EXECUTION VERSION

AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT

made by
each of the Grantors (as defined herein)
in favor of

Apollo Investment Corporation,
as Administrative Agent

Dated as of February 3, 2014

#4453699.7

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TABLE OF CONTENTS
Page
ARTICLE I Definitions                                            2
Section 1.01
Definitions.                                        2

Section 1.02
Other Definitional Provisions; References                        5

ARTICLE II Guarantee                                            5
Section 2.01
Guarantee                                            5

Section 2.02
Payments                                            6

Section 2.03
Reinstatement                                        6

ARTICLE III Grant of Security Interest                                    6
Section 3.01
Grant of Security Interest                                    6

Section 3.02
Transfer of Pledged Securities                                7

Section 3.03
Grantors Remain Liable under Accounts, Chattel Paper and Payment
Intangibles    7

Section 3.04
Pledged Securities                                        8

ARTICLE IV Acknowledgments, Waivers and Consents                            8
Section 4.01
Acknowledgments, Waivers and Consents                        8

Section 4.02
No Subrogation, Contribution or Reimbursement                 11

ARTICLE V Representations and Warranties                                 11
Section 5.01
Representations in Credit Agreement                         11

Section 5.02
Benefit to the Guarantor                                 12

Section 5.03
Title; No Other Liens                                 12

Section 5.04
Perfected First Priority Liens                             12

Section 5.05
Legal Names, Organizational Status, Chief Executive Office             12

Section 5.06
Instruments and Chattel Paper                             12

Section 5.07
Collateral Locations                                 12

Section 5.08
Certain Property                                     13

Section 5.09
Investment Property                                 13

Section 5.10
Receivables                                     13

Section 5.11
Securities Accounts, Commodities Accounts and Deposit Accounts         14

Section 5.12
Letters of Credit                                     14

Section 5.13
Intellectual Property                                 14

Section 5.14
Drilling Rigs                                     15

ARTICLE VI Covenants                                         15
Section 6.01
Covenants in Credit Agreement                             15

Section 6.02
Delivery and Control of Instruments, Investment Property, Certificated
Securities, Letter-of-Credit Rights and Chattel Paper                     15

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Section 6.03
Maintenance of Perfected Security Interest; Further Documentation         16

Section 6.04
Investment Property                                 18

Section 6.05
Commercial Tort Claims                                 19

Section 6.06
Receivables                                     19

Section 6.07
[Reserved]                                         20

Section 6.08
Vehicles                                         20

Section 6.09
Intellectual Property                                 20

Section 6.10
Inventory and Equipment                                 21

ARTICLE VII Remedial Provisions                                     22
Section 7.01
Investment Property                                 22

Section 7.02
Collections on Accounts, Etc.                             23

Section 7.03
Proceeds                                         24

Section 7.04
New York UCC and Other Remedies                         24

Section 7.05
Registration; Private Sales of Pledged Securities                     25

Section 7.06
Waiver; Deficiency                                 26

Section 7.07
Non-Judicial Enforcement                             27

Section 7.08
License                                         27

ARTICLE VIII The Administrative Agent                                 27
Section 8.01
Administrative Agent’s Appointment as Attorney-in-Fact, Etc.             27

Section 8.02
Duty of Administrative Agent                             29

Section 8.03
Execution of Financing Statements                         29

Section 8.04
Authority of Administrative Agent                         30

ARTICLE IX Subordination of Indebtedness                                 30
Section 9.01
Subordination of All Guarantor Claims                         30

Section 9.02
Claims in Bankruptcy                                 30

Section 9.03
Payments Held in Trust                                 31

Section 9.04
Liens Subordinate                                     31

Section 9.05
Notation of Records                                 31

ARTICLE X Miscellaneous                                         31
Section 10.01
Waiver                                         31

Section 10.02
Notices                                         32

Section 10.03
Successors and Assigns                                 32

Section 10.04
Severability                                     32

Section 10.05
Counterparts                                     32

Section 10.06
Survival; Revival; Reinstatement                             32

Section 10.07
Headings                                         33

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Section 10.08
No Oral Agreements                                 33

Section 10.09
Governing Law; Submission to Jurisdiction                     33

Section 10.10
EXCULPATION PROVISIONS                             34

Section 10.11
Additional Grantors                                 34

Section 10.12
Set-Off                                         34

Section 10.13
Releases                                         35

Section 10.14
No Third Party Beneficiaries                             35

Section 10.15
Amendment and Restatement                             36

SCHEDULES:
1.
Notice Addresses of Guarantors

2.
Description of Investment Property

3.
Filings and Other Actions Required to Perfect Security Interests

4.
Legal Name, Jurisdiction of Organization, Organizational Identification Number,
Taxpayor Identification Number, Location of Chief Executive Office, Prior Names
and Prior Chief Executive Office

5.
Collateral Locations

6.
Certain Property

7.
Securities Accounts, Commodity Accounts and Deposit Accounts

8.
Letters of Credit

9.
Intellectual Property

10.
Rigs

11.
Commercial Tort Claims

ANNEX:
1.    Form of Assumption Agreement
    

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This AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of
February 3, 2014, is made by Miller Energy Resources, Inc., a Tennessee
corporation (the “Borrower”), and each of the other signatories hereto other
than the Administrative Agent (the Borrower and each of the other signatories
hereto other than the Administrative Agent, together with any other entity that
may become a party hereto as provided herein, the “Grantors”), in favor of
Apollo Investment Corporation, as administrative agent (in such capacity,
together with its successors in such capacity, the “Administrative Agent”), for
the banks and other financial institutions (the “Lenders”) from time to time
parties to the Amended and Restated Credit Agreement, dated of even date
herewith (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the Borrower, the Lenders, the Administrative Agent,
and the other parties party thereto.
RECITALS
A.    The Borrower entered into a (i) Loan Agreement dated as of June 29, 2012
with Apollo Investment Corporation, as arranger and administrative agent (in
such capacity, the “Existing Agent”), and the other financial institutions party
thereto (as amended to the date hereof, the “Existing Credit Agreement”), and
(ii) Guarantee and Collateral Agreement dated as of June 29, 2012 in favor of
the Existing Agent (as amended to the date hereof, the “Existing Security
Agreement”).

B.    The Borrower has requested, and the Lenders and the Administrative Agent
have agreed, that the Existing Credit Agreement and the Existing Security
Agreement be amended and restated in their entirety.

C.    Pursuant to the Credit Agreement, the Lenders have severally agreed to
make extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein.

D.    The Borrower is a member of an affiliated group of companies that includes
each other Grantor.

E.    The proceeds of the extensions of credit under the Credit Agreement will
be used in part to enable the Borrower to make valuable transfers to one or more
of the other Grantors in connection with the operation of their respective
businesses.

F.    The Borrower and the other Grantors are engaged in related businesses, and
each Grantor will derive substantial direct and indirect benefit from the making
of the extensions of credit under the Credit Agreement.

