Execution Version

====================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of February 3, 2014
among
MILLER ENERGY RESOURCES, INC.,
as Borrower,
APOLLO INVESTMENT CORPORATION,
as Arranger and Administrative Agent,
and
The Lenders Party Hereto
                    
====================================================================

#4452571.13

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

TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01.    Terms Defined Above                                1
Section 1.02.    Certain Defined Terms                            1
Section 1.03.    Types of Loans                                29
Section 1.04.    Terms Generally; Rules of Construction                    29
Section 1.05.    Accounting Terms and Determinations; GAAP                30
ARTICLE II
THE CREDITS
Section 2.01.    Commitments                                    30
Section 2.02.    Loans                                        30
Section 2.03.    Requests for Loans                                31
Section 2.04.    Interest Elections                                32
Section 2.05.    Funding of Loans                                33
Section 2.06.    Reserved                                    33
Section 2.07.    Reserved                                    33
Section 2.08.    Reserved                                    33
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES
Section 3.01.    Repayment of Loans                                33
Section 3.02.    Interest                                        33
Section 3.03.    Alternate Rate of Interest                            34
Section 3.04.    Prepayments                                    35
Section 3.05.    Make-Whole Premium & Prepayment Premium                36
Section 3.06.    Fees                                        37
ARTICLE IV
Payments; Pro Rata Treatment; Sharing of Set-offs
Section 4.01.    Payments Generally; Pro Rata Treatment; Sharing of
Set-offs        37
Section 4.02.    Presumption of Payment by the Borrower                    38
Section 4.03.    Certain Deductions by the Administrative
Agent                38
Section 4.04.    Disposition of Proceeds                            39
ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

i

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

Section 5.01.    Increased Costs                                39
Section 5.02.    Break Funding Payments                            40
Section 5.03.    Taxes                                        40
Section 5.04.    Mitigation Obligations; Replacement of
Lenders                45
Section 5.05.    Illegality                                    46
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01.    Effective Date                                    46
Section 6.02.    Additional Conditions                                51
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01.    Organization; Powers                                52
Section 7.02.    Authority; Enforceability                            52
Section 7.03.    Approvals; No Conflicts                            52
Section 7.04.    Financial Condition; No Material Adverse
Change                53
Section 7.05.    Litigation                                    53
Section 7.06.    Environmental Matters                            54
Section 7.07.    Compliance with the Laws and Agreements; No
Defaults            55
Section 7.08.    Investment Company Act                            55
Section 7.09.    Taxes                                        55
Section 7.10.    ERISA                                        56
Section 7.11.    Disclosure; No Material Misstatements                    56
Section 7.12.    Insurance                                    57
Section 7.13.    Restriction on Liens                                57
Section 7.14.    Subsidiaries                                    57
Section 7.15.    Location of Business and Offices                        57
Section 7.16.    Properties; Titles, Etc.                                58
Section 7.17.    Maintenance of Properties                            59
Section 7.18.    Gas Imbalances, Prepayments                        59
Section 7.19.    Marketing of Production                            60
Section 7.20.    Swap Agreements                                60
Section 7.21.    Use of Loans                                    60
Section 7.22.    Solvency                                    60
Section 7.23.    Acquisition Documents                            61
Section 7.24.    Foreign Corrupt Practices                            61
Section 7.25.    Money Laundering                                61

ii

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

Section 7.26.    OFAC                                        61
Section 7.27.    Patriot Act                                    61
Section 7.28.    Security Documents                                61
Section 7.29.    Labor Matters.                                    62
Section 7.30.    Brokerage Fees                                62
Section 7.31.    Material Contracts                                62
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01.    Financial Statements; Other Information                    63
Section 8.02.    Notices of Material Events                            67
Section 8.03.    Existence; Conduct of Business                        67
Section 8.04.    Payment of Obligations                            67
Section 8.05.    Performance of Obligations under Loan Documents and Material
Contracts    
                                        67
Section 8.06.    Operation and Maintenance of Properties                    68
Section 8.07.    Insurance                                    68
Section 8.08.    Books and Records; Inspection Rights                    69
Section 8.09.    Compliance with Laws                            69
Section 8.10.    Environmental Matters                            69
Section 8.11.    Further Assurances                                71
Section 8.12.    Reserve Reports                                71
Section 8.13.    Title Information                                72
Section 8.14.    Additional Collateral; Additional
Guarantors                    72
Section 8.15.    ERISA Compliance                                73
Section 8.16.    Post-Closing Covenants                            74
Section 8.17.    Hedging Maintenance.                            75
Section 8.18.    Board Observation Rights                            75
Section 8.19.    Appraisal                                    76
Section 8.20.    Minimum Liquidity                                76
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01.    Financial Covenants                                76
Section 9.02.    Debt                                        77
Section 9.03.    Liens                                        78
Section 9.04.    Dividends, Distributions and Redemptions                    79
Section 9.05.    Investments, Loans and Advances                        80

iii

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

Section 9.06.    Nature of Business; International
Operations                    81
Section 9.07.    Limitation on Leases                                82
Section 9.08.    Proceeds of Loans                                82
Section 9.09.    ERISA Compliance                                82
Section 9.10.    Sale or Discount of Receivables; Alaska Oil & Gas Production
Tax Credits    83
Section 9.11.    Mergers, Etc.                                    83
Section 9.12.    Dispositions of Properties                            83
Section 9.13.    Transactions with Affiliates                            85
Section 9.14.    Subsidiaries; Equity Interests                            85
Section 9.15.    Negative Pledge Agreements; Dividend
Restrictions                85
Section 9.16.    Gas Imbalances, Take-or-Pay or Other
Prepayments                86
Section 9.17.    Swap Agreements                                86
Section 9.18.    Acquisition Documents & Organizational Documents            86
Section 9.19.    Fiscal Year                                    87
Section 9.20.    Preferred Equity Interests                            87
Section 9.21.    Marketing Activities                                87
Section 9.22.    Press Release and Related Matters                        87
Section 9.23.    Consolidated G&A Expenses                            88
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01.    Events of Default                                88
Section 10.02.    Remedies                                    90
ARTICLE XI
THE AGENTS
Section 11.01.    Appointment; Powers                                92
Section 11.02.    Duties and Obligations of Administrative
Agent                92
Section 11.03.    Action by Administrative Agent                        93
Section 11.04.    Reliance by Administrative Agent                        93
Section 11.05.    Subagents                                    94
Section 11.06.    Resignation of Administrative Agent                        94
Section 11.07.    Agents as Lenders                                94
Section 11.08.    No Reliance                                    94
Section 11.09.    Administrative Agent May File Proofs of
Claim                95
Section 11.10.    Authority of Administrative Agent to Release Collateral and
Liens        96
Section 11.11.    The Arranger                                    96
ARTICLE XII

iv

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

MISCELLANEOUS
Section 12.01.    Notices                                    96
Section 12.02.    Waivers; Amendments                            97
Section 12.03.    Expenses, Indemnity; Damage Waiver                    99
Section 12.04.    Successors and Assigns                            101
Section 12.05.    Survival; Revival; Reinstatement                        105
Section 12.06.    Counterparts; Integration;
Effectiveness                    106
Section 12.07.    Severability                                    106
Section 12.08.    Right of Setoff                                    106
Section 12.09.    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS    
107
Section 12.10.    Headings                                    108
Section 12.11.    Confidentiality                                108
Section 12.12.    Interest Rate Limitation                            109
Section 12.13.    EXCULPATION PROVISIONS                        109
Section 12.14.    Reserved                                    110
Section 12.15.    No Third Party Beneficiaries                            110
Section 12.16.    USA Patriot Act Notice                            110
Section 12.17.    Alaska Statutes                                110
Section 12.18.    Intercreditor Agreement                            110
Section 12.19.    Amendment and Restatement                            110

v

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

ANNEXES, EXHIBITS AND SCHEDULES

Annex I        Commitments

Exhibit A        Form of Note
Exhibit B        Form of Borrowing Request
Exhibit C        Form of Continuation Request
Exhibit D        Form of Compliance Certificate
Exhibit E        Form of Transfer Order Letters
Exhibit F        Form of Assignment and Assumption
Exhibit G        Form of Intercreditor Agreement

Schedule 7.05        Litigation
Schedule 7.06        Environmental Matters
Schedule 7.14        Subsidiaries and Partnerships
Schedule 7.18        Gas Imbalances
Schedule 7.19        Marketing Contracts
Schedule 7.20        Swap Agreements
Schedule 7.31        Material Contracts
Schedule 8.16        Post-Closing Items
Schedule 9.02        Existing Debt
Schedule 9.05        Existing Investments
Schedule 9.13         Transactions with Affiliates

vi

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

THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of February 3, 2014, is
among: MILLER ENERGY RESOURCES, INC., a corporation duly formed and existing
under the laws of the State of Tennessee (the “Borrower”); each of the Lenders
from time to time party hereto; and APOLLO INVESTMENT CORPORATION (in its
individual capacity, “Apollo”), as administrative agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Administrative
Agent”).
R E C I T A L S
A.    The Borrower entered into a Loan Agreement dated as of June 29, 2012 with
Apollo Investment Corporation, as arranger and administrative agent, and the
other financial institutions party thereto (as amended to the date hereof, the
“Existing Credit Agreement”).
B.    The Borrower has requested, and the Lenders and the Administrative Agent
have agreed, that the Existing Credit Agreement be amended and restated in its
entirety as set forth herein.
C.    Now, therefore, in consideration of the mutual covenants and agreements
herein contained and of the loans and commitments hereinafter referred to, the
parties hereto agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01.    Terms Defined Above. As used in this Agreement, each term
defined above has the meaning indicated above.

Section 1.02.    Certain Defined Terms. As used in this Agreement, the following
terms have the meanings specified below:

“ABR”, when used in reference to any Loan, refers to whether such Loan is
bearing interest at a rate determined by reference to the Alternate Base Rate.
“Acquired Equity” means the Equity Interests of Anchor Point Energy, LLC, to be
acquired pursuant to the terms of the Acquisition Agreement.
“Acquisition” means the acquisition of certain oil, gas and mineral Properties
pursuant to the terms and conditions of the Acquisition Documents.
“Acquisition Agreement” means the Purchase and Sale Agreement among Armstrong
Cook Inlet, LLC, GMT Exploration Company, LLC, Dale Resources Alaska, LLC, Jonah
Gas Company, LLC and Nerd Gas Company, LLC, collectively, as Seller, and CIE, as
Buyer, dated November 22, 2013.
“Acquisition Closing Date” means the “Closing Date” as defined in the
Acquisition Agreement.
“Acquisition Documents” means (a) the Acquisition Agreement, and (b) all bills
of sale, assignments, agreements, instruments and documents executed and
delivered in connection therewith, as amended in accordance with the terms
hereof and thereof.
“Acquisition Properties” means the Oil and Gas Properties and other properties
acquired by the Borrower or any Guarantor pursuant to the Acquisition Documents.

1

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

“Adjusted LIBO Rate” means, with respect to any Eurodollar Loan for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the next
1/100 of 1%) equal to the LIBO Rate for such Interest Period multiplied by the
Statutory Reserve Rate; provided however, that at no time shall the Adjusted
LIBO Rate be less than 2.00% per annum.
“Administrative Questionnaire” means an Administrative Questionnaire in a form
supplied by the Administrative Agent.
“Affected Loans” has the meaning assigned such term in Section 5.05.
“Affiliate” means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
“Agents” means, collectively, the Administrative Agent and any sub-agent
appointed by the Administrative Agent pursuant to Section 11.05; and “Agent”
shall mean any of them individually, as the context requires.
“Aggregate Commitment” means, as of any date of determination, the sum of the
Commitments of all of the Lenders as of such date. On the Effective Date, the
Aggregate Commitment is $175,000,000.
“Agreement” means this Credit Agreement, as the same may from time to time be
amended, modified, supplemented or restated.
“Aircraft” means that certain Hawker 400 aircraft owned by the Borrower as of
the Effective Date, acquired pursuant to the Aircraft Purchase Agreement, dated
November 17, 2010, among The Heavener Company Leasing, LLC, Bristol Capital
Advisors, LLC, as seller, and the Borrower, as purchaser.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus ½ of 1% and (c) the Adjusted LIBO Rate for a
three month Interest Period on such day (or if such day is not a Business Day,
the immediately preceding Business Day) plus 1.0%, provided that, for the
avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the
rate appearing on the Reuters Screen LIBOR01 (or any successor or substitute
page) at approximately 11:00 a.m., New York time, on such day (or the
immediately preceding Business Day if such day is not a day on which banks are
open for dealings in dollar deposits in the London interbank market). Any change
in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds
Effective Rate or the Adjusted LIBO Rate shall be effective from and including
the effective date of such change in the Prime Rate, the Federal Funds Effective
Rate or the Adjusted LIBO Rate, respectively.
“Applicable Margin” means, for any day, with respect to (a) any ABR Loan, a rate
per annum equal to 8.75%, and (b) any Eurodollar Loan, a rate per annum equal to
9.75%.
“Applicable Percentage” means, with respect to any Lender, (a) at any time prior
to the termination of the Aggregate Commitment, the percentage of the Aggregate
Commitment represented by such Lender’s Commitment, and (b) at any time after
the termination of the Aggregate Commitment, the percentage of all outstanding
Loans represented by the outstanding Loans made by such Lender. The Applicable
Percentage of each Lender on the Effective Date is set forth on Annex I.
“Approved Counterparty” means (a) Cargill, Incorporated, (b) BP Corporation
North America Inc., (c) any First Lien Lender or Affiliate thereof and (d) any
other Person whose long term senior unsecured debt rating at the time of
entering into the Swap Agreement is A/A2 by S&P or Moody’s (or their equivalent)
or higher.

2

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

“Approved Petroleum Engineers” means (a) Netherland, Sewell & Associates, Inc.,
(b) Ryder Scott Company Petroleum Consultants, L.P., (c) DeGolyer & MacNaughton
and (d) any other independent petroleum engineers reasonably acceptable to the
Administrative Agent.
“Approved Senior Credit Agreement” means a credit agreement (as amended,
restated, extended, replaced, supplemented, modified or refinanced as permitted
by the Intercreditor Agreement) to be entered into on or before the date that is
45 days after the Effective Date, which credit agreement contains terms
substantially in accordance with those set forth in the term sheet dated January
31, 2014 provided by the Borrower to the Administrative Agent on or before the
date hereof (and certified by the Borrower as being a true and complete copy
thereof), with the First Lien Administrative Agent as described in said term
sheet, and other usual and customary terms and conditions approved by the
Administrative Agent and the Majority Lenders (such approval not to be
unreasonably withheld or delayed); provided, that, for the avoidance of doubt,
such Approved Senior Credit Agreement may not contain any financial covenants
that are more restrictive than those set forth in Section 9.01 hereof.
“Arranger” means Apollo, in its capacity as arranger hereunder.
“Assignment and Assumption” means an assignment and assumption entered into by a
Lender and an assignee (with the consent of any party whose consent is required
by Section 12.04(b)), and accepted by the Administrative Agent, in the form of
Exhibit F or any other form approved by the Administrative Agent.
“Asset Coverage Test Date” means (a) the date of each Borrowing Base
redetermination under the First Lien Credit Agreement, including all scheduled,
interim and special redeterminations thereunder, (b) the last day of each fiscal
quarter, commencing with the fiscal quarter ending April 30, 2014, (c) each
other date on which the Loan Parties acquire or Dispose of (to the extent
permitted hereby or otherwise consented to in accordance with the terms hereof)
Oil and Gas Properties or any other Properties pursuant to Section 9.12(c) or
Section 9.05(n) or otherwise with an aggregate NYMEX Value of total Proved
Developed Reserves or fair market value, respectively, equal to $500,000 or
more, and (d) the date on which any borrowing of First Lien Loans or any other
credit extension is made under the First Lien Credit Agreement (including
without limitation any issuance of a letter of credit thereunder).
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America or any successor Governmental Authority.
“Borrowing Base” has the meaning set forth in the Intercreditor Agreement.
“Borrowing Base Deficiency” means “Borrowing Base Deficiency” or any similar
term as defined in the First Lien Credit Agreement.
“Borrowing Request” means a request by the Borrower for a borrowing of Loans in
accordance with Section 2.03.
“BP Swap Agreement” means the ISDA 2002 Master Agreement dated as of December 6,
2010 between the Borrower and BP Corporation North America Inc., as amended by
the Amendment dated as of December 8, 2010, together with all schedules and
annexes thereto and transactions thereunder.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed; and if such day relates to a borrowing or
continuation of, a payment or prepayment of principal of or interest on, or a
conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice
by the Borrower with respect

3

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

to any such Loan or continuation, payment, prepayment, conversion or Interest
Period, any day which is also a day on which banks are open for dealings in
dollar deposits in the London interbank market.
“Capital Leases” means, in respect of any Person, all leases that are or should
be, in accordance with GAAP, recorded as capital leases on the balance sheet of
the Person liable (whether contingent or otherwise) for the payment of rent
thereunder. Any lease that was treated as an operating lease under GAAP at the
time it was entered into that later becomes a capital lease as a result of a
change in GAAP during the life of such lease, including any renewals, shall be
treated as an operating lease for all purposes under this Agreement, and any
lease that was treated as a capital lease under GAAP at the time it was entered
into that later becomes an operating lease as a result of a change in GAAP
during the life of such lease, including any renewals, shall be treated as a
capital lease for all purposes under this Agreement.
“Cargill Swap Agreement” means the means the ISDA 1992 Master Agreement dated as
of December 17, 2013 between the Borrower and Cargill, Incorporated, together
with all schedules and annexes thereto and transactions thereunder.
“Cash Equivalents” means Investments described in Section 9.05(c), (d), (e) and
(f).
“Cash Management Agreement” means any agreement to provide any one or more of
the following types of services or facilities to a Loan Party: (a) ACH
transactions, (b) treasury and/or cash management services, including, without
limitation, controlled disbursement services, (c) foreign exchange facilities,
(d) credit or debit cards, (e) deposit and other accounts and (f) merchant
services (other than those constituting a line of credit).
“Casualty Event” means any loss, casualty or other damage to, or any
nationalization, taking under power of eminent domain or by condemnation or
similar proceeding of, any Oil and Gas Property of the Borrower or any of its
Subsidiaries having an estimated dollar amount in excess of $5,000,000.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Exchange Act and Rule 13d-3 of the Securities and Exchange
Commission thereunder as in effect on the Effective Date) of Equity Interests
representing more than 30.0% of the aggregate ordinary voting power represented
by the issued and outstanding Equity Interests of the Borrower; (b) occupation
of a majority of the seats (other than vacant seats) on the board of directors
of the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) approved or appointed by directors so
nominated; or (c) other than in a Permitted Disposition, any of Scott Boruff,
David Hall, David Voyticky, or Deloy Miller sells or otherwise disposes of any
of the Equity Interests of the Borrower owned by such Person on the Effective
Date; provided, however, that each will be permitted to sell Equity Interests of
the Borrower in an amount equal to the proceeds required for (i) the exercise of
warrants or stock options with respect to the Borrower’s Equity Interests prior
to their expiration and/or (ii) the payment of U.S. federal and state income
Taxes recognized by such Person with respect to Equity Interests granted to such
Person by the Borrower as compensation for employment and the provision of
services to or for the Borrower. In connection with sales of Equity Interests
permitted under clause (ii) of the prior sentence, the Person selling such
Equity Interests shall provide the Administrative Agent with a detailed
calculation of such Person’s taxable income derived from the receipt of Equity
Interests from the Borrower as employment compensation and the proceeds
generated from the sale of Equity Interests to pay the U.S. federal and state
income Taxes owing with respect to such receipts within 60 days of the date of
sale.
“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

4

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

or treaty or in the administration, interpretation, implementation or
application thereof by any Governmental Authority or (c) the making or issuance
of any request, rule, guideline or directive (whether or not having the force of
law) by any Governmental Authority; provided that notwithstanding anything
herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer
Protection Act and all requests, rules, guidelines or directives thereunder or
issued in connection therewith and (y) all requests, rules, guidelines or
directives promulgated by the Bank for International Settlements, the Basel
Committee on Banking Supervision (or any successor or similar authority) or the
United States of America or foreign regulatory authorities, in each case
pursuant to Basel III, shall in each case be deemed to be a “Change in Law”,
regardless of the date enacted, adopted or issued.
“CIE” means Cook Inlet Energy LLC, an Alaska limited liability company and
wholly owned subsidiary of the Borrower.
“CIE Pipeline Asset Disposition” means the sale by CIE to Tesoro Alaska Company
or its Affiliates of approximately eight miles of 8” diameter onshore crude oil
pipeline which connects CIE’s Kustatan production facility to the Trading Bay
Production Facility, together with the related right-of-way in connection with
the construction and operation of the planned Trans-Foreland Pipeline project
under consideration by the Alaska Department of Natural Resources.
“Code” means the Internal Revenue Code of 1986, as amended from time to time,
and any successor statute.
“Collections Account” means (a) Account Nos. 7238394311 and 7238394329
maintained by the Loan Parties with Fifth Third Bank and (b) any other DDA
established by any Loan Party into which proceeds from the sales of Hydrocarbons
are deposited.
“Commitment” means, with respect to each Lender at any time, the commitment of
such Lender to make Loans in an aggregate principal amount not to exceed the
dollar amount set forth opposite such Lender’s name on Annex I, as such
commitment may be modified from time to time pursuant to assignments by or to
such Lender pursuant to Section 12.04(b).
“Conforming RBL Agreement” means a credit agreement (as amended, restated,
extended, replaced, supplemented, modified or refinanced as permitted by the
Intercreditor Agreement) to be entered into on or before the date that is 365
days after the Effective Date among the Borrower, the First Lien Administrative
Agent and the other lenders party thereto from time to time, that:
(a) provides for a combined all in rate (which includes all interest, fees,
original issue discount, and any other similar payment obligations thereunder
and under the other First Lien Loan Documents) not to exceed a rate based on the
London Interbank Offered Rate (it being understood that there shall be no
minimum floor for such rate) plus 4.75% per annum;
(b) provides for an initial Borrowing Base of not less than $50,000,000;
(c) provides only for one, three and six month interest periods in respect of
the loans thereunder bearing interest a rate based on the London Interbank
Offered Rate;
(d) does not contain any financial covenants that are more restrictive than
those set forth in Section 9.01 hereof; and
(e) contains other usual and customary terms and conditions approved by the
Administrative Agent and the Majority Lenders (such approval not to be
unreasonably withheld or delayed).

5

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

“Consolidated G&A Expenses” means, for any period, the aggregate of all general
and administrative expenses of the Borrower and its Subsidiaries paid in cash,
determined on a consolidated basis in accordance with GAAP, excluding legal fees
and other non-recurring items reasonably acceptable to the Administrative Agent.
Annual performance bonuses acceptable to the Administrative Agent in its sole
discretion shall also be excluded from “Consolidated G&A Expenses”.
“Consolidated Net Income” means with respect to the Borrower and the
Consolidated Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Borrower and the Consolidated Subsidiaries after allowances for
taxes (but for the avoidance of doubt, prior to preferred stock dividends and
accretions) for such period determined on a consolidated basis in accordance
with GAAP; provided that there shall be excluded from such net income (or loss)
(to the extent otherwise included therein) the following: (a) the net income (or
loss) of any Person in which the Borrower or any Consolidated Subsidiary has an
interest (which interest does not cause the net income of such other Person to
be consolidated with the net income of the Borrower and the Consolidated
Subsidiaries in accordance with GAAP), except to the extent of the amount of
dividends or distributions actually paid in cash during such period by such
other Person to the Borrower or to a Consolidated Subsidiary, as the case may
be; (b) the net income (but not loss) during such period of any Consolidated
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions or transfers or loans by that Consolidated Subsidiary is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument or Governmental Requirement applicable to such Consolidated
Subsidiary or is otherwise restricted or prohibited; (c) any extraordinary gains
or losses during such period, (d) non-cash gains, losses or adjustments,
including non-cash gains, losses or adjustments under authoritative guidance
from the FASB as a result of changes in the fair market value of derivatives and
any gains or losses attributable to writeups or writedowns of assets, including
ceiling test writedowns and writedowns under authoritative guidance from the
FASB as a result of accounting for oil and gas activities, goodwill and other
intangible assets, and property, plant and equipment (for the avoidance of
doubt, realized gains or losses will be counted in Consolidated Net Income in
the quarter that cash is actually received or paid); (e) any non-cash employee
based compensation; and (f) any gain or loss realized in connection with asset
sales.
“Consolidated Subsidiaries” means each Subsidiary of the Borrower (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of the
Borrower in accordance with GAAP.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise. For the
purposes of this definition, and without limiting the generality of the
foregoing, any Person that owns directly or indirectly 10% or more of the Equity
Interests having ordinary voting power for the election of the directors or
other governing body of a Person (other than as a limited partner of such other
Person) will be deemed to “control” such other Person. “Controlling” and
“Controlled” have meanings correlative thereto.
“DDA” means any Deposit Account (as defined in the Uniform Commercial Code as in
effect on the date hereof and from time to time in the State of New York)
maintained by the Borrower or any Subsidiary.
“Debt” means, for any Person, the sum of the following (without duplication):
(a) all obligations of such Person for borrowed money or evidenced by bonds,
bankers’ acceptances, debentures, notes or other similar instruments; (b) all
obligations of such Person (whether contingent or otherwise) in respect of
letters of credit, surety or other bonds and similar instruments; (c) all
accounts payable and all accrued expenses, liabilities or other obligations of
such Person to pay the deferred purchase price of Property or services
(including, without limitation, any earn-out obligations, contingent payment
obligations, or other similar obligations associated with such purchase), but
excluding trade accounts payable in the ordinary course of

6

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

business (including guarantees thereof or instruments evidencing such
liabilities) that are either (i) not greater than 90 days past due or (ii) are
being contested in good faith by appropriate proceedings and adequate reserves
therefore have been established under GAAP; (d) the principal component of
obligations under Capital Leases; (e) all obligations under Synthetic Leases;
(f) all Debt (as defined in the other clauses of this definition) of others
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) a Lien on any Property of such
Person, whether or not such Debt is assumed by such Person; (g) all Debt (as
defined in the other clauses of this definition) of others guaranteed by such
Person or in which such Person otherwise assures a creditor against loss of the
Debt (howsoever such assurance shall be made) to the extent of the lesser of the
amount of such Debt and the maximum stated amount of such guarantee or assurance
against loss; (h) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or covenants of others or to
purchase the Debt or Property of others; (i) obligations to deliver commodities,
goods or services, including, without limitation, Hydrocarbons, in consideration
of one or more advance payments, other than gas balancing agreements in the
ordinary course of business; (j) obligations to pay for goods or services even
if such goods or services are not actually received or utilized by such Person;
(k) any Debt of a partnership for which such Person is liable either by
agreement, by operation of law or by a Governmental Requirement but only to the
extent of such liability; (l) Disqualified Capital Stock; (m) the undischarged
balance of any production payment created by such Person or for the creation of
which such Person directly or indirectly received payment; and (n) all
obligations of such Person with respect to any arrangement, directly or
indirectly, whereby such Person shall sell or transfer any material asset, and
whereby such Person shall then or immediately thereafter rent or lease as lessee
such asset or any part thereof. The Debt of any Person shall include all
obligations of such Person of the character described above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is not included as a liability of such Person under GAAP.
For the avoidance of doubt, “Debt” does not include obligations in respect of
Swap Agreements, indemnities incurred in the ordinary course of business or in
connection with the disposition of assets, any employee or director
compensation, any compensation paid to employees or directors pursuant to stock
appreciation rights, or obligations under operating leases.
“Default” means any event or condition which constitutes an Event of Default or
which upon notice, lapse of time or both would, unless cured or waived, become
an Event of Default.
“Deposit Account Control Agreement” means a deposit account control agreement to
be executed and delivered among any Loan Party, the Administrative Agent and
certain banks at which such Loan Party maintains Collection Accounts or other
applicable DDAs, in each case, in form and substance as may be reasonably
acceptable to the Administrative Agent, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.
“Disbursement Letter” means the disbursement request executed and delivered by
the Borrower to the Administrative Agent contemporaneous with the Effective Date
regarding the Loans to be made on the Effective Date, the form and substance of
which shall be satisfactory to the Administrative Agent.
“Dispose” means to sell, lease, assign, farm-out, convey, transfer, or otherwise
dispose of any Property. “Disposition” has a correlative meaning thereto.
“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable) or upon the happening of any event, matures or is mandatorily
redeemable for any consideration other than other Equity Interests (which would
not constitute Disqualified Capital Stock), pursuant to a sinking fund
obligation or otherwise, or is convertible or exchangeable for Debt or
redeemable for any consideration other than other Equity Interests (which would

7

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

not constitute Disqualified Capital Stock) at the option of the holder thereof,
in whole or in part, on or prior to the date that is 91 days after the
Termination Date.
“dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means any Subsidiary that is organized under the laws of
the United States of America or any state thereof or the District of Columbia.
“EBITDAX” means, for any period of four consecutive fiscal quarters, without
duplication, (a) Consolidated Net Income for such period plus (b) the following
expenses or charges to the extent deducted in calculating Consolidated Net
Income for such period: Interest Expense, income Taxes, depreciation, depletion,
amortization (including amortization of deferred financing costs), exploration
expenses, accretion of asset retirement obligations, and other noncash charges
reasonably acceptable to the Administrative Agent, plus (c) to the extent
deducted in calculating Consolidated Net Income for such period, the payments to
be paid to Apollo under and as defined in the Restructuring Agreement, minus (d)
the following items, to the extent added in the determination of Consolidated
Net Income: (i) all noncash income included in the calculation of Consolidated
Net Income and (ii) any cash received outside the ordinary course of business
from any foreign, United States, state or local tax credit or incentive program,
including, without limitation, Alaska’s Oil & Gas Production Tax Credit program;
provided, however, that if any such Person shall have consummated any
acquisition or disposition during such period, EBITDAX shall be subject to pro
forma adjustments for such acquisition or disposition (calculated in accordance
with Regulation S-X under the Securities Exchange Act of 1934, as amended or as
otherwise approved by the Administrative Agent), as if such acquisition or
disposition had occurred on the first day of such period and shall also include
adding back to Consolidated Net Income any non-recurring or one-time cash or
non-cash charges or expenses associated with such acquisition or disposition
that are reasonably acceptable to the Administrative Agent; provided further
that (i) for the fiscal quarter ended April 30, 2014, EBITDAX shall be EBITDAX
for such fiscal quarter multiplied by 4; (ii) for the fiscal quarter ended July
31, 2014, EBITDAX shall be EBITDAX for the two fiscal quarters then ended
multiplied by 2; and (iii) for the fiscal quarter ended October 31, 2014,
EBITDAX shall be EBITDAX for the three fiscal quarters then ended multiplied by
4/3.
“Effective Date” means the date on which the conditions specified in Article VI
are satisfied (or waived in accordance with Section 12.02).
“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) a
Related Fund, and (d) any other Person (other than a natural person) approved by
(i) the Administrative Agent and (ii) unless an Event of Default has occurred
and is continuing, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.
“Environmental Laws” means any and all Governmental Requirements pertaining in
any way to health and safety (insofar as either may be affected by a Release of,
or exposure to, Hazardous Materials) the environment, the preservation or
reclamation of natural resources, or the management, Release or threatened
Release of any Hazardous Materials, in effect in any and all jurisdictions in
which the Borrower or any Subsidiary is conducting, or at any time has
conducted, business, or where any Property of the Borrower or any Subsidiary is
located, including, the Oil Pollution Act of 1990, as amended, the Clean Air
Act, as amended, the Comprehensive Environmental, Response, Compensation, and
Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution
Control Act, as amended, the Occupational Safety and Health Act of 1970, as
amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as
amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control
Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as
amended, the Hazardous Materials

8

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

Transportation Act, as amended, the Natural Gas Pipeline Safety Act of 1968, as
amended, the Hazardous Liquid Pipeline Safety Act of 1979, as amended, and other
environmental conservation or protection Governmental Requirements.
“Environmental Permit” means any permit, registration, license, notice,
approval, consent, exemption, variance, or other authorization required under or
issued pursuant to applicable Environmental Laws.
“Equity Interests” means shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a
trust or other equity ownership interests in a Person, and any warrants, options
or other rights entitling the holder thereof to purchase or acquire any such
Equity Interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute.
“ERISA Affiliate” means each trade or business (whether or not incorporated)
which together with the Borrower or a Subsidiary would be deemed to be a “single
employer” within the meaning of section 4001(b)(1) of ERISA or subsections (b),
(c), (m) or (o) of section 414 of the Code.
“ERISA Event” means (a) a Reportable Event with respect to any Plan subject to
Title IV of ERISA, (b) the withdrawal of the Borrower or any of its Subsidiaries
or ERISA Affiliates from a Plan subject to Title IV of ERISA during a plan year
in which it was a “substantial employer” (as defined in Section 4001(a)(2) of
ERISA), (c) the providing of notice of intent to terminate a Plan in a distress
termination (as described in Section 4041(c) of ERISA), (d) the institution by
the PBGC of proceedings to terminate a Plan or a Multiemployer Plan or, (e) any
event or condition (i) that provides a basis under Section 4042(a)(1), (2), or
(3) of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan subject to Title IV of ERISA, or (ii) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA, or (f)
the partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of the Borrower, any of its Subsidiaries or ERISA Affiliates from a
Multiemployer Plan.
“Eurodollar”, when used in reference to any Loan, refers to whether such Loan is
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Section 10.01.
“Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental
charges or levies which are not 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) Liens in connection with workers’ compensation,
unemployment insurance or other social security, old age pension or public
liability obligations which are not delinquent or which are being contested in
good faith by appropriate action and for which adequate reserves have been
maintained in accordance with GAAP; (c) landlord’s liens, operators’, vendors’,
carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’,
materialmen’s, construction or other like Liens arising by operation of law or
otherwise in the ordinary course of business or incident to the exploration,
development, operation and maintenance of Oil and Gas Properties each of which
is in respect of obligations that are not delinquent or which are being
contested in good faith by appropriate action and for which adequate reserves
have been maintained in accordance with GAAP; (d) contractual Liens which arise
in the ordinary course of business under operating agreements, joint venture
agreements, oil and gas partnership agreements, oil and gas leases, farm-out or
farm-in agreements, division orders, contracts for the sale, transportation or
exchange of oil and natural gas, unitization and pooling declarations and
agreements, area of mutual interest agreements, overriding royalty agreements,
marketing agreements, processing

9

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

agreements, net profits agreements, development agreements, gas balancing or
deferred production agreements, injection, repressuring and recycling
agreements, salt water or other disposal agreements, seismic or other
geophysical permits or agreements, and other agreements which are usual and
customary in the oil and gas business and are for claims which are not
delinquent or which are being contested in good faith by appropriate action and
for which adequate reserves have been maintained in accordance with GAAP,
provided that any such Lien referred to in this clause does not materially
impair the use of the Property covered by such Lien for the purposes for which
such Property is held by the Borrower or any Subsidiary or materially impair the
value of such Property subject thereto; (e) Liens arising solely by virtue of
any statutory or common law provision or any deposit account agreement or
similar agreement relating to banker’s liens, rights of set-off or similar
rights and remedies and burdening only deposit accounts or other funds
maintained with a creditor depository institution, provided that no such deposit
account is a dedicated cash collateral account or is subject to restrictions
against access by the depositor in excess of those set forth by regulations
promulgated by the Board and no such deposit account is intended by Borrower or
any of its Subsidiaries to provide collateral to the depository institution; (f)
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any Property of the Borrower or any Subsidiary 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 which in the aggregate do not materially impair the use of such
Property for the purposes of which such Property is held by the Borrower or any
Subsidiary or materially impair the value of such Property subject thereto; (g)
Liens on cash or securities pledged to secure performance of tenders, surety and
appeal bonds, government contracts, performance and return of money bonds, bids,
trade contracts, leases, statutory obligations, regulatory obligations and other
obligations of a like nature incurred in the ordinary course of business and not
in connection with the borrowing of money, and (h) judgment and attachment Liens
not giving rise to an Event of Default, provided that any appropriate legal
proceedings which may have been duly initiated for the review of such judgment
shall not have been finally terminated or the period within which such
proceeding may be initiated shall not have expired and no action to enforce such
Lien has been commenced; provided, further that Liens described in clauses (a)
through (e) shall remain “Excepted Liens” only for so long as no action to
enforce such Lien has been commenced and no intention to subordinate the Lien
granted in favor of the Secured Parties is to be hereby implied or expressed by
the permitted existence of such Excepted Liens.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto.
“Excluded Taxes” means, with respect to the Administrative Agent or any Lender
or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, (a) Taxes imposed on or measured by net income (however denominated),
state franchise Taxes, and branch profits Taxes, in each case, (i) by the United
States of America (or any political subdivision thereof) or such other
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, or (ii)
that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal
withholding Taxes imposed on amounts payable to or for the account of such
Lender with respect to an applicable interest in a Loan or Commitment pursuant
to a law in effect on the date on which (i) such Lender acquires such interest
in the Loan or Commitment (other than pursuant to an assignment request by the
Borrower under Section 5.04(b)) or (ii) such Lender changes its lending office,
except in each case to the extent that, pursuant to Section 5.03, amounts with
respect to such Taxes were payable either to such Lender’s assignor immediately
before such Lender became a party hereto or to such Lender immediately before it
changed its lending office, (c) Taxes attributable to any such recipient’s
failure to comply with Section 5.03(e), and (d) any United States federal
withholding Tax that is imposed under FATCA.

10

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

“Existing Credit Agreement” has the meaning set forth in the Recitals.
“Extraordinary Proceeds” means any cash received by Borrower or any of its
Subsidiaries (a) not in the ordinary course of business (and not consisting of
proceeds described in Section 3.04(c)(i) or Section 3.04(c)(iii)), and/or (b)
from or in respect of (ii) pension plan reversions, (iii) any insurance
provider, (iv) judgments, proceeds of settlements or other consideration of any
kind in connection with any cause of action, (v) condemnation awards (and
payments in lieu thereof), and (vi) any purchase price adjustment received in
connection with any purchase agreement; provided, however, that “Extraordinary
Proceeds” shall not include any proceeds from (i) the issuance of any Equity
Interests by the Borrower, or (ii) any foreign, United States, state or local
tax credit or incentive program, including, without limitation, Alaska’s Oil &
Gas Production Tax Credits program; provided, further that “Extraordinary
Proceeds” shall be reduced by any amounts that are required to be and are
applied to repay the First Lien Secured Obligations, unless, if required to be
so applied, any one or more of the holders of the First Lien Secured Obligations
entitled to receive such payments decline or waive their right to such payment,
in each case, pursuant to and in accordance with the terms of the First Lien
Credit Agreement (without giving effect to any amendments, supplements or
modifications thereto unless approved by the Administrative Agent in its sole
discretion).
“FATCA” means Sections 1471 through 1474 of the Code, as of the Effective Date
(or any amended or successor version that is substantively comparable and not
materially more onerous to comply with), any current or future regulations or
official interpretations thereof, any agreement entered into pursuant to Section
1471(b)(1) of the Code, any intergovernmental agreement entered into in
connection with the implementation of such Sections of the Code and any fiscal
or regulatory legislation, rules or practices adopted pursuant to such
intergovernmental agreement.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
“Fee Letter” means that certain letter agreement dated as of the Effective Date
between Borrower and Administrative Agent.
“Financial Officer” means, for any Person, the chief financial officer,
principal accounting officer, treasurer or controller of such Person. Unless
otherwise specified, all references herein to a Financial Officer means a
Financial Officer of the Borrower.
“Financial Statements” means the financial statement or statements of the
Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).
“First Lien Administrative Agent” means the “Senior Representative” as defined
in the Intercreditor Agreement.
“First Lien Credit Agreement” means either (a) a Conforming RBL Agreement or (b)
an Approved Senior Credit Agreement (but not both).
“First Lien Effective Date” means the date on which the First Lien Credit
Agreement becomes effective in accordance with its terms.

11

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

“First Lien Lenders” means the “Senior Lenders” as defined in the Intercreditor
Agreement.
“First Lien Loans” means the “Senior Loans” as defined in the Intercreditor
Agreement.
“First Lien Loan Documents” means the “Senior Debt Documents” as defined in the
Intercreditor Agreement.
“First Lien Secured Obligations” means the “Senior Obligations” as defined in
the Intercreditor Agreement.
“fiscal quarter” means each fiscal quarter ending on the last day of each July,
October, January and April.
“fiscal year” means each fiscal year of the Borrower and its Subsidiaries for
accounting and tax purposes, ending on April 30 of each year.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. 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.
“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.
“GAAP” means generally accepted accounting principles in the United States of
America as in effect from time to time subject to the terms and conditions set
forth in Section 1.05.
“Governmental Authority” means the government of the United States of America,
any other nation or 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).
“Governmental Requirement” means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, rules of common law, authorization or other
directive or requirement, whether now or hereinafter in effect, of any
Governmental Authority.
“Guarantee and Collateral Agreement” means the Amended and Restated Guarantee
and Collateral Agreement dated as of the Effective Date executed by the Borrower
and the Guarantors, as the same may be amended, modified or supplemented from
time to time.
“Guarantors” means each Subsidiary of the Borrower and each other Person who may
hereafter guarantee payment or performance of the whole or any part of the
Secured Obligations pursuant to Section 8.14(b).
“Gunsight Acquisition” means the acquisition by the Borrower of approximately
2,207 acres of land owned by Gunsight Holdings LLC in Scott County, Tennessee,
as set forth in the Gunsight Acquisition Agreement, for a total purchase price
of $1,300,000, with $300,000 deposited by Borrower at signing of the agreement,
$50,000 due at closing and the remainder payable over three years, plus interest
on any unpaid portion of that purchase price, at a rate of 5%.

12

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

“Gunsight Acquisition Agreement” means the Contract for Sale of Real Estate
between Gunsight Holdings LLC, as seller and the Borrower, as buyer, with an
effective date of January 28, 2014.
“Hazardous Material” means any substance regulated or as to which liability
might arise under any applicable Environmental Law including: (a) any chemical,
compound, material, product, byproduct, substance or waste defined as or
included in the definition or meaning of “hazardous substance,” “hazardous
material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous
substance,” “toxic substance,” “contaminant,” “pollutant,” or words of similar
meaning or import found in any applicable Environmental Law; (b) Hydrocarbons,
petroleum products, petroleum substances, natural gas, oil, oil and gas waste
(including drilling fluids and any produced water), crude oil, and any
components, fractions, or derivatives thereof; and (c) radioactive materials,
explosives, asbestos or asbestos containing materials, polychlorinated
biphenyls, radon, infectious materials or medical wastes.
“Highest Lawful Rate” means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Secured Obligations under laws applicable to such Lender which are presently in
effect or, to the extent allowed by law, under such applicable laws which may
hereafter be in effect and which allow a higher maximum nonusurious interest
rate than applicable laws allow as of the date hereof.
“Hydrocarbon Interests” means all rights, titles, interests and estates now or
hereafter acquired by the Borrower or any Guarantor in and to oil and gas
leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon
leases, mineral fee interests, overriding royalty and royalty interests, net
profit interests and production payment interests, including any reserved or
residual interests of whatever nature.
“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline,
condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all
constituents, elements or compounds thereof and all products refined or
separated therefrom.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or
with respect to any payment made by or on account of any obligation of the
Borrower any Guarantor under any Loan Document and (b) to the extent not
otherwise described in (a), Other Taxes.
“Initial Reserve Report” means (a) the report of Ryder Scott Company Petroleum
Consultants, L.P., dated as of December 10, 2013, with respect to certain Oil
and Gas Properties being acquired by the Borrower under the Acquisition as of
December 1, 2013; and (b) the report of Ryder Scott Company Petroleum
Consultants, L.P., dated as of December 9, 2013, with respect to certain Oil and
Gas Properties of the Borrower and its Subsidiaries as of December 1, 2013.
“Intercreditor Agreement” means that certain Intercreditor Agreement to be
entered into among the Borrower, the Guarantors, the Administrative Agent and
the First Lien Administrative Agent in substantially the form attached hereto as
Exhibit G or such other form that is acceptable to the Administrative Agent in
its sole discretion.
“Interest Expense” shall mean, for any period, the sum of (a) the interest
expense (including imputed interest expense in respect of obligations under any
Capital Lease or Synthetic Lease) of the Borrower and the Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP (excluding,
for the avoidance of doubt, interest on preferred stock), plus (b) any interest
accrued during such period in respect of Debt of the Borrower or any Subsidiary
that is required to be capitalized rather than included in consolidated interest
expense for such period in accordance with GAAP; provided that (i) for the
fiscal quarter ended April 30, 2014, Interest Expense shall be Interest Expense
for such fiscal quarter multiplied by 4; (ii)

13

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

for the fiscal quarter ended July 31, 2014, Interest Expense shall be Interest
Expense for the two fiscal quarters then ended multiplied by 2; and (iii) for
the fiscal quarter ended October 31, 2014, Interest Expense shall be Interest
Expense for the three fiscal quarters then ended multiplied by 4/3. For purposes
of the foregoing, interest expense shall be determined after giving effect to
any net payments made or received by the Borrower or any Subsidiary with respect
to interest rate Swap Agreements.
“Interest Payment Date” means, with respect to any Loan, the last day of each
March, June, September and December.
“Interest Period” means with respect to any Eurodollar Loan, the period
commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months (or, with the
consent of each Lender, twelve months) thereafter, as the Borrower may elect;
provided that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period pertaining to a Eurodollar
Loan that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a borrowing of
Loans initially shall be the date on which such Loans are made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Loans.
“Investment” means, for any Person: (a) the acquisition (whether for cash,
Property, services or securities or otherwise) of Equity Interests of any other
Person or of a business unit of such Person (including, without limitation, any
“short sale” or any sale of any securities at a time when such securities are
not owned by the Person entering into such short sale) or of any Oil and Gas
Properties or activities related to Oil and Gas Properties (other than an
acquisition by any Loan Party of such interests in any Oil and Gas Properties or
activities related to Oil and Gas Properties of any other Loan Party, or
transfer of such interests from one Loan Party to another, provided that (i) no
Default or Event of Default has occurred and is continuing, (ii) such
acquisition or transfer shall not adversely affect the security interests of the
Administrative Agent or any Secured Party granted under any Loan Document and
(iii) the Administrative Agent shall have given its prior written consent to
such purchase or transfer (not to be unreasonably withheld, conditioned or
delayed)); (b) the making of any deposit with, or advance, loan or capital
contribution to, assumption of Debt of, purchase or other acquisition of any
other Debt or equity participation or interest in, or other extension of credit
to, any other Person (excluding any such advance, loan or extension of credit
having a term not exceeding ninety (90) days representing the purchase price of
inventory or supplies sold by such Person in the ordinary course of business);
or (c) the entering into of any guarantee of, or other contingent obligation
(including the deposit of any Equity Interests to be sold) with respect to, Debt
or other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person. For purposes hereof a
“business unit” means (i) with respect to any seller from whom a collection of
business assets are being acquired, a relatively autonomous division of that
seller that has been operated by the seller as an independent enterprise within
the seller’s overall business or (ii) any collection of assets that would be
reasonably expected to be operated as  a relatively autonomous division of the
Borrower or any Subsidiary thereof.
“Lenders” means the Persons listed on Annex I and any Person that shall have
become a party hereto pursuant to an Assignment and Assumption, other than any
such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption.
“Leverage Ratio” means (a) for any date of determination on or prior to July 31,
2014, the ratio of (i) Net Debt as of such date to (ii) EBITDAX for the four
fiscal quarters ending on or immediately prior to

14

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

such date and (b) for any date of determination after July 31, 2014, the ratio
of (i) Total Debt as of such date to (ii) EBITDAX for the four fiscal quarters
ending on or immediately prior to such date.
“LIBO Rate” means, with respect to any Eurodollar Loan for any Interest Period,
the rate (rounded upwards, if necessary, to the next 1/100 of 1%) appearing on
Reuters Reference Screen LIBOR01 Page (or on any successor or substitute screen
of such service, or any successor to or substitute for such service, providing
rate quotations comparable to those currently provided on such screen of such
service, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period, as the rate for
dollar deposits with a maturity comparable to such Interest Period. In the event
that such rate is not available at such time for any reason, then the “LIBO
Rate” with respect to such Eurodollar Loan for such Interest Period shall be the
rate (rounded upwards, if necessary, to the next 1/100 of 1%) at which dollar
deposits of an amount comparable to such Eurodollar Loan and for a maturity
comparable to such Interest Period are offered by the principal London office of
J.P. Morgan Chase Bank, N.A. (or such other commercial bank reasonably selected
by the Administrative Agent) in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations. For the
purposes of this Agreement, the Borrower and its Subsidiaries shall be deemed to
be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
“Liquidity” means at any time, the sum of (a) readily and immediately available
unrestricted cash held in deposit accounts of any Loan Party and Cash
Equivalents of the Loan Parties, in each case, which are free and clear of all
Liens (other than Liens in favor of Administrative Agent securing the Secured
Obligations and the First Lien Administrative Agent securing the First Lien
Secured Obligations) and which are reflected on the Borrower’s balance sheet,
and (b) the amount of the First Lien Loans that are then available for
borrowing.
“Loan Documents” means this Agreement, the Notes, the Security Instruments, the
Fee Letter, the Intercreditor Agreement, the Disbursement Letter and any other
agreement entered into, now or in the future, in connection with this Agreement.
“Loan Party” means the Borrower and each Guarantor.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.
“Majority Lenders” means, at any time while no Loans are outstanding, Lenders
having more than fifty percent (50.0%) of the Aggregate Commitment; and at any
time while any Loans are outstanding, Lenders holding more than fifty percent
(50.0%) of the outstanding aggregate principal amount of the Loans (without
regard to any sale by a Lender of a participation in any Loan under Section
12.04(c)).

