power, or (B) such Person shall not be a
publicly traded entity and such acquisition or Investment shall be related to
the business and operations of Borrower or one of its Subsidiaries.
 
"Current Assets" means the sum of the current assets of Borrower and its
Consolidated Subsidiaries at such time, plus the Availability at such time, but
excluding, for purposes of this definition any non-cash gains for any Hedging
Contract resulting from the requirements at such time of SFAS 133 or any
replacement accounting standard.
 
"Current Liabilities" means the current liabilities of Borrower and its
Consolidated Subsidiaries at such time, but excluding for purposes of this
definition, (i) any non-cash losses or charges on any Hedging Contract resulting
from the requirement at such time of SFAS 133 or any replacement accounting
standard and (ii) current maturities of the Obligations.
 
"Default" means any Event of Default and any default, event or condition which
would, with the giving of any requisite notices and the passage of any requisite
periods of time, constitute an Event of Default.
 
"Default Rate" means, at the time in question (a) with respect to any Base Rate
Loan, the rate per annum equal to three percent (3%) above the Adjusted Base
Rate then in effect and (b) with respect to any Eurodollar Loan, the rate per
annum equal to three percent (3%) above the Adjusted Eurodollar Rate then in
effect for such Loan, provided in each case that no Default Rate charged by any
Person shall ever exceed the Highest Lawful Rate.
 
"Disclosure Letter" means the letter of even date with the Agreement from
Borrower to the Agent.
 
"Disclosure Report" means either a notice given by Borrower under Section 6.4 or
a certificate given by Borrower's Chief Financial Officer under Section 6.2(b).

 
5

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"Dividend" means any dividend or other distribution made by a Restricted Person
on or in respect of any stock, partnership interest, or other equity interest in
such Restricted Person or any other Restricted Person (including any option or
warrant to buy such an equity interest), excluding Stock Repurchases.
 
"Domestic Lending Office" means, (a) with respect to any Lender, the office of
such Lender specified as its "Domestic Lending Office" below its name on the
Lenders Schedule, or such other office as such Lender may from time to time
specify to Borrower and Administrative Agent and (b) with respect to
Administrative Agent, the office, branch, or agency through which it administers
this Agreement.
 
"Domestic Subsidiary" means any Subsidiary that is organized under the laws of
any political subdivision of the United States.
 
"EBITDAX" means, for any period, the sum of (without duplication, and without
giving effect to any extraordinary losses or gains during such period) the
following determined on a Consolidated basis (1) Net Income during such period,
plus (2) all interest paid or accrued during such period on Indebtedness
(including amortization of original issue discount and the interest component of
any deferred payment obligations and capital lease obligations) which was
deducted in determining such Net Income, plus (3) all income taxes which were
deducted in determining such Net Income, plus (4) all depreciation, amortization
(including amortization of goodwill and debt issue costs), depletion, accretion
and other non-cash charges (including any provision for the reduction in the
carrying value of assets recorded in accordance with GAAP) which were deducted
in determining such Net Income, plus (5) all exploration expenses which were
deducted in determining such Net Income, minus (6) all non-cash items of income
which were included in determining such Net Income.
 
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person), approved
by (i) Administrative Agent and (ii) unless a Default has occurred and is
continuing, Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, "Eligible Assignee" shall
not include Borrower or any of Borrower's Affiliates or Subsidiaries.

"Engineering Report" means the Initial Engineering Report and each engineering
report delivered pursuant to Section 6.2.
 
"Environmental Laws" means any and all Laws relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes
into the environment including ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.

"Equity Interest" means (i) with respect to any corporation, the capital stock
of such corporation, (ii) with respect to any limited liability company, the
membership interests in such limited liability company, (iii) with respect to
any partnership or joint venture, the partnership or joint venture interests
therein, and (iv) with respect to any other legal entity, the ownership
interests in such entity.

 
6

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"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statutes or statute, together with all
rules and regulations promulgated with respect thereto.
 
"ERISA Affiliate" means each Restricted Person and all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
under common control that, together with such Restricted Person, are treated as
a single employer under Section 414 of the Internal Revenue Code.
 
"ERISA Plan" means any employee pension benefit plan subject to Title IV of
ERISA maintained by any ERISA Affiliate with respect to which any Restricted
Person has a fixed or contingent liability.
 
"Eurodollar Lending Office" means, with respect to any Lender, the office of
such Lender specified as its "Eurodollar Lending Office" below its name on the
Lenders Schedule (or, if no such office is specified, its Domestic Lending
Office), or such other office of such Lender as such Lender may from time to
time specify to Borrower and Administrative Agent.
 
"Eurodollar Loan" means a Loan that bears interest at the Adjusted Eurodollar
Rate.
 
"Eurodollar Margin" means, on any day (a) on or before October 13, 2008,
3.00% per annum, and (b) after October 13, 2008, 3.50% per annum.
 
"Eurodollar Rate" means, for any Eurodollar Loan within a Borrowing and with
respect to the related Interest Period therefor, (a) the interest rate per annum
(carried out to the fifth decimal place) equal to the applicable London
interbank offered rate for deposits in the requested currency appearing on the
Reuters Reference LIBOR01 page for such currency as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or (b) in the
event the rate referenced in the preceding subsection (a) does not appear on
such page or service or such page or service shall cease to be available, the
rate per annum (carried out to the fifth decimal place) equal to the rate
determined by Administrative Agent to be the offered rate on Page BBAM of the
Bloomberg Financial Market Information Service as of 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, or (c) in the
event the rates referenced in the preceding subsections (a) and (b) are not
available, the rate per annum determined by Administrative Agent as the rate of
interest at which deposits in U.S. dollars (for delivery on the first day of
such Interest Period) in same day funds in the approximate amount of the
applicable Eurodollar Loan and with a term equivalent to such Interest Period
would be offered by Societe Generale or one of its Affiliate banks to major
banks in the London interbank market at their request at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period.
 
"Event of Default" has the meaning given to such term in Section 8.1.
 
"Excluded Taxes" means, with respect to Administrative Agent, any Lender, LC
Issuer or any other recipient of any payment to be made by or on account of any
obligation of Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
Applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which Borrower is located; and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by Borrower under Section
3.7(b), any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party hereto (or designates a
new lending office) or is attributable to such Foreign Lender's failure or
inability (other than as a result of a Change in Law) to comply with Section
3.5(e), except to the extent that such Foreign Lender (or its assignor, if any)
was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from Borrower with respect to such
withholding tax pursuant to Section 3.5(a).

 
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"Facility Usage" means, at the time in question, the aggregate principal amount
of outstanding Loans.
 
"Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100th of one percent) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate quoted to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
 
"Fee Letter" means that certain Fee Letter dated July 15, 2008, between
Administrative Agent, SG Americas Securities, LLC, BNP Paribas, BNP Paribas
Securities Corp., and Borrower.
 
"Fiscal Quarter" means a three-month period ending on March 31, June 30,
September 30 or December 31 of any year.
 
"Fiscal Year" means a twelve-month period ending on December 31 of any year.
 
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which Borrower is resident for tax
purposes.  For purposes of this definition, the United States of America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

"Four-Quarter Period" means any period of four consecutive Fiscal Quarters.
 
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 
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"GAAP" means those generally accepted accounting principles and practices which
are recognized as such by the Financial Accounting Standards Board (or any
generally recognized successor) and which, in the case of Borrower and its
Consolidated Subsidiaries, are applied for all periods after the date hereof in
a manner consistent with the manner in which such principles and practices were
applied to the audited Initial Financial Statements.  If any change in any
accounting principle or practice is required by the Financial Accounting
Standards Board (or any such successor) in order for such principle or practice
to continue as a generally accepted accounting principle or practice, all
reports and financial statements required hereunder with respect to Borrower or
with respect to Borrower and its Consolidated Subsidiaries shall be prepared in
accordance with such change, which change shall be disclosed to Administrative
Agent on the next date on which financial statements are required to be
delivered to Lenders pursuant to Section 6.2(a); provided that, unless the
Majority Lenders shall otherwise agree in writing, no such change shall modify
or affect the manner in which compliance with the covenants contained in Article
VII are computed such that all such computations shall be conducted utilizing
financial information presented consistently with prior periods.
 
"Governmental Authority" means the government of the United States or any other
nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central Bank).
 
"Guarantor" means any Person who has guaranteed some or all of the Obligations
and who has been accepted by Administrative Agent as a Guarantor or any
Subsidiary of Borrower which now or hereafter executes and delivers a guaranty
to Administrative Agent pursuant to Section 6.15.
 
"Hazardous Materials" means any substances regulated under any Environmental
Law, whether as pollutants, contaminants, or chemicals, or as industrial, toxic
or hazardous substances or wastes, or otherwise.
 
"Hedging Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.

 
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"Highest Lawful Rate" means, with respect to each Lender Party to whom
Obligations are owed, the maximum nonusurious rate of interest that such Lender
Party is permitted under applicable Law to contract for, take, charge, or
receive with respect to such Obligations.  All determinations herein of the
Highest Lawful Rate, or of any interest rate determined by reference to the
Highest Lawful Rate, shall be made separately for each Lender Party as
appropriate to assure that the Loan Documents are not construed to obligate any
Person to pay interest to any Lender Party at a rate in excess of the Highest
Lawful Rate applicable to such Lender Party.
 
"Indebtedness" of any Person means Liabilities in any of the following
categories (without duplication):
 
(a)           Liabilities for borrowed money,
 
(b)           Liabilities constituting an obligation to pay the deferred
purchase price of property or services,
 
(c)           Liabilities evidenced by a bond, debenture, note or similar
instrument,
 
(d)           Liabilities which (i) would under GAAP be shown on such Person's
balance sheet as a liability, and (ii) are payable more than one year from the
date of creation thereof (other than reserves for taxes and reserves for
contingent obligations),
 
(e)           Liabilities arising under Hedging Contracts,
 
(f)            Liabilities constituting principal under leases capitalized in
accordance with GAAP,
 
(g)           Liabilities arising under conditional sales or other title
retention agreements,
 
(h)           Liabilities owing under direct or indirect guaranties of
Liabilities of any other Person or otherwise constituting obligations to
purchase or acquire or to otherwise protect or insure a creditor against loss in
respect of Liabilities of any other Person (such as obligations under working
capital maintenance agreements, agreements to keep-well, or agreements to
purchase Liabilities, assets, goods, securities or services), but excluding
endorsements in the ordinary course of business of negotiable instruments in the
course of collection,
 
(i)            Liabilities (for example, repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements) consisting of an
obligation to purchase or redeem securities or other property, if such
Liabilities arises out of or in connection with the sale or issuance of the same
or similar securities or property,
 
(j)            Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor;
 
(k)           Liabilities with respect to payments received in consideration of
oil, gas, or other minerals yet to be acquired or produced at the time of
payment (including obligations under "take-or-pay" contracts to deliver gas in
return for payments already received and the undischarged balance of any
production payment created by such Person or for the creation of which such
Person directly or indirectly received payment),

 
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(l)             Liabilities with respect to other obligations to deliver goods
or services in consideration of advance payments therefor; or
 
(m)           Liabilities with respect to bankers acceptances,
 
provided, however, that the "Indebtedness" of any Person shall not include
Liabilities that were incurred by such Person on ordinary trade terms to
vendors, suppliers, or other Persons providing goods and services for use by
such Person in the ordinary course of its business which are paid as required by
Section 6.7.
 
"Indemnified Taxes" means Taxes other than Excluded Taxes.
 
"Independent Engineers" means an independent petroleum engineering firm chosen
by Borrower and acceptable to Administrative Agent.
 
"Initial Engineering Report" means the engineering reports concerning Mineral
Interests of Restricted Persons prepared by Degolyer and MacNaughton as of
January 1, 2008 and Ryder Scott Company as of February 1, 2008.
 
"Initial Financial Statements" means the audited annual financial statements of
Borrower dated as of December 31, 2007 and the quarterly unaudited financial
statements of Borrower dated as of March 31, 2008.
 
"Insolvent" means with respect to any Person, that such Person (a) is insolvent
(as such term is defined in the United States Bankruptcy Code, Title 11 U.S.C.,
as amended (the "Bankruptcy Code"), and with all terms used in this Section that
are defined in the Bankruptcy Code having the meanings ascribed to those terms
in the text and interpretive case law applicable to the Bankruptcy Code), or (b)
the sum of such Person's debts, including absolute and contingent liabilities,
the Obligations or guarantees thereof, exceeds the value of such Person's
assets, at a fair valuation, and (c) such Person's capital is unreasonably small
for the business in which such Person is engaged and intends to be
engaged.  Such Person has incurred (whether under the Loan Documents or
otherwise), or intends to incur debts which will be beyond its ability to pay as
such debts mature.  In determining whether a Person is "Insolvent" all rights of
contribution of each Restricted Party against other Restricted Parties under the
Guaranty, at law, in equity or otherwise shall be taken into account.
 
"Insurance Schedule" means Schedule 2 attached hereto.
 
"Interest Payment Date" means (a) with respect to each Base Rate Loan, the last
day of each Fiscal Quarter and (b) with respect to each Eurodollar Loan, the
last day of the Interest Period that is applicable thereto and, if such Interest
Period is six months in length, each date specified by Administrative Agent
which is approximately three months after such Interest Period begins.

 
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"Interest Period" means, with respect to each particular Eurodollar Loan in a
Borrowing, the period specified in the Borrowing Notice or
Continuation/Conversion Notice applicable thereto, beginning on and including
the date specified in such Borrowing Notice or Continuation/Conversion Notice
(which must be a Business Day), and ending one, two, three, or six months
thereafter, as Borrower may elect in such notice; provided that:  (a) any
Interest Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day; (b) any Interest Period which begins on the
last Business Day in a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day in a calendar month; and (c)
notwithstanding the foregoing, any Interest Period which would otherwise end
after the last day of the Commitment Period shall end on the last day of the
Commitment Period (or, if the last day of the Commitment Period is not a
Business Day, on the next preceding Business Day).
 
"Internal Revenue Code" means the United States Internal Revenue Code of 1986,
as amended from time to time and any successor statute or statutes, together
with all rules and regulations promulgated with respect thereto.
 
"Investment" means any investment, made directly or indirectly, in any Person or
any property, whether by purchase, acquisition of shares of capital stock,
indebtedness or other obligations or securities or by loan, advance, capital
contribution or otherwise and whether made in cash, by the transfer of property,
or by any other means.
 
"Law" means any statute, law, regulation, ordinance, rule, treaty, judgment,
order, decree, permit, concession, franchise, license, agreement or other
governmental restriction of the United States or any state or political
subdivision thereof or of any foreign country or any department, province or
other political subdivision thereof.  Any reference to a Law includes any
amendment or modification to such Law, and all regulations, rulings, and other
Laws promulgated under such Law.
 
"Lender Parties" means Administrative Agent and all Lenders.
 
"Lenders" means each signatory hereto (other than Borrower and any Restricted
Person that is a party hereto), including Societe Generale in its capacity as a
Lender hereunder rather than as Administrative Agent, and the successors of each
such party as holder of a Note.
 
"Lenders Schedule" means Schedule 1 hereto.
 
"Liabilities" means, as to any Person, all indebtedness, liabilities and
obligations of such Person, whether matured or unmatured, liquidated or
unliquidated, primary or secondary, direct or indirect, absolute, fixed or
contingent, and whether or not required to be considered pursuant to GAAP.
 
"Lien" means, with respect to any property or assets, any right or interest
therein of a creditor to secure Liabilities owed to it or any other arrangement
with such creditor which provides for the payment of such Liabilities out of
such property or assets or which allows such creditor to have such Liabilities
satisfied out of such property or assets prior to the general creditors of any
owner thereof, including any lien, mortgage, security interest, pledge, deposit,
production payment, rights of a vendor under any title retention or conditional
sale agreement or lease substantially equivalent thereto, tax lien, mechanic's
or materialman's lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of
business.  "Lien" also means any filed financing statement, any registration of
a pledge (such as with an issuer of uncertificated securities), or any other
arrangement or action which would serve to perfect a Lien described in the
preceding sentence, regardless of whether such financing statement is filed,
such registration is made, or such arrangement or action is undertaken before or
after such Lien exists.

 
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"Loan" means an extension of credit by a Lender to Borrower under Article II as
part of a Borrowing and refers to a Base Rate Loan or a Eurodollar Loan.
 
"Loan Documents" means this Agreement, the Notes, and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection herewith or therewith (exclusive of term sheets and commitment
letters).
 
"Majority Lenders" means two or more Lenders whose aggregate Percentage Shares
equal or exceed fifty-one percent (51%).
 
"Material Adverse Change" means a material and adverse change, from the state of
affairs presented in the Initial Financial Statements or as represented or
warranted in any Loan Document, to (a) Borrower's Consolidated financial
condition, (b) Borrower's Consolidated operations, properties or prospects,
considered as a whole, (c) Borrower's ability to timely pay the Obligations, (d)
the enforceability of the material terms of any Loan Documents, or (e) the
rights and remedies of Administrative Agent or Lenders under the Loan Documents.
 
"Material Subsidiary" means a Subsidiary of Borrower that (a) owns assets
representing five percent (5%) of the market value of Borrower's Consolidated
assets or (b) has EBITDAX for the Four-Quarter Period most recently ended that
equals or exceeds five percent (5%) of Borrower's Consolidated EBITDAX for such
period.
 
"Maturity Date" means the earlier of (a) December 31, 2008 and (b) the date of
the occurrence of any Capital Markets Event.
 
"Maximum Credit Amount" means $100,000,000.
 
"Mineral Interests" means rights, estates, titles, and interests in and to oil,
gas, sulfur, or other mineral leases and any mineral interests, royalty and
overriding royalty interest, production payment, net profits interests, mineral
fee interests, and other rights therein, including, without limitation, any
reversionary or carried interests relating to the foregoing, together with
rights, titles, and interests created by or arising under the terms of any
unitization, communization, and pooling agreements or arrangements, and all
properties, rights and interests covered thereby, whether arising by contract,
by order, or by operation of Law, which now or hereafter include all or any part
of the foregoing.
 
"Moody's" means Moody's Investors Service, Inc. or its successor.

 
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"Net Income" means, for any period, the net income (or loss) of Borrower and its
properly consolidated Subsidiaries for such period, calculated on a consolidated
basis.
 
"Net Worth" of any Person means, as of any date, the remainder of all
Consolidated assets of such Person minus such Person's Consolidated liabilities,
each as determined by GAAP, but excluding, for purposes of this definition any
assets and liabilities for any Hedging Contract resulting from the requirements
of SFAS 133 at such time.
 
"Non-Core Acquisitions and Investments" means acquisitions and Investments that
are not Core Acquisitions and Investments.
 
"Note" has the meaning given to such term in Section 2.1.
 
"Obligations" means all Liabilities from time to time owing by any Restricted
Person to any Lender Party under or pursuant to any of the Loan
Documents.  "Obligation" means any part of the Obligations.
 
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
 
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
 
"Participant" has the meaning assigned to such term in clause (d) of Section
10.5.
 
"Percentage Share" means, with respect to any Lender, the percentage set forth
below such Lender's name on Lenders Schedule or as set forth in any Assignment
and Assumption relating to any assignment that has become effective pursuant to
Section 10.5, as such amount may be modified from time to time pursuant to the
terms hereof.  Notwithstanding the foregoing, if the Commitments of the Lenders
have been terminated or have expired, "Percentage Share" shall mean with respect
to any Lender, the percentage obtained by dividing (i) the unpaid principal
balance of such Lender's Loans at the time in question by (ii) the aggregate
unpaid principal balance of all Loans at such time.
 
"Permitted Investments" means (a) Cash Equivalents, (b) property of the
Restricted Persons used in the ordinary course of business of the Restricted
Persons, (c) current assets arising from the sale or lease of goods and services
in the ordinary course of business by the Restricted Persons or from sales
permitted under Section 7.5, (d) investments, in an aggregate amount not to
exceed $4,000,000, in a Person engaged in the sole business of ownership and
operation of drilling rigs, and (e) sales or leases permitted under Section 7.5.

 
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"Permitted Liens" means:
 
(a)           statutory Liens for taxes, assessments or other governmental
charges or levies which are not yet delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP;
 
(b)           landlords', operators', carriers', warehousemen's, repairmen's,
mechanics', materialmen's, or other like Liens which do not secure Indebtedness,
in each case only to the extent arising in the ordinary course of business and
only to the extent securing obligations which are not delinquent or which are
being contested in good faith by appropriate proceedings and for which adequate
reserves have been maintained in accordance with GAAP;
 
(c)           minor defects and irregularities in title to any property, so long
as such defects and irregularities neither secure Indebtedness nor materially
impair the value of such property or the use of such property for the purposes
for which such property is held;
 
(d)          deposits of cash or securities to secure the performance of bids,
acquisition agreements, trade contracts, leases, statutory obligations and other
obligations of a like nature (excluding appeal bonds) incurred in the ordinary
course of business;
 
(e)           Liens under the Senior Security Documents;
 
(f)           easements, restrictions, servitudes, permits, conditions,
covenants, exceptions or reservations in any property of Borrower or any of its
Subsidiaries for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, that do not secure
any monetary obligations and that do not materially interfere with the future
development of such property or with cash flow from such property as reflected
in the most recent Engineering Report;
 
(g)           Liens under joint operating agreements, pooling or unitization
agreements, partnership agreements, oil and gas leases, farm-out agreements,
division orders, contracts for the sale, purchase, transportation, processing or
exchange of oil, gas or other hydrocarbons, unitization and pooling declarations
and agreements, area of mutual interest agreements, development agreements,
joint ownership arrangements or similar contractual arrangements arising in the
ordinary course of the business of Borrower or its Subsidiaries to secure
amounts owing under such agreements and contracts, which amounts are not more
than 90 days past due or are being contested in good faith by appropriate
proceedings, if such reserve as may be required by GAAP shall have been made
therefor;
 
(h)           (i) Liens on fixed or capital assets acquired, constructed or
improved by Borrower or its Subsidiaries; provided that (A) such Liens secure
Indebtedness permitted under Section 7.1, (B) such Liens and the Indebtedness
secured thereby are incurred substantially simultaneously with the acquisition,
construction or improvement of such fixed or capital assets or within 180 days
thereafter, (C) such Liens do not at any time encumber any property other than
the property financed by such Indebtedness and (D) the amount of Indebtedness
secured thereby is not more than 100% of the purchase price, and (ii) Liens in
the nature of precautionary financing statements filed against leased property
by lessors holding Capital Lease Obligations included in Indebtedness permitted
under Section 7.1;

 
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(i)           all lessors' royalties, overriding royalties, net profits
interests, carried interests, production payments that do not constitute
Indebtedness, reversionary interests and other burdens on or deductions from the
proceeds of production with respect to each Mineral Interest (in each case) that
do not operate to reduce the net revenue interest for such Mineral Interest (if
any) as reflected in any Security Document or Engineering Report or increase the
working interest for such Mineral Interest (if any) as reflected in any Security
Document or Engineering Report without a corresponding increase in the
corresponding net revenue interest; .
 