G.    It is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the
Administrative Agent for the benefit of the Secured Parties.

H.    NOW, THEREFORE, to induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders and other Secured
Parties to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Secured Parties, as follows:

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ARTICLE I
DEFINITIONS
Section 1.01.    Definitions.

(a)    As used in this Agreement, each term defined above shall have the meaning
indicated above. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, and the following terms as well as all uncapitalized terms which are
defined in the New York UCC on the date hereof are used herein as so defined:
Accounts, As-extracted collateral, Certificated Security, Chattel Paper,
Commercial Tort Claims, Commodity Account, Commodity Contract, Commodity
Intermediary, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment,
General Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Payment Intangibles, Proceeds, Securities Account,
Securities Intermediary, Security Entitlement, Supporting Obligations, Tangible
Chattel Paper, and Uncertificated Security.

(b)    The following terms shall have the following meanings:

“Account Debtor” means a Person (other than any Grantor) obligated on an
Account, Chattel Paper, or General Intangible.
“Agreement” means this Amended and Restated Guarantee and Collateral Agreement,
as the same may be amended, supplemented or otherwise modified from time to
time.
“Alaska Receivable” means any right of any Grantor to receive payment from the
State of Alaska as a tax rebate, tax credit or other tax-related receivable
payable to any Grantor in accordance with the laws of Alaska.

“Collateral” shall have the meaning assigned such term in Section 3.01.
“Control Agreement” means a control agreement, in form and substance reasonably
satisfactory to Administrative Agent, among a Grantor, Administrative Agent, the
Second Lien Administrative Agent and the applicable bank, Securities
Intermediary or Commodity Intermediary, as applicable, with respect to a Deposit
Account, Securities Account or Commodity Account, as applicable.
“Copyright Licenses” means all written agreements naming any Grantor as licensor
or licensee, including those listed on Schedule 9, granting any right under any
Copyright, including the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.
“Copyrights” means all copyrights arising under the laws of the United States,
any other country or any political subdivision thereof, whether registered or
unregistered and whether published or unpublished, including those listed on
Schedule 9, all registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and applications
in the United States Copyright Office, and the right to obtain all renewals of
any of the foregoing.

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“Excluded Property” means (a) any Equipment subject to a purchase money security
interest or equipment or capital lease if and to the extent that the creation of
a security interest in the right, title or interest of the Grantor in such
Equipment would cause or result in a default under any contractual provision or
other restriction; (b) any rights or interest in any contract to which Grantor
is a party, or any license, permit or franchise or covering real or personal
property of the Grantor if, under the terms of the contract, license, permit or
franchise or applicable law, the grant of a security interest or other Lien
therein is prohibited as a matter of law, or under the terms of the contract,
license, permit or franchise and that prohibition has not been effectively
waived or the consent of the other party(ies) to such contract, license, permit
or franchise has not been obtained, but the foregoing exclusions in no way will
be construed (i) to apply to the extent that any described prohibition is
unenforceable under Section 9-406, 9-407, 9-408, or 9-409 of the New York UCC
(as same may be limited by other applicable law) or other applicable law, or
(ii) to limit, impair or otherwise affect the continuing security interests of
the Secured Parties in and Liens upon any rights or interests of the Grantors in
or to (i) monies due or to become due under any described contract, license,
permit or franchise (including any Accounts), or (ii) any proceeds from the
sale, license, lease, or other dispositions of any such contract or license; (c)
“intent to use” trademark applications; (d) the Equity Interests of any Excluded
Subsidiary; and (e) only for so long as that certain Security Agreement, dated
effective as of February 1, 2012, among Cook Inlet Energy, LLC, Cook Inlet
Region, Inc., and the State of Alaska Department of Natural Resources as in
effect on the date hereof continues to be in effect, the “Collateral” as defined
therein; provided, however, that (A) Excluded Property shall not include any
Proceeds of any item of General Intangibles, and (B) any item of General
Intangibles that at any time ceases to satisfy the criteria for Excluded
Property (whether as a result of the applicable Grantor obtaining any necessary
consent, any change in any rule of law, statute or regulation, or otherwise),
shall no longer be Excluded Property.
“Excluded Subsidiary” means each of (a) Miller Energy Income 2009-A, LP, a
Delaware limited partnership, (b) Pellissippi Pointe, L.L.C., a Tennessee
limited liability company and (c) Pellissippi Pointe II, LLC, a Tennessee
limited liability company.
“Guarantors” means, collectively, each Grantor other than the Borrower.
“Indemnitees” shall the meaning assigned to such term in Section 8.02.
“Intellectual Property” means the collective reference to all rights, priorities
and privileges relating to intellectual property, whether arising under United
States, multinational or foreign laws or otherwise, including the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, inventions, trade secrets, know-how, and all rights to sue
at law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.
“Intercompany Notes” means any promissory note evidencing loans made by any
Grantor to any other Grantor.
“Investment Property” means the collective reference to (a) all “investment
property” as such term is defined in Section 9-102 of the New York UCC, (b) all
“financial assets” as such term is defined in Section 8-102(a)(9) of the New
York UCC, and (c) whether or not constituting “investment property” as so
defined, all Pledged Notes and all Pledged Securities.

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“Issuers” means, collectively, each issuer of a Pledged Security.
“Material Intellectual Property” means (a) any Intellectual Property registered,
issued or subject to an application for registration or issuance with the United
States Patent and Trademark Office or the United States Copyright Office or is
registered, issued or subject to an application for registration or issuance in
any similar office or agency within or outside the United States, and (b) any
unregistered Intellectual Property that is material to the use and operation of
any of the Collateral or the business, prospects, operations, results of
operations or condition (financial or otherwise) of any Grantor.

“New York UCC” means the Uniform Commercial Code, as it may be amended, from
time to time in effect in the State of New York.
“Patent Licenses” means all agreements, whether written or oral, providing for
the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including any of the
foregoing referred to in Schedule 9.
“Patents” means (a) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof and
all goodwill associated therewith, including any of the foregoing referred to in
Schedule 9, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, including any of the foregoing referred to in Schedule 9, and (c) all
rights to obtain any reissues or extensions of the foregoing.
“Platform Rig” means a certain 2000 H.P. Offshore/Onshore Winterized SCR
Drilling Rig known as “Rig #35”, which was constructed by Voorhees Equipment and
Consulting, Inc.