15

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

“Make-Whole Premium” means, with respect to a Loan on any Prepayment Date, the
excess, if any, of (a) the present value on such Prepayment Date of (i) the
principal amount of such Loan multiplied by the applicable Prepayment Percentage
at the date immediately following the date that is the one-year anniversary of
the Effective Date as set forth in Section 3.05 hereof, expressed in dollars,
plus (ii) any required interest payments due on such Loan through the date
immediately following the date that is the one-year anniversary of the Effective
Date (except for accrued and unpaid interest to the Prepayment Date), computed
using a discount rate equal to the Treasury Rate plus 50 basis points and
applied quarterly, discounted to the Prepayment Date (assuming a 360-day year
consisting of twelve 30-day months), over (b) the principal amount of such Loan
on the Prepayment Date. For the avoidance of doubt, the Make-Whole Premium shall
not be less than zero.
“Management Option Proceeds” means any cash proceeds received by the Borrower as
consideration from the exercise by any director or officer of the Borrower of
any option to purchase Equity Interests of the Borrower.
“Material Adverse Effect” means any event, development or circumstance that has
had or could reasonably be expected to have a material adverse effect on (a) the
business, operations, Property, assets, liabilities (actual or contingent),
condition (financial or otherwise), prospects, or material agreements of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the Borrower,
any Subsidiary or any Guarantor to perform any of its obligations under the Loan
Documents to which it is a party or (c) the validity or enforceability of any
Loan Document or the rights or remedies of or benefits available to the
Administrative Agent, any other Agent or the Lenders thereunder.
“Material Contract” means, as to any Person, any supply, purchase, service,
employment, tax, indemnity, farm-in agreement, farm-out agreement, gas
marketing, gas imbalance, operating, unitization, communitization, partnership,
joint venture or other agreement of such Person or any of its Subsidiaries or by
which such Person or any of its Subsidiaries or any of their respective
properties are otherwise bound, if such agreement either (i) requires the
expenditure of over $100,000 by such Person during any calendar year (other than
contracts with respect to the routine acquisition of leasehold, the drilling of
wells, the construction and operation of gathering, processing or treating
facilities or equipment, or other similar contracts pursuant to which such
Person routinely acquires, drills, develops and operates the Hydrocarbon
Interests), or (ii) involves the sale of more than $1,000,000 in Hydrocarbons by
such Person in any calendar year (except to the extent any such contract is
cancelable by such Person on 60-days’ notice or less), or (iii) involves a
liability of such Person in excess of $500,000, or (iv) results or could
reasonably be expected to result in the loss of title to, or the transfer or
creation of a Lien upon any Property (except to the extent otherwise permitted
hereunder), as the same shall be amended, modified and supplemented and in
effect from time to time.
“Material Indebtedness” means Debt (other than the Loans), or obligations in
respect of one or more Swap Agreements, of any one or more of the Borrower and
its Subsidiaries in an individual or aggregate principal amount exceeding
$5,000,000. For purposes of determining Material Indebtedness, the “principal
amount” of the obligations of the Borrower or any Subsidiary in respect of any
Swap Agreement at any time shall be the Swap Termination Value.
“Maturity Date” means the earlier of (a) the later of (i) February 3, 2018 and
(ii) the date that is six months after the scheduled maturity date of the First
Lien Credit Agreement and (b) February 3, 2019. For the avoidance of doubt, if
no First Lien Credit Agreement is in effect, the Maturity Date shall be February
3, 2018.
“Miller 2009 Partnership” means Miller Energy Income 2009-A, LP, a Delaware
limited partnership, and its successors and permitted assigns.

16

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

“Miller Drilling Fund” means a limited partnership or similar investment vehicle
to which the Borrower or other Loan Party Disposes of any Oil and Gas Property
on which no Proved Reserve is located in accordance with Section 9.12 for the
purpose of financing the exploration and development of such contributed
property.
“Money Laundering Law” means any law governing conduct or acts designed in whole
or in part to conceal or disguise the nature, location, source, ownership or
control of money (including currency or equivalents, e.g., checks, electronic
transfers, etc.) to avoid a transaction reporting requirement under state or
federal law or to disguise the fact that the money was acquired by illegal
means.
“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that
is a nationally recognized rating agency.
“Mortgage” means each of the mortgages or deeds of trust executed by any one or
more Loan Party for the benefit of the Secured Parties as security for the
Secured Obligations, together with any assumptions or assignments of the
obligations thereunder by any Loan Party, and “Mortgages” shall mean all of such
Mortgages collectively.
“Mortgaged Property” means any Property owned by the Borrower or any Guarantor
which is subject to the Liens existing and to exist under the terms of the
Mortgages.
“Multiemployer Plan” means a multiemployer plan, as defined in section 3(37) or
4001(a)(3) of ERISA, that is subject to Title IV of ERISA and to which the
Borrower, a Subsidiary or an ERISA Affiliate is making or accruing an obligation
to make contributions or was obligated to make contributions within the last six
(6) years.
“Net Cash Proceeds” means, (A) with respect to any Disposition of any Properties
by Borrower or any Subsidiary, the excess, if any, of (a) the sum of cash and
cash equivalents received in connection with such Disposition, but only as and
when so received, over (b) the sum of (i) the principal amount of any Debt that
is secured by Liens on such asset senior to Liens securing the Secured
Obligations and that is required to be repaid in connection with the Disposition
thereof (other than the Loans), (ii) the out-of-pocket expenses incurred by the
Borrower or any Subsidiary in connection with such Disposition, (iii) all legal,
title and recording tax expense and all federal, state, provincial, foreign and
local taxes required to be accrued as a liability under GAAP as a consequence of
such Disposition, (iv) the deduction of appropriate amounts provided by the
seller as a reserve, in accordance with GAAP, against any liabilities associated
with the property or other assets disposed of in such Disposition and retained
by the Borrower or any Subsidiary after such Disposition, and (v) any portion of
the purchase price from such Disposition placed in escrow, whether as a reserve
for adjustment of the purchase price, for satisfaction of indemnities in respect
of such Disposition or otherwise in connection with such Disposition; provided,
however, that upon the termination of that escrow, Net Cash Proceeds will be
increased by any portion of funds in the escrow that are released to the
Borrower or any Subsidiary, and (B) with respect to any incurrence, issuance or
refinancing of any Debt, the cash proceeds from such incurrence, issuance or
refinancing net of underwriting discounts and commissions and other reasonable
costs and expenses associated therewith, including reasonable legal fees and
expenses; provided, however, that “Net Cash Proceeds” shall be reduced by any
amounts that are required to be and are applied to repay the First Lien Secured
Obligations, unless, if required to be so applied, any one or more of the
holders of the First Lien Secured Obligations entitled to receive such payments
decline or waive their right to such payment, in each case, pursuant to and in
accordance with the terms of the First Lien Credit Agreement (without giving
effect to any amendments, supplements or modifications thereto unless approved
by the Administrative Agent in its sole discretion).

17

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

“Net Debt” means, on any date of determination, (a) Total Debt minus (b) the
aggregate amount of readily and immediately available unrestricted cash held in
deposit accounts of any Loan Party and Cash Equivalents of the Loan Parties, in
each case, which are free and clear of all Liens (other than Liens in favor of
Administrative Agent securing the Secured Obligations and the First Lien
Administrative Agent securing the First Lien Secured Obligations) and which are
reflected on the Borrower’s balance sheet as of such date.
“Notes” means the promissory notes of the Borrower described in Section 2.02(d)
and being substantially in the form of Exhibit A, together with all amendments,
modifications, replacements, extensions and rearrangements thereof.
“Notice of Assignment” has the meaning set forth in Section 12.04(b)(vi).
“NYMEX” has the meaning specified in the definition of “NYMEX Price”.
“NYMEX Price” means, as of the date of the determination thereof with respect to
each of the appropriate crude oil or natural gas categories included in the then
most recent Reserve Report provided by the Borrower to Administrative Agent
pursuant to Section 8.12, the prices for the 36 succeeding monthly futures
contract prices (the “3 Year Strip”) and held constant thereafter based on the
price of the average of the contract prices for the last twelve (12) months of
such 3-Year Strip period, commencing with the month during which the
determination is to be made, as quoted on the New York Mercantile Exchange (the
“NYMEX”) and published in a nationally recognized publication for such pricing
as selected by the Administrative Agent, adjusted to account for the historical
basis in a manner acceptable to the Administrative Agent, and held constant
thereafter; provided, however, in the event that the NYMEX no longer provides
futures contract price quotes for 36 month periods, the longest period of quotes
of less than 36 months shall be used and held constant thereafter based on the
average of the contract prices for the last twelve (12) months of such period,
and, if the NYMEX no longer provides such futures contract quotes or has ceased
to operate, the Administrative Agent shall designate another nationally
recognized commodities exchange to replace the NYMEX for purposes of the
references to the NYMEX herein.
“NYMEX Value” means, at any date of determination thereof as to the Proved
Developed Producing Reserves or Proved Developed Non-Producing Reserves of the
Loan Parties, the discounted present value (determined at a discount factor of
10%) of future net revenues (i.e., after deducting production and ad valorem
taxes and less future capital costs and operating expenses) from Proved
Developed Producing Reserves or Proved Developed Non-Producing Reserves, as the
case may be, of the Loan Parties as of such date calculated for all volumes
covered under Swap Agreements at the contract price under such Swap Agreements
(taking into account any Swap Agreements covering basis differential) and for
all volumes in excess of the volumes covered under Swap Agreements utilizing the
NYMEX Price and assuming that production costs (which shall include a good faith
estimate of net abandonment costs) thereafter remain constant on a per barrel of
oil equivalent basis.
“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now
or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently
existing or future unitization agreements, pooling agreements and declarations
of pooled units and the units created thereby (including without limitation all
units created under orders, regulations and rules of any Governmental Authority)
which may affect all or any portion of the Hydrocarbon Interests; (d) all
operating agreements, contracts and other agreements, including production
sharing contracts and agreements, which relate to any of the Hydrocarbon
Interests or the production, sale, transportation, purchase, exchange or
processing of Hydrocarbons from or attributable to such Hydrocarbon Interests;
(e) all Hydrocarbons in and under and which may be produced and saved or
attributable to the Hydrocarbon Interests, including all oil in tanks, and all
rents, issues, profits, proceeds, products, revenues and other incomes from or
attributable to the Hydrocarbon Interests; (f) all tenements,

18

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

hereditaments, appurtenances and Properties in any manner appertaining,
belonging, affixed or incidental to the Hydrocarbon Interests and (g) all
Properties, rights, titles, interests and estates described or referred to
above, including any and all Property, real or personal, now owned or
hereinafter acquired and situated upon, used, held for use or useful in
connection with the operating, working or development of any of such Hydrocarbon
Interests or Property (excluding drilling rigs, automotive equipment, rental
equipment or other personal Property which may be on such premises for the
purpose of drilling a well or for other similar temporary uses) and including
any and all oil wells, gas wells, injection wells or other wells, buildings,
structures, fuel separators, liquid extraction plants, plant compressors, pumps,
pumping units, field gathering systems, tanks and tank batteries, fixtures,
valves, fittings, machinery and parts, engines, boilers, meters, apparatus,
equipment, appliances, tools, implements, cables, wires, towers, casing, tubing
and rods, surface leases, rights-of-way, easements and servitudes together with
all additions, substitutions, replacements, accessions and attachments to any
and all of the foregoing.
“Other Connection Taxes” means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower or any Guarantor hereunder or under any other Loan
Document, Taxes imposed as a result of a present or former connection between
such recipient and the jurisdiction imposing such Tax (other than connections
arising from such recipient having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected
a security interest under, engaged in any other transaction pursuant to or
enforced any Loan Document, or sold or assigned an interest in any Loan or Loan
Document).
“Other Taxes” means all present or future stamp, court or documentary,
intangible, recording, filing or similar Taxes that arise from any payment made
under, from the execution, delivery, performance, enforcement or registration
of, from the receipt or perfection of a security interest under, or otherwise
with respect to, any Loan Document, except any such Taxes that are Other
Connection Taxes imposed with respect to an assignment (other than an assignment
made pursuant to Section 5.04).
“Participant” has the meaning assigned to such term in Section 12.04(c)(i).
“Participant Register” has the meaning assigned to such term in Section
12.04(c)(i).
“Patriot Act” has the meaning assigned to such term in Section 12.16.
“PBGC” means the Pension Benefit Guaranty Corporation as defined in Title IV of
ERISA, or any successor thereto.
“Pellissippi Pointe Entities” means the collective reference to Pellissippi
Pointe, L.L.C., a Tennessee limited liability company and Pellissippi Pointe II,
LLC, a Tennessee limited liability company.
“Permitted Disposition” means any transfer, contribution, sale or other
disposition of Equity Interests of the Borrower by (a) Scott Boruff, David
Voyticky, or David Hall, of 30% or less of the Equity Interests of the Borrower
owned by such Person on the Effective Date or (b) Deloy Miller, of 50% or less
of the Equity Interests of the Borrower owned by such Person on the Effective
Date, in any case, so long as (i) the Borrower delivers all documents entered
into in connection with such transfer, contribution, sale or disposition of
Equity Interests to the Administrative Agent on or prior to the date of such
transfer, contribution, sale or disposition of Equity Interests, which documents
shall be in form and substance reasonably satisfactory to the Administrative
Agent and (ii) the value of any such Equity Interests subject to such transfer,
contribution, sale or other disposition shall be equal to or greater than $10
per share for the ten (10) consecutive Business Days preceding the date of such
transfer, contribution, sale or disposition without giving effect to any splits
or reverse splits of stock effective on or after the Effective Date.

19

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

“Permitted Refinancing Debt” means Debt (for purposes of this definition, “new
Debt”) incurred in exchange for, or proceeds of which are used to refinance, all
of any other Debt (the “Refinanced Debt”); provided that (a) such new Debt is in
an aggregate principal amount not in excess of the sum of (i) the aggregate
principal amount then outstanding of the Refinanced Debt (or, if the Refinanced
Debt is exchanged or acquired for an amount less than the principal amount
thereof to be due and payable upon a declaration of acceleration thereof, such
lesser amount) and (ii) an amount necessary to pay any fees and expenses,
including premiums, related to such exchange or refinancing; (b) such new Debt
has a stated maturity no earlier than the stated maturity of the Refinanced Debt
and a weighted average life no shorter than the weighted average life of the
Refinanced Debt; (c) such new Debt does not have a stated interest rate in
excess of the stated interest rate of the Refinanced Debt; (d) such new Debt
does not contain any covenants which, taken as a whole, are more onerous to the
Borrower and its Subsidiaries than those imposed by the Refinanced Debt and (e)
if such Refinanced Debt was subordinated, such new Debt (and any guarantees
thereof) is subordinated in right of payment to the Secured Obligations (or, if
applicable, the Guarantee and Collateral Agreement) to at least the same extent
as the Refinanced Debt and is otherwise subordinated on terms reasonably
satisfactory to the Administrative Agent.
“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Plan” means any employee pension benefit plan, as defined in section 3(2) of
ERISA but excluding any Multiemployer Plan, which (a) is currently or hereafter
sponsored, maintained or contributed to by the Borrower, a Subsidiary or an
ERISA Affiliate or (b) was at any time during the six calendar years preceding
the date hereof, sponsored, maintained or contributed to by the Borrower or a
Subsidiary or an ERISA Affiliate.
“Prepayment Date” means the date on which any Loan is (or is required to be)
prepaid or repaid in whole or in part pursuant to this Agreement.
“Prepayment Percentage” shall have the meaning set forth in Section 3.05.
“Prepayment Premium” shall mean, on any date, (a)(i) the applicable Prepayment
Percentage minus (ii) 100% multiplied by (b) the principal amount of the
applicable Loans being prepaid or repaid (or that are required to be prepaid or
repaid) on such date.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by J.P. Morgan Chase Bank, N.A. (or such other commercial bank
reasonably selected by the Administrative Agent) as its prime rate in effect at
its principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
“Property” means any interest in any kind of property or asset, whether real,
personal or mixed, or tangible or intangible, including, without limitation,
cash, securities, accounts and contract rights.
“Proved Developed Non-Producing Reserves” has the meaning set forth in the
definition of “Proved Reserves.”
“Proved Developed Producing Reserves” has the meaning set forth in the
definition of “Proved Reserves.”
“Proved Developed Reserves” has the meaning set forth in the definition of
“Proved Reserves.”

20

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

“Proved Reserves” means “Proved Reserves” as defined in the Definitions for Oil
and Gas Reserves (in this paragraph, the “Definitions”) promulgated by the
Society of Petroleum Engineers (or any generally recognized successor) as in
effect at the time in question. “Proved Developed Producing Reserves” means
Proved Reserves which are categorized as both “Developed” and “Producing” in the
Definitions. “Proved Developed Non-Producing Reserves” means Proved Reserves
which are categorized as both “Developed” and “Non-Producing” in the
Definitions. “Proved Developed Reserves” means Proved Reserves which are
categorized as either “Proved Developed Producing Reserves” or “Proved Developed
Non-Producing Reserves” in the Definitions.
“Purchase Price” has the meaning set forth in Section 12.04(b)(vi).
“Redemption” means with respect to any Debt, the repurchase, redemption,
prepayment, repayment, defeasance or any other acquisition or retirement for
value (or the segregation of funds with respect to any of the foregoing) of such
Debt. “Redeem” has the correlative meaning thereto.
“Refinanced Debt” has the meaning assigned such term in the definition of
“Permitted Refinancing Debt”.
“Register” has the meaning assigned to such term in Section 12.04(b)(iv).
“Regulation D” means Regulation D of the Board, as the same may be amended,
supplemented or replaced from time to time.
“Related Fund” means a fund, money market account, investment account or other
account managed by a Lender or an Affiliate of such Lender.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors (including attorneys, accountants and experts) of such Person and such
Person’s Affiliates.
“Release” means any depositing, spilling, leaking, pumping, pouring, placing,
emitting, discarding, abandoning, emptying, discharging, migrating, injecting,
escaping, leaching, dumping, or disposing.
“Remedial Work” has the meaning assigned such to term in Section 8.10(a).
“Reportable Event” means any of the events described in Section 4043(c) of ERISA
or the regulations thereunder other than a Reportable Event as to which the
provision of 30 days’ notice to the PBGC is waived under applicable regulations.
“Reserve Report” means a report, in form and substance reasonably satisfactory
to the Administrative Agent, setting forth, as of each May 1st or November 1st
(or such other date in the event of an interim redetermination of the Borrowing
Base) the oil and gas reserves attributable to the Oil and Gas Properties of the
Borrower and the Subsidiaries located in the United States of America, together
with a projection of the rate of production and future net income, taxes,
operating expenses and capital expenditures with respect thereto as of such
date, based upon the economic assumptions consistent with the Administrative
Agent’s lending requirements at the time.
“Responsible Officer” means, as to any Person, the Chief Executive Officer, the
President, any Financial Officer or any Vice President of such Person. Unless
otherwise specified, all references to a Responsible Officer herein shall mean a
Responsible Officer of the Borrower.

21

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

“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other Property) with respect to any Equity Interests in the
Borrower or any of its Subsidiaries, or any payment (whether in cash, securities
or other Property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such Equity Interests in the Borrower or any of its Subsidiaries or any
option, warrant or other right to acquire any such Equity Interests in the
Borrower or any of its Subsidiaries.
“Restructuring Agreement” means that certain letter agreement dated as of the
Effective Date re: Prepayment Premiums under the Existing Credit Agreement among
the Borrower and Apollo Investment Corporation, as administrative agent and
lender under the Existing Credit Agreement.
“SEC” means the Securities and Exchange Commission or any successor Governmental
Authority.
“Secured Obligations” means any and all amounts owing or to be owing by the
Borrower, any Subsidiary or any Guarantor (whether direct or indirect (including
those acquired by assumption), absolute or contingent, due or to become due, now
existing or hereafter arising): (a) to the Administrative Agent or any other
Secured Party under any Loan Document; (b) all accrued and unpaid interest,
premium, if any, and fees owing to the Administrative Agent or any other Secured
Party under any Loan Document (including the Make-Whole Premium or any
Prepayment Premium and any interest accruing after the filing of a bankruptcy or
insolvency proceeding, whether or not such interest would be an allowable claim
in such proceeding); and (c) all renewals, extensions and/or rearrangements of
any of the above.
“Secured Party” means, collectively, the Administrative Agent, each Lender and
each sub-agent pursuant to Section 11.05 appointed by the Administrative Agent
with respect to matters relating to the Loan Documents.
“Security Instruments” means, collectively, any and all of the security
agreements (including the Guarantee and Collateral Agreement and each Deposit
Account Control Agreement), pledges, Mortgages, deeds of trust, assignments,
Transfer Order Letters, stock pledge agreements, assignments of partnership
interests, assignments of member interests, and such other agreements, documents
and instruments, in form and substance satisfactory to the Administrative Agent,
which are, or are to be, executed by a Loan Party in favor of the Administrative
Agent and/or the Secured Parties as may be required from time to time by the
Administrative Agent to provide the Administrative Agent for the benefit of the
Secured Parties with Liens upon all of the assets and properties of such Loan
Party as security for the payment and performance in full of the Secured
Obligations, in each case as the same may be amended, modified, restated,
supplemented, increased, renewed, extended, substituted for or replaced from
time to time.
“Series B Preferred Dividend” means a 12% semi-annual dividend, payable in cash
on March 1 and September 1 of each year, on the Borrower’s Series B Preferred
Stock.
“Series B Preferred Stock” means the class of equity of the Borrower to be
designated “Series B Redeemable Preferred Stock”; provided that no more than
300,000 shares of such Series B Preferred Stock shall be authorized or
outstanding at any time.
“Series C Preferred Dividend” means a 10.75% per annum quarterly dividend,
payable in cash on March 1, June 1, September 1 and December 1 of each year, on
the Borrower’s Series C Preferred Stock. For the avoidance of doubt, the Series
C Preferred Dividend shall not include any dividend in excess of the amount
specified in the foregoing sentence, including without limitation any dividends
accruing at the “Penalty Rate” set forth in the Borrower’s articles of
incorporation or otherwise.

22

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

“Series C Preferred Stock” means the class of equity of the Borrower to be
designated “10.75% Series C Cumulative Redeemable Preferred Stock”; provided
that no more than 3,250,000 shares of such Series C Preferred Stock shall be
authorized or outstanding at any time.
“Series D Preferred Dividend” means a 10.5% per annum cash payment paid
quarterly, subject to prior payment in full of accrued but unpaid dividends on
any other senior securities, if any, that may be issued with dividend rights
senior to the Series D Preferred Stock.
“Series D Preferred Stock” means the class of equity of the Borrower to be
designated “10.5% Series D Cumulative Redeemable Preferred Stock”, provided that
no more than 4,000,000 shares of such Series D Preferred Stock shall be
authorized or outstanding at any time.
“S&P” means Standard & Poor’s Ratings Group, a division of The McGraw-Hill
Companies, Inc., and any successor thereto that is a nationally recognized
rating agency.
“Specified Liens” means, collectively, (a) Excepted Liens identified in clauses
(a) to (d) and (f) of the definition thereof, but subject to the provisos at the
end of such definition, and (b) Liens permitted by Section 9.03(e).
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board for eurocurrency funding (currently referred to as
“Eurocurrency Liabilities” in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
“Subject Interests” has the meaning set forth in Section 12.04(b)(vi).
“subsidiary” means, with respect to any Person (the “parent”) at any date, any
other Person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other Person (a) of which Equity Interests representing more than 50% of the
equity or more than 50% of the ordinary voting power (irrespective of whether or
not at the time Equity Interests of any other class or classes of such Person
shall have or might have voting power by reason of the happening of any
contingency) or, in the case of a partnership, any general partnership interests
are, as of such date, owned, controlled or held, or (b) that is, as of such
date, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
“Subsidiary” means any subsidiary of the Borrower; provided that,
notwithstanding anything to the contrary contained herein, none of the Miller
2009 Partnership, any Miller Drilling Fund nor any of the Pellissippi Pointe
Entities shall be deemed a Subsidiary of any Loan Party for purposes of this
Agreement.
“Swap Agreement” means any agreement with respect to any swap, cap, collar,
forward, future or derivative transaction or option or similar agreement,
whether exchange traded, “over-the-counter” or otherwise, involving, or settled
by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures
of economic, financial or pricing risk or value or any similar transaction or
any combination of these transactions.

23

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

“Swap Termination Value” means, in respect of any one or more Swap Agreements,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Agreements, (a) for any date on or after the
date such Swap Agreements have been closed out and termination value(s)
determined in accordance therewith, such termination value(s) and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Agreements, as determined by the
counterparties to such Swap Agreements.
“Synthetic Leases” means, in respect of any Person, all leases which shall have
been, or should have been, in accordance with GAAP, treated as operating leases
on the financial statements of the Person liable (whether contingently or
otherwise) for the payment of rent thereunder and which were properly treated as
debt for borrowed money for purposes of U.S. federal income taxes, if the lessee
in respect thereof is obligated to either purchase for an amount in excess of,
or pay upon early termination an amount in excess of, 80% of the residual value
of the Property subject to such operating lease upon expiration or early
termination of such lease.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
“Tennessee Oil and Gas Properties” means Oil and Gas Properties of the Loan
Parties located in the State of Tennessee.
“Termination Date” means the date on which each of the following events shall
have occurred: (a) the termination of the Aggregate Commitment, and (b) the
payment in full in cash of all Secured Obligations (other than indemnity
obligations and similar obligations that survive the termination of the Loan
Documents for which no notice of a claim has been received by the Loan Parties).
“Total Debt” means, on any date of determination, all Debt of the Borrower and
the Consolidated Subsidiaries as of such date.
“Transactions” means, with respect to (a) the Borrower, the execution, delivery
and performance by the Borrower of this Agreement, each other Loan Document and
Acquisition Document to which it is a party, the Acquisition, the borrowing of
Loans, the use of the proceeds thereof and the grant of Liens by the Borrower on
Mortgaged Properties and other Properties pursuant to the Security Instruments,
and (b) each Guarantor, the execution, delivery and performance by such
Guarantor of each Loan Document and Acquisition Document to which it is a party,
the Acquisition, the guaranteeing of the Secured Obligations and the other
obligations under the Guarantee and Collateral Agreement by such Guarantor and
such Guarantor’s grant of the security interests and provision of collateral
under the Security Instruments and the grant of Liens by such Guarantor on
Mortgaged Properties and other Properties pursuant to the Security Instruments.
From and after the First Lien Effective Date, “Transactions” shall also include
the execution, delivery and performance by the Loan Parties of the First Lien
Loan Documents, the borrowing of First Lien Loans and receipt of other credit
extensions thereunder, the guaranteeing of the First Lien Secured Obligations by
the Guarantors thereunder and the grant by the Loan Parties of the security
interests and provision of collateral under the First Lien Loan Documents to
secure the First Lien Secured Obligations, in accordance with the Intercreditor
Agreement.
“Transfer Order Letters” means transfer order letters in the form of Exhibit E
attached hereto containing the information as provided for therein.
“Treasury Rate” means the yield to maturity at the time of computation of United
States Treasury securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Statistical

24

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

Release H.15(519) which has become publicly available at least two Business Days
prior to the Prepayment Date (or, if such Statistical Release is no longer
published, any publicly available source of similar market data)) most nearly
equal to the period from the Prepayment Date to the date immediately following
the date that is the one-year anniversary of the Effective Date; provided,
however, that if such period is not equal to the constant maturity of a United
States Treasury security for which a weekly average yield is given, the Treasury
Rate shall be obtained by linear interpolation (calculated to the nearest
one-twelfth of a year) from the weekly average yields of United States Treasury
securities for which such yields are given, except that if the period from the
Prepayment Date to the date immediately following the date that is the one-year
anniversary of the Effective Date is less than one year, the weekly average
yield on actually traded United States Treasury securities adjusted to a
constant maturity of one year shall be used. Any calculation of the Treasury
Rate and Make-Whole Premium by Administrative Agent in connection with any
prepayment or repayment of the Loans shall be conclusive absent manifest error.
“Type”, when used in reference to any Loan, refers to whether the rate of
interest on such Loan is determined by reference to the Alternate Base Rate or
the Adjusted LIBO Rate.
“U.S. Person” means any Person that is a “United States person” as defined in
Section 7701(a)(30) of the Code.
“VCOC Letters” means, the letters dated as of the Effective Date, executed by
the Borrower in favor of Highbridge Principal Strategies - Specialty Loan
Institutional Fund III-L, L.P. and Highbridge Principal Strategies - Specialty
Loan Institutional Fund III, L.P. regarding certain management rights, in form
and substance satisfactory to such Lenders.
“Wholly-Owned Subsidiary” means any Subsidiary of which all of the outstanding
Equity Interests (other than any directors’ qualifying shares mandated by
applicable law), on a fully-diluted basis, are owned by the Borrower or one or
more of the Wholly-Owned Subsidiaries or are owned by the Borrower and one or
more of the Wholly-Owned Subsidiaries.
Section 1.03.    Types of Loans. For purposes of this Agreement, Loans may be
classified and referred to by Type (e.g., a “Eurodollar Loan”).

Section 1.04.    Terms Generally; Rules of Construction. The definitions of
terms herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” as used in this Agreement shall be deemed to be
followed by the phrase “without limitation”. The word “will” shall be construed
to have the same meaning and effect as the word “shall”. Unless the context
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth in the Loan Documents), (b)
any reference herein to any law shall be construed as referring to such law as
amended, modified, codified or reenacted, in whole or in part, and in effect
from time to time, (c) any reference herein to any Person shall be construed to
include such Person’s successors and assigns (subject to the restrictions
contained in the Loan Documents), (d) the words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (e) with
respect to the determination of any time period, the word “from” means “from and
including” and the word “to” means “to but excluding” and (f) any reference
herein to Articles, Sections, Annexes, Exhibits and Schedules shall be construed
to refer to Articles and Sections of, and Annexes, Exhibits and Schedules to,
this Agreement. No provision of this Agreement or any other

25

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

Loan Document shall be interpreted or construed against any Person solely
because such Person or its legal representative drafted such provision.

Section 1.05.    Accounting Terms and Determinations; GAAP. Unless otherwise
specified herein, all financial statements and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared in accordance with GAAP as in effect from time to time. All
accounting terms used herein shall be interpreted, and all determinations with
respect to accounting matters hereunder (including with respect to Section 9.01)
shall be made in accordance with GAAP as in effect on the date hereof unless
otherwise agreed to by the Borrower and the Majority Lenders. In the event of
any change in GAAP or in the application thereof that would have an effect on
the calculation of any financial provisions in this Agreement, the Borrower will
furnish to the Administrative Agent and each Lender a certificate of a Financial
Officer specifying such change and the effect of such change on such
calculations.

ARTICLE II
THE CREDIT

Section 2.01.    Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees to make a Loan to the Borrower on the Effective Date
in an aggregate principal amount not to exceed such Lender’s Commitment, which
Loans shall be funded net of the original issue discount described in the Fee
Letter. After giving effect to the funding of the Loans on the Effective Date,
the Commitments shall immediately terminate without further action. Amounts
borrowed under this Section 2.01 and prepaid or repaid may not be reborrowed.

Section 2.02.    Loans.

(a)    Several Obligations. The failure of any Lender to make any Loan required
to be made
by it shall not relieve any other Lender of its obligations hereunder; provided
that the Commitments
are several and no Lender shall be responsible for any other Lender’s failure to
make Loans as required.

(b)    Type of Loans. Subject to Section 3.03 and Section 5.05, the Loans shall
be comprised
entirely of Eurodollar Loans. Each Lender at its option may make any Eurodollar
Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any
exercise of such option shall not affect the obligation of the Borrower to repay
such Loan in accordance
with the terms of this Agreement.

(c)    Continuation of Loans. Notwithstanding any other provision of this
Agreement, the
Borrower shall not be entitled to (a) request, or to elect to continue any
borrowing of Eurodollar
Loans if the Interest Period requested with respect thereto would end after the
Maturity Date, or (b)
subject to Section 3.03 and Section 5.05, convert any Eurodollar Loan into an
ABR Loan.

(d)    Notes. If requested by any Lender, the Loans made by such Lender shall be
evidenced
by a single promissory note of the Borrower in substantially the form of Exhibit
A, dated, in the case
of (i) any Lender party hereto as of the date of this Agreement, as of the date
of this Agreement or
(ii) any Lender that becomes a party hereto pursuant to an Assignment and
Assumption, as of the
effective date of the Assignment and Assumption, payable to such Lender in a
principal amount equal
to its Commitment as in effect on such date, and otherwise duly completed. In
the event that any
such Lender’s Commitment increases or decreases for any reason (whether pursuant
to Section 12.04
(b) or otherwise), the Borrower shall deliver or cause to be delivered on the
effective date of such
increase or decrease, a new Note payable to such Lender in a principal amount
equal to its Commitment

26

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

after giving effect to such increase or decrease, and otherwise duly completed.
The date, amount,
Type, interest rate and, if applicable, Interest Period of each Loan made by
such Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books
for its Note, and, prior to any transfer, may be recorded by such Lender on a
schedule attached to
such Note or any continuation thereof or on any separate record maintained by
such Lender. Failure
to make any such notation or to attach a schedule shall not affect any Lender’s
or the Borrower’s
rights or obligations in respect of such Loans or affect the validity of such
transfer by any Lender of
its Note.

Section 2.03.    Requests for Loans. To request a borrowing of Loans, the
Borrower shall notify the Administrative Agent of such request by telephone not
later than 12:00 noon, New York City time, ten Business Days before the
Effective Date. Such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in substantially the form of Exhibit B and signed
by the Borrower. Such telephonic and written Borrowing Request shall specify the
following information in compliance with Section 2.02:

(i)    the aggregate amount of the requested Loan;

(ii)    the date of such Loan, which shall be a Business Day;

(iii)    the initial Interest Period to be applicable thereto, which shall be a
period
contemplated by the definition of the term “Interest Period”; and

(iv)    the location and number of the Borrower’s account to which funds are to
be
disbursed.

If no Interest Period is specified in the Borrowing Request, then the Borrower
shall be deemed to have selected an Interest Period of one month’s duration.
Promptly following receipt of a Borrowing Request in accordance with this
Section 2.03, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested borrowing.
Section 2.04.    Interest Elections.

(a)    Continuance of Eurodollar Loans. Each borrowing of Eurodollar Loans shall
have
an initial Interest Period as specified in the Borrowing Request. Thereafter,
the Borrower may elect
to continue such borrowing and may elect a new Interest Period therefor, as
provided in this Section
2.04. All Loans made hereunder shall have the same Interest Period applicable
thereto.

(b)    Requests to Continue Eurodollar Loans. To make an election to continue
Eurodollar
Loans pursuant to this Section 2.04, the Borrower shall notify the
Administrative Agent of such
election by telephone not later than 12:00 noon, New York City time, three
Business Days before the
effective date of such election. Each such telephonic Continuation Request shall
be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written
Continuation Request in substantially the form of Exhibit C and signed by the
Borrower.

(c)    Information in Continuation Requests. Each telephonic and written
Continuation
Request shall specify the following information in compliance with Section 2.02:

27

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

(i)    the effective date of the election made pursuant to such Continuation
Request,
which shall be a Business Day; and

(ii)    the Interest Period to be applicable thereto after giving effect to such
election,
which shall be a period contemplated by the definition of the term “Interest
Period”.

If any such Continuation Request does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period of one month’s
duration.
(d)    Notice to Lenders by the Administrative Agent. Promptly following receipt
of a
Continuation Request, the Administrative Agent shall advise each Lender of the
details thereof.

(e)    Effect of Failure to Deliver Timely Continuation Request. If the Borrower
fails to
deliver a timely Continuation Request for any Eurodollar Loans prior to the end
of the Interest Period
applicable thereto, then, unless such Loans are repaid as provided herein, at
the end of such Interest
Period, the Borrower shall be deemed to have selected a new Interest Period of
one month’s duration
for such Loans.

Section 2.05.    Funding of Loans.

(a)    Funding by Lenders. Each Lender shall make each Loan to be made by it
hereunder
on the proposed date thereof by wire transfer of immediately available funds by
1:00 p.m., New York
City time, to the account of the Administrative Agent most recently designated
by it for such purpose
by notice to the Lenders. The Administrative Agent will make such Loans
available to the Borrower
by promptly crediting the amounts so received, in like funds, to an account of
the Borrower designated
by the Borrower in the Borrowing Request. Nothing herein shall be deemed to
obligate any Lender
to obtain the funds for its Loan in any particular place or manner or to
constitute a representation by
any Lender that it has obtained or will obtain the funds for its Loan in any
particular place or manner.

(b)    Presumption of Funding by the Lenders. Unless the Administrative Agent
shall have
received notice from a Lender prior to the proposed date of any borrowing of
Loans that such Lender
will not make available to the Administrative Agent such Lender’s share of such
borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in
accordance with Section 2.05(a) and may, in reliance upon such assumption, make
available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact made
its share of the
applicable borrowing available to the Administrative Agent, then the applicable
Lender and the
Borrower severally agree to pay to the 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 the Borrower to but excluding the date of payment to the Administrative
Agent, at (i) in the case
of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii)
in the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included
in such borrowing.

Section 2.06.    Reserved.

28

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

Section 2.07.    Reserved.

Section 2.08.    Reserved.

ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST; PREPAYMENTS; FEES

Section 3.01.    Repayment of Loans. The Borrower hereby unconditionally
promises to pay to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Loan on the Maturity Date.

Section 3.02.    Interest.

(a)    ABR Loans. ABR Loans shall bear interest at the Alternate Base Rate plus
the
Applicable Margin, but in no event to exceed the Highest Lawful Rate.

(b)    Eurodollar Loans. Eurodollar Loans shall bear interest at the Adjusted
LIBO Rate for
the Interest Period in effect for such Loan plus the Applicable Margin, but in
no event to exceed the
Highest Lawful Rate.

(c)    Post-Default Rate. Notwithstanding the foregoing, if any principal of or
interest on
any Loan or any fee or other amount payable by the Borrower or any Guarantor
hereunder or under
any other Loan Document is not paid when due, whether at stated maturity, upon
acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per
annum equal to three and one-half percent (3.5%) plus the higher of the rate
applicable to ABR Loans
as provided in Section 3.02(a) and the rate applicable to Eurodollar Loans as
provided in Section
3.02(b) (in either case, including the Applicable Margin), but in no event to
exceed the Highest Lawful
Rate. Notwithstanding the foregoing, (i) if an Event of Default or a Borrowing
Base Deficiency has
occurred and is continuing, all Loans outstanding at such time shall bear
interest, after as well as
before judgment, at the rate then applicable to such Loans (including the
Applicable Margin) plus an
additional three and one-half percent (3.5%), but in no event to exceed the
Highest Lawful Rate.

(d)    Interest Payment Dates. Accrued interest on each Loan shall be payable in
arrears on
each Interest Payment Date for such Loan and on the Maturity Date; provided that
(i) interest accrued
pursuant to Section 3.02(c) shall be payable on demand, (ii) in the event of any
repayment or
prepayment of any Loan, accrued interest on the principal amount repaid or
prepaid shall be payable
on the date of such repayment or prepayment, and (iii) in the event of any
conversion of any Eurodollar
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be
payable on the effective date of such conversion.

(e)    Interest Rate Computations. All interest hereunder shall be computed on
the basis of
a year of 360 days, unless such computation would exceed the Highest Lawful
Rate, in which case
interest shall be computed on the basis of a year of 365 days (or 366 days in a
leap year), except that
interest computed by reference to the Alternate Base Rate at times when the
Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days (or
366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day
but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO
Rate or LIBO Rate
shall be determined by the Administrative Agent, and such determination shall be
conclusive absent

29

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

manifest error, and be binding upon the parties hereto.

Section 3.03.    Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a borrowing of Eurodollar Loans:

(a)    the Administrative Agent determines (which determination shall be
conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO
Rate or the LIBO Rate for such Interest Period; or

(b)    the Administrative Agent is advised by the Majority Lenders that the
Adjusted LIBO
Rate or LIBO Rate, as applicable, for such Interest Period will not adequately
and fairly reflect the
cost to such Lenders of making or maintaining their Loans for such Interest
Period;

then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Continuation
Request that requests the continuation of any Eurodollar Loans shall be
ineffective (and such Loans shall be automatically converted into ABR Loans on
the last day of the relevant Interest Period), and (ii) if any Borrowing Request
requests a borrowing of Eurodollar Loans, such borrowing shall be made either as
a borrowing of ABR Loans or at an alternate rate of interest determined by the
Majority Lenders as their cost of funds.
Section 3.04.    Prepayments.

(a)    Optional Prepayments. The Borrower shall have the right at any time and
from time
to time to prepay the Loans in whole or in part, subject to prior notice in
accordance with Section
3.04(b).

(b)    Notice and Terms of Optional Prepayment. The Borrower shall notify the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the
case of prepayment of Eurodollar Loans, not later than 12:00 noon, New York City
time, three Business
Days before the date of prepayment, or (ii) in the case of prepayment of ABR
Loans, not later than
12:00 noon, New York City time, the date of prepayment. Each such notice shall
be irrevocable and
shall specify the prepayment date and the principal amount of the Loans to be
prepaid. Promptly
following receipt of any such notice, the Administrative Agent shall advise the
Lenders of the contents
thereof. Each partial prepayment of any Loans shall be in minimum principal
amounts of $100,000
or integral multiples of $100,000 thereof (unless the outstanding principal
amount of all Loans is less
than $100,000, then such prepayments shall be equal to such outstanding
principal amount). Each
prepayment shall be applied ratably to the Loans outstanding at such time in
accordance with each
Lender’s Applicable Percentage thereof. Prepayments pursuant to this Section
3.04 shall be
accompanied by accrued interest to the extent required by Section 3.02 and the
amounts required by
Section 3.05.

(c)    Mandatory Prepayments.

(i)    Unless waived by the Administrative Agent in its sole discretion,
immediately
upon any Disposition by the Borrower or any of its Subsidiaries of any Property
in accordance
with Sections 9.12(c), (e) or (i)), the Borrower shall immediately prepay the
outstanding Loans

30

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

in accordance with Section 3.04(c)(iv) in an amount equal to 100% of the Net
Cash Proceeds
received by such Person in connection with such Disposition. Nothing contained
in this
Section 3.04(c)(i) shall permit Borrower or any of its Subsidiaries to sell or
otherwise Dispose
of any Property other than in accordance with this Agreement.

(ii)    Unless waived by the Administrative Agent in its sole discretion,
immediately
upon the receipt by the Borrower or any of its Subsidiaries of any Extraordinary
Proceeds in
any one or series of related events, the Borrower shall immediately prepay the
outstanding
Loans in accordance with Section 3.04(c)(iv) in an amount equal to 100% of such
Extraordinary Proceeds, net of any reasonable expenses incurred in collecting
such
Extraordinary Proceeds.

(iii)    Unless waived by Administrative Agent in its sole discretion,
immediately
upon the issuance or incurrence by the Borrower or any of its Subsidiaries of
any Debt other
than Debt permitted under Section 9.02, the Borrower shall immediately prepay
the
outstanding Loans in accordance with Section 3.04(c)(iv) in an amount equal to
100% of the
Net Cash Proceeds received by such Person in connection with such issuance or
incurrence.
Nothing contained in this Section 3.04(c)(iii) shall permit the Borrower or any
of its
Subsidiaries to issue or incur any Debt other than in accordance with the terms
and conditions
of this Agreement.

(iv)    Unless waived by Administrative Agent in its sole discretion, if the
Alaska
Department of Natural Resources affirmatively rejects the transfer of the
Acquisition Properties (other
than the Acquired Equity) to CIE pursuant to the Acquisition Documents or fails
to approve such
transfer on or before the date that is 120 days after the Effective Date, the
Borrower shall prepay the
outstanding Loans in an amount equal to $59,557,303 within five (5) Business
Days following such
rejection or such date, as the case may be.

(v)    Each prepayment of Loans pursuant to this Section 3.04(c) shall be (A)
applied
ratably to the outstating principal amount of the Loans in accordance with each
Lender’s Applicable
Percentage thereof, and (B) accompanied by accrued interest to the extent
required by Section 3.02
and all amounts required by Section 3.05.

Section 3.05.    Make-Whole Premium & Prepayment Premium. Each prepayment or
repayment of
Loans that is (or is required to be) made hereunder, including as a result of
acceleration under Article
X or otherwise, but excluding any prepayment or repayment pursuant to Section
2.05(b), (A) on or
before the date that is the one-year anniversary of the Effective Date, shall be
made together with the
Make-Whole Premium and (B) at any time thereafter, shall be made at the
percentage (herein referred
to as the “Prepayment Percentage”) set forth in the following chart, of the
principal amount so prepaid
or repaid, in each case, together with all unpaid interest on the amount so
prepaid or repaid.
Date of Prepayment
Prepayment Percentage
1.From the date immediately following the date that is the one-year anniversary
of the Effective Date through and including the date that is two-year
anniversary of the Effective Date.
102%
2.From the date immediately following the date that is the two-year anniversary
of the Effective Date through and including the date the Loans are paid in full.
101%

31

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

Section 3.06.    Fees. The Borrower agrees to pay to the Administrative Agent,
for its own account, fees payable in the amounts and at the times set forth in
the Fee Letter or otherwise separately agreed upon between the Borrower and the
Administrative Agent.

ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; SHARING OF SET-OFFS

Section 4.01.    Payments Generally; Pro Rata Treatment; Sharing of Set-offs.

(a)    Payments by the Borrower. The Borrower shall make each payment required
to be
made by it hereunder (whether of principal, interest or fees, or of amounts
payable under Section
5.01, Section 5.02, Section 5.03 or otherwise) prior to 12:00 noon, New York
City time, on the date
when due, in immediately available funds, without defense, deduction,
recoupment, set-off or
counterclaim. Fees, once paid, shall be fully earned and shall not be refundable
under any
circumstances. Any amounts received after such time on any date may, in the
discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for
purposes of calculating interest thereon. All such payments shall be made to the
Administrative Agent
at its offices specified in Section 12.01, except that payments pursuant to
Section 5.01, Section 5.02,
Section 5.03 and Section 12.03 shall be made directly to the Persons entitled
thereto. The
Administrative Agent shall distribute any such payments received by it for the
account of any other
Person to the appropriate recipient promptly following receipt thereof. If any
payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be
payable for the period of such extension. All payments hereunder shall be made
in dollars.

(b)    Application of Insufficient Payments. If at any time insufficient funds
are received
by and available to the Administrative Agent to pay fully all amounts of
principal, interest, premiums
and fees then due hereunder, such funds shall be applied (i) first, towards
payment of interest and
fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts
of interest and fees then due to such parties, (ii) second, towards payment of
principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then
due to such parties, and third, towards payment of any Make-Whole Premium or
Prepayment Premium
then due hereunder, ratably among the parties entitled thereto in accordance
with the amounts of such
Make-Whole Premium or Prepayment Premium due to such parties.

(c)    Sharing of Payments by Lenders. If any Lender shall, by exercising any
right of set-
off or counterclaim or otherwise, obtain payment in respect of any principal of
or interest on any of
its Loans resulting in such Lender receiving payment of a greater proportion of
the aggregate amount
of its Loans and accrued interest thereon than the proportion received by any
other Lender, then the
Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the
Loans of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest
on their respective Loans and; provided that (i) if any such participations are
purchased and all or
any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions
of this Section 4.01(c) shall not be construed to apply to any payment made by
the Borrower pursuant
to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender
as consideration for the assignment of or sale of a participation in any of its
Loans to any assignee
or participant (including the Borrower to the extent made pursuant to and in
accordance with Section

32

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

12.04(b)(vi), provided that the provisions of this Section 4.01(c) shall apply
to any other such
assignment or sale to the Borrower or any Subsidiary or Affiliate thereof). The
Borrower consents
to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such
Lender were a direct creditor of the Borrower in the amount of such
participation.

Section 4.02.     Presumption of Payment by the Borrower. Unless the
Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of
the Lenders that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption, distribute to the
Lenders the amount due. In such event, if the Borrower has not in fact made such
payment, then each of the Lenders severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation.

Section 4.03.    Certain Deductions by the Administrative Agent. If any Lender
shall fail to make any payment required to be made by it pursuant to Section
2.05(a) or Section 4.02 then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid. After acceleration or maturity of the Loans, all
principal will be paid ratably as provided in Section 10.02(c).

Section 4.04.    Disposition of Proceeds. The Security Instruments contain an
assignment by the Borrower and/or the Guarantors unto and in favor of the
Administrative Agent for the benefit of the Secured Parties of all of the
Borrower’s or each Guarantor’s interest in and to production and all proceeds
attributable thereto which may be produced from or allocated to the Mortgaged
Property. The Security Instruments further provide in general for the
application of such proceeds to the satisfaction of the Secured Obligations and
other obligations described therein and secured thereby. Notwithstanding the
assignment contained in such Security Instruments, until the occurrence of an
Event of Default, (a) the Administrative Agent and the Lenders agree that they
will neither notify the purchaser or purchasers of such production nor take any
other action to cause such proceeds to be remitted to the Administrative Agent
or the Lenders, but the Lenders will instead permit such proceeds to be paid to
the Borrower and its Subsidiaries and (b) the Lenders hereby authorize the
Administrative Agent to take such actions as may be necessary to cause such
proceeds to be paid to the Borrower and/or such Subsidiaries.

ARTICLE V
INCREASED COSTS; BREAK FUNDING PAYMENTS; TAXES; ILLEGALITY

Section 5.01.    Increased Costs.

(a)    Eurodollar Changes in Law. If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO
Rate); or

33

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

(ii)    impose on any Lender or the London interbank market any other condition
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 (whether of principal, interest or otherwise, but not
including Excluded Taxes, Indemnified Taxes or Other Taxes), then the 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 and Liquidity Requirements. If any Lender determines that any
Change in
Law regarding capital or liquidity requirements has or would have the effect of
reducing the rate of
return on such Lender’s capital or liquidity or on the capital or liquidity of
such Lender’s holding
company, if any, as a consequence of this Agreement 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 or liquidity), then from time
to time the 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.

(c)    Certificates. A certificate of a Lender setting forth in reasonable
detail the basis for,
and a calculation of, the amount or amounts necessary to compensate such Lender
or its holding
company, as the case may be, as specified in Section 5.01(a) or (b) shall be
delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay such
Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.

(d)    Effect of Failure or Delay in Requesting Compensation. Failure or delay
on the part
of any Lender to demand compensation pursuant to this Section 5.01 shall not
constitute a waiver of
such Lender’s right to demand such compensation; provided that the Borrower
shall not be required
to compensate a Lender pursuant to this Section 5.01 for any increased costs
incurred or reductions
suffered more than 180 days prior to the date that such Lender notifies the
Borrower of the Change
in Law giving rise to such increased costs or reductions and of such Lender’s
intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs
or reductions is retroactive, then the 180-day period referred to above shall be
extended to include
the period of retroactive effect thereof.

Section 5.02.    Break Funding Payments. In the event of (a) the payment of any
principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan into an ABR Loan other than on the last
day of the Interest Period applicable thereto, (c) the failure to borrow,
convert, continue or prepay any Eurodollar Loan on the date specified in any
notice delivered pursuant hereto, or (d) the assignment of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto as a result
of a request by the Borrower pursuant to Section 5.04(a), then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event (exclusive of any lost profits or opportunity costs).
In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall
be deemed to include an amount determined by such Lender to be the excess, if
any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such Loan, for the period from the date of such
event to the last day of the then current Interest Period therefor (or, in the
case of a failure to borrow, convert or continue, for the period that

34

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

would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section 5.02 shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.

Section 5.03.    Taxes.

(a)    Payments Free of Taxes. Any and all payments by or on account of any
obligation of
the Borrower or any Guarantor under any Loan Document shall be made free and
clear of and without
deduction or withholding for any Taxes; provided that if the Borrower or any
Guarantor shall be
required to deduct or withhold any Taxes from such payments, as determined in
good faith by the
Borrower or the Administrative Agent, as applicable, then (i) if such Taxes are
Indemnified Taxes,
the sum payable shall be increased as necessary so that after making all
required deductions or
withholdings (including deductions or withholdings of Indemnified Taxes
applicable to additional
sums payable under this Section 5.03(a)), the Administrative Agent or Lender
receives an amount
equal to the sum it would have received had no such deductions or withholding
been made, (ii) the
Borrower or such Guarantor shall make such deductions or withholding and (iii)
the Borrower or
such Guarantor shall pay the full amount deducted or withheld to the relevant
Governmental Authority
in accordance with applicable law.