(j)           rights of first refusal, purchase options and similar rights
granted pursuant to joint operating agreements, joint ownership agreements,
stockholders agreements, organic documents and other similar agreements and
documents which are described in the Disclosure Letter;
 
(k)          pre-judgment Liens and judgment Liens provided no Event of Default
has occurred under Section 8.1;
 
(l)           customary Liens for the fees, costs and expenses of trustees and
escrow agents pursuant to the indenture, escrow agreement or other similar
agreement establishing such trust or escrow arrangement;
 
(m)          Liens pursuant to merger agreements, stock purchase agreements,
asset sale agreements and similar agreements (i) limiting the transfer of
properties and assets pending consummation of the subject transaction and (ii)
in respect of earnest money deposits, good faith deposits, purchase price
adjustment escrows and similar deposits and escrow arrangements made or
established thereunder; and
 
(n)          rights reserved to or vested in any municipality or governmental,
statutory or public authority by the terms of any right, power, franchise,
grant, license or permit, or by any provision of law, to terminate such right,
power, franchise, grant, license or permit or to purchase, condemn, expropriate
or recapture or to designate a purchaser of any of the property of such Person;
rights reserved to or vested in any municipality or governmental, statutory or
public authority to control or regulate any property of such Person, or to use
such property in a manner which does not materially impair the use of such
property for the purposes for which it is held by such Person; and any
obligation or duties affecting the property of such Person to any municipality
or governmental, statutory or public authority with respect to any franchise,
grant, license or permit.
 
"Permitted Subordinated Debt" means Indebtedness in respect of subordinated
notes issued by Borrower from time to time, that complies with all of the
following requirements:
 
(a)          such Indebtedness is and shall remain unsecured at all times;

 
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(b)           no payment of principal of such Indebtedness is due on or before
the Maturity Date as in effect on the date such Indebtedness is issued (in this
definition called the "Date of Issuance");
 
(c)           the financial covenants are no more restrictive with respect to
the Restricted Persons than the financial covenants under this Agreement and all
of the covenants and events of default governing such Indebtedness are not,
taken as a whole, materially more restrictive with respect to the Restricted
Persons than the covenants and Events of Default under this Agreement;
 
(d)           on the Date of Issuance and after giving effect to such
Indebtedness Borrower is in compliance on a pro forma basis with Section 7.11
and Section 7.12 of this Agreement, calculated for the most recent Four-Quarter
Period for which the financial statements described in Section 6.2(b) are
available to Lender;
 
(e)           no Default or Event of Default exists on the Date of Issuance or
will occur as a result of the issuance of the subordinated notes evidencing such
Indebtedness;
 
(f)            the payment of such Indebtedness is subordinated to payment of
the Obligations pursuant to a written agreement (whether contained in the
applicable indenture or a separate subordination agreement) in form and
substance acceptable to Administrative Agent, in its sole discretion; and
 
(g)           Borrower shall have delivered to Administrative Agent a
certificate in reasonable detail reflecting compliance with the foregoing
requirements.
 
"Person" means an individual, corporation, partnership, limited liability
company, association, joint stock company, trust or trustee thereof, estate or
executor thereof, unincorporated organization or joint venture, Governmental
Authority or any other legally recognizable entity.
 
"Projected Gas Production" means the projected production of gas (measured by
BTU equivalent, not sales price) for the term of the contracts or a particular
month, as applicable, from properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Developed Producing Reserves, as such production is
projected in the most recent report delivered pursuant to Section 6.2(d) or (e),
after deducting projected production from any properties or interests sold or
under contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
report meeting the requirements of such Section 6.2(d) or (e) above and
otherwise are satisfactory to Administrative Agent.
 
"Projected NGL Production" means the projected production of natural gas liquids
(measured by volume unit, not sales price) for the term of the contracts or a
particular month, as applicable, from properties and interests owned by any
Restricted Person which are located in or offshore of the United States and
which have attributable to them Proved Developed Producing Reserves, as such
production is projected in the most recent report delivered pursuant to Section
6.2(d) or (e), after deducting projected production from any properties or
interests sold or under contract for sale that had been included in such report
and after adding projected production from any properties or interests that had
not been reflected in such report but that are reflected in a separate or
supplemental report meeting the requirements of such Section 6.2(d) or (e) above
and otherwise are satisfactory to Administrative Agent.

 
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"Projected Oil Production" means the projected production of oil or gas
(measured by volume unit , not sales price) for the term of the contracts or a
particular month, as applicable, from properties and interests owned by any
Restricted Person which are located in or offshore of the United States and
which have attributable to them Proved Developed Producing Reserves, as such
production is projected in the most recent report delivered pursuant to Section
6.2(d) or (e), after deducting projected production from any properties or
interests sold or under contract for sale that had been included in such report
and after adding projected production from any properties or interests that had
not been reflected in such report but that are reflected in a separate or
supplemental report meeting the requirements of such Section 6.2(d) or (e) above
and otherwise are satisfactory to Administrative Agent.
 
"Property" of any Person means any and all property (whether real, personal, or
mixed, tangible or intangible) or other assets owned, leased or operated by such
Person.
 
"Proved Reserves" means "Proved Reserves" as defined in Definitions for Oil and
Gas Reserves (in this paragraph, the "Definitions") promulgated by the Society
for Petroleum Engineers (or any generally recognized successor) as in effect at
the time in question.  "Proved Developed Producing Reserves" are Proved
Reserves, which are categorized as both "Developed" and "Producing" in the
Definitions.
 
"Rating Agency" means either S & P or Moody's.
 
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect.
 
"Related Parties" means, with respect to any Person, such Person's Affiliates
and the partners, directors, officers, employees, agents and advisors of such
Person and of such Person's Affiliates.

"Required Lenders" means two or more Lenders whose aggregate Percentage Shares
equal or exceed sixty-six and two-thirds percent (66 2/3%).
 
"Reserve Requirement" means, at any time, the maximum rate at which reserves
(including any marginal, special, supplemental, or emergency reserves) are
required to be maintained under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System against "Eurocurrency liabilities" (as such
term is used in Regulation D).  Without limiting the effect of the foregoing,
the Reserve Requirement shall reflect any other reserves required to be
maintained by such member banks with respect to (a) any category of liabilities
which includes deposits by reference to which the Adjusted Eurodollar Rate is to
be determined, or (b) any category of extensions of credit or other assets which
include Eurodollar Loans.
 
"Responsible Officer" means, with respect to Borrower, the Chief Executive
Officer, President, Chief Operating Officer, or Chief Financial Officer of
Borrower, and with respect to any other Restricted Person, if such Restricted
Person is a limited liability company, a Manager of such Restricted Person, and
if such Restricted Person is a corporation, the President or Chief Financial
Officer of such Restricted Person.

 
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"Restricted Person" means any of Borrower and each Subsidiary of Borrower.
 
"SG Money Market Credit Agreement" means the Letter Agreement dated as of July
15, 2008, between Borrower and Societe Generale.

"SG Money Market Facility" means the credit facility in the amount of
$30,000,000 made available to Borrower by Societe Generale pursuant to the SG
Money Market Credit Agreement.

"SG Money Market Facility Obligations" means the Indebtedness arising under the
SG Money Market Facility in an aggregate principal amount not to exceed
$30,000,000, plus all interest accrued thereon all and fees, expenses and other
Liabilities payable with respect thereto.

"S & P" means Standard & Poor's Ratings Services (a division of The McGraw-Hill
Companies), or its successor.

"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
 
"Staff Engineers" means petroleum engineers who are employees of Borrower or of
a staffing company that provides its employees to Borrower.
 
"Stock Repurchase" means any payment made by a Restricted Person to purchase,
redeem, acquire or retire any Equity Interest in such Restricted Person or any
other Restricted Person (including any option or warrant to purchase such an
Equity Interest).
 
"Subsidiary" means, with respect to any Person, any corporation, association,
partnership, limited liability company, joint venture, or other business or
corporate entity, enterprise or organization which is directly or indirectly
(through one or more intermediaries) controlled by or owned fifty percent or
more by such Person, provided that associations, joint ventures or other
relationships (a) which are established pursuant to a standard form operating
agreement or similar agreement or which are partnerships for purposes of federal
income taxation only, (b) which are not corporations or partnerships (or subject
to the Uniform Partnership Act) under applicable state Law, and (c) whose
businesses are limited to the exploration, development and operation of oil, gas
or mineral properties and interests owned directly by the parties in such
associations, joint ventures or relationships, shall not be deemed to be
"Subsidiaries" of such Person.
 
"Taxes" means all present or future taxes, levies, imposts, duties, deductions,
withholdings, assessments, fees or other charges imposed by any Governmental
Authority, including any interest, additions to tax or penalties applicable
thereto.

 
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"Termination Event" means (a) the occurrence with respect to any ERISA Plan of
(i) a reportable event described in Section 4043(b)(5) or (6) of ERISA or (ii)
any other reportable event described in Section 4043(b) of ERISA other than a
reportable event not subject to the provision for 30-day notice to the Pension
Benefit Guaranty Corporation pursuant to a waiver by such corporation under
Section 4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an
ERISA Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent
to terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any ERISA Plan.
 
"Total Funded Debt" means all Liabilities of the Restricted Persons of the types
described in clauses (a), (b), (c), (d), (f), (h), (j) of the definition of
Indebtedness.
 
"Type" means, with respect to any Loans, the characterization of such Loans as
either Base Rate Loans or Eurodollar Loans.
 
"UCC" means the Uniform Commercial Code in effect in the State of California
from time to time.
 
"WF Agent" means Wells Fargo Bank, National Association in its capacity as the
administrative agent under the WF Facility.
 
"WF Collateral" means the "Collateral" as defined in the WF Credit Agreement.
 
"WF Credit Agreement" means the Amended and Restated Credit Agreement dated as
of July 15, 2008, between Borrower, the WF Lenders, and Wells Fargo Bank,
National Association, as administrative agent and swing line lender

"WF Facility" means the senior secured credit facility in the amount of
$1,500,000,000 made available to Borrower pursuant to the WF Credit Agreement.

"WF Facility Obligations" means the Indebtedness arising under the WF Facility
in an aggregate principal amount not to exceed $1,500,000,000, plus all interest
accrued thereon and all fees, expenses and other Liabilities payable with
respect thereto.

"WF Lender Hedging Obligations" means the "Lender Hedging Obligations" as
defined in the WF Credit Agreement.
 
"WF Lenders" means the lenders party to the WF Credit Agreement from time to
time.
 
"WF Security Documents" means the "Security Documents" as defined in the WF
Credit Agreement.
 
Section 1.2.       Exhibits and Schedules; Additional Definitions.  All Exhibits
and Schedules attached to this Agreement are a part hereof for all purposes.

 
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Section 1.3.       Amendment of Defined Instruments.  Unless the context
otherwise requires or unless otherwise provided herein the terms defined in this
Agreement which refer to a particular agreement, instrument or document also
refer to and include all renewals, extensions, modifications, amendments and
restatements of such agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.
 
Section 1.4.       References and Titles.  All references in this Agreement to
Exhibits, Schedules, articles, sections, subsections and other subdivisions
refer to the Exhibits, Schedules, articles, sections, subsections and other
subdivisions of this Agreement unless expressly provided otherwise.  Exhibits
and Schedules to any Loan Document shall be deemed incorporated by reference in
such Loan Document.  References to any document, instrument, or agreement (a)
shall include all exhibits, schedules, and other attachments thereto, and (b)
shall include all documents, instruments, or agreements issued or executed in
replacement thereof.  Titles appearing at the beginning of any subdivisions are
for convenience only and do not constitute any part of such subdivisions and
shall be disregarded in construing the language contained in such
subdivisions.  The words "this Agreement", "this instrument", "herein",
"hereof", "hereby", "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited.  The phrases "this section" and "this subsection" and similar phrases
refer only to the sections or subsections hereof in which such phrases
occur.  The word "or" is not exclusive, and the word "including" (in its various
forms) means "including without limitation".  Pronouns in masculine, feminine
and neuter genders shall be construed to include any other gender, and words in
the singular form shall be construed to include the plural and vice versa,
unless the context otherwise requires.  Accounting terms have the meanings
assigned to them by GAAP, as applied by the accounting entity to which they
refer.  References to "days" shall mean calendar days, unless the term "Business
Day" is used.  Unless otherwise specified, references herein to any particular
Person also refer to its successors and permitted assigns.
 
Section 1.5.       Calculations and Determinations.  All calculations under the
Loan Documents shall be made on the basis of actual days elapsed (including the
first day but excluding the last) and a year of 360 days.  Each determination by
a Lender Party of amounts to be paid under Article III or any other matters
which are to be determined hereunder by a Lender Party (such as any Eurodollar
Rate, Adjusted Eurodollar Rate, Business Day, Interest Period, or Reserve
Requirement) shall, in the absence of manifest error, be conclusive and
binding.  Unless otherwise expressly provided herein or unless Majority Lenders
otherwise consent all financial statements and reports furnished to any Lender
Party hereunder shall be prepared and all financial computations and
determinations pursuant hereto shall be made in accordance with GAAP.
 
Section 1.6.       Joint Preparation; Construction of Indemnities and
Releases.  This Agreement and the other Loan Documents have been reviewed and
negotiated by sophisticated parties with access to legal counsel and no rule of
construction shall apply hereto or thereto which would require or allow any Loan
Document to be construed against any party because of its role in drafting such
Loan Document.  All indemnification and release provisions of this Agreement
shall be construed broadly (and not narrowly) in favor of the Persons receiving
indemnification or being released.

 
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ARTICLE II - - The Loans
 
Section 2.1.       Commitments to Lend; Notes.  Subject to the terms and
conditions hereof, each Lender agrees to make Loans to Borrower upon Borrower's
request from time to time during the Commitment Period, provided that (a)
subject to Section 3.3, Section 3.4, and Section 3.6, all Lenders are requested
to make Loans of the same Type in accordance with their respective Percentage
Shares and as part of the same Borrowing, and (b) after giving effect to such
Loans the Facility Usage then outstanding does not exceed the Aggregate
Commitment.  The aggregate amount of all Loans in any Borrowing of Base Rate
Loans must be greater than or equal to $500,000 or a higher integral multiple of
$100,000 or must equal the remaining Availability, and the aggregate amount of
all Loans in any Borrowing of Eurodollar Loans must be greater than or equal to
$3,000,000 or any higher integral multiple of $1,000,000 or must equal the
remaining Availability.  Borrower may have no more than ten Borrowings of
Eurodollar Loans outstanding at any time.  The obligation of Borrower to repay
to each Lender the aggregate amount of all Loans made by such Lender, together
with interest accruing in connection therewith, shall be evidenced by a single
promissory note (herein called such Lender's "Note") made by Borrower payable to
the order of such Lender in the form of Exhibit A with appropriate
insertions.  The amount of principal owing on any Lender's Note at any given
time shall be the aggregate amount of all Loans theretofore made by such Lender
minus all payments of principal theretofore received by such Lender on such
Note.  Interest on each Note shall accrue and be due and payable as provided
herein and therein.  Each Note shall be due and payable as provided herein and
therein, and shall be due and payable in full on the Maturity Date.  Subject to
the terms and conditions hereof, Borrower may borrow, repay, and reborrow
hereunder.
 
Section 2.2.       Requests for New Loans.  Borrower must give to Administrative
Agent written or electronic notice (or telephonic notice promptly confirmed in
writing) of any requested Borrowing of new Loans to be advanced by
Lenders.  Each such notice constitutes a "Borrowing Notice" hereunder and must:
 
(a)           specify (i) the aggregate amount of any such Borrowing of new Base
Rate Loans and the date on which such Base Rate Loans are to be advanced, or
(ii) the aggregate amount of any such Borrowing of new Eurodollar Loans, the
date on which such Eurodollar Loans are to be advanced (which shall be the first
day of the Interest Period which is to apply thereto), and the length of the
applicable Interest Period; and
 
(b)           be received by Administrative Agent not later than 1:00 a.m., New
York, New York time on, (i) the day on which any such Base Rate Loans are to be
made, or (ii) the third Business Day preceding the day on which any such
Eurodollar Loans are to be made.

 
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Each such written request or confirmation must be made in the form and substance
of the "Borrowing Notice" attached hereto as Exhibit B, duly completed.  Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation.  Upon receipt of any such Borrowing
Notice, Administrative Agent shall give each Lender prompt notice of the terms
thereof.  If all conditions precedent to such new Loans have been met, each
Lender will on the date requested promptly remit to Administrative Agent at
Administrative Agent's office in New York, New York the amount of such Lender's
new Loan in immediately available funds, and upon receipt of such funds, unless
to its actual knowledge any conditions precedent to such Loans have been neither
met nor waived as provided herein, Administrative Agent shall promptly make such
Loans available to Borrower.  Unless Administrative Agent shall have received
prompt notice from a Lender that such Lender will not make available to
Administrative Agent such Lender's new Loan, Administrative Agent may in its
discretion assume that such Lender has made such Loan available to
Administrative Agent in accordance with this section and Administrative Agent
may if it chooses, in reliance upon such assumption, make such Loan available to
Borrower.  In such event, if a Lender has not in fact made its share of the
applicable Loan available to Administrative Agent, then the applicable Lender
and Borrower severally agree to pay to Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to Borrower to but excluding the date of
payment to Administrative Agent, at (i) in the case of a payment to be made by
such Lender, the greater of the Federal Funds Rate and a rate determined by
Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by Borrower, the
interest rate applicable to Base Rate Loans.  If Borrower and such Lender shall
pay such interest to Administrative Agent for the same or an overlapping period,
Administrative Agent shall promptly remit to Borrower the amount of such
interest paid by Borrower for such period.  If such Lender pays its share of the
applicable Borrowing to Administrative Agent, then the amount so paid shall
constitute such Lender's Loan included in such Borrowing.  Any payment by
Borrower shall be without prejudice to any claim Borrower may have against a
Lender that shall have failed to make such payment to Administrative Agent.
 
Section 2.3.       Continuations and Conversions of Existing Loans.  Borrower
may make the following elections with respect to Loans already outstanding: to
convert Base Rate Loans to Eurodollar Loans, to convert Eurodollar Loans to Base
Rate Loans on the last day of the Interest Period applicable thereto, and to
continue Eurodollar Loans beyond the expiration of such Interest Period by
designating a new Interest Period to take effect at the time of such
expiration.  In making such elections, Borrower may combine existing Loans made
pursuant to separate Borrowings into one new Borrowing or divide existing Loans
made pursuant to one Borrowing into separate new Borrowings, provided that
Borrower may have no more than ten Borrowings of Eurodollar Loans outstanding at
any time.  To make any such election, Borrower must give to Administrative Agent
written notice (or telephonic notice promptly confirmed in writing) of any such
Conversion or Continuation of existing Loans, with a separate notice given for
each new Borrowing.  Each such notice constitutes a "Continuation/Conversion
Notice" hereunder and must:
 
(a)           specify the existing Loans which are to be Continued or Converted;
 
(b)           specify (i) the aggregate amount of any Borrowing of Base Rate
Loans into which such existing Loans are to be continued or converted and the
date on which such Continuation or Conversion is to occur, or (ii) the aggregate
amount of any Borrowing of Eurodollar Loans into which such existing Loans are
to be continued or converted, the date on which such Continuation or Conversion
is to occur (which shall be the first day of the Interest Period which is to
apply to such Eurodollar Loans), and the length of the applicable Interest
Period; and

 
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(c)           be received by Administrative Agent not later than 1:00 a.m., New
York, New York time, on (i) the day on which any such Continuation or Conversion
to Base Rate Loans is to occur, or (ii) the third Business Day preceding the day
on which any such Continuation or Conversion to Eurodollar Loans is to occur.
 
Each such written request or confirmation must be made in the form and substance
of the "Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed.  Each such telephonic request shall be deemed a representation,
warranty, acknowledgment and agreement by Borrower as to the matters which are
required to be set out in such written confirmation.  Upon receipt of any such
Continuation/Conversion Notice, Administrative Agent shall give each Lender
prompt notice of the terms thereof.  Each Continuation/Conversion Notice shall
be irrevocable and binding on Borrower.  During the continuance of any Default,
Borrower may not make any election to convert existing Loans into Eurodollar
Loans or continue existing Loans as Eurodollar Loans.  If (due to the existence
of a Default or for any other reason) Borrower fails to timely and properly give
any Continuation/Conversion Notice with respect to a Borrowing of existing
Eurodollar Loans at least three days prior to the end of the Interest Period
applicable thereto, such Eurodollar Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period.  No new funds shall be
repaid by Borrower or advanced by any Lender in connection with any Continuation
or Conversion of existing Loans pursuant to this section, and no such
Continuation or Conversion shall be deemed to be a new advance of funds for any
purpose; such Continuations and Conversions merely constitute a change in the
interest rate applicable to already outstanding Loans.
 