“Pledged Notes” means all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor.
“Pledged Securities” means: (a) the equity interests described or referred to in
Schedule 2; and (b) (i) the certificates or instruments, if any, representing
such equity interests, (ii) all dividends (cash, stock or otherwise), cash,
instruments, rights to subscribe, purchase or sell and all other rights and
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such equity interests, (iii) all
replacements, additions to and substitutions for any of the property referred to
in this definition, including, without limitation, claims against third parties,
(iv) the proceeds, interest, profits and other income of or on any of the
property referred to in this definition and (v) all books and records relating
to any of the property referred to in this definition.
“Receivable” means all rights to payment, whether or not earned by performance,
for goods or other property sold, leased, licensed, assigned or otherwise
disposed of, or services rendered or to be rendered, including, without
limitation all such rights constituting or evidenced by any Account, Chattel
Paper, Instrument, General Intangible or Investment Property, together with all
rights of the Grantors, if any, in any goods or other property giving rise to
such right to payment and all supporting obligations related thereto.

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“Securities Act” means the Securities Act of 1933, as amended.
“Vehicles”: all cars, trucks, trailers, construction and earth moving equipment
and other vehicles covered by a certificate of title law of any state and, in
any event including, without limitation, the vehicles listed on Schedule 6 and
all tires and other appurtenances to any of the foregoing.
Section 1.02.    Other Definitional Provisions; References. The meanings given
to terms defined herein shall be equally applicable to both the singular and
plural forms of such terms. The gender of all words shall include the masculine,
feminine, and neuter, as appropriate. The words “herein,” “hereof,” “hereunder”
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not to any particular article, section or subsection.
Any reference herein to a Section shall be deemed to refer to the applicable
Section of this Agreement unless otherwise stated herein. Any reference herein
to an exhibit, schedule or annex shall be deemed to refer to the applicable
exhibit, schedule or annex attached hereto unless otherwise stated herein. Where
the context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof.

ARTICLE II
GUARANTEE
Section 2.01.    Guarantee.

(a)    Each of the Guarantors hereby, jointly and severally, unconditionally and
irrevocably, guarantees to the Administrative Agent, for the ratable benefit of
the Secured Parties and each of their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and performance by the
Borrower and the Guarantors when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations. Each Guarantor agrees
that its guarantee hereunder constitutes a guaranty of payment and performance
when due and not of collection, and waives any right to require that any resort
be made by the Administrative Agent or the Secured Parties to any of the
Collateral, any other Person or any other security.

(b)    Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors.

(c)    Each Guarantor agrees that the Secured Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing the guarantee contained in this Article II or affecting the
rights and remedies of the Administrative Agent or any Secured Party hereunder.

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(d)    Each Guarantor agrees that if the maturity of any of the Secured
Obligations is accelerated by bankruptcy or otherwise, such maturity shall also
be deemed accelerated for the purpose of this guarantee without demand or notice
to such Guarantor. The guarantee contained in this Article II shall remain in
full force and effect until the Termination Date, notwithstanding that from time
to time during the term of the Credit Agreement, no Secured Obligations may be
outstanding.

(e)    No payment made by the Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from the Borrower, any of the Guarantors, any
other guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Secured Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Guarantor hereunder
which shall, notwithstanding any such payment (other than any payment made by
such Guarantor in respect of the Secured Obligations or any payment received or
collected from such Guarantor in respect of the Secured Obligations), remain
liable for the Secured Obligations up to the maximum liability of such Guarantor
hereunder until the Termination Date.

Section 2.02.    Payments. Each Guarantor hereby agrees and guarantees that
payments hereunder will be paid to the Administrative Agent without set-off or
counterclaim in dollars that constitute immediately available funds at the
principal office of the Administrative Agent specified pursuant to the Credit
Agreement.

Section 2.03.    Reinstatement. The guarantee contained in this Article 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Secured Obligations is rescinded or
must otherwise be restored or returned by any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
other Grantor, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Borrower or
any other Grantor or any substantial part of its property, or otherwise, all as
though such payments had not been made.

ARTICLE III
GRANT OF SECURITY INTEREST

Section 3.01.    Grant of Security Interest. Each Grantor hereby pledges,
assigns, transfers and grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a security interest in all of the following
property now owned or at any time hereafter acquired by such Grantor or in which
such Grantor now has or at any time in the future may acquire any right, title
or interest and whether now existing or hereafter coming into existence
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Secured Obligations:

(a)    all Accounts;

(b)    all Chattel Paper (whether Tangible Chattel Paper or Electronic Chattel
Paper);

(c)    all Commercial Tort Claims listed on Schedule 11 hereto;

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(d)    all Deposit Accounts other than payroll, withholding tax and other
fiduciary Deposit Accounts;

(e)    all Documents;

(f)    all General Intangibles (including, without limitation, rights in and
under any Swap Agreements and any Alaska Receivable);

(g)    all Goods (including, without limitation, all Inventory and all Equipment
(including, the Platform Rig and the other drilling rigs set forth on Schedule
10));

(h)    all Instruments;

(i)    all Investment Property;

(j)    all Letter-of-Credit Rights (whether or not the letter of credit is
evidenced by a writing);

(k)    all Pledged Securities;

(l)    all Supporting Obligations;

(m)    all books and records pertaining to the Collateral;

(n)    all Vehicles and title documents with respect to Vehicles;

(o)    all Intellectual Property;

(p)    to the extent not otherwise included, any other property insofar as it
consists of personal property of any kind or character defined in and subject to
the New York UCC; and

(q)    to the extent not otherwise included, all Proceeds and products of any
and all of the foregoing and all collateral security, guarantees and other
Supporting Obligations given with respect to any of the foregoing.

Notwithstanding anything to the contrary contained in clauses (a) through (p)
above, the Collateral will not include any Excluded Property.
Section 3.02.    Transfer of Pledged Securities. All certificates and
instruments representing or evidencing Pledged Securities shall be delivered to
and held pursuant hereto by the Administrative Agent or a Person designated by
the Administrative Agent and, in the case of an instrument or certificate in
registered form, shall be duly indorsed to the Administrative Agent or in blank
by an effective indorsement (whether on the certificate or instrument or on a
separate writing), and accompanied by any required transfer tax stamps to effect
the pledge of the Pledged Securities to the Administrative Agent.
Notwithstanding the preceding sentence, all Pledged Securities so registered
must be delivered or transferred in such manner, and each Grantor shall take all
such further action as may be reasonably requested by the Administrative Agent,
as to permit the Administrative Agent to be a “protected purchaser” to the
extent of its security interest as provided in Section 8-303 of the New York UCC
(if the Administrative Agent otherwise qualifies as a protected purchaser).

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Section 3.03.    Grantors Remain Liable under Accounts, Chattel Paper and
Payment Intangibles. Anything herein to the contrary notwithstanding, each
Grantor shall remain liable under each of the Accounts, Chattel Paper and
Payment Intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to each such Account, Chattel Paper or Payment
Intangible. Neither the Administrative Agent nor any other Secured Party shall
have any obligation or liability under any Account, Chattel Paper or Payment
Intangible (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any such other
Secured Party of any payment relating to such Account, Chattel Paper or Payment
Intangible, pursuant hereto, nor shall the Administrative Agent or any other
Secured Party be obligated in any manner to perform any of the obligations of
any Grantor under or pursuant to any Account, Chattel Paper or Payment
Intangible (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party under any Account, Chattel
Paper or Payment Intangible (or any agreement giving rise thereto), to present
or file any claim, to take any action to enforce any performance or to collect
the payment of any amounts which may have been assigned to it or to which it may
be entitled at any time or times.