(b)    Payment of Other Taxes by the Borrower. The Borrower shall pay any Other
Taxes
to the relevant Governmental Authority in accordance with applicable law, or at
the option of the
Administrative Agent timely reimburse it for payment of such Other Taxes.

(c)    Indemnification by the Borrower. The Borrower shall indemnify the
Administrative
Agent and each Lender, within 10 days after written demand therefor, for the
full amount of any
Indemnified Taxes paid by the Administrative Agent or such Lender, as the case
may be, on or with
respect to any payment by or on account of any obligation of the Borrower
hereunder (including
Indemnified Taxes imposed or asserted on or attributable to amounts payable
under this Section 5.03)
and any penalties, interest and reasonable out-of-pocket expenses arising
therefrom or with respect
thereto, whether or not such Indemnified Taxes were correctly or legally imposed
or asserted by the
relevant Governmental Authority; provided that the Borrower shall not be
required to indemnify the
Administrative Agent or any Lender for any amounts under this Section 5.03(c) to
the extent that
such Person fails to notify the Borrower of its intent to make a claim for
indemnification under this
Section 5.03(c) within 180 days after a claim is asserted against such Person by
the relevant
Governmental Authority. A certificate of the Administrative Agent or a Lender as
to the amount of
such payment or liability under this Section 5.03 shall be delivered to the
Borrower and shall be
conclusive absent manifest error.

(d)    Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes
or Other Taxes by the Borrower or a Guarantor to a Governmental Authority, the
Borrower shall
deliver to the 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 the Administrative
Agent.

(e)    Status of Lenders.

35

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

(i)    Any Lender that is entitled to an exemption from or reduction of
withholding
Tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which
such jurisdiction is a party, with respect to payments under this Agreement or
any other Loan
Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time
or times prescribed by applicable law, such properly completed and executed
documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such
payments to be made without withholding or at a reduced rate. In addition, any
Lender, if
reasonably requested by the Borrower or the Administrative Agent, shall deliver
such other
documentation prescribed by applicable law or reasonably requested by the
Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine
whether or not such Lender is subject to backup withholding or information
reporting
requirements. Notwithstanding anything to the contrary in the preceding two
sentences, the
completion, execution and submission of such documentation (other than such
documentation
set forth in Section 5.03(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be
required if in the
Lender’s reasonable judgment such completion, execution or submission would
subject such
Lender to any material unreimbursed cost or expense or would materially
prejudice the legal
or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that the
Borrower
is a U.S. Person:

(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the
Administrative Agent on or prior to the date on which such Lender becomes a
Lender
under this Agreement (and from time to time thereafter upon the reasonable
request
of the Borrower or the Administrative Agent), executed originals of IRS Form W-9
certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the 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 reasonable request of the Borrower or the Administrative Agent),
whichever
of the following is applicable:

(1)    in the case of a Foreign Lender claiming the benefits of an
income tax treaty to which the United States is a party (x) with respect to
payments of interest under any Loan Document, executed originals of IRS
Form W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “interest” article of such tax treaty and (y)
with respect to any other applicable payments under any Loan Document, IRS
Form W-8BEN establishing an exemption from, or reduction of, U.S. federal
withholding Tax pursuant to the “business profits” or “other income” article
of such tax treaty:

(2)    executed originals of IRS Form W-8ECI;

(3)    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

36

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

certificate substantially in the form of Exhibit G-1 to the effect that such
Foreign
Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code,
a “10-percent shareholder” of the Borrower within the meaning of Section 881
(c)(3)(B) of the Code, or a “controlled foreign corporation” described in
Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and
(y) executed originals of IRS Form W-8BEN; or

(4)    to the extent a Foreign Lender is not the beneficial owner,
executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI,
IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the
form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification
documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of
such Foreign Lender are claiming the portfolio interest exemption, such
Foreign Lender may provide a U.S. Tax Compliance Certificate substantially
in the form of Exhibit G-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so,
deliver to the Borrower and the 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 reasonable request of the Borrower or the Administrative Agent),
executed
originals of any other form prescribed by applicable law as a basis for claiming
exemption from or a reduction in U.S. federal withholding Tax, duly completed,
together with such supplementary documentation as may be prescribed by
applicable
law to permit the Borrower or the Administrative Agent to determine the
withholding
or deduction required to be made; and

(D)    if a payment made to a Lender or the Administrative Agent under any
Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA
if such Lender or the Administrative Agent were to fail to comply with the
applicable
reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender or the Administrative Agent
shall
deliver to the Borrower and the Administrative Agent at the time or times
prescribed
by law and at such time or times reasonably requested by the Borrower or the
Administrative Agent such documentation prescribed by applicable law (including
as
prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional
documentation reasonably requested by the Borrower or the Administrative Agent
as
may be necessary for the Borrower and the Administrative Agent to comply with
their
obligations under FATCA and to determine that such Lender or the Administrative
Agent has complied with its obligations under FATCA or to determine the amount
to
deduct and withhold from such payment. Solely for purposes of this clause (D),
“FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

(iii)    Each Lender agrees that if any form or certification it previously
delivered
expires or becomes obsolete or inaccurate in any respect, it shall update such
form or
certification or promptly notify the Borrower and the Administrative Agent in
writing of its
legal inability to do so.

37

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

(f)    Indemnification by the Lenders. Each Lender shall severally indemnify the
Administrative Agent, within 30 days after demand therefor, for (i) any Taxes
attributable to such
Lender (but only to the extent that the Borrower has not already indemnified the
Administrative Agent
for such Taxes and without limiting the obligation of the Borrower to do so) and
(ii) any Taxes
attributable to such Lender’s failure to comply with the provisions of Section
12.04(c) relating to the
maintenance of the register described in Section 12.04(c)(i)(D), in either case,
that are payable or
paid by the Administrative Agent in connection with any Loan Document, and any
reasonable
expenses arising therefrom or with respect thereto, whether or not such 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 any Lender by the Administrative Agent shall
be conclusive absent
manifest error. Each Lender hereby authorizes the Administrative Agent to set
off and apply any and
all amounts at any time owing to such Lender under any Loan Document or
otherwise payable by
the Administrative Agent to the Lender from any other source against any amount
due to the
Administrative Agent under this Section 5.03(f).

(g)    Treatment of Certain Refunds. If any party determines, in its sole
discretion exercised
in good faith, that it has received a refund of any Taxes as to which it has
been indemnified pursuant
to this Section 5.03 (including by the payment of additional amounts pursuant to
this Section 5.03),
it shall pay to the indemnifying party an amount equal to such refund (but only
to the extent of
indemnity payments made under this Section with respect to the Taxes giving rise
to such refund),
net of all out-of-pocket expenses (including Taxes) of such indemnified party
and without interest
(other than any interest paid by the relevant Governmental Authority with
respect to such refund).
Such indemnifying party, upon the request of such indemnified party, shall repay
to such indemnified
party the amount paid over pursuant to this paragraph (g) (plus any penalties,
interest or other charges
imposed by the relevant Governmental Authority) in the event that such
indemnified party is required
to repay such refund to such Governmental Authority. Notwithstanding anything to
the contrary in
this paragraph (g), in no event will the indemnified party be required to pay
any amount to an
indemnifying party pursuant to this paragraph (g) the payment of which would
place the indemnified
party in a less favorable net after-Tax position than the indemnified party
would have been in if the
Tax subject to indemnification and giving rise to such refund had not been
deducted, withheld or
otherwise imposed and the indemnification payments or additional amounts with
respect to such Tax
had never been paid. This paragraph shall not be construed to require any
indemnified party to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to
the indemnifying party or any other Person.

Section 5.04.    Mitigation Obligations; Replacement of Lenders.

(a)    Designation of Different Lending Office. If any Lender requests
compensation under
Section 5.01, or if the Borrower is required to pay any additional amount to any
Lender or any
Governmental Authority for the account of any Lender pursuant to Section 5.03,
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 5.01 or Section 5.03, 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. The Borrower hereby agrees to pay all
reasonable costs and
expenses incurred by any Lender solely as a result of any such designation or
assignment.

38

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

(b)    Replacement of Lenders. If (i) any Lender requests compensation under
Section 5.01,
or (ii) the Borrower is required to pay any additional amount to any Lender or
any Governmental
Authority for the account of any Lender pursuant to Section 5.03, then the
Borrower may, at its sole
expense and effort, upon notice to such Lender and the Administrative Agent,
require such Lender
to assign and delegate, without recourse (in accordance with and subject to the
restrictions contained
in Section 12.04(b)), all its interests, rights and obligations under this
Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such
assignment); provided that (i) if such assignee is not a Lender the Borrower
shall have received the
prior written consent of the Administrative Agent, which consent shall not
unreasonably be withheld,
(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, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower
(in the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim
for compensation under Section 5.01 or payments required to be made pursuant to
Section 5.03, such
assignment will result in a reduction in such compensation or payments. A Lender
shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender
or otherwise, the circumstances entitling the Borrower to require such
assignment and delegation
cease to apply.

Section 5.05.    Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
applicable lending office to honor its obligation to make or maintain Eurodollar
Loans either generally or having a particular Interest Period hereunder, then
(a) such Lender shall promptly notify the Borrower and the Administrative Agent
thereof and such Lender’s obligation to make such Eurodollar Loans shall be
suspended (the “Affected Loans”) until such time as such Lender may again make
and maintain such Eurodollar Loans and (b) all Affected Loans which would
otherwise be made by such Lender shall be made instead as ABR Loans (and, if
such Lender so requests by notice to the Borrower and the Administrative Agent,
all Affected Loans of such Lender then outstanding shall be automatically
converted into ABR Loans on the date specified by such Lender in such notice)
and, to the extent that Affected Loans are so made as (or converted into) ABR
Loans, all payments of principal which would otherwise be applied to such
Lender’s Affected Loans shall be applied instead to its ABR Loans.
ARTICLE I

ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01.    Effective Date. The obligations of the Lenders to make the
Loans hereunder on the Effective Date shall not become effective until the date
on which each of the following conditions is satisfied (or waived in accordance
with Section 12.02):

(a)    (i) The Administrative Agent shall have received counterparts of the Fee
Letter duly
executed by the Borrower (in such number as may be requested by the
Administrative Agent), and
(ii) the Administrative Agent, the Arranger and the Lenders shall have received
all fees and amounts
specified therein or otherwise due and payable on or prior to the Effective
Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed
or paid by the Borrower hereunder.

(b)    The Administrative Agent shall have received a certificate of the
Secretary or an
Assistant Secretary of the Borrower and each Guarantor setting forth (i)
resolutions of its board of
directors (or equivalent governing body) with respect to the authorization of
the Borrower or such
Guarantor to execute and deliver the Loan Documents to which it is a party and
to enter into the

39

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

transactions contemplated in those documents, certified as being true and
complete and in full force
and effect, (ii) the officers of the Borrower or such Guarantor (A) who are
authorized to sign the Loan
Documents to which the Borrower or such Guarantor is a party and (B) who will,
until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes
of signing documents and giving notices and other communications in connection
with this Agreement
and the transactions contemplated hereby, (iii) specimen signatures of such
authorized officers, and
(iv) the articles or certificate of incorporation and bylaws (or comparable
governing documents) of
the Borrower and such Guarantor, certified as being true and complete. The
Administrative Agent
and the Lenders may conclusively rely on such certificate until the
Administrative Agent receives
notice in writing from the Borrower to the contrary.

(c)    The Administrative Agent shall have received certificates, each dated
within a recent
date of the Effective Date, of the appropriate state agencies with respect to
the existence, qualification
and good standing of the Borrower and each Guarantor in its jurisdiction of
formation or organization
and each other jurisdiction in which its failure to be duly qualified or
licensed could reasonably be
expected to have a Material Adverse Effect (which certificates shall indicate
that such Loan Party is
in good standing in each of such jurisdictions).

(d)    The Administrative Agent shall have received from each party hereto
counterparts (in
such number as may be requested by the Administrative Agent) of this Agreement
signed on behalf
of such party.

(e)    The Administrative Agent shall have received from each party thereto
counterparts
(in such number as may be requested by the Administrative Agent) of the VCOC
Letters signed on
behalf of such party.

(f)    The Administrative Agent shall have received duly executed Notes payable
to each
Lender requesting a Note at least three Business Days prior to the Effective
Date, in each case in a
principal amount equal to the Commitment of such Lender and dated as of the date
hereof.

(g)    The Administrative Agent shall have received from each party thereto duly
executed
counterparts (in such number as may be requested by the Administrative Agent) of
the Security
Instruments (other than the Deposit Account Control Agreements described in
Section 8.16), including
the Guarantee and Collateral Agreement and Transfer Order Letters executed in
blank to each
purchaser of production and disburser of proceeds of production from or
attributable to the Oil and
Gas Properties. In connection with the execution and delivery of the Security
Instruments, the
Administrative Agent shall:

(i)    be reasonably satisfied that the Security Instruments create first
priority,
perfected Liens (subject only to Specified Liens) on at least 80% of the total
value of the Oil
and Gas Properties evaluated in the Initial Reserve Report;

(ii)    have received Mortgages covering the real property located at (A) 3651
Baker
Highway, Huntsville, TN 37756 and (B) 9534 Morgan Co. Highway, Sunbright, TN
37872;

(iii)    have received certificates, together with undated, blank stock powers
for each
such certificate, representing all of the issued and outstanding Equity
Interests of each of the
Guarantors; and

40

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

            
(iv)    have received (i) all financing statements required by Administrative
Agent,
and (ii) all other agreements, documents or instruments required by
Administrative Agent in
its sole discretion to evidence that first-priority security interests (subject
only to Specified
Liens) in all of the Loan Parties’ assets have been granted to Administrative
Agent for the
benefit of the Secured Parties pursuant to the Loan Documents.

(h)    The Administrative Agent shall have received the Disbursement Letter duly
executed
by the Borrower.

(i)    The Administrative Agent shall have received an opinion of (i) Vinson &
Elkins LLP,
special counsel to the Borrower, in form and substance satisfactory to the
Administrative Agent, and
(ii) local counsel in each of the following states: Alaska, Tennessee and any
other jurisdictions
requested by the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.

(j)    The Administrative Agent shall have received (i) a certificate of
insurance coverage
of the Borrower evidencing that the Borrower is carrying insurance in accordance
with Section 7.12,
and (ii) and with respect to any real property covered by a Mortgage on which a
“building” or “mobile
home” (in each case, as such terms are defined for purposes of the National
Flood Insurance Program)
is located, (A) a flood determination certificate or letter issued by the
appropriate Governmental
Authority or third party indicating whether such property is designated as a
“flood hazard area” and
(B) if such property is designated to be in a “flood hazard area”, evidence of
flood insurance on such
property obtained by the applicable Loan Party in such total amount as required
by Regulation H of
the Federal Reserve Board, and all official rulings and interpretations
thereunder or thereof, and
otherwise in compliance with the National Flood Insurance Program as set forth
in the Flood Disaster
Protection Act of 1973.

(k)    The Administrative Agent shall have received title information as the
Administrative
Agent may reasonably require satisfactory to the Administrative Agent setting
forth the status of title
to at least 80% of the total value of the Oil and Gas Properties evaluated in
the Initial Reserve Report.

(l)    The Administrative Agent shall be reasonably satisfied with the
environmental
condition of the Oil and Gas Properties of the Borrower and its Subsidiaries.

(m)    The Administrative Agent shall have received a certificate of a
Responsible Officer
of the Borrower certifying that (i) the Borrower has received all consents and
approvals required by
Section 7.03, (ii) there is no litigation that involves any Loan Document, any
Acquisition Document
or the Transactions or that could impair the consummation of the Acquisition or
the acquisition of
the Acquired Equity at the time and in the manner contemplated by the
Acquisition Documents and
(iii) as to the matters contained in Section 6.02(a), (b), and (c).

(n)    The Administrative Agent shall have received the financial statements
referred to in
Section 7.04(a) and the Initial Reserve Report accompanied by a certificate
covering the matters
described in Section 8.01(i).

(o)    The Administrative Agent shall have received appropriate UCC search
certificates
reflecting no prior Liens encumbering the Properties of the Borrower and the
Subsidiaries for each
of the following jurisdictions: Alaska, Tennessee, and any other jurisdiction
requested by the
Administrative Agent; other than those being assigned or released on or prior to
the Effective Date

41

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

or Liens permitted by Section 9.03.

(p)    The Administrative shall be reasonably satisfied with the Swap Agreements
listed on
Schedule 7.20.

(q)    The Administrative Agent shall have received (i) a certificate of a
Responsible Officer
of the Borrower certifying: (A) that the Borrower is concurrently consummating
the Acquisition in
accordance with the terms of the Acquisition Documents (with all of the material
conditions precedent
thereto having been satisfied in all material respects by the parties thereto)
and acquiring substantially
all of the Acquisition Properties contemplated by the Acquisition Documents
(other than the Acquired
Equity, which pursuant to the terms of Sections 8.2(a), 8.2(c) and 9.5 of the
Acquisition Agreement
are to be transferred to CIE after the Acquisition Closing Date, immediately
following the receipt of
approval from the Regulatory Commission of Alaska for the acquisitions of those
Equity Interests
by CIE); (B) as to the purchase price for the Acquisition Properties after
giving effect to all adjustments
as of the Acquisition Closing Date contemplated by the Acquisition Agreement and
specifying, by
category, the amount of such adjustment; and (C) describing any casualty with
respect to any
Acquisition Property for which the Buyer waived the condition under Section
7.1(d) of the Acquisition
Agreement or for which the proceeds of insurance were paid and have been applied
or will be applied
to the repair and restoration of the Acquisition Property; (ii) a true and
complete executed copy of
each of the Acquisition Documents; (iii) original counterparts or copies,
certified as true and complete,
of the assignments, deeds and leases for all of the Acquisition Properties; and
(iv) such other related
documents and information as the Administrative Agent shall have reasonably
requested.

(r)    The Administrative Agent shall have received evidence satisfactory to it
that the Miller
2009 Loan Documents (as defined in the Existing Credit Agreement) are being
simultaneously
terminated, paid in full and that all Liens securing such facility are being
released or terminated and
that arrangements satisfactory to the Administrative Agent have been made for
recording and filing
of such releases.

(s)    The Administrative Agent and the Lenders shall have received from the
Borrower, at
least 5 days prior to the Effective Date, all requested documentation and other
information required
under applicable “know your customer” and anti-money laundering rules and
regulations, including
the Patriot Act.

(t)    The Lenders shall have received a satisfactory opening balance sheet of
the Borrower
giving pro forma effect to the Acquisition and the Debt to be incurred on the
Effective Date.

(u)    The Administrative Agent shall have received a certificate of a
Responsible Officer
of the Borrower certifying that, after giving effect to the Transactions, (a)
the aggregate assets (after
giving effect to amounts that could reasonably be received by reason of
indemnity, offset, insurance
or any similar arrangement), at a fair valuation, of the Borrower and the
Guarantors, taken as a whole,
will exceed the aggregate Debt of the Borrower and the Guarantors on a
consolidated basis, as the
Debt becomes absolute and matures, (b) each of the Borrower and the Guarantors
will not have
incurred or intended to incur, and will not believe that it will incur, Debt
beyond its ability to pay
such Debt (after taking into account the timing and amounts of cash to be
received by each of the
Borrower and the Guarantors and the amounts to be payable on or in respect of
its liabilities, and
giving effect to amounts that could reasonably be received by reason of
indemnity, offset, insurance
or any similar arrangement) as such Debt becomes absolute and matures and (c)
each of the Borrower
and the Guarantors will not have (and will have no reason to believe that it
will have thereafter)

42

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

unreasonably small capital for the conduct of its business.

(v)    The Administrative Agent shall have received and reviewed copies of all
Material
Contracts in effect on the Effective Date, and such Material Contracts shall be
in form and substance
satisfactory to Administrative Agent.

(w)    The Administrative Agent shall have completed its business, legal,
environmental and
collateral due diligence, including (i) a collateral audit and review of the
Borrower’s and each of its
Subsidiaries’ books and records and verification of the Borrower’s and each of
its Subsidiaries’
representations and warranties to the Administrative Agent, the results of which
shall be satisfactory
to the Administrative Agent, (ii) an inspection of such locations of the
Borrower and its Subsidiaries
as shall be required by the Administrative Agent, the results of which shall be
satisfactory to the
Administrative Agent, and (iii) background and credit checks on each of the Loan
Parties and certain
Financial Officers of the Loan Parties.

(x)    The Borrower shall have delivered to Administrative Agent all
environmental reports
in the possession or control of any Loan Party that was performed on any Oil and
Gas Property that
is subject to the Lien created by the Security Instruments within the past two
(2) years, and the matters
contained therein shall be reasonably acceptable to the Administrative Agent.

(y)    The Administrative Agent shall have received such other documents as the
Administrative Agent or special counsel to the Administrative Agent may
reasonably request.

The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders to make Loans hereunder shall not
become effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 12.02) at or prior to 2:00 p.m., New York City time, on
February 4, 2014 (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
Section 6.02.    Additional Conditions. The obligation of each Lender to make
its Loan hereunder on the Effective Date is subject to the satisfaction of the
following conditions:

(a)    At the time of and immediately after giving effect to the funding of such
Loans, no
Default shall have occurred and be continuing.

(b)    At the time of and immediately after giving effect to the funding of such
Loans, no
event, development or circumstance has occurred or shall then exist that has
resulted in, or could
reasonably be expected to have, a Material Adverse Effect.

(c)    The representations and warranties of the Borrower and the Guarantors set
forth in
this Agreement and in the other Loan Documents shall be true and correct in all
material respects
(unless such representation and warranty is already qualified by materiality, in
which case such
representation or warranty shall simply be true and correct) on and as of the
Effective Date, except
to the extent any such representations and warranties are expressly limited to
an earlier date, in which
case, on and as of the Effective Date, such representations and warranties shall
continue to be true .
and correct as aforesaid as of such specified earlier date.

(d)    The receipt by the Administrative Agent of a Borrowing Request in
accordance with

43

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

Section 2.03.

(e)    Delivery of a Borrowing Request to the Administrative Agent shall be
deemed to
constitute a representation and warranty by the Borrower on the date thereof as
to the matters specified
in Section 6.02(a) through (d).

ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:

Section 7.01.    Organization; Powers. Each of the Borrower and the Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization. Each of the Borrower and the Subsidiaries has
all requisite power and authority, and has all material governmental licenses,
authorizations, consents and approvals necessary, to own its assets and to carry
on its business as now conducted, and is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where failure to have such power, authority, licenses, authorizations,
consents, approvals and qualifications could not reasonably be expected to have
a Material Adverse Effect.

Section 7.02.    Authority; Enforceability. The Transactions are within the
Borrower’s and each Guarantor’s corporate, partnership or limited liability
company, as applicable, powers and have been duly authorized by all necessary
corporate, partnership, limited liability company and, if required, stockholder,
partner or member action (including, without limitation, any action required to
be taken by any class of directors of the Borrower or any other Person, whether
interested or disinterested, in order to ensure the due authorization of the
Transactions). Each Loan Document and Acquisition Document to which the Borrower
and each Guarantor is a party has been duly executed and delivered by the
Borrower and such Guarantor and constitutes a legal, valid and binding
obligation of the Borrower and such Guarantor, as applicable, enforceable in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, fraudulent transfer or conveyance, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

Section 7.03.    Approvals; No Conflicts. The Transactions (a) do not require
any consent or approval of, registration or filing with, or any other action by,
any Governmental Authority or any other third Person (including shareholders or
any class of directors, whether interested or disinterested, of the Borrower or
any other Person), nor is any such consent, approval, registration, filing or
other action necessary for the validity or enforceability of any Loan Document
or the consummation of the transactions contemplated thereby, except such as
have been obtained or made and are in full force and effect other than (i) the
recording or filing of the Security Instruments and related financing statements
as required by this Agreement, (ii) those third party approvals or consents
which, if not made or obtained, would not cause a Default hereunder, could not
reasonably be expected to have a Material Adverse Effect and do not have an
adverse effect on the enforceability of the Loan Documents, (iii) routine
filings related to the Loan Parties and the operation of their respective
businesses and (iv) filings as may be necessary in connection with the exercise
of remedies, (b) will not violate any applicable material law or regulation or
the charter, by-laws or other organizational documents of the Borrower or any
Subsidiary or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon the Borrower or any Subsidiary or their respective Properties, or give rise
to a right thereunder to require any payment to be made by the Borrower or such
Subsidiary and (d) except as contemplated by this Agreement and the First Lien
Loan Documents will not result in the creation or imposition of any Lien on any
Property of the Borrower or any Subsidiary.

44

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

Section 7.04.    Financial Condition; No Material Adverse Change.

(a)    The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended
April 30, 2013, reported on by KPMG, independent public accountants, and (ii) as
of and for the
fiscal quarter and the portion of the fiscal year ended October 31, 2013,
certified by its chief financial
officer. Such financial statements present fairly, in all material respects, the
financial position and
results of operations and cash flows of the Borrower and its Consolidated
Subsidiaries as of such
dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the
absence of footnotes in the case of the unaudited quarterly financial
statements.
        
(b)    Since April 30, 2013, (i) there has been no event, development or
circumstance that
has had or could reasonably be expected to have a Material Adverse Effect and
(ii) the business of
the Borrower and its Subsidiaries has been conducted only in the ordinary course
consistent with past
business practices.

(c)    Neither the Borrower nor any Subsidiary has on the date hereof any
material Debt
(including Disqualified Capital Stock) or any contingent liabilities,
off-balance sheet liabilities or
partnerships, liabilities for taxes, unusual forward or long-term commitments or
unrealized or
anticipated losses from any unfavorable commitments, except as referred to or
reflected or provided
for in the Financial Statements.

Section 7.05.    Litigation.

(a)    Except as set forth on Schedule 7.05, there are no actions, suits,
investigations or
proceedings by or before any arbitrator or Governmental Authority pending
against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or
involving the Acquisition or the proposed acquisition of the Acquired Equity (i)
as to which there is
a reasonable possibility of an adverse determination that, if adversely
determined, could reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect, (ii) that involve
any Loan Document, any Acquisition Document or the Transactions or (iii) that
could impair the
consummation of the Acquisition or the acquisition of the Acquired Equity at the
time and in the
manner contemplated by the Acquisition Documents.

(b)    Since the date of this Agreement, there has been no change in the status
of the matters
disclosed in Schedule 7.05 that, individually or in the aggregate, has resulted
in, or materially increased
the likelihood of, a Material Adverse Effect.

Section 7.06.    Environmental Matters. Except for such matters as set forth on
Schedule 7.06 or that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect:

(a)    the Borrower and the Subsidiaries and each of their respective Properties
and
operations thereon are, and within all applicable statute of limitation periods
have been, in compliance
with all applicable Environmental Laws.

(b)    the Borrower and the Subsidiaries have obtained all Environmental Permits
required
for their respective operations and each of their Properties and are in
compliance with all
Environmental Permits, with all such Environmental Permits being currently in
full force and effect,

45

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

and none of the Borrower or the Subsidiaries has received any written notice or
otherwise has
    
knowledge that any such existing Environmental Permit will be revoked or that
any application for
any new Environmental Permit or renewal of any existing Environmental Permit
will be contested
in any proceeding before any Governmental Authority.

(c)    there are no claims, demands, suits, orders, inquiries, or proceedings
concerning any
violation of, or any liability (including as a potentially responsible party)
under, any applicable
Environmental Laws that is pending or, to the Borrower’s knowledge, threatened
against the Borrower
or any Subsidiary or any of their respective Properties or as a result of any
operations at such Properties.

(d)    none of the Properties of the Borrower or any Subsidiary contain or have
contained
any: (i) underground storage tanks; (ii) asbestos-containing materials in a
damaged or friable
condition; (iii) landfills or dumps; (iv) hazardous waste management units as
defined pursuant to
RCRA or any comparable state law; or (v) sites listed on, or nominated for
listing on, the National
Priority List promulgated pursuant to CERCLA or any state remedial priority list
promulgated or
published pursuant to any comparable state law.

(e)    there has been no Release or, to the Borrower’s knowledge, threatened
Release, of
Hazardous Materials at, on, under or from the Borrower’s or any Subsidiary’s
Properties, there are
no investigations, remediations, abatements, removals, or monitorings of
Hazardous Materials
required under applicable Environmental Laws at such Properties and, to the
knowledge of the
Borrower, none of such Properties are adversely affected by any Release or
threatened Release of a
Hazardous Material originating or emanating from any other real property.

(f)    neither the Borrower nor any Subsidiary has received any written notice
asserting an
alleged liability or obligation under any applicable Environmental Laws with
respect to the
investigation, remediation, abatement, removal, or monitoring of any Hazardous
Materials at, under,
or Released or threatened to be Released from any real properties offsite the
Borrower’s or any
Subsidiary’s Properties and, to the Borrower’s knowledge, there are no
conditions or circumstances
that could reasonably be expected to result in the receipt of such written
notice.

(g)    there has been no exposure of any Person or Property to any Hazardous
Materials as
a result of or in connection with the operations and businesses of any of the
Borrower’s or the
Subsidiaries’ Properties that could reasonably be expected to form the basis for
a claim for damages
or compensation.

(h)    The Borrower and the Subsidiaries have provided to the Lenders complete
and correct
copies of all environmental site assessment reports, investigations, studies,
analyses, and
correspondence on environmental matters (including matters relating to any
alleged non-compliance
with or liability under Environmental Laws) that are in any of the Borrower’s or
the Subsidiaries’
possession or control and relating to their respective Properties or operations
thereon.

Section 7.07.    Compliance with the Laws and Agreements; No Defaults.

(a)    Each Loan Party is in compliance with all Governmental Requirements
applicable to
it or its Property and all agreements and other instruments binding upon it or
its Property, and possesses
all licenses, permits, franchises, exemptions, approvals and other governmental
authorizations
necessary for the ownership of its Property and the conduct of its business,
except where the failure

46

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

to do so, individually or in the aggregate, could not reasonably be expected to
result in a Material
Adverse Effect.

(b)    No Loan Party is in default nor has any event or circumstance occurred
which, but for
the expiration of any applicable grace period or the giving of notice, or both,
would constitute a
default or would require the such Loan Party to Redeem or make any offer to
Redeem under any
indenture, note, credit agreement or instrument pursuant to which any Material
Indebtedness is
outstanding or by which the Borrower or any Subsidiary or any of their
Properties is bound where
such default could reasonably be expected to result in a Material Adverse
Effect.

(c)    No Default has occurred and is continuing.
    
Section 7.08.    Investment Company Act. Neither the Borrower nor any Subsidiary
is an “investment company” within the meaning of, or subject to regulation
under, the Investment Company Act of 1940, as amended.

Section 7.09.    Taxes. Each of the Borrower and its Subsidiaries has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves in accordance with GAAP or (b) to the
extent that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of Taxes and other governmental charges
are, in the reasonable opinion of the Borrower, adequate. No Tax Lien (other
than an Excepted Lien) has been filed and, to the knowledge of the Borrower, no
claim is being asserted with respect to any such Tax or other such governmental
charge.
    
Section 7.10.    ERISA. Except as could not reasonably be expected to have a
Material Adverse Effect:

(a)    the Borrower, the Subsidiaries and each ERISA Affiliate have complied
with ERISA
and, where applicable, the Code regarding each Plan.

(b)    each Plan is, and has been, established and maintained in compliance with
its terms,
ERISA and, where applicable, the Code.

(c)    no act, omission or transaction has occurred which could result in
imposition on the
Borrower, any Subsidiary or any ERISA Affiliate (whether directly or indirectly)
of (i) either a civil
penalty assessed pursuant to subsections (c), (i), (l) or (m) of section 502 of
ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages
under section 409 of ERISA.

(d)    full payment when due has been made of all amounts which the Borrower,
the
Subsidiaries or any ERISA Affiliate is required under the terms of each Plan and
Multiemployer Plan
or applicable law to have paid as contributions to such Plan or Multiemployer
Plan as of the date
hereof.

(e)    neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors,
maintains,
or contributes to an employee welfare benefit plan, as defined in section 3(1)
of ERISA, including,
without limitation, any such plan maintained to provide benefits to former
employees of such entities,
that may not be terminated by the Borrower, a Subsidiary or any ERISA Affiliate
in its sole discretion

47

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

at any time without any liability.

(f)    neither the Borrower, the Subsidiaries nor any ERISA Affiliate sponsors,
maintains
or contributes to, or has at any time in the six-year period preceding the date
hereof sponsored,
maintained or contributed to, any employee pension benefit plan, as defined in
section 3(2) of ERISA,
that is subject to Title IV of ERISA, section 302 of ERISA or section 412 of the
Code.

Section 7.11.    Disclosure; No Material Misstatements. The Borrower has
disclosed to the Administrative Agent and the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower or any Subsidiary to the
Administrative Agent or any Lender or any of their Affiliates in connection with
the negotiation of this Agreement or any other Loan Document or delivered
hereunder or under any other Loan Document (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
with respect to projected financial information, the Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time. There is no fact peculiar to the Borrower or any
Subsidiary which could reasonably be expected to have a Material Adverse Effect
or in the future is reasonably likely to have a Material Adverse Effect and
which has not been set forth in this Agreement or the Loan Documents or the
other documents, certificates and statements furnished to the Administrative
Agent or the Lenders by or on behalf of the Borrower or any Subsidiary prior to,
or on, the date hereof in connection with the transactions contemplated hereby.
There are no statements or conclusions in any Reserve Report which are based
upon or include materially misleading information or fail to take into account
material information regarding the matters reported therein, it being understood
that projections concerning volumes attributable to the Oil and Gas Properties
of the Borrower and the Subsidiaries and production and cost estimates contained
in each Reserve Report are necessarily based upon professional opinions,
estimates and projections and that the Borrower and the Subsidiaries do not
warrant that such opinions, estimates and projections will ultimately prove to
have been accurate.

Section 7.12.    Insurance. The Borrower has, and has caused all of its
Subsidiaries to have, (a) all insurance policies sufficient for the compliance
by each of them with all material Governmental Requirements and all material
agreements and (b) insurance coverage in at least amounts and against such risk
(including, without limitation, public liability) that are usually insured
against by companies similarly situated and engaged in the same or a similar
business for the assets and operations of the Borrower and its Subsidiaries. The
Administrative Agent has been named as additional insured in respect of such
liability insurance policies and the Administrative Agent has been named as loss
payee with respect to Property loss insurance. Except as disclosed in writing to
the Administrative Agent, no “building” or “mobile home” (in each case, as such
terms are defined for purposes of the National Flood Insurance Program) exists
on any real property covered by a Mortgage. The Loan Parties have obtained and
provided evidence to the Administrative Agent of all flood insurance required to
be obtained under Section 8.07.
    
Section 7.13.    Restriction on Liens. Neither the Borrower nor any of the
Subsidiaries is a party to any agreement or arrangement (other than the First
Lien Loan Documents and Capital Leases creating Liens permitted by Section
9.03(c), but then only on the Property subject of such Capital Lease, any
accessions thereto and proceeds thereof), or subject to any order, judgment,
writ or decree, which either restricts or purports to restrict its ability to
grant Liens to the Administrative Agent and the Lenders on or in respect of
their Properties to secure the Secured Obligations and the Loan Documents.

48

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

Section 7.14.    Subsidiaries; Foreign Operations. Except as set forth on
Schedule 7.14 or as disclosed in writing to the Administrative Agent (which
shall promptly furnish a copy to the Lenders), which shall be a supplement to
Schedule 7.14, the Borrower has no Subsidiaries. Neither the Borrower nor any of
its Subsidiaries own (i) any Foreign Subsidiaries or (ii) any Oil and Gas
Properties not located within the geographic boundaries of the United States of
America. Each Subsidiary on such schedule is a Wholly-Owned Subsidiary.

Section 7.15.    Location of Business and Offices. The Borrower’s jurisdiction
of organization is Tennessee; the name of the Borrower as listed in the public
records of its jurisdiction of organization is Miller Energy Resources, Inc.;
and the organizational identification number of the Borrower in its jurisdiction
of organization is 000047469 (or, in each case, as set forth in a notice
delivered to the Administrative Agent pursuant to Section 8.01(o) in accordance
with Section 12.01). The Borrower’s principal place of business and chief
executive offices are located at the address specified in Section 12.01 (or as
set forth in a notice delivered pursuant to Section 8.01(o) and Section
12.01(c)). Each Subsidiary’s jurisdiction of organization, name as listed in the
public records of its jurisdiction of organization, organizational
identification number in its jurisdiction of organization, and the location of
its principal place of business and chief executive office is stated on Schedule
7.14 (or as set forth in a notice delivered pursuant to Section 8.01(o)).

Section 7.16.    Properties; Titles, Etc.

(a)    The Borrower or a Subsidiary has good and defensible title to the
Acquisition
Properties and the Oil and Gas Properties evaluated in the most recently
delivered Reserve Report
(except any that have been sold or otherwise disposed of in accordance with
Section 9.12 since the
date of such Reserve Report) and each of the Borrower and each Subsidiary have
good title to all its
personal Properties that are necessary to permit the Borrower and the
Subsidiaries to conduct their
business in all material respects in the same manner as its business has been
conducted prior to the
date hereof, and in each case, free and clear of all Liens except Liens
permitted by Section 9.03. After
giving full effect to the Excepted Liens, the Borrower or the Subsidiary
specified as the owner owns
the net interests in production attributable to the Hydrocarbon Interests as
reflected in the most recently
delivered Reserve Report (except any that have been sold or otherwise disposed
of in accordance
with Section 9.12 since the date of such Reserve Report), and the ownership of
such Properties shall
not obligate the Borrower or such Subsidiary to bear the costs and expenses
relating to the
maintenance, development and operations of each such Property in an amount
materially in excess
of the working interest of each Property set forth in the most recently
delivered Reserve Report that is not offset by a corresponding proportionate
increase in the Borrower’s or such Subsidiary’s net revenue interest in such
Property; provided that the Borrower or any Subsidiary shall have the right to
bear costs disproportionate to the Borrower's or such Subsidiary's working
interest with respect to any Hydrocarbon Interest for a period of time in order
to earn an interest in such Hydrocarbon Interest from a third party as evidenced
by written agreement.

(b)    All material leases and agreements evaluated in the most recently
delivered Reserve
Report or that are necessary for the conduct of the business of the Borrower and
the Subsidiaries are
valid and subsisting, in full force and effect, and there exists no default or
event or circumstance
which with the giving of notice or the passage of time or both would give rise
to a default under any
such lease or leases.

(c)    The rights and Properties presently owned, leased or licensed by the
Borrower and
the Subsidiaries including, without limitation, all easements and rights of way,
include all material

49

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

rights and Properties necessary to permit the Borrower and the Subsidiaries to
conduct their business
in all material respects in the same manner as its business has been conducted
prior to the date hereof.

(d)    All of the Properties of the Borrower and the Subsidiaries which are
reasonably
necessary for the operation of their businesses are in good working condition
(normal wear and tear
excepted) and are maintained in accordance with prudent business standards.

(e)    The Borrower and each Subsidiary owns, or is licensed to use, all
trademarks,
tradenames, copyrights, patents and other intellectual Property material to its
business, and the use
thereof by the Borrower and such Subsidiary does not infringe upon the rights of
any other Person,
except for any such infringements that, individually or in the aggregate, could
not reasonably be
expected to result in a Material Adverse Effect. The Borrower and its
Subsidiaries either own or have
valid licenses or other rights to use all databases, geological data,
geophysical data, engineering data,
seismic data, maps, interpretations and other technical information used in
their businesses as
presently conducted, subject to the limitations contained in the agreements
governing the use of the
same, which limitations are customary for companies engaged in the business of
the exploration and
production of Hydrocarbons, with such exceptions as could not reasonably be
expected to have a
Material Adverse Effect.

Section 7.17.    Maintenance of Properties. Except for such acts or failures to
act as could not be reasonably expected to have a Material Adverse Effect, the
Oil and Gas Properties (and Properties unitized therewith) of the Borrower and
its Subsidiaries have been maintained, operated and developed in a good and
workmanlike manner and in conformity with all Governmental Requirements and in
conformity with the provisions of all leases, subleases or other contracts
comprising a part of the Hydrocarbon Interests and other contracts and
agreements forming a part of the Oil and Gas Properties of the Borrower and its
Subsidiaries. Specifically in connection with the foregoing, except for those as
could not be reasonably expected to have a Material Adverse Effect, (i) no Oil
and Gas Property of the Borrower or any Subsidiary is subject to having
allowable production 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) and (ii) none of the wells comprising a part
of the Oil and Gas Properties (or Properties unitized therewith) of the Borrower
or any Subsidiary is deviated from the vertical more than the maximum permitted
by Governmental Requirements, and such wells are, in fact, bottomed under and
are producing from, and the well bores are wholly within, the Oil and Gas
Properties (or in the case of wells located on Properties unitized therewith,
such unitized Properties) of the Borrower or such Subsidiary. All pipelines,
wells, gas processing plants, platforms and other material improvements,
fixtures and equipment owned in whole or in part by the Borrower or any of its
Subsidiaries that are necessary to conduct normal operations are being
maintained in a state adequate to conduct normal operations, and with respect to
such of the foregoing which are operated by the Borrower or any of its
Subsidiaries, in a manner consistent with the Borrower’s or its Subsidiaries’
past practices (other than those the failure of which to maintain in accordance
with this Section 7.17 could not reasonably be expected to have a Material
Adverse Effect).

Section 7.18.    Gas Imbalances, Prepayments. Except as set forth on Schedule
7.18 or on the most recent certificate delivered pursuant to Section 8.01(i), on
a net basis there are no gas imbalances, take or pay or other prepayments which
would require the Borrower or any of its Subsidiaries to deliver Hydrocarbons
produced from their Oil and Gas Properties at some future time without then or
thereafter receiving full payment therefor exceeding $500,000 in the aggregate.

Section 7.19.    Marketing of Production. Except for contracts listed and in
effect on the date hereof on Schedule 7.19 (with respect to all of which
contracts the Borrower represents that it or its Subsidiaries

50

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

are receiving a price for all production sold thereunder which is computed
substantially in accordance with the terms of the relevant contract as in effect
on the date of such disclosure and are not having deliveries curtailed
substantially below the subject Property’s delivery capacity), no material
agreements exist which are not cancelable on 120 days’ notice or less without
penalty or detriment for the sale of production from the Borrower’s or its
Subsidiaries’ Hydrocarbons (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 from the date
hereof.
    
Section 7.20.    Swap Agreements. Schedule 7.20, as of the date hereof, and each
report required to be delivered by the Borrower pursuant to Section 8.01(e), as
of the date of such report, sets forth, a true and complete list of all Swap
Agreements of the Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net mark to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied) and the
counterparty to each such agreement.

Section 7.21.    Use of Loans . The proceeds of the Loans shall be used solely
(a) to refinance Debt under the Existing Credit Agreement in an amount not to
exceed $75,000,000, (b) to fund cash consideration for the Acquisition in an
amount not to exceed $60,000,000, (c) to pay costs, fees and expenses in
connection with this Agreement and the other Loan Documents, and (d) for general
corporate purposes. The Borrower and its Subsidiaries are not engaged
principally, or as one of its or their important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying margin stock (within the meaning of Regulation T, U or X of
the Board). No part of the proceeds of any Loan will be used for any purpose
which violates the provisions of Regulations T, U or X of the Board.

Section 7.22.    Solvency. After giving effect to the transactions contemplated
hereby, (a) the aggregate assets (after giving effect to amounts that could
reasonably be received by reason of indemnity, offset, insurance or any similar
arrangement), at a fair valuation, of the Borrower and the Guarantors, taken as
a whole, will exceed the aggregate Debt of the Borrower and the Guarantors on a
consolidated basis, as the Debt becomes absolute and matures, (b) each of the
Borrower and the Guarantors will not have incurred or intended to incur, and
will not believe that it will incur, Debt beyond its ability to pay such Debt
(after taking into account the timing and amounts of cash to be received by each
of the Borrower and the Guarantors and the amounts to be payable on or in
respect of its liabilities, and giving effect to amounts that could reasonably
be received by reason of indemnity, offset, insurance or any similar
arrangement) as such Debt becomes absolute and matures and (c) each of the
Borrower and the Guarantors will not have (and will have no reason to believe
that it will have thereafter) unreasonably small capital for the conduct of its
business.

Section 7.23.    Acquisition Documents. The copies of the Acquisition Documents
and Gunsight Acquisition Documents previously delivered by the Borrower to the
Administrative Agent are true, accurate and complete and have not been amended
or modified in any manner, other than pursuant to amendments or modifications
previously delivered to the Administrative Agent. No party to any Acquisition
Document or Gunsight Acquisition Document is in default in respect of any
material term or obligation thereunder.

Section 7.24.    Foreign Corrupt Practices. Neither the Borrower nor any of its
Subsidiaries, nor any director, officer, agent, employee or Affiliate of the
Borrower or any of its Subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a material violation by such
Persons of the Foreign Corrupt Practices Act (the “FCPA”), including without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the

51

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

giving of anything of value to any “foreign official” (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate
for foreign political office, in contravention of the FCPA; and, the Borrower,
its Subsidiaries and its and their Affiliates have conducted their business in
material compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

Section 7.25.    Money Laundering. The operations of the Borrower and its
Subsidiaries are and have been conducted at all times in material compliance
with applicable financial recordkeeping, reporting and other requirements of the
Money Laundering Laws, and no action, suit or proceeding by or before any court
or governmental agency, authority or body or any arbitrator involving the
Borrower or any of its Subsidiaries with respect to the Money Laundering Laws is
pending or, to the best knowledge of the Borrower, threatened.

Section 7.26.    OFAC. Neither the Borrower nor any of its Subsidiaries, nor any
director, officer, agent, employee or Affiliate of the Borrower or any of its
Subsidiaries is currently subject to any material U.S. sanctions administered by
Office of Foreign Asset Control (“OFAC”), and the Borrower will not directly or
indirectly use the proceeds from the Loans or lend, contribute or otherwise make
available such proceeds to any Subsidiary, joint venture partner or other
Person, for the purpose of financing the activities of any Person currently
subject to any U.S. sanctions administered by OFAC.

Section 7.27.    Patriot Act. Each Loan Party is in compliance with all
applicable statutes, regulations and orders of (including any laws relating to
terrorism, money laundering, embargoed persons or the Patriot Act), and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including, without limitation, applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls).

Section 7.28.    Security Documents.

(a)    The Security Instruments, upon execution and delivery thereof by the
parties thereto,
will create in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, a legal,
valid and enforceable security interest in the collateral described therein and
the proceeds thereof and
(i) to the extent that any Pledged Securities (as defined in the Guarantee and
Collateral Agreement)
constitute “securities” under Article 8 of the New York UCC (as defined in the
Guarantee and
Collateral Agreement), when such Pledged Securities are delivered to the
Administrative Agent (or
to the First Lien Administrative Agent (as bailee for the Administrative
Agent)), the Lien created
under the Guarantee and Collateral Agreement shall constitute a perfected Lien
on, and security
interest in, all right, title and interest of the Loan Parties in such Pledged
Securities, and (ii) when
financing statements in appropriate form are recorded in the offices specified
on Schedule 3 of the
Guarantee and Collateral Agreement, the Lien created under the Security
Instruments will constitute
a perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such
collateral to the extent that such Lien can be perfected by the filing of a
financing statement, in each
case subject only to Specified Liens.

(b)    The Mortgages are effective to create in favor of the Administrative
Agent, for the
ratable benefit of the Secured Parties, a legal, valid and enforceable Lien on
all of the Loan Parties’
right, title and interest in and to the Mortgaged Property (as defined therein)
and the proceeds thereof,
and when the Mortgages are recorded in the appropriate filing offices, the
Mortgages shall constitute
a perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such
Mortgaged Property and the proceeds thereof, in each case prior and superior in
right to any other
Person, other than with respect to the rights of Persons pursuant to Specified
Liens.

52

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

Section 7.29.    Labor Matters. As of the Effective Date, there are no strikes,
lockouts or slowdowns against the Borrower or its Subsidiaries pending or, to
the knowledge of the Borrower or its Subsidiaries, threatened. The hours worked
by and payments made to employees of the Borrower and its Subsidiaries have not
been in material violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All
payments due from the Borrower and its Subsidiaries, or for which any claim may
be made against the Borrower or any of its Subsidiaries, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the Borrower and its Subsidiaries.

Section 7.30.    Brokerage Fees. No brokerage commission or finder’s fees has or
shall be incurred or payable in connection with or as a result of the Borrower’s
obtaining the financing contemplated hereby.

Section 7.31.    Material Contracts. Set forth on Schedule 7.31 is a complete
and correct list of all Material Contracts (other than the Loan Documents) in
effect or to be in effect as of the Effective Date. The Borrower has delivered
to Administrative Agent true and complete copies of each such Material Contract,
as each may have been amended. The Material Contracts are in full force and
effect in accordance with their respective terms, and except as set forth on
Schedule 7.31, there exist no defaults in the performance of any obligation
thereunder. Additionally, the Borrower is not aware of any event that with
notice or lapse of time, or both, would constitute a default under any such
Material Contracts.

ARTICLE VIII
AFFIRMATIVE COVENANTS
Until the Termination Date, the Borrower covenants and agrees with the Lenders
that:
Section 8.01.    Financial Statements; Other Information. The Borrower will
furnish to the Administrative Agent:

(a)    Annual Financial Statements. As soon as available, but in any event in
accordance
with then applicable law and not later than 90 days after the end of each fiscal
year of the Borrower,
its audited consolidated balance sheet and related statements of operations,
stockholders’ equity and
cash flows as of the end of and for such year, setting forth in each case in
comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
of recognized national
standing (without a “going concern” or like qualification or exception and
without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements
present fairly in all material respects the financial condition and results of
operations of the Borrower
and its Consolidated Subsidiaries on a consolidated basis in accordance with
GAAP consistently
applied.

(b)    Quarterly Financial Statements. As soon as available, but in any event in
accordance
with then applicable law and not later than 45 days after the end of each of the
first three fiscal quarters
of each fiscal year of the Borrower, its consolidated balance sheet and related
statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter
and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous
fiscal year, all certified by one of its Financial Officers as presenting fairly
in all material respects
the financial condition and results of operations of the Borrower and its
Consolidated Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end
audit adjustments and the absence of footnotes.

53

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

(c)    Certificate of Financial Officer -- Compliance. Concurrently with the
delivery of each
financial statement under Section 8.01(a) or Section 8.01(b), a certificate of a
Financial Officer in
substantially the form of Exhibit D hereto (i) certifying as to whether a
Default has occurred and, if
a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken
with respect thereto and (ii) setting forth reasonably detailed calculations
demonstrating compliance
with Section 8.20 and Section 9.01.