Section 2.4.       Use of Proceeds.  Borrower shall use all Loans to finance
capital expenditures, provide working capital for its operations and for other
general business purposes; Notwithstanding the foregoing, in no event shall the
funds from any Loan be used to make any acquisition, regardless of whether such
acquisition is permitted by this Agreement.  In no event shall the funds from
any Loan be used directly or indirectly by any Person for personal, family,
household or agricultural purposes or for the purpose, whether immediate,
incidental or ultimate, of purchasing, acquiring or carrying any "margin stock"
(as such term is defined in Regulation U promulgated by the Board of Governors
of the Federal Reserve System) or to extend credit to others directly or
indirectly for the purpose of purchasing or carrying any such margin
stock.  Borrower represents and warrants that Borrower is not engaged
principally, or as one of Borrower's important activities, in the business of
extending credit to others for the purpose of purchasing or carrying such margin
stock.
 
Section 2.5.       Interest Rates and Fees.
 
(a)           Base Rate Loans.  So long as no Event of Default has occurred and
is continuing, all Base Rate Loans (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the Adjusted Base Rate in effect on such day.  If an Event of
Default has occurred and is continuing, all Base Rate Loans (exclusive of any
past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date Borrower shall pay to the holder hereof
all unpaid interest which has accrued on the Base Rate Loans to but not
including such Interest Payment Date.
 
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(b)           Eurodollar Loans.  So long as no Event of Default has occurred and
is continuing, each Eurodollar Loan (exclusive of any past due principal or
interest) shall bear interest on each day during the related Interest Period at
the related Adjusted Eurodollar Rate in effect on such day.  If an Event of
Default has occurred and is continuing, all Eurodollar Loans (exclusive of any
past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date relating to such Eurodollar Loan,
Borrower shall pay to the holder hereof all unpaid interest which has accrued on
such Eurodollar Loan to but not including such Interest Payment Date.
 
(c)           Past Due Principal and Interest.  All past due principal of and
past due interest on the Loans shall bear interest on each day outstanding at
the Default Rate in effect on such day, and such interest shall be due and
payable daily as it accrues.
 
(d)           Commitment Fees.  In consideration of each Lender's commitment to
make Loans, Borrower will pay to Administrative Agent for the account of each
Lender a commitment fee determined on a daily basis by applying the Commitment
Fee Rate to such Lender's Percentage Share of the Availability each day during
the Commitment Period.  This commitment fee shall be due and payable in arrears
on the last day of each Fiscal Quarter and at the end of the Commitment Period.
 
(e)           Additional Fees.  In addition to all other amounts due to
Administrative Agent under the Loan Documents, Borrower will pay fees to
Administrative Agent as described in the Fee Letter.
 
Section 2.6.       Optional Prepayments.  Borrower may from time to time and
without premium or penalty prepay the Notes, in whole or in part, so long as the
aggregate amount of Base Rate Loans prepaid at any time must be equal to
$500,000 or a higher integral multiple of $100,000, and the aggregate amount of
Eurodollar Loans prepaid at any time must be equal to $3,000,000 or any higher
integral multiple of $1,000,000, provided that if Borrower prepays any Base Rate
Loan, it shall give notice to Administrative Agent at least one Business Day's
prior notice to the date such prepayment is made and further provided that if
Borrower prepays any Eurodollar Loan, it shall give notice to Administrative
Agent at least three Business Days' prior to the date such prepayment is made
and pay to Lenders any amounts due under Section 3.4.
 
Section 2.7.       Mandatory Prepayments.
 
(a)           If at any time the Facility Usage is in excess of the Aggregate
Commitment (such excess being herein called a "Deficiency"), Borrower shall
prepay the principal of the Obligations in an aggregate amount at least equal to
such Deficiency in a single installment due and payable one business day after
the date on which such notice is given to Borrower.
 
(b)           Each prepayment of principal under this section shall be
accompanied by all interest then accrued and unpaid on the principal so prepaid
and any amounts due under Section 3.4.  Any principal or interest prepaid
pursuant to this section shall be in addition to, and not in lieu of, all
payments otherwise required to be paid under the Loan Documents at the time of
such prepayment.
 
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Section 2.8.       Decrease in Aggregate Commitment.  Borrower may at any time
reduce the Aggregate Commitment in whole, or in part ratably among the Lenders
in the amount of $5,000,000 or any higher integral multiple of $1,000,000, upon
at least three Business Days' written notice to Administrative Agent, which
notice shall specify the amount of any such reduction, provided, however, that
the amount of the Aggregate Commitment may not be reduced below the Facility
Usage and may not be reinstated.
 
Section 2.9.       Obligations of Lenders Several. The obligations of the
Lenders hereunder to make Loans and to make payments pursuant to Section 2.2 are
several and not joint.  The failure of any Lender to make any Loan or to make
any payment under Section 10.4(b) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan or to make its payment under Section 10.4(b).
 
 
ARTICLE III -  - Payments to Lenders
 
Section 3.1.       General Procedures.  Borrower will make each payment which it
owes under the Loan Documents to Administrative Agent for the account of the
Lender Party to whom such payment is owed, in lawful money of the United States
of America, without set-off, deduction or counterclaim, and in immediately
available funds.  Each such payment must be received by Administrative Agent not
later than 1:00 a.m., New York, New York time, on the date such payment becomes
due and payable.  Any payment received by Administrative Agent after such time
will be deemed to have been made on the next following Business Day.  Should any
such payment become due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day,
and, in the case of a payment of principal or past due interest, interest shall
accrue and be payable thereon for the period of such extension as provided in
the Loan Document under which such payment is due.  Each payment under a Loan
Document shall be due and payable at the place set forth for Administrative
Agent on the Lenders Schedule. When Administrative Agent collects or receives
money on account of the Obligations, Administrative Agent shall distribute all
money so collected or received, and each Lender Party shall apply all such money
so distributed, as follows (except as otherwise provided in Section 8.3):
 
(a)           first, for the payment of all Obligations which are then due (and
if such money is insufficient to pay all such Obligations, first to any
reimbursements due to Administrative Agent under Section 6.9 or 10.4 and then to
the partial payment of all other Obligations then due in proportion to the
amounts thereof, or as Lender Parties shall otherwise agree);
 
(b)           then for the prepayment of amounts owing under the Loan Documents
(other than principal on the Notes) if so specified by Borrower;
 
(c)           then for the prepayment of principal on the Notes, together with
accrued and unpaid interest on the principal so prepaid; and
 
(d)           last, for the payment or prepayment of any other Obligations.

 
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All payments applied to principal or interest on any Note shall be applied first
to any interest then due and payable, then to principal then due and payable,
and last to any prepayment of principal and interest in compliance with Sections
2.6 and 2.7.  All distributions of amounts described in any of subsections (b),
(c) or (d) above shall be made by Administrative Agent pro rata to each Lender
Party then owed Obligations described in such subsection in proportion to all
amounts owed to all Lender Parties which are described in such subsection;
provided that if any Lender then owes payments to Administrative Agent under
Section 10.4(b), any amounts otherwise distributable under this section to such
Lender shall be deemed to belong to Administrative Agent, to the extent of such
unpaid payments, and Administrative Agent shall apply such amounts to make such
unpaid payments rather than distribute such amounts to such Lender.
 
Section 3.2.       Increased Costs.
 
(a)           Increased Costs Generally.  If any Change in Law shall:
 
(i)        impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets of,
deposits with or for the account of, or credit extended or participated in by,
any Lender (except any reserve requirement reflected in the Adjusted Eurodollar
Rate);
 
(ii)       subject any Lender to any Tax of any kind whatsoever with respect to
this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 3.5 and the imposition of, or any change
in the rate of, any Excluded Tax payable by such Lender); or
 
(iii)      impose on any Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or Eurodollar Loans made by
such Lender;
 
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender, Borrower will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional
costs incurred or reduction suffered.
 
(b)           Capital Requirements.  If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender's
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender to a level below
that which such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy),
then from time to time Borrower will pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.

 
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(c)           Certificates for Reimbursement.  A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in paragraph (a) or (b) of this
Section and delivered to Borrower shall be conclusive absent manifest
error.  Borrower shall pay such Lender the amount shown as due on any such
certificate within ten (10) days after receipt thereof.
 
(d)           Delay in Requests.  Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation, provided that Borrower shall
not be required to compensate a Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender notifies Borrower of the Change in Law giving rise to
such increased costs or reductions and of such Lender's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
 
Section 3.3.       Illegality.  If any Change in Law after the date hereof shall
make it unlawful for any Lender Party to fund or maintain Eurodollar Loans,
then, upon notice by such Lender Party to Borrower and Administrative Agent, (a)
Borrower's right to elect Eurodollar Loans from such Lender Party shall be
suspended to the extent and for the duration of such illegality, (b) all
Eurodollar Loans of such Lender Party which are then the subject of any
Borrowing Notice and which cannot be lawfully funded shall be funded as Base
Rate Loans of such Lender Party, and (c) all Eurodollar Loans of such Lender
Party shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by Law.  If any such conversion of a Eurodollar
Loan occurs on a day which is not the last day of the then current Interest
Period with respect thereto, Borrower shall pay to such Lender Party such
amounts, if any, as may be required pursuant to Section 3.4.
 
Section 3.4.       Funding Losses.  In addition to its other obligations
hereunder, Borrower will indemnify each Lender Party against, and reimburse each
Lender Party on demand for, any loss or expense incurred or sustained by such
Lender Party (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by a Lender
Party to fund or maintain Eurodollar Loans), as a result of (a) any payment or
prepayment (whether authorized or required hereunder or otherwise) of all or a
portion of a Eurodollar Loan on a day other than the day on which the applicable
Interest Period ends, (b) any payment or prepayment, whether required hereunder
or otherwise, of a Loan made after the delivery, but before the effective date,
of a Continuation/Conversion Notice requesting the continuation of outstanding
Eurodollar Loans as, or the conversion of outstanding Base Rate Loans to,
Eurodollar Loans, if such payment or prepayment prevents such Continuation/
Conversion Notice from becoming fully effective, (c) the failure of any Loan to
be made or of any Continuation/Conversion Notice requesting the continuation of
outstanding Eurodollar Loans as, or the conversion of outstanding Base Rate
Loans to, Eurodollar Loans to become effective due to any condition precedent
not being satisfied or due to any other action or inaction of any Restricted
Person, (d) any Conversion (whether authorized or required hereunder or
otherwise) of all or any portion of any Eurodollar Loan into a Base Rate Loan or
into a different Eurodollar Loan on a day other than the day on which the
applicable Interest Period ends, or (e) any assignment of a Eurodollar Loan on a
day other than the last day of the Interest Period therefor as a result of a
request by Borrower pursuant to Section 3.7(b).  Such indemnification shall be
on an after-tax basis.
 
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Section 3.5.       Taxes.
 
(a)           Payment Free of Taxes.  Any and all payments by or on account of
any obligation of Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if Borrower shall be required by applicable
law to deduct any Indemnified Taxes (including any Other Taxes) from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) Administrative Agent or Lender, as the case may
be, receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
 
(b)          Payment of Other Taxes by Borrower.  Without limiting the
provisions of paragraph (a) above, Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
 
(c)           Indemnification by Borrower.  Borrower shall indemnify
Administrative Agent, and each Lender, within ten (10) days after demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by Administrative Agent or such Lender,
as the case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender (with a copy to Administrative
Agent), or by Administrative Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.
 
(d)           Evidence of Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower shall deliver to Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Administrative Agent.
 
(e)           Status of Lenders.  Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to Borrower (with a copy to Administrative Agent),
at the time or times prescribed by applicable law or reasonably requested by
Borrower or Administrative Agent, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate of withholding.  In addition, any
Lender, if requested by Borrower or Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by
Borrower or Administrative Agent as will enable Borrower or Administrative Agent
to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

 
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Without limiting the generality of the foregoing, in the event that Borrower is
resident for tax purposes in the United States of America, any Foreign Lender
shall deliver to Borrower and Administrative Agent (in such number of copies as
shall be requested by the recipient) on or prior to the date on which such
Foreign Lender becomes a Lender under this Agreement (and from time to time
thereafter upon the request of Borrower or Administrative Agent, but only if
such Foreign Lender is legally entitled to do so), whichever of the following is
applicable:

(i)        duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States of America is a party,
 
(ii)       duly completed copies of Internal Revenue Service Form W-8ECI,
 
(iii)      in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank" within
the meaning of section 881(c)(3)(A) of the Internal Revenue Code, (B) a "10
percent shareholder" of Borrower within the meaning of section 881(c)(3)(B) of
the Internal Revenue Code, or (C) a "controlled foreign corporation" described
in section 881(c)(3)(C) of the Internal Revenue Code and (y) duly completed
copies of  Internal Revenue Service Form W-8BEN, or
 
(iv)     any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
applicable law to permit Borrower to determine the withholding or deduction
required to be made.
 
(f)           Treatment of Certain Refunds.  If Administrative Agent or a Lender
receives a refund of any Taxes or Other Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional
amounts pursuant to this Section, it shall pay to Borrower an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of
Administrative Agent or such Lender, as the case may be, and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund), provided that Borrower, upon the request of
Administrative Agent or such Lender, agrees to repay the amount paid over to
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to Administrative Agent or such Lender in the event
Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority.  This subsection shall not be construed to require
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes that it deems confidential) to Borrower
or any other Person.

 
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Section 3.6.       Alternative Rate of Interest.  If prior to the commencement
of any Interest Period for a Borrowing of Eurodollar Loans:
 
(a)           Administrative Agent determines that adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period (any
such determination shall be conclusive absent manifest error); or
 
(b)           Administrative Agent is advised by Required Lenders that the
Eurodollar Rate for such Interest Period will not adequately and fairly reflect
the cost to such Lenders of making or maintaining their Loans included in such
Borrowing for such Interest Period;
 
then Administrative Agent shall give notice thereof to Borrower and Lenders by
telephone or facsimile as promptly as practicable thereafter and, until
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Continuation/Conversion Notice that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Borrowing of Eurodollar Loans shall be ineffective and shall be deemed a
request to continue such Borrowing as a Borrowing of Base Rate Loans and (ii) if
any Borrowing Notice requests a Borrowing of Eurodollar Loans, such Borrowing
shall be made as a Borrowing of Base Rate Loans.  Upon receipt of such notice,
Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of Eurodollar Loans.
 
Section 3.7.       Mitigation Obligations; Replacement of Lenders.
 
(a)           Designation of a Different Lending Office. If any Lender requests
compensation under Section 3.2, or requires Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.5, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.2
or 3.5, as the case may be, in the future and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender.  Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
 
(b)           Replacement of Lenders.  If any Lender requests compensation under
Section 3.2, or if any Lender gives notice to Borrower under Section 3.3 that it
is unlawful for such Lender to fund or maintain Eurodollar Loans, or if Borrower
is required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.5, or if any
Lender defaults in its obligation to fund Loans hereunder, or if any Lender has
been deemed insolvent or becomes the subject of a bankruptcy or insolvency
proceeding, or if, in connection with any consent or approval of any proposed
amendment, modification, waiver, or consent that requires consent of each
Lender, the consent of Required Lenders shall have been obtained but any Lender
has not so consented or approved (any such Lender, a "Non-Consenting Lender"),
then Borrower may, at its sole expense and effort, upon notice to such Lender
and Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.5), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:

 
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(i)        Borrower shall have paid to Administrative Agent the assignment fee
specified in Section 10.5;
 
(ii)       such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 3.4) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or Borrower (in the
case of all other amounts);
 
(iii)      (A) in the case of any such assignment resulting from a Lender
becoming a Non-Consenting Lender, the applicable assignees shall have agreed to,
and shall be sufficient (together with all other consenting Lenders) to cause
the adoption of, the applicable departure, waiver or amendment of the Loan
Documents and (B) in the case of any such assignment resulting from a claim for
compensation under Section 3.2 or payments required to be made pursuant to
Section 3.5, such assignment will result in a reduction in such compensation or
payments thereafter and (C) in the case of any assignment due to illegality,
such assignee can fund and maintain Eurodollar Loans; and
 
(iv)      such assignment does not conflict with applicable law.
 
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling Borrower to require such assignment and delegation cease
to apply.  In connection with any such replacement, if any such Lender does not
execute and deliver to Administrative Agent a duly executed assignment specified
in Section 10.5 reflecting such replacement within five (5) Business Days of the
date on which the assignee Lender executes and delivers such assignment to such
Lender, then such Lender shall be deemed to have executed and delivered such
assignment without any action on the part of such Lender.
 
 
ARTICLE IV - - Conditions Precedent to Lending
 
Section 4.1.       Documents to be Delivered.  No Lender has any obligation to
make its first Loan under this Agreement unless Administrative Agent shall have
received all of the following, at Administrative Agent's office in New York, New
York, duly executed and delivered and in form, substance and date satisfactory
to Administrative Agent:
 
(a)           Loan Documents.  Administrative Agent shall have received
counterparts of each Loan Document originally executed and delivered by each
applicable Restricted Person and Lenders and in such numbers as Administrative
Agent or its counsel may reasonably request.
 
(b)           Organizational Documents; Incumbency.  Administrative Agent shall
have received (i) copies of each Organizational Document executed and delivered
by each Restricted Person, as applicable, and, to the extent applicable,
certified as of a recent date by the appropriate governmental official, each
dated the Closing Date or a recent date prior thereto; (ii) signature and
incumbency certificates of the officers of such Person executing the Loan
Documents to which it is a party; (iii) resolutions of the Board of Directors or
similar governing body of each Restricted Person approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party or by which it or its assets may be bound as of
the Closing Date, certified as of the Closing Date by an Responsible Officer as
being in full force and effect without modification or amendment; (iv) an
existence and good standing certificate from the applicable Governmental
Authority of each Restricted Person's jurisdiction of incorporation,
organization or formation and in each jurisdiction in which it owns real
property, each dated a recent date prior to the Closing Date; and (v) such other
documents as Administrative Agent may reasonably request.

 
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(c)           Closing Certificate.  Administrative Agent shall have received a
"Closing Certificate" of a Responsible Officer of Borrower, of even date with
this Agreement, in which such officer certifies to the satisfaction of each of
the conditions set out in Section 4.1 and Section 4.2.
 
(d)           Governmental Authorizations and Consents.  Each Restricted Person
shall have obtained all Governmental Authorizations and all consents of other
Persons, in each case that are necessary or advisable in connection with the
transactions contemplated by the Loan Documents and each of the foregoing shall
be in full force and effect and in form and substance reasonably satisfactory to
Administrative Agent.  All applicable waiting periods shall have expired without
any action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Loan Documents or the financing thereof and no action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.
 
(e)           Environmental Reports.  To the extent not already provided to
Administrative Agent under the WF Facility, Administrative Agent shall have
received reports and other information, in form, scope and substance reasonably
satisfactory to Administrative Agent, regarding environmental matters relating
to Borrower's material real property assets.
 
(f)            Evidence of Insurance.  Administrative Agent shall have received
a certificate from Borrower's insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant to
Section 6.8 is in full force and effect and that Administrative Agent has been
named as additional insured thereunder as its interests may appear and to the
extent required under Section 6.8.
 
(g)           Opinion of Counsel.  Administrative Agent shall have received
originally executed copies of the favorable written opinion of Musick, Peeler &
Garrett LLP, counsel to Restricted Persons, in the form of Exhibit E and opining
as to such other matters as Administrative Agent may reasonably request at least
three days prior to the Closing Date, dated as of the Closing Date and otherwise
in form and substance reasonably satisfactory to Administrative Agent (and each
Restricted Person hereby instructs such counsel to deliver such opinions to
Administrative Agent and Lenders).

 
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(h)           Fees.  Administrative Agent shall have received all commitment,
facility, agency, recording, filing, and other fees required to be paid to
Administrative Agent or any Lender pursuant to any Loan Documents or any
commitment agreement heretofore entered into.
 
(i)            Financial Statements.  Lenders shall have received the Initial
Financial Statements, which shall be in form and substance reasonably
satisfactory to Administrative Agent, together with a certificate by a
Responsible Officer certifying the Initial Financial Statements.
 
(j)            Initial Engineering Report.  To the extent not already provided
to Lenders under the WF Facility, Lenders shall have received the Initial
Engineering Report, which shall be in form and substance reasonably satisfactory
to Administrative Agent.
 
(k)           Additional Loan Documents.  To the extent not already provided to
Lenders under the WF Facility, Lenders shall have received copies of the WF
Credit Agreement, the SG Money Market Credit Agreement, and each other
agreement, instrument, or document executed by Borrower or any of its
Subsidiaries or any of their Responsible Officers at any time in connection with
the WF Credit Agreement or the SG Money Market Credit Agreement on or before the
date hereof.
 
(l)            No Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs the financing hereunder or any of
the other transactions contemplated by the Loan Documents, or that could
reasonably be expected to cause a Material Adverse Change.
 
(m)           Completion of Proceedings.  All partnership, corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Administrative Agent and its counsel shall be reasonably
satisfactory in form and substance to Administrative Agent and such counsel, and
Administrative Agent and such counsel shall have received all such counterpart
originals or certified copies of such documents as Administrative Agent may
reasonably request.
 
(n)           Material Adverse Change.  No event or circumstance shall have
occurred or be continuing since the date of the Initial Financial Statements
that has had, or could be reasonably expected to cause, either individually or
in the aggregate, a Material Adverse Change.
 
(o)           Due Diligence.  Administrative Agent and Lenders shall have
completed satisfactory due diligence review of the assets, liabilities,
business, operations and condition (financial or otherwise) of the Restricted
Persons, including, a review of their Mineral Interests and all legal,
financial, accounting, governmental, environmental, tax and regulatory matters,
and fiduciary aspects of the proposed financing.
 