Section 3.04.    Pledged Securities. The granting of the foregoing security
interest does not make the Administrative Agent or any Secured Party a successor
to Grantor as a partner or member in any Issuer that is a partnership, limited
partnership or limited liability company, as applicable, and neither the
Administrative Agent, any Secured Party, nor any of their respective successors
or assigns hereunder shall be deemed to have become a partner or member in any
Issuer, as applicable, by accepting this Agreement or exercising any right
granted herein unless and until such time, if any, when any such Person
expressly becomes a partner or member in any Issuer, as applicable, and complies
with any applicable transfer provisions set forth in the charter or
organizational documents relating to an applicable Pledged Security after a
foreclosure thereon.

ARTICLE IV
ACKNOWLEDGMENTS, WAIVERS AND CONSENTS

Section 4.01.    Acknowledgments, Waivers and Consents.

(a)    Each Grantor acknowledges and agrees that the obligations undertaken by
it under this Agreement involve the guarantee and the provision of collateral
security for the obligations of Persons other than such Grantor and that such
Grantor’s guarantee and provision of collateral security for the Secured
Obligations are absolute, irrevocable and unconditional under any and all
circumstances. In full recognition and furtherance of the foregoing, each
Grantor understands and agrees, to the fullest extent permitted under applicable
law and except as may otherwise be expressly and specifically provided in the
Loan Documents, that each Grantor shall remain obligated hereunder (including,
without limitation, with respect to the guarantee made by such Grantor hereby
and the collateral security provided by such Grantor herein) and the
enforceability and effectiveness of this Agreement and the liability of such
Grantor, and the rights, remedies, powers and privileges of the Administrative
Agent and the other Secured Parties under this Agreement and the other Loan
Documents shall not be affected, limited, reduced, discharged or terminated in
any way:

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(i)    notwithstanding that, without any reservation of rights against any
Grantor and without notice to or further assent by any Grantor, (A) any demand
for payment of any of the Secured Obligations made by the Administrative Agent
or any other Secured Party may be rescinded by the Administrative Agent or such
other Secured Party and any of the Secured Obligations continued; (B) the
Secured Obligations, the liability of any other Person upon or for any part
thereof or any collateral security or guarantee therefor or right of offset with
respect thereto, may, from time to time, in whole or in part, be renewed,
extended, amended, modified, accelerated, compromised, waived, surrendered or
released by, or any indulgence or forbearance in respect thereof granted by, the
Administrative Agent or any other Secured Party; (C) the Credit Agreement, the
other Loan Documents, any Secured Swap Agreement and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part in accordance with the terms
thereof; (D) any Grantor or any other Person may from time to time accept or
enter into new or additional agreements, security documents, guarantees or other
instruments in addition to, in exchange for or relative to, any Loan Document or
Secured Swap Agreement, all or any part of the Secured Obligations or any
Collateral now or in the future serving as security for the Secured Obligations;
(E) any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any other Secured Party for the payment of the
Secured Obligations may be sold, exchanged, waived, surrendered or released; and
(F) any other event shall occur which constitutes a defense or release of
sureties generally; and

(ii)    without regard to, and each Grantor hereby expressly waives to the
fullest extent permitted by law any defense now or in the future arising by
reason of, (A) the illegality, invalidity or unenforceability of the Credit
Agreement, any other Loan Document, any Secured Swap Agreement, any of the
Secured Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any other Secured Party, (B) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Grantor or any other Person against
the Administrative Agent or any other Secured Party, (C) the insolvency,
bankruptcy arrangement, reorganization, adjustment, composition, liquidation,
disability, dissolution or lack of power of any Grantor or any other Person at
any time liable for the payment of all or part of the Secured Obligations or the
failure of the Administrative Agent or any other Secured Party to file or
enforce a claim in bankruptcy or other proceeding with respect to any Person; or
any sale, lease or transfer of any or all of the assets of the any Grantor, or
any changes in the shareholders of any Grantor; (D) the fact that any Collateral
or Lien contemplated or intended to be given, created or granted as security for
the repayment of the Secured Obligations shall not be properly perfected or
created, or shall prove to be unenforceable or subordinate to any other Lien, it
being recognized and agreed by each of the Grantors that it is not entering into
this Agreement in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectability or value of any of the Collateral for
the Secured Obligations; (E) any failure of the Administrative Agent or any
other Secured Party to marshal assets in favor of any Grantor or any other
Person, to exhaust any collateral for all or any part of the Secured
Obligations, to pursue or exhaust any right, remedy, power or privilege it may
have against any Grantor or any other Person or to take any action whatsoever to
mitigate or reduce any Grantor’s liability under this Agreement or any other
Loan Document; (F) any law which provides that the obligation of a surety or
guarantor must neither be larger in amount nor in other respects more burdensome
than that of the principal or which reduces a surety’s or guarantor’s obligation
in proportion to the

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principal obligation; (G) the possibility that the Secured Obligations may at
any time and from time to time exceed the aggregate liability of such Grantor
under this Agreement; or (H) any other circumstance or act whatsoever (with or
without notice to or knowledge of any Grantor), which constitutes, or might be
construed to constitute, an equitable or legal discharge or defense of the
Borrower for the Secured Obligations, or of such Grantor under the guarantee
contained in Article II or with respect to the collateral security provided by
such Grantor herein, or which might be available to a surety or guarantor, in
bankruptcy or in any other instance.

(b)    Each Grantor hereby waives to the extent permitted by law: (i) except as
expressly provided otherwise in any Loan Document, all notices to such Grantor,
or to any other Person, including but not limited to, notices of the acceptance
of this Agreement, the guarantee contained in Article II or the provision of
collateral security provided herein, or the creation, renewal, extension,
modification, accrual of any Secured Obligations, or notice of or proof of
reliance by the Administrative Agent or any other Secured Party upon the
guarantee contained in Article II or upon the collateral security provided
herein, or of default in the payment or performance of any of the Secured
Obligations owed to the Administrative Agent or any other Secured Party and
enforcement of any right or remedy with respect thereto; or notice of any other
matters relating thereto; the Secured Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee contained in Article
II and the collateral security provided herein and no notice of creation of the
Secured Obligations or any extension of credit already or hereafter contracted
by or extended to the Borrower need be given to any Grantor; and all dealings
between the Borrower and any of the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in Article II and on the collateral security provided
herein; (ii) diligence and demand of payment, presentment, protest, dishonor and
notice of dishonor; (iii) any statute of limitations affecting any Grantor’s
liability hereunder or the enforcement thereof; (iv) all rights of revocation
with respect to the Secured Obligations, the guarantee contained in Article II
and the provision of collateral security herein; and (v) all principles or
provisions of law which conflict with the terms of this Agreement and which can,
as a matter of law, be waived.