(d)    Certificate of Financial Officer -- Consolidating Information. If, at any
time, all of
the Consolidated Subsidiaries of the Borrower are not Consolidated Subsidiaries,
then concurrently
with any delivery of financial statements under Section 8.01(a) or Section
8.01(b), a certificate of a
Financial Officer setting forth consolidating spreadsheets that show all
subsidiaries that are not
Consolidated Subsidiaries and the eliminating entries, in such form as would be
presentable to the
auditors of the Borrower.

(e)    Certificate of Financial Officer - Swap Agreements. Concurrently with the
delivery
of each Reserve Report hereunder, a certificate of a Financial Officer, in form
and substance
satisfactory to the Administrative Agent, setting forth as of a recent date, a
true and complete list of
all Swap Agreements between the Borrower and each Subsidiary, the material terms
thereof (including
the type, term, effective date, termination date and notional amounts or
volumes), the net mark-to-
market value therefor, any new credit support agreements relating thereto not
listed on Schedule 7.20,
any margin required or supplied under any credit support document, and the
counterparty to each
such agreement.

(f)    Certificate of Insurer -- Insurance Coverage. Concurrently with any
delivery of
financial statements under Section 8.01(a), a certificate of insurance coverage
from each insurer with
respect to the insurance required by Section 8.07, in form and substance
reasonably satisfactory to
the Administrative Agent, and, if requested by the Administrative Agent, all
copies of the applicable
policies.

(g)    SEC and Other Filings; Reports to Shareholders. Promptly after the same
become
publicly available, copies of all periodic and other reports, proxy statements
and other materials (other
than filings under Section 16 of the Securities Exchange Act of 1934) filed by
the Borrower or any
Subsidiary with the SEC, or with any national securities exchange, or
distributed by the Borrower to
its shareholders generally, as the case may be.

(h)    Notices Under Material Instruments. Promptly after the furnishing
thereof, copies of
any financial statement, report or notice furnished to or by any Person pursuant
to the terms of the
First Lien Loan Documents (including any borrowing notices and prepayment
notices thereunder),
any preferred stock designation, indenture, loan or credit or other similar
agreement, other than this
Agreement and not otherwise required to be furnished to the Lenders pursuant to
any other provision
of this Section 8.01.

(i)    Lists of Purchasers. Concurrently with the delivery of any Reserve Report
to the
Administrative Agent pursuant to Section 8.12, (i) a list of all Persons
purchasing Hydrocarbons from
the Borrower or any Subsidiary and (ii) a certificate from a Responsible Officer
certifying that in all
material respects: (A) the information provided by the Borrower in connection
with the Reserve
Report and any other information delivered in connection therewith is true and
correct and any
projections based upon such information have been prepared in good faith based
upon assumptions

54

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

believed by the Borrower to be reasonable, subject to uncertainties inherent in
all projections, (B)
the Borrower or its Subsidiaries owns good and defensible title to the Oil and
Gas Properties evaluated
in such Reserve Report (except for any Oil and Gas Properties described in the
exhibit referred to in
clause (D) below) and such Properties are free of all Liens except for Liens
permitted by Section
9.03, (C) except as set forth on an exhibit to the certificate, on a net basis
there are no gas imbalances,
take or pay or other prepayments in excess of the volume specified in Section
7.18 with respect to
its Oil and Gas Properties evaluated in such Reserve Report which would require
the Borrower or
any Subsidiary to deliver Hydrocarbons either generally or produced from such
Oil and Gas Properties
at some future time without then or thereafter receiving full payment therefor,
(D) none of their Oil
and Gas Properties have been sold since the date of the last Reserve Report
except as set forth on an
exhibit to the certificate, which certificate shall list all of its Oil and Gas
Properties sold and in such
detail as reasonably required by the Administrative Agent, (E) attached to the
certificate is a list of
all marketing agreements entered into subsequent to the later of the date hereof
or the most recently
delivered Reserve Report which the Borrower could reasonably be expected to have
been obligated
to list on Schedule 7.19 had such agreement been in effect on the date hereof,
and (F) except as
disclosed in such certificate, all of the Oil and Gas Properties evaluated by
such Reserve Report are
Mortgaged Property.

(j)    Notice of Sales of Oil and Gas Properties. In the event the Borrower or
any Subsidiary
intends to Dispose of any Oil or Gas Properties or any Equity Interests in any
Subsidiary in accordance
with Section 9.12, in either case having a fair market value or involving
acquisition consideration
greater than $1,000,000 (whether in one transaction or a series of
transactions), prior written notice
of such Disposition, the price thereof and the anticipated date of closing and
any other details thereof
requested by the Administrative Agent or any Lender.

(k)    Notice of Casualty Events. Prompt written notice, and in any event within
three
Business Days, of the occurrence of any Casualty Event or the commencement of
any action or
proceeding that could reasonably be expected to result in a Casualty Event.

(l)    Permitted Refinancing Debt. In the event the Borrower intends to
refinance any Debt
under the First Lien Loan Documents in accordance with the Intercreditor
Agreement, prompt written
notice (and in any event within ten (10) days prior thereto) of such intended
refinancing, the amount
thereof and the anticipated date of closing and a copy of the preliminary
offering memorandum (if
any) and the final offering memorandum (if any).

(m)    Information Regarding the Borrower and Guarantors. Prompt written notice
(and in
any event within ten (10) days prior thereto) of any change (i) in the Borrower
or any Guarantor’s
corporate name, (ii) in the location of the Borrower or any Guarantor’s chief
executive office or
principal place of business, (iii) in the Borrower or any Guarantor’s identity
or corporate structure,
organization identification number, or in the jurisdiction in which such Person
is incorporated or
formed, and (iv) in the Borrower or any Guarantor’s federal taxpayer
identification number.

(n)    Production Report and Lease Operating Statements. Within 60 days after
the end of
each fiscal quarter, a report setting forth, for each calendar month during the
then current fiscal year
to date, the volume of production and sales attributable to production (and the
prices at which such
sales were made and the revenues derived from such sales) for each such calendar
month from the
Oil and Gas Properties, and setting forth the related ad valorem, severance and
production taxes and
lease operating expenses attributable thereto and incurred for each such
calendar month.

55

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

        
(o)    Notices of Certain Changes. Promptly, but in any event within five (5)
Business Days
after the execution thereof, copies of any amendment, modification or supplement
to the certificate
or articles of incorporation, by-laws, any preferred stock designation or any
other organic document
of the Borrower or any Subsidiary.

(p)    Annual Operating Forecast and Budget. As soon as practicable and in any
event within
sixty (60) days after the end of each fiscal year, an operating forecast and
budget of the Borrower
and its Subsidiaries, in form and substance reasonably satisfactory to the
Administrative Agent, for
the ensuing four (4) fiscal quarters.

(q)    Notices Relating to Acquisition. In the event that after the Effective
Date: (i) the
Borrower is required or elects to purchase any of the Acquisition Properties
which had been excluded
from, or return any of the Acquisition Properties which had been included in,
the Acquisition Properties
in accordance with the terms of the Acquisition Documents, (ii) the Borrower is
required to honor
any preferential purchase right in respect of any Acquisition Property which has
not been waived,
(iii) any matter being disputed in accordance with the terms of the Acquisition
Documents is resolved,
(iv) the Borrower and the seller(s) calculate and agree upon the “closing
adjustment statement” or
“post-closing adjustment statement” as contemplated by the Acquisition
Documents, or (v) there is
any material delay in the proposed acquisition of the Acquired Equity beyond
July 31, 2014, then, in
each such case, the Borrower shall promptly give the Administrative Agent notice
in reasonable detail
of such circumstances. The Borrower shall give the Administrative Agent prompt
written notice
(but in any event within three (3) Business Days) of its receipt of confirmation
that the Alaska
Department of Natural Resources has approved the transfer of the Acquisition
Properties (other than
the Acquired Equity) to CIE pursuant to the Acquisition Documents.

(r)    Other Requested Information. Promptly following any request therefor,
such other
information regarding the operations, business affairs and financial condition
of the Borrower or any
Subsidiary (including, without limitation, (i) any Plan and any reports or other
information required
to be filed with respect thereto under the Code or under ERISA, (ii) regular
production and operating
updates, and (iii) the other certificates, statements or other reports required
to be delivered pursuant
to this Article VIII), or compliance with the terms of this Agreement or any
other Loan Document,
as the Administrative Agent or any Lender may reasonably request.

Section 8.02.    Notices of Material Events. The Borrower will furnish to the
Administrative Agent prompt written notice of the following:

(a)    the occurrence of any Default;

(b)    the filing or commencement of, or the threat in writing of, any action,
suit, proceeding,
investigation or arbitration by or before any arbitrator or Governmental
Authority against or affecting
the Borrower or any Affiliate thereof not previously disclosed in writing to the
Lenders or any material
adverse development in any action, suit, proceeding, investigation or
arbitration (whether or not
previously disclosed to the Lenders) that, in either case, if adversely
determined, could reasonably
be expected to result in a Material Adverse Effect; and

(c)    any notice or occurrence of any “default” or “event of default” under the
First Lien
Loan Documents; and

56

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

(d)    any other development that results in, or could reasonably be expected to
result in, a Material Adverse Effect.

Each notice delivered under this Section 8.02 shall be accompanied by a
statement of a Responsible Officer setting forth in reasonable details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
Section 8.03.    Existence; Conduct of Business. The Borrower will, and will
cause each Subsidiary to, do or cause to be done all things necessary to (i)
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business and (ii) maintain its qualification to do business in each other
jurisdiction in which its Oil and Gas Properties are located or the ownership of
its Properties requires such qualification, except where the failure to so
qualify could not reasonably be expected to have a Material Adverse Effect;
provided that the foregoing shall not prohibit any merger, consolidation,
liquidation, dissolution, sale or other disposition permitted under Section
9.11.

Section 8.04.    Payment of Obligations. The Borrower will, and will cause each
Subsidiary to, pay its obligations, including Tax liabilities of the Borrower
and all of its Subsidiaries before the same shall become delinquent or in
default, except where (a) the validity or amount thereof is being contested in
good faith by appropriate proceedings and the Borrower or such Subsidiary has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and (b) the failure to make payment could not reasonably be expected to
result in a Material Adverse Effect or result in the seizure or levy of any
material Property of the Borrower or any Subsidiary.

Section 8.05.    Performance of Obligations under Loan Documents and Material
Contracts. The Borrower will pay the Notes according to the terms thereof, and
the Borrower will, and will cause each Subsidiary to, do and perform every act
and discharge all of the obligations to be performed and discharged by them
under the Loan Documents, including, without limitation, this Agreement, at the
time or times and in the manner specified therein. The Borrower will comply in
all material respects with the Material Contracts and all other contracts and
agreements applicable to or relating to the Proved Reserves or the production
and sale of Hydrocarbons and accompanying elements therefrom.

Section 8.06.    Operation and Maintenance of Properties. The Borrower, at its
own expense, will, and will cause each Subsidiary to:

(a)    operate its Oil and Gas Properties and other material Properties or cause
such Oil and
Gas Properties and other material Properties to be operated in a careful and
efficient manner in
accordance with the practices of the industry and in compliance with all
applicable contracts and
agreements and in compliance with all Governmental Requirements, including,
without limitation,
applicable pro ration requirements and Environmental Laws, and all applicable
laws, rules and
regulations of every other Governmental Authority from time to time constituted
to regulate the
development and operation of its Oil and Gas Properties and the production and
sale of Hydrocarbons
and other minerals therefrom, except, in each case, where the failure to comply
could not reasonably
be expected to have a Material Adverse Effect.

(b)    preserve, maintain and keep in good repair, working order and efficiency
(ordinary
wear and tear excepted) all of its material Oil and Gas Properties and other
material Properties,
including, without limitation, all equipment, machinery and facilities.

57

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

(c)    promptly pay and discharge, or make reasonable and customary efforts to
cause to be
paid and discharged, all delay rentals, royalties, expenses and obligations
accruing under the leases
or other agreements affecting or pertaining to its material Oil and Gas
Properties and will do all other
things necessary to keep unimpaired their rights with respect thereto and
prevent any forfeiture thereof
or default thereunder.

(d)    promptly perform or make reasonable and customary efforts to cause to be
performed,
in accordance with industry standards, the obligations required by each and all
of the assignments,
deeds, leases, sub-leases, contracts and agreements affecting its interests in
its material Oil and Gas
Properties.

(e)    to the extent the Borrower is not the operator of any Property, the
Borrower shall use
commercially reasonable efforts to cause the operator to comply with this
Section 8.06, but the failure
of the operator to so comply will not constitute a Default or Event of Default
hereunder.

Section 8.07.    Insurance.

(a)    The Borrower will, and will cause each Subsidiary to, maintain, with
financially sound
and reputable insurance companies, insurance in such amounts and against such
risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the
same or similar locations. Such insurance policy or policies shall name the
Administrative Agent as
an additional insured in respect of any such liability insurance policies and as
loss payee with respect
to any such Property loss insurance policies and provide that the insurer will
endeavor to give at least
30 days prior notice of any cancellation to the Administrative Agent. All such
policies of insurance
shall include a waiver of subrogation. Upon the Administrative Agent’s request,
the Borrower shall
deliver to the Administrative Agent certified copies of such policies of
insurance and evidence of the
payment of all premiums therefor.

(b)    If at any time any real property covered by a Mortgage on which a
“building” or
“mobile home” (in each case, as such terms are defined for purposes of the
National Flood Insurance
Program) is located is designated a “flood hazard area” in any Flood Insurance
Rate Map published
by the Federal Emergency Management Agency (or any successor agency), the
Borrower shall, and
shall cause each of its Subsidiaries to, (i) obtain flood insurance in such
total amount as required by
Regulation H of the Federal Reserve Board, as from time to time in effect and
all official rulings and
interpretations thereunder or thereof, and otherwise comply with the National
Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973, as it may be
amended from time
to time and (ii) provide evidence in form and substance satisfactory to the
Administrative Agent of
such flood insurance to the Administrative Agent.

Section 8.08.    Books and Records; Inspection Rights. The Borrower will, and
will cause each Subsidiary to, keep proper books of record and account in which
full, true and correct entries are made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender (coordinated through the Administrative Agent), upon reasonable
prior notice, to visit and inspect its Properties, to examine and make extracts
from its books and records, and to discuss its affairs, finances and condition
with its officers and independent accountants, all at such reasonable times and
as often as reasonably requested. The Borrower shall bear the cost of not more
than one (1) such inspection and examination during any 12-month period unless a
Default or Event of Default then exists, in which event the Borrower shall bear
such cost.

58

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

Section 8.09.    Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its Property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

Section 8.10.    Environmental Matters.

(a)    The Borrower shall at its sole expense: (i) comply, and shall cause its
Properties and
operations and each Subsidiary and each Subsidiary’s Properties and operations
to comply, with all
applicable Environmental Laws, the breach of which could be reasonably expected
to have a Material
Adverse Effect; (ii) not Release or threaten to Release, and shall cause each
Subsidiary not to Release
or threaten to Release, any Hazardous Material on, under, about or from any of
the Borrower’s or its
Subsidiaries’ Properties or any other property offsite the Property to the
extent caused by the
Borrower’s or any of its Subsidiaries’ operations except in compliance with
applicable Environmental
Laws, the Release or threatened Release of which could reasonably be expected to
have a Material
Adverse Effect; (iii) timely obtain or file, and shall cause each Subsidiary to
timely obtain or file, all
Environmental Permits, if any, required under applicable Environmental Laws to
be obtained or filed
in connection with the operation or use of the Borrower’s or its Subsidiaries’
Properties, which failure
to obtain or file could reasonably be expected to have a Material Adverse
Effect; (iv) promptly
commence and diligently prosecute to completion, and shall cause each Subsidiary
to promptly
commence and diligently prosecute to completion, any assessment, evaluation,
investigation,
monitoring, containment, cleanup, removal, repair, restoration, remediation or
other remedial
obligations (collectively, the “Remedial Work”) in the event any Remedial Work
is required or
reasonably necessary under applicable Environmental Laws because of or in
connection with the
actual or suspected past, present or future Release or threatened Release of any
Hazardous Material
on, under, about or from any of the Borrower’s or its Subsidiaries’ Properties,
which failure to
commence and diligently prosecute to completion could reasonably be expected to
have a Material
Adverse Effect; (v) conduct, and cause its Subsidiaries to conduct, their
respective operations and
businesses in a manner that will not expose any Property or Person to Hazardous
Materials that could
reasonably be expected to form the basis for a claim for damages or compensation
that could
reasonably be expected to have a Material Adverse Effect; and (vi) implement,
and shall cause each
Subsidiary to implement, such procedures as may be necessary to assure that the
Borrower’s and its
Subsidiaries’ obligations under this Section 8.10(a) are timely and fully
satisfied, which failure to
establish and implement could reasonably be expected to have a Material Adverse
Effect.

(b)    The Borrower will promptly, but in no event later than five days of the
occurrence
thereof, notify the Administrative Agent and the Lenders in writing of any
threatened action,
investigation or inquiry by any Governmental Authority or any threatened demand
or lawsuit by any
Person against the Borrower or its Subsidiaries or their Properties of which the
Borrower has
knowledge in connection with any Environmental Laws if the Borrower could
reasonably anticipate
that such action will result in liability (whether individually or in the
aggregate) in excess of $500,000,
not fully covered by insurance, subject to normal deductibles.

(c)    The Borrower will, and will cause each Subsidiary to, provide
environmental
assessments, audits and tests in accordance with the most current version of the
American Society of
Testing Materials standards upon request by the Administrative Agent and the
Lenders and no more
than once per year in the absence of any Event of Default (or as otherwise
required to be obtained
by the Administrative Agent or the Lenders by any Governmental Authority), in
connection with the
Borrower’s and its Subsidiaries’ existing and hereafter acquired Oil and Gas
Properties or other

59

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

Properties.

(d)    To the extent the Borrower or a Subsidiary is not the operator of any
Property, none
of the Borrower and its Subsidiaries shall be obligated to directly perform any
undertakings
contemplated by the covenants and agreements contained in this Section 8.10
which are performable
only by such operators and are beyond the control of the Borrower or any of its
Subsidiaries.
Notwithstanding the above, the Borrower shall, and shall cause its Subsidiaries
to, use commercially
reasonable efforts to cause the operator to comply with this Section 8.10.

Section 8.11.    Further Assurances.

(a)    The Borrower at its sole expense will, and will cause each Subsidiary to,
promptly
execute and deliver to the Administrative Agent all such other documents,
agreements and instruments
reasonably requested by the Administrative Agent to comply with, cure any
defects or accomplish
the conditions precedent, covenants and agreements of the Borrower or any
Subsidiary, as the case
may be, in the Loan Documents, including the Notes, or to further evidence and
more fully describe
the collateral intended as security for the Secured Obligations, or to correct
any omissions in this
Agreement or the Security Instruments, or to state more fully the obligations
secured therein, or to
perfect, protect or preserve any Liens created pursuant to this Agreement or any
of the Security
Instruments or the priority thereof, or to make any recordings, file any notices
or obtain any consents,
all as may be reasonably necessary or appropriate, in the sole discretion of the
Administrative Agent,
in connection therewith.

(b)    The Borrower hereby authorizes the Administrative Agent to file one or
more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Mortgaged
Property or other Property subject to the Security Instruments without the
signature of the Borrower
or any other Guarantor where permitted by law. A carbon, photographic or other
reproduction of the
Security Instruments or any financing statement covering the Mortgaged Property
or other Property
subject to the Security Instruments or any part thereof shall be sufficient as a
financing statement
where permitted by law.

Section 8.12.    Reserve Reports.

(a)    On or before July 1st and January 1st of each year, commencing July 1,
2014, the
Borrower shall furnish to the Administrative Agent and the Lenders a Reserve
Report evaluating the
Oil and Gas Properties of the Borrower and its Subsidiaries as of the
immediately preceding May 1st
and November 1st. The Reserve Report as of January 1 of each year shall be
prepared by one or
more Approved Petroleum Engineers, and the July 1 Reserve Report of each year
shall be prepared
either (i) by one or more Approved Petroleum Engineers or (ii) by or under the
supervision of the
chief engineer of the Borrower who shall certify such Reserve Report to be true
and accurate and to
have been prepared in accordance with the procedures used in the immediately
preceding January 1
Reserve Report.

(b)    The Borrower shall also deliver to the Administrative Agent any other
Reserve Report
delivered to the First Lien Administrative Agent under the First Lien Credit
Agreement, together with
all other reports and information provided to the First Lien Administrative
Agent and/or the First Lien
Lenders in connection with any Reserve Report.

Section 8.13.    Title Information.

60

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

(a)    On or before the delivery to the Administrative Agent and the Lenders of
each Reserve
Report required by Section 8.12(a), the Borrower will deliver title information
in form and substance
acceptable to the Administrative Agent covering enough of the Oil and Gas
Properties evaluated by
such Reserve Report that were not included in the immediately preceding Reserve
Report, so that
the Administrative Agent shall have received together with title information
previously delivered to
the Administrative Agent, satisfactory title information on at least 80% of the
total value of the Oil
and Gas Properties evaluated by such Reserve Report.

(b)    If the Borrower has provided title information for additional Properties
under Section
8.13(a), the Borrower shall, within 60 days (or such later date as the
Administrative Agent may agree
in its sole discretion) of notice from the Administrative Agent that title
defects or exceptions exist
with respect to such additional Properties, either (i) cure any such title
defects or exceptions (including
defects or exceptions as to priority) which are not permitted by Section 9.03
raised by such information,
(ii) substitute acceptable Mortgaged Properties with no title defects or
exceptions except for Specified
Liens having an equivalent value or (iii) deliver title information in form and
substance acceptable
to the Administrative Agent so that the Administrative Agent shall have
received, together with title
information previously delivered to the Administrative Agent, satisfactory title
information on at least
80% of the value of the Oil and Gas Properties evaluated by such Reserve Report.

Section 8.14.    Additional Collateral; Additional Guarantors.

(a)    In connection with each redetermination of the Borrowing Base or delivery
of a
Reserve Report hereunder, the Borrower shall review such Reserve Report and the
list of current
Mortgaged Properties (as described in Section 8.01(i)(F)) to ascertain whether
the Mortgaged
Properties represent at least 80% of the total value of the Oil and Gas
Properties evaluated in the most
recently completed Reserve Report after giving effect to exploration and
production activities,
acquisitions, dispositions and production. In the event that the Mortgaged
Properties do not represent
at least 80% of such total value, then the Borrower shall, and shall cause its
Subsidiaries to, grant,
within thirty (30) days of delivery of the certificate required under Section
8.01(i), to the
Administrative Agent as security for the Secured Obligations a first-priority
Lien interest (provided
that Specified Liens may exist) on additional Oil and Gas Properties not already
subject to a Lien of
the Security Instruments such that after giving effect thereto, the Mortgaged
Properties will represent
not less than the minimum set forth above. All such Liens will be created and
perfected by and in
accordance with the provisions of deeds of trust, security agreements and
financing statements or
other Security Instruments, all in form and substance reasonably satisfactory to
the Administrative
Agent and in sufficient executed (and acknowledged where necessary or
appropriate) counterparts
for recording purposes. In order to comply with the foregoing, if any Subsidiary
places a Lien on its
Oil and Gas Properties and such Subsidiary is not a Guarantor, then it shall
become a Guarantor and
comply with Section 8.14(b).

(b)    In the event that the Borrower creates or acquires any Domestic
Subsidiary, the
Borrower shall promptly cause such Subsidiary to become a party to the Guarantee
and Collateral
Agreement. In connection therewith, the Borrower shall, or shall cause such
Subsidiary to, (A)
execute and deliver a supplement to the Guarantee and Collateral Agreement, (B)
pledge all of the
Equity Interests of such new Subsidiary (including, without limitation, delivery
of original stock
certificates evidencing the Equity Interests of such Subsidiary, together with
an appropriate undated
stock powers for each certificate duly executed in blank by the registered owner
thereof, to the
Administrative Agent (or to the First Lien Administrative Agent (as bailee for
the Administrative

61

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

Agent)) and (C) execute and deliver such other additional closing documents,
certificates and legal
opinions as shall reasonably be requested by the Administrative Agent.

(c)    At any time during the continuation of an Event of Default, if required
by the
Administrative Agent, the Borrower shall, and shall cause each of its
Subsidiaries to grant to the
Administrative Agent a Lien to secure the Secured Obligations on all other Oil
and Gas Properties,
except those assets as to which the Administrative Agent shall determine in its
reasonable discretion
that the cost of obtaining a Lien or other security interest therein is
excessive in relation to the value
of the security to be afforded thereby.

(d)    The Borrower agrees that it will not, and will not permit any Subsidiary
to, grant a
Lien on any Property to secure the First Lien Secured Obligations without first
(i) giving fifteen (15)
days’ prior written notice to the Administrative Agent thereof and (ii) granting
to the Administrative
Agent to secure the Secured Obligations a second-priority, perfected Lien
(subject to Specified Liens)
on the same Property pursuant to Security Instruments in form and substance
reasonably satisfactory
to the Administrative Agent. In connection therewith, the Borrower shall, or
shall cause its
Subsidiaries to, execute and deliver such other additional closing documents,
certificates and legal
opinions as shall reasonably be requested by the Administrative Agent.

(e)    The Borrower will at all times cause the other material tangible and
intangible assets
of the Borrower and each Subsidiary to be subject to a Lien of the Security
Instruments.

Section 8.15.    ERISA Compliance. The Borrower will promptly furnish and will
cause the Subsidiaries and any ERISA Affiliate to promptly furnish to the
Administrative Agent immediately upon becoming aware of the occurrence of any
non-exempt “prohibited transaction,” as described in section 406 of ERISA or in
section 4975 of the Code, in connection with any Plan or any trust created
thereunder, a written notice signed by the President or the principal Financial
Officer of the Borrower, the Subsidiary or the ERISA Affiliate, as the case may
be, specifying the nature thereof, what action the Borrower, the Subsidiary or
the ERISA Affiliate is taking or proposes to take with respect thereto, and,
when known, any action taken or proposed by the Internal Revenue Service or the
Department of Labor with respect thereto.

Section 8.16.    Post-Closing Covenants.

(a)    On or prior to the date that is 60 days after the Effective Date (or such
later date that
is approved by the Administrative Agent in its sole discretion), the Borrower
and the other Loan
Parties shall enter into and deliver to the Administrative Agent a Deposit
Account Control Agreement
with each bank at which any Loan Party maintains any Collections Account, which
agreement shall
provide for a perfected Lien in such Collections Account in favor of the
Administrative Agent for the
benefit of the Secured Parties (subject in priority only to (i) Liens described
in clause (e) of the
definition of “Excepted Liens” and (ii) Liens permitted by Section 9.03(e)).
Subject to the foregoing,
the Borrower shall, and shall cause each of its Subsidiaries to, (x) cause all
proceeds from the sales
of Hydrocarbons by the Loan Parties to be deposited into a Collections Account
that is subject to a
Deposit Account Control Agreement, and (y) direct the State of Alaska to make
any payment in respect
of any tax credit certificate, or right or interest therein, or any right to or
interest in any payment from
the Oil and Gas Tax Credit Fund, held by such Person by virtue of Alaska’s Oil &
Gas Production
Tax Credit program, directly to an account of the Borrower or such Subsidiary
that is subject to a
Deposit Account Control Agreement.

(b)    On or prior to the date that is 30 days after the Effective Date (or such
later date that

62

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

is approved by the Administrative Agent in its sole discretion), the Borrower
shall deliver to the
Administrative Agent, in form and substance reasonably satisfactory to the
Administrative Agent, (i)
lien searches with respect to the Aircraft as of a recent date and (ii) evidence
that the Administrative
Agent has a first-priority perfected Lien (subject only to Specified Liens) in
the Aircraft that secures
the Secured Obligations.

(c)    On or prior to the date that is 30 days after the Effective Date (or such
later date that
is approved by the Administrative Agent in its sole discretion), the Borrower
shall deliver to the
Administrative Agent (i) ALTA mortgagee title insurance policies subject only to
encumbrances
acceptable to the Administrative Agent and issued by one or more title companies
designated by the
Administrative Agent (each, a “Title Policy”) with respect to the Loan Parties’
Kustatan production
facilities, in amounts not less than the fair market value of such production
facilities, together with
a title report issued by a title company with respect thereto and copies of all
recorded documents
listed as exceptions to title or otherwise referred to therein, each in form and
substance reasonably
satisfactory to the Administrative Agent (such Title Policies to be in a form
insuring the applicable
Mortgage as a first-priority Lien, encumbering the applicable portion of the
Kustatan production
facilities, subject to no Liens or encumbrances other than Specified Liens);
(ii) evidence reasonably
satisfactory to the Administrative Agent that the Loan Parties have paid to the
title company or to the
appropriate Governmental Authorities all expenses and premiums of the title
company and all other
sums required in connection with the issuance of each Title Policy and all
recording and stamp taxes
(including mortgage recording and intangible taxes) payable in connection with
recording the
Mortgage for such production facilities in the appropriate real estate records;
and (iii) all consents
and other requirements necessary for the Loan Parties to comply with the
provisions set forth in this
Section 8.16(c).

(d)    The Borrower shall, and to the extent applicable, cause each of the other
Loan Parties
to, deliver to the Administrative Agent, on or before the applicable date set
forth in therein (or such
later date that is approved by the Administrative Agent in its sole discretion),
all items required by Schedule 8.16 in form and substance reasonably
satisfactory to the Administrative Agent.

Section 8.17.    Hedging Maintenance.

(a)    The Loan Parties shall maintain in effect at all times on a continuous
basis one or more
Swap Agreements satisfactory to Administrative Agent with respect to their oil
production with an
Approved Counterparty, which Swap Agreements taken together shall at all times
cover not less than
80% or more than 100% of the volume of oil of such Proved Developed Producing
Reserves projected
in the most recent Reserve Report to be produced during a rolling 24-month
period.

(b)    The Borrower shall use such Swap Agreements solely as a part of its
normal business
operations as a risk management strategy and/or hedge against changes resulting
from market
conditions related to the Borrower’s and its Subsidiaries’ oil and gas
operations and not as a means
to speculate for investment purposes on trends and shifts in financial or
commodities markets.

(c)    The Borrower shall notify the Administrative Agent immediately upon
becoming
aware (in any event not later than the close of business on the same Business
Day) that the production
of Hydrocarbons by any Loan Party could reasonably be expected to be
insufficient to meet its
obligations under any Swap Agreements.

63

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

Section 8.18.    Board Observation Rights. So long as Apollo or any of its
Affiliates holds at least $25,000,000 of the outstanding Loans and/or
Commitments, Apollo shall have the right to designate one individual (the
“Observer”) to attend all meetings of the Borrower’s Board of Directors (and any
committees thereof) in a non-voting observer capacity. The Observer shall be
entitled to receive all notices of meetings, reports, presentations and
materials as if the Observer were a member of the Board. The Borrower shall
reimburse the Observer for all reasonable travel and other out-of-pocket
expenses incurred in connection with meetings of its Board of Directors and
committees thereof in a manner consistent with its reimbursement policies for
members of its Board of Directors. The Borrower will hold regular and customary
meetings of its Board of Directors. Apollo may, in its sole discretion, transfer
its right to designate an Observer pursuant to this Section 8.18 to any Eligible
Assignee that assumes any of Apollo’s or its Affiliates’ rights and obligations
hereunder in accordance with Section 12.04 so long as such Eligible Assignee or
any of its Affiliates holds at least $25,000,000 of the outstanding Loans and/or
Commitments.

Section 8.19.    Appraisal. On or before each anniversary of the Effective Date
thereafter, or such earlier date as the Administrative Agent shall reasonably
request, the Borrower shall provide to Administrative Agent an updated appraisal
of all hard assets of the Borrower and its Subsidiaries, in form and substance
satisfactory to the Administrative Agent, from Hadco International Inc. or
another appraiser selected by the Borrower and reasonably acceptable to the
Administrative Agent.

Section 8.20.    Minimum Liquidity. The Borrower shall at all times maintain
Liquidity equal to or greater than $5,000,000.

ARTICLE IX
NEGATIVE COVENANTS

Until the Termination Date, the Borrower covenants and agrees with the Lenders
that:
Section 9.01.    Financial Covenants.
   
(a)    Leverage Ratio. The Borrower will not, as of the last day of any fiscal
quarter set
forth below, permit its Leverage Ratio to be greater than:
Date
Ratio
Fiscal quarter ending April 30, 2014
4.00:1.00
Fiscal quarter ending July 31, 2014
3.75:1.00
Fiscal quarter ending October 31, 2014 and the last day of each quarter ending
thereafter
3.50:1.00

(b)    Interest Coverage Ratio. The Borrower will not permit, as of the last day
of any fiscal
quarter, commencing with the fiscal quarter ending April 30, 2014, its ratio of
EBITDAX for the
period of four fiscal quarters ending on such date to Interest Expense for such
period to be less than
2.5 to 1.0.

(c)    Current Ratio. The Borrower will not permit, as of the last day of any
fiscal quarter,
commencing with the fiscal quarter ending April 30, 2014, its ratio of (i)
consolidated current assets
(including the unused amount of the total Commitments, but excluding non-cash
assets under ASC
815 and current plugging and abandonment restricted cash) to (ii) consolidated
current liabilities
(excluding non-cash obligations under ASC 815, current liabilities for plugging
and abandonment

64

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

expense and current maturities under this Agreement) to be less than 1.0 to 1.0.

(d)    Minimum Gross Production. The Borrower will not permit, as of the last
day of any
fiscal quarter, commencing with the fiscal quarter ending April 30, 2014, the
daily average of gross
production of Hydrocarbons (calculated at the wellhead on a barrel of oil
equivalent basis, where 10
Mcf of natural gas is equal to one barrel of oil) from the Loan Parties’ Oil and
Gas Properties
constituting Mortgaged Property during each such fiscal quarter, to be less than
2,500.

(e)    Asset Coverage Ratio. The Borrower will not permit, as of any Asset
Coverage Test
Date, the ratio of (a) the NYMEX Value of the total Proved Developed Reserves of
the Loan Parties
as shown on the most recently delivered Reserve Report, to (b) Total Debt, to be
less than 1.10 to
1.00.

For purposes of this Section 9.01(e) only, “Proved Developed Reserves” shall be
determined in accordance with SEC guidelines, with the following exceptions: (i)
commodity prices shall be forecast according to a “Strip Price,” adjusted for
any basis differential and any existing commodity hedges for forecasting oil and
gas prices; (ii) current operating expenses will be held constant; and (iii)
such expenses must include an accurate estimate of net abandonment costs. As
used herein, “Strip Price” shall mean the equivalent futures price as quoted by
the NYMEX for three years and held constant thereafter.
Section 9.02.    Debt. The Borrower will not, and will not permit any Subsidiary
or Miller 2009 Partnership to, incur, create, assume or suffer to exist any
Debt, except:

(a)    the Notes and other Secured Obligations and any Permitted Refinancing
Debt in respect
thereof.

(b)    Debt of the Borrower and its Subsidiaries existing on the date hereof
that is set forth
on Schedule 9.02, and any Permitted Refinancing Debt in respect thereof.

(c)    Purchase money Debt and Debt under Capital Leases not to exceed
$5,000,000 in the
aggregate at any time outstanding.

(d)    Debt associated with bonds or surety obligations required by Governmental
Requirements in connection with the operation of the Oil and Gas Properties in
an aggregate amount
not to exceed $10,000,000 at any time outstanding.

(e)    intercompany Debt among the Loan Parties to the extent permitted by
Section 9.05
(g); provided that such Debt is not held, assigned, transferred, negotiated or
pledged to any Person
other than the Borrower or one of its Wholly-Owned Subsidiaries, and, provided
further, that any
such Debt owed by either the Borrower or a Guarantor shall be subordinated to
the Secured Obligations
on terms set forth in the Guarantee and Collateral Agreement.

(f)    endorsements of negotiable instruments for collection in the ordinary
course of
business.

(g)    so long as the Intercreditor Agreement has been duly executed by the
parties thereto
and delivered to the Administrative Agent, Debt under the First Lien Credit
Agreement, the original
principal amount of which does not exceed $100,000,000 in the aggregate at any
time outstanding;

65

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

provided, however, that immediately before and after giving pro forma effect to
each borrowing of
First Lien Loans or making of any other credit extension thereunder (including
without limitation
any issuance of a letter of credit thereunder), the aggregate amount of Debt
that has been funded
thereunder (including without limitation, the face amount of any letters of
credit issued thereunder),
shall not exceed the least of (i) 30% of the NYMEX Value of the total Proved
Reserves of the Loan
Parties as shown on the most recently delivered Reserve Report (as adjusted to
give effect to
Dispositions, individually or in the aggregate, of 5.00% or more of Proved
Reserves of the Loan
Parties as shown on the most recently delivered Reserve Report) delivered prior
to the date such Debt
was incurred, (ii) the Borrowing Base as in effect on the date such Debt was
incurred and (iii)
$100,000,000.

(h)    insurance premiums incurred in the ordinary course of business and
consistent with
past practices if the amount financed does not exceed the premium payable for
the current policy
period.

(i)    Debt arising under Cash Management Agreements with any financial
institution in
which the Borrower or any of its Subsidiaries maintains a deposit account.

(j)    Debt existing on the date hereof under the Restructuring Agreement.

(k)    Debt constituting the deferred purchase price payable in connection with
the Gunsight
Acquisition in accordance with the Gunsight Acquisition Agreement, in an
aggregate principal amount
not to exceed $950,000.

(l)    other Debt not to exceed $5,000,000 in the aggregate at any one time
outstanding.

Section 9.03.    Liens. The Borrower will not, and will not permit any
Subsidiary or Miller 2009 Partnership to, create, incur, assume or permit to
exist any Lien on any of its Properties (now owned or hereafter acquired),
except:

(a)    Liens securing the payment and/or performance of any Secured Obligations.

(b)    Excepted Liens.

(c)    Liens securing purchase money Debt and Capital Leases permitted by
Section 9.02
(c) but only on the Property, improvements, accessions and proceeds thereof
financed by such Debt
or under such Capital Lease; provided that such Liens are created within 180
days of construction,
acquisition or lease of such Property.

(d)    Liens on Property not otherwise permitted by the foregoing clauses of
this Section
9.03; provided that the aggregate principal or face amount of all Debt secured
under this Section 9.03
(d) shall not exceed $1,000,000 at any time.

(e)    Liens on Property securing the First Lien Secured Obligations to the
extent permitted
under the Intercreditor Agreement; provided, however, that both before and after
giving effect to the
incurrence of any such Lien, the Borrower is in compliance with Section 8.14(d).

(f)    Liens on Property not constituting collateral for the Secured Obligations
and not
otherwise permitted by the foregoing clauses of this Section 9.03; provided that
the aggregate principal

66

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

or face amount of all Debt secured under this Section 9.03(f) shall not exceed
$5,000,000 in the
aggregate at any time outstanding.

(g)    Liens on cash collateral securing the Borrower’s obligations under the BP
Swap
Agreement and the Cargill Swap Agreement, in an amount not to exceed $25,000,000
in the aggregate
at any time outstanding.

(h)    the Lien on the property acquired by the Borrower pursuant to the
Gunsight Acquisition
Agreement securing the loan of approximately $425,000 made to Gunsight Holdings
LLC; provided
that such Lien is released promptly following the payment in full by the
Borrower of the purchase
price therefor as set forth in the Gunsight Acquisition Agreement.

Section 9.04.    Dividends, Distributions and Redemptions.
 
(a)    Restricted Payments. The Borrower will not, and will not permit any of
its Subsidiaries
or Miller 2009 Partnership to, declare or make, or agree to pay or make,
directly or indirectly, any
Restricted Payment, return any capital to its stockholders or make any
distribution of its Property to
its Equity Interest holders, except (a) the Borrower may declare and pay
dividends with respect to
its Equity Interests payable solely in additional shares of its Equity Interests
(other than Disqualified
Capital Stock), (b) Subsidiaries or Miller 2009 Partnership may declare and pay
dividends ratably
with respect to their Equity Interests to the Borrower or any other Loan Party,
(c) the Borrower may
make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit
plans for management or employees of the Borrower and its Subsidiaries, (d)
distributions or dividends
made or paid by Miller 2009 Partnership to the holders of its Equity Interests
out of payments received
by Miller 2009 Partnership from the Borrower under the Miller 2009 Loan
Documents, (e) payments
of the Series B Preferred Dividend, the Series C Preferred Dividend and the
Series D Preferred
Dividend so long as immediately prior to and after giving effect to each such
payment, no Default
or Event of Default shall have occurred and be continuing and immediately after
giving effect to each
such payment, the Borrower is in pro forma compliance with Section 9.01 and (f)
the Borrower may
implement a discretionary Equity Interest repurchase plan on terms and
conditions reasonably
satisfactory to the Administrative Agent and the Majority Lenders; provided that
(i) all expenditures
or payments under such repurchase plan are made solely with Management Option
Proceeds and (ii)
immediately prior to and after giving effect to any expenditure or payment under
such repurchase
plan (A) Liquidity is equal to or greater than the higher of $20,000,000 and 20%
of the Borrowing
Base in effect at such time, and (B) no Default or Event of Default shall have
occurred and be
continuing.

(b)    Redemption of Subordinated Debt. The Borrower will not, and will not
permit any
Subsidiary or Miller 2009 Partnership to call, make or offer to make any
optional or voluntary
prepayment or redemption of or otherwise optionally or voluntarily redeem or
prepay (in whole or
in part) any Debt that is subordinated to the Secured Obligations; provided that
the Borrower may
redeem or prepay any such Debt with the proceeds of any Permitted Refinancing
Debt in respect
thereof.

Section 9.05.    Investments, Loans and Advances. The Borrower will not, and
will not permit any Subsidiary or Miller 2009 Partnership to, make or permit to
remain outstanding any Investments in or to any Person, except that the
foregoing restriction shall not apply to:

(a)    Investments reflected in Schedule 9.05.

67

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

(b)    accounts receivable arising in the ordinary course of business.

(c)    direct obligations of the United States of America or any agency thereof,
or obligations
guaranteed by the United States of America or any agency thereof, in each case
maturing within one
year from the date of creation thereof.

(d)    commercial paper maturing within one year from the date of creation
thereof rated in
the highest grade by S&P or Moody’s.

(e)    deposits maturing within one year from the date of creation thereof with,
including
certificates of deposit issued by, (i) any Lender or First Lien Lender or (ii)
any office located in the
United States of America of any other bank or trust company which is organized
under the laws of
the United States of America or any state thereof, has capital, surplus and
undivided profits aggregating
at least $100,000,000 (as of the date of such bank or trust company’s most
recent financial reports)
and has a short term deposit rating of no lower than A2 or P2, as such rating is
set forth from time to
time, by S&P or Moody’s, respectively.

(f)    Investments in money market or other mutual funds substantially all of
whose assets
are described in Section 9.05(c), Section 9.05(d) and Section 9.05(e).

(g)    Investments (i) made by the Borrower in or to the Guarantors and (ii)
made by any
Guarantor in or to the Borrower or any Guarantor.

(h)    Investments (including, without limitation, capital contributions) in
general or limited
partnerships or other types of entities (each a “venture”) entered into by the
Borrower or a Subsidiary
with others in the ordinary course of business; provided that (i) any such
venture is engaged
exclusively in oil and gas exploration, development, production, processing and
related activities,
including transportation, (ii) the interest in such venture is acquired in the
ordinary course of business,
and (iii) such venture interests acquired and capital contributions made (valued
as of the date such
interest was acquired or the contribution made) do not exceed $5,000,000 in the
aggregate at any
time outstanding.

(i)    loans or advances to employees, officers or directors in the ordinary
course of business
of the Borrower or any of its Subsidiaries, in each case only as permitted by
applicable law, including
Section 402 of the Sarbanes-Oxley Act of 2002, but in any event not to exceed
$1,000,000 in the
aggregate outstanding at any time.

(j)    Investments in stock, obligations or securities received in settlement of
debts arising
from Investments permitted under this Section 9.05 owing to the Borrower or any
Subsidiary as a
result of a bankruptcy or other insolvency proceeding of the obligor in respect
of such debts or upon
the enforcement of any Lien in favor of the Borrower or any of its Subsidiaries.

(k)    guarantees by the Borrower or any Guarantor of Debt permitted by
Section 9.02.

(l)    Investments arising from the endorsement of financial instruments in the
ordinary
course of business.

(m)    Investments arising out of the receipt by the Borrower or any Subsidiary
of noncash

68

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

consideration for the sale of assets permitted under Section 9.12.

(n)    the acquisition of Oil and Gas Properties and related oilfield equipment
located thereon
from Persons other than Affiliates of the Borrower or its Subsidiaries so long
as:

(i)    at the time of and after giving effect to such acquisition, no Default or
Event
of Default exists or could reasonably be expected to result from such
acquisition;

(ii)    the Borrower and its Subsidiaries shall have complied with all of the
requirements of Section 8.14 with respect thereto;

(iii)    the Borrower is in compliance with Section 9.01(d) for the most
recently ended
fiscal quarter; and

(iv)    after giving effect to such acquisition, the Borrower is in pro forma
compliance
with each of the covenants set forth in Section 9.01(a), (b), (c) and (e).

(o)    Investments in certificates of deposit less than $100,000, provided that
such certificate
of deposit is insured.

(p)    consummation of the Acquisition on the Effective Date and the acquisition
of the
Acquired Equity after the Effective Date, in each case, in accordance with the
Acquisition Agreement.

(q)    other Investments not to exceed $4,000,000 in the aggregate at any time
outstanding.

Section 9.06.    Nature of Business; International Operations. The Borrower will
not, and will not permit any Subsidiary or Miller 2009 Partnership to, allow any
material change to be made in the character of its business as an independent
oil and gas exploration and production company. From and after the date hereof,
the Borrower and its Subsidiaries will not acquire or make any other expenditure
(whether such expenditure is capital, operating or otherwise) in or related to,
any Oil and Gas Properties not located within the geographical boundaries of the
United States of America.

Section 9.07.    Limitation on Leases. The Borrower will not, and will not
permit any Subsidiary or Miller 2009 Partnership to, create, incur, assume or
suffer to exist any obligation for the payment of rent or hire of Property of
any kind whatsoever (real or personal but excluding Capital Leases, leases of
Hydrocarbon Interests and leases of drilling rigs, vessels, and other equipment
used in operating the Oil and Gas Properties), under leases or lease agreements
which would cause the aggregate amount of all payments made by the Borrower and
the Subsidiaries pursuant to all such leases or lease agreements, including,
without limitation, any residual payments at the end of any lease, to exceed
$2,000,000 in the aggregate in any period of twelve consecutive calendar months
during the life of such leases.

Section 9.08.    Proceeds of Loans. The Borrower will not permit the proceeds of
the Loans to be used for any purpose other than those permitted by Section 7.21.
Neither the Borrower nor any Person acting on behalf of the Borrower has taken
or will take any action which might cause any of the Loan Documents to violate
Regulations T, U or X or any other regulation of the Board or to violate Section
7 of the Securities Exchange Act of 1934 or any rule or regulation thereunder,
in each case as now in effect or as the same may hereinafter be in effect.

69

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

Section 9.09.    ERISA Compliance. The Borrower will not, and will not permit
any Subsidiary or Miller 2009 Partnership to, at any time:

(a)    engage in, or permit any ERISA Affiliate to engage in, any transaction in
connection
with which the Borrower, a Subsidiary or any ERISA Affiliate could be subjected
to either a civil
penalty assessed pursuant to subsections (c), (i), (l) or (m) of section 502 of
ERISA or a tax imposed
by Chapter 43 of Subtitle D of the Code that could reasonably be expected to
result in liability to the
Borrower or any of its Subsidiaries in excess of $100,000 individually or in the
aggregate.

(b)    fail to make, or permit any ERISA Affiliate to fail to make, full payment
when due of
all amounts which, under the provisions of any Plan, agreement relating thereto
or applicable law,
the Borrower, a Subsidiary or any ERISA Affiliate is required to pay as
contributions thereto that
could reasonably be expected to result in liability to the Borrower or any of
its Subsidiaries in excess
of $100,000 individually or in the aggregate.

(c)    except as could not be reasonably expected to have a Material Adverse
Effect,
contribute to or assume an obligation to contribute to, or permit any ERISA
Affiliate to contribute to
or assume an obligation to contribute to (i) any employee welfare benefit plan,
as defined in section
3(1) of ERISA, including, without limitation, any such plan maintained to
provide benefits to former
employees of such entities, that may not be terminated by such entities in their
sole discretion at any
time without any material liability, or (ii) any employee pension benefit plan,
as defined in section 3
(2) of ERISA, that is subject to Title IV of ERISA, section 302 of ERISA or
section 412 of the Code.

Section 9.10.    Sale or Discount of Receivables; Alaska Oil & Gas Production
Tax Credits.

(a)    Except for receivables obtained by the Borrower or any Subsidiary out of
the ordinary
course of business or the settlement of joint interest billing accounts in the
ordinary course of business
or discounts granted to settle collection of accounts receivable or the sale of
defaulted accounts arising
in the ordinary course of business in connection with the compromise or
collection thereof and not
in connection with any financing transaction, the Borrower will not, and will
not permit any Subsidiary
or Miller 2009 Partnership to, discount or sell (with or without recourse) any
of its notes receivable
or accounts receivable.

(b)    Notwithstanding anything to the contrary contained herein or in the other
Loan
Documents, in no event shall the Borrower or any of its Subsidiaries sell,
transfer, discount or otherwise
Dispose of any tax credit certificate, or right or interest therein, or any
right to or interest in any
payment from the Oil and Gas Tax Credit Fund, held by such Person by virtue of
Alaska’s Oil & Gas
Production Tax Credit program, or any receivable obtained by the Borrower or any
Subsidiary in
connection therewith except a sale of such certificate to the State of Alaska
the proceeds of which
have been directed to be paid directly to an account of the Borrower or a
Subsidiary that is subject
to a Deposit Account Control Agreement.

Section 9.11.    Mergers, Etc. The Borrower will not, and will not permit any
Subsidiary or Miller 2009 Partnership to, merge into or with or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or Dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property to any other Person (whether now owned
or hereafter acquired) (any such transaction, a “consolidation”), or liquidate
or dissolve; provided that:

(a)    any Subsidiary may participate in a consolidation with the Borrower
(provided that

70

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

the Borrower shall be the continuing or surviving corporation) or any other
Subsidiary that is a
Domestic Subsidiary (provided that if one of such Subsidiaries is a Wholly-Owned
Subsidiary or
Guarantor, then the surviving Person shall be a Wholly-Owned Subsidiary or
Guarantor, as the case
may be); and

(b)    the Loan Parties may make Dispositions permitted by Section 9.12(b).