(p)           USA Patriot Act.  Each Lender that is subject to the Act shall
have received such information requested by such Lender in order to comply with
the Act.
 
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(q)           Other Documentation.  Administrative Agent shall have received all
documents and instruments which Administrative Agent has then reasonably
requested, in addition to those described in this Section 4.1.  All such
additional documents and instruments shall be reasonably satisfactory to
Administrative Agent in form, substance and date.  For purposes of determining
compliance with the conditions specified in this Section 4.1, each Lender that
has executed and delivered this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless Administrative Agent shall have received notice
from such Lender prior to the proposed Closing Date specifying its objection
thereto.
 
Section 4.2.       Additional Conditions Precedent.  No Lender has any
obligation to make any Loan (including its first) as part of any Borrowing
unless the following conditions precedent have been satisfied:
 
(a)           Administrative Agent shall have received all appropriate evidence
required by Administrative Agent and Lenders in their sole discretion necessary
to determine that the WF Facility has been fully funded and is in full force and
effect on the date of such Borrowing.
 
(b)           All representations and warranties made by any Restricted Person
in any Loan Document shall be true and correct in all material respects on and
as of the date of such Loan as if such representations and warranties had been
made as of the date of such Borrowing, except to the extent that such
representation or warranty was made as of a specific date or updated, modified
or supplemented as of a subsequent date with the consent of Required Lenders and
Administrative Agent, in which cases such representations and warranties shall
have been true and correct in all material respects on and of such earlier date.
 
(c)           No Default shall exist at the date of such Borrowing.
 
(d)           No Material Adverse Change shall have occurred to, and no event or
circumstance shall have occurred that could reasonably be expected to cause a
Material Adverse Change to, Borrower's Consolidated financial condition or
businesses since the date of the Initial Financial Statements.
 
(e)           Each Restricted Person shall have performed and complied with all
agreements and conditions required in the Loan Documents to be performed or
complied with by it on or prior to the date of such Borrowing.
 
(f)           The making of such Loan shall not be prohibited by any Law and
shall not subject any Lender to any penalty or other onerous condition under or
pursuant to any such Law.
 
(g)           Administrative Agent shall have received all documents and
instruments which Administrative Agent has then reasonably requested, in
addition to those described in Section 4.1 (including opinions of legal counsel
for Restricted Persons and Administrative Agent; corporate documents and
records; documents evidencing governmental authorizations, consents, approvals,
licenses and exemptions; and certificates of public officials and of officers
and representatives of Borrower and other Persons), as to (i) the accuracy and
validity of or compliance with all representations, warranties and covenants
made by any Restricted Person in this Agreement and the other Loan Documents,
(ii) the satisfaction of all conditions contained herein or therein, and (iii)
all other matters pertaining hereto and thereto.  All such additional documents
and instruments shall be reasonably satisfactory to Administrative Agent in
form, substance and date.

 
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ARTICLE V - - Representations and Warranties
 
To confirm each Lender's understanding concerning Restricted Persons and
Restricted Persons' businesses, properties and obligations and to induce each
Lender to enter into this Agreement and to extend credit hereunder, Borrower
represents and warrants to each Lender that:
 
Section 5.1.       No Default.  No event has occurred and is continuing which
constitutes a Default.
 
Section 5.2.       Organization and Good Standing.  Each Restricted Person is
duly organized, validly existing and in good standing under the Laws of its
jurisdiction of organization, having all powers required to carry on its
business and enter into and carry out the transactions contemplated
hereby.  Each Restricted Person is duly qualified, in good standing, and
authorized to do business in all other jurisdictions within the United States
wherein the character of the properties owned or held by it or the nature of the
business transacted by it makes such qualification necessary.  Each Restricted
Person has taken all actions and procedures customarily taken in order to enter,
for the purpose of conducting business or owning property, each jurisdiction
outside the United States wherein the character of the properties owned or held
by it or the nature of the business transacted by it makes such actions and
procedures desirable.
 
Section 5.3.       Authorization.  Each Restricted Person has duly taken all
action necessary to authorize the execution and delivery by it of the Loan
Documents to which it is a party and to authorize the consummation of the
transactions contemplated thereby and the performance of its obligations
thereunder.  Borrower is duly authorized to borrow funds hereunder.
 
Section 5.4.       No Conflicts or Consents.  The execution and delivery by the
various Restricted Persons of the Loan Documents to which each is a party, the
performance by each of its obligations under such Loan Documents, and the
consummation of the transactions contemplated by the various Loan Documents, do
not and will not (a) conflict with any provision of (i) any Law, (ii) the
organizational documents of any Restricted Person, or (iii) any agreement,
judgment, license, order or permit applicable to or binding upon any Restricted
Person in any material respect, (b) result in the acceleration of any
Indebtedness owed by any Restricted Person, or (c) result in or require the
creation of any Lien upon any assets or properties of any Restricted Person
except as expressly contemplated or permitted in the Loan Documents.  Except as
expressly contemplated in the Loan Documents no consent, approval, authorization
or order of, and no notice to or filing with, any Governmental Authority or
third party is required in connection with the execution, delivery or
performance by any Restricted Person of any Loan Document or to consummate any
transactions contemplated by the Loan Documents.
 
Section 5.5.       Enforceable Obligations.  This Agreement is, and the other
Loan Documents when duly executed and delivered will be, legal, valid and
binding obligations of each Restricted Person which is a party hereto or
thereto, enforceable in accordance with their terms except as such enforcement
may be limited by bankruptcy, insolvency or similar Laws of general application
relating to the enforcement of creditors' rights.
 
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Section 5.6.       Initial Financial Statements.  Borrower has heretofore
delivered to each Lender true, correct and complete copies of the Initial
Financial Statements.  The Initial Financial Statements fairly present
Borrower's Consolidated financial position at the respective dates thereof and
the Consolidated results of Borrower's operations and Borrower's Consolidated
cash flows for the respective periods thereof.  Since the date of the annual
Initial Financial Statements no Material Adverse Change has occurred, except as
reflected in the quarterly Initial Financial Statements or in Section 5.6 of the
Disclosure Letter.  All Initial Financial Statements were prepared in accordance
with GAAP.
 
Section 5.7.       Other Obligations and Restrictions.  No Restricted Person has
any outstanding Liabilities of any kind (including contingent obligations, tax
assessments, and unusual forward or long-term commitments) which are, in the
aggregate, material to Borrower or material with respect to Borrower's
Consolidated financial condition and not shown in the Initial Financial
Statements or disclosed in Section 5.7 of the Disclosure Letter or a Disclosure
Report.  Except as shown in the Initial Financial Statements or disclosed in
Section 5.7 of the Disclosure Letter or a Disclosure Report, no Restricted
Person is subject to or restricted by any franchise, contract, deed, charter
restriction, or other instrument or restriction which could reasonably be
expected to cause a Material Adverse Change.
 
Section 5.8.       Full Disclosure.  No certificate, statement or other
information delivered herewith or heretofore by any Restricted Person to any
Lender in connection with the negotiation of this Agreement or in connection
with any transaction contemplated hereby (excluding projections, estimates and
Engineering Reports) contains any untrue statement of a material fact or omits
to state any material fact known to any Restricted Person (other than
industry-wide risks normally associated with the types of businesses conducted
by Restricted Persons) necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made; provided that, with
respect to the estimates, projections and pro forma financial information
contained in the materials referenced above, Borrower only represents that they
are based upon good faith estimates and assumptions believed by management of
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.  There is no fact known to any Restricted Person
(other than industry-wide risks normally associated with the types of businesses
conducted by Restricted Persons) that has not been disclosed to each Lender in
writing which could reasonably be expected to cause a Material Adverse
Change.  There are no statements or conclusions in any Engineering Report which
are based upon or include misleading information or fail to take into account
material information regarding the matters reported therein, it being understood
that each Engineering Report is necessarily based upon professional opinions,
estimates and projections and that Borrower does not warrant that such opinions,
estimates and projections will ultimately prove to have been accurate. Borrower
has heretofore delivered to each Lender true, correct and complete copies of the
Initial Engineering Report.

 
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Section 5.9.       Litigation.  Except as disclosed in the Initial Financial
Statements or in Section 5.9 of the Disclosure Letter:  (a) there are no
actions, suits or legal, equitable, arbitrative or administrative proceedings
pending, or to the knowledge of any Restricted Person threatened, against any
Restricted Person or affecting any Property of any Restricted Person before any
Governmental Authority which could reasonably be expected to cause a Material
Adverse Change, (b) there are no outstanding judgments, injunctions, writs,
rulings or orders by any such Governmental Authority against any Restricted
Person or any Restricted Person's stockholders, partners, directors or officers
or any of its material Property which could reasonably be expected to cause a
Material Adverse Change, and (c) there are no cease and desist, noncompliance
orders or notices from the California Division of Oil, Gas and Geothermal
Resources or other Governmental Authorities which could reasonably be expected
to cause a Material Adverse Change.
 
Section 5.10.     Labor Disputes and Acts of God.  Except as disclosed in
Section 5.10 of the Disclosure Letter or a Disclosure Report, neither the
business nor the Properties of any Restricted Person has been affected by any
fire, explosion, accident, strike, lockout or other labor dispute, drought,
storm, hail, earthquake, embargo, act of God or of the public enemy or other
casualty (whether or not covered by insurance), which could reasonably be
expected to cause a Material Adverse Change.
 
Section 5.11.     ERISA Plans and Liabilities.  All currently existing ERISA
Plans are listed in Section 5.11 of the Disclosure Letter or a Disclosure
Report.  Except as disclosed in the Initial Financial Statements or in Section
5.11 of the Disclosure Letter or a Disclosure Report, no Termination Event has
occurred with respect to any ERISA Plan and all ERISA Affiliates are in
compliance with ERISA in all material respects.  No ERISA Affiliate is required
to contribute to, or has any other absolute or contingent liability in respect
of, any "multiemployer plan" as defined in Section 4001 of ERISA.  Except as set
forth in Section 5.11 of the Disclosure Letter or a Disclosure Report:  (a) no
"accumulated funding deficiency" (as defined in Section 412(a) of the Internal
Revenue Code) exists with respect to any ERISA Plan, whether or not waived by
the Secretary of the Treasury or his delegate, and (b) the current value of each
ERISA Plan's benefits does not exceed the current value of such ERISA Plan's
assets available for the payment of such benefits by more than $500,000.
 
Section 5.12.     Environmental and Other Laws.  Except as disclosed in Section
5.12 of the Disclosure Letter or a Disclosure Report: (a) Restricted Persons are
conducting their businesses in material compliance with all applicable Laws,
including Environmental Laws, and have and are in compliance with all material
licenses, permits and bonds required under any such Laws; (b) none of the
operations or properties of any Restricted Person is the subject of federal,
state or local investigation evaluating whether any material remedial action is
needed to respond to a release of any Hazardous Materials into the environment
or to the improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Materials; (c) no Restricted Person (and to the best
knowledge of Borrower, no other Person) has filed any notice under any Law
indicating that any Restricted Person is responsible for the improper release
into the environment, or the improper storage or disposal, of any material
amount of any Hazardous Materials or that any Hazardous Materials have been
improperly released, or are improperly stored or disposed of, upon any property
of any Restricted Person; (d) no Restricted Person has transported or arranged
for the transportation of any Hazardous Material to any location which is (i)
listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, listed for
possible inclusion on such National Priorities List by the Environmental
Protection Agency in its Comprehensive Environmental Response, Compensation and
Liability Information System List, or listed on any similar state list or (ii)
the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against any Restricted Person for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims (whether under Environmental Laws or otherwise); and (e) no
Restricted Person otherwise has any known material contingent liability under
any Environmental Laws or in connection with the release into the environment,
or the storage or disposal, of any Hazardous Materials.  Each Restricted Person
undertook, at the time of its acquisition of each of its material properties,
all appropriate inquiry into the previous ownership and uses of the Property and
any potential environmental liabilities associated therewith.

 
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Section 5.13.     Names and Places of Business.  No Restricted Person has,
during the preceding five years, had, been known by, or used any other trade or
fictitious name, except as disclosed in Section 5.13 of the Disclosure Letter or
a Disclosure Report.  Except as otherwise indicated in Section 5.13 of the
Disclosure Letter or a Disclosure Report, the chief executive office and
principal place of business of each Restricted Person are (and for the preceding
five years have been) located at the address of Borrower set out on the
signature pages hereto.  Except as indicated in Section 5.13 of the Disclosure
Letter or a Disclosure Report, no Restricted Person has any other office or
place of business.
 
Section 5.14.     Borrower's Subsidiaries.  Borrower does not presently have any
Subsidiary or own any stock in any other corporation or association except those
listed in Section 5.14 of the Disclosure Letter or a Disclosure Report.  Neither
Borrower nor any Restricted Person is a member of any general or limited
partnership, joint venture or association of any type whatsoever except those
listed in Section 5.14 of the Disclosure Letter or a Disclosure Report, and
associations, joint ventures or other relationships (a) which are established
pursuant to a standard form operating agreement or similar agreement or which
are partnerships for purposes of federal income taxation only, (b) which are not
corporations or partnerships (or subject to the Uniform Partnership Act) under
applicable state Law, and (c) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or
relationships.  Except as otherwise revealed in a Disclosure Report, Borrower
owns, directly or indirectly, the Equity Interest in each of its Subsidiaries
which is indicated in Section 5.14 of the Disclosure Letter.
 
Section 5.15.     Government Regulation.  Neither Borrower nor any other
Restricted Person owing Obligations is subject to regulation under the Federal
Power Act, the Investment Company Act of 1940 (as any of the preceding acts have
been amended) or any other Law which regulates the incurring by such Person of
Indebtedness, including Laws relating to common contract carriers or the sale of
electricity, gas, steam, water or other public utility services.
 
Section 5.16.     Solvency.  Upon giving effect to the issuance of the Notes,
the execution of the Loan Documents by Borrower and each Guarantor and the
consummation of the transactions contemplated hereby, no Restricted Person will
be Insolvent.
 
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Section 5.17.     Title to Properties; Licenses.  Except for those Mineral
Interests disposed of in accordance with this Agreement and oil and gas leases
that have expired in accordance with their terms, each Restricted Person has (a)
good and defensible title to, or valid leasehold interests in, all of its
Mineral Interests covered by the most recently delivered Engineering Report,
free and clear of all Liens, encumbrances, or adverse claims other than
Permitted Liens; and (b) good and valid title to, or valid leasehold interests
in, licenses of, or rights to use, all other Property owned or leased by such
Restricted Person, free and clear of all Liens, encumbrances, or adverse claims
other than Permitted Liens, except in the case of clauses (a) and (b) of this
section, defects in title or adverse claims which could not reasonably be
expected to cause a Material Adverse Change; provided that no representation or
warranty is made in this section with respect to any Mineral Interest to which
no Proved Reserves are properly attributed.  Other than changes which arise
pursuant to non-consent provisions of operating agreements or other agreements
(if any) described in Exhibit A to any Senior Security Document and except for
properties disposed of in compliance with this Agreement or leases that have
expired in accordance with their terms: (x) each Restricted Person owns the net
interests in production attributable to the wells and units of such Restricted
Person evaluated in the most recently delivered Engineering Report subject to
Permitted Liens and (y) the ownership of such properties does not in the
aggregate in any material respect obligate such Restricted Person to bear the
costs and expenses relating to the maintenance, development and operations of
such properties in an amount materially in excess of the working interest of
such properties set forth in such Engineering Report.  Upon delivery of each
Engineering Report furnished to the Lenders pursuant to Section 6.2(d) and (e),
the statements made in the preceding sentences of this section and in Section
5.8 shall be true with respect to such Engineering Report.  Each Restricted
Person possesses all licenses, permits, franchises, or otherwise has valid
rights, rights to use all patents, copyrights, trademarks and trade names, and
other intellectual property (or otherwise possesses the right to use such
intellectual property without violation of the rights of any other Person) which
are necessary to carry out its business as presently conducted and as presently
proposed to be conducted hereafter, and no Restricted Person is in violation in
any material respect of the terms under which it possesses such intellectual
property or the right to use such intellectual property.
 
Section 5.18.     Leases and Contracts; Performance of Obligations.  Except for
those Mineral Interests disposed of in accordance with this Agreement and oil
and gas leases that have expired in accordance with their terms, the leases,
contracts, servitudes and other agreements forming a part of the Mineral
Interests of the Restricted Persons covered by the most recently delivered
Engineering Report are in full force and effect unless (i) disputed in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP, or (ii) the failure to be in full force and
effect could not reasonably be expected to cause a Material Adverse Change.  All
rents, royalties and other payments due and payable under such leases,
contracts, servitudes and other agreements, or under any Permitted Liens, or
otherwise attendant to the ownership or operation of any Mineral Interests
covered by the most recently delivered Engineering Report, have been properly
and timely paid or will be paid prior to delinquency unless (i) disputed in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP or (ii) the failure to pay could not
reasonably be expected to cause a Material Adverse Change.  No Restricted Person
is in default with respect to its obligations (and no Restricted Person is aware
of any default by any third party with respect to such third party's
obligations) under any such leases, contracts, servitudes and other agreements,
or under any Permitted Liens, or otherwise attendant to the ownership or
operation of any part of the Mineral Interests covered by the Engineering
Report, where such failure could reasonably be expected to cause a Material
Adverse Change.  No Restricted Person is currently accounting for any royalties,
or overriding royalties or other payments out of production, on a basis (other
than delivery in kind) less favorable to such Restricted Person than proceeds
received by such Restricted Person (calculated at the well) from sale of
production, and no Restricted Person has any liability (or alleged liability) to
account for the same on any such less favorable basis.

 
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Section 5.19.     Gas Imbalances, Prepayments.  Except as listed on the
Disclosure Letter, on a net basis there are no gas imbalances, take or pay or
other prepayments (excluding firm transportation contracts entered into in the
ordinary course of business) which would require Borrower or any of its
Subsidiaries to deliver Mineral Interests produced from the Oil and Gas
Properties at some future time without then or thereafter receiving full payment
therefor exceeding 1 Bcf of gas or the energy equivalent for oil in the
aggregate.  Except for contracts listed in the Disclosure Letter or included in
the most recently delivered Engineering Report (with respect to all of which
contracts Borrower represents that it or its Subsidiaries are receiving a price
for all production sold thereunder which is computed substantially in accordance
with the terms of the relevant contract and are not having deliveries curtailed
substantially below the subject property's delivery capacity except as disclosed
in the Disclosure Letter or the most recently delivered Engineering Report), no
material agreements exist which are not cancelable on 120 days notice or less
without penalty or detriment for the sale of production from Borrower's or its
Subsidiaries' Mineral Interests (including, without limitation, calls on or
other rights to purchase, production, whether or not the same are currently
being exercised) that (a) pertain to the sale of production at a fixed price and
(b) have a maturity or expiry date of longer than six (6) months.
 
Section 5.20.     Operation of Mineral Interests. Except for those Mineral
Interests disposed of in accordance with this Agreement and oil and gas leases
that have expired in accordance with their terms, the Mineral Interests covered
by the most recently delivered Engineering Report (and all properties unitized
therewith) are being (and, to the extent the same could adversely affect the
ownership or operation of the Mineral Interests covered by the most recently
delivered Engineering Report after the date hereof, have in the past been)
maintained, operated and developed in a good and workmanlike manner, in
accordance with prudent industry standards and in conformity with all applicable
Laws and in conformity with all oil, gas or other mineral leases and other
contracts and agreements forming a part of the Mineral Interest covered by the
most recently delivered Engineering Report and in conformity with the Permitted
Liens except where the failure to do so could not reasonably be expect to have a
Material Adverse Change.  No Mineral Interest covered by the most recently
delivered Engineering Report is subject to having allowable production after the
date hereof reduced below the full and regular allowable (including the maximum
permissible tolerance) because of any overproduction (whether or not the same
was permissible at the time) prior to the date hereof and none of the wells
located on the Mineral Interests covered by the most recently delivered
Engineering Report (or properties unitized therewith) are or will be deviated
from the vertical more than the maximum permitted by applicable laws,
regulations, rules and orders, and such wells are bottomed under and producing
from, with the well bores wholly within, the Mineral Interests covered by the
most recently delivered Engineering Report (or, in the case of wells located on
properties unitized therewith, such unitized properties) except where such
matter could not reasonably be expect to have a Material Adverse Change.  Each
Restricted Person has all governmental licenses, permits and bonds necessary or
appropriate to own and operate its Mineral Interests covered by the most
recently delivered Engineering Report, and no Restricted Person has received
notice of any violations in respect of any such licenses or permits, except
where the failure to do, or any such violation, so could not reasonably be
expect to have a Material Adverse Change.

 
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Section 5.21.     Regulation U.  None of Borrower or its Subsidiaries are
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock, and no proceeds of any Loans will be used for a purpose
which violates Regulation U.
 
 
ARTICLE VI - - Affirmative Covenants of Borrower
 
To conform with the terms and conditions under which each Lender is willing to
have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and extend credit hereunder, Borrower warrants, covenants and
agrees that until the full and final payment of the Obligations and the
termination of this Agreement, unless Majority Lenders have previously agreed
otherwise:
 
Section 6.1.       Payment and Performance.  Borrower will pay all amounts due
under the Loan Documents in accordance with the terms thereof and will observe,
perform and comply with every covenant, term and condition expressed or implied
in the Loan Documents.  Borrower will cause each other Restricted Person to
observe, perform and comply with every such term, covenant and condition in any
Loan Document.
 