(c)    When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Grantor, the Administrative Agent or any other
Secured Party may, but shall be under no obligation to, join or make a similar
demand on or otherwise pursue or exhaust such rights and remedies as it may have
against the Borrower, any other Grantor or any other Person or against any
collateral security or guarantee for the Secured Obligations or any right of
offset with respect thereto, and any failure by the Administrative Agent or any
other Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from the Borrower, any other Grantor or any
other Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the Borrower, any Grantor
or any other Person or any such collateral security, guarantee or right of
offset, shall not relieve any Grantor of any obligation or liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent or any other
Secured Party against any Grantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings. Neither the
Administrative Agent nor any other Secured Party shall have any obligation to
protect, secure, perfect or insure any Lien at any time held by it as security
for the Secured Obligations or for the guarantee contained in Article II or any
property subject thereto.

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Section 4.02.    No Subrogation, Contribution or Reimbursement. Notwithstanding
any payment made by any Grantor hereunder or any set-off or application of funds
of any Grantor by the Administrative Agent or any other Secured Party, no
Grantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any other Secured Party against the Borrower or any
other Grantor or any collateral security or guarantee or right of offset held by
the Administrative Agent or any other Secured Party for the payment of the
Secured Obligations, nor shall any Grantor seek or be entitled to seek any
indemnity, exoneration, participation, contribution or reimbursement from the
Borrower or any other Grantor in respect of payments made by such Grantor
hereunder, and each Grantor hereby expressly agrees not to exercise any such
rights of subrogation, reimbursement, indemnity and contribution in each case
until the Termination Date. If any amount shall be paid to any Grantor on
account of such subrogation rights at any time before the Termination Date, such
amount shall be held by such Grantor in trust for the Administrative Agent and
the Lenders, segregated from other funds of such Grantor, and shall, forthwith
upon receipt by such Grantor, be turned over to the Administrative Agent in the
exact form received by such Grantor (duly indorsed by such Grantor to the
Administrative Agent, if required), to be applied against the Secured
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine. The Administrative Agent, for the benefit of the Secured
Parties, may use, sell or dispose of any item of Collateral or security as it
sees fit without regard to any subrogation rights any Grantor may have, and upon
any disposition or sale, any rights of subrogation any Grantor may have with
regard to such item of Collateral shall terminate.

ARTICLE V
REPRESENTATIONS AND WARRANTIES

To induce the Administrative Agent and the other Secured Parties to enter into
the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrower thereunder and to induce the Lenders and
Affiliates of the Lenders to enter into Secured Swap Agreements and Cash
Management Agreements, each Grantor hereby represents and warrants to the
Administrative Agent and each other Secured Party that:

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Section 5.01.    Representations in Credit Agreement. In the case of each
Guarantor, the representations and warranties set forth in Article VII of the
Credit Agreement as they relate to such Guarantor (in its capacity as an
Affiliate of the Borrower) or to the Loan Documents to which such Guarantor is a
party are true and correct in all material respects, provided that each
reference in each such representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 5.01, be deemed to be a reference to
such Guarantor’s knowledge.

Section 5.02.    Benefit to the Guarantor. The Borrower is a member of an
affiliated group of companies that includes each Guarantor, and the Borrower and
the Guarantors are engaged in related businesses. Each Guarantor is an Affiliate
of the Borrower and its guaranty and surety obligations pursuant to this
Agreement reasonably may be expected to benefit, directly or indirectly, it; and
it has determined that this Agreement is necessary and convenient to the
conduct, promotion and attainment of the business of such Guarantor and the
Borrower.

Section 5.03.    Title; No Other Liens. Except for the security interest granted
to the Administrative Agent for the ratable benefit of the Secured Parties
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral by Section 9.03 of the Credit Agreement, such Grantor owns each item
of the Collateral free and clear of any and all Liens or claims of others. No
financing statement or other public notice with respect to all or any part of
the Collateral is on file or of record in any public office, except such as have
been filed in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, pursuant to this Agreement or as are permitted by the Credit
Agreement.

Section 5.04.    Perfected First Priority Liens. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected security
interests in favor of the Administrative Agent in all of the Collateral in which
a security interest may be perfected by filing under the New York UCC, by
possession or by such other action described on Schedule 3, for the ratable
benefit of the Secured Parties, as collateral security for such Grantor’s
obligations, enforceable in accordance with the terms hereof against all
creditors of such Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the Collateral in
existence on the date hereof except for Specified Liens which have priority over
the Liens on the Collateral by operation of law.

Section 5.05.    Legal Names, Organizational Status, Chief Executive Office. On
the date hereof, such Grantor’s correct legal name, jurisdiction of
organization, identification number from the jurisdiction of organization (if
any), taxpayer identification number (if any), the location of such Grantor’s
chief executive office or sole place of business or principal residence, as the
case may be and any and all legal names, trade names and locations of the chief
executive office of such Grantor over the last five years (if different than
those specified above), in each case, are specified on Schedule 4.

Section 5.06.    Instruments and Chattel Paper. Such Grantor has delivered to
the Administrative Agent all Collateral constituting Instruments and Chattel
Paper having a value in excess of $100,000. No Collateral constituting Chattel
Paper or Instruments contains any statement therein to the effect that such
Collateral has been assigned to an identified party other than the
Administrative Agent, and the grant of a security interest in such Collateral in
favor of the Administrative Agent hereunder does not violate the rights of any
other Person as a secured party.

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Section 5.07.    Collateral Locations. Schedule 5 sets forth (a) all locations
where, as of the date hereof, all Inventory and the Equipment owned by each
Grantor is kept, except with respect to Inventory and Equipment (i) deployed in
the field and being utilized by the Grantors in the ordinary course of business,
(ii) in transit, (iii) out for repair or refurbishment, (iv) with a fair market
value of less than $25,000 which may be located at other locations within the
United States or (v) in the case of Inventory consisting of As-extracted
collateral, stored adjacent to wells operated by such Grantor and (b) whether
each such Collateral location and place of business (including each Grantor’s
chief executive office) is owned or leased (and if leased, specifies the
complete name and notice address of each lessor). No Collateral is located
outside the United States or, as of the date hereof, in the possession of any
lessor, bailee, warehouseman or consignee, except as indicated on Schedule 5.

Section 5.08.    Certain Property. None of the Collateral constitutes, or is the
Proceeds of, (a) Farm Products, (b) Health-Care-Insurance Receivables or (c)
except as set forth on Schedule 6, vessels, aircraft, Vehicles or any other
property subject to any certificate of title or other registration statute of
the United States, any State or other jurisdiction.