Section 9.12.    Dispositions of Properties. The Borrower will not, and will not
permit any Subsidiary or Miller 2009 Partnership to, Dispose of any Property or
any interest therein (including within such prohibition transfers and
dispositions of overriding royalty interests, production payments, net profits
interests and any other interests payable out of or measured by production or
the proceeds of production) or any Subsidiary owning any such Oil and Gas
Property, other than:

(a)    (i) sales of Hydrocarbons in the ordinary course of business; (ii) sales
of equipment
(other than the Aircraft) that is (x) obsolete, worn out, depleted or uneconomic
and disposed of in the
ordinary course of business; (y) no longer necessary for the business of the
Borrower or any Subsidiary;
and (z) contemporaneously replaced by equipment of at least comparable use and
value and (iii) the
exchange of equipment (other than the Aircraft) for other equipment of at least
comparable value in
the ordinary course of business;

(b)    Dispositions of assets by any Loan Party or the Miller 2009 Partnership
to any other
Loan Party (other than any Disposition by Borrower or CIE in one transaction or
a series of transactions
of all or substantially all of its respective assets); provided that, with
respect to any such Disposition
that consists of Oil and Gas Properties or activities related to Oil and Gas
Properties, the following
conditions must be satisfied: (i) no Default or Event of Default has occurred
and is continuing, (ii)
such Disposition shall not adversely affect the Liens of the Administrative
Agent or any Secured
Party granted under any Loan Document and (iii) the Administrative Agent shall
have given its prior
written consent to such Disposition (not to be unreasonably withheld,
conditioned or delayed);

(c)    Dispositions to any Miller Drilling Fund of any Oil and Gas Properties
(including
pursuant to the sale of not less than 100% of the Equity Interests of any
Subsidiary) on which no
Proved Reserve is located, so long as (i) such Dispositions do not exceed,
individually or in the
aggregate, $5,000,000 and (ii) any non-cash consideration received by any Loan
Party in connection
with such Disposition shall be pledged by such Loan Party to Administrative
Agent for the benefit
of the Secured Parties as security for the Secured Obligations; provided that,
the Borrower shall
deliver to the Administrative Agent a certificate executed by a Financial
Officer of the Borrower
certifying that (A) no Default or Event of Default is existing or would result
therefrom, (B) the
consideration received from any such Disposition is at least equal to the fair
market value of the Oil
and Gas Properties subject to such Disposition, as reasonably determined in good
faith by the board
of directors (or equivalent governing body) of such Loan Party, and (C) the
Borrower is in compliance
with Section 9.01 after giving effect to such Disposition of Oil and Gas
Properties;

(d)    Dispositions of claims against customers, working interest owners, other
industry
partners or any other Person in connection with workouts or bankruptcy,
insolvency or other similar
proceedings with respect thereto;

(e)    a Disposition of the Aircraft so long as (i) the Net Cash Proceeds
received from such
Disposition have been or immediately shall be paid to Administrative Agent for
application in
accordance with Section 3.04(c)(i) by wire transfer of immediately available
funds to the

71

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

Administrative Agent, and (ii) the consideration received from such Disposition
consists of cash and
is at least equal to the fair market value of the Aircraft, as reasonably
determined in good faith by the
board of directors of the Borrower (and upon any Disposition of the Aircraft in
accordance with this
sentence, the Administrative Agent agrees to, at the sole cost and expense of
the Borrower, release
its Lien upon the Aircraft in connection with such Disposition);

(f)    Dispositions of Tennessee Oil and Gas Properties;

(g)    the CIE Pipeline Asset Disposition;

(h)    Dispositions of Cash Equivalents and Investments permitted by Section
9.05(j) and
Section 9.05(o); and

(i)    other Dispositions of Properties not regulated by Section 9.12(a) to (h)
having a fair
market value not to exceed $4,000,000 during any 12-month period;

provided, that, notwithstanding the foregoing, it shall be a condition to any
Disposition of Oil and Gas Properties pursuant to this Section 9.12 that (a) the
Borrower is in compliance with Section 9.01 immediately before and after giving
effect to such Disposition of Oil and Gas Properties, (b) the consideration
received from any such Disposition is at least equal to the fair market value of
the Oil and Gas Properties subject to such Disposition, as reasonably determined
in good faith by the board of directors (or equivalent governing body) of such
Loan Party, and (c) 100% of the consideration for such Oil and Gas Properties
shall be cash or Cash Equivalents.
Section 9.13.    Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary or Miller 2009 Partnership to, enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property or the rendering of any service, with any Affiliate;
provided, however, that the foregoing restrictions will not apply to (a)
transactions that are not otherwise prohibited under this Agreement and are upon
fair and reasonable terms no less favorable to it than it would obtain in a
comparable arm’s length transaction with a Person not an Affiliate, (b)
reasonable and customary fees paid to members of the board of directors (or
similar governing body) of the Borrower and its Subsidiaries, (c) reasonable and
customary indemnification, benefit, compensation and other employment
arrangements and agreements for directors, officers and other employees of the
Borrower and its Subsidiaries entered into in the ordinary course of business,
(d) transactions permitted by Section 9.04(a), (e) transactions between or among
Loan Parties and (f) transactions set forth on Schedule 9.13.
 
Section 9.14.    Subsidiaries; Equity Interests. The Borrower will not, and will
not permit any Subsidiary or Miller 2009 Partnership to, create or acquire any
additional Subsidiary unless the Borrower gives written notice to the
Administrative Agent of such creation or acquisition and complies with Section
8.14(b). The Borrower shall not, and shall not permit any Subsidiary to (a)
Dispose of any Equity Interests in any Subsidiary except in compliance with
Section 9.12 or (b) issue any Equity Interest in any Subsidiary unless such
Equity Interest is subject to the Lien of the Administrative Agent pursuant to
the Security Instruments. None of the Borrower, any Subsidiary or Miller 2009
Partnership shall have any Foreign Subsidiaries.

Section 9.15.    Negative Pledge Agreements; Dividend Restrictions. The Borrower
will not, and will not permit any Subsidiary or Miller 2009 Partnership to,
create, incur, assume or suffer to exist any contract, agreement or
understanding which in any way prohibits or restricts (or which requires the
consent of or notice

72

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

to other Persons in connection therewith) (a) the granting, conveying, creation
or imposition of any Lien on any of its Property in favor of the Secured
Parties, (b) any Subsidiary or Miller 2009 Partnership from paying dividends or
making distributions to the Borrower or any Guarantor, or (c) any Subsidiary
from guaranteeing Debt of the Borrower or any other Loan Party; provided,
however, that the preceding restrictions will not apply to encumbrances or
restrictions arising under or by reason of (i) this Agreement, the Security
Instruments or the First Lien Loan Documents, (ii) Liens permitted by Section
9.03(c) (but only to the extent related to the Property on which such Liens were
created), or (iii) any restriction with respect to the Borrower or a Subsidiary
or Miller 2009 Partnership imposed pursuant to an agreement entered into for the
direct or indirect sale or disposition of the Property of the Borrower or such
Subsidiary or Miller 2009 Partnership or all or substantially all the equity of
a Subsidiary (or the Property that is subject to such restriction) pending the
closing of such sale or disposition, in each case, to the extent disposition is
permitted hereby and such restriction applies only to the Property that is the
subject of such disposition.

Section 9.16.    Gas Imbalances, Take-or-Pay or Other Prepayments. The Borrower
will not, and will not permit any Subsidiary or Miller 2009 Partnership to,
allow gas imbalances, take-or-pay or other prepayments with respect to the Oil
and Gas Properties of the Borrower or any Subsidiary that would require the
Borrower or such Subsidiary to deliver Hydrocarbons at some future time without
then or thereafter receiving full payment therefor to exceed $500,000 in the
aggregate.

Section 9.17.    Swap Agreements. The Borrower will not, and will not permit any
Subsidiary to, enter into any Swap Agreements with any Person other than (a)
Swap Agreements in respect of commodities (i) with an Approved Counterparty and
(ii) the notional volumes for which (when aggregated with other commodity Swap
Agreements then in effect other than basis differential swaps on volumes already
hedged pursuant to other Swap Agreements) do not exceed, as of the date such
Swap Agreement is executed, 100% of the reasonably anticipated projected
production from proved, developed, producing Oil and Gas Properties for each
month during the period during which such Swap Agreement is in effect for each
of crude oil and natural gas, calculated separately, and (b) Swap Agreements in
respect of interest rates with an Approved Counterparty, as follows: (i) Swap
Agreements effectively converting interest rates from fixed to floating, the
notional amounts of which (when aggregated with all other Swap Agreements of the
Borrower and its Subsidiaries then in effect effectively converting interest
rates from fixed to floating) do not exceed 50% of the then outstanding
principal amount of the Borrower’s Debt for borrowed money which bears interest
at a fixed rate and (ii) Swap Agreements effectively converting interest rates
from floating to fixed, the notional amounts of which (when aggregated with all
other Swap Agreements of the Borrower and its Subsidiaries then in effect
effectively converting interest rates from floating to fixed) do not exceed 75%
of the then outstanding principal amount of the Borrower’s Debt for borrowed
money which bears interest at a floating rate; provided that all such Swap
Agreements described in the foregoing clauses (a) and (b) shall be on
commercially reasonable terms and entered into on an arm’s length basis. Except
for the BP Swap Agreement and the Cargill Swap Agreement, but subject to the
limitations set forth in Section 9.03(g), in no event shall any Swap Agreement
contain any requirement, agreement or covenant for the Borrower or any
Subsidiary to post collateral or margin to secure their obligations under such
Swap Agreement or to cover market exposures. The Borrower will not permit Miller
2009 Partnership to enter into any Swap Agreements.

Section 9.18.    Acquisition Documents & Organizational Documents.

(a)    The Borrower will not, and will not permit any of its Subsidiaries or
Miller 2009
Partnership to, amend, modify or supplement any of the Acquisition Documents or
the certificate or
articles of incorporation, by-laws, or other organizational or governing
documents of such Person,
in each case, if the effect thereof could reasonably be expected to be adverse
to the Lenders (and
provided that the Borrower promptly furnishes to the Administrative Agent a copy
of such amendment,

73

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

modification or supplement).

(b)    The Borrower will not, and will not permit any of its Subsidiaries or
Miller 2009
Partnership to, amend, modify or supplement the Gunsight Acquisition Agreement
without the prior
written consent of the Administrative Agent.

Section 9.19.    Fiscal Year; Accounting Practices. The Borrower shall not, and
shall not permit any other Loan Party to, change its fiscal year-end or any
material accounting practice without giving 30 days prior written notice thereof
to the Administrative Agent.

Section 9.20.    Preferred Equity Interests.

(a)    The Borrower shall not redeem any of the Series B Preferred Stock, Series
C Preferred
Stock, or Series D Preferred Stock prior to the date that is 30 days after the
Termination Date. The
foregoing covenant shall survive the termination of the Loan Documents and
repayment of the Secured
Obligations.

(b)    The Borrower shall not amend or otherwise modify the terms or conditions
of the
Series B Preferred Stock, the Series C Preferred Stock, or the Series D
Preferred Stock (including
without limitation the Series B Preferred Dividend, the Series C Preferred
Dividend, or the Series D
Preferred Dividend).

(c)    The Borrower will not issue or designate any series or class of Equity
Interest that by
its terms is preferred as to the payment of dividends, or as to the distribution
of assets upon any
voluntary or involuntary liquidation or dissolution of the Borrower, over common
Equity Interests
of the Borrower, other than the Series B Preferred Stock, the Series C Preferred
Stock, and the Series
D Preferred Stock.

Section 9.21.    Marketing Activities. The Borrower will not, and will not
permit any of its Subsidiaries or Miller 2009 Partnership to, engage in
marketing activities for any Hydrocarbons or enter into any contracts related
thereto other than (i) contracts for the sale of Hydrocarbons scheduled or
reasonably estimated to be produced from their proved Oil and Gas Properties
during the period of such contract, and (ii) contracts for the sale of
Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil
and Gas Properties of third parties during the period of such contract
associated with the Oil and Gas Properties of the Borrower and its Subsidiaries
or Miller 2009 Partnership that the Borrower or one of its Subsidiaries or
Miller 2009 Partnership has the right to market pursuant to joint operating
agreements, unitization agreements or other similar contracts that are usual and
customary in the oil and gas business; provided that in each case, except for
contracts listed on Schedule 7.19 on the Effective Date, no such contracts shall
pertain to the sale of Hydrocarbon production at a fixed price.

Section 9.22.    Press Release and Related Matters. No Loan Party shall, and no
Loan Party shall permit any of its Affiliates to, issue any press release or
other public disclosure (other than any document filed with any Governmental
Authority relating to a public offering of securities of any Loan Party) using
the name, logo or otherwise referring to Apollo or of any of its Affiliates, the
Loan Documents or any transaction contemplated therein to which Apollo is party
without the prior consent of Apollo except to the extent required to do so under
applicable Governmental Requirements and then, except with respect to securities
laws, only after consulting with Apollo prior thereto.

74

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

Section 9.23.    Consolidated G&A Expenses. The Borrower shall not permit
Consolidated G&A Expenses to exceed $6,250,000 in any fiscal quarter.

ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01.    Events of Default. One or more of the following events shall
constitute an “Event of Default”:

(a)    the Borrower shall fail to pay any principal of any Loan when and as the
same shall
become due and payable, whether at the due date thereof or at a date fixed for
prepayment thereof,
by acceleration or otherwise.

(b)    the Borrower shall fail to pay any interest on any Loan or any fee or any
other amount
(other than an amount referred to in Section 10.01(a)) payable under any Loan
Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period
of three Business Days.

(c)    any representation or warranty made or deemed made by or on behalf of the
Borrower
or any Subsidiary in or in connection with any Loan Document or any amendment or
modification
of any Loan Document or waiver under such Loan Document, or in any report,
certificate, financial
statement or other document furnished pursuant to or in connection with any Loan
Document or any
amendment or modification thereof or waiver thereunder, shall prove to have been
incorrect in any
material respect when made or deemed made (unless such representation or
warranty was already
qualified by materiality, in which case such representation or warranty shall
simply prove to have
been incorrect).

(d)    the Borrower, any Subsidiary or Miller 2009 Partnership shall fail to
observe or perform
any covenant, condition or agreement applicable to it contained in Section
8.01(m), Section 8.02,
Section 8.03, Section 8.07, Section 8.13(b), Section 8.14, Section 8.16, Section
8.20 or in Article IX.

(e)    the Borrower or any Subsidiary shall fail to observe or perform any
covenant, condition
or agreement contained in this Agreement (other than those specified in Section
10.01(a), Section
10.01(b) or Section 10.01(d)) or any other Loan Document, and such failure shall
continue unremedied
for a period of 30 days after the earlier to occur of (A) notice thereof from
the Administrative Agent
to the Borrower (which notice will be given at the request of any Lender) or (B)
a Responsible Officer
of the Borrower or such Subsidiary otherwise becoming aware of such default.

(f)    the Borrower, any Subsidiary or Miller 2009 Partnership shall fail to
make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness,
when and as the same shall become due and payable.

(g)    any event or condition occurs that results in any Material Indebtedness
becoming due
prior to its scheduled maturity or that enables or permits (with or without the
giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or any
trustee or agent on
its or their behalf to cause any Material Indebtedness to become due, or to
require the Redemption
thereof or any offer to Redeem to be made in respect thereof, prior to its
scheduled maturity or require
the Borrower, any Subsidiary or Miller 2009 Partnership to make an offer in
respect thereof; provided

75

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

that this clause (g) shall not apply to secured Debt that becomes due as a
result of the voluntary sale
or transfer of the property or assets securing such Debt and permitted hereby.

(h)    an involuntary proceeding shall be commenced or an involuntary petition
shall be
filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower, any Subsidiary
or Miller 2009 Partnership or its debts, or of a substantial part of its assets,
under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or hereafter
in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the
Borrower, any Subsidiary or Miller 2009 Partnership or for a substantial part of
its assets, and, in any
such case, such proceeding or petition shall continue undismissed for 60 days or
an order or decree
approving or ordering any of the foregoing shall be entered.

(i)    the Borrower, any Subsidiary or Miller 2009 Partnership shall (i)
voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any
proceeding or petition described in Section 10.01(h), (iii) apply for or consent
to the appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower, any
Subsidiary or Miller 2009 Partnership or for a substantial part of their
respective assets, (iv) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of
effecting any of the foregoing.

(j)    the Borrower, any Subsidiary or Miller 2009 Partnership shall become
unable, admit
in writing its inability or fail generally to pay its debts as they become due.

(k)    one or more judgments for the payment of money in an aggregate amount in
excess
of $5,000,000 (to the extent not covered by independent third party insurance as
to which the insurer
does not dispute coverage and is not subject to an insolvency proceeding), shall
be rendered against
the Borrower, any Subsidiary or Miller 2009 Partnership or any combination
thereof and the same
shall remain undischarged for a period of 60 consecutive days during which
execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor
to attach or levy upon
any assets of the Borrower, any Subsidiary or Miller 2009 Partnership to enforce
any such judgment.

(l)    the Loan Documents after delivery thereof shall for any reason, except to
the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable
in accordance with their terms against the Borrower or a Guarantor party thereto
or shall be repudiated
by any of them, or cease to create a valid and perfected Lien of the priority
required thereby on any
of the collateral purported to be covered thereby, except to the extent
permitted by the terms of this
Agreement, or the Borrower, any Subsidiary or Miller 2009 Partnership or any of
their Affiliates shall
so state in writing.

(m)    the Intercreditor Agreement, after delivery thereof shall for any reason,
except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and
enforceable in accordance with its terms against any Loan Party or any holder of
Debt under the First
Lien Loan Documents or shall be repudiated in writing by any such Person.

(n)    (i) any Loan Party shall make any payment, whether in principal,
interest, premiums
or fees, that is not allowed under the terms of the Intercreditor Agreement, or
(ii) any Loan Party

76

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

amends, supplements or otherwise modifies the First Lien Credit Agreement or any
other First Lien
Loan Document that is not allowed under, or otherwise violates or breaches, the
provisions of the
Intercreditor Agreement.

(o)    an ERISA Event occurs which results in, or could reasonably be expected
to result in,
a liability of the Borrower, any Subsidiary or the Miller 2009 Partnership in an
amount in excess of
$100,000.

(p)    The Borrower or any ERISA Affiliate as employer under a Plan makes a
complete or
partial withdrawal from such Plan and such withdrawing employer incurs, or could
reasonably be
expected to incur, a withdrawal liability in an annual amount in excess of
$100,000.

(q)    If (i) David Voyticky ceases to be President of the Borrower, or David
Hall ceases to
be Chief Executive Officer of CIE, or Scott Boruff ceases to be Chief Executive
Officer of the Borrower
or (ii) either David Voyticky or Scott Boruff otherwise ceases to be
substantially involved in the daily
operations of the Borrower or David Hall otherwise ceases to be substantially
involved in the daily
operations of CIE.

(r)    If the Borrower is delisted from the New York Stock Exchange, without
giving effect
to any pending appeals.

(s)    A Change in Control shall occur.

Section 10.02.    Remedies.

(a)    In the case of an Event of Default other than one described in Section
10.01(h), Section
10.01(i) or Section 10.01(j), at any time thereafter during the continuance of
such Event of Default,
the Administrative Agent may, and at the request of the Majority Lenders, shall,
by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the
Notes and the Loans then outstanding to be due and payable in whole (or in part,
in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable),
and thereupon the principal of the Loans so declared to be due and payable,
together with accrued
interest thereon and all fees and other obligations of the Borrower and the
Guarantors accrued
hereunder and under the Notes and the other Loan Documents (including, without
limitation, the
Make-Whole Premium or any applicable Prepayment Premium), shall become due and
payable
immediately, without presentment, demand, protest, notice of intent to
accelerate, notice of
acceleration or other notice of any kind, all of which are hereby waived by the
Borrower and each
Guarantor; and in case of an Event of Default described in Section 10.01(h),
Section 10.01(i) or
Section 10.01(j), the Commitments shall automatically terminate and the Notes
and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and the other obligations
of the Borrower and the Guarantors accrued hereunder and under the Notes and the
other Loan
Documents (including, without limitation, the Make-Whole Premium or any
applicable Prepayment
Premium), shall automatically become due and payable, without presentment,
demand, protest, notice
of intent to accelerate, notice of acceleration or other notice of any kind, all
of which are hereby
waived by the Borrower and each Guarantor.

(b)    In the case of the occurrence of an Event of Default, the Administrative
Agent and the
Lenders will have all other rights and remedies available at law and equity.

77

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

(c)    All proceeds realized from the liquidation or other disposition of
collateral or otherwise
received after maturity of the Notes, whether by acceleration or otherwise,
shall be applied (subject
in all cases to the Intercreditor Agreement):

(i)    first, to payment or reimbursement of that portion of the Secured
Obligations
constituting fees, expenses and indemnities payable to the Administrative Agent
in its capacity
as such;

(ii)    second, pro rata to payment or reimbursement of that portion of the
Secured
Obligations constituting fees, expenses and indemnities payable to the Lenders;

(iii)    third, pro rata to payment of accrued interest on the Loans;

(iv)    fourth, pro rata to payment of principal outstanding on the Loans;

(v)    fifth, pro rata to payment of the Make-Whole Premium or any Prepayment
Premium then due and owing;

(vi)    sixth, pro rata to any other Secured Obligations; and

(vii)    seventh, any excess, after all of the Secured Obligations shall have
been
indefeasibly paid in full in cash, shall be paid to the Borrower or as otherwise
required by
any Governmental Requirement.

ARTICLE XI
THE AGENTS

Section 11.01.    Appointment; Powers. Each of the Lenders hereby irrevocably
appoints the Administrative Agent as its agent and authorizes the Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms hereof and the other Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.

Section 11.02.    Duties and Obligations of Administrative Agent. The
Administrative Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Administrative Agent shall not be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing (the use of the term “agent” herein and in the other Loan
Documents with reference to the Administrative Agent is not intended to connote
any fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law; rather, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties), (b) the Administrative
Agent shall have no duty to take any discretionary action or exercise any
discretionary powers, except as provided in Section 11.03, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to the Borrower or any of its Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation

78

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

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
under any other Loan Document 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 in any other Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document, (v) the satisfaction of
any condition set forth in Article VI or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent
or as to those conditions precedent expressly required to be to the
Administrative Agent’s satisfaction, (vi) the existence, value, perfection or
priority of any collateral security or the financial or other condition of the
Borrower and its Subsidiaries or any other obligor or guarantor, or (vii) any
failure by the Borrower or any other Person (other than itself) to perform any
of its obligations hereunder or under any other Loan Document or the performance
or observance of any covenants, agreements or other terms or conditions set
forth herein or therein. For purposes of determining compliance with the
conditions specified in Article VI, each Lender 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 the Administrative Agent shall have received
written notice from such Lender prior to the Effective Date specifying its
objection thereto.

Section 11.03.    Action by Administrative Agent. The Administrative Agent shall
have no 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 the Administrative Agent is required to
exercise in writing as directed by the Majority Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 12.02) and in all cases the Administrative Agent shall be
fully justified in failing or refusing to act hereunder or under any other Loan
Documents unless it shall (a) receive written instructions from the Majority
Lenders or the Lenders, as applicable, (or such other number or percentage of
the Lenders as shall be necessary under the circumstances as provided in Section
12.02) specifying the action to be taken and (b) be indemnified to its
satisfaction by the Lenders against any and all liability and expenses which may
be incurred by it by reason of taking or continuing to take any such action. The
instructions as aforesaid and any action taken or failure to act pursuant
thereto by the Administrative Agent shall be binding on all of the Lenders. If a
Default has occurred and is continuing, then the Administrative Agent shall take
such action with respect to such Default as shall be directed by the requisite
Lenders in the written instructions (with indemnities) described in this Section
11.03, provided that, unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interests of the Lenders.
In no event, however, shall the Administrative Agent be required to take any
action which exposes the Administrative Agent to personal liability or which is
contrary to this Agreement, the Loan Documents or applicable law. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Majority Lenders or the Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.02), and otherwise the Administrative
Agent shall not be liable for any action taken or not taken by it hereunder or
under any other Loan Document or under any other document or instrument referred
to or provided for herein or therein or in connection herewith or therewith
INCLUDING ITS OWN ORDINARY NEGLIGENCE, except for its own gross negligence or
willful misconduct.

Section 11.04.    Reliance by Administrative Agent. The 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 believed by it to be genuine and to have been signed or sent by
the proper Person. The Administrative Agent also may rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person, and shall not incur any liability for relying thereon and

79

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

each of the Borrower and the Lenders hereby waives the right to dispute the
Administrative Agent’s record of such statement, except in the case of gross
negligence or willful misconduct by the Administrative Agent. The Administrative
Agent may consult with legal counsel (who may be counsel for the 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. The Administrative Agent may deem and
treat the payee of any Note as the holder thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof permitted
hereunder shall have been filed with the Administrative Agent.

Section 11.05.    Subagents. The Administrative Agent may perform any and all
its duties and exercise its rights and powers by or through any one or more
sub-agents appointed by the Administrative Agent. The Administrative Agent and
any such sub-agent may perform any and all its duties and exercise its rights
and powers through their respective Related Parties. The exculpatory provisions
of the preceding Sections of this Article XI shall apply to any such sub-agent
and to the Related Parties of the 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 11.06.    Resignation of Administrative Agent. Subject to the
appointment and acceptance of a successor Administrative Agent as provided in
this Section 11.06, the Administrative Agent may resign at any time by notifying
the Lenders and the Borrower. Upon any such resignation, the Majority Lenders
shall have the right, in consultation with the Borrower, to appoint a successor.
If no successor shall have been so appointed by the Majority Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent. Upon the acceptance of its appointment as Administrative
Agent hereunder by a successor, such successor shall succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Administrative Agent’s resignation hereunder, the provisions of this
Article XI and Section 12.03 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 it was acting as Administrative Agent.

Section 11.07.    Agents as Lenders. Each bank serving as an 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 an Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not an Agent hereunder.

Section 11.08.    No Reliance. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, any other
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement and each other Loan Document to which it is a party. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, any other Agent or any other Lender 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, any related agreement or any
document furnished hereunder or thereunder. The Agents shall not be required to
keep themselves informed as to the performance or observance by the Borrower or
any of its Subsidiaries of this Agreement, the Loan Documents or any other
document referred to or provided for herein

80

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

or to inspect the Properties or books of the Borrower or its Subsidiaries.
Except for notices, reports and other documents and information expressly
required to be furnished to the Lenders by the Administrative Agent hereunder,
no Agent nor the Arranger shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition or business of the Borrower (or any of its Affiliates) which may come
into the possession of such Agent or any of its Affiliates. In this regard, each
Lender acknowledges that Bracewell & Giuliani LLP is acting in this transaction
as special counsel to the Administrative Agent only, except to the extent
otherwise expressly stated in any legal opinion or any Loan Document. Each other
party hereto will consult with its own legal counsel to the extent that it deems
necessary in connection with the Loan Documents and the matters contemplated
therein.

Section 11.09.    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 the Borrower or any of its Subsidiaries, the
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 the Administrative Agent shall have made any demand on
the 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 Secured 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 the Lenders
and the Administrative Agent (including any claim for the reasonable
compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and their
respective agents
and counsel and all other amounts due the Lenders and the Administrative Agent
under Section 12.03)
allowed in such judicial proceeding; and

(b)    to collect and receive any monies 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 the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Section 12.03.
Nothing contained herein shall be deemed to authorize the 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 Secured
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
Section 11.10.    Authority of Administrative Agent to Release Collateral and
Liens. Each Lender hereby authorizes the Administrative Agent to release (a) any
collateral that is permitted to be sold or released pursuant to the terms of the
Loan Documents and (b) all collateral on the Termination Date. Each Lender
hereby authorizes the Administrative Agent to execute and deliver to the
Borrower, at the Borrower’s sole cost and expense, any and all releases of
Liens, termination statements, assignments or other documents reasonably
requested by the Borrower in connection with (x) any Disposition of Property to
the extent such Disposition is permitted by the terms of Section 9.12 or is
otherwise authorized by the terms of the Loan Documents and (y) the release of
all collateral on the Termination Date.

81

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

Section 11.11.    The Arranger. The Arranger shall have no duties,
responsibilities or liabilities under this Agreement and the other Loan
Documents other than its duties, responsibilities and liabilities in its
capacity as a Lender hereunder.
ARTICLE XII
MISCELLANEOUS

Section 12.01.    Notices.

(a)    Except in the case of notices and other communications expressly
permitted to be
given by telephone (and subject to Section 12.01(b)), 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 telecopy, as follows:

(i)    if to the Borrower, to it at:

MILLER ENERGY RESOURCES, INC.
9721 Cogdill Road, Ste. 302,
Knoxville, Tennessee 37932
Attn: Scott M. Boruff, CEO
Fax No.: (865) 691-8209

with copies to:     MILLER ENERGY RESOURCES, INC.
9721 Cogdill Road, Ste. 302,
Knoxville, Tennessee 37932
Attn: Kurt Yost, General Counsel
Fax No.: (865) 691-8209

(ii)    if to the Administrative Agent, to it at:
APOLLO INVESTMENT CORPORATION
9 West 57th Street, 37th Floor
New York, New York 10019
Attention: Dan Vogel
Phone: (212) 822-0740
Email: dvogel@apolloic.com
Fax: (646) 417-6678

with copies to:        Dewey J. Gonsoulin, Jr.
Bracewell & Giuliani LLP
711 Louisiana Street, Suite 2300
Houston, Texas 77002-2781
Phone: (713) 221-1110
Email: dewey.gonsoulin@bgllp.com
Fax: (713) 221-2121
and
(iii)    if to any other Lender, to it at its address (or telecopy number) set
forth in its
Administrative Questionnaire.

82

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

(b)    Notices and other communications to the Lenders hereunder may be
delivered or
furnished by electronic communications pursuant to procedures approved by the
Administrative
Agent; provided that the foregoing shall not apply to notices pursuant to
Article II, Article III, Article
IV and Article V unless otherwise agreed by the Administrative Agent and the
applicable Lender.
The Administrative Agent or the Borrower 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.

(c)    Any party hereto may change its address or telecopy number for notices
and other
communications hereunder by notice to the other parties hereto. All notices and
other communications
given to any party hereto in accordance with the provisions of this Agreement
shall be deemed to
have been given on the date of receipt.

Section 12.02.    Waivers; Amendments.

(a)    No failure on the part of the Administrative Agent, any other Agent or
any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or
privilege, or any abandonment or discontinuance of steps to enforce such right,
power or privilege,
under any of the Loan Documents shall operate as a waiver thereof, nor shall any
single or partial
exercise of any right, power or privilege under any of the Loan Documents
preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies
of the Administrative Agent, any other Agent and the Lenders hereunder and under
the other Loan
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise
have. No waiver of any provision of this Agreement or any other Loan Document or
consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted
by Section 12.02(b), and then such waiver or consent shall be effective only in
the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of
a Loan shall not be construed as a waiver of any Default, regardless of whether
the Administrative
Agent, any other Agent or any Lender may have had notice or knowledge of such
Default at the time.

(b)    Neither this Agreement nor any provision hereof nor any Loan Document
(other than
the Fee Letter) nor any provision thereof may be waived, amended or modified
except pursuant to
an agreement or agreements in writing entered into by the Borrower and the
Majority Lenders or by
the Borrower and the Administrative Agent with the consent of the Majority
Lenders; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of
such Lender, (ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon, or
reduce any fees payable hereunder, or reduce any other Secured Obligations
hereunder or under any
other Loan Document, without the written consent of each Lender directly
affected thereby, (iii)
postpone the scheduled date of payment or prepayment of the principal amount of
any Loan, or any
interest thereon, or any fees payable hereunder, or any other Secured
Obligations hereunder or under
any other Loan Document, or reduce the amount of, waive or excuse any such
payment, or postpone
or extend the Maturity Date or the Termination Date without the written consent
of each Lender
directly affected thereby, (iv) change Section 4.01(b) or Section 4.01(c) in a
manner that would alter
the pro rata sharing of payments required thereby, without the written consent
of each Lender, (v)
waive or amend Section 3.04(c), Section 6.01 or Section 10.02(c) without the
written consent of each
Lender directly affected thereby, (vi) release any Guarantor (except as
expressly set forth in the Loan
Documents), release all or substantially all of the collateral (other than as
provided in Section 11.10),
or reduce the percentage set forth in Section 8.14(a) to less than 80%, without
the written consent of

83

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

each Lender, (vii) change any of the provisions of this Section 12.02(b) or the
definition “Majority
Lenders” or any other provision hereof specifying the number or percentage of
Lenders required to
waive, amend or modify any rights hereunder or under any other Loan Documents or
make any
determination or grant any consent hereunder or any other Loan Documents,
without the written
consent of each Lender, or (viii) contractually subordinate the payment of all
the Secured Obligations
to any other Debt or, except as set forth in the Intercreditor Agreement,
contractually subordinate the
priority of any of the Administrative Agent’s Liens to the Liens securing any
other Debt, in each case,
without the written consent of each Lender; provided further that no such
agreement shall amend,
modify or otherwise affect the rights or duties of the Administrative Agent or
any other Agent
hereunder or under any other Loan Document without the prior written consent of
the Administrative
Agent or such other Agent, as the case may be. Notwithstanding the foregoing,
any supplement to
Schedule 7.14 shall be effective simply by delivering to the Administrative
Agent a supplemental
schedule clearly marked as such and, upon receipt, the Administrative Agent will
promptly deliver
a copy thereof to the Lenders.

Section 12.03.    Expenses, Indemnity; Damage Waiver.
  

(a)    The Borrower shall pay (i) all reasonable out-of-pocket expenses incurred
by the
Administrative Agent and its Affiliates, including, without limitation, the
reasonable and documented
fees, charges and disbursements of Bracewell & Giuliani LLP, counsel for the
Administrative Agent
(and as required by a firm of local counsel in each appropriate jurisdiction and
in the case of an actual
or potential conflict of interest, one additional firm of counsel to the
affected Lenders) and other
outside consultants for the Administrative Agent, the reasonable travel,
photocopy, mailing, courier,
telephone and other similar expenses, and the cost of environmental invasive and
non-invasive
assessments and audits and surveys and appraisals, in connection with the
syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration
(both before and after the execution hereof and including advice of counsel to
the Administrative
Agent as to the rights and duties of the Administrative Agent and the Lenders
with respect thereto)
of this Agreement and the other Loan Documents and any amendments, modifications
or waivers of
or consents related to the provisions hereof or thereof (whether or not the
transactions contemplated
hereby or thereby shall be consummated), (ii) all costs and expenses incurred by
any Agent in
connection with any filing, registration, recording or perfection of any
security interest contemplated
by this Agreement or any Security Instrument or any other document referred to
therein, and (iii) all
out-of-pocket expenses incurred by any Agent or any Lender, including the fees,
charges and
disbursements of any counsel for any Agent or any Lender, in connection with the
enforcement or
protection of its rights in connection with this Agreement or any other Loan
Document, including its
rights under this Section 12.03, or in connection with the Loans made hereunder,
including, without
limitation, all such out-of-pocket expenses incurred during any workout,
restructuring or negotiations
in respect of such Loans.

(b)    THE BORROWER SHALL INDEMNIFY EACH AGENT, THE ARRANGER AND
EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS
(EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND DEFEND AND
HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS,
DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES,
CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE,
INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN
CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS

84

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

AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY AGREEMENT OR
INSTRUMENT CONTEMPLATED HEREBY OR THEREBY, THE PERFORMANCE BY THE
PARTIES HERETO OR THE PARTIES TO ANY OTHER LOAN DOCUMENT OF THEIR
RESPECTIVE OBLIGATIONS HEREUNDER OR THEREUNDER OR THE CONSUMMATION
OF THE TRANSACTIONS CONTEMPLATED HEREBY OR BY ANY OTHER LOAN
DOCUMENT, (ii) THE FAILURE OF THE BORROWER OR ANY SUBSIDIARY TO COMPLY
WITH THE TERMS OF ANY LOAN DOCUMENT, INCLUDING THIS AGREEMENT, OR WITH
ANY GOVERNMENTAL REQUIREMENT, (iii) ANY INACCURACY OF ANY
REPRESENTATION OR ANY BREACH OF ANY WARRANTY OR COVENANT OF THE
BORROWER OR ANY GUARANTOR SET FORTH IN ANY OF THE LOAN DOCUMENTS OR
ANY INSTRUMENTS, DOCUMENTS OR CERTIFICATIONS DELIVERED IN CONNECTION
THEREWITH, (iv) ANY LOAN OR THE USE OF THE PROCEEDS THEREFROM, (v) ANY
OTHER ASPECT OF THE LOAN DOCUMENTS, (vi) THE OPERATIONS OF THE BUSINESS
OF THE BORROWER AND ITS SUBSIDIARIES BY THE BORROWER AND ITS
SUBSIDIARIES, (vii) ANY ASSERTION THAT THE LENDERS WERE NOT ENTITLED TO
RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THE SECURITY INSTRUMENTS,
(viii) ANY ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY
SUBSIDIARY OR ANY OF THEIR PROPERTIES OR OPERATIONS, INCLUDING, THE
PRESENCE, GENERATION, STORAGE, RELEASE, THREATENED RELEASE, USE,
TRANSPORT, DISPOSAL, ARRANGEMENT FOR DISPOSAL OR TREATMENT OF
HAZARDOUS MATERIALS ON OR AT ANY OF THEIR PROPERTIES, (ix) THE BREACH OR
NON-COMPLIANCE BY THE BORROWER OR ANY SUBSIDIARY WITH ANY
ENVIRONMENTAL LAW APPLICABLE TO THE BORROWER OR ANY SUBSIDIARY, (x) THE
PAST OWNERSHIP BY THE BORROWER OR ANY SUBSIDIARY OF ANY OF THEIR
PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR PROPERTIES WHICH, THOUGH
LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD RESULT IN PRESENT
LIABILITY, (xi) THE PRESENCE, USE, RELEASE, STORAGE, TREATMENT, DISPOSAL,
GENERATION, THREATENED RELEASE, TRANSPORT, ARRANGEMENT FOR
TRANSPORT OR ARRANGEMENT FOR DISPOSAL OF HAZARDOUS MATERIALS ON OR
AT ANY OF THE PROPERTIES OWNED OR OPERATED BY THE BORROWER OR ANY
SUBSIDIARY OR ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS
MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER
OR ANY OF ITS SUBSIDIARIES, (xii) ANY ENVIRONMENTAL LIABILITY RELATED IN ANY
WAY TO THE BORROWER OR ANY OF ITS SUBSIDIARIES, OR (xiii) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE LOAN
DOCUMENTS, OR (xiv) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION,
INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF
WHETHER ANY INDEMNITEE IS A PARTY THERETO, AND SUCH INDEMNITY SHALL
EXTEND TO EACH INDEMNITEE NOTWITHSTANDING THE SOLE OR CONCURRENT
NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER, WHETHER ACTIVE OR
PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION, INCLUDING WITHOUT
LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN THE RESTATEMENT
(SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNITEES OR BY REASON OF
STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE OF THE
INDEMNITEES; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS,
DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE

85

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

RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE OR RELATE TO TAXES SUBJECT TO INDEMNIFICATION UNDER SECTION
5.03.

(c)    To the extent that the Borrower fails to pay any amount required to be
paid by it to
any Agent or the Arranger under Section 12.03(a) or (b), each Lender severally
agrees to pay to such
Agent or the Arranger, as the case may be, such Lender’s Applicable Percentage
(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 such
Agent or the Arranger
in its capacity as such.

(d)    To the extent permitted by applicable law, the Borrower shall not assert,
and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential
or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or
as a result of, this Agreement, any other Loan Document or any agreement or
instrument contemplated
hereby or thereby, the Transactions, any Loan or the use of the proceeds
thereof.

(e)    All amounts due under this Section 12.03 shall be payable not later than
10 Business
Days after written demand therefor.

Section 12.04.    Successors and Assigns.

(a)    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 (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written
consent of each Lender (and any attempted assignment or transfer by the Borrower
without such
consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or
obligations hereunder except in accordance with this Section 12.04. 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 Section
12.04(c)) and, to the extent expressly contemplated hereby, the Related Parties
of each of the
Administrative Agent and the Lenders) any legal or equitable right, remedy or
claim under or by
reason of this Agreement.

(b)    (i)    Subject to the conditions set forth in Section 12.04(b)(ii), any
Lender may
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) with
the prior written consent (such consent not to be unreasonably withheld) of:
                
(A)    the Borrower, provided that no consent of the Borrower shall be
required if (1) an Event of Default has occurred and is continuing or
(2) at any other time, such assignment is to a Lender, an Affiliate of a
Lender or a Related Fund; and

(B)    the Administrative Agent, provided that no consent of the
                    Administrative Agent     shall be required for an assignment
to an
assignee that is a Lender immediately prior to giving
effect to such assignment.

86

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

(ii)    Assignments shall be subject to the following additional conditions:

(A)    except in the case of an assignment to a Lender or an Affiliate of a
Lender or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans, the amount of the
Commitment or 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 the Administrative
Agent) shall not be less than $3,000,000 unless each of the Borrower
and the Administrative Agent otherwise consent, provided that no such
consent of the Borrower shall be required if an Event of Default has
occurred and is continuing;

(B)    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;

(C)    the parties to each assignment shall execute and deliver to the
                    Administrative Agent an Assignment and Assumption, together
with a
processing and recordation fee of $5,000; and

(D)    the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire.

(iii)    Subject to Section 12.04(b)(iv) and the acceptance and recording
thereof, from
and after the effective date specified in each Assignment and Assumption the
assignee
thereunder shall be a party hereto 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 Section 5.01, Section 5.02, Section 5.03 and Section
12.03). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does
not comply with this Section 12.04 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 Section
12.04(c).

(iv)    The Administrative Agent, acting for this purpose as an agent of the
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
Commitment of, and principal amount 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 the Borrower, the 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 the Borrower and any Lender, at any reasonable time
and from
time to time upon reasonable prior notice. In connection with any changes to the
Register, if
necessary, the Administrative Agent will reflect the revisions on Annex I and
forward a copy

87

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

of such revised Annex I to the Borrower and each Lender.

(v)    Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and
recordation fee referred to in Section 12.04(b) and any written consent to such
assignment
required by Section 12.04(b), the Administrative Agent shall accept such
Assignment and
Assumption and record the information contained therein in the Register. No
assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register
as provided in this Section 12.04(b).

(vi)    Notwithstanding the foregoing or anything to the contrary contained
herein,
each Lender agrees to give the Borrower seven (7) Business Days’ prior written
notice (a
“Notice of Assignment”) prior to assigning (other than (A) any assignment
required pursuant
to Section 5.04(b) or (B) any assignment to another Lender or any Affiliate
thereof or any
Related Fund) any of its Loans, Secured Obligations or Commitments (or any
combination
thereof) (the “Subject Interests”) hereunder and of the proposed purchase price
therefor (the
“Purchase Price”). Upon receipt of any Notice of Assignment, the Borrower may
elect to
purchase the Subject Interests at the Purchase Price, so long as the Borrower
gives written
notice of such election to the assigning Lender within seven (7) Business Days
after the
Borrower’s receipt of such Notice of Assignment. If the Borrower does not make
an election
to purchase the Subject Interests within such seven (7) Business Day period or
the Borrower
expressly declines to do so, then such Lender shall be entitled to assign the
Subject Interests
within thirty (30) days after the expiration of such seven (7) Business Day
period or the date
on which the Borrower declines to purchase the Subject Interests, so long as the
consideration
received for such assignment is equal to or greater than the Purchase Price. Any
Loans,
Secured Obligations or Commitments acquired by the Borrower pursuant hereto
shall be
retired and cancelled promptly upon the acquisition thereof (and in no event
shall the Borrower
be deemed to be a Lender hereunder). Any such acquisition of Loans, Secured
Obligations
or Commitments hereunder by the Borrower shall be made pursuant to documentation
in form
and substance reasonably satisfactory to the Borrower, the assigning Lender and
the
Administrative Agent.

(c)     (i)    Any Lender may, without the consent of the Borrower, the
Administrative
Agent or any other Person, sell participations to one or more banks or other
entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this Agreement
(including all or a
portion of its Commitment and the Loans owing to it); provided that (A) such
Lender’s obligations
under this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to
the other parties hereto for the performance of such obligations, (C) the
Borrower, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection
with such Lender’s rights and obligations under this Agreement, and (D) the
selling Lender shall
maintain a register containing the name and address of the Participant and the
principal amount (and
stated interest) of the Loans owing to such participant. 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 first proviso to Section 12.02(b) that affects such Participant. In addition
such agreement must
provide that the Participant be bound by the provisions of Section 12.03.
Subject to Section 12.04

88

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

(c)(ii), the Borrower agrees that each Participant shall be entitled to the
benefits of Section 5.01,
Section 5.02 and Section 5.03 to the same extent as if it were a Lender and had
acquired its interest
by assignment pursuant to Section 12.04(b). To the extent permitted by law, each
Participant also
shall be entitled to the benefits of Section 12.08 as though it were a Lender,
provided such Participant
agrees to be subject to Section 4.01(c) as though it were a Lender. Each Lender
that sells a participation
shall, acting solely for this purpose as an agent of the Borrower, maintain a
register on which it enters
the name and address of each Participant and the principal amounts (and stated
interest) of each
Participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or
any portion of the
Participant Register (including the identity of any Participant or any
information relating to a
Participant's interest in any commitments, loans, letters of credit or its other
obligations under any
Loan Document) to any Person except to the extent that such disclosure is
necessary to establish that
such commitment, loan, letter of credit or other obligation is in registered
form under Section 5f.103-1
(c) of the United States Treasury Regulations. The entries in the Participant
Register shall be
conclusive absent manifest error, and such Lender shall treat each Person whose
name is recorded in
the Participant Register as the owner of such participation for all purposes of
this Agreement
notwithstanding any notice to the contrary.

(ii)    A Participant shall not be entitled to receive any greater payment under
Section
5.01 or Section 5.03 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 the 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 5.03 such
Participant agrees, for the benefit of the Borrower, to comply with Section
5.03(e) as though
it were a Lender (it being understood the documentation required under Section
5.03(e) shall
be provided only to the selling Lender).

(d)    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, without limitation,
any pledge or assignment to secure obligations to a Federal Reserve Bank or a
central bank, and this
Section 12.04 shall not apply to any such pledge or assignment of a security
interest; provided that
no such pledge or assignment of a security interest shall release a Lender from
any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

Section 12.05.    Survival; Revival; Reinstatement.

(a)    All covenants, agreements, representations and warranties made by the
Loan Parties
herein and in the certificates or other instruments delivered in connection with
or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the other
parties hereto and shall survive the execution and delivery of this Agreement
and the other Loan
Documents and the making of any Loans, regardless of any investigation made by
any such other
party or on its behalf and notwithstanding that the Administrative Agent, any
other Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at
the time any credit is extended hereunder, and shall continue in full force and
effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount
payable under this
Agreement is outstanding and unpaid and so long as the Commitments have not
expired or terminated.
The provisions of Section 5.01, Section 5.02, Section 5.03 and Section 12.03 and
Article XI shall
survive and remain in full force and effect regardless of the consummation of
the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Commitments

89

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

or the termination of this Agreement, any other Loan Document or any provision
hereof or thereof.

(b)    To the extent that any payments on the Secured Obligations or proceeds of
any
collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required
to be repaid to a trustee, debtor in possession, receiver or other Person under
any bankruptcy law,
common law or equitable cause, then to such extent, the Secured Obligations so
satisfied shall be
revived and continue as if such payment or proceeds had not been received and
the Administrative
Agent’s and the Lenders’ Liens, security interests, rights, powers and remedies
under this Agreement
and each Loan Document shall continue in full force and effect. In such event,
each Loan Document
shall be automatically reinstated and the Borrower shall take such action as may
be reasonably
requested by the Administrative Agent and the Lenders to effect such
reinstatement.

Section 12.06.    Counterparts; Integration; Effectiveness.

(a)    This Agreement may be executed in counterparts (and by different parties
hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together
shall constitute a single contract.

(b)    THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND THERETO AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

(c)    Except as provided in Section 6.01, this Agreement shall become effective
when it
shall have been executed by the Administrative Agent and when the Administrative
Agent shall have
received counterparts hereof which, when taken together, bear the signatures of
each of the other
parties hereto, and thereafter shall be binding upon and inure to the benefit of
the parties hereto and
their respective successors and assigns. Delivery of an executed counterpart of
a signature page of
this Agreement by telecopy, facsimile or other similar electronic means shall be
effective as delivery
of a manually executed counterpart of this Agreement.

Section 12.07.    Severability. Any provision of this Agreement or any other
Loan Document held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such invalidity,
illegality or unenforceability without affecting the validity, legality and
enforceability of the remaining provisions hereof or thereof; and the invalidity
of a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.

Section 12.08.Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other obligations (of whatsoever kind, including,
without limitations obligations under Swap Agreements) at any time owing by such
Lender or Affiliate to or for the credit or the account of the Borrower or any
Subsidiary against any of and all the obligations of the Borrower or any
Subsidiary owed to such Lender now or hereafter existing under this Agreement or
any other Loan Document, irrespective of whether or not such Lender shall have
made any demand under this Agreement or any other Loan Document and although
such obligations may be unmatured. The rights of each Lender under this Section
12.08 are in addition to other rights and remedies (including other rights of
setoff) which such Lender or its Affiliates may have.

90

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

Section 12.09.    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS
.
(a)    THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b)    ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN
DOCUMENTS SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR
OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY
ACCEPTS FOR ITSELF AND (TO THE EXTENT PERMITTED BY LAW) IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING
IN SUCH RESPECTIVE JURISDICTIONS.

(c)    EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF
ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO IT AT THE ADDRESS SPECIFIED IN SECTION 12.01 OR SUCH OTHER
ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 (OR ITS ASSIGNMENT AND
ASSUMPTION). NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY OR ANY
HOLDER OF A NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
ANOTHER PARTY IN ANY OTHER JURISDICTION.

(d)    EACH PARTY HEREBY (i) IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN; (ii) IRREVOCABLY WAIVES, TO
THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE
OR CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES; (iii) CERTIFIES THAT NO PARTY HERETO NOR ANY
REPRESENTATIVE OR 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 (iv) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, THE LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED
HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS SECTION 12.09.

Section 12.10.    Headings . Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.