Section 6.2.       Books, Financial Statements and Reports.  Each Restricted
Person will at all times maintain full and accurate books of account and
records.  Borrower will maintain and will cause its Subsidiaries to maintain a
standard system of accounting, will maintain its Fiscal Year, and will furnish
the following statements and reports to each Lender Party at Borrower's expense
to the extent that such statements and reports have not been furnished to such
Lender Party under the WF Facility, except as to the Compliance Certificate:
 
(a)           As soon as available, and in any event within ninety (90) days
after the end of each Fiscal Year, complete Consolidated and consolidating
financial statements of Borrower together with all notes thereto, prepared in
reasonable detail in accordance with GAAP, together with an unqualified opinion,
based on an audit using generally accepted auditing standards, by independent
certified public accountants selected by Borrower and acceptable to Majority
Lenders, stating that such Consolidated financial statements have been so
prepared.  These financial statements shall contain a Consolidated and
consolidating balance sheet as of the end of such Fiscal Year and Consolidated
and consolidating statements of earnings, of cash flows, and of changes in
owners' equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year.
 
(b)           As soon as available, and in any event within forty-five (45) days
after the end of the first three Fiscal Quarters in each Fiscal Year, Borrower's
Consolidated and consolidating balance sheet as of the end of such Fiscal
Quarter and Consolidated and consolidating statements of Borrower's earnings and
cash flows for the period from the beginning of the then current Fiscal Year to
the end of such Fiscal Quarter, all in reasonable detail and prepared in
accordance with GAAP, subject to changes resulting from normal year-end
adjustments.  In addition, Borrower will, together with each such set of
financial statements and each set of financial statements furnished under
subsection (a) of this section, furnish a Compliance Certificate signed by the
Chief Financial Officer, Treasurer or Controller of Borrower stating that such
financial statements are accurate and complete (subject to normal year-end
adjustments), stating that he has reviewed the Loan Documents, containing
calculations showing compliance (or non-compliance) at the end of such Fiscal
Quarter with the requirements of Section 7.11 and Section 7.12 and stating that
no Default exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any such
Default.

 
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(c)           As soon as available, and in any event within fifteen (15) days
after the date required to be delivered to the SEC, Borrower will deliver copies
of all financial statements, reports, notices and proxy statements sent by any
Restricted Person to its stockholders and all registration statements, periodic
reports and other statements and schedules filed by any Restricted Person with
any securities exchange, the SEC or any similar governmental
authority.  Documents required to be delivered pursuant to Section 6.2(a), (b)
or (c) (to the extent any such documents are included in materials otherwise
filed with the SEC) may be delivered electronically and if so delivered, shall
be deemed to have been delivered on the date (i) on which Borrower posts such
documents, or provides a link thereto, on Borrower's website on the Internet at
the website address listed in the Disclosure Letter; or (ii) on which such
documents are posted on Borrower's behalf on IntraLinks/IntraAgency or another
relevant website, if any, including, but not limited to any filings made on
EDGAR to which each Lender and Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by Administrative Agent);
provided that: (x) Borrower shall deliver paper copies of such documents to
Administrative Agent or any Lender that requests Borrower to deliver such paper
copies until a written request to cease delivering paper copies is given by
Administrative Agent or such Lender and (y) Borrower shall notify (which may be
by facsimile or electronic mail) Administrative Agent and each Lender of the
posting of any such documents and provide to Administrative Agent by electronic
mail electronic versions (i.e., soft copies) of such documents.  Notwithstanding
anything contained herein, in every instance Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.2(b)
to Administrative Agent and each of the Lenders.  Except for such Compliance
Certificates, Administrative Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by Borrower with any
such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.
 
(d)           By March 15 of each year, Borrower will deliver an Engineering
Report prepared by Independent Engineers as of January 1 of such year,
concerning all oil and gas properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Reserves.  This report shall be satisfactory to
Administrative Agent, shall contain sufficient information to enable Borrower to
meet the reporting requirements concerning oil and gas reserves contained in
Regulations S-K and S-X promulgated by the SEC and shall contain information and
analysis comparable in scope to that contained in the Initial Engineering
Report.

 
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(e)           By September 15 of each year, commencing September 15, 2008,
Borrower will deliver an engineering report prepared by Staff Engineers
consistent in form and scope of the Engineering Reports described in (d) above,
as of July 1 of such year.
 
(f)           Together with each Engineering Report required under Section
2.9(d) and each Engineering Report required under Section 2.9(e), Borrower will
furnish lease operating statements for twelve consecutive calendar months then
ended, which include lease operating statements for such period and for each
month during such period, for properties covered by such Engineering Report.
 
(g)           Together with each set of financial statements furnished under
subsections (a) and (b) of this section, Borrower will furnish a report (in form
reasonably satisfactory to Administrative Agent) of all Hedging Contracts of
Borrower and each of its Subsidiaries, setting forth the type, term, effective
date, termination date and notional amounts or volumes and the counterparty to
each such agreement.
 
(h)           As soon as available, and in any event within forty-five (45) days
after the end of each calendar quarter, Borrower will deliver a report
describing by lease or unit the gross volume of production and sales
attributable to production during such quarter from the properties described in
the most recent Engineering Report and describing the related severance taxes,
other taxes, leasehold operating expenses and capital costs attributable thereto
and incurred during such quarter.
 
(i)            When Borrower or a Consolidated subsidiary of Borrower acquires
assets during a Four-Quarter Period and such assets are included in the
calculation of Adjusted EBITDAX for such Four-Quarter Period, Borrower shall
deliver to Administrative Agent and Lenders, together with the financial
statements described in Section 6.2(b), pro forma financial statements of
Borrower for such period prepared on a Consolidated basis as if such assets had
been acquired by Borrower or such subsidiary on the first day of such
Four-Quarter Period.
 
(j)            Concurrently with the reports referred to in Section 6.2(d),
Borrower will deliver a report describing material gas imbalances and
curtailments of production affecting any Properties of any Restricted Person.
 
Section 6.3.       Other Information and Inspections.  Each Restricted Person
will furnish to each Lender any information which Administrative Agent may from
time to time reasonably request concerning any provision of the Loan Documents
or any matter in connection with Restricted Persons' businesses, properties,
prospects, financial condition and operations.  Each Restricted Person will
permit representatives appointed by Administrative Agent (including independent
accountants, auditors, Administrative Agents, attorneys, appraisers and any
other Persons) to visit and inspect during normal business hours any of such
Restricted Person's property, including its books of account, other books and
records, and any facilities or other business assets, and to make extra copies
therefrom and photocopies and photographs thereof, and to write down and record
any information such representatives obtain, and each Restricted Person shall
permit Administrative Agent or its representatives to investigate and verify the
accuracy of the information furnished to Administrative Agent or any Lender in
connection with the Loan Documents and to discuss all such matters with its
officers, employees and representatives.

 
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Section 6.4.       Notice of Material Events and Change of Address.  Borrower
will promptly notify each Lender in writing, stating that such notice is being
given pursuant to this Agreement, of:
 
(a)           occurrence of any Material Adverse Change,
 
(b)           the occurrence of any Default,
 
(c)           the acceleration of the maturity of any Indebtedness owed by any
Restricted Person or of any default by any Restricted Person under any
indenture, mortgage, agreement, contract or other instrument to which any of
them is a party or by which any of them or any of their properties is bound, if
such acceleration or default could cause a Material Adverse Change,
 
(d)           the occurrence of any Termination Event,
 
(e)           any claim of $10,000,000 or more, any notice of potential
liability under any Environmental Laws which might exceed such amount, or any
other material adverse claim asserted against any Restricted Person or with
respect to any Restricted Person's properties, and
 
(f)           the filing of any suit or proceeding against any Restricted Person
in which an adverse decision could reasonably be expected to cause a Material
Adverse Change.
 
Upon the occurrence of any of the foregoing Restricted Persons will take all
necessary or appropriate steps to remedy promptly any such Material Adverse
Change, Default, acceleration, default or Termination Event, to protect against
any such adverse claim, to defend any such suit or proceeding, and to resolve
all controversies on account of any of the foregoing.  Borrower will also notify
Administrative Agent and Administrative Agent's counsel in writing at least
twenty Business Days prior to the date that any Restricted Person changes its
name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records.
 
Section 6.5.       Maintenance of Properties.  Each Restricted Person will
maintain, preserve, protect, and keep all property used or useful in the conduct
of its business in good condition and in compliance with all applicable Laws in
all material respects, and will from time to time make all repairs, renewals and
replacements needed to enable the business and operations carried on in
connection therewith to be promptly and advantageously conducted at all times.
 
Section 6.6.       Maintenance of Existence and Qualifications.  Each Restricted
Person will maintain and preserve its existence and its rights and franchises in
full force and effect and will qualify to do business in all states or
jurisdictions where required by applicable Law, except where the failure so to
qualify will not cause a Material Adverse Change.  The foregoing shall not
restrict (i) any merger or consolidation permitted by Section 7.4 or (ii) the
liquidation or dissolution of any Subsidiary if Borrower determines in good
faith that such liquidation or dissolution is in the best interests of Borrower
and is not materially disadvantageous to the Lenders.

 
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Section 6.7.       Payment of Trade Liabilities, Taxes, etc.  Each Restricted
Person will (a) timely file all required tax returns; (b) timely pay all taxes,
assessments, and other governmental charges or levies imposed upon it or upon
its income, profits or property; (c) pay all Liabilities owed by it on ordinary
trade terms to vendors, suppliers and other Persons providing goods and services
used by it in the ordinary course of its business within a period of time after
the invoice date that is customary in the oil and gas industry; (d) pay and
discharge when due all other Liabilities now or hereafter owed by it; and (e)
maintain appropriate accruals and reserves for all of the foregoing in
accordance with GAAP.  Each Restricted Person may, however, delay paying or
discharging any of the foregoing so long as (i) it is in good faith contesting
the validity thereof by appropriate proceedings and has set aside on its books
adequate reserves therefor or (ii) the nonpayment or nondischarge could not
reasonably be expected to cause a Material Adverse Change.
 
Section 6.8.       Insurance.
 
(a)           Each Restricted Person shall at all times maintain (at its own
expense) insurance for its property in accordance with the Insurance Schedule in
at least such amounts, with at least such limitations on deductibles, and
against such risks, in such form and with such financially sound and reputable
insurers as shall be reasonably satisfactory to Administrative Agent from time
to time. Each Restricted Person shall at all times maintain insurance against
its liability for injury to persons or property in accordance with the Insurance
Schedule, which insurance shall be by financially sound and reputable insurers.
 
(b)           All insurance policies shall be modified or endorsed as necessary
to (A) name Administrative Agent as additional insured on policies insuring
against liability for injury to persons or property and (B) prevent any
expiration, or cancellation of the coverage provided by such policies without at
least thirty (30) days prior written notice to Administrative Agent by the
insurer.  Each Restricted Person shall, if so requested by Administrative Agent,
deliver to Administrative Agent original or duplicate policies of such insurance
and, as often as Administrative Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance.  Reimbursement under
any liability insurance maintained by Restricted Persons pursuant to this
Section 6.8 may be paid directly to the Person who has incurred the liability
covered by such insurance.
 
Section 6.9.       Performance on Borrower's Behalf.  If any Restricted Person
fails to pay any taxes, insurance premiums, expenses, attorneys' fees or other
amounts it is required to pay under any Loan Document, Administrative Agent may
pay the same.  Borrower shall immediately reimburse Administrative Agent for any
such payments and each amount paid by Administrative Agent shall constitute an
Obligation owed hereunder which is due and payable on the date such amount is
paid by Administrative Agent.
 
Section 6.10.     Interest.  Borrower hereby promises to each Lender Party to
pay interest at the Default Rate applicable to Base Rate Loans on all
Obligations (including Obligations to pay fees or to reimburse or indemnify any
Lender) which Borrower has in this Agreement promised to pay to such Lender
Party and which are not paid when due.  Such interest shall accrue from the date
such Obligations become due until they are paid.

 
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Section 6.11.     Compliance with Agreements and Law.  Each Restricted Person
will perform all material obligations it is required to perform under the terms
of each indenture, mortgage, deed of trust, security agreement, lease,
franchise, agreement, contract or other instrument or obligation to which it is
a party or by which it or any of its properties is bound, except when failure to
do so could not reasonably be expected to cause a Material Adverse Change.  Each
Restricted Person will conduct its business and affairs in compliance with all
Laws applicable thereto and will maintain in good standing all licenses that may
be necessary or appropriate to carry on its business.
 
Section 6.12.     Environmental Matters; Environmental Reviews.
 
(a)           Except in each case where failure to do so could not reasonably be
expected to cause a Material Adverse Change, each Restricted Person will comply
in all material respects with all Environmental Laws now or hereafter applicable
to such Restricted Person, as well as all contractual obligations and agreements
with respect to environmental remediation or other environmental matters, and
shall obtain, at or prior to the time required by applicable Environmental Laws,
all environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect.  Except in each case where failure to do so could not reasonably be
expected to cause a Material Adverse Change, no Restricted Person will do
anything or permit anything to be done which will subject any of its properties
to any remedial obligations under, or result in noncompliance with applicable
permits and licenses issued under, any applicable Environmental Laws, assuming
disclosure to the applicable governmental authorities of all relevant facts,
conditions and circumstances.  Upon Administrative Agent's reasonable request,
at any time and from time to time, Borrower will provide at its own expense an
environmental inspection of any of the Restricted Persons' material real
properties and audit of their environmental compliance procedures and practices,
in each case from an engineering or consulting firm reasonably acceptable to
Administrative Agent.  Administrative Agent and Lenders will use their best
efforts to protect any attorney client privilege that exists with respect to
reports or audits prepared by such engineers or consultants.
 
(b)           Borrower will promptly furnish to Administrative Agent all written
notices of violation, orders, claims, citations, complaints, penalty
assessments, suits or other proceedings received by any Restricted Person, or of
which Borrower otherwise has notice, pending or threatened against any
Restricted Person by any Governmental Authority with respect to any alleged
violation of or non-compliance with any Environmental Laws or relating to
potential responsibility with respect to any investigation or clean-up of
Hazardous Material at any location, in each case which involves a claim or
liability in excess of $10,000,000.
 
Section 6.13.     Evidence of Compliance.  Each Restricted Person will furnish
to each Lender at such Restricted Person's or Borrower's expense all evidence
which Administrative Agent from time to time reasonably requests in writing as
to the accuracy and validity of or compliance with all representations,
warranties and covenants made by any Restricted Person in the Loan Documents,
the satisfaction of all conditions contained therein, and all other matters
pertaining thereto.
 
Section 6.14.     Bank Accounts; Offset.  To secure the repayment of the
Obligations Borrower hereby grants to each Lender a security interest, a lien,
and a right of offset, each of which shall be in addition to all other
interests, liens, and rights of any Lender at common Law, under the Loan
Documents, or otherwise, and each of which shall be upon and against (a) any and
all moneys, securities or other property (and the proceeds therefrom) of
Borrower now or hereafter held or received by or in transit to any Lender from
or for the account of Borrower, whether for safekeeping, custody, pledge,
transmission, collection or otherwise, (b) any and all deposits (general or
special, time or demand, provisional or final) of Borrower with any Lender, and
(c) any other credits and claims of Borrower at any time existing against any
Lender, including claims under certificates of deposit.  At any time and from
time to time after the occurrence of any Default, each Lender is hereby
authorized to foreclose upon, or to offset against the Obligations then due and
payable (in either case without notice to Borrower), any and all items
hereinabove referred to.  The remedies of foreclosure and offset are separate
and cumulative, and either may be exercised independently of the other without
regard to procedures or restrictions applicable to the other.

 
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Section 6.15.     Guaranties of Borrower's Subsidiaries.  Each Domestic
Subsidiary of Borrower that is a Material Subsidiary now existing or created,
acquired or coming into existence after the date hereof shall, promptly upon
request by Administrative Agent, execute and deliver to Administrative Agent an
absolute and unconditional guaranty of the timely repayment of the Obligations
and the due and punctual performance of the obligations of Borrower hereunder,
which guaranty shall be satisfactory to Administrative Agent in form and
substance.  Each such Domestic Subsidiary of Borrower that is a Material
Subsidiary existing on the date hereof shall duly execute and deliver such a
guaranty prior to the making of any Loan hereunder.  Borrower will cause each
such Domestic Subsidiary to deliver to Administrative Agent, simultaneously with
its delivery of such a guaranty, written evidence satisfactory to Administrative
Agent and its counsel that such Domestic Subsidiary has taken all company action
necessary to duly approve and authorize its execution, delivery and performance
of such guaranty and any other documents which it is required to execute.
 
Section 6.16.     Mineral Interests.  Each Restricted Person will carry out its
sales of production, will operate the Mineral Interests, and will otherwise deal
with the Mineral Interests and the production therefrom, in such a way that the
representations and warranties in Section 5.18 through 5.20 remain true and
correct at, and as of, all times that this Agreement is in effect (and not just
at, and as of, the times such representations and warranties are made).
 
 
ARTICLE VII -  Negative Covenants of Borrower
 
To conform with the terms and conditions under which each Lender is willing to
have credit outstanding to Borrower, and to induce each Lender to enter into
this Agreement and make the Loans, Borrower warrants, covenants and agrees that
until the full and final payment of the Obligations and the termination of this
Agreement, unless Majority Lenders have previously agreed otherwise:
 
Section 7.1.       Indebtedness.  No Restricted Person will in any manner owe or
be liable for Indebtedness except:
 
(a)           the Obligations;

 
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(b)           Liabilities for taxes and governmental assessments in the ordinary
course of business that are not yet due;
 
(c)           Indebtedness arising under Hedging Contracts permitted under
Section 7.3;
 
(d)           Liability for that certain royalty associated with production from
Borrower's Formax properties;
 
(e)           Permitted Subordinated Debt;
 
(f)            WF Facility Obligations;
 
(g)           SG Money Market Facility Obligations;
 
(h)           intercompany Indebtedness arising from loans made by (i) Borrower
to its wholly-owned Subsidiaries that are Guarantors, or (ii) any Subsidiary of
Borrower to Borrower; provided, however that upon the request of Administrative
Agent at any time, any such Indebtedness shall be evidenced by promissory notes
having terms reasonably satisfactory to Administrative Agent, and the sole
originally executed counterparts of which shall be pledged and delivered to
Administrative Agent, for the benefit of Administrative Agent and Lenders, as
security for the Obligations; and
 
(i)            miscellaneous items of Indebtedness not described in subsections
(a) through (h) the outstanding amount of which does not in the aggregate
(taking into account all such Indebtedness of all Restricted Persons) exceed at
any one time an amount equal to five percent (5%) of the Net Worth of Borrower
at such time.
 
Section 7.2.       Limitation on Liens.  Except for Permitted Liens, no
Restricted Person will create, assume or permit to exist any Lien upon any of
the properties or assets which it now owns or hereafter acquires.
 
Section 7.3.       Hedging Contracts.  No Restricted Person will be a party to
or in any manner be liable on any Hedging Contract except:
 
(a)           Oil.  Contracts entered into with the purpose and effect of fixing
prices on oil expected to be produced, sold or transported by Restricted Persons
from its oil and gas properties, provided that at all times: (i) no such
contract fixes a price for a term of more than 60 months except (x) contracts
that are directly hedged to offset a longer term fixed rate contract and (y)
contracts covering oil and gas properties in the Midway-Sunset Field which have
a term not to exceed 84 months; (ii) the aggregate monthly production covered by
all such contracts (determined, in the case of contracts that are not settled on
a monthly basis, by a monthly proration acceptable to Administrative Agent) for
any single month does not in the aggregate exceed 90% of Restricted Persons'
aggregate Projected Oil Production anticipated to be sold in the ordinary course
of Restricted Persons' businesses for such month, and the aggregate monthly
production covered by all such contracts having a term of more than 60 months
but not more than 84 months shall not in the aggregate exceed 60% of the
Restricted Persons' aggregate Projected Oil Production from the Midway-Sunset
Field anticipated to be sold in the ordinary course of such Persons' business
for such month, (iii) except for letters of credit and the WF Collateral under
the WF Security Documents with respect to WF Lender Hedging Obligations, no such
contract requires any Restricted Person to put up money, assets or other
security against the event of its nonperformance prior to actual default by such
Restricted Person in performing its obligations thereunder, and (iv) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a WF Lender or one of its
Affiliates) at the time the contract is made has long-term obligations rated A1
by Moody's or A+ by S & P, or better, respectively, by either Rating Agency.

 
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(b)           Gas.  Contracts entered into with the purpose and effect of fixing
prices on gas expected to be produced, sold or transported by Restricted Persons
from its oil and gas properties or gas expected to be purchased by Restricted
Persons for use in oil production by such Restricted Persons, provided that at
all times: (i) no such contract fixes a price for a term of more than 60 months
except contracts that are directly hedged to offset a longer term fixed rate
contract; (ii) the aggregate monthly production or purchase volume,
respectively, covered by all such contracts (determined, in the case of
contracts that are not settled on a monthly basis, by a monthly proration
acceptable to Administrative Agent) for any single month does not exceed 90% of
Restricted Persons' aggregate Projected Gas Production anticipated to be sold in
the case of contracts on gas sales volumes, or 90% of Restricted Persons'
aggregate volume of projected gas purchases anticipated in the ordinary course
of Restricted Persons' businesses for such month, (iii) except for letters of
credit and the WF Collateral under the WF Security Documents with respect to WF
Lender Hedging Obligations, no such contract requires any Restricted Person to
put up money, assets or other security against the event of its nonperformance
prior to actual default by such Restricted Person in performing its obligations
thereunder, and (iv) each such contract is with a counterparty or has a
guarantor of the obligation of the counterparty who (unless such counterparty is
a WF Lender or one of its Affiliates) at the time the contract is made has
long-term obligations rated A1 by Moody's or A+ by S & P, or better,
respectively, by either Rating Agency.