Section 5.09.    Investment Property.

(a)    The shares (or such other interests) of Pledged Securities pledged by
such Grantor hereunder constitute all the issued and outstanding shares (or such
other interests) of all classes of the capital stock or other equity interests
of each Issuer owned by such Grantor. All the shares (or such other interests)
of the Pledged Securities have been duly authorized by the Issuers thereof and
validly issued and (other than Pledged Securities consisting of limited
liability company interests or partnership interest, which cannot be fully paid
and nonasseable) are fully paid and nonassessable.
(b)    Each of the (i) Intercompany Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto and the (ii) Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, in each case, enforceable in accordance with its terms (subject
to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing).
(c)    Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement and Liens permitted by Section
9.03 of the Credit Agreement.
Section 5.10.    Receivables.

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(a) Each Receivable (other than (x) the Alaska Receivable and (y) any Receivable
having a value less than $50,000) (i) is and will be the legal, valid and
binding obligation of the account debtor in respect thereof, (ii) is and will be
enforceable in accordance with its terms, and (iii) is and will not be subject
to any setoffs, defenses, taxes or counterclaims (except with respect to
disputes, refunds, returns, discounts and allowances in the ordinary course of
business).
(b) Each Receivable is and will be in compliance with all Governmental
Requirements.
(c) No amount payable to such Grantor under or in connection with any Receivable
is evidenced by any Instrument or Chattel Paper which has not been delivered to
the Administrative Agent (if required by Section 6.02).
(d) No obligor on any Receivable (other than the Alaska Receivable) having a
value in excess of $50,000, either individually or in the aggregate, is a
Governmental Authority.
(e) The amounts represented by such Grantor to the Administrative Agent and the
other Secured Parties from time to time as owing to such Grantor in respect of
the Receivables will at such times be accurate.
Section 5.11.    Securities Accounts, Commodities Accounts and Deposit Accounts.

(a)    Schedule 7 sets forth under the heading “Securities Accounts” and
“Commodities Accounts”, respectively, all of the Securities Account and
Commodities Accounts in which each Grantor has an interest as of the date
hereof. Each Grantor is the sole entitlement holder of each such Securities
Account and Commodity Account, and such Grantor has not consented, to, and is
not otherwise aware of, any Person (other than the Administrative Agent pursuant
hereto) having “control” (within the meanings of Sections 8-106 and 9-106 of the
New York UCC) over, or any other interest in or claim against, any such
Securities Account or Commodity Account or securities or other property credited
thereto.
(b)    Schedule 7 sets forth under the headings “Deposit Accounts” all of the
Deposit Accounts which constitute Collateral and in which each Grantor has an
interest as of the date hereof. Each Grantor is the sole account holder of each
such Deposit Account and such Grantor has not consented to, and is not otherwise
aware of, any Person (other than the Administrative Agent pursuant hereto)
having either sole dominion and control (within the meaning of common law) or
“control” (within the meanings of Section 9-104 of the New York UCC) over, or
any other interest in or claim against, any such Deposit Account or any money or
other property deposited therein (other than interests in withholding tax and
interests established by statute in any payroll account).
Section 5.12.    Letters of Credit. Such Grantor is not a beneficiary or
assignee, as of the date hereof, under any letter of credit, other than the
letters of credit described in Schedule 8.

Section 5.13.    Intellectual Property.

(a)    Schedule 9 lists all Material Intellectual Property owned by each Grantor
in its own name on the date hereof.

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(b)    All Material Intellectual Property owned by any Grantor is valid,
subsisting, unexpired and enforceable, has not been abandoned and, to such
Grantor’s knowledge, does not infringe the intellectual property rights of any
other Person.

(c)    Except as set forth in Schedule 9, none of the Intellectual Property is
the subject of any licensing or franchise agreement pursuant to which such
Grantor is the licensor or franchisor.

(d)    No holding, decision or judgment has been rendered by any Governmental
Authority which would limit, cancel or question the validity of, or any
Grantor’s rights in, any Material Intellectual Property owned by any Grantor.

(e)    No action or proceeding is pending, or, to the knowledge of such Grantor,
threatened (i) seeking to limit, cancel or question the validity of any
Grantor’s Intellectual Property or any Grantor’s ownership interest therein, or
(ii) which, if adversely determined, would adversely affect the value of any
Material Intellectual Property.

Each Grantor owns and possesses or has a license or other right to use all
Intellectual Property as is necessary for the conduct of the businesses of such
Grantor, without any infringement upon rights of others which could reasonably
be expected to have a Material Adverse Effect.
Section 5.14.    Drilling Rigs. Schedule 10 hereto lists all drilling rigs owned
by the Grantors on the date hereof.

ARTICLE VI
COVENANTS

Each Grantor covenants and agrees with the Administrative Agent and the other
Secured Parties that, from and after the date of this Agreement until the
Termination Date:
Section 6.01.    Covenants in Credit Agreement. In the case of each Guarantor,
such Guarantor shall take, or shall refrain from taking, as the case may be,
each action that is necessary to be taken or not taken, as the case may be, so
that no Default or Event of Default is caused by the failure to take such action
or to refrain from taking such action by such Guarantor or any of its
Subsidiaries.

Section 6.02.    Delivery and Control of Instruments, Investment Property,
Certificated Securities, Letter-of-Credit Rights and Chattel Paper.
  
(a)    If any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper (in the case of Instruments and Chattel
Paper exceeding $100,000 in value on an individual basis or $250,000 in the
aggregate for all such Instruments and Chattel Paper), such Instrument,
Certificated Security or Chattel Paper shall be immediately delivered to the
Administrative Agent, duly indorsed in a manner satisfactory to the
Administrative Agent, to be held as Collateral pursuant to this Agreement and in
the case of Electronic Chattel Paper, the applicable Grantor shall cause the
Administrative Agent to have control thereof within the meaning set forth in
Section 9-105 of the New York UCC.

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(b)    If any of the Collateral is or shall become evidenced or represented by
an Uncertificated Security, such Grantor shall immediately cause (or in the case
of an Issuer that is not a Subsidiary of the Borrower, use commercially
reasonable efforts acting in good faith to cause) the Issuer thereof either (i)
to register the Administrative Agent as the registered owner of such
Uncertificated Security, upon original issue or registration of transfer or (ii)
to agree in writing with such Grantor and the Administrative Agent that such
Issuer will comply with instructions with respect to such Uncertificated
Security originated by the Administrative Agent without further consent of such
Grantor, such agreement to be in form and substance satisfactory to the
Administrative Agent.

(c)    With respect to any Investment Property of such Grantor consisting of a
Securities Account or Security Entitlement, (i) such Grantor shall promptly
notify the Administrative Agent of the opening or existence thereof (other than
those listed on Schedule 7 as of the date hereof) in writing, and (ii) upon
request of the Administrative Agent, such Grantor shall enter into, and shall
cause the Securities Intermediary maintaining such Securities Account or
Security Entitlement to enter into, a Control Agreement pursuant to which such
Securities Intermediary shall agree to comply with the entitlement orders and
other instructions originated by the Administrative Agent without further
consent of such Grantor.