91

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

Section 12.11.    Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates’
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such disclosure
is made will be informed of the confidential nature of such Information and
required to keep such Information confidential), (b) to the extent requested by
any regulatory authority having authority over the Administrative Agent or any
Lender, (c) to the extent required by applicable laws or regulations or by any
subpoena or similar legal process, (d) to any other party to this Agreement or
any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section 12.11, to (i) any
assignee of or Participant in, or any prospective assignee of or Participant in,
any of its rights or obligations under this Agreement (provided that such Person
agrees to be bound by the provisions of this Section 12.11) or (ii) any actual
or prospective counterparty (or its advisors) to any Swap Agreement relating to
the Borrower and its obligations (provided that such Person agrees to be bound
by the provisions of this Section 12.11), (g) with the consent of the Borrower
or (h) to the extent such Information (i) becomes publicly available other than
as a result of a breach of this Section 12.11 or (ii) becomes available to the
Administrative Agent or any Lender on a nonconfidential basis from a source
other than the Borrower. For the purposes of this Section 12.11, “Information”
means all information received from the Borrower or any Subsidiary relating to
the Borrower or any Subsidiary and their businesses, including any Information
obtained by the Observer, other than any such information that is available to
the Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by the Borrower or a Subsidiary; provided that, in the case of
information received from the Borrower or any Subsidiary after the date hereof,
such information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as provided
in this Section 12.11 shall be considered to have complied with its obligation
to do so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

Section 12.12.    Interest Rate Limitation. It is the intention of the parties
hereto that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of New York or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Secured Obligations (or, to the extent that the principal amount of the Secured
Obligations shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower); and (ii) in the event that the maturity of the Notes is
accelerated by reason of an election of the holder thereof resulting from any
Event of Default under this Agreement or otherwise, or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
such Lender as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited by such Lender on the principal amount of
the Secured Obligations (or, to the extent that the principal amount of the
Secured Obligations shall have been or would thereby be paid in full, refunded
by such Lender to the Borrower). All sums paid or agreed to be paid to any
Lender

92

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

for the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender, be amortized, prorated, allocated
and spread throughout the stated term of the Loans evidenced by the Notes until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Lender pursuant to this Section 12.12 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Lender would be less than the amount of interest payable to such Lender computed
at the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.12.

Section 12.13.    EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS; AND HAS RECEIVED
THE ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
“CONSPICUOUS.”

Section 12.14.    Reserved.

Section 12.15.    No Third Party Beneficiaries. This Agreement, the other Loan
Documents, and the agreement of the Lenders to make Loans hereunder are solely
for the benefit of the Borrower, and no other Person (including, without
limitation, any Subsidiary of the Borrower, any obligor, contractor,
subcontractor, supplier or materialsman) shall have any rights, claims, remedies
or privileges hereunder or under any other Loan Document against the
Administrative Agent, any other Agent or any Lender for any reason whatsoever.
There are no third party beneficiaries.

Section 12.16.    USA Patriot Act Notice. Each Lender hereby notifies the
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 “Patriot Act”), it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender to identify the Borrower in accordance
with the Patriot Act.

Section 12.17.    Alaska Statutes. The Loan Parties are personally obligated and
fully liable for the amount due under this Agreement. The Administrative Agent
has the right to sue on this Agreement and the

93

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

other Loan Documents and obtain a personal judgment against each Loan Party for
satisfaction of the amount due under this Agreement and the other Loan Documents
either before or after a judicial foreclosure of any Mortgage under AS 09.45.170
- 09.45.220.

Section 12.18.    Intercreditor Agreement. The Administrative Agent is hereby
authorized on behalf of the Lenders to enter into the Intercreditor Agreement
substantially in the form attached hereto as Exhibit G. Each Lender acknowledges
and agrees to the terms of such Intercreditor Agreement and agrees that the
terms thereof shall be binding on such Secured Party and its successors and
assigns, as if it were a party thereto.

Section 12.19.    Amendment and Restatement. This Agreement represents an
amendment and restatement of the Existing Credit Agreement. Any indebtedness
under the Existing Credit Agreement continues, without duplication, under this
Agreement, and the execution of this Agreement does not indicate a payment,
satisfaction, novation or discharge thereof.

94

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

[SIGNATURES BEGIN NEXT PAGE]

95

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

The parties hereto have caused this Agreement to be duly executed as of the day
and year first above written.

BORROWER:
 
MILLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
/s/ Scott M. Boruff
 
 
Name:
Scott M. Boruff
 
 
Title:
Chief Financial Officer

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

ADMINISTRATIVE AGENT:
 
 
APOLLO INVESTMENT CORPORATION, as
 
 
 
Administrative Agent for the Lenders
 
 
 
 
 
 
By:
Apollo Investment Management, L.P.
 
 
 
 
 
 
By:
ACC Management, LLC, as its General Partner
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ted Goldthorpe
 
 
Name:
Ted Goldthorpe
 
 
Title:
President

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
APOLLO INVESTMENT CORPORATION, as
 
 
 
a Lender
 
 
 
 
 
 
By:
Apollo Investment Management, L.P.
 
 
 
 
 
 
By:
ACC Management, LLC, as its General Partner
 
 
 
 
 
 
 
 
 
 
By:
/s/ Ted Goldthorpe
 
 
Name:
Ted Goldthorpe
 
 
Title:
President

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE PRINCIPAL STRATEGIES -
 
 
 
SPECIALTY LOAN FUND III, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC as
 
 
 
Trading Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE PRINCIPAL STRATEGIES -
 
 
 
SPECIALTY LOAN VG FUND, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its
 
 
 
Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE PRINCIPAL STRATEGIES -
 
 
 
NDT SENIOR LOAN FUND, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its trading
 
 
 
Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE PRINCIPAL STRATEGIES -
 
 
 
SPECIALTY LOAN INSTITUTIONAL FUND
 
 
 
III, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its
 
 
 
Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE SPECIALTY LOAN
 
 
 
INSTITUTIONAL HOLDINGS LIMITED
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its
 
 
 
investment manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE AIGUILLES ROUGES
 
 
 
SECTOR A INVESTMENT FUND, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC as
 
 
 
manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
HIGHBRIDGE SPECIALTY LOAN SECTOR
 
 
 
A INVESTMENT FUND, L.P.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its
 
 
 
Trading Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

LENDER:
 
 
LINCOLN INVESTMENT SOLUTIONS, INC.
 
 
 
 
 
 
By:
Highbridge Principal Strategies, LLC its
 
 
 
Investment Manager
 
 
 
 
 
 
 
 
 
 
By:
/s/ Don Dimitrievich
 
 
Name:
Don Dimitrievich
 
 
Title:
Managing Director

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

ANNEX I
LIST OF COMMITMENTS
Name of Lender
Applicable Percentage
Commitment
Apollo Investment Corporation
50.0%
$87,500,000.00
Highbridge Principal Strategies - Specialty Loan Fund III, L.P.
10.68%
 $18,682,125.00
Highbridge Specialty Loan Sector A Investment Fund, L.P.
23.37%
 $40,889,625.00
Highbridge Specialty Loan Institutional Holdings Limited
3.88%
 $6,795,250.00
Highbridge Aiguilles Rouges Sector A Investment Fund, L.P.
3.40%
 $5,956,125.00
Highbridge Principal Strategies - Specialty Loan Institutional Fund III, L.P.
3.06%
 $5,355,000.00
Highbridge Principal Strategies - Specialty Loan VG Fund, L.P.
2.55%
 $4,458,125.00
Highbridge Principal Strategies - NDT Senior Loan Fund, L.P.
1.58%
 $2,766,750.00
Lincoln Investment Solutions, Inc.
1.48%
 $2,597,000.00
TOTAL
100.00%
$175,000,000.00

[SIGNATURE PAGE - AMENDED & RESTATED CREDIT AGREEMENT]

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

EXHIBIT A
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS
FORM OF NOTE
[DATE]
FOR VALUE RECEIVED, Miller Energy Resources, Inc., a corporation duly formed and
existing under the law of the State of Tennessee (“Borrower”), hereby promises
to pay to [__] (“Lender”), in accordance with the provisions of the Credit
Agreement (as hereinafter defined), the principal amount of each Loan or so much
thereof as may be advanced by Lender from time to time to or for the benefit or
account of Borrower under that certain Amended and Restated Credit Agreement,
dated as of February 3, 2014 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Credit Agreement;” the
terms defined therein being used herein as therein defined), among Borrower, the
lenders from time to time party thereto, and Apollo Investment Corporation, as
Administrative Agent (in such capacity, “Administrative Agent”).
Borrower promises to pay interest on the unpaid principal amount of this Note
from the date hereof until the Loans made by Lender are paid in full, at such
interest rates and at such times as provided in the Credit Agreement. All
payments of principal and interest shall be made to Administrative Agent for the
account of Lender in dollars in immediately available funds as provided in the
Credit Agreement. If any amount is not paid in full when due hereunder, then
such unpaid amount shall bear interest, to be paid upon demand, from the due
date thereof until the date of actual payment (and before as well as after
judgment) computed at the per annum rate set forth in the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement, is entitled
to the benefits thereof and may be prepaid in whole or in part subject to the
terms and conditions provided therein. This Note is also entitled to the
benefits of the Security Instruments and the other Loan Documents. Upon the
occurrence and continuation of one or more of the Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable all as provided in
the Credit Agreement. The Loans made by Lender shall be evidenced by an account
maintained by Lender in the ordinary course of business. Lender may also attach
schedules to this Note and endorse thereon the date, amount and maturity of its
Loans and payments with respect thereto. Borrower, for itself, its successors
and assigns, hereby waives diligence, presentment, protest and demand and notice
of protest, demand, dishonor and non-payment of this Note.
Borrower is personally obligated and fully liable for the amount due under this
Note. The Lender has the right to sue on this Note and obtain a personal
judgment against Borrower for satisfaction of the amount due under this Note
either before or after a judicial foreclosure of the Mortgages under the laws of
the State of Alaska (including, but not limited to, AS 09.45.170 - 09.45.220).
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.

[Remainder of page intentionally left blank. Signature page follows.]

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

IN WITNESS WHEREOF, the undersigned has executed this Note as of the day and
year set forth above.
 
 
MILLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

Exhibit A

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

EXHIBIT B
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS

FORM OF
BORROWING REQUEST
[Date]
Apollo Investment Corporation, as Administrative Agent
9 West 57th Street, 37th Floor
New York, New York 10019
Attention: Dan Vogel
Phone: (212) 822-0740
Email: dvogel@apolloic.com
Fax: (646) 417-6678

Ladies and Gentlemen:
The undersigned, Miller Energy Resources, Inc., a Tennessee corporation
(“Borrower”), refers to the Amended and Restated Credit Agreement dated as of
February 3, 2014 (as the same may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Borrower,
the lenders from time to time party thereto (the “Lenders”), and Apollo
Investment Corporation, as Administrative Agent for the Lenders. Capitalized
terms used but not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement.
Borrower hereby gives you irrevocable notice pursuant to Section 2.03 of the
Credit Agreement that it hereby requests a borrowing of Loans under the Credit
Agreement (the “Requested Borrowing”), and in connection therewith sets forth
below the information relating to such Requested Borrowing as required by
Section 2.03 of the Credit Agreement:
(a)    The aggregate principal amount of the Requested Borrowing is
$[__________].
(b)    The date of the Requested Borrowing is [________, ____].1 
(c)    The initial Interest Period applicable to the Requested Borrowing is
[______].2 
(d)    The location and number of the Borrower’s account to which funds are to
be disbursed is [____].3
——————
1    To be a Business Day.
2    To be a period contemplated by the definition of the term "Interest
Period."
3    Insert wiring instructions.

Exhibit B
#4463408.3

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

The undersigned hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date of the
Requested Borrowing:
(i)    The representations and warranties of each of the Loan Parties contained
in each Loan Document are true and correct in all material respects (unless such
representation and warranty is already qualified by materiality, in which case
such representation or warranty is simply true and correct) on and as of the
date hereof, except to the extent any such representations and warranties are
expressly limited to an earlier date, in which case, on and as of the date
hereof, such representations and warranties continue to be true and correct as
aforesaid as of such specified earlier date
(ii)    No Default has occurred and is continuing or will result from the making
of the Requested Borrowing.
(iii)    No event, development or circumstance has occurred or exists that has
resulted in, or could reasonably be expected to have, or after giving effect to
the Requested Borrowing will result in, a Material Adverse Effect.
Delivery of an executed counterpart of this Borrowing Request by facsimile or
other electronic means will be effective as delivery of an original executed
counterpart of this Borrowing Request.

[Signature Page Follows]

Exhibit B

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

IN WITNESS WHEREOF, the undersigned has executed this Borrowing Request as of
the day and year set forth above.

 
 
MILLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

Exhibit B

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

EXHIBIT C
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS
 

FORM OF CONTINUATION REQUEST

[Date]

Apollo Investment Corporation, as Administrative Agent
9 West 57th Street, 37th Floor
New York, New York 10019
Attention: Dan Vogel
Phone: (212) 822-0740
Email: dvogel@apolloic.com
Fax: (646) 417-6678

Ladies and Gentlemen:

The undersigned, Miller Energy Resources, Inc., a corporation duly formed and
existing under the laws of the State of Tennessee (“Borrower”), refers to the
Amended and Restated Credit Agreement dated as of February 3, 2014 (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among Borrower, the lenders from time to time party
thereto (the “Lenders”), and Apollo Investment Corporation, as Administrative
Agent for the Lenders. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.

Borrower hereby gives you irrevocable notice pursuant to Section 2.04(b) of the
Credit Agreement that it hereby requests a continuation of outstanding
Eurodollar Loans, and in connection with that request sets forth below the
information relating to such continuation (the “Proposed Continuation”) as
required by Section 2.04(c) of the Credit Agreement:

(a)    The date of the Proposed Continuation is [____________, ____].4 

(b)    The Interest Period for the Loans to be continued pursuant to the
Proposed Continuation is [____].

————————
4    To be a Business Day
5    To be a period contemplated by the definition of the term "Interest
Period."

[Signature Page Follows]

    

Exhibit C
#4463531.2

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

IN WITNESS WHEREOF, the undersigned has executed this Continuation Request as of
the day and year set forth above.
 
 
MILLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

Exhibit C

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

Exhibit D
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS

FORM OF COMPLIANCE CERTIFICATE

COMPANY LETTERHEAD

[Date]

Apollo Investment Corporation, as Administrative Agent
9 West 57th Street, 37th Floor
New York, New York 10019
Attention: Dan Vogel
Phone: (212) 822-0740
Email: dvogel@apolloic.com
Fax: (646) 417-6678

Ladies and Gentlemen:

This Compliance Certificate (this “Certificate”) is given pursuant to
Section 8.01(c) of that certain Amended and Restated Credit Agreement dated as
of February 3, 2014 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among Miller Energy Resources, Inc.,
a Tennessee corporation (“Borrower”), the lenders from time to time party
thereto (the “Lenders”), and Apollo Investment Corporation, as Administrative
Agent for the Lenders. Capitalized terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement.
The officer executing this Certificate is the [________]6 of Borrower, and as
such is duly authorized to execute and deliver this Certificate on behalf of
Borrower. By so executing this Certificate, the undersigned hereby certifies to
Administrative Agent on behalf of Borrower, solely in his capacity as the
[________] of Borrower and not individually, that:
1.
The financial statements for the [fiscal year/fiscal quarter] ending
[__________], 20[__] delivered with this Certificate in accordance with Section
[8.01(a)][8.01(b)] of the Credit Agreement fairly present in all material
respects the financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied at the dates and for the periods indicated in the financial
statements[, subject, in the case of any unaudited financial statements
delivered pursuant to Section 8.01(b) of the Cred Agreement, to normal year-end
audit adjustments and the absence of footnotes]. 7 

————————
6
Must be a Financial Officer

7
Insert bracketed phrase when financial statements delivered with this
Certificate are delivered pursuant to Section 8.01(b).

Exhibit D
#4463577.6

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

2.
No Default or Event of Default has occurred and is continuing, except as set
forth in Schedule 1 hereto, which includes a description of the nature and
status and period of existence of such Default or Event of Default, if any, and
what action the Borrower has taken, is undertaking and/or proposes to take with
respect thereto.

3.
Except as set forth in Schedule 1 hereto, the Borrower is in compliance, as of
the last day of the period covered by the financial statements attached hereto,
with each of the covenants set forth in Section 8.20 and Section 9.01 of the
Credit Agreement, as demonstrated by the detailed calculations of such covenants
set forth in Schedule 2 hereto.

4.
No change in GAAP or in the application thereof has occurred since the date of
the most recent audited financial statements delivered pursuant to Section
8.01(a) of the Credit Agreement, except as set forth in Schedule 3 hereto, which
includes a description of the change in GAAP and the effect of such change on
the financial statements accompanying this Certificate.

[Signature page follows.]

Exhibit D

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

IN WITNESS WHEREOF, the undersigned has executed this Compliance Certificate as
of the day and year set forth above.

 
 
MILLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 

Exhibit D

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

SCHEDULE 1
DEFAULTS AND EVENTS OF DEFAULT

Schedule 1 to Compliance Certificate

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

SCHEDULE 2
FINANCIAL COVENANT CALCULATIONS

Fiscal [year] [quarter] ending [__]

Section 8.20 - Liquidity

(a)
readily and immediately available unrestricted cash held in

deposit accounts of the Loan Parties and Cash Equivalents
of the Loan Parties, in each case, which are free and
clear of all Liens (other than Liens in favor
of Administrative Agent securing the Secured
Obligations and the First Lien Administrative Agent
securing the First Lien Secured Obligations)
and which are reflected on the Borrower’s balance sheet

$            

(b)
the amount of the First Lien Loans that

are available for borrowing                    $            

Liquidity = (a) + (b)                          $            

Minimum Liquidity:                        $5,000,000.00

Compliance                            Yes      No

Schedule 2 to Compliance Certificate

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

Section 9.01(a) - Leverage Ratio

(a)    [Net Debt] 8 [Total Debt]9 of
the Borrower as of the last day of
such fiscal [quarter] [year]                    $            

(b)    Borrower’s consolidated EBITDAX10,11 for
the four fiscal quarter period then ended
(i) + [(ii) + (iii) + (iv) + (v) + (vi) + (vii) + (viii) + (ix)]12 + (x) - [(xi)
+ (xii)]13 =             
$            

(i)    Consolidated Net Income14     $            
(ii)    Interest Expense15,16 (A + B)            $            
(A)     interest expense (including imputed interest expense in respect of
                obligations under any Capital Lease or Synthetic Lease) of the
                Borrower and the Subsidiaries for such period, determined on a
                consolidated basis in accordance with GAAP (excluding, for the
                avoidance of doubt, interest on preferred stock)

—————————
8
For each quarter ending on or before July 31, 2014.

9
For each quarter ending after July 31, 2014.

10
Insert annualized numbers pursuant to the proviso in the definition of “EBITDAX”
for quarters April 30, 2014, July 31, 2014 and October 31, 2014.,

11
EBITDAX shall be subject to pro forma adjustments for acquisitions or
dispositions (calculated in accordance with Regulation S-X under the Securities
Exchange Act of 1934, as amended or as otherwise approved by the Administrative
Agent), as if such acquisition or disposition had occurred on the first day of
such period and shall also include adding back to Consolidated Net Income any
non-recurring or one-time cash or non-cash charges or expenses associated with
such acquisition or disposition that are reasonably acceptable to the
Administrative Agent.

12
Only add items (ii) - (ix) to the extent deducted in calculating Consolidated
Net Income.

13
Only subtract items (xi) and (xii) to the extent added in the determination of
Consolidated Net Income.

14
Exclude from net income (or loss) (to the extent otherwise included therein) the
following: (a) the net income (or loss) of any Person in which the Borrower or
any Consolidated Subsidiary has an interest (which interest does not cause the
net income of such other Person to be consolidated with the net income of the
Borrower and the Consolidated Subsidiaries in accordance with GAAP), except to
the extent of the amount of dividends or distributions actually paid in cash
during such period by such other Person to the Borrower or to a Consolidated
Subsidiary, as the case may be; (b) the net income (but not loss) during such
period of any Consolidated Subsidiary to the extent that the declaration or
payment of dividends or similar distributions or transfers or loans by that
Consolidated Subsidiary is not at the time permitted by operation of the terms
of its charter or any agreement, instrument or Governmental Requirement
applicable to such Consolidated Subsidiary or is otherwise restricted or
prohibited; (c) any extraordinary gains or losses during such period, (d)
non-cash gains, losses or adjustments, including non-cash gains, losses or
adjustments under authoritative guidance from the FASB as a result of changes in
the fair market value of derivatives and any gains or losses attributable to
writeups or writedowns of assets, including ceiling test writedowns and
writedowns under authoritative guidance from the FASB as a result of accounting
for oil and gas activities, goodwill and other intangible assets, and property,
plant and equipment (for the avoidance of doubt, realized gains or losses will
be counted in Consolidated Net Income in the quarter that cash is actually
received or paid); (e) any non-cash employee based compensation; and (f) any
gain or loss realized in connection with asset sales.        

15
Insert annualized numbers pursuant to the proviso in the definition of “Interest
Expense” for quarters ending April 30, 2014, July 31, 2014 and October 31,
2014.,

16
Interest expense shall be determined after giving effect to any net payments
made or received by the Borrower or any Subsidiary with respect to interest rate
Swap Agreements.

$            
                        

Schedule 2 to Compliance Certificate

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

(B)    any interest accrued during such period in respect of Debt of the
                Borrower or any Subsidiary that is required to be capitalized
rather             than included in consolidated interest expense for such
period in                 accordance with GAAP

$            

(iii)    income Taxes                    $            
(iv)    depreciation                    $            
(v)    depletion                    $            

(vi)    amortization17                     $            

(vii)     exploration expenses                $            

(viii)    accretion of asset retirement obligations    $            

(ix)    other noncash charges reasonably
acceptable to the Administrative Agent    $            

(x)    payments paid to
Apollo under and as defined
in the Restructuring Agreement18     $            

(xi)     noncash income included
in the calculation of
Consolidated Net Income            $            

(xii)    any cash received outside
the ordinary course of business from
any foreign, United States, state or local
tax credit or incentive program, including,
without limitation, Alaska’s Oil & Gas
Production Tax Credit program        $            

Leverage Ratio = (a) divided by (b)              ________ : ________

Maximum Leverage Ratio:                [3.75 to 1.00][3.50 to 1.00]19

Compliance                        Yes      No

————————
17
Including amortization of deferred financing costs.

18
To the extent deducted in calculating Consolidated Net Income    

19
Use (a) 3.75 to 1.00 for fiscal quarters ending April 30, 2014 and July 31,
2014, and (b) 3.50 to 1.00 for each fiscal quarter ending on or after October
31, 2014.

Schedule 2 to Compliance Certificate

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

        

Section 9.01(b) - Interest Coverage Ratio
    
(a)    EBITDAX for the four
fiscal quarter period then ended [cross reference calculation above]
                        
$_______________

(b)    Interest Expense for the four
fiscal quarter period then ended [cross reference calculation
above]                                                
$_______________

Interest Coverage Ratio = (a) divided by (b)        ________ : ________
    
Minimum Interest Coverage Ratio:            [2.25 to 1.00][2.50 to 1.00]20
        

Compliance                        Yes     No

Section 9.01(c) - Current Ratio

(a)    consolidated current assets (including
the unused amount of the total Commitments,
but excluding non-cash assets under ASC 815
and current plugging and abandonment restricted cash) as of the last day of such
            fiscal [quarter] [year]

$_______________

(b)    consolidated current liabilities (excluding
non-cash obligations under ASC 815,
current liabilities for plugging and abandonment
expense and current maturities
under the Credit Agreement) as of the last day of such fiscal [quarter] [year]

$_______________

Current Ratio = (a) divided by (b)            ________ : ________

Minimum Current Ratio:                1.0 to 1.0

Compliance                        Yes     No
————————
20
Use (a) 2.25 to 1.00 for the fiscal quarter ending April 30, 2014, and (b) 2.50
to 1.00 for each fiscal quarter ending on and after July 31, 2014.    

Schedule 2 to Compliance Certificate

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

Section 9.01(d) - Minimum Gross Production

Daily average of gross production of Hydrocarbons (calculated at the wellhead on
a barrel of oil equivalent basis, where 10 Mcf of natural gas is equal to one
barrel of oil) from the Loan Parties’ Oil and Gas Properties constituting
Mortgaged Property during the fiscal quarter then ended:

_______________

Minimum Gross Production:                2,500

Compliance                        Yes     No

Section 9.01(e) - Asset Coverage Ratio

(a)    NYMEX Value of the total Proved Developed Reserves
of the Loan Parties as shown
on the most recently delivered Reserve Report    
$_______________
    
(b)    Total Debt as of the last day of such fiscal [quarter]
[year]                        
$_______________

Minimum Asset Coverage Ratio:            1.10 to 1.00

Compliance                        Yes     No

                                        

Schedule 2 to Compliance Certificate

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

SCHEDULE 3

CHANGES IN GAAP

Schedule 3 to Compliance Certificate

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

EXHIBIT E
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS

FORM OF TRANSFER ORDER LETTERS

___________ ___, _______

VIA CERTIFIED MAIL
RETURN RECEIPT REQUESTED

TO:

Re:    Letter in Lieu of Transfer Order

Ladies and Gentlemen:

By one or more mortgages and/or deeds of trust, a copy of which is enclosed with
this letter, Miller Energy Resources, Inc., Cook Inlet Energy, LLC, East
Tennessee Consultants, Inc. and East Tennessee Consultants II, L.L.C. Confirm
that these companies are the only ones that own oil & gas properties.
(hereinafter collectively referred to as the “Companies”) have granted to Apollo
Investment Corporation, as administrative agent (in such capacity together with
its successors in such capacity, “Administrative Agent”) for one or more lenders
(such lenders, together with their respective successors and assigns, the
“Lenders”), a lien on and security interest in the property interests described
on Schedule I attached hereto (the “Properties”), including without limitation
an assignment and transfer of all of the present and future production and
proceeds of production from the Properties.

We understand that, pursuant to division orders, transfer orders,
letters-in-lieu thereof or other agreements, you are currently disbursing
proceeds of the production from the Properties to one or more of the Companies
or its designees.

The Companies and Administrative Agent on behalf of the Lenders hereby give you
written notice of the matters set forth above and the assignment and transfer to
Administrative Agent for the benefit of the Lenders of all accounts from the
sale of hydrocarbons from the Properties. Furthermore, you are hereby authorized
and directed to commence paying, immediately upon your receipt of this letter,
100% of all proceeds of production distributed by you and attributable to the
interest of any and all of the Companies in the Properties, less applicable
severance and ad valorem taxes, directly to Administrative Agent for the benefit
of the Lenders at the following address:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ABA#
 
 
 
 
 
Account Number
 
 
 
 
 
Credit: Apollo Investment Corporation
 
 
 
 
Re: Miller Energy Resources, Inc.
 
 
 

Exhibit E

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

You are hereby further authorized and directed to continue to pay applicable
severance and ad valorem taxes to the appropriate parties. To the extent you
currently pay royalties, overriding royalties and other burdens on the interest
of the Companies in the Properties, you are directed to continue making such
distributions. You are hereby further authorized and directed to change your
records in accordance with this letter effective immediately upon your receipt
of this letter.
In consideration of your acceptance of this letter in lieu of a division or
transfer order, the Companies hereby agree to indemnify, save and hold you
harmless from and against any and all claims, actions, judgments, damages,
liabilities, losses, costs, recoveries and other expenses which you sustain by
reason of the payments to Administrative Agent for the benefit of the Lenders of
proceeds of production as requested and authorized hereby.
In order that we have a record evidencing your acceptance of this letter, we
request that you sign two copies of this letter in the space provided below and
return them to Administrative Agent at ______________________________________,
___________________________, Attn: __________________ Fax No.:
____________________ in the enclosed, self-addressed envelope. If you have
further requirements concerning this transfer, please notify Administrative
Agent at the address specified above. None of the terms or provisions of this
letter may be changed without the prior written consent of Administrative Agent.
[Signature Pages Follow]

Exhibit E

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

 
 
Sincerely,
 
 
 
 
 
[                                                                         ],
 
 
a                                             corporation
 
 
 
 
 
By:
 
 
Name:
 
 
Title;
 
 
 
 
 
APOLLO INVESTMENT CORPORATION,
 
 
as Administrative Agent
 
 
 
 
 
By:
 
 
Name:
 
 
Title:

ACCEPTED AND AGREED this ____ day of ___________, ______, and our records have
been changed
effective as of _______________.

 
 
 
 
 
 
 
 
By:
 
 
 
Name:
 
 
 
Title:
 
 
 

Exhibit E

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

EXHIBIT F
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS
FORM OF 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 [ASSIGNOR]
(the “Assignor”) and [ASSIGNEE] (the “Assignee”). Capitalized terms not defined
herein shall have the meanings assigned to such terms in the Credit Agreement
referred to below (as amended, modified, supplemented, or restated from time to
time, 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 (the “Standard Terms and Conditions”) 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 and the Credit Agreement, as of the Effective Date referred to below
inserted by the 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 any letters of credit
and 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.
Assignor:
 
 
 
 
 
 
 
 
 
Assignee:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
[For Assignee, indicate [Affiliate][Related Fund] or [identify Lender], if
applicable]
Borrower:
 
Miller Energy Resources, Inc.
Administrative Agent:
 
Apollo Investment Corporation

Exhibit F

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

Credit Agreement:
Amended and Restated Credit Agreement dated as of February 3, 2014, among Miller
Energy Resources, Inc., the Lenders parties thereto, and Apollo Investment
Corporation, as Administrative Agent

Assigned Interest:
Commitment Assigned
Aggregate Amount of Commitment/Loans for all Lenders
Amount of Commitment/Loans Assigned
Percentage Assigned of Commitment/Loans 22
 
$    
$    
   %

[Trade Date:
 
]23

[Signature Pages Follow]

——————————
22    Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

23
To be completed if the Assignor and the Assignee intent that the minimum
assignment amount is to be determined as of the Trade Date.

Exhibit F

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

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:
 
Title:
 
 
 
 
 
ASSIGNEE
 
 
 
[NAME OF ASSIGNEE]
 
 
 
By:
 
Title:
 
 
 
 
[Consented to] and Accepted:
 
 
 
APOLLO INVESTMENT CORPORATION, as
 
Administrative Agent
 
 
 
By:
 
Title:
 
 
 
[Consented to:]
 
 
 
MILLER ENERGY RESOURCES, INC.
 
 
 
By:
 
Title:
 

Exhibit F

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

ANNEX 1
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 thereto, 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 the 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 the
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.

2. Payments. From and after the Effective Date, the 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. Pursuant to Section 5-1401 of the New York
General Obligations Law, the substantive laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
without regard to the choice of law principles that might otherwise apply, and
the applicable federal laws of the United States of America, shall govern the
validity, construction, enforcement and interpretation of this Assignment and
Assumption.

Exhibit F

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

EXHIBIT G
TO
AMENDED AND RESTATED CREDIT AGREEMENT BY AND AMONG MILLER ENERGY RESOURCES,
INC., AS BORROWER, THE LENDERS SIGNATORY THERETO, AND APOLLO INVESTMENT
CORPORATION, AS ADMINISTRATIVE AGENT FOR THE LENDERS

FORM OF INTERCREDITOR AGREEMENT

INTERCREDITOR AGREEMENT
among
MILLER ENERGY RESOURCES, INC.,
the other Grantors party hereto,
[ ],
as Senior Representative,
and
Apollo Investment Corporation,
as the Second Priority Representative,

dated as of [ ]

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

INTERCREDITOR AGREEMENT dated as of [•] (as amended, supplemented or otherwise
modified from time to time, this “Agreement”), among MILLER ENERGY RESOURCES,
INC., a Tennessee corporation (the “Company”), the other Grantors (as defined
below) party hereto, [•], as representative for the Senior Secured Parties
referred to below (in such capacity and together with its successors and
permitted assigns in such capacity, the “Senior Representative”), Apollo
Investment Corporation, as representative for the Second Priority Debt Parties
referred to below (in such capacity and together with its successors and
permitted assigns in such capacity, the “Second Priority Representative”).
R E C I T A L S
WHEREAS, the Company, as borrower, the Senior Representative, as administrative
agent, and the various financial institutions party thereto as agents or lenders
are parties to that certain Credit Agreement dated as of the date hereof (as
amended, restated, extended, replaced, supplemented, modified or Refinanced, the
“Senior Credit Agreement”), pursuant to which such financial institutions have
agreed to make loans and extended other financial accommodations to the Company;
WHEREAS, the Company, as borrower, the Second Priority Representative, as
administrative agent and the various financial institutions and other entities
parties thereto as agents or lenders are parties to that certain Amended and
Restated Credit Agreement dated as of February 3, 2014 (as amended, restated,
extended, replaced, supplemented, modified or Refinanced, the “Second Priority
Credit Agreement”), pursuant to which such financial institutions have agreed to
make loans to the Company;
WHEREAS, the Company and the other Grantors (as defined below) have granted to
the Senior Representative security interests in the Collateral (as defined
below) as security for payment and performance of the obligations under the
Senior Credit Agreement and the other Senior Obligations (as defined below),
which Collateral shall secure such Senior Obligations on a first-priority basis
pursuant to the terms of the Senior Collateral Documents (as defined below) and
of this Agreement; and
WHEREAS, the Company and the other Grantors have granted to the Second Priority
Representative security interests in the Collateral as security for payment and
performance of the obligations under the Second Priority Credit Agreement and
the other Second Priority Debt Obligations (as defined below), which Collateral
shall secure such Second Priority Debt Obligations on a second-priority basis
pursuant to the terms of the Second Priority Collateral Documents (as defined
below) and of this Agreement;
NOW THEREFORE, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Senior Representative (for itself and on behalf of the
other Senior Secured Parties (as defined below)), the Second Priority
Representative (for itself and on behalf of the other Second Priority Debt
Parties (as defined below)), agree as follows:

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

ARTICLE I

DEFINITIONS
SECTION 1.01    Certain Defined Terms. Capitalized terms used but not otherwise
defined herein have the meanings set forth in the Senior Credit Agreement (as in
effect on the date hereof) or in the UCC (it being understood that if any term
is defined both under the Senior Credit Agreement and the UCC, the Senior Credit
Agreement defined term shall be used unless the context clearly requires
otherwise). As used in this Agreement, the following terms have the meanings
specified below: NTD: Definitions subject to review/confirmation of definitions
in final Senior Credit Agreement and Second Priority Credit Agreement.

“Aggregate Purchase Price” means the sum of (a) the aggregate principal amount
of all Senior Loans and unreimbursed draws on Letters of Credit outstanding
under the Senior Credit Agreement and (b) all accrued but unpaid interest
(including interest that accrues after the commencement of any Insolvency or
Liquidation Proceeding, whether or not allowed or allowable) in respect of such
Senior Obligations, without premium or penalty.
“Assignment Documentation” has the meaning assigned to that term in Section
5.07(a)(ii).
“Agreement” has the meaning assigned to such term in the introductory paragraph
of this Agreement.
“Bankruptcy Case” means a case under the Bankruptcy Code or any other Bankruptcy
Law.
“Bankruptcy Code” means Title 11 of the United States Code, as amended or any
similar federal or state law for the relief of debtors.
“Bankruptcy Law” means the Bankruptcy Code and any other federal, state or
foreign law for the relief of debtors, or any arrangement, reorganization,
insolvency, moratorium, assignment for the benefit of creditors, any other
marshalling of the assets or liabilities of the Company or any of its
Subsidiaries, or similar law affecting creditors’ rights generally.
“Borrowing Base” shall have the meaning assigned to such term in the Senior
Credit Agreement or as defined in any other Senior Debt Document evidencing the
Refinancing thereof; provided such “Borrowing Base”, whether in the Senior
Credit Agreement or other Senior Debt Document evidencing the Refinancing
thereof, is a traditional conforming corporate banking borrowing base for oil
and gas secured loan transactions (as determined by the Second Priority Debt
Representative in its reasonable discretion), including customary mechanisms for
periodic redeterminations thereof.

——————————
24    NTD: Definitions subject to review/confirmation of definitions in final
Senior Credit Agreement and Second Priority Credit Agreement.

- 2 -

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

“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Houston, Texas are authorized or
required by law to remain closed.
“Capped Obligations” shall mean the outstanding principal balance of credit
extended and the face amount of outstanding Letters of Credit under the Senior
Debt Documents (including, without duplication, unreimbursed Letter of Credit
obligations outstanding under the Senior Debt Documents).
“Cash Collateral” has the meaning given to such term in Section 363(a) of the
Bankruptcy Code.
“Cash Management Obligations” means any obligation of a Grantor in respect of:
(a) ACH transactions, (b) treasury and/or cash management services, including,
without limitation, controlled disbursement services, (c) foreign exchange
facilities, (d) credit or debit cards, (e) deposit and other accounts and (f)
merchant services (other than those constituting a line of credit), in each
case, that are secured by the Senior Collateral Documents.
“Collateral” means all of the property of the Grantors whether real, personal or
mixed with respect to which a Lien is granted (or is required to be granted)
pursuant to (a) a Senior Collateral Document as security for the Senior
Obligations and (b) a Second Priority Collateral Document as security for the
Second Priority Debt Obligations.
“Collateral Documents” means the Senior Collateral Documents and the Second
Priority Collateral Documents.
“Company” has the meaning assigned to such term in the introductory paragraph of
this Agreement.
“Debt Facility” means any Senior Facility and any Second Priority Debt Facility.
“DIP Cap” means, with respect to any DIP Financing, the product of (a) the
outstanding amount of the pre-petition Senior Obligations constituting Capped
Obligations (provided that such outstanding amount shall not exceed an amount
equal to the Senior Cap Amount), and (b) an amount equal to 5% of such
outstanding amount described in clause (a).
“DIP Financing” has the meaning assigned to such term in Section 6.01.
“Discharge of Senior Priority Obligations” means, except to the extent otherwise
expressly provided in Section 5.06:
(a)
payment in full in cash of the principal of and interest (including interest
accruing on or after the commencement of any Insolvency or Liquidation
Proceeding, whether or not such interest would be allowed in such Insolvency or
Liquidation Proceeding), on all Debt outstanding under the Senior Debt Documents
and constituting Senior Priority Obligations;

(b)
payment in full in cash of all Secured Swap Obligations constituting Senior
Priority Obligations and the expiration or termination of all Secured Swap
Agreements included in the Senior Priority Obligations or the cash
collateralization of all such Secured Swap Obligations on terms satisfactory to
each applicable counterparty;

- 3 -

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

(c)
payment in full in cash of all other Senior Priority Obligations that are due
and payable or otherwise accrued and owing at or prior to the occurrence of the
events set forth in clauses (a), (b), (d), (e) and (f) of this definition (other
than any indemnification obligations for which no claim or demand for payment,
whether oral or written, has been made at such time);

(d)
termination or expiration of all commitments, if any, to extend credit that
would constitute Senior Priority Obligations;

(e)
termination, expiration, cancellation or cash collateralization (in an amount
and manner reasonably satisfactory to the Senior Representative, but in no event
greater than 103% of the aggregate undrawn face amount) of all Letters of Credit
issued under the Senior Debt Documents and constituting Senior Priority
Obligations; and

(f)
the cash collateralization of all Cash Management Obligations constituting
Senior Priority Obligations, or the termination of all services and transactions
giving rise to such Cash Management Obligations.

“Discharge of Second Priority Debt Obligations” means:
(a)
payment in full in cash of the principal of and interest (including interest
accruing on or after the commencement of any Insolvency or Liquidation
Proceeding, whether or not such interest would be allowed in such Insolvency or
Liquidation Proceeding), on all Debt outstanding under the Second Priority Debt
Documents and constituting Second Priority Debt Obligations;

(b)
payment in full in cash of all other Second Priority Debt Obligations that are
due and payable or otherwise accrued and owing at or prior to the occurrence of
the events set forth in clause (a) and (c) of this definition (other than any
indemnification obligations for which no claim or demand for payment, whether
oral or written, has been made at such time); and

(c)
termination or expiration of all commitments, if any, to extend credit that
would constitute Second Priority Debt Obligations.

“Enforcement Action” means an action under applicable law to:
(a)
foreclose, execute, levy, or collect on, take possession or control of, sell or
otherwise realize upon (judicially or non-judicially), or lease, license, or
otherwise dispose of (whether publicly or privately), Collateral, or otherwise
exercise or enforce remedial rights with respect to Collateral under any of the
Senior Debt Documents or the Second Priority Debt Documents (including by way of
set-off, recoupment, notification of a public or private sale or other
disposition pursuant to the UCC or other applicable law, notification to account
debtors, notification to depositary banks under deposit account control
agreements, or exercise of rights under landlord consents, if applicable);

(b)
solicit bids from third Persons to conduct the liquidation or disposition of
Collateral or to engage or retain sales brokers, marketing agents, investment
bankers, accountants, appraisers, auctioneers, or other third Persons for the
purposes of valuing, marketing, promoting and selling Collateral;

(c)
receive a transfer of Collateral in satisfaction of Debt or any other obligation
secured thereby;

- 4 -

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

(d)
otherwise enforce a security interest or exercise another right or remedy, as a
secured creditor or otherwise, pertaining to the Collateral at law, in equity,
or pursuant to any of the Senior Debt Documents or the Second Priority Debt
Documents (including the commencement of applicable legal proceedings or other
actions with respect to Collateral to facilitate the actions described in the
preceding clauses, and exercising voting rights in respect of equity interests
comprising Collateral); or

(e)
effect the disposition of Collateral by any Grantor after the occurrence and
during the continuation of an Event of Default under any of the Senior Debt
Documents or the Second Priority Debt Documents with the consent of the
applicable Representative.

For the avoidance of doubt, “Enforcement Action” shall not include any
forbearance from the exercise of all or any remedies by any Senior Secured
Party.
“Event of Default” means an “Event of Default” under and as defined in, or any
condition or event that would give any Secured Party the right to exercise
remedies under, the applicable Senior Debt Documents and/or any applicable
Second Priority Debt Documents, as the context may require.
“Excess Senior Obligations” shall mean Capped Obligations in excess of the
Senior Cap Amount and the interest accrued on such excess.
“Grantors” means the Company, each Guarantor and each other Person which has
granted a security interest in any Collateral pursuant to any Collateral
Document to secure any Senior Obligation or Second Priority Debt Obligation.
“Guarantors” shall mean, collectively, each Subsidiary of the Company that has
guaranteed, that shall be required to guarantee, or that may from time to time
hereafter guarantee, the Senior Obligations or the Second Priority Debt
Obligations.
“Insolvency or Liquidation Proceeding” means:
(a)
any case commenced by or against the Company or any other Grantor under any
Bankruptcy Law, any other proceeding for the reorganization, recapitalization or
adjustment or marshalling of the assets or liabilities of the Company or any
other Grantor, any receivership or assignment for the benefit of creditors
relating to the Company or any other Grantor or any similar case or proceeding
relative to the Company or any other Grantor or its creditors, as such, in each
case whether or not voluntary;

(b)
any liquidation, dissolution, marshalling of assets or liabilities or other
winding up of or relating to the Company or any other Grantor, in each case
whether or not voluntary and whether or not involving bankruptcy or insolvency;
or

(c)
any other proceeding of any type or nature in which substantially all claims of
creditors of the Company or any other Grantor are determined and any payment or
distribution is or may be made on account of such claims.

“Letters of Credit” means “Letters of Credit” as defined in the Senior Credit
Agreement or any similar term in any Senior Debt Document evidencing any
Refinancing of the Senior Credit Agreement.

- 5 -

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

“Lien” means any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to (a) the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes or (b) production payments and the like payable out of Oil
and Gas Properties. The term “Lien” shall include easements, restrictions,
servitudes, permits, conditions, covenants, exceptions or reservations.
“New Senior Debt Notice” has the meaning assigned to such term in Section 5.06.
“Officer’s Certificate” has the meaning assigned to such term in Section 8.08.
“Permitted Remedies” means, with respect to any Second Priority Debt
Obligations:
(a)
filing a claim or statement of interest with respect to such Second Priority
Debt Obligations; provided that an Insolvency or Liquidation Proceeding has been
commenced by or against any Grantor;

(b)
taking any action (not adverse to the Liens on the Collateral securing any
Senior Obligations, the priority status thereof, or the rights of the Senior
Representative or any other Senior Secured Party to exercise rights, powers
and/or remedies in respect thereof) in order to create, perfect, preserve or
protect (but not enforce) its Lien on any of the Collateral;

(c)
filing any necessary or appropriate responsive or defensive pleadings in
opposition to any motion, claim, adversary proceeding or other pleading made by
any Person objecting to or otherwise seeking the disallowance of the claims or
Liens of the Second Priority Debt Parties, including any claims secured by the
Collateral, or otherwise make any agreements or file any motions or objections
pertaining to the claims of the Second Priority Debt Parties;

(d)
filing any pleadings, objections, motions or agreements which (i) assert rights
or interests available to unsecured creditors of the Grantors or (ii) in the
case of a sale or other disposition of any Collateral free and clear of its
Liens or other claims under Section 363 of the Bankruptcy Code, which assert
rights or interests available to secured creditors of the Grantors, in each case
arising under either any Insolvency or Liquidation Proceeding or applicable
non-bankruptcy law;

(e)
voting on any plan of reorganization, filing any proof of claim, making other
filings and making any arguments, obligations, and motions (including in support
of or opposition to, as applicable, the confirmation or approval of any plan of
reorganization);

(f)
taking any Enforcement Action after the termination of the Standstill Period;

(g)
exercising any other rights and remedies as an unsecured creditor against any
Grantor in accordance with the provisions of the Second Priority Debt Documents
and applicable law;

(h)
seeking any equitable relief (including injunctive relief) available to any
Second Priority Debt Party (including as undersecured or unsecured creditor) in
accordance with the terms of the Second Priority Debt Documents and applicable
law;

- 6 -

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

(i)
exercising any right or remedy or taking any other action permitted under
Article VI hereof; and

(j)
exercising any other rights and remedies available to any Second Priority Debt
Party at law or in equity, under, or with respect to the transactions
contemplated by, the Second Priority Debt Documents, other than the exercise of
rights and remedies with respect to the Collateral set forth in this Agreement.

“Person” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
“Pledged or Controlled Collateral” has the meaning assigned to such term in
Section 5.05(a).
“Proceeds” means the proceeds of any sale, collection or other liquidation of
Collateral and any payment or distribution made in respect of Collateral.
“Purchase” means any purchase of the Senior Obligations as contemplated by
Section 5.07.
“Recovery” has the meaning assigned to such term in Section 6.04.
“Refinance” means, in respect of a Debt Facility, to refinance, extend, renew,
defease, amend, increase, modify, supplement, restructure, refund, replace or
repay, or to issue other Debt or enter alternative financing arrangements, in
exchange or replacement for such Debt Facility (in whole or in part), including
by adding or replacing lenders, creditors, agents, borrowers and/or guarantors,
and including, in each case, through any credit agreement, indenture or other
agreement. “Refinanced” and “Refinancing” have correlative meanings.
“Representatives” means the Senior Representative and the Second Priority
Representative.
“Second Priority Collateral Documents” means the Guarantee and Collateral
Agreement (as defined in the Second Priority Credit Agreement) and the other
“Security Instruments” as defined in the Second Priority Credit Agreement and
each of the collateral agreements, security agreements, mortgages, deeds of
trust and other instruments and documents executed and delivered by the Company
or any other Grantor for purposes of providing collateral security for any
Second Priority Debt Obligation.
“Second Priority Credit Agreement” has the meaning assigned to such term in the
recitals.
“Second Priority Debt Documents” means the Second Priority Credit Agreement and
the other “Loan Documents” as such term is defined in the Second Priority Credit
Agreement or any similar term in any Second Priority Debt Document evidencing
any Refinancing of the Second Priority Credit Agreement.
“Second Priority Debt Facility” means the Second Priority Credit Agreement and
any Second Priority Debt Document evidencing the Refinancing thereof.
“Second Priority Debt Obligations” means, collectively, all obligations and all
amounts owing, due, or secured under the terms of the Second Priority Credit
Agreement or any other Second Priority Debt Document, whether, now existing or
arising hereafter, including all principal, premium, interest, fees, attorney’s
fees, costs, charges, expenses, reimbursement obligations, any other indemnities
or guarantees, and all other amounts payable under or secured by any Second
Priority Debt Document (including, in each case, all amounts accruing on or
after the commencement of any Insolvency or Liquidation Proceeding

- 7 -

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

relating to any Grantor, or that would have accrued or become due under the
terms of the Second Priority Debt Documents but for the effect of the Insolvency
or Liquidation Proceeding and irrespective of whether a claim for all or any
portion of such amounts is allowable or allowed in such Insolvency or
Liquidation Proceeding).
“Second Priority Debt Parties” means, at any relevant time, the holders of
Second Priority Debt Obligations at that time, including the lenders under the
Second Priority Credit Agreement and the Second Priority Representative.
“Second Priority Representative” has the meaning assigned to such term in the
introductory paragraph of this Agreement.
“Secured Obligations” means collectively, the Senior Obligations and the Second
Priority Debt Obligations.
“Secured Parties” means the Senior Secured Parties and the Second Priority Debt
Parties.
“Secured Swap Agreement” means any Swap Agreement between a Grantor and a Person
that, at the time such Swap Agreement was entered into, was a Senior Lender or
an Affiliate of a Senior Lender and that is secured by the Senior Collateral
Documents.
“Secured Swap Obligations” means any obligation of a Grantor pursuant to any
Secured Swap Agreement.
“Secured Swap Provider” means any Person that is the counterparty to the
Borrower or any other Grantor pursuant to a Secured Swap Agreement.
“Senior Cap Amount” means, as of any date of determination and in respect of the
Senior Obligations constituting Capped Obligations, an amount not to exceed the
lesser of (a) the most recently established Borrowing Base determined by the
requisite Senior Lenders in accordance with the Senior Debt Documents, and (b)
$100,000,000. For the avoidance of doubt the calculation of the “Senior Cap
Amount” refers only to the Capped Obligations and does not include amounts due
in respect of Secured Swap Obligations or Cash Management Obligations.
“Senior Collateral Documents” means the Guarantee and Collateral Agreement and
the other “Security Instruments” as defined in the Senior Credit Agreement and
each of the collateral agreements, security agreements, mortgages, deeds of
trust and other instruments and documents executed and delivered by the Company
or any other Grantor for purposes of providing collateral security for any
Senior Obligation.
“Senior Credit Agreement” has the meaning assigned to such term in the recitals
to this Agreement.
“Senior Debt Documents” means the Senior Credit Agreement and the other “Loan
Documents” as such term is defined in the Senior Credit Agreement or any similar
term in any Senior Debt Document evidencing any Refinancing of the Senior Credit
Agreement.
“Senior Facility” means the Senior Credit Agreement and any Senior Debt Document
evidencing any Refinancing thereof.
“Senior Lender” means the “Lenders” as such term is defined in the Senior Credit
Agreement or any similar term in any Senior Debt Document evidencing any
Refinancing of the Senior Credit Agreement.