(c)           NGL.  Contracts entered into with the purpose and effect of fixing
prices on natural gas liquids expected to be produced, sold or transported by
Restricted Persons from its oil and gas properties, provided that at all times:
(i) no such contract fixes a price for a term of more than 60 months except
contracts that are directly hedged to offset a longer term fixed rate contract;
(ii) the aggregate monthly production covered by all such contracts (determined,
in the case of contracts that are not settled on a monthly basis, by a monthly
proration acceptable to Administrative Agent) for any single month does not in
the aggregate exceed 90% of Restricted Persons' aggregate Projected NGL
Production anticipated to be sold in the ordinary course of Restricted Persons'
businesses for such month, (iii) except for letters of credit and the WF
Collateral under the WF Security Documents with respect to WF Lender Hedging
Obligations, no such contract requires any Restricted Person to put up money,
assets or other security against the event of its nonperformance prior to actual
default by such Restricted Person in performing its obligations thereunder, and
(iv) each such contract is with a counterparty or has a guarantor of the
obligation of the counterparty who (unless such counterparty is a WF Lender or
one of its Affiliates) at the time the contract is made has long-term
obligations rated A1 by Moody's or A+ by S & P, or better, respectively, by
either Rating Agency.

(d)           Interest Rates.  Contracts entered into by a Restricted Person
with the purpose and effect of fixing or capping interest rates on a principal
amount of indebtedness of such Restricted Person that is accruing interest at a
variable rate, provided that (i) the aggregate notional amount of such contracts
never exceeds eighty percent (80%) of the anticipated outstanding principal
balance of the indebtedness to be hedged by such contracts or an average of such
principal balances calculated using a generally accepted method of matching
interest hedging contracts to declining principal balances, (ii) the floating
rate index of each such contract generally matches the index used to determine
the floating rates of interest on the corresponding indebtedness to be hedged by
such contract, (iii) except for letters of credit and the WF Collateral under
the WF Security Documents with respect to WF Lender Hedging Obligations, no such
contract requires any Restricted Person to put up money, assets or other
security against the event of its nonperformance prior to actual default by such
Restricted Person in performing its obligations thereunder, and (iv) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a WF Lender or one of its
Affiliates) at the time the contract is made has long-term obligations rated A1
by Moody's or A+ by S & P, or better.

 
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(e)           Electricity.  Contracts entered into with the purpose and effect
of fixing prices on electricity expected to be produced or sold by Restricted
Persons, provided that at all times:  (i) no such contract fixes a price for a
term of more than sixty (60) months, (ii) the aggregate monthly production
covered by all such contracts (determined, in the case of contracts that are not
settled on a monthly basis, by a monthly proration acceptable to Administrative
Agent) for any single month does not in the aggregate exceed ninety percent
(90%) of Restricted Persons' aggregate Projected Electricity Production
anticipated to be sold in the ordinary course of Restricted Persons' businesses
for such month, (iii) except for letters of credit and WF Collateral under the
WF Security Documents with respect to WF Lender Hedging Obligations, no such
contract requires any Restricted Person to put up money, assets or other
security against the event of its nonperformance prior to actual default by such
Restricted Person in performing its obligations thereunder, and (iv) each such
contract is with a counterparty or has a guarantor of the obligation of the
counterparty who (unless such counterparty is a WF Lender or one of its
Affiliates) at the time the contract is made has long-term obligations rated A1
by Moody's or A+ by S&P, or better, respectively, by either Rating Agency.  As
used in this subsection, the term "Projected Electricity Production" means the
projected production of electricity (measured by volume unit or megawatt per
hour equivalent, not sales price) for the term of the contracts or a particular
month, as applicable, from generating facilities owned by any Restricted Person
which are located in the United States and  projected by Restricted Persons.
 
(f)            Put Options; Cap Transactions.  Notwithstanding the foregoing
provisions of this Section 7.3, there shall be no limitations on the purchase by
the Restricted Persons of put options or floor transactions with respect to oil,
gas, natural gas liquids or electricity produced by, call options or cap
transactions with respect to gas expected to be purchased by, or cap
transactions with respect to principal balances of indebtedness of, the
Restricted Person; provided, however, that any such put or call options or cap
or floor transactions shall be solely for hedging, and not for speculative
purposes, and the Restricted Person shall have no obligations thereunder other
than payment of the applicable premium for any such put or call options or cap
or floor transactions.

Section 7.4.       Limitation on Mergers, Issuances of Securities.  No
Restricted Person will merge or consolidate with or into any other Person;
provided that so long as no Default has occurred and is continuing or will occur
as a result thereof (a) Borrower may merge or consolidate with another Person so
long as Borrower is the surviving business entity, (b) any wholly-owned
Subsidiary of Borrower may be merged into or consolidated with another Person so
long as Borrower or a wholly-owned Subsidiary of Borrower is the surviving
business entity, and (c) any Subsidiary of Borrower may merge or consolidate
with another Person so long as Borrower or a Subsidiary of Borrower is the
surviving business entity.  Borrower will not issue any securities other than
shares of its common stock and any options or warrants giving the holders
thereof only the right to acquire such shares.  No Subsidiary of Borrower will
issue any additional shares of its capital stock or other securities or any
options, warrants or other rights to acquire such additional shares or other
securities except to Borrower and only to the extent not otherwise forbidden
under the terms hereof.

 
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Section 7.5.       Limitation on Sales of Property.  No Restricted Person will
sell, transfer, lease, exchange, alienate or dispose of any of its material
assets or properties or any material interest therein or portions thereof, or
discount, sell, pledge or assign any notes payable to it, accounts receivable or
future income, except, to the extent not otherwise forbidden under the WF
Security Documents:
 
(a)           equipment which is worthless or obsolete or which is replaced by
equipment of equal suitability and value;
 
(b)           inventory (including oil and gas sold as produced and seismic
data) which is sold in the ordinary course of business on ordinary trade terms;
 
(c)           capital stock of any of Borrower's Subsidiaries which is
transferred to Borrower or a wholly owned Subsidiary of Borrower;
 
(d)           interests in oil and gas properties or portions thereof, to which
no Proved Reserves of oil, gas or other liquid or gaseous hydrocarbons are
properly attributed;
 
(e)           leases of drilling rigs in the ordinary course of business and
sales of drilling rigs that are under options for sale on the Closing Date which
are described in Schedule 3;
 
(f)           exchanges of (i) Restricted Persons' oil and gas leasehold
interests in non-producing zones to which no Proved Reserves of oil, gas or
other liquid or gaseous hydrocarbons are properly attributed, whether or not
such interests are subject to Liens created under the WF Security Documents in
favor of WF Agent, for (ii) other oil and gas leasehold interests in producing
or non-producing zones owned by other Persons;
 
(g)           exchanges and transfers of Mineral Interests located in the DJ
Basin in Colorado owned by Restricted Persons (in this Section called the "Berry
DJ Properties") for Mineral Interests located therein by Rosewood Resources (in
this Section called "Rosewood DJ Properties"); provided that the aggregate
amount of Rosewood DJ Properties received in exchange for Berry DJ Properties
shall have a value equivalent to the Berry DJ Properties so exchanged;
 
(h)           transfers among Borrower and Guarantors;

 
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(i)           sales and dispositions of other property for a purchase price paid
in cash or Mineral Interests in an amount at least equal to the fair market
value thereof.
 
Section 7.6.       Limitation on Dividends, Stock Repurchases and Subordinated
Debt.
 
(a)           No Restricted Person will declare or make any Dividends or Stock
Repurchases other than (i) Dividends payable to Borrower or Subsidiaries of
Borrower, (ii) Stock Repurchases by Borrower; provided that the aggregate amount
paid by Borrower in connection therewith does not exceed $35,000,000 during any
Four-Quarter Period, (iii) so long as no Default has occurred and is continuing
or will occur as a result thereof, Dividends payable to Borrower's shareholders,
to the extent that the aggregate value of all such Dividends made during any
Four-Quarter Period does not exceed the greater of $20,000,000 or seventy-five
percent (75%) of Net Income for such Four-Quarter Period, and (iv) Dividends and
Stock Repurchases made with the net cash proceeds received from a substantially
concurrent issue of new shares of its common stock or other common Equity
Interests.
 
(b)           No Restricted Person shall make any payment of principal, interest
or fees on Permitted Subordinated Debt, except to the extent expressly permitted
by the applicable subordination agreement with Administrative Agent.
 
Section 7.7.       Limitation on Acquisitions, Investments; and New
Businesses.  Except as expressly permitted by this section, no Restricted Person
will make any acquisitions of, or capital contributions to, or other Investments
in any Person or property; provided that the Restricted Persons (i) may make
Permitted Investments and Core Acquisitions and Investments without limitation,
and (ii) may make Non-Core Acquisitions and Investments so long as the aggregate
amount expended on Non-Core Acquisitions and Investments during the period from
the date hereof until the Maturity Date never exceeds 10% of Borrower's Net
Worth at any time during such period.  No Restricted Person will engage directly
or indirectly in any business or conduct any operations except in connection
with or incidental to its present businesses and operations and transactions
permitted by Section 7.8.
 
Section 7.8.       Limitation on Credit Extensions.  Except for Permitted
Investments, no Restricted Person will extend credit, make advances or make
loans other than normal and prudent extensions of credit to customers buying
goods and services in the ordinary course of business, which extensions shall
not be for longer periods than those extended by similar businesses operated in
a normal and prudent manner.
 
Section 7.9.       Transactions with Affiliates.  Neither Borrower nor any of
its Subsidiaries nor any Guarantor will engage in any material transaction with
any of its Affiliates on terms which are less favorable to it than those which
would have been obtainable at the time in arm's-length dealing with Persons
other than such Affiliates, provided that such restriction shall not apply to
transactions among Borrower and its wholly owned Subsidiaries.
 
Section 7.10.     Prohibited Contracts.
 
(a)           Except as expressly provided for in the Loan Documents, no
Restricted Person will, directly or indirectly, enter into, create, or otherwise
allow to exist any contract or other consensual restriction on (i) the ability
of any Subsidiary of Borrower to (1) pay dividends or make other distributions
to Borrower, (2) to redeem equity interests held in it by Borrower, (3) to repay
loans and other indebtedness owing by it to Borrower, or (4) to transfer any of
its assets to Borrower or (ii) on the ability of any Restricted Person to grant
Administrative Agent and Lenders liens on its Property, except:

 
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(A)          any customary encumbrance or restriction with respect to a
Subsidiary imposed pursuant to a merger agreement or an agreement entered into
for the sale or disposition of all or substantially all the capital stock or
assets of such Subsidiary pending the closing of such sale or disposition; and
 
(B)           with respect to the above clauses (i)(4) and clause (iv) only,
 
(i)           any such encumbrance or restriction consisting of customary
nonassignment provisions (including provisions forbidding subletting or
sublicensing) in agreements, leases governing leasehold interests and licenses
to the extent such provisions restrict the transfer of the agreement, lease or
license or the property leased, or licensed thereunder;
 
(ii)          customary restrictions contained in asset sale agreements limiting
the transfer of such assets pending the closing of such sale;
 
(iii)         restrictions in the instruments creating a Permitted Lien
described in clause (d) or (h) of the definition of Permitted Lien, limiting
Liens on the property subject to such Permitted Lien;
 
(iv)         restrictions on Equity Interests constituting minority Investments
permitted by Section 7.7;
 
(v)          existing restrictions with respect to a Person acquired by Borrower
or any of its Subsidiaries (except to the extent such restrictions were put in
place in connection with or in contemplation of such acquisition), which
restrictions are not applicable to any Person, or the properties or assets of
any Person other than the Person, or the property or assets of the Person, so
acquired; and
 
(vi)         customary supermajority voting provisions and other customary
provisions with respect to the disposition or distribution of assets, each
contained in corporate charters, bylaws, stockholders' agreements, limited
liability company agreements, partnership agreements, joint venture agreements
and other similar agreements entered into in the ordinary course of business of
Borrower and its Subsidiaries.
 
(b)           Except as permitted by Section 5.19, no Restricted Person will
enter into any "take-or-pay" contract or other contract or arrangement for the
purchase of goods or services which obligates it to pay for such goods or
services regardless of whether they are delivered or furnished to it, excluding
firm transportation contracts entered into in the ordinary course of business.
No Restricted Person will amend or permit any amendment to any contract or lease
which releases, qualifies, limits, makes contingent or otherwise detrimentally
affects the rights and benefits of Administrative Agent or any Lender under or
acquired pursuant to any Security Documents.  No ERISA Affiliate will incur any
obligation to contribute to any "multiemployer plan" as defined in Section 4001
of ERISA.

 
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Section 7.11.     Current Ratio.  Beginning with the Fiscal Quarter ending
September 30, 2008, the ratio of Borrower's Current Assets to Borrower's Current
Liabilities will never be less than 1.0 to 1.0.
 
Section 7.12.     EBITDAX to Total Funded Debt Ratio.  Beginning with the Fiscal
Quarter ending September 30, 2008, the ratio of (a) Total Funded Debt to (b)
Adjusted EBITDAX for the Four-Quarter Period then ended, will not be greater
than 3.5 to 1.0 at the end of any Fiscal Quarter.
 
 
ARTICLE VIII - - Events of Default and Remedies
 
Section 8.1.       Events of Default.  Each of the following events constitutes
an Event of Default under this Agreement:
 
(a)           Any Restricted Person fails to pay any principal component of any
Obligation when due and payable, whether at a date for the payment of a fixed
installment or as a contingent or other payment becomes due and payable or as a
result of acceleration or otherwise;
 
(b)           Any Restricted Person fails to pay any Obligation (other than the
Obligations in subsection (a) above) when due and payable, whether at a date for
the payment of a fixed installment or as a contingent or other payment becomes
due and payable or as a result of acceleration or otherwise, within three
Business Days after the same becomes due;
 
(c)           Any "default" or "event of default" occurs under any Loan Document
which defines either such term, and the same is not remedied within the
applicable period of grace (if any) provided in such Loan Document;
 
(d)           Any Restricted Person fails to duly observe, perform or comply
with any covenant, agreement or provision of Section 6.4 or Article VII;
 
(e)           Any Restricted Person fails (other than as referred to in
subsections (a), (b), (c) or (d) above) to duly observe, perform or comply with
any covenant, agreement, condition or provision of any Loan Document, and such
failure remains unremedied for a period of thirty (30) days after notice of such
failure is given by Administrative Agent to Borrower;
 
(f)            Any representation or warranty previously, presently or hereafter
made in writing by or on behalf of any Restricted Person in connection with any
Loan Document shall prove to have been false or incorrect in any material
respect on any date on or as of which made, or any Loan Document at any time
ceases to be valid, binding and enforceable as warranted in Section 5.5 for any
reason other than its release or subordination by Administrative Agent;
 
(g)           Any Restricted Person (i) fails to pay any portion, when such
portion is due, (A) of any of its Indebtedness owing under the WF Facility or
under the SG Money Market Facility, or (B) any of its other Indebtedness in
excess of $25,000,000, or (ii) breaches or defaults in the performance of any
agreement or instrument by which the WF Facility, the SG Money Market Facility
or any such other Indebtedness in excess of $25,000,000 is issued, evidenced,
governed, or secured, and any such failure, breach or default continues beyond
any applicable period of grace provided therefor;

 
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(h)           Either (i) any "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code) in excess of $5,000,000 exists with
respect to any ERISA Plan, whether or not waived by the Secretary of the
Treasury or his delegate, or (ii) any Termination Event occurs with respect to
any ERISA Plan and the then current value of such ERISA Plan's benefit
liabilities exceeds the then current value of such ERISA Plan's assets available
for the payment of such benefit liabilities by more than $5,000,000 (or in the
case of a Termination Event involving the withdrawal of a substantial employer,
the withdrawing employer's proportionate share of such excess exceeds such
amount);
 
(i)            Any Change of Control occurs; and
 
(j)            Any Restricted Person:
 
(i)             suffers the entry against it of a judgment, decree or order for
relief by a Governmental Authority of competent jurisdiction in an involuntary
proceeding commenced under any applicable bankruptcy, insolvency or other
similar Law of any jurisdiction now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended, or has any such
proceeding commenced against it which remains undismissed for a period of sixty
days; or
 
(ii)            commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the federal
Bankruptcy Code, as from time to time amended; or applies for or consents to the
entry of an order for relief in an involuntary case under any such Law; or makes
a general assignment for the benefit of creditors; or fails generally to pay (or
admits in writing its inability to pay) its debts as such debts become due; or
takes corporate or other action to authorize any of the foregoing; or
 
(iii)           suffers the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
all or a substantial part of its assets in a proceeding brought against or
initiated by it, and such appointment or taking possession is neither made
ineffective nor discharged within sixty days after the making thereof, or such
appointment or taking possession is at any time consented to, requested by, or
acquiesced to by it; or
 
(iv)           suffers the entry against it of a final judgment for the payment
of money in excess of $5,000,000 (not covered by insurance satisfactory to
Administrative Agent in its discretion), unless the same is discharged within
sixty days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay of
execution pending such appeal is obtained; or
 
(v)            suffers a writ or warrant of attachment or any similar process to
be issued by any Governmental Authority against all or any substantial part of
its assets, and such writ or warrant of attachment or any similar process is not
stayed or released within sixty days after the entry or levy thereof or after
any stay is vacated or set aside.

 
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Upon the occurrence of an Event of Default described in subsection (j)(i),
(j)(ii) or (j)(iii) of this section with respect to Borrower, all of the
Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement.  Upon any such acceleration, any obligation
of any Lender to make any further Loans hereunder shall be permanently
terminated.  During the continuance of any other Event of Default,
Administrative Agent at any time and from time to time may (and upon written
instructions from Majority Lenders, Administrative Agent shall), without notice
to Borrower or any other Restricted Person, do either or both of the
following:  (1) terminate any obligation of Lenders to make Loans hereunder and
(2) declare any or all of the Obligations immediately due and payable, and all
such Obligations shall thereupon be immediately due and payable, without demand,
presentment, notice of demand or of dishonor and nonpayment, protest, notice of
protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement.
 
Section 8.2.       Remedies.  If any Default shall occur and be continuing, each
Lender Party may protect and enforce its rights under the Loan Documents by any
appropriate proceedings, including proceedings for specific performance of any
covenant or agreement contained in any Loan Document, and each Lender Party may
enforce the payment of any Obligations due it or enforce any other legal or
equitable right which it may have.  All rights, remedies and powers conferred
upon Lender Parties under the Loan Documents shall be deemed cumulative and not
exclusive of any other rights, remedies or powers available under the Loan
Documents or at Law or in equity.
 
Section 8.3.       Application of Proceeds After Acceleration.  After the
exercise of remedies provided for in Section 8.2 (or after the Loans have
automatically become immediately due and payable), any amounts received on
account of the Obligations shall be applied by Administrative Agent in the
following order:
 
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to Administrative Agent (including fees and time
charges for attorneys who may be employees of Agent) and amounts payable under
Article III) payable to Administrative Agent in its capacity as such;
 
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to
Lenders (including fees, charges and disbursements of counsel to the respective
Lenders and amounts payable under Article III), ratably among them in proportion
to the respective amounts described in this clause Second payable to them;

 
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Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans, ratably among Lenders in proportion to the
respective amounts described in this clause Third payable to them;
 
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans, ratably among Lenders in proportion to the respective
amounts described in this clause Fourth held by them; and
 
Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to Borrower or as otherwise required by Law.
 
 
ARTICLE IX - - Administrative Agent
 
Section 9.1.       Appointment and Authority.  Each of the Lenders hereby
irrevocably appoints Societe Generale to act on its behalf as Administrative
Agent hereunder and under the other Loan Documents and authorizes Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to Administrative Agent by the terms hereof or thereof, together with
such actions and powers as are reasonably incidental thereto.  The provisions of
this Article are solely for the benefit of Administrative Agent and the Lenders,
and neither Borrower nor any other Restricted Person shall have rights as a
third party beneficiary of any of such provisions.
 
Section 9.2.       Exculpation Provisions.  Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents.  Without limiting the generality of the foregoing,
Administrative Agent:
 
(a)           shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
 
(b)           shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that Administrative
Agent is required to exercise as directed in writing by the Required Lenders (or
such other number or percentage of Lenders as shall be expressly provided for
herein or in the other Loan Documents), provided that Administrative Agent shall
not be required to take any action that, in its opinion or the opinion of its
counsel, may expose Administrative Agent to liability or that is contrary to any
Loan Document or applicable law; and
 
(c)           shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as
Administrative Agent or any of its Affiliates in any capacity.
 
Administrative Agent shall not be liable for any action taken or not taken by it
(i) with the consent or at the request of Required Lenders (or such other number
or percentage of the Lenders as shall be necessary, or as Administrative Agent
shall believe in good faith shall be necessary under the circumstances as
provided in Sections 10.1 and 8.2) or (ii) in the absence of its own gross
negligence or willful misconduct.  Administrative Agent shall be deemed not to
have knowledge of any Default unless and until notice describing such Default is
given to Administrative Agent by Borrower or a Lender.

 
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Administrative Agent shall not be responsible for or have any duty to ascertain
or inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to Administrative Agent.
 
Section 9.3.       Reliance by Administrative Agent.  Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person.  Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, that by its terms must be fulfilled to the
satisfaction of a Lender, Administrative Agent may presume that such condition
is satisfactory to such Lender unless Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such
Loan.  Administrative Agent may consult with legal counsel (who may be counsel
for Borrower), independent accountants and other experts selected by it, and
shall not be liable for any action taken or not taken by it in accordance with
the advice of any such counsel, accountants or experts.
 
Section 9.4.       Non-Reliance on Administrative Agent and Other Lenders. Each
Lender acknowledges that it has, independently and without reliance upon
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender also
acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement, any other Loan Document or any related
agreement or any document furnished hereunder or thereunder.
 
Section 9.5.       Rights as Lender.  The Person serving as Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not Administrative
Agent and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving
as Administrative Agent hereunder in its individual capacity.  Such Person and
its Affiliates may accept deposits from, lend money to, act as the financial
advisor or in any other advisory capacity for and generally engage in any kind
of business with Borrower or any Subsidiary or other Affiliate thereof as if
such Person were not Administrative Agent hereunder and without any duty to
account therefor to the Lenders.