(d)    With respect to any Investment Property of such Grantor consisting of a
Commodity Account or Commodity Contract, (i) such Grantor shall promptly notify
the Administrative Agent of the opening or existence thereof (other than those
listed on Schedule 7 as of the date hereof), and (ii) upon request of the
Administrative Agent, such Grantor shall enter into, and shall cause the
Commodity Intermediary maintaining such Commodity Account or Commodity Contract
to enter into, a Control Agreement pursuant to which such Commodity Intermediary
shall agree to comply with the Administrative Agent’s instructions to apply any
value distributed on account of any Commodity Contract carried in the Commodity
Account or other directions concerning the Commodity Account originated by the
Administrative Agent, in each case without further consent by such Grantor.

(e)    With respect to each Deposit Account of such Grantor, (i) such Grantor
shall promptly notify the Administrative Agent of the opening or existence
thereof (other than those listed on Schedule 7 as of the date hereof) in
writing, and (ii) to the extent required pursuant to the Credit Agreement or
upon request of the Administrative Agent if an Event of Default has occurred and
is continuing, such Grantor shall enter into, and shall cause the bank
maintaining such Deposit Account to enter into, a Control Agreement pursuant to
which such bank shall agree to comply with instructions originated by the
Administrative Agent directing the disposition of funds in such Deposit Account
without further consent by such Grantor.

(f)    With respect to any Letter-of-Credit Rights of such Grantor in which the
related letter of credit has a face amount in excess of $250,000, such Grantor
shall use commercially reasonable efforts acting in good faith to obtain the
consent of the issuer thereof and any nominated Person thereon to the assignment
of the proceeds of the related letter of credit to the Administrative Agent in
accordance with Section 5-114(c) of the New York UCC, such consent to be in form
and substance satisfactory to the Administrative Agent.

Section 6.03.    Maintenance of Perfected Security Interest; Further
Documentation.

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(a)    Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest (except to the extent such security
interest in any Deposit Account or Letter of Credit Rights and perfection
thereof is governed by Section 8.16 of the Credit Agreement or otherwise subject
to the limitations on perfection set forth in Section 6 of this Agreement)
having at least the priority described in Section 5.04 and shall defend such
security interest against the claims and demands of all Persons whomsoever
except for Liens permitted by Section 9.03 of the Credit Agreement.

(b)    Such Grantor will furnish to the Administrative Agent from time to time
statements and schedules further identifying and describing the Collateral and
other assets and property of such Grantor and such other reports in connection
therewith as the Administrative Agent may reasonably request, all in such detail
as the Administrative Agent may reasonably specify.

(c)    At any time and from time to time, upon the written request of the
Administrative Agent or any other Secured Party, and at the sole cost and
expense of such Grantor, such Grantor will promptly and duly authorize, execute
and deliver, and have recorded, all further instruments and documents and take
all further actions as may be necessary or that the Administrative Agent may
reasonably request for the purpose of perfecting or protecting the assignments
and security interests granted hereunder and obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, (i) executing and filing any financing or
continuation statements under the UCC (or other similar laws) in effect in any
jurisdiction with respect to the security interests created hereby, (ii) in the
case of Investment Property, Deposit Accounts, Electronic Chattel Paper and
Letter-of-Credit Rights (except to the extent such security interest in any
Deposit Account or Letter of Credit Rights and perfection thereof is governed by
Section 8.16 of the Credit Agreement or otherwise subject to the limitations on
perfection set forth in Section 6 of this Agreement) and any other relevant
Collateral, taking any actions reasonably necessary to enable the Administrative
Agent to obtain “control” (within the meaning of the applicable UCC) with
respect thereto, in each case pursuant to documents in form and substance
satisfactory to the Administrative Agent, (iii) using commercially reasonable
efforts acting in good faith to obtain waivers from mortgagees, lessors,
landlords, warehousemen, and repairmen in form and substance satisfactory to the
Administrative Agent, (iv) if requested by the Administrative Agent, delivering,
to the extent permitted by law, any original motor vehicle certificates of title
received by such Grantor from the applicable secretary of state or other
Governmental Authority after information reflecting the Administrative Agent’s
security interest has been recorded therein, (v) if requested by the
Administrative Agent, executing and delivering any mortgages or other security
agreements covering any aircraft owned by such Grantor and (vi) taking all
actions reasonably requested by the Administrative Agent in order to perfect and
give notice of its security interest in the Alaska Receivables (including
executing and delivering notices in respect thereof, and filing such
applications and further documents with the Alaska Department of Revenue as may
be necessary and convenient to establish, perfect and maintain such security
interest).

(d)    Each Grantor shall enter into and deliver to the Collateral Agent a
Deposit Account Control Agreement with each bank at which such Grantor maintains
any deposit account with respect to each such deposit account (other than
accounts maintained solely for the benefit of Persons other than the Borrower or
any other Subsidiary and payroll accounts) in favor of the Administrative Agent
for the benefit of the Agents and the Lenders (subject in priority only to
customary Liens provided in favor of such depositary bank); provided, that the
foregoing shall be deemed satisfied to the extent that the Grantors have
complied with the requirements set forth in the Credit Agreement within the time
periods set forth therein.

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Section 6.04.    Investment Property.

(a)    If such Grantor shall become entitled to receive or shall receive any
stock certificate or other instrument (including, without limitation, any
certificate or instrument representing a dividend or a distribution in
connection with any reclassification, increase or reduction of capital or any
certificate or instrument issued in connection with any reorganization), option
or rights in respect of the capital stock or other equity interests of any
Issuer, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares (or such other interests) of the Pledged Securities, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the Administrative Agent and the other Secured Parties, hold the same in trust
for the Administrative Agent and the other Secured Parties and deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Grantor to the Administrative Agent, if required, together with an
undated stock power or other equivalent instrument of transfer acceptable to the
Administrative Agent covering such certificate or instrument duly executed in
blank by such Grantor and with, if the Administrative Agent so requests,
signature guaranteed, to be held by the Administrative Agent, subject to the
terms hereof, as additional collateral security for the Secured Obligations.
Upon the occurrence and during the continuance of an Event of Default, (i) any
sums paid upon or in respect of any Investment Property upon the liquidation or
dissolution of any Issuer shall be paid over to the Administrative Agent to be
held, at the Administrative Agent’s option, either by it hereunder as additional
Collateral for the Secured Obligations or applied to the Secured Obligations as
provided in Section 7.03, and (ii) in case any distribution of capital shall be
made on or in respect of any Investment Property or any property shall be
distributed upon or with respect to any Investment Property pursuant to the
recapitalization or reclassification of the capital of any Issuer or pursuant to
the reorganization thereof, the property so distributed shall be delivered to
the Administrative Agent to be held, at the Administrative Agent’s option,
either by it hereunder as additional Collateral for the Secured Obligations or
applied to the Secured Obligations as provided in Section 7.03. Upon the
occurrence and during the continuance of an Event of Default, if any sums of
money or property so paid or distributed in respect of any Investment Property
shall be received by such Grantor, such Grantor shall, until such money or
property is paid or delivered to the Administrative Agent, hold such money or
property in trust for the Secured Parties, segregated from other funds of such
Grantor, as additional Collateral for the Secured Obligations.