- 8 -

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

“Senior Loans” means the “Loans” as such term is defined in the Senior Credit
Agreement or any similar term in any Senior Debt Document evidencing any
Refinancing of the Senior Credit Agreement.
“Senior Obligations” means, collectively, all obligations and all amounts owing,
due, or secured under the terms of the Senior Credit Agreement or any other
Senior Debt Document, all Secured Swap Obligations and Cash Management
Obligations, whether, now existing or arising hereafter, including all
principal, premium, interest, fees, attorney’s fees, costs, charges, expenses,
reimbursement obligations, any other indemnities or guarantees, and all other
amounts payable under or secured by any Senior Debt Document (including, in each
case, all amounts accruing on or after the commencement of any Insolvency or
Liquidation Proceeding relating to any Grantor, or that would have accrued or
become due under the terms of the Senior Debt Documents but for the effect of
the Insolvency or Liquidation Proceeding and irrespective of whether a claim for
all or any portion of such amounts is allowable or allowed in such Insolvency or
Liquidation Proceeding).
“Senior Priority Obligations” means all Senior Obligations exclusive of the
Excess Senior Obligations, which Excess Senior Obligations shall be excluded
from (and shall not constitute) Senior Priority Obligations.
“Senior Representative” has the meaning assigned to such term in the
introductory paragraph of this Agreement.
“Senior Secured Parties” means, at any relevant time, the holders of Senior
Obligations at that time, including the Senior Lenders, the Secured Swap
Providers and the Senior Representative.
“Standstill Period” has the meaning assigned to such term in Section 3.01(a)(i).
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any
other Person the accounts of which would be consolidated with those of the
parent in the parent’s consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other Person (a) of which Equity Interests representing more than 50% of the
equity or more than 50% of the ordinary voting power (irrespective of whether or
not at the time Equity Interests of any other class or classes of such Person
shall have or might have voting power by reason of the happening of any
contingency) or, in the case of a partnership, any general partnership interests
are, as of such date, owned, controlled or held, or (b) that is, as of such
date, otherwise Controlled, by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent; provided
that, notwithstanding anything to the contrary contained herein, none of the
Miller 2009 Partnership, any Miller Drilling Fund nor any of the Pellissippi
Pointe Entities shall be deemed a Subsidiary of any Grantor for purposes of this
Agreement. Unless otherwise indicated herein, each reference to the term
“Subsidiary” shall mean a Subsidiary of the Company.
“Uniform Commercial Code” or “UCC” means the Uniform Commercial Code as from
time to time in effect in the State of New York, or the Uniform Commercial Code
(or any similar or comparable legislation) of another jurisdiction, to the
extent it may be required to apply to any item or items of Collateral.
SECTION 1.02.    Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words “include,” “includes” and “including” shall
be deemed to be followed by the phrase “without limitation.” The word “will”
shall be construed to have the same meaning and effect as the word “shall.”
Unless the context requires otherwise, (a) any definition of or reference to any
agreement, instrument, other document, statute or regulation herein

- 9 -

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

shall be construed as referring to such agreement, instrument, other document,
statute or regulation as from time to time amended, supplemented or otherwise
modified, (b) any reference herein to any Person shall be construed to include
such Person’s successors and assigns, but shall not be deemed to include the
subsidiaries of such Person unless express reference is made to such
subsidiaries, (c) the words “herein,” “hereof” and “hereunder,” and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles, Sections and Annexes shall be construed to refer to Articles, Sections
and Annexes of this Agreement, (e) unless otherwise expressly qualified herein,
the words “asset” and “property” shall be construed to have the same meaning and
effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights and (f) the
term “or” is not exclusive.

ARTICLE II

PRIORITIES AND AGREEMENTS WITH RESPECT TO COLLATERAL

SECTION 2.01.    Lien Subordination. Notwithstanding the date, time, manner or
order of filing or recordation of any document or instrument or grant,
attachment or perfection of any Liens granted to any Second Priority
Representative or any other Second Priority Debt Parties on the Collateral or of
any Liens granted to the Senior Representative or any other Senior Secured Party
on the Collateral (or any actual or alleged defect in any of the foregoing) or
any defect or deficiencies in, or failure to perfect or lapse in perfection of,
or avoidance as a fraudulent conveyance or otherwise and notwithstanding any
provision of the UCC, any applicable law, any Second Priority Debt Document or
any Senior Debt Document or any other circumstance whatsoever, the Senior
Representative, on behalf of itself and each other Senior Secured Party, and the
Second Priority Representative, on behalf of itself and each other Second
Priority Debt Party, hereby agrees that (a) any Lien on the Collateral securing
any Senior Priority Obligations now or hereafter held by or on behalf of the
Senior Representative, any other Senior Secured Party or other agent or trustee
therefor, regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall have priority over and be senior in all
respects and prior to any Lien on the Collateral securing any Second Priority
Debt Obligations, (b) any Lien on the Collateral securing any Second Priority
Debt Obligations now or hereafter held by or on behalf of the Second Priority
Representative, any other Second Priority Debt Party or any other agent or
trustee therefor, regardless of how acquired, whether by grant, statute,
operation of law, subrogation or otherwise, shall be junior and subordinate in
all respects to all Liens on the Collateral securing any Senior Priority
Obligations, (c) any Lien on the Collateral securing any Second Priority Debt
Obligations now or hereafter held by or on behalf of the Second Priority
Representative, any other Second Priority Debt Party or other agent or trustee
therefor, regardless of how acquired, whether by grant, statute, operation of
law, subrogation or otherwise, shall have priority over and be senior in all
respects and prior to any Lien on the Collateral securing any Excess Senior
Obligations, and (d) any Lien on the Collateral securing any Excess Senior
Obligations now or hereafter held by or on behalf of the Senior Representative,
any other Senior Secured Party or any other agent or trustee therefor,
regardless of how acquired, whether by grant, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all
Liens on the Collateral securing any Second Priority Debt Obligations. All Liens
on the Collateral (i) securing any Senior Priority Obligations shall be and
remain senior in all respects and prior to all Liens on the Collateral securing
any Second Priority Debt Obligations for all purposes, whether or not such Liens
securing any Senior Priority Obligations are subordinated to any Lien securing
any other obligation of the Company, any Grantor or any other Person or
otherwise subordinated, voided, avoided, invalidated or lapsed, and (ii)
securing any Second Priority Debt Obligations shall be and remain senior in all
respects and prior to all Liens on the Collateral securing any Excess Senior
Obligations for all purposes, whether or not such Liens securing any Second
Priority Debt Obligations are subordinated to any Lien securing any other
obligation of the Company, any Grantor or any other Person or otherwise
subordinated, voided, avoided, invalidated or lapsed. For the

- 10 -

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

avoidance of doubt, the subordination provided for in this Agreement is lien
subordination only and the Second Priority Debt Obligations are not subordinated
in right of payment to the Senior Obligations. Other than to the extent
constituting secured claims on the Collateral, all debt claims of the Senior
Secured Parties and the Second Priority Debt Parties are intended to be pari
passu.

Section 2.02.    Nature of Senior Secured Party Claims. The Second Priority
Representative, on behalf of itself and each other Second Priority Debt Party,
acknowledges that except as otherwise expressly provided herein, (a) a portion
of the Senior Obligations may be revolving in nature and that the amount thereof
that may be outstanding at any time or from time to time may be increased or
reduced and subsequently reborrowed, (b) the terms of the Senior Debt Documents
and the Senior Obligations may be amended, supplemented or otherwise modified,
and the Senior Obligations, or a portion thereof, may be Refinanced from time to
time, and (c) the aggregate amount of the Senior Obligations may be increased,
in each case, without notice to or consent by the Second Priority Representative
or any other Second Priority Debt Party and without affecting the provisions
hereof (it being understood, for avoidance of doubt, that any such increase is
subject to the definition of “Excess Senior Obligations” to the extent
applicable). The Lien priorities provided for in Section 2.01 shall not be
altered or otherwise affected by any amendment, supplement or other
modification, or any Refinancing, of either the Senior Obligations or the Second
Priority Debt Obligations, or any portion thereof. As between the Company and
the other Grantors and the Second Priority Debt Parties or Senior Secured
Parties, as the case may be, the foregoing provisions will not limit or
otherwise affect the obligations of the Company and the other Grantors contained
in any Senior Debt Document or Second Priority Debt Document, as the case may
be, with respect to the incurrence of additional Senior Obligations or Second
Priority Debt Obligations, as the case may be.

Section 2.03.    Prohibition on Contesting Liens. The Second Priority
Representative, for itself and on behalf of each other Second Priority Debt
Party, agrees that it shall not (and hereby waives any right to) contest or
support any other Person in contesting, in any proceeding (including any
Insolvency or Liquidation Proceeding), the validity, extent, perfection,
priority or enforceability of any Lien securing any Senior Obligations held (or
purported to be held) by or on behalf of the Senior Representative or any of the
other Senior Secured Parties or other agent or trustee therefor in any
Collateral, and the Senior Representative, for itself and on behalf of each
other Senior Secured Party, agrees that it shall not (and hereby waives any
right to) contest or support any other Person in contesting, in any proceeding
(including any Insolvency or Liquidation Proceeding), the validity, extent,
perfection, priority or enforceability of any Lien securing any Second Priority
Debt Obligations held (or purported to be held) by or on behalf of any Second
Priority Representative or any of the other Second Priority Debt Parties in any
Collateral. Notwithstanding the foregoing, no provision in this Agreement shall
be construed to prevent or impair the rights of the Senior Representative or the
Second Priority Representative to enforce this Agreement (including the priority
of the Liens securing the Senior Obligations and Second Priority Debt
Obligations as provided in Section 2.01) or any of the Senior Debt Documents or
Second Priority Debt Documents, as the case may be.

Section 2.04.    No New Liens. The parties hereto agree that, so long as this
Agreement has not terminated in accordance with its terms, (a) none of the
Grantors shall grant or permit any additional Liens on any asset or property of
any Grantor to secure any Second Priority Debt Obligation unless it has granted,
or concurrently therewith grants, a Lien on such asset or property of such
Grantor to secure the Senior Obligations; and (b) none of the Grantors shall
grant or permit any additional Liens on any asset or property of any Grantor to
secure any Senior Obligations unless it has granted, or concurrently therewith
grants, a Lien on such asset or property of such Grantor to secure the Second
Priority Debt Obligations.
  
To the extent that the foregoing provisions are not complied with for any
reason, without limiting any other rights and remedies available to the
Representatives and/or the other Secured Parties, the

- 11 -

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

Representatives, on behalf of the Secured Parties of the Debt Facility for which
it is acting, agrees that any amounts received by or distributed to any of them
pursuant to or as a result of Liens granted in contravention of this Section
2.04 shall be treated in the same manner as set forth in Section 4.02.
Section 2.05.    Perfection of Liens. Except for the agreements of the Senior
Representative set forth in Section 5.05 hereof, (a) neither the Senior
Representative nor the other Senior Secured Parties shall be responsible for
perfecting and maintaining the perfection of Liens with respect to the
Collateral for the benefit of the Second Priority Representative or the other
Second Priority Debt Parties, and (b) neither the Second Priority Representative
nor the other Second Priority Debt Parties shall be responsible for perfecting
and maintaining the perfection of Liens with respect to the Collateral for the
benefit of the Senior Representative or the other Senior Secured Parties. The
provisions of this Agreement are intended solely to govern the respective Lien
priorities as between the Senior Secured Parties and the Second Priority Debt
Parties and shall not impose on the Senior Representative, the Senior Secured
Parties, the Second Priority Representative, the Second Priority Debt Parties or
any agent or trustee therefor any obligations in respect of the disposition of
Proceeds of any Collateral which would conflict with prior perfected claims
therein in favor of any other Person or any order or decree of any court or
governmental authority or any applicable law.

Section 2.06.    [Reserved].

Section 2.07.    Similar Liens and Agreements. The Representatives, on behalf of
the Secured Parties of the Debt Facility for which it is acting, agree that it
is their intention that the Collateral securing each Debt Facility be identical.
In furtherance of the foregoing and of Section 8.11, the parties hereto agree,
subject to the other provisions of this Agreement:

(a)upon request by the Senior Representative or the Second Priority
Representative, to cooperate in good faith (and to direct their counsel to
cooperate in good faith) from time to time in order to determine the specific
items included in the Collateral and the steps taken to perfect their respective
Liens thereon and the identity of the respective parties obligated under the
Senior Debt Documents and the Second Priority Debt Documents; and

(b)that the documents and agreements creating or evidencing the Collateral and
guarantees for the Senior Obligations and the Second Priority Debt Obligations,
subject to Section 5.03, shall be in all material respects the same forms of
documents other than with respect to the first lien and the second lien nature
of the obligations thereunder; and

(c)to the extent that one Representative or a Secured Party holds liens on
assets securing the Debt Facility for which it is acting, and such liens are not
also granted to the other Representative and applicable Secured Parties, then
the Representative or Secured Party (as the case may be) holding such liens on
such additional assets, shall also hold such liens for the benefit of the other
Representative and applicable Secured Parties.

ARTICLE III

ENFORCEMENT

Section 3.01.    Exercise of Remedies.

- 12 -

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

(a)So long as the Discharge of Senior Priority Obligations has not occurred,
whether or not any Insolvency or Liquidation Proceeding has been commenced by or
against the Company or any other Grantor, neither the Second Priority
Representative nor any other Second Priority Debt Party will

(i)take any Enforcement Action; provided, the Second Priority Representative may
take any Enforcement Action after a period (such period, as the same may be
extended pursuant to the following proviso, the “Standstill Period”) of 90
consecutive days has elapsed from the date of delivery of written notice from
the Second Priority Representative to the Senior Representative stating that (A)
an Event of Default has occurred and is continuing under the Second Priority
Debt Documents, (B) the Second Priority Debt Obligations are currently due and
payable in full (whether as a result of acceleration thereof or otherwise) in
accordance with the terms of the Second Priority Debt Documents, and (C) the
Second Priority Representative intends to exercise its rights to take such
Enforcement Action (provided that, if on the expiration of such 90 consecutive
day period, the Senior Representative or Senior Secured Parties are then
diligently pursuing an Enforcement Action with respect to all or substantially
all of the Collateral, the Standstill Period shall be extended to the date on
which no Senior Secured Party shall be diligently pursuing an Enforcement Action
with respect to all or substantially all of the Collateral; provided, further,
that, to the extent permitted to do so under applicable law, the Senior
Representative shall give prompt notice of such Enforcement Action to the Second
Priority Debt Representative and shall keep the Second Priority Debt
Representative reasonably apprised of such Enforcement Action);

(ii)contest, protest or object to any Enforcement Action brought with respect to
the Collateral by the Senior Representative or any other Senior Secured Party
except to the extent any such Enforcement Action is not taken in accordance with
applicable law; or

(iii)object to the forbearance by the Senior Secured Parties from bringing or
pursuing any Enforcement Action during the Standstill Period or any other
exercise of any rights or remedies relating to the Collateral in respect of
Senior Obligations.

(b)Until the earlier of the Discharge of Senior Priority Obligations has
occurred and the expiration of the Standstill Period, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against any
Grantor, subject to Section 3.01(a)(i) and Section 3.01(c), the Senior
Representative and the other Senior Secured Parties shall have the exclusive
right to commence and maintain an Enforcement Action; provided, that any
proceeds received by the Senior Representative in excess of those necessary to
achieve a Discharge of Senior Priority Obligations are distributed to Second
Priority Representative on behalf of the Second Priority Debt Parties or
otherwise in accordance with the UCC and other applicable law, subject to the
relative priorities described herein; provided further, that the Lien securing
the Second Priority Debt Obligations shall remain on the proceeds of such
Collateral released or disposed of subject to the relative priorities described
in Section 2.01. In commencing or maintaining any Enforcement Action, the Senior
Representative and the other Senior Secured Parties may enforce the provisions
of the Senior Debt Documents and exercise remedies thereunder, all in such order
and in such manner as they may determine in the exercise of their sole
discretion in compliance with any applicable law and without consultation with
the Second Priority Representative or any other Second Priority Debt Party. Such
exercise and enforcement shall include the rights of an agent appointed by the
Senior Representative or any other Senior Secured Party to sell or otherwise
dispose of Collateral upon foreclosure, to incur expenses in connection with
such sale or disposition, and to exercise all the rights and remedies of a
secured lender under the Uniform Commercial Code of any applicable jurisdiction
and of a secured creditor under Bankruptcy Laws of any applicable jurisdiction.

- 13 -

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

(c)Notwithstanding anything to the contrary contained herein, the Second
Priority Debt Parties may at any time exercise Permitted Remedies.
 
(d)Without limiting Section 3.01(c) and unless and until the Discharge of Senior
Priority Obligations has occurred, (i) the Second Priority Representative, for
itself and on behalf of each other Second Priority Debt Party, agrees that
neither such Second Priority Representative nor any such other Second Priority
Debt Party will take any action that would hinder any exercise of remedies
undertaken by the Senior Representative or any Senior Secured Party with respect
to the Collateral under the Senior Debt Documents, including any sale, lease,
exchange, transfer or other disposition of the Collateral, whether by
foreclosure or otherwise, and (ii) the Second Priority Representative, for
itself and on behalf of each other Second Priority Debt Party, hereby waives any
and all rights it or any such Second Priority Debt Party may have as a junior
lien creditor or otherwise to object to the manner in which the Senior
Representative or the Senior Secured Parties seek to enforce or collect the
Senior Obligations or the Liens granted on any of the Collateral, regardless of
whether any action or failure to act by or on behalf of the Senior
Representative or any other Senior Secured Party is adverse to the interests of
the Second Priority Debt Parties.

(e)If, upon the expiration of the Standstill Period, (as it may be extended
pursuant to Section 3.01(a)(i) above), in the event that and for so long as the
Second Priority Representative or any other Second Priority Debt Party has
commenced any Enforcement Action, none of the Senior Representative or any other
Senior Secured Party shall take any action to hinder, delay or limit the
exercise by the Second Priority Representative or any other Second Priority Debt
Party of any Enforcement Action and whether or not any Insolvency or Liquidation
Proceeding has been commenced by or against any Grantor, the Second Priority
Representative and the other Second Priority Debt Parties shall have the
exclusive right to commence and maintain an Enforcement Action or otherwise
enforce, collect or realize on the Collateral; provided, however, that to the
extent permitted to do so under applicable law, the Second Priority
Representative shall give prompt notice of the commencement of any such
Enforcement Action to the Senior Representative and shall keep Senior
Representative reasonably apprised of such enforcement action.

(f)Section 3.01 hereof shall not be construed to in any way limit or impair the
right of (i) any Senior Secured Party or any Second Priority Debt Party to bid
for or purchase Collateral at any private, public or judicial foreclosure upon
such Collateral initiated by any of them, (ii) any Second Priority Debt Party to
receive any remaining proceeds of Collateral after the Discharge of Senior
Priority Obligations, and (iii) any Senior Secured Party to receive any
remaining proceeds of the Collateral in respect of the Excess Senior Obligations
after the Discharge of Second Priority Debt Obligations.

Section 3.02.    Specific Performance. Each Representative may demand specific
performance of this Agreement. Each Representative, on behalf of itself and on
behalf of the Secured Parties of the Debt Facility for which it is acting,
hereby irrevocably waive any defense based on the adequacy of a remedy at law
and any other defense which might be asserted to bar the remedy of specific
performance in any action which may be brought by a Representative or any
Secured Party. No provision of this Agreement shall constitute or be deemed to
constitute a waiver by a Representative, on behalf of itself and on behalf of
the Secured Parties of the Debt Facility for which it is acting, of any right to
seek damages from any Person in connection with any breach or alleged breach of
this Agreement.

ARTICLE IV

PAYMENTS

Section 4.01.    Application of Proceeds.

- 14 -

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

(a)After an Event of Default under any Senior Debt Document has occurred and
until such Event of Default is cured or waived, so long as the Discharge of
Senior Priority Obligations has not occurred, the Collateral or Proceeds thereof
received in connection with the sale or other disposition of, or collection on,
such Collateral upon any Enforcement Action shall be applied by the Senior
Representative to the Senior Priority Obligations in such order as specified in
the relevant Senior Debt Documents until the Discharge of Senior Priority
Obligations has occurred.

(b)Upon the Discharge of Senior Priority Obligations, the Senior Representative
shall deliver promptly to the Second Priority Representative any Collateral or
Proceeds thereof held by it in the same form as received, with any necessary
endorsements, or as a court of competent jurisdiction may otherwise direct, to
be applied by the Second Priority Representative to the Second Priority Debt
Obligations in such order as specified in the relevant Second Priority Debt
Documents.

(c)Upon the Discharge of Second Priority Debt Obligations, if any Excess Senior
Obligations then exist, the Second Priority Representative shall deliver
promptly to the Senior Representative any Collateral or Proceeds thereof held by
it in the same form as received, with any necessary endorsements, or as a court
of competent jurisdiction may otherwise direct, to be applied by the Senior
Representative to the Excess Senior Obligations in such order as specified in
the relevant Senior Debt Documents.

Section 4.02.    Payments Over.

(a)Unless and until the Discharge of Senior Priority Obligations has occurred,
any Collateral or Proceeds thereof received by any Second Priority
Representative or any other Second Priority Debt Party in connection with any
Enforcement Action shall be segregated and held in trust for the benefit of and
promptly paid over to the Senior Representative for the benefit of the Senior
Secured Parties in the same form as received, with any necessary endorsements,
or as a court of competent jurisdiction may otherwise direct. The Senior
Representative is hereby authorized to make any such endorsements as agent for
each of the Second Priority Debt Parties. This authorization is coupled with an
interest and is irrevocable.

(b)If the Discharge of Senior Priority Obligations has occurred, then unless and
until the Discharge of Second Priority Debt Obligations has occurred, any
Collateral or Proceeds thereof received by any Senior Representative or any
other Senior Secured Party in connection with any Enforcement Action shall be
segregated and held in trust for the benefit of and promptly paid over to the
Second Priority Representative for the benefit of the Second Priority Debt
Parties in the same form as received, with any necessary endorsements, or as a
court of competent jurisdiction may otherwise direct. The Second Priority
Representative is hereby authorized to make any such endorsements as agent for
each of the Senior Secured Parties. This authorization is coupled with an
interest and is irrevocable.

ARTICLE V

OTHER AGREEMENTS

Section 5.01.    Releases.

(a)The Second Priority Representative, for itself and on behalf of each other
Second Priority Debt Party, agrees that, in the event of a sale, transfer or
other disposition of any specified item of Collateral (including all or
substantially all of the equity interests of any subsidiary of the Company) in
connection with (i) any Enforcement Action by a Senior Secured Party pursuant to
Section 3.01 or (ii) any

- 15 -

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

sale, transfer or other disposition of Collateral that is permitted under the
Second Priority Debt Documents (other than during the continuance of any Event
of Default under the Second Priority Debt Documents), the Liens granted to the
Second Priority Representative and the other Second Priority Debt Parties upon
such Collateral to secure Second Priority Debt Obligations shall terminate and
be released, automatically and without any further action, concurrently with the
termination and release of all Liens granted upon such Collateral to secure
Senior Obligations; provided that the Liens securing the Senior Obligations and
the Second Priority Debt Obligations will attach to the Proceeds of the sale on
the same basis of priority as the Liens on the Collateral securing the Senior
Obligations rank to the Liens on the Collateral securing the Second Priority
Debt Obligations pursuant to this Agreement. Upon delivery to a Second Priority
Representative of an Officer’s Certificate stating that (x) any such termination
and release of Liens securing the Senior Obligations has become effective (or
shall become effective concurrently with such termination and release of the
Liens granted to the Second Priority Debt Parties and the Second Priority
Representative) and (y) in the case of any release pursuant to clause (ii)
above, such sale, transfer or other disposition is permitted under the Second
Priority Debt Documents and no Event of Default is occurring thereunder, and any
necessary or proper instruments of termination or release prepared by the
Company or any other Grantor, such Second Priority Representative will promptly
execute, deliver or acknowledge, at the Company’s or the other Grantor’s sole
cost and expense, such instruments reasonably requested by the Company to
evidence such termination and release of the Liens. Nothing in this Section
5.01(a) will be deemed to affect any agreement of a Second Priority
Representative, for itself and on behalf of the other Second Priority Debt
Parties, to release the Liens on the Collateral as set forth in the Second
Priority Debt Documents.

(b)Until the Discharge of the Senior Obligations, the Second Priority
Representative, for itself and on behalf of each other Second Priority Debt
Party, hereby irrevocably constitutes and appoints the Senior Representative and
any officer or agent of the Senior Representative, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Second Priority
Representative or such Second Priority Debt Party or in the Senior
Representative’s own name, from time to time in the Senior Representative’s
discretion, for the purpose of carrying out the terms of Section 5.01(a), to
take any and all appropriate action and to execute any and all documents and
instruments that may be reasonably necessary to accomplish the purposes of
Section 5.01(a), including any termination statements, endorsements or other
instruments of transfer or release.

(c)Notwithstanding anything to the contrary in any Second Priority Collateral
Document, in the event the terms of a Senior Collateral Document and a Second
Priority Collateral Document each require any Grantor (i) to make payment in
respect of any item of Collateral to, (ii) to deliver or afford control over (to
the extent only one party can have control of such Collateral) any item of
Collateral to, or deposit any item of Collateral with, (iii) to register
ownership of any item of Collateral in the name of or make an assignment of
ownership of any Collateral or the rights thereunder, and (iv) to hold any item
of Collateral in trust for (to the extent such item of Collateral cannot be held
in trust for multiple parties under applicable law), in favor of, in any case,
both the Senior Representative and any Second Priority Representative or other
Second Priority Debt Party, such Grantor may, until the Discharge of Senior
Priority Obligations has occurred, comply with such requirement under the Second
Priority Collateral Document as it relates to such Collateral by taking any of
the actions set forth above only with respect to, or in favor of, the Senior
Representative.

Section 5.02.    Insurance and Condemnation Awards. Unless and until the
Discharge of Senior Priority Obligations has occurred, the Senior Representative
and the Senior Secured Parties shall have the sole and exclusive right, subject
to the rights of the Grantors under the Senior Debt Documents, (a) to adjust
settlement for any insurance policy covering the Collateral in the event of any
loss thereunder and (b) to approve any award granted in any condemnation or
similar proceeding affecting the Collateral. Unless and until the Discharge of
Senior Priority Obligations has occurred, all Proceeds of any such policy and
any such

- 16 -

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

award, if in respect of the Collateral, shall be paid (i) first, prior to the
occurrence of the Discharge of Senior Priority Obligations, to the Senior
Representative for the benefit of Senior Secured Parties pursuant to the terms
of the Senior Debt Documents to the extent required by the terms of such Senior
Debt Documents, (ii) second, after the occurrence of the Discharge of Senior
Priority Obligations or to the extent such Proceeds are not required to be paid
to the Senior Representative for the benefit of Senior Secured Parties pursuant
to the terms of the Senior Debt Documents, to the Second Priority Representative
for the benefit of the Second Priority Debt Parties pursuant to the terms of the
applicable Second Priority Debt Documents, and (iii) third, after the occurrence
of the Discharge of Second Priority Debt Obligations, to (x) if any Excess
Senior Obligations are then outstanding, to the Senior Representative for the
benefit of the Senior Secured Parties pursuant to the terms of the Senior Debt
Documents, or (y) if no Excess Senior Obligations are then outstanding, to the
owner of the subject property, such other Person as may be entitled thereto or
as a court of competent jurisdiction may otherwise direct. If any Senior Secured
Party or Second Priority Debt Party shall, at any time, receive any Proceeds of
any such insurance policy or any such award in contravention of this Agreement,
it shall pay such Proceeds over to the Representative entitled thereto in
accordance with the terms of Section 4.02.

Section 5.03    Amendments to Senior Collateral Documents and Second Priority
Collateral Documents.
(a)    No Collateral Document with respect to the Collateral may be amended,
supplemented or otherwise modified or entered into to the extent such amendment,
supplement or modification, or the terms of any new Collateral Document, would
be prohibited by the terms of this Agreement. The Second Priority
Representative, for itself and on behalf of each other Second Priority Debt
Party, agrees that, if requested by the Senior Representative, each Second
Priority Collateral Document shall include the following language (or language
to similar effect reasonably approved by the Senior Representative):

“Notwithstanding anything herein to the contrary, (a) the liens and security
interests granted to Apollo Investment Corporation, as administrative agent,
pursuant to this [Agreement] and the exercise by Apollo Investment Corporation,
as administrative agent, hereunder are subject to the limitations and provisions
of the Intercreditor Agreement dated as of [•] (as amended, restated,
supplemented or otherwise modified from time to time, the “Intercreditor
Agreement”), among [•], as Senior Representative, Apollo Investment Corporation,
as Second Priority Representative, the Company and its subsidiaries and
affiliated entities party thereto (together with their successors and permitted
assigns). In the event of any conflict between the terms of the Intercreditor
Agreement and the terms of this [Agreement], the terms of the Intercreditor
Agreement shall govern.”
(b)    The Senior Debt Documents may be amended, supplemented or otherwise
modified in accordance with their terms and the Senior Credit Agreement may be
Refinanced, in each case, without notice to, or the consent of the Second
Priority Representative or the other Second Priority Debt Parties, all without
affecting the Lien subordination or other provisions of this Agreement; provided
that the holders of such Refinancing debt bind themselves in a writing addressed
to the Second Priority Representative and the other Second Priority Debt Parties
to the terms of this Agreement and any such amendment, supplement, modification
or Refinancing shall not, without the consent of the Second Priority
Representative:

(i)    increase (A) the “Applicable Margin” or similar component of the interest
rate or yield provisions applicable to the Senior Debt Facility or (B) a letter
of credit, commitment, facility, utilization, upfront, original issue discount
or similar fee so that the combined interest rate and fees are increased from
the rate that is in effect on the date of this Agreement (including any
increases as a result of additional interest, interest that is paid-in-kind,
original issue discount, and any increases

- 17 -

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

in interest rate floors, but excluding increases resulting from (A) application
of the pricing grid set forth in the Senior Credit Agreement as in effect on the
date hereof or (B) the accrual of interest at the default rate as in effect on
the date hereof);

(ii)    modify a covenant or event of default that directly or indirectly limits
or restricts one or more Grantors from making payments under the Second Priority
Debt Documents that would otherwise be permitted under the Senior Debt Documents
as in effect on the date hereof; or

(iii)    contravene the provisions of this Agreement.

(d)    The Second Priority Debt Documents may be amended, supplemented or
otherwise modified in accordance with their terms and the Second Priority Credit
Agreement may be Refinanced, in each case, without notice to, or the consent of
the Senior Representative or the other Senior Secured Parties, all without
affecting the Lien subordination or other provisions of this Agreement; provided
that the holders of such Refinancing debt bind themselves in a writing addressed
to the Senior Representative and the other Senior Secured Parties to the terms
of this Agreement and any such amendment, supplement, modification or
Refinancing shall not, without the consent of the Senior Representative:

(i)    modify covenants, defaults, or events of default to make them materially
more restrictive than those in existence on the date hereof as to the Grantors,
taken as a whole, except for modifications to match changes made to the Senior
Obligations so as to preserve, on substantially similar economic terms, any
differential that exists on the date hereof between the covenants, defaults, or
events of default in the Senior Debt Documents and the covenants, defaults, or
events of default in the Second Priority Debt Documents;

(ii)    accelerate any date upon which a scheduled payment of principal or
interest is due, or otherwise decrease the weighted average life to maturity of
the Second Priority Debt Obligations; or

(iii)    contravene the provisions of this Agreement.

(e)    The Company agrees to deliver to (i) the Senior Representative copies of
(A) any amendments, supplements or other modifications to the Second Priority
Debt Documents, and (B) any new Second Priority Debt Documents, and (ii) the
Second Priority Representative copies of (A) any amendments, supplements or
other modifications to the Senior Debt Documents, and (B) any new Senior Debt
Documents, in each case, promptly after effectiveness thereof.

Section 5.04.    Rights as Unsecured Creditors. Notwithstanding anything to the
contrary in this Agreement, during an Event of Default under the Second Priority
Debt Documents, the Second Priority Representative and the other Second Priority
Debt Parties may exercise rights and remedies as unsecured creditors against the
Company and any other Grantor in accordance with the terms of the Second
Priority Debt Documents and applicable law so long as such rights and remedies
do not violate any express provision of this Agreement. Nothing in this
Agreement shall prohibit the acceleration of the Second Priority Debt
Obligations or the receipt by any Second Priority Representative or any other
Second Priority Debt Party of the required payments of principal, premium,
interest, fees and other amounts due under the Second Priority Debt Documents so
long as such receipt is not the direct or indirect result of the exercise by the
Second Priority Representative or any other Second Priority Debt Party of an
Enforcement Action or any other rights or remedies as a secured creditor in
respect of Collateral. In the event any Second Priority Representative

- 18 -

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

or any other Second Priority Debt Party becomes a judgment lien creditor in
respect of Collateral as a result of its enforcement of its rights as an
unsecured creditor in respect of Second Priority Debt Obligations, such judgment
Lien shall be subject to this Agreement for all purposes (including in relation
to the Senior Obligations) as the other Liens securing the Second Priority Debt
Obligations are subject to this Agreement.

Section 5.05.    Gratuitous Bailee for Perfection.

(a)The Senior Representative acknowledges and agrees that if it shall at any
time hold a Lien securing any Senior Obligations on any Collateral that can be
perfected by the possession or control of such Collateral or of any account in
which such Collateral is held, and if such Collateral or any such account is in
fact in the possession or under the control of the Senior Representative, or of
agents or bailees of such Person (such Collateral being referred to herein as
the “Pledged or Controlled Collateral”), or if it shall any time obtain any
landlord waiver or bailee’s letter or any similar agreement or arrangement
granting it rights or access to Collateral, the Senior Representative shall also
hold such Pledged or Controlled Collateral, or take such actions with respect to
such landlord waiver, bailee’s letter or similar agreement or arrangement, as
sub-agent or gratuitous bailee for the relevant Second Priority Representative,
in each case solely for the purpose of perfecting the Liens granted under the
relevant Second Priority Collateral Documents and subject to the terms and
conditions of this Section 5.05.

(b)The rights of the Second Priority Representative and the Second Priority Debt
Parties with respect to the Pledged or Controlled Collateral shall at all times
be subject to the terms of this Agreement.
  
(c)The Senior Representative and the other Senior Secured Parties shall have no
obligation whatsoever to the Second Priority Representative or any other Second
Priority Debt Party to assure that any of the Pledged or Controlled Collateral
is genuine or owned by the Grantors or to protect or preserve rights or benefits
of any Person or any rights pertaining to the Collateral, except as expressly
set forth in this Section 5.05. The duties or responsibilities of the Senior
Representative under this Section 5.05 shall be limited solely to holding or
controlling the Collateral and the related Liens referred to in paragraphs (a)
and (b) of this Section 5.05 as sub-agent and gratuitous bailee for the relevant
Second Priority Representative for purposes of perfecting the Lien held by such
Second Priority Representative.

(d)The Senior Representative shall not have by reason of the Second Priority
Collateral Documents or this Agreement, or any other document, a fiduciary
relationship in respect of any Second Priority Representative or any other
Second Priority Debt Party.

(e)Following the Discharge of Senior Priority Obligations, the Senior
Representative shall, at the Grantors’ sole cost and expense, (i) (A) deliver to
the Second Priority Representative, to the extent that it is legally permitted
to do so, all Collateral, including all Proceeds thereof, held or controlled by
the Senior Representative or any of its agents or bailees, including the
transfer of possession and control, as applicable, of the Pledged or Controlled
Collateral, together with any necessary endorsements and notices to depositary
banks, securities intermediaries and commodities intermediaries, and assign its
rights under any landlord waiver or bailee’s letter or any similar agreement or
arrangement granting it rights or access to Collateral, or (B) direct and
deliver such Collateral as a court of competent jurisdiction may otherwise
direct, (ii) notify any applicable insurance carrier that it is no longer
entitled to be a loss payee or additional insured under the insurance policies
of any Grantor issued by such insurance carrier and (iii) notify any
governmental authority involved in any condemnation or similar proceeding
involving any Grantor that the Second Priority Representative is entitled to
approve any awards granted in such proceeding. The Company and the other
Grantors shall take such further action at their expense as is required to
effectuate the transfer contemplated hereby and shall indemnify the Senior
Representative for loss or damage suffered by the Senior Representative

- 19 -

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

as a result of such transfer, except for loss or damage suffered by any such
Person as a result of its own willful misconduct, gross negligence or bad faith.
The Senior Representative has no obligations to follow instructions from any
Second Priority Representative or any other Second Priority Debt Party in
contravention of this Agreement.

(f)Neither the Senior Representative nor any of the other Senior Secured Parties
shall be required to marshal any present or future collateral security for any
obligations of any Grantor to the Senior Representative or any Senior Secured
Party under the Senior Debt Documents or any assurance of payment in respect
thereof, or to resort to such collateral security or other assurances of payment
in any particular order, and all of their rights in respect of such collateral
security or any assurance of payment in respect thereof shall be cumulative and
in addition to all other rights, however existing or arising.

Section 5.06.    When Discharge of Senior Priority Obligations Deemed To Not
Have Occurred.
    
If, at any time after the Discharge of Senior Priority Obligations has occurred,
the Company or any Subsidiary substantially concurrently enters into any
Refinancing of any Senior Obligations (other than in respect of the payment of
indemnities surviving the Discharge of Senior Priority Obligations), then such
Discharge of Senior Priority Obligations shall automatically be deemed not to
have occurred for all purposes of this Agreement (other than with respect to any
actions taken prior to the date of such designation as a result of the
occurrence of such first Discharge of Senior Priority Obligations) and, from and
after the date on which the New Senior Debt Notice is delivered to the Second
Priority Representative in accordance with the next sentence, the obligations
under such Refinancing of the Senior Debt Documents shall automatically be
treated as Senior Obligations for all purposes of this Agreement, the applicable
agreement governing such Senior Obligations shall automatically be treated as a
Senior Debt Document for all purposes of this Agreement, including for purposes
of the Lien priorities and rights in respect of Collateral set forth herein and
the agent, representative or trustee for the holders of such Senior Obligations
shall be the Senior Representative for all purposes of this Agreement. Upon
receipt of notice (the “New Senior Debt Notice”) of such incurrence (including
the identity of the new Senior Representative), the Second Priority
Representative shall promptly upon request (a) enter into such documents and
agreements (at the expense of the Company), including amendments or supplements
to this Agreement, as the Company or such new Senior Representative shall
reasonably request in writing in order to provide the new Senior Representative
the rights of the Senior Representative contemplated hereby, in each case
consistent with the terms of this Agreement, (b) deliver to the Senior
Representative, to the extent that it is legally permitted to do so, all
Collateral, including all Proceeds thereof, held or controlled by such Second
Priority Representative or any of its agents or bailees, including the transfer
of possession and control, as applicable, of the Pledged or Controlled
Collateral, together with any necessary endorsements and notices to depositary
banks, securities intermediaries and commodities intermediaries, and agree to
amendments to any landlord waiver or bailee’s letter or any similar agreement or
arrangement granting it rights or access to Collateral, (c) notify any
applicable insurance carrier that it is no longer entitled to be a sole loss
payee or additional insured under the insurance policies of any Grantor issued
by such insurance carrier and (d) notify any governmental authority involved in
any condemnation or similar proceeding involving a Grantor that the new Senior
Representative is entitled to approve any awards granted in such proceeding. The
new Senior Representative shall agree in writing addressed to the Second
Priority Representative and the Second Priority Debt Parties to be bound by the
terms of this Agreement.

Section 5.07.    Option to Purchase.

(a)Automatic Offer to Purchase Senior Obligations.

- 20 -

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

i.Without prejudice to the enforcement of the Senior Secured Parties’ remedies,
the Senior Secured Parties agree at any time following an acceleration of the
Senior Obligations in accordance with the terms of the Senior Credit Agreement
or the commencement of an Insolvency or Liquidation Proceeding involving the
Company as debtor, the Senior Secured Parties will be deemed to have
automatically offered the Second Priority Debt Parties the option to purchase at
par/face amount the entire aggregate amount of outstanding Senior Obligations
(which includes principal, interest, fees, breakage costs, attorneys’ fees and
expenses, amounts required by Section 5.07(c)(vii) below, and, in the case of
any Secured Swap Agreements, on a per Secured Swap Provider basis, the positive
amount that is payable by the applicable Grantor thereunder reflecting any
unpaid amount then due or amount owing in connection with the termination (or
early termination) on or prior to the date of the Purchase after giving effect
to offset and netting arrangements in respect of such Secured Swap Provider, but
which excludes any rights of the Senior Secured Parties with respect to
indemnification and other obligations of the Grantors under the Senior Debt
Documents that are expressly stated to survive the termination of the Senior
Debt Documents).
 
ii.The Second Priority Debt Parties shall irrevocably accept or reject the offer
described in Section 5.01(a)(i) above within ten (10) Business Days of the
acceleration or commencement of the Insolvency or Liquidation Proceedings, as
applicable, and the parties shall endeavor to close promptly thereafter, but in
no event later than twenty (20) Business Days after such acceleration or
commencement of the Insolvency or Liquidation Proceeding, as applicable. If the
Second Priority Debt Parties accept such offer, it shall be exercised pursuant
to documentation mutually acceptable to the Senior Representative and the Second
Priority Representative (the “Assignment Documentation”). If the Second Priority
Debt Parties reject such offer (or do not so irrevocably accept such offer
within the required timeframe), the Senior Secured Parties shall have no further
obligations pursuant to this Section 5.07(a) and may take any further actions in
their sole discretion in accordance with the Senior Debt Documents and this
Agreement.

(b)Option to Purchase Obligations under Senior Credit Agreement.

i.One or more Second Priority Debt Parties (the “Initiating Purchasers”) may, at
any time, provide written notice to the Senior Representative, which notice
shall be irrevocable and binding upon such Initiating Purchasers (the “Purchase
Notice”), that it (or they, or one or more of its (or their) affiliates or
designees) desires to purchase all, but not less than all, of the outstanding
Senior Obligations of the Senior Lenders under the Senior Credit Agreement
(including the unfunded commitments under the Senior Credit Agreement) for cash
consideration, in immediately available funds, equal to the Aggregate Purchase
Price. Such Initiating Purchasers shall also provide with the Purchase Notice,
evidence reasonably satisfactory to the Senior Representative that they have
combined capital available on a timely basis sufficient to make such purchase,
and the delivery of such evidence shall be considered an integral part (and
included within the definition) of “Purchase Notice”. Promptly thereafter, the
Initiating Purchasers shall provide a copy of the Purchase Notice to the Second
Priority Representative (and the Second Priority Representative shall provide a
copy thereof to each other Second Priority Debt Party).

ii.Any Second Priority Debt Party that would like to participate in the purchase
of the Senior Obligations as contemplated by this Section 5.07(b) (the
“Additional

- 21 -

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

Purchasers”; and together with the Initiating Purchasers, the “Purchasers”)
shall provide written notice to the Initiating Purchasers within ten (10) days
of its receipt of a copy of the Purchase Notice providing the aggregate amount
of the Senior Obligations that it (or one or more of its affiliates or
designees) desires to purchase. The Purchasers shall allocate the purchase among
themselves on a pro rata basis based upon the Aggregate Purchase Price committed
by each such Person (but in any event not in excess of any such Purchaser’s
amount of Senior Obligations that it desires to purchase).

iii.The Senior Representative agrees, for itself and the other Senior Secured
Parties, that upon the Senior Representative’s receipt of a Purchase Notice (the
“Notice Delivery Date”), no Senior Secured Party shall take any Enforcement
Action with respect to the Collateral and shall not exercise any right or remedy
available to such Person under the Senior Debt Documents (including any action
to accelerate the Senior Loans), in each case during the thirty (30) day period
following the Notice Delivery Date (such thirty (30) day period, the “Purchase
Period”). Promptly after the delivery of the Purchase Notice, the Senior
Representative shall provide the Initiating Purchasers with a written
confirmation of the Aggregate Purchase Price and amounts required by Section
5.07(c)(vii) below, together with reasonable detail.

iv.The purchase of the Senior Obligations contemplated by this Section 5.07(b)
shall be consummated promptly after the delivery of the Purchase Notice (but in
any event prior to expiration of the Purchase Period) pursuant to the Assignment
Documentation, and such purchase shall become effective upon the later of (A)
the execution of the Assignment Documentation by all parties thereto and (B)
receipt by the Senior Representative of cash consideration by wire transfer of
immediately available funds from or on behalf of the Purchasers in an amount
equal to the Aggregate Purchase Price plus all amounts required by Section
5.07(c)(vii) below.

(c)General Purchase-Related Matters.

i.In no event shall any Grantor or any Affiliate thereof be permitted to be an
Initiating Purchaser or a Purchaser hereunder.

ii.Notwithstanding the foregoing, in the event that (x) the purchasing Second
Priority Debt Parties shall have executed the Assignment Documentation and shall
have delivered executed counterparts of their respective signature pages to the
Assignment Agreement to the Senior Representative prior to expiration of the
requisite periods described in Sections 5.07(a) and 5.07(b), and (y) one or more
Senior Secured Parties shall for any reason refuse or otherwise fail to execute
the Assignment Documentation prior to the expiration of such requisite period,
then each Senior Secured Party, by authorization of the Senior Representative’s
execution and delivery of this Agreement or by separate authorization, hereby
irrevocably constitutes and appoints the Senior Representative and any officer
or agent of the Senior Representative, with full power of substitution, as its
true and lawful attorney-in-fact, coupled with an interest, with full
irrevocable power and authority in the place and stead of such Senior Secured
Party or in the Senior Representative’s own name, and the Senior Representative
is hereby irrevocably authorized, by authorization of the execution and delivery
of this Agreement or by separate authorization, and instructed (and the Senior
Representative hereby agrees), to execute the Assignment Documentation on behalf
of each Senior Secured Party; provided, however, that, if the Senior Secured
Parties and/or the Senior Representative

- 22 -

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

shall for any reason refuse or otherwise fail to so execute the Assignment
Documentation prior to the expiration of such requisite period, then the Senior
Representative, by its execution and delivery of this Agreement, and each Senior
Secured Party, by authorization of the Senior Representative’s execution and
delivery of this Agreement or by separate authorization, hereby irrevocably
constitutes and appoints the Second Priority Representative and any officer or
agent of the Second Priority Representative, with full power of substitution, as
its true and lawful attorney-in-fact, coupled with an interest, with full
irrevocable power and authority in the place and stead of the Senior
Representative and such other Senior Secured Parties, respectively, or in the
Second Priority Representative’s own name, and the Second Priority
Representative is hereby irrevocably authorized and instructed (and the Second
Priority Representative hereby agrees), to execute the Assignment Documentation
on behalf of such Senior Secured Party.

iii.Notwithstanding anything to the contrary contained in the Senior Credit
Agreement or any limitations contained therein (including any restriction
contained in the Senior Agreement with respect to assignments), each purchasing
Second Priority Debt Party shall be permitted, upon consummation of the purchase
of the Senior Obligations under the Senior Credit Agreement and payment of the
amounts required by Section 5.07(a) or Section 5.07(b) as aforesaid, as the case
may be, and Section 5.07(c)(vii) below, to become a “Lender” under the Senior
Credit Agreement in accordance with this Section 5.07.

iv.Each of the Grantors hereby consents to the purchases of the Senior
Obligations contemplated by this Section 5.07 and confirms that no other consent
at the time of any such sale is necessary notwithstanding anything to the
contrary in the Senior Credit Agreement or any other Senior Debt Document.
v.For avoidance of doubt, any Senior Obligations which are not purchased
pursuant to this Section 5.07 will continue to constitute Senior Obligations
hereunder and shall be secured in the same manner and subject to the same
protections hereunder as existed immediately prior to the Purchase. Any Purchase
shall be made without warranty or representation (other than with respect to
each of the Senior Secured Parties’ ownership of the Senior Obligations owed to
or held by such Senior Secured Parties, free and clear of all claims created by,
or consented to in writing by, such Senior Secured Parties) or recourse, all as
more fully described in this Section 5.07.

vi.The Senior Representative agrees that if in connection with any Purchase, the
Senior Representative gives written notice of its resignation as administrative
agent, collateral agent or such other similar capacity under the Senior Credit
Agreement pursuant to the terms thereof (the “Resigning Senior Representative”),
then the Resigning Senior Representative (A) shall promptly deliver a copy of
such notice to the Second Priority Representative and the other Second Priority
Debt Parties, and (B) shall remain as administrative agent, collateral agent or
such other similar capacity under the Senior Credit Agreement (to the extent
then acting as such) for an additional period commencing on the date on which
the notice referred to in clause (A) above shall have been delivered to the
Second Priority Representative and the other Second Priority Debt Parties and
ending on the earlier of (x) the appointment of a successor administrative
agent, collateral agent or such other similar capacity (the “Successor Senior
Representative”) and the acceptance by the Successor Senior Representative of
such appointment and (y) thirty (30) days thereafter; provided, however, that
(1) the Resigning Senior Representative shall on or prior to the effective date
of such resignation, deliver all Collateral in its possession to the Successor
Senior Representative (or if none exists, to the

- 23 -

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

Second Priority Representative), and (2) the Resigning Senior Representative and
each Grantor shall, following the effective date of such resignation, furnish
promptly, at the Grantors’ expense, additional releases, amendment or
termination statements, assignments and such other documents, instruments and
agreements as are customary and may be reasonably requested by the Successor
Senior Representative or the Second Priority Debt Parties from time to time in
order to effect the matters covered hereby; and provided further that the
Resigning Senior Representative shall not be obligated to take any action or
accept any direction from the Second Priority Debt Parties (or their agents or
representatives) unless indemnified to its reasonable satisfaction.
vii.In connection with any Purchase, the purchasing Second Priority Debt Parties
shall furnish cash collateral to any relevant Senior Secured Party as it
reasonably deems necessary to secure any such Senior Secured Party’s outstanding
Letters of Credit (not to exceed 103% of the face amount of the aggregate
undrawn face amount of such Letters of Credit).

Section 5.08.    Payments in Excess of Senior Cap Amount. Upon an Event of
Default under any Senior Debt Document and receipt of Collateral or Proceeds
thereof in connection with the sale or other disposition of, or collection on,
such Collateral upon the exercise of remedies by the Senior Secured Parties in
an amount equal to the Senior Priority Obligations, the Second Priority
Representative shall assume the roles hereunder of the Senior Representative and
all receipts of Collateral or Proceeds shall thereafter be applied to the Second
Priority Debt Obligations until the Discharge of Second Priority Debt
Obligations occurs, at which time the Senior Representative shall reassume such
roles until the amount of Excess Senior Obligations are paid in full.

ARTICLE VI

INSOLVENCY OR LIQUIDATION PROCEEDINGS.

Section 6.01.    Financing Issues.
  
(a)Until the Discharge of Senior Priority Obligations has occurred, if the
Company or any other Grantor shall be subject to any Insolvency or Liquidation
Proceeding and the Senior Representative or any other Senior Secured Party shall
desire to consent (or not object) to the use of Collateral constituting Cash
Collateral or to consent (or not object) to the Company’s or any other Grantor’s
obtaining financing under Section 363 or Section 364 of the Bankruptcy Code or
any similar provision of any other Bankruptcy Law (“DIP Financing”), then the
Second Priority Representative, for itself and on behalf of each other Second
Priority Debt Party, agrees that it will raise no objection to and will not
otherwise contest such Cash Collateral use or DIP Financing (and to the extent
the Liens securing the Senior Obligations are subordinated to or pari passu with
such DIP Financing, the Second Priority Representative will subordinate its
Liens in the Collateral to the Liens securing such DIP Financing (and all
obligations relating thereto)) and will not request adequate protection or any
other relief in connection therewith (except, as expressly agreed by the Senior
Representative or to the extent permitted by Section 6.03); provided that, (i)
the aggregate principal amount of the DIP Financing does not exceed the DIP Cap,
(ii) the Second Priority Representative and the other Second Priority Debt
Parties retain the right to object to any ancillary agreements or arrangements
regarding Cash Collateral use or the DIP Financing that are materially
prejudicial to their interests, (iii) such Cash Collateral use or DIP Financing
is on commercially reasonable terms, (iv) the terms of the DIP Financing or cash
collateral order do not compel the Grantors to seek confirmation of a specific
plan of reorganization for which all or substantially all of the material terms
are set forth in the DIP Financing documentation, the cash collateral order or a
related document, and (v) the DIP Financing documentation or cash collateral
order does not

- 24 -

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

expressly require the liquidation of the Collateral prior to a default under the
DIP Financing documentation or cash collateral order.