 
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Section 9.6.       Sharing of Set-Offs and Other Payments.  Each Lender Party
agrees that if it shall, whether through the rights of banker's lien, set off,
or counterclaim against Borrower or otherwise, obtain payment of a portion of
the aggregate Obligations owed to it, taking into account all distributions made
by Administrative Agent under Section 3.1, and such payment causes such Lender
Party to have received more than it would have received had such payment been
received by Administrative Agent and distributed pursuant to Section 3.1, then
(a) it shall be deemed to have simultaneously purchased and shall be obligated
to purchase interests in the Obligations as necessary to cause all Lender
Parties to share all payments as provided for in Section 3.1, and (b) such other
adjustments shall be made from time to time as shall be equitable to ensure that
Administrative Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however, that nothing herein contained shall
in any way affect the right of any Lender Party to obtain payment (whether by
exercise of rights of banker's lien, set-off or counterclaim or otherwise) of
indebtedness other than the Obligations.  Borrower expressly consents to the
foregoing arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation.  If all or any part of any funds transferred pursuant to this
section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Governmental Authority
order to be paid on account of the possession of such funds prior to such
recovery.
 
Section 9.7.       Investments.  Whenever Administrative Agent in good faith
determines that it is uncertain about how to distribute to Lender Parties any
funds which it has received, or whenever Administrative Agent in good faith
determines that there is any dispute among Lender Parties about how such funds
should be distributed, Administrative Agent may choose to defer distribution of
the funds which are the subject of such uncertainty or dispute.  If
Administrative Agent in good faith believes that the uncertainty or dispute will
not be promptly resolved, or if Administrative Agent is otherwise required to
invest funds pending distribution to Lender Parties, Administrative Agent shall
invest such funds pending distribution; all interest on any such Investment
shall be distributed upon the distribution of such Investment and in the same
proportion and to the same Persons as such Investment.  All moneys received by
Administrative Agent for distribution to Lender Parties (other than to the
Person who is Administrative Agent in its separate capacity as a Lender Party)
shall be held by Administrative Agent pending such distribution solely as
Administrative Agent for such Lender Parties, and Administrative Agent shall
have no equitable title to any portion thereof.
 
Section 9.8.       Resignation of Administrative Agent.  Administrative Agent
may at any time give notice of its resignation to the Lenders and
Borrower.  Upon receipt of any such notice of resignation, Required Lenders
shall have the right, in consultation with Borrower, to appoint a successor,
which shall be a bank with an office in the United States, or an Affiliate of
any such bank with an office in the United States.  If no such successor shall
have been so appointed by Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders, appoint a successor Administrative Agent meeting the qualifications set
forth above; provided that if Administrative Agent shall notify Borrower and the
Lenders that no qualifying Person has accepted such appointment, then such
resignation shall nonetheless become effective in accordance with such notice
and (1) the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder and under the other Loan Documents and (2) all
payments, communications and determinations provided to be made by, to or
through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Administrative
Agent as provided for above in this Section.  Upon the acceptance of a
successor's appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent.  The fees payable by
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between Borrower and such
successor.  After the retiring Administrative Agent's resignation hereunder and
under the other Loan Documents, the provisions of this Article and Section 10.4
shall continue in effect for the benefit of such retiring Administrative Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while the retiring Administrative
Agent was acting as Administrative Agent.

 
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Section 9.9.       Delegation of Duties.  Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by
Administrative Agent.  Administrative Agent and any such sub-agent may perform
any and all of its duties and exercise its rights and powers by or through their
respective Related Parties.  The exculpatory provisions of this Article shall
apply to any such sub-agent and to the Related Parties of Administrative Agent
and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as
well as activities as Administrative Agent.
 
Section 9.10.     No Other Duties, etc.  Anything herein to the contrary
notwithstanding, none of the Joint Bookrunners, the Co-Lead Arrangers or the
Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as Administrative Agent or a
Lender hereunder.
 
Section 9.11.     Administrative Agent May File Proofs of Claim.  In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Restricted Person, Administrative Agent (irrespective
of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether
Administrative Agent shall have made any demand on Borrower) shall be entitled
and empowered, by intervention in such proceeding or otherwise
 
(a)           to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of Lenders and Administrative Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of Lenders and Administrative Agent and their respective agents and
counsel and all other amounts due Lenders and Administrative Agent under Section
2.5 and 10.4) allowed in such judicial proceeding; and

 
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(b)           to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
 
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under
Sections 2.5 and 10.4.  Nothing contained herein shall be deemed to authorize
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize
Administrative Agent to vote in respect of the claim of any Lender in any such
proceeding.
 
Section 9.12.     Guaranty Matters.  Each Lender hereby irrevocably authorizes
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under any guaranty if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder.  Upon request by
Administrative Agent at any time, each Lender will confirm in writing
Administrative Agent's authority to release any Guarantor from its obligations
under any guaranty pursuant to this Section 9.12.
 
 
ARTICLE X - - Miscellaneous
 
Section 10.1.     Waivers and Amendments; Acknowledgments.
 
(a)           Waivers and Amendments.  No failure or delay (whether by course of
conduct or otherwise) by any Lender in exercising any right, power or remedy
which such Lender Party may have under any of the Loan Documents shall operate
as a waiver thereof or of any other right, power or remedy, nor shall any single
or partial exercise by any Lender Party of any such right, power or remedy
preclude any other or further exercise thereof or of any other right, power or
remedy.  No waiver of any provision of any Loan Document and no consent to any
departure therefrom shall ever be effective unless it is in writing and signed
as provided below in this section, and then such waiver or consent shall be
effective only in the specific instances and for the purposes for which given
and to the extent specified in such writing.  No notice to or demand on any
Restricted Person shall in any case of itself entitle any Restricted Person to
any other or further notice or demand in similar or other circumstances.  This
Agreement and the other Loan Documents set forth the entire understanding
between the parties hereto with respect to the transactions contemplated herein
and therein and supersede all prior discussions and understandings with respect
to the subject matter hereof and thereof, and no waiver, consent, release,
modification or amendment of or supplement to this Agreement or the other Loan
Documents shall be valid or effective against any party hereto unless the same
is in writing and signed by (i) if such party is Borrower, by Borrower, (ii) if
such party is Administrative Agent, by Administrative Agent, and (iii) if such
party is a Lender, by such Lender or by Administrative Agent on behalf of
Lenders with the written consent of Majority Lenders (which consent has already
been given as to the termination of the Loan Documents as provided in Section
10.9.  Notwithstanding the foregoing or anything to the contrary herein,
Administrative Agent shall not, without the prior consent of each individual
Lender, execute and deliver on behalf of such Lender any waiver or amendment
which would:  (1) waive any of the conditions specified in Section 4.1 (provided
that Administrative Agent may in its discretion withdraw any request it has made
under Section 4.1(q)), (2) increase the maximum amount which such Lender is
committed hereunder to lend, (3) reduce any fees payable to such Lender
hereunder, or the principal of, or rate of interest on, such Lender's Note, (4)
postpone any date fixed for any payment of any such fees, principal or interest,
(5) amend the definition herein of "Majority Lenders" or "Required Lenders" or
otherwise change the aggregate amount of Percentage Shares which is required for
Administrative Agent, Lenders or any of them to take any particular action under
the Loan Documents, (6) amend the definition of "Maximum Credit Amount" to mean
an amount higher than $100,000,000, (7) release Borrower from its obligation to
pay such Lender's Note or any Guarantor from its guaranty of such payment, or
(8) amend this Section 10.1(a).

 
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(b)           Acknowledgments and Admissions.  Borrower hereby represents,
warrants, acknowledges and admits that (i) it has been advised by counsel in the
negotiation, execution and delivery of the Loan Documents to which it is a
party, (ii) it has made an independent decision to enter into this Agreement and
the other Loan Documents to which it is a party, without reliance on any
representation, warranty, covenant or undertaking by Administrative Agent or any
Lender, whether written, oral or implicit, other than as expressly set out in
this Agreement or in another Loan Document delivered on or after the date
hereof, (iii) there are no representations, warranties, covenants, undertakings
or agreements by any Lender as to the Loan Documents except as expressly set out
in this Agreement or in another Loan Document delivered on or after the date
hereof, (iv) no Lender has any fiduciary obligation toward Borrower with respect
to any Loan Document or the transactions contemplated thereby, (v) the
relationship pursuant to the Loan Documents between Borrower and the other
Restricted Persons, on one hand, and each Lender, on the other hand, is and
shall be solely that of debtor and creditor, respectively, (vi) no partnership
or joint venture exists with respect to the Loan Documents between any
Restricted Person and any Lender, (vii) Administrative Agent is not Borrower's
Administrative Agent but Administrative Agent for Lenders, (viii) should a
Default occur or exist, each Lender will determine in its sole discretion and
for its own reasons what remedies and actions it will or will not exercise or
take at that time, (ix) without limiting any of the foregoing, Borrower is not
relying upon any representation or covenant by any Lender, or any representative
thereof, and no such representation or covenant has been made, that any Lender
will, at the time of a Default or at any other time, waive, negotiate, discuss,
or take or refrain from taking any action permitted under the Loan Documents
with respect to any such Default or any other provision of the Loan Documents,
and (x) all Lender Parties have relied upon the truthfulness of the
acknowledgments in this section in deciding to execute and deliver this
Agreement and to become obligated hereunder.
 
(c)           Joint Acknowledgment.  This written Agreement and the other Loan
Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties.

 
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There are no unwritten oral agreements between the parties.
 
Section 10.2.     Survival of Agreements; Cumulative Nature.  All of Restricted
Persons' various representations, warranties, covenants and agreements in the
Loan Documents shall survive the execution and delivery of this Agreement and
the other Loan Documents and the performance hereof and thereof, including the
making or granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender Party and all of Lender Parties' obligations to Borrower are
terminated.  All statements and agreements contained in any certificate or other
instrument delivered by any Restricted Person to any Lender Party under any Loan
Document shall be deemed representations and warranties by Borrower or
agreements and covenants of Borrower under this Agreement.  The representations,
warranties, indemnities, and covenants made by Restricted Persons in the Loan
Documents, and the rights, powers, and privileges granted to Lender Parties in
the Loan Documents, are cumulative, and, except for expressly specified waivers
and consents, no Loan Document shall be construed in the context of another to
diminish, nullify, or otherwise reduce the benefit to any Lender Party of any
such representation, warranty, indemnity, covenant, right, power or
privilege.  In particular and without limitation, no exception set out in this
Agreement to any representation, warranty, indemnity, or covenant herein
contained shall apply to any similar representation, warranty, indemnity, or
covenant contained in any other Loan Document, and each such similar
representation, warranty, indemnity, or covenant shall be subject only to those
exceptions which are expressly made applicable to it by the terms of the various
Loan Documents.
 
Section 10.3.     Notices; Effectiveness; Electronic Communication.
 
(a)           Notices Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
 
(i)        if to Borrower or any other Restricted Person or Administrative
Agent; to the address, facsimile number, electronic mail address or telephone
number specified for such Person on the signature pages hereto;
 
(ii)       if to any other Lender Party, to it at its address, facsimile number,
electronic mail address or telephone number as specified on the Lenders
Schedule.
 
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in said
subsection (b).

 
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(b)           Electronic Communications.  Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by Administrative Agent, provided that the foregoing shall not apply to
notices to any Lender pursuant to Article II if such Lender has notified
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  Administrative Agent or Borrower or any
other Restricted Person may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
 
Unless Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
 
(c)           Change of Address, Etc.  Each of Borrower, any other Restricted
Person and Administrative Agent may change its address, facsimile or telephone
number for notices and other communications hereunder by notice to the other
parties hereto.  Each other Lender Party may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to
Borrower and Administrative Agent.
 
Section 10.4.     Payment of Expenses; Indemnity.
 
(a)           Payment of Expenses.  Whether or not the transactions contemplated
by this Agreement are consummated, Borrower will promptly (and in any event,
within 30 days after any invoice or other statement or notice) pay: (i) all
transfer, stamp, documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of this Agreement or
any of the other Loan Documents or any other document or transaction referred to
herein or therein, (ii) all reasonable costs and expenses incurred by or on
behalf of Administrative Agent (including without limitation attorneys' fees and
engineering fees, travel costs and miscellaneous expenses) in connection with
(1) the negotiation, preparation, execution and delivery of the Loan Documents,
and any and all consents, waivers or other documents or instruments relating
thereto, (2) the borrowings hereunder and other action reasonably required in
the course of administration hereof, (3) monitoring or confirming (or
preparation or negotiation of any document related to) any Restricted Person's
compliance with any covenants or conditions contained in this Agreement or in
any Loan Document, and (iii) all reasonable costs and expenses incurred by or on
behalf of any Lender Party (including without limitation attorneys' fees,
consultants' fees and accounting fees) in connection with the preservation of
any rights under the Loan Documents or the defense or enforcement of any of the
Loan Documents (including this section), any attempt to cure any breach
thereunder by any Restricted Person, or the defense of any Lender Party's
exercise of its rights thereunder.  In addition to the foregoing, until all
Obligations have been paid in full, Borrower will also pay or reimburse
Administrative Agent for all reasonable out-of-pocket costs and expenses of
Administrative Agent or its sub-agents or employees in connection with the
continuing administration of the Loans and the related due diligence of
Administrative Agent, including reasonable travel and miscellaneous expenses and
fees and expenses of Administrative Agent's outside counsel, reserve engineers
and consultants engaged in connection with the Loan Documents.

 
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(b)           Reimbursement by Lenders.  To the extent that Borrower for any
reason fails to indefeasibly pay any amount required under paragraph (a) or (b)
of this Section to be paid by it to Administrative Agent (or any sub-agent
thereof) or any Related Party of Administrative Agent, each Lender severally
agrees to pay to Administrative Agent (or any such sub-agent) or such Related
Party, as the case may be, such Lender's Percentage Share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against Administrative Agent (or any such sub-agent) in its capacity
as such, or any Related Party of Administrative Agent acting for Administrative
Agent (or any such sub-agent) in connection with such capacity.  The obligations
of the Lenders under this paragraph (c) are subject to the provisions of Section
2.9.
 
(c)           Indemnity.  Borrower agrees to indemnify each Lender Party, upon
demand, from and against any and all liabilities, obligations, broker's fees,
claims, losses, damages, penalties, fines, actions, judgments, suits,
settlements, costs, expenses or disbursements (including reasonable fees of
attorneys, accountants, experts and advisors) of any kind or nature whatsoever
(in this section collectively called "liabilities and costs") which to any
extent (in whole or in part) may be imposed on, incurred by, or asserted against
such Lender Party growing out of, resulting from or in any other way associated
with the Loan Documents and the transactions and events (including the
enforcement or defense thereof) at any time associated therewith or contemplated
therein (whether arising in contract or in tort or otherwise).  Among other
things, the foregoing indemnification covers all liabilities and costs incurred
by any Lender Party related to any breach of a Loan Document by a Restricted
Person, any bodily injury to any Person or damage to any Person's property, or
any violation or noncompliance with any Environmental Laws by any Lender Party
or any other Person or any liabilities or duties of any Lender Party or any
other Person with respect to Hazardous Materials found in or released into the
environment.
 
The foregoing indemnification shall apply whether or not such liabilities and
costs are in any way or to any extent owed, in whole or in part, under any claim
or theory of strict liability or caused, in whole or in part by any negligent
act or omission of any kind by any Lender Party,

 
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provided only that no Lender Party shall be entitled under this section to
receive indemnification for that portion, if any, of any liabilities and costs
which is proximately caused by its own individual gross negligence or willful
misconduct, as determined in a final judgment.  If any Person (including
Borrower or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct.  As used in this section the term "Lender Party" shall refer
not only to each Person designated as such in Section 1.1 but also to each
director, officer, Administrative Agent, agent, advisor, trustee, attorney,
employee, representative and Affiliate of or for such Person.
 
Section 10.5.     Successors and Assigns; Assignments.
 
(a)           Successors and Assigns Generally.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither Borrower nor any other Restricted Person may assign or otherwise
transfer any of its rights or obligations hereunder without the prior written
consent of Administrative Agent and each Lender, and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of paragraph (b) of this
Section, (ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section
(and any other attempted assignment or transfer by any party hereto shall be
null and void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

(b)           Assignments by Lenders.  Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that

(i)        except in the case of an assignment of the entire remaining amount of
the assigning Lender's Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to Administrative Agent or, if "Trade Date" is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than $5,000,000;

(ii)       each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned;

 
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(iii)      any assignment of a Commitment must be approved by Administrative
Agent unless the Person that is the proposed assignee is itself a Lender with a
Commitment (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and

(iv)     the parties to each assignment shall execute and deliver to
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,000, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to Administrative Agent an Administrative Questionnaire.

Subject to acceptance and recording thereof by Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Article III and Section 10.4 and Section 10.12
with respect to facts and circumstances occurring prior to the effective date of
such assignment.  Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (d) of
this Section.

(c)           Register.  Administrative Agent, acting solely for this purpose as
an agent of Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender pursuant to the terms hereof from
time to time (the "Register").  The entries in the Register shall be conclusive,
and Borrower, Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be available for inspection by Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

(d)           Participations.  Any Lender may at any time, without the consent
of or notice to, Borrower or Administrative Agent, sell participations to any
Person (other than a natural person or Borrower or any of Borrower's Affiliates
or Subsidiaries) (each, a "Participant") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
its Commitment and/or the Loans owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) Borrower, Administrative Agent and the Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.

 
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Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the fifth sentence of
Section 10.1(a) that affects such Participant.  Subject to paragraph (e) of this
Section, Borrower agrees that each Participant shall be entitled to the benefits
of Article III to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section.  To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 6.14 as though it were a Lender, provided such Participant agrees to be
subject to Section 9.6 as though it were a Lender.

(e)           Limitations upon Participant Rights.  A Participant shall not be
entitled to receive any greater payment under Article III than the applicable
Lender would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with Borrower's prior written consent.  A Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 3.5 unless Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of Borrower, to
comply with Section 3.5(e) as though it were a Lender.

(f)           Certain Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

Section 10.6.     Confidentiality.  Administrative Agent and each Lender (each,
a "Lending Party") agrees to keep confidential any information furnished or made
available to it by any Restricted Person pursuant to this Agreement that is
marked confidential; provided that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director, employee,
Administrative Agent, or advisor of any Lending Party or Affiliate of any
Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
Law, (d) upon the order of any court or administrative agency, (e) upon the
request or demand of any Governmental Authority, (f) that is or becomes
available to the public or that is or becomes available to any Lending Party
other than as a result of a disclosure by any Lending Party prohibited by this
Agreement, (g) in connection with any litigation to which such Lending Party or
any of its Affiliates may be a party; provided that such Lending Party makes
reasonable efforts to obtain from the applicable court protective orders or
similar confidential procedures protecting such confidential information, (h) to
the extent necessary in connection with the exercise of any right or remedy
under this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this section, to (1) any actual or
proposed participant or assignee or (2) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to Borrower and
its obligations.

 
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Section 10.7.     Governing Law; Submission to Process.  Except to the extent
that the law of another jurisdiction is expressly elected in a Loan Document,
the Loan Documents shall be deemed contracts and instruments made under the laws
of the State of California and shall be construed and enforced in accordance
with and governed by the laws of the State of California and the laws of the
United States of America, without regard to principles of conflicts of
law.  Borrower hereby irrevocably submits itself to the non-exclusive
jurisdiction of the state and federal courts sitting in the Northern District of
California for the United States District Court and agrees and consents that
service of process may be made upon it in any legal proceeding relating to the
Loan Documents or the Obligations by any means allowed under California or
federal law.
 
Section 10.8.     Limitation on Interest.  Lender Parties, Restricted Persons
and the other parties to the Loan Documents intend to contract in strict
compliance with applicable usury Law from time to time in effect.  In
furtherance thereof such persons stipulate and agree that none of the terms and
provisions contained in the Loan Documents shall ever be construed to provide
for interest in excess of the maximum amount of interest permitted to be
contracted for, charged, or received by applicable Law from time to time in
effect.  Neither any Restricted Person nor any present or future guarantors,
endorsers, or other Persons hereafter becoming liable for payment of any
Obligation shall ever be liable for unearned interest thereon or shall ever be
required to pay interest thereon in excess of the maximum amount that may be
lawfully contracted for, charged, or received under applicable Law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith.
 
Section 10.9.     Termination; Limited Survival.  In its sole and absolute
discretion Borrower may at any time that no Obligations are owing elect in a
written notice delivered to Administrative Agent to terminate this
Agreement.  Upon receipt by Administrative Agent of such a notice, if no
Obligations are then owing, this Agreement and all other Loan Documents shall
thereupon be terminated and the parties thereto released from all prospective
obligations thereunder, except as otherwise provided in such Loan
Documents.  Notwithstanding the foregoing or anything herein to the contrary,
any waivers or admissions made by any Restricted Person in any Loan Document,
any Obligations under Sections 3.2 through Section 3.5, and any obligations
which any Person may have to indemnify or compensate any Lender Party shall
survive any termination of this Agreement or any other Loan Document.  At the
request and expense of Borrower, Administrative Agent shall prepare and execute
all necessary instruments to reflect and effect such termination of the Loan
Documents.  Administrative Agent is hereby authorized to execute all such
instruments on behalf of all Lenders, without the joinder of or further action
by any Lender.
 
Section 10.10.   Severability.  If any term or provision of any Loan Document
shall be determined to be illegal or unenforceable all other terms and
provisions of the Loan Documents shall nevertheless remain effective and shall
be enforced to the fullest extent permitted by applicable Law.
 
Section 10.11.   Counterparts; Fax.  This Agreement may be separately executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to constitute one
and the same Agreement.  This Agreement and the Loan Documents may be validly
executed and delivered by facsimile or other electronic transmission.