(b)The Second Priority Representative, for itself and on behalf of each Second
Priority Debt Party under the Second Priority Debt Facility, agrees that notice
from the Company received two (2) Business Days prior to the entry of an order
approving such usage of Cash Collateral or approving such DIP Financing shall be
adequate notice.

Section 6.02.    Relief from the Automatic Stay. Until the Discharge of Senior
Priority Obligations has occurred, the Second Priority Representative, for
itself and on behalf of each other Second Priority Debt Party, agrees that none
of them shall seek relief from the automatic stay or any other stay in any
Insolvency or Liquidation Proceeding or take any action in derogation thereof,
in each case in respect of any Collateral, without the prior written consent of
the Senior Representative, unless a motion for adequate protection permitted
under Section 6.03 has been denied by the applicable bankruptcy court.

Section 6.03.    Adequate Protection.

(a)The Second Priority Representative, for itself and on behalf of each other
Second Priority Debt Party, agrees that none of them shall:

(i)object, contest or support any other Person objecting to or contesting (A)
any request by the Senior Representative or any other Senior Secured Parties for
adequate protection, (B) any objection by the Senior Representative or any
Senior Secured Parties to any motion, relief, action or proceeding based on the
Senior Representative’s or Senior Secured Party’s claiming a lack of adequate
protection or (C) the payment of interest, fees, expenses or other amounts of
the Senior Representative or any other Senior Secured Party under Section 506(b)
of the Bankruptcy Code or any similar provision of any other Bankruptcy Law, or

(ii)assert or support any claim for costs or expenses of preserving or disposing
of any Collateral under Section 506(c) of the Bankruptcy Code or any similar
provision of any other Bankruptcy Law.
 
(b)Notwithstanding anything contained in this Section 6.03 or in Section 6.01,
in any Insolvency or Liquidation Proceeding:

(i)if the Senior Secured Parties (or any subset thereof) are granted adequate
protection in the form of additional collateral or superpriority claims in
connection with any DIP Financing or use of Cash Collateral under Section 363 or
364 of the Bankruptcy Code or any similar provision of any other Bankruptcy Law,
then the Second Priority Representative, for itself and on behalf of each other
Second Priority Debt Party, may seek or request adequate protection in the form
of a replacement Lien on such additional collateral or superpriority claim,
which Lien or superpriority claim is subordinated to the Liens securing all
Senior Obligations and such DIP Financing (and all obligations relating thereto)
on the same basis as the other Liens securing the Second Priority Debt
Obligations are so subordinated to the Liens securing Senior Obligations under
this Agreement; and

(ii)in the event any Second Priority Representative, for itself and on behalf of
the other Second Priority Debt Parties, seeks or requests adequate protection
and such adequate protection is granted in the form of additional collateral or
superpriority claims (in each

- 25 -

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

instance, to the extent such grant is otherwise permissible under the terms and
conditions of this Agreement), then such Second Priority Representative, for
itself and on behalf of each other Second Priority Debt Party under the Second
Priority Debt Facility, agrees that the Senior Representative shall also be
granted (as applicable) a senior superpriority claim or senior Lien on such
additional collateral as security for the Senior Priority Obligations, and that
any Lien on such additional collateral securing the Second Priority Debt
Obligations or superpriority claim granted to the Second Priority Debt Parties
shall be subordinated to the Liens on such collateral securing the Senior
Priority Obligations and any such DIP Financing (and all obligations relating
thereto) and any other Liens granted to the Senior Secured Parties, or the
superpriority claim granted to the Senior Secured Parties, as adequate
protection on the same basis as the other Liens securing the Second Priority
Debt Obligations are so subordinated to such Liens securing Senior Priority
Obligations under this Agreement.

(c)Notwithstanding anything contained in this Section 6.03 or in Section 6.01,
in any Insolvency or Liquidation Proceeding, to the extent that the Senior
Secured Parties are granted adequate protection in the form of payments in the
amount of current incurred fees and expenses and/or other cash payments, or
otherwise with the consent of the Senior Representative, then the Second
Priority Representative and the Second Priority Debt Parties may seek adequate
protection in the form of payments in the amount of current incurred fees and
expenses and/or other cash payments (as applicable). In addition, to the extent
the Senior Secured Parties are awarded or otherwise granted an allowed claim in
any Insolvency or Liquidation Proceeding with respect to post-petition interest,
nothing herein shall prevent the Second Priority Debt Parties from seeking or
otherwise asserting a claim for post-petition interest to the extent of the
value of the Lien of the Second Priority Debt Parties on the Collateral (after
taking into account the Senior Priority Obligations).

Section 6.04.    Preference Issues. If any Secured Party is required in any
Insolvency or Liquidation Proceeding or otherwise to disgorge, turn over or
otherwise pay any amount to the estate of the Company or any other Grantor (or
any trustee, receiver or similar Person therefor), because the payment of such
amount was declared to be fraudulent or preferential in any respect or for any
other reason, any amount (a “Recovery”), whether received as proceeds of
security, enforcement of any right of setoff or otherwise, then the applicable
Secured Obligations shall be reinstated to the extent of such Recovery and
deemed to be outstanding as if such payment had not occurred and the applicable
Secured Parties shall be entitled to the benefits of this Agreement until all
such Secured Obligations shall have again been paid in full in cash. If this
Agreement shall have been terminated prior to such Recovery, this Agreement
shall be reinstated in full force and effect, and such prior termination shall
not diminish, release, discharge, impair or otherwise affect the obligations of
the parties hereto. Each Representative, for itself and on behalf of each
Secured Party for which it is acting under the applicable Debt Facility, hereby
agrees that none of them shall be entitled to benefit from any avoidance action
affecting or otherwise relating to any distribution or allocation made in
accordance with this Agreement, whether by preference or otherwise, it being
understood and agreed that the benefit of such avoidance action otherwise
allocable to them shall instead be allocated and turned over for application in
accordance with the priorities set forth in this Agreement.

Section 6.05.    Separate Grants of Security and Separate Classifications. The
Second Priority Representative, for itself and on behalf of each other Second
Priority Debt Party, acknowledges and agrees that (a) the grants of Liens
pursuant to the Senior Collateral Documents and the Second Priority Collateral
Documents constitute separate and distinct grants of Liens and (b) because of,
among other things, their differing rights in the Collateral, the Second
Priority Debt Obligations are fundamentally different from the Senior
Obligations and must be separately classified in any plan of reorganization
proposed or adopted in an Insolvency or Liquidation Proceeding. To further
effectuate the intent of the parties as provided in the immediately preceding
sentence, if it is held that any claims of the Senior Secured Parties and the
Second

- 26 -

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

Priority Debt Parties in respect of the Collateral constitute a single class of
claims (rather than separate classes of senior and junior secured claims), then
each of the parties hereto hereby acknowledges and agrees that, subject to
Sections 2.01 and 4.01, all distributions shall be made as if there were
separate classes of senior and junior secured claims against the Grantors in
respect of the Collateral, with the effect being that to the extent that the
aggregate value of the Collateral is sufficient (for this purpose ignoring all
claims held by the Second Priority Debt Parties), the Senior Secured Parties
shall be entitled to receive, in addition to amounts distributed to them in
respect of principal, pre-petition interest and other claims, all amounts owing
in respect of post-petition interest, whether or not allowable (but excluding in
all cases any Excess Senior Obligations) before any distribution from the
Collateral is made in respect of the Second Priority Debt Obligations. The
Second Priority Representative, for itself and on behalf of the other Second
Priority Debt Parties, hereby acknowledges and agrees to turn over to the Senior
Representative amounts otherwise received or receivable by it from the
Collateral to the extent necessary to effectuate the intent of the foregoing
sentence, even if such turnover has the effect of reducing the claim or recovery
of the Second Priority Debt Parties.

Section 6.06    [Reserved].

Section 6.07.    Application. This Agreement, which the parties hereto expressly
acknowledge is a “subordination agreement” under Section 510(a) of the
Bankruptcy Code or any similar provision of any other Bankruptcy Law, shall be
effective before, during and after the commencement of any Insolvency or
Liquidation Proceeding. The relative rights as to the Collateral and Proceeds
thereof shall continue after the commencement of any Insolvency or Liquidation
Proceeding on the same basis as prior to the date of the petition therefor,
subject to any court order approving the financing of, or use of Cash Collateral
by, any Grantor. All references herein to any Grantor shall include such Grantor
as a debtor-in-possession and any receiver or trustee for such Grantor.

Section 6.08.    [Reserved].

Section 6.09.    [Reserved].
  
Section 6.10.    Reorganization Securities. If, in any Insolvency or Liquidation
Proceeding, debt obligations of the reorganized debtor secured by Liens upon any
property of the reorganized debtor are distributed, pursuant to a plan of
reorganization or similar dispositive restructuring plan, on account of both the
Senior Obligations and the Second Priority Debt Obligations, then, to the extent
the debt obligations distributed on account of the Senior Obligations and on
account of the Second Priority Debt Obligations are secured by Liens upon the
same assets or property, the provisions of this Agreement will survive the
distribution of such debt obligations pursuant to such plan and will apply with
like effect to the Liens securing such debt obligations.

ARTICLE VII

RELIANCE; ETC.

Section 7.01.    Reliance. All loans and other extensions of credit made or
deemed made on and after the date hereof by the Senior Secured Parties and the
Second Priority Debt Parties to the Company or any Subsidiary shall be deemed to
have been given and made in reliance upon this Agreement. The Second Priority
Representative, on behalf of itself and each other Second Priority Debt Party,
acknowledges that it and such Second Priority Debt Parties have, independently
and without reliance on the Senior Representative or other Senior Secured Party,
and based on documents and information deemed by them appropriate, made their
own credit analysis and decision to enter into the Second Priority Debt
Documents to which they are

- 27 -

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

party or by which they are bound, this Agreement and the transactions
contemplated hereby and thereby, and they will continue to make their own credit
decisions in taking or not taking any action under the Second Priority Debt
Documents or this Agreement. The Senior Representative, on behalf of itself and
each other Senior Secured Party, acknowledges that it and such Senior Secured
Parties have, independently and without reliance on the Second Priority
Representative or other Second Priority Debt Party, and based on documents and
information deemed by them appropriate, made their own credit analysis and
decision to enter into the Senior Debt Documents to which they are party or by
which they are bound, this Agreement and the transactions contemplated hereby
and thereby, and they will continue to make their own credit decisions in taking
or not taking any action under the Senior Debt Documents or this Agreement.

Section 7.02.    No Warranties or Liability. The Second Priority Representative,
on behalf of itself and each other Second Priority Debt Party, acknowledges and
agrees that, except as otherwise expressly set forth herein, neither the Senior
Representative nor any other Senior Secured Party has made any express or
implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectability or enforceability of any of the
Senior Debt Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon. The Senior Representative, on behalf of itself
and each other Senior Secured Party, acknowledges and agrees that, except as
otherwise expressly provided herein, neither the Second Priority Representative
nor any other Second Priority Debt Party has made any express or implied
representation or warranty, including with respect to the execution, validity,
legality, completeness, collectability or enforceability of any of the Second
Priority Debt Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon. The Senior Secured Parties will be entitled to
manage and supervise their respective loans and extensions of credit under the
Senior Debt Documents in accordance with law and as they may otherwise, in their
sole discretion, deem appropriate, and the Senior Secured Parties may manage
their loans and extensions of credit without regard to any rights or interests
that the Second Priority Representative and the Second Priority Debt Parties
have in the Collateral or otherwise, except as otherwise provided in this
Agreement. The Second Priority Debt Parties will be entitled to manage and
supervise their respective loans and extensions of credit under the Second
Priority Documents in accordance with law and as they may otherwise, in their
sole discretion, deem appropriate, and the Second Priority Debt Parties may
manage their loans and extensions of credit without regard to any rights or
interests that the Senior Representative and the Senior Secured Parties have in
the Collateral or otherwise, except as otherwise provided in this Agreement.
Neither the Senior Representative nor any other Senior Secured Party shall have
any duty to any Second Priority Representative or other Second Priority Debt
Party to act or refrain from acting in a manner that allows, or results in, the
occurrence or continuance of an event of default or default under any agreement
with the Company or any Subsidiary (including the Second Priority Debt
Documents), regardless of any knowledge thereof that they may have or be charged
with. Neither the Second Priority Representative nor any other Second Priority
Debt Party shall have any duty to any Senior Representative or other Senior
Secured Party to act or refrain from acting in a manner that allows, or results
in, the occurrence or continuance of an event of default or default under any
agreement with the Company or any Subsidiary (including the Senior Debt
Documents), regardless of any knowledge thereof that they may have or be charged
with. Except as expressly set forth in this Agreement, the Senior
Representative, the Senior Secured Parties, the Second Priority Representative
and the Second Priority Debt Parties have not otherwise made to each other, nor
do they hereby make to each other, any warranties, express or implied, nor do
they assume any liability to each other with respect to (a) the enforceability,
validity, value or collectability of any of the Senior Obligations, the Second
Priority Debt Obligations or any guarantee or security which may have been
granted to any of them in connection therewith, (b) any Grantor’s title to or
right to transfer any of the Collateral or (c) any other matter except as
expressly set forth in this Agreement.

- 28 -

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

Section 7.03.    Obligations Unconditional. All rights, interests, agreements
and obligations of the Senior Representative, the Senior Secured Parties, the
Second Priority Representative and the Second Priority Debt Parties hereunder
shall remain in full force and effect irrespective of:

(a)any lack of validity or enforceability of any Senior Debt Document or any
Second Priority Debt Document;

(b)except as otherwise expressly set forth in this Agreement, any change in the
time, manner or place of payment of, or in any other terms of, all or any of the
Senior Obligations or Second Priority Debt Obligations, or any amendment or
waiver or other modification, including any increase in the amount thereof,
whether by course of conduct or otherwise, of the terms of the Senior Credit
Agreement or any other Senior Debt Document or of the terms of any Second
Priority Debt Document;

(c)except as otherwise expressly set forth in this Agreement, any exchange of
any security interest in any Collateral or any other collateral or any
amendment, waiver or other modification, whether in writing or by course of
conduct or otherwise, of all or any of the Senior Obligations or Second Priority
Debt Obligations or any guarantee thereof;

(d)the commencement of any Insolvency or Liquidation Proceeding in respect of
the Company or any other Grantor; or

(e)any other circumstances that otherwise might constitute a defense available
to, or a discharge of, (i) the Company or any other Grantor in respect of the
Senior Obligations, (ii) any Senior Representative or other Senior Secured Party
in respect of this Agreement, or (iii) any Second Priority Representative or
other Second Priority Debt Party in respect of this Agreement.

ARTICLE VIII
MISCELLANEOUS

Section 8.01.    Conflicts. In the event of any conflict between the provisions
of this Agreement and the provisions of any Senior Debt Document or any Second
Priority Debt Document, the provisions of this Agreement shall govern.

Section 8.02.    Continuing Nature of this Agreement; Severability. Subject to
Section 6.04, this Agreement shall continue to be effective until the earlier of
(a) the date on which the Discharge of Senior Priority Obligations occurs, if no
Excess Senior Obligations are outstanding on such date, (b) the date on which
the Discharge of Second Priority Debt Obligations occurs, and (c) the date on
which no Excess Senior Obligations are outstanding after the Discharge of Senior
Priority Obligations has occurred. This is a continuing agreement of Lien
subordination, and the Senior Secured Parties may continue, at any time and
without notice to the Second Priority Representative or any other Second
Priority Debt Party, to extend credit and other financial accommodations and
lend monies to or for the benefit of the Company or any Subsidiary constituting
Senior Obligations in reliance hereon. The terms of this Agreement shall survive
and continue in full force and effect in any Insolvency or Liquidation
Proceeding. Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall not invalidate the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.

- 29 -

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

Section 8.03.    Amendments; Waivers.

(a)No failure or delay on the part of any party hereto in exercising any right
or power hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the parties hereto are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice or demand on any party
hereto in any case shall entitle such party to any other or further notice or
demand in similar or other circumstances.

(b)This Agreement may be amended in writing signed by each Representative (in
each case, acting in accordance with the documents governing the applicable Debt
Facility); provided that any such amendment, supplement or waiver which by the
terms of this Agreement expressly requires the Company’s consent or which
increases the obligations or reduces the rights of the Company or any Grantor,
shall require the consent of the Company. Any such amendment, supplement or
waiver shall be in writing and shall be binding upon the Senior Secured Parties,
the Second Priority Debt Parties, the Company and the other Grantors and each of
their respective successors and assigns.

Section 8.04.    Information Concerning Financial Condition of the Company and
the Subsidiaries. The Senior Representative, the Senior Secured Parties, the
Second Priority Representative and the Second Priority Debt Parties shall each
be responsible for keeping themselves informed of (a) the financial condition of
the Company and the Subsidiaries and all endorsers or guarantors of the Senior
Obligations or the Second Priority Debt Obligations and (b) all other
circumstances bearing upon the risk of nonpayment of the Senior Obligations or
the Second Priority Debt Obligations, as applicable. The Senior Representative,
the Senior Secured Parties, the Second Priority Representative and the Second
Priority Debt Parties shall have no duty to advise any other party hereunder of
information known to it or them regarding such condition or any such
circumstances or otherwise. In the event that the Senior Representative, any
Senior Secured Party, any Second Priority Representative or any Second Priority
Debt Party, in its sole discretion, undertakes at any time or from time to time
to provide any such information to any other party, it shall be under no
obligation to (i) make, and the Senior Representative, the Senior Secured
Parties, the Second Priority Representative and the Second Priority Debt Parties
shall not make or be deemed to have made, any express or implied representation
or warranty, including with respect to the accuracy, completeness, truthfulness
or validity of any such information so provided, (ii) provide any additional
information or to provide any such information on any subsequent occasion, (iii)
undertake any investigation or (iv) disclose any information that, pursuant to
accepted or reasonable commercial finance practices, such party wishes to
maintain confidential or is otherwise required to maintain confidential.

Section 8.05.    Subrogation. With respect to the value of any payments or
distributions in cash, property or other assets that the Second Priority
Representative or any other Second Priority Debt Party pays over to the Senior
Representative or any other Senior Secured Party under the terms of this
Agreement, the Second Priority Representative and other Second Priority Debt
Parties shall be subrogated to the rights of the Senior Representative and the
other Senior Secured Parties; provided that, the Second Priority Representative,
on behalf of itself and the other Second Priority Debt Parties, hereby agrees
not to assert or enforce all such rights of subrogation it may acquire as a
result of any payment hereunder until the Discharge of Senior Priority
Obligations has occurred. The Grantors acknowledge and agree that the value of
any payments or distributions in cash, property or other assets received by the
Second Priority Representative or

- 30 -

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

other Second Priority Debt Parties that are paid over to the Senior
Representative or other Senior Secured Parties pursuant to this Agreement shall
not reduce any of the Second Priority Debt Obligations.

Section 8.06.    Application of Payments. Except as otherwise provided herein,
all payments received by the Senior Secured Parties may be applied, reversed and
reapplied, in whole or in part, to such part of the Senior Obligations as the
Senior Secured Parties, in their sole discretion, deem appropriate, consistent
with the terms of the Senior Debt Documents. Except as otherwise provided
herein, the Second Priority Representative, on behalf of itself and each other
Second Priority Debt Party or any part thereof and to any other indulgence with
respect thereto, to any substitution, exchange or release of any security that
may at any time secure any part of the Senior Obligations and to the addition or
release of any other Person primarily or secondarily liable therefor. Except as
otherwise provided herein, all payments received by the Second Priority Debt
Parties may be applied, reversed and reapplied, in whole or in part, to such
part of the Second Priority Debt Obligations as the Second Priority Debt
Parties, in their sole discretion, deem appropriate, consistent with the terms
of the Second Priority Debt Documents. Except as otherwise provided herein, the
Senior Representative, on behalf of itself and each other Senior Secured Party,
assents to any such extension or postponement of the time of payment of the
Second Priority Debt Obligations or any part thereof and to any other indulgence
with respect thereto, to any substitution, exchange or release of any security
that may at any time secure any part of the Second Priority Debt Obligations and
to the addition or release of any other Person primarily or secondarily liable
therefor.

Section 8.07.    Additional Grantors. The Company agrees that, if any Subsidiary
shall become a Grantor after the date hereof, it will promptly cause such
Subsidiary to become party hereto by executing and delivering an instrument in
the form of Annex I. Upon such execution and delivery, such Subsidiary will
become a Grantor hereunder with the same force and effect as if originally named
as a Grantor herein. The execution and delivery of such instrument shall not
require the consent of any other party hereunder, and will be acknowledged by
the Second Priority Representative and the Senior Representative. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Agreement.

Section 8.08.    Dealings with Grantors. Upon any application or demand by the
Company or any Grantor to any Representative to take or permit any action under
any of the provisions of this Agreement or under any Collateral Document (if
such action is subject to the provisions hereof), the Company or such Grantor,
as appropriate, shall furnish to such Representative a certificate of a
Responsible Officer (an “Officer’s Certificate”) stating that all conditions
precedent, if any, provided for in this Agreement or such Collateral Document,
as the case may be, relating to the proposed action have been complied with,
except that in the case of any such application or demand as to which the
furnishing of documents is specifically required by any provision of this
Agreement or any Collateral Document relating to such particular application or
demand, no additional certificate or opinion need be furnished.

Section 8.09.    Consent to Jurisdiction; Waivers. Each Representative, on
behalf of itself and the Secured Parties of the Debt Facility for which it is
acting, irrevocably and unconditionally:

(a)submits for itself and its property in any legal action or proceeding
relating to this Agreement and the Collateral Documents, or for recognition and
enforcement of any judgment in respect thereof, to the exclusive jurisdiction of
the courts of the State of New York, the courts of the United States of America
for the Southern District of New York, and appellate courts from any thereof;

(b)consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such

- 31 -

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

court or that such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;

(c)agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Person (or its
Representative) at the address referred to in Section 8.10 or by a procedure
permitted under the relevant Senior Debt Document or Second Priority Debt
Documents, as the case may be;

(d)agrees that nothing herein shall affect the right of any other party hereto
(or any Secured Party) to effect service of process in any other manner
permitted by law; and

(e)waives, to the maximum extent not prohibited by law, any right it may have to
claim or recover in any legal action or proceeding referred to in this
Section 8.09 any special, exemplary, punitive or consequential damages.

Section 8.10.    Notices. All notices, requests, demands and other
communications provided for or permitted hereunder shall be in writing and shall
be sent:

(i)if to the Company or any Grantor, to the Company, at its address at: [∙];
(ii)if to the Second Priority Representative, to it at: [∙]; and
(iii)if to the Senior Representative, to it at: [∙].

Unless otherwise specifically provided herein, any notice or other communication
herein required or permitted to be given shall be in writing and, may be
personally served, faxed or sent by courier service or U.S. mail and shall be
deemed to have been given when delivered in person or by courier service, upon
confirmed receipt of a facsimile or, if agreed to, electronic mail or upon
receipt via U.S. mail (registered or certified, with postage prepaid and
properly addressed). For the purposes hereof, the addresses of the parties
hereto shall be as set forth above or, as to each party, at such other address
as may be designated by such party in a written notice to all of the other
parties. As agreed to in writing among each Representative from time to time,
notices and other communications may also be delivered by e-mail to the e-mail
address of a representative of the applicable person provided from time to time
by such person.
Section 8.11.    Further Assurances. The Senior Representative, on behalf of
itself and each other Senior Secured Party, and the Second Priority
Representative, on behalf of itself, and each other Second Priority Debt Party,
agrees that it will take such further action and shall execute and deliver such
additional documents and instruments (in recordable form, if requested) as the
other parties hereto may reasonably request to effectuate the terms of, and the
Lien priorities contemplated by, this Agreement.

Section 8.12.    GOVERNING LAW; WAIVER OF JURY TRIAL.
  
(A)    THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
(B)    EACH PARTY HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.

- 32 -

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

Section 8.13.    Binding on Successors and Assigns. This Agreement shall be
binding upon the Senior Representative, the Senior Secured Parties, the Second
Priority Representative, the Second Priority Debt Parties, the Company, the
other Grantors party hereto and their respective successors and assigns.

Section 8.14.    Section Titles. The section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Agreement.

Section 8.15.    Counterparts. This Agreement may be executed in one or more
counterparts, including by means of facsimile or other electronic method, each
of which shall be an original and all of which shall together constitute one and
the same document. Delivery of an executed signature page to this Agreement by
facsimile or other electronic transmission shall be as effective as delivery of
a manually signed counterpart of this Agreement.

Section 8.16.    Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other
parties hereto that it is duly authorized to execute this Agreement.

Section 8.17.    No Third Party Beneficiaries; Successors and Assigns. The lien
priorities set forth in this Agreement and the rights and benefits hereunder in
respect of such lien priorities shall inure solely to the benefit of the Senior
Representative, the Senior Secured Parties, the Second Priority Representative
and the Second Priority Debt Parties, and their respective permitted successors
and assigns, and no other Person (including the Grantors, or any trustee,
receiver, debtor in possession or bankruptcy estate in a bankruptcy or like
proceeding) shall have or be entitled to assert such rights.

Section 8.18.    Effectiveness. This Agreement shall become effective when
executed and delivered by the parties hereto.

Section 8.19.    Representative Capacities. It is understood and agreed that (a)
the Senior Representative is entering into this Agreement in its capacity as
administrative agent under the Senior Credit Agreement and the provisions of
Article XI of the Senior Credit Agreement applicable to the Agents (as defined
therein) thereunder shall also apply to the Senior Representative hereunder and
(b) the Second Priority Representative is entering into this Agreement in its
capacity as administrative agent under the Second Priority Credit Agreement and
the provisions of Article XI of the Second Priority Credit Agreement applicable
to the Agent (as defined therein) thereunder shall also apply to the Second
Priority Representative hereunder.

Section 8.20.    Relative Rights. Notwithstanding anything in this Agreement to
the contrary, nothing in this Agreement is intended to or will (a) except to the
extent expressly provided herein, amend, waive or otherwise modify the
provisions of the Senior Credit Agreement, any other Senior Debt Document or any
Second Priority Debt Document, or permit the Company or any Grantor to take any
action, or fail to take any action, to the extent such action or failure would
otherwise constitute a breach of, or default under, the Senior Credit Agreement
or any other Senior Debt Document or any Second Priority Debt Document or (b)
obligate the Company or any Grantor to take any action, or fail to take any
action, that would otherwise constitute a breach of, or default under, the
Senior Credit Agreement or any other Senior Debt Document or any Second Priority
Debt Document.

Section 8.21.    Survival of Agreement. All covenants, agreements,
representations and warranties made by any party in this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement.

- 33 -

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

[SIGNATURES BEGIN NEXT PAGE]

- 34 -

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

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
 
 
 
 
 
as Senior Representative
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:

[Signature Page Intercreditor Agreement]

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

 
 
APOLLO INVESTMENT CORPORATION,
 
 
as Second Priority Representative
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:

[Signature Page Intercreditor Agreement]

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

BORROWER:
MLLER ENERGY RESOURCES, INC.
 
 
 
 
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 
 
 
 
GRANTORS:
 
 
 
 
 
 

[Signature Page Intercreditor Agreement]

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

ANNEX I
FORM OF SUPPLEMENT
SUPPLEMENT NO. __   dated as of [•] to the INTERCREDITOR AGREEMENT dated as of
[•] (as heretofore amended, supplemented, restated or otherwise modified, the
“Intercreditor Agreement”), among MILLER ENERGY RESOURCES, INC., a Tennessee
corporation (the “Company”), and certain subsidiaries of the Company (together
with the Company, each a “Grantor”), [•], as Senior Representative, and Apollo
Investment Corporation, as Second Priority Representative.
A.    Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Intercreditor Agreement.
B.    The Grantors have entered into the Intercreditor Agreement. Pursuant to
the Senior Credit Agreement and certain Second Priority Debt Documents, certain
newly acquired or organized Subsidiaries of the Company are required to enter
into the Intercreditor Agreement. Section 8.07 of the Intercreditor Agreement
provides that such Subsidiaries may become party to the Intercreditor Agreement
by execution and delivery of an instrument in the form of this Supplement. The
undersigned Subsidiary (the “New Grantor”) is executing this Supplement in
accordance with the requirements of the Senior Credit Agreement and the Second
Priority Debt Documents.
Accordingly, the New Grantor agrees as follows:
SECTION 1. In accordance with Section 8.07 of the Intercreditor Agreement, the
New Grantor by its signature below becomes a Grantor under the Intercreditor
Agreement with the same force and effect as if originally named therein as a
Grantor, and the New Grantor hereby agrees to all the terms and provisions of
the Intercreditor Agreement applicable to it as a Grantor thereunder. Each
reference to a “Grantor” in the Intercreditor Agreement shall be deemed to
include the New Grantor. The Intercreditor Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Grantor represents and warrants to the Senior Representative,
the Second Priority Debt Representative and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Supplement shall become effective when the Senior
Representative and the Second Priority Debt Representative shall have received a
counterpart of this Supplement that bears the signature of the New Grantor.
Delivery of an executed signature page to this Supplement by facsimile
transmission or other electronic method shall be as effective as delivery of a
manually signed counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the Intercreditor Agreement
shall remain in full force and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions contained in this
Supplement should be held invalid, illegal or unenforceable in any respect, no
party hereto shall be required to comply with such provision for so long as such
provision is held to be invalid, illegal or unenforceable, but the validity,
legality

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

and enforceability of the remaining provisions contained herein and in the
Intercreditor Agreement shall not in any way be affected or impaired. The
parties hereto shall endeavor in good-faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 7. All communications and notices hereunder shall be in writing and
given as provided in Section 8.10 of the Intercreditor Agreement. All
communications and notices hereunder to the New Grantor shall be given to it in
care of the Company as specified in the Intercreditor Agreement.
SECTION 8. The Company agrees to reimburse each of the Senior Representative and
the Second Priority Debt Representative for its reasonable out-of-pocket
expenses in connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Senior Representative.

Annex I-2

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

IN WITNESS WHEREOF, the New Grantor, and the Senior Representative have duly
executed this Supplement to the Intercreditor Agreement as of the day and year
first above written.
 
 
[NAME OF NEW GRANTOR]
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 
 
 
 
Acknowledged by:
 
 
 
 
 
[ ], as Senior Representative
 
 
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:
 
 
 
 
 
 
 
 
 
 
APOLLO INVESTMENT CORPORATION, as Second Priority Representative
 
 
 
 
By:
 
 
 
 
Name:
 
 
 
Title:
 
 

Annex I-3

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

SCHEDULE 7.05
LITIGATION

NONE.

Annex I-4

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

SCHEDULE 7.16
ENVIRONMENTAL MATTERS

NONE.

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

SCHEDULE 7.14
SUBSIDIARIES AND PARTNERSHIPS

SUBSIDIARIES

Full Legal Name:
Cook Inlet Energy, LLC
Jurisdiction of Organization:
Alaska
Organization Identification Number:
AK business license: 924411
 
AK State Unemployment: 01691651
 
AK entity: 120124
 
AK Dept of Commerce, Community & Economic Development: 120124
 
Qualification File No. Division of Oil & Gas: 2359
 
Alaska Dept of Natural Resources (DNR): 000050467 (state royalty ID)
Chief Executive Office/Sole Place of
601 W. 5th Avenue
Business:
Suite 310
 
Anchorage, AK 99501

Full Legal Name:
East Tennessee Consultants, Inc.
Jurisdiction of Organization:
Tennessee
Organization Identification Number:
TN Sec of State: 000128322
Chief Executive Office/Sole Place of
9534 Morgan County Highway
Business:
Sunbright, TN 37872
 
 

Full Legal Name:
East Tennessee Consultants II, L.L.C.
Jurisdiction of Organization:
Tennessee
Organization Identification Number:
TN Sec of State: 000322422
Chief Executive Office/Sole Place of
9534 Morgan County Highway
Business:
Sunbright, TN 37872
 
 

Full Legal Name:
Miller Rig & Equipment, LLC
Jurisdiction of Organization:
Delaware
Organization Identification Number:
DE 4613262
Chief Executive Office/Sole Place of
3651 Baker Highway
Business:
Huntsville, TN 37756
 
 

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

Full Legal Name:
Miller Drilling, TN LLC
Jurisdiction of Organization:
Tennessee
Organization Identification Number:
TN Sec of State: 000581094
 
TN State Unemployment: 06246855
Chief Executive Office/Sole Place of
3651 Baker Highway
Business:
Huntsville, TN 37756
 
 

Full Legal Name:
Miller Energy GP, LLC
Jurisdiction of Organization:
Delaware
Organization Identification Number:
DE 4671347
Chief Executive Office/Sole Place of
3651 Baker Highway
Business:
Huntsville, TN 37756
 
 

Full Legal Name:
Miller Energy Services, LLC
Jurisdiction of Organization:
Delaware
Organization Identification Number:
DE 4613258
Chief Executive Office/Sole Place of
3651 Baker Highway
Business:
Huntsville, TN 37756
 
 

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

SCHEDULE 7.18
GAS IMBALANCES

NONE.

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

SCHEDULE 7.19
MARKETING CONTRACTS
Cook Inlet Energy, LLC
Crude Oil Purchase Agreement (effective 02/01/2012)
Tesoro Refining and Marketing Company
19100 Ridgewood Pkwy
San Antonio, TX 78259
Oil sale contract

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

SCHEDULE 7.20
SWAP AGREEMENTS

Miller Energy Resources, Inc.
Hedging Agreement
(“2002 Master Agreement” of the International Swaps and Derivatives Association,
Inc.) dated December 6, 2010, as amended December 8, 2010, between BP
Corporation North America Inc. and Miller Petroleum, Inc.
BP Corporation North America, Inc.
501 Westlake Park Boulevard
Houston, TX 77079-2604
Miller Energy Resources, Inc.
Credit Support Annex to the Schedule to the ISDA Master Agreement dated as of
December 6, 2010 between BP Corporation North America, Inc. and Miller
Petroleum, Inc.
BP Corporation North America, Inc.
501 Westlake Park Boulevard
Houston, TX 77079-2604

Counter Party
Type
Price per Bbl
Term (Months)
Effective Date
Termination Date
Volume
As of 12/31/13
MTM Value
(Liability)
BP Corporation North America, Inc.
Brent Crude
$101.10
12
1/1/14
12/31/14
584,000
(4,519,499)
BP Corporation North America, Inc.
Brent Crude
$95.35
12
1/1/15
12/31/15
292,000
(2,153,323)
BP Corporation North America, Inc.
Brent Crude
$95.35
12
1/1/15
12/31/15
292,000
(2,153,323)
BP Corporation North America, Inc.
Brent Crude
$91.95
6
1/1/16
6/30/16
291,200
(1,832,933)

Miller Energy Resources, Inc.
Hedging Agreement
(ISDA International Swaps and Derivatives Association, Inc. Master Agreement)
dated December 17, 2013, between Cargill, Incorporated and Miller Energy
Resources, Inc.
Cargill, Incorporated (acting through its Cargill Risk Management Business Unit)
9350 Excelsior Blvd.
Hopkins, MN 55343

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

Counter Party
Type
Price per Bbl
Term (Months)
Effective Date
Termination Date
Volume
As of 1/28/14
MTM Value
(Liability)
Cargill, Incorporated
Brent Crude
108.91
1
1/1/2014
1/31/2014
17,000
31,558
Cargill, Incorporated
Brent Crude
108.22
1
2/1/2014
2/28/2014
15,000
17,098
Cargill, Incorporated
Brent Crude
108.22
2
3/1/2014
4/30/2014
34,000
59,479
Cargill, Incorporated
Brent Crude
107.12
3
5/1/2014
7/31/2014
51,000
82,310
Cargill, Incorporated
Brent Crude
105.82
1
8/1/2014
8/31/2014
17,000
21,252
Cargill, Incorporated
Brent Crude
105.82
1
9/1/2014
9/30/2014
16,000
26,964
Cargill, Incorporated
Brent Crude
105.82
1
10/1/2014
10/31/2014
17,000
35,215
Cargill, Incorporated
Brent Crude
104.66
3
11/1/2014
1/31/2015
51,000
82,247
Cargill, Incorporated
Brent Crude
103.31
1
2/1/2015
2/28/2015
15,000
14,972
Cargill, Incorporated
Brent Crude
103.31
2
3/1/2015
4/30/2015
34,000
54,327
Cargill, Incorporated
Brent Crude
101.91
3
5/1/2015
7/31/2015
51,000
58,207
Cargill, Incorporated
Brent Crude
100.50
1
8/1/2015
8/31/2015
17,000
9,001
Cargill, Incorporated
Brent Crude
100.50
1
9/1/2015
9/30/2015
16,000
14,416
Cargill, Incorporated
Brent Crude
100.50
1
10/1/2015
10/31/2015
17,000
21,810
Cargill, Incorporated
Brent Crude
99.10
3
11/1/2015
1/31/2016
51,000
30,621
Cargill, Incorporated
Brent Crude
97.79
1
2/1/2016
2/29/2016
16,000
1,010
Cargill, Incorporated
Brent Crude
96.79
2
3/1/2016
4/30/2016
34,000
16,689
Cargill, Incorporated
Brent Crude
96.76
3
5/1/2016
7/31/2013
51,000
3,527
Cargill, Incorporated
Brent Crude
95.77
1
8/1/2016
8/31/2016
17,000
(7,679)
Cargill, Incorporated
Brent Crude
95.77
1
9/1/2016
9/30/2016
16,000
(3,602)
Cargill, Incorporated
Brent Crude
95.77
1
10/1/2016
10/31/2016
17,000
(16)
Cargill, Incorporated
Brent Crude
94.98
2
11/1/2016
12/31/2016
17,000
(16,667)

* For swaps with a term of more than one month, the volume is divided equally
over the term of the swap, by month.

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

SCHEDULE 7.31
MATERIAL CONTRACTS

Loan Party
Style (or Title) of Contract and Effective Date
Name and Addresses of Other Parties
Description of Subject Matter
Miller Energy Resources, Inc.
-Loan and Security Agreement
(March 19, 2010)
-First Secured Promissory Note (November 1, 2009)
-Second Secured Promissory Note (December 15, 2009)
-Third Secured Promissory Note
(May 15, 2010)
- First Amendment to Promissory Notes
(June 29, 2012)
- Subordination Agreement to Apollo
(June 29, 2012)
Miller Energy Income 2009-A, LP*
c/o Miller Energy GP, LLC
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Approximately $3MM secured loan; subordinated to 2012 Apollo Credit Facility
Cook Inlet Energy, LLC
Crude Oil Purchase Agreement
(March 9, 2012)
Tesoro Refining and Marketing Company
19100 Ridgewood Pkwy
San Antonio, TX 78259
Oil sale contract
Cook Inlet Energy, LLC
Assignment Oversight Agreement
(November 5, 2009)
State of Alaska Department of Natural Resources
550 W. 7th Ave, Suite 1100
Anchorage, AK 99501
Conditions for assignment of leases to CIE
Cook Inlet Energy, LLC
Cook Inlet Energy, LLC Performance Bond Agreement (March 11, 2011)
State of Alaska Department of Natural Resources
550 W. 7th Ave, Suite 1100
Anchorage, AK 99501
Bonding requirements for the Osprey platform
Miller Energy Resources, Inc.
Agreement for Sale of Membership Interests in Cook Inlet Energy, LLC
(December 10, 2009)
-David M. Hall
48110 David Hall Road
Kenai, Alaska 99611
-Walter J. Wilcox II ("JR")
2804 W. 35th Avenue
Anchorage, AK  99517
-Troy Stafford
c/o David L. Cooper, Esq.
208 Third Avenue North
Suite 300
Nashville, TN 37201
Purchased subsidiary
Cook Inlet Energy, LLC
Settlement Agreement
(October 14, 2010)
Cook Inlet Pipe Line Company (“CIPL”)
4800 Foumace Place
Bellaire, TX 77401
Settled tariff dispute
Cook Inlet Energy, LLC
10th Plan of Development
(February 17, 2011)
State of Alaska Department of Natural Resources
550 W. 7th Ave, Suite 1100
Anchorage, AK 99501
Part of documentation required to restart Osprey platform

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

Cook Inlet Energy, LLC
RU Plan of Redevelopment
(March 16, 2011)
State of Alaska Department of Natural Resources
550 W. 7th Ave, Suite 1100
Anchorage, AK 99501
Part of documentation required to restart Osprey platform
Miller Energy Resources, Inc.
Hedging Agreement
(ISDA Master Agreement, addenda)
(December 6, 2010)

Amendment to the ISDA Master Agreement (December 8, 2010)
BP Corporation North America, Inc.
501 Westlake Park Boulevard
Houston, TX 77079-2604
Hedging agreement
Miller Energy Resources, Inc.
Hedging Agreement
(ISDA Master Agreement)
(December 17, 2013)
Cargill, Incorporated (acting through its Cargill Risk Management Business Unit)
9350 Excelsior Blvd.
Hopkins, MN 55343
Hedging agreement
Miller Energy Resources, Inc.
Consulting Agreement, as amended
(March 12, 2010)
Bristol Capital LLC
6353 W. Sunset Boulevard, Suite 4006
Los Angeles, California 90028
Consulting agreement (amended 4/29/11 and 3/11/2012 )
Miller Energy Resources, Inc.
Guaranty Agreement (October 10, 2013)
Schlumberger Technology Corporation, M-I LLC, and Smith International, Inc.
PO Box 201556
Houston, Texas 77216-1556
Guaranty on debt from purchase from Schlumberger Technology
Cook Inlet Energy, LLC
Bylaws (2007)

Response Action Contract (2009)
Cook Inlet Spill Prevention and Response, Inc. (“CISPRI”)
P.O. Box 7314
Nikiski, Alaska, 99635
Bylaws and spill response agreement
Cook Inlet Energy, LLC
Purchase and Sale Agreement
(May 25, 2010)

Lease Assignment
(effective May 1, 2010)
Buccaneer Alaska, LLC
2500 Tanglewilde Ave, Suite 340
Houston, TX 77063
Assigned leases
Miller Energy Resources, Inc.
Contract of Construction and Sale for One, 2000 H.P. Offshore Winterized SCR
Drilling Rig
(June 12, 2011)
Voorhees Equipment and Consulting, Inc.
1011 Highway 6 South, Suite 115
Houston, TX 77077
Rig Construction Contract
Cook Inlet Energy, LLC
Susitna No. 4 Exploration License
(February 11, 2011)
State of Alaska Department of Natural Resources
550 W. 7th Ave, Suite 1100
Anchorage, AK 99501
Exploration License
Miller Energy Resources, Inc.
Employment Agreement
(July 29, 2013)
Scott M. Boruff
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Employment Agreement with Chief Executive Officer

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

Miller Energy Resources, Inc.
Employment Agreement
(July 29, 2013)
David J. Voyticky
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Employment Agreement with President
Miller Energy Resources, Inc.
Employment Agreement
(July 29, 2013)
Deloy Miller
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Employment Agreement with Executive Chairman
Miller Energy Resources, Inc.
Employment Agreement
(July 29, 2013)
David M. Hall
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Employment Agreement with Chief Operating Officer
Miller Energy Resources, Inc.
Employment Agreement
(July 29, 2013)
Kurt C. Yost
c/o Miller Energy Resources, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Employment Agreement with Senior Vice President and General Counsel
Cook Inlet Energy, LLC
Employment Agreement
(March 25, 2013)
Conrad Perry
c/o Cook Inlet Energy, LLC
601 W. 5th Avenue, Suite 310
Anchorage, AK 99501
Employment Agreement with Vice President and Drilling Manager
Miller Energy Resources, Inc.
Mutual Settlement and Release Agreement
(January 24, 2014)
CNX Gas Company, LLC
1000 Consol Energy Drive
CNX Center
Canonsburg, PA 15317
Agreement settling lawsuit
Miller Energy Resources, Inc.
Consulting and Services Agreement
(November 12, 2013)
John M. Brawley Financial Consulting, LLC
612 E 10 ½ ST
Houston, TX 77008
Consulting Agreement
Miller Energy Resources, Inc.
Amended Consulting Agreement
(September 18, 2013)
Highgate Capital, LLC
82 North Franklin Turnpike, Ho Ho Kus, NJ 07423
Kevin DeLeon Investor Relations Consulting Agreement
Miller Energy Resources, Inc.
Consulting Agreement
William R. Weakley
8512 Melinda Drive
Nashville, Tennessee 37205
Investor Relations Consulting Agreement
Cook Inlet Energy, LLC
Farmout Agreement for ADL 17602
(September 20, 2012)
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 100
Anchorage, AK 99503
Farmout Agreement
Cook Inlet Energy, LLC
Farmout Agreement for ADL 18758
(September 20, 2012)
Hilcorp Alaska, LLC
3800 Centerpoint Drive, Suite 100
Anchorage, AK 99503
Farmout Agreement
Miller Energy Resources, Inc.
Lease Agreement
(dated June 24, 2011)
Pellissippi Pointe II, LLC
9721 Cogdill Road
Knoxville, TN 37932
Lease Agreement for corporate headquarters (third floor)

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

Cook Inlet Energy, LLC
Office Lease Agreement, (effective April 15, 2010)
Fourth Amendment (effective April 15, 2013)
Peach Investments, LLC
3000 C Street Suite 105
Anchorage, AK 99503
Lease Agreement for office, as amended
Cook Inlet Energy, LLC
Daywork Drilling Contract
(May 8, 2013)
Patterson-UTI Drilling Company LLC
1125 17th Street, Suite 800
Denver, CO 80202
Rig rental contract
Cook Inlet Energy, LLC
Letter Agreement extending Daywork Drilling Contract
(September 6, 2013)
Patterson-UTI Drilling Company LLC
1125 17th Street, Suite 800
Denver, CO 80202
Extension of Rig rental contract
Cook Inlet Energy, LLC
Purchase and Sale Agreement
(November 22, 2013)
Armstrong Cook Inlet, LLC, GMT Exploration Company, LLC, Dale Resources Alaska,
LLC, Jonah Gas Company, LLC and Nerd Gas Company, LLC
1421 Blake Street
Denver, CO 80202
North Fork Purchase and Sale Agreement
Miller Energy Resources, Inc.
At Market Issuance Sales Agreement
(October 12, 2013)
MLV & Co. LLC
1251 Avenue of the Americas
41st Floor
New York, NY 10020
Series C Preferred Stock At The Market Sales Agreement
Miller Energy Resources, Inc.
At Market Issuance Sales Agreement
(October 17, 2013)
MLV & Co. LLC
1251 Avenue of the Americas
41st Floor
New York, NY 10020
Series D Preferred Stock At The Market Sales Agreement

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

SCHEDULE 8.16
POST-CLOSING ITEMS

Requirement
Delivery Date
An electronic copy of a recorded Memorandum of Lease or similar instrument
regarding the leasehold interest in the Cook Inlet Region, Inc. lease (a portion
of the former BLM-A-035017 lease)
Seven (7) days after the Effective Date
Electronic copies of lease amendments to the Mental Health Trust leases numbered
MHT-9300062 and MHT-9300063 extending the end of the primary term of each such
lease to September 1, 2014 or December 31, 2014, as applicable, and ratifying
that each such lease remains in full force and effect
Seven (7) days after the Effective Date
An electronic copy of recorded Assignment and Bill of Sale from Hilcorp Alaska,
LLC assigning to CIE its thirty percent (30%) working interest in lease ADL
17602 with a reservation of a one percent (1%) overriding royalty interest
Thirty (30) days after the Effective Date

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

SCHEDULE 9.02
EXISTING DEBT

Description
Type
Amount
Apollo Credit Facility (Includes accrued interest through 1/31/14) To be
extinguished on the Effective Date 25
Term Loan between Borrower and Apollo Investment Corp. (Apollo Credit Facility
(June 29, 2012))
$78,310,774
Miller Energy Income 2009, LP To be extinguished on the Effective Date 26
Term Loan between Borrower and Miller Energy Income 2009, LP
(-First Secured Promissory Note (November 1, 2009)
-Second Secured Promissory Note (December 15, 2009)
-Third Secured Promissory Note
(May 15, 2010)
- First Amendment to Promissory Notes
(June 29, 2012))
$3,820,790
Pellissippi Pointe, LLC
Term Loan Guarantee between Borrower and FSGBank, National Association -
Knoxville (July 12, 2012)
$849,218
Pellissippi Pointe II, LLC
Term Loan Guarantee between Borrower and FSGBank, National Association -
Knoxville (July 12, 2012)
$1,846,356
Osprey Platform
Performance Bond Agreement between Cook Inlet Energy, LLC and State of Alaska,
Department of Natural Resources (March 11, 2011)
$18,000,000

———————————
25    To be extinguished on the Effective Date
26    To be extinguished on the Effective Date

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

SCHEDULE 9.05
EXISTING INVESTMENTS

Guarantee of Pellissippi Pointe, LLC and Pellissippi Pointe II, LLC’s Debt. On
June 24, 2011, the Borrower acquired a 48% minority interest in Pellissippi
Pointe I, LLC and Pellissippi Pointe II, LLC for total cash consideration of
$400. In connection with the transaction, the Borrower executed a five-year
lease agreement with the investee and relocated its corporate offices to the new
facility on November 7, 2011. Borrower does not exercise control over the
financial and operating decisions made by the entities. On July 12, 2012, the
Borrower signed a direct guarantee for 55% of the $5,074,000 outstanding loan
obligations with FSG Bank for the Pellissippi Pointe equity investment.

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

SCHEDULE 9.13
TRANSACTIONS WITH AFFILIATES

From time to time the Borrower provides service work on oil and gas wells owned
by Mr. Herman Gettelfinger (and family), a member of the Board of Directors.

From time to time the Borrower provides service work on oil and gas wells owned
by Mr. Deloy Miller (and family), a member of the Board of Directors.

From November 2009 to May 2010 we entered into three secured promissory notes
with the Miller 2009 Partnership to borrow $3,071,000 with maturity dates
ranging from November 2013 to May 2014. On June 29, 2012, the maturity dates on
the promissory notes were amended to reflect the later of (i) 91 days after the
date on which the Apollo Credit Facility is extinguished, or (ii) July 31, 2017.

On June 24, 2011, we entered into a five year lease for our corporate office
space with Pellissippi Pointe II, LLC, a limited liability company of which we
own 48%. On January 31, 2012, we entered into a forty-four month lease for
additional office space with the same entity.