 
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Section 10.12.    WAIVER OF JURY TRIAL, PUNITIVE DAMAGES, ETC.  BORROWER AND
EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY
(A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR
INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN
DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH,
BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY
LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY
"SPECIAL DAMAGES", AS DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY HERETO HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.  AS USED IN THIS SECTION, "SPECIAL DAMAGES" INCLUDES ALL SPECIAL,
CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS OF HOW NAMED), BUT
DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO HAS EXPRESSLY
PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY HERETO.  NO "ADMINISTRATIVE AGENT"
REFERRED TO IN 10.4 ABOVE, AND NO "LENDER PARTY" REFERRED TO IN SECTION 10.4
ABOVE, SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY UNINTENDED
RECIPIENTS OF ANY INFORMATION OR OTHER MATERIALS DISTRIBUTED BY IT THROUGH
TELECOMMUNICATIONS, ELECTRONIC OR OTHER INFORMATION TRANSMISSION SYSTEMS IN
CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
 
Section 10.13.    USA Patriot Act.  Each Lender that is subject to the Act (as
hereinafter defined) and Administrative Agent (for itself and not on behalf of
any Lender) hereby notifies Borrower that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "Act"), it is required to obtain, verify and record information that
identifies Borrower, which information includes the name and address of Borrower
and other information that will allow such Lender or Administrative Agent, as
applicable, to identify Borrower in accordance with the Act.

 
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IN WITNESS WHEREOF, this Agreement is executed as of the date first written
above.

 
BERRY PETROLEUM COMPANY,
 
Borrower
         
By:
     
Steven B. Wilson
   
Treasurer

 
 

 
Address:
 
1999 Broadway, Suite 3700
 
Denver, Colorado 80202
 
Attention:
  Shawn Canaday              
Telephone:
  403/999-4000  
Fax:
  403/999-4100  
Email:
  smc@bry.com

 

--------------------------------------------------------------------------------

 
 

 
SOCIETE GENERALE, as Administrative Agent
             
By:
     
Name:
   
Title:

 

--------------------------------------------------------------------------------

 
 

 
SOCIETE GENERALE, as a Lender
             
By:
     
Name:
   
Title:

 

--------------------------------------------------------------------------------

 

 
BNP PARIBAS, as a Lender
             
By:
     
Name:
   
Title:
             
By:
     
Name:
   
Title:

 

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SCHEDULE 1

LENDERS SCHEDULE

LENDER
 
 
PERCENTAGE SHARE
 
 
COMMITMENT AMOUNT*
 
Societe Generale
 
50%
 
$50,000,000
 
BNP Paribas
 
50%
 
$50,000,000
 
TOTAL
 
100%
 
$100,000,000
 

* Each Lender's Commitment Amount is equal to such Lender's Percentage Share of
the Aggregate Commitment.
 

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SCHEDULE 2

INSURANCE SCHEDULE

 

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SCHEDULE 3

SUBJECT DRILLING RIGS

RIG 1

MAST: Lee C. Moore 127eH x 13e6eW Cantilever Mast 236,000#  Hook Load Capacity
SUBSTRUCTURE: Gee Bee Welding 12e 6eH x 38eL Box Type Sub 250,000#  Setback
DRAWWORKS:  Superior 400 HP Drawworks, Lebus 1 1/8e Line, TSM 22S Water Brake,
Crown-O-Matic Hydraulic Catheads.
ENGINE: (New) Detroit Series 60 450 HP Diesel Engine.
MUD PUMPS: (2) Gardner Denver PZ8 Triplex Pumps p/b (New) Detroit Series 2000
Engines
GENERATORS: (2) Caterpillar SR-4 210 KW p/b (1) Caterpillar 3306 and (1)
Caterpillar  3406 Diesel Engines
BLOCK / HOOK: Sowa Model 0636-4 150-Ton w/ (4) 36e Sheaves
ROTARY TABLE: National C-175, 17 1/2"
SWIVEL: Ideco TL200
BOP RAMS: (New) Townsend 11" Double 3,000 PSI
BOP ANNULAR: (New) Townsend 11e 3,000 Type 90 Annular
CHOKE MANIFOLD: (New) 3,000#
CLOSING UNIT: Mayco Electric 5-Station
MUD PIT: (New) 6e 6eH x 11'W x 45eL  570 BBL (5) Compartments, Swaco Linear
Motion Shaker (2) Mission Magnum Mixing Pumps, 7.5 HP Mud Agitator, Degasser,
Mud Hopper Mud Guns, Walkways and Rails.
FUEL TANK: 5,000 Gallons
WATER TANK: 400 BBL
DOGHOUSE: 9'W x 16'L
DRILL PIPE: 8,000 FT (New) 4.5" E 16.60#
DRILL COLLARS: (26) (New)  6 1/2" (12) (New)  8"
SPINNERS:    (New) Graychain Hyd Drill Pipe Spinner, Foster Kelly Spinner

RIG 5

DRAWWORKS: One (1) Cooper LTO-550 Single Drum
CARRIER: Cooper LTO-550 Self Propelled
ENGINE: One (1) Detroit Series 60
MAST:  One (1) Premco 112e, 300,000# Static Hook Load Mast w/(6) Sheave Crown
and Racking Board,
SUBSTRUCTURE:  One (1) 10eH Box Type Substucture w/ Mud Boat Ramp 5eH x 30eL
V-Door, Stairs & Safety Rails
MUD PUMPS: Two (2) Gardner-Denver PZ-8 Triplex
ENGINES: Two (2) (New) Detroit Series 60
GENERATORS: One (2) Detroit Series 60 Diesel Engines w/Marathon 350KW
BLOCK / HOOK: One (1) McKissick 150-Ton
ROTARY TABLE: One (1) Cooper 27-1/2e Rotary Table w/Master Bushing,
SWIVEL: One (1) Gardner-Denver SW-200 200-Ton
BOP RAMS: One (1) Townsend 11e 3000 PSI Double
BOP ANNULAR: One (1) Townsend 11e 3,000 PSI
CHOKE MANIFOLD: 3,000 PSI
MUD PITS: (New) 800 BBL
SHALE SHAKER: (New) Derrick Linear Motion Shaker
DESANDER: One (1) Mud Cleaner c/w 8 each Desilter Cones
FUEL TANK:  One (1) 6000 gallon
WATER TANK: One (1) 280 bbl
DOGHOUSE: One (1) Dog House 8' x 8' x 16'
DRILL PIPE:  6000 FT 4e E 14.40#
DRILL COLLARS:  (16) 6 1/2"
MISCELLANEOUS: Pipe Spinner, Kelly Spinner, and Miscellaneous Handling Tools

 

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RIG 9
DRAWWORKS: Gardner Denver 1000 HP Electric Drawworks w/ (2) 600 HP Electric
Motors.
MAST: Partec 136e Boot Strap, Rated 480,000# Static Hook Load Capacity.
SUBSTRUCTURE: Partec 21e Box Substructure w/ 4e Skid Structure, 80e Long.
GENERATORS: (3) (New) Detroit Series 2000 Diesel Engines w/600 Volt Generators
for SCR.
SCR: (1) (New) Omron 3x3
TOP DRIVE: (New) Tesco 250T A/C Drive
MUD PUMPS: (2) (New) 1300 HP China F1300 Triplex, Belt Driven w/ (2) GE 752 Hi
torque motors.
ROTARY TABLE: Rebuilt National 23e
SWIVEL: Rebuilt Gardner Denver 300 Ton
BLOCK/HOOK: Rebuilt Gardner Denver 300 Ton unitized
BOP RAMS: (New) China 11e 5000# Double Ram BOP
BOP ANNULAR: (New) China 11e 5000# Annular
CHOKE MANIFOLD: 5000# Choke Manifold
CLOSING UNIT: (New) 5 Station 110 Gallon Closing Unit
MUD SYSTEM: (New) 800 BBL Mud System w/ 6 x 8 centrifugal mixing pumps, low
pressure mixing guns, shaker, agitators.
SHALE SHAKER: (2) (New) Derrick Linear Motion Shale Shaker
FUEL TANK: (New) 12,000 gallon
WATER TANK: (New) 500 BBL
DOGHOUSE: (New) 10' x 8' x 30'
DRILL PIPE: 13,000e (New) 4.5e G105 16.60#
DRILL COLLARS: (21) New 6.5"
MISCELLANEOUS: Toolpusheres quarters, Catwalk, Six (6) Pipe Racks, Pipe Spinner,
Kelly Spinner, and Miscellaneous Handling Tools.

 

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SCHEDULE 4

ADDRESSES OF LENDERS FOR NOTICES

SOCIeTE GENERALE
1111 Bagby, Suite 2020
Houston, Texas 77002
Attention:
Cameron Null
Tel:
713.759.6347
Fax:
713.650.0824
Email:
cameron.null@sgcib.com
       
BNP PARIBAS
1200 Smith Street
Suite 3100
Houston, Texas 77002
Attention:
Robert Long
Tel:
713.982.1165
Fax:
713.659.6915
Email:
robert.j.long@americas.bnpparibas.com

 

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EXHIBIT A
 
 
PROMISSORY NOTE
 
[_______________], 2008
 
 
FOR VALUE RECEIVED, the undersigned, Berry Petroleum Company, a Delaware
corporation (herein called "Borrower"), hereby promises to pay to the order of
[________________________________________________] (herein called "Lender"), the
principal sum equal to the amount of such Lender's Commitment, or, if greater or
less, the aggregate unpaid principal amount of the Loans made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided in
lawful money of the United States of America at the offices of Administrative
Agent under the Credit Agreement, [_______________________], or at such other
place as from time to time may be designated by the holder of this Note.

This Note (a) is issued and delivered under that certain Credit Agreement of
even date herewith among Borrower, Societe Generale, as administrative agent,
and the lenders (including Lender) referred to therein (herein, as from time to
time supplemented, amended or restated, called the "Credit Agreement"), and is a
"Note" as defined therein and (b) is subject to the terms and provisions of the
Credit Agreement, which contains provisions for payments and prepayments
hereunder and acceleration of the maturity hereof upon the happening of certain
stated events.  Payments of principal and interest on this Note shall be made
and applied as provided herein and in the Credit Agreement.  Reference is hereby
made to the Credit Agreement for a description of certain rights, limitations of
rights, obligations and duties of the parties hereto and for the meanings
assigned to terms used and not defined herein.

The principal amount of this Note, together with all interest accrued hereon,
shall be due and payable in full on the Maturity Date.

If this Note is placed in the hands of an attorney for collection after default,
or if all or any part of the indebtedness represented hereby is proved,
established or collected in any court or in any bankruptcy, receivership, debtor
relief, probate or other court proceedings, Borrower and all endorsers, sureties
and guarantors of this Note jointly and severally agree to pay reasonable
attorneys' fees and collection costs to the holder hereof in addition to the
principal and interest payable hereunder.

Borrower and all endorsers, sureties and guarantors of this Note hereby
severally waive demand, presentment, notice of demand and of dishonor and
nonpayment of this Note, protest, notice of protest, notice of intention to
accelerate the maturity of this Note, declaration or notice of acceleration of
the maturity of this Note, diligence in collecting, the bringing of any suit
against any party and any notice of or defense on account of any extensions,
renewals, partial payments or changes in any manner of or in this Note or in any
of its terms, provisions and covenants, or any releases or substitutions of any
security, or any delay, indulgence or other act of any trustee or any holder
hereof, whether before or after maturity.

 

--------------------------------------------------------------------------------

 

This Note and the rights and duties of the parties hereto shall be governed by
the Laws of the State of California (without regard to principles of conflicts
of law), except to the extent the same are governed by applicable federal Law.

 
BERRY PETROLEUM COMPANY
             
By:
     
Name:
   
Title:

 

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EXHIBIT B

BORROWING NOTICE

Reference is made to that certain Credit Agreement dated as of _______________,
2008 (as from time to time amended, the "Credit Agreement"), by and among Berry
Petroleum Company ("Borrower"), Societe Generale, as administrative agent (in
such capacity, the "Administrative Agent"), and certain financial institutions
("Lenders").  Terms which are defined in the Credit Agreement are used herein
with the meanings given them in the Credit Agreement.  Pursuant to the terms of
the Credit Agreement Borrower hereby requests a Borrowing of new Loans to be
advanced pursuant to Section 2.2(a) of the Credit Agreement as follows:

Aggregate amount of Borrowing:
$
     
Type of Loans in Borrowing:
 

 
Date on which Loans are to be advanced:
     
Length of Interest Period for Eurodollar Loans (1, 2, 3 or 6 months):
 
months

If combined with existing Loans
see attached Continuation/Conversion Notice.

To induce Lenders to make such Loans, Borrower hereby represents, warrants,
acknowledges, and agrees to and with Administrative Agent and each Lender that:

(a)           The officer of Borrower signing this instrument is the duly
elected, qualified and acting officer of Borrower as indicated below such
officer's signature hereto having all necessary authority to act for Borrower in
making the request herein contained.

(b)           The representations and warranties of Borrower set forth in the
Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties have been made as of the date hereof, except to the extent that such
representations or warranties were made as of a specific date or updated,
modified or supplemented as of a subsequent date with the consent of Required
Lenders and Administrative Agent, in which case such representations and
warranties shall have been true and correct in all material respects on and of
such date.

(c)           There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 10.1(a) of the Credit Agreement; nor will any such Default exist upon
Borrower's receipt and application of the Loans requested hereby.  Borrower will
use the Loans hereby requested in compliance with Section 2.4 of the Credit
Agreement.

 

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(d)           Except to the extent waived in writing as provided in Section
10.1(a) of the Credit Agreement, Borrower has performed and complied with all
agreements and conditions in the Credit Agreement required to be performed or
complied with by Borrower on or prior to the date hereof, and each of the
conditions precedent to Loans contained in the Credit Agreement remains
satisfied.

(e)           The Facility Usage, after the making of the Loans requested
hereby, will not be in excess of the Aggregate Commitment on the date requested
for the making of such Loans.

(f)            The Loan Documents have not been modified, amended or
supplemented by any unwritten representations or promises, by any course of
dealing, or by any other means not provided for in Section 10.1(a) of the Credit
Agreement.  The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.

The officer of Borrower signing this instrument hereby certifies that, to the
best of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and complete.

IN WITNESS WHEREOF, this instrument is executed as of ____________, 20__.

 
BERRY PETROLEUM COMPANY
             
By:
     
Name:
   
Title:

 

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EXHIBIT C

CONTINUATION/CONVERSION NOTICE

Reference is made to that certain Credit Agreement dated as of
_________________, 2008 (as from time to time amended, the "Credit Agreement"),
by and among Berry Petroleum Company ("Borrower"), Societe Generale, as
administrative agent (in such capacity, the "Administrative Agent"), and the
lenders referred to therein ("Lenders").  Terms which are defined in the Credit
Agreement are used herein with the meanings given them in the Credit Agreement.

Borrower hereby requests a Conversion or Continuation of existing Loans into a
new Borrowing pursuant to Section 2.3 of the Credit Agreement as follows:

Existing Borrowing(s) to be continued or converted:

$____________ of Eurodollar Loans with Interest Period ending _____________

$____________ of Base Rate Loans

If being combined with new Loans, $____________ of new Loans to be advanced on
____________

Aggregate amount of Borrowing:
$
     
Type of Loans in new Borrowing:
 

 
Date of Continuation or Conversion:
     
Length of Interest Period for Eurodollar Loans (1, 2, 3 or 6 months):
 
months

To meet the conditions set out in the Credit Agreement for such
conversion/continuation, Borrower hereby represents, warrants, acknowledges, and
agrees to and with Administrative Agent and each Lender that:

(a)           The officer of Borrower signing this instrument is the duly
elected, qualified and acting officer of Borrower as indicated below such
officer's signature hereto having all necessary authority to act for Borrower in
making the request herein contained.

(b)           There does not exist on the date hereof any condition or event
which constitutes a Default which has not been waived in writing as provided in
Section 10.1(a) of the Credit Agreement.

(c)           The Loan Documents have not been modified, amended or supplemented
by any unwritten representations or promises, by any course of dealing, or by
any other means not provided for in Section 10.1(a) of the Credit
Agreement.  The Credit Agreement and the other Loan Documents are hereby
ratified, approved, and confirmed in all respects.

 

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The officer of Borrower signing this instrument hereby certifies that, to the
best of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and complete.

IN WITNESS WHEREOF this instrument is executed as of __________________.

 
BERRY PETROLEUM COMPANY
             
By:
     
Name:
   
Title:

 

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EXHIBIT D

CERTIFICATE ACCOMPANYING
FINANCIAL STATEMENTS
 
Reference is made to that certain Credit Agreement dated as of
__________________, 2008 (as from time to time amended, the "Credit Agreement"),
by and among Berry Petroleum Company ("Borrower"), Societe Generale, as
administrative agent (in such capacity, the "Administrative Agent"), and certain
financial institutions ("Lenders"), which Credit Agreement is in full force and
effect on the date hereof.  Terms which are defined in the Credit Agreement are
used herein with the meanings given them in the Credit Agreement.

This Certificate is furnished pursuant to Section 6.2(b) of the Credit
Agreement.  Together herewith Borrower is furnishing to Administrative Agent and
each Lender Borrower's *[audited/unaudited] financial statements (the "Financial
Statements") as at ____________ (the "Reporting Date").  Borrower hereby
represents, warrants, and acknowledges to Administrative Agent and each Lender
that:

(b)           the officer of Borrower signing this instrument is the duly
elected, qualified and acting ____________ of Borrower and as such is Borrower's
Chief Financial Officer;

(a)           the Financial Statements are accurate and complete and satisfy the
requirements of the Credit Agreement;

(b)           attached hereto is a schedule of calculations showing Borrower's
compliance as of the Reporting Date with the requirements of Sections 7.11 and
7.12 of the Credit Agreement *[and Borrower's non-compliance as of such date
with the requirements of Section(s) ____________ of the Credit Agreement];

(c)           on the Reporting Date Borrower was, and on the date hereof
Borrower is, in full compliance with the disclosure requirements of Section 6.4
of the Credit Agreement, and no Default otherwise existed on the Reporting Date
or otherwise exists on the date of this instrument *[except for Default(s) under
Section(s) ____________ of the Credit Agreement, which *[is/are] more fully
described on a schedule attached hereto].

(d)           *[Unless otherwise disclosed on a schedule attached hereto,] The
representations and warranties of Borrower set forth in the Credit Agreement and
the other Loan Documents are true and correct in all material respects on and as
of the date hereof as if such representations and warranties have been made as
of the date hereof, except to the extent that such representations or warranties
were made as of a specific date or updated, modified or supplemented as of a
subsequent date with the consent of Required Lenders and Administrative Agent,
in which case such representations and warranties shall have been true and
correct in all material respects on and of such date.

The officer of Borrower signing this instrument hereby certifies that he has
reviewed the Loan Documents and the Financial Statements and has otherwise
undertaken such inquiry as is in his opinion necessary to enable him to express
an informed opinion with respect to the above representations, warranties and
acknowledgments of Borrower and, to the best of his knowledge, such
representations, warranties, and acknowledgments are true, correct and complete.

 

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IN WITNESS WHEREOF, this instrument is executed as of ____________, 20__.

 
BERRY PETROLEUM COMPANY
             
By:
     
Name:
   
Title:

 

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EXHIBIT E

OPINION OF COUNSEL FOR RESTRICTED PERSONS

 

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EXHIBIT F

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this "Assignment and Assumption") is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee").  Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as from time to
time amended, the "Credit Agreement"), receipt of a copy of which is hereby
acknowledged by the Assignee.  The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions attached hereto as Annex 1 and the Credit Agreement, as of the
Effective Date inserted by Administrative Agent as contemplated below (i) all of
the Assignor's rights and obligations in its capacity as a Lender under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
below of all of such outstanding rights and obligations of the Assignor under
the respective facilities identified below (including, without limitation, the
Letters of Credit or guarantees included in such facilities) and (ii) to the
extent permitted to be assigned under applicable law, all claims, suits, causes
of action and any other right of the Assignor (in its capacity as a Lender)
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or
related to any of the foregoing, including, but not limited to, contract claims,
tort claims, malpractice claims, statutory claims and all other claims at law or
in equity related to the rights and obligations sold and assigned pursuant to
clause (i) above (the rights and obligations sold and assigned pursuant to
clauses (i) and (ii) above being referred to herein collectively as, the
"Assigned Interest").  Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.

1.
Assignor:        _______________________

2.
Assignee:        _______________________  [and is an Affiliate/Approved Fund of
[identify Lender]]

3.
Borrower:         Berry Petroleum Company

4.
Administrative Agent: Societe Generale, as administrative agent under the Credit
Agreement

 

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5.
Credit Agreement:        Credit Agreement dated as of ______________, 2008, by
and among Borrower, Administrative Agent, and certain financial institutions
("Lenders")

6.
Assigned Interest:

 
Aggregate
Amount of
Commitment/Loans
for all Lenders*
Amount of
Commitment/Loans
Assigned
Percentage
Assigned of
Commitment/Loans
     
$
$
%
$
$
%
$
$
%

[7.           Trade Date:     __________________]

Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

 
ASSIGNOR
 
[NAME OF ASSIGNOR]
       
By:
     
Name:
   
Title:
       
ASSIGNEE
 
[NAME OF ASSIGNEE]
       
By:
     
Name:
   
Title:

 

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[Consented to and] Accepted:

SOCIETE GENERALE,
as Administrative Agent

By:
     
Name:
   
Title:
       
[Consented to:]
       
By:
     
Name:
   
Title:
 

 

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ANNEX 1 TO ASSIGNMENT
AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION

1.         Representations and Warranties.

1.1.      Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by Borrower,
any of its Subsidiaries or Affiliates or any other Person of any of their
respective obligations under any Loan Document.

1.2.      Assignee.  The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Credit Agreement
(subject to receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.2(a) and (b)
thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on Administrative Agent, the Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

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2.         Payments.  From and after the Effective Date, Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.

3.         General Provisions.  This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption.  This
Assignment and Assumption shall be governed by, and construed in accordance
with, the law of the State of California.

 

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