(b)    Without the prior written consent of the Administrative Agent, such
Grantor will not (i) unless otherwise permitted hereby, vote to enable, or take
any other action to permit, any Issuer to issue any stock or other equity
interests of any nature or to issue any other securities or interests
convertible into or granting the right to purchase or exchange for any stock or
other equity interests of any nature of any Issuer, (ii) sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with respect to, the
Investment Property or Proceeds thereof (except pursuant to a transaction
permitted by the Credit Agreement), (iii) except for Liens permitted by Section
9.03 of the Credit Agreement, create, incur or permit to exist any Lien or
option in favor of, or any claim of any Person with respect to, any of the
Investment Property or Proceeds thereof, or any interest therein, except for the
security interests created by this Agreement or (iv) except as permitted by the
Credit Agreement enter into any agreement or undertaking restricting the right
or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Investment Property or Proceeds thereof.

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(c)    In the case of each Grantor which is an Issuer, such Issuer agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in Section 6.04(a) with
respect to the Investment Property issued by it and (iii) the terms of Section
7.01(c) and Section 7.05 shall apply to it, mutatis mutandis, with respect to
all actions that may be required of it pursuant to Section 7.01(c) or Section
7.05 with respect to the Investment Property issued by it. In addition, each
Grantor which is either an Issuer or an owner of any Investment Property
consents to the grant by each other Grantor of the security interest hereunder
in favor of the Administrative Agent and to the transfer of any Investment
Property to the Administrative Agent or its nominee upon the occurrence or
during the continuation of an Event of Default and to the substitution of the
Administrative Agent or its nominee as a partner, member or shareholder of the
Issuer of the related Investment Property.

(d)    Without the prior written consent of the Administrative Agent, such
Grantor shall not vote to enable, consent to or take any other action to: (i)
amend, terminate or waive any default under or breach of any terms of any
governing document in any way that adversely affects the validity, perfection or
priority of the Administrative Agent’s security interest hereunder or (ii) cause
or, to the fullest extent possible, permit any Issuer of any Pledged Securities
that are not securities (for purposes of Article 8 of the UCC) on the date
hereof (or, if such Pledged Securities are owned or acquired by such Grantor
after the date hereof, then on such date of acquisition) to elect or otherwise
take any action that would cause such Pledged Securities to be treated as
securities for purposes of Article 8 of the UCC.

(e)    Such Grantor shall furnish to the Administrative Agent such stock powers
and other equivalent instruments of transfer as may be required by the
Administrative Agent to assure the transferability of and the perfection of the
security interest in the Pledged Securities when and as often as may be
reasonably requested by the Administrative Agent.

Section 6.05.    Commercial Tort Claims. If any Grantor shall at any time
acquire any Commercial Tort Claim in excess of $500,000, such Grantor shall
within thirty (30) days of obtaining such interest sign and deliver
documentation acceptable to the Administrative Agent granting a security
interest under the terms and provisions of this Agreement in and to such
Commercial Tort Claim.

Section 6.06.    Receivables.
  
(a)    Other than in the ordinary course of business or with respect to
Receivables in amounts which are not material to the business of the Grantors,
taken as a whole, such Grantor will not (i) grant any extension of the time of
payment of any Receivable, (ii) compromise or settle any Receivable for less
than the full amount thereof, (iii) release, wholly or partially, any Person
liable for the payment of any Receivable, (iv) allow any credit or discount
whatsoever on any Receivable or (v) amend, supplement or modify any Receivable
in any manner that could adversely affect the value thereof.

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(b)    Such Grantor shall keep and maintain at its own cost and expense
satisfactory and substantially complete records of the Receivables, including,
but not limited to, substantially complete records of all payments received and
all credits granted on the Receivables.

Section 6.07.    [Reserved].

Section 6.09.    Intellectual Property.

(a)    Such Grantor (either itself or through licensees) will (i) not adopt or
use any mark which is confusingly similar or a colorable imitation of any
third-party Trademark; (ii) not adopt a new mark or updated mark which is
Material Intellectual Property unless the Administrative Agent, for the ratable
benefit of the Secured Parties, shall obtain a perfected security interest in
such mark pursuant to this Agreement, (iii) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
Trademark that constitutes Material Intellectual Property may become invalidated
or impaired in any material respects, and (iv) continue to use each Trademark
which is Material Intellectual Property, on each and every class of goods
applicable to its current use, in order to maintain such Trademark in full force
free from any claim of abandonment for non-use.

(b)    Such Grantor (either itself or through licensees) will not do any act, or
knowingly omit to do any act, whereby any Material Intellectual Property may
lapse or become forfeited, abandoned or dedicated to the public, or
unenforceable.

(c)    Such Grantor (either itself or through licensees) will not (and will not
permit any licensee or sublicensee thereof to) do any act or knowingly omit to
do any act whereby any portion of any Copyright that constitutes Material
Intellectual Property may become invalidated or otherwise impaired in any
material respects. Such Grantor will not (either itself or through licensees) do
any act whereby any material portion of the Copyrights that constitute Material
Intellectual Property may fall into the public domain.

(d)    Such Grantor (either itself or through licensees) will not use or permit
any Intellectual Property to infringe the intellectual property rights of any
other Person, except for any infringement that could not reasonably be expected
to result in a Material Adverse Effect.

(e)    Such Grantor will notify the Administrative Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Material Intellectual Property may become forfeited, abandoned or dedicated
to the public, invalid or unenforceable, or of any material adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding, such Grantor’s ownership of, or the validity or
enforceability of, any Material Intellectual Property or such Grantor’s right to
register the same or to own and maintain the same.

(f)    Whenever such Grantor, either by itself or through any agent, employee,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the Administrative Agent concurrently with the next delivery of
financial statements of the Borrower pursuant to Section 8.01 of the Credit
Agreement. Upon the request of the Administrative Agent, such Grantor shall
execute and deliver, and have recorded, any and all agreements, instruments,
documents, and papers as the Administrative Agent may reasonably request to
evidence the Administrative Agent’s security interest in any Copyright, Patent
or Trademark and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby.

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(g)    Such Grantor will take all reasonable and necessary steps to maintain and
pursue each application it filed with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof and to maintain each
registration of all Material Intellectual Property owned by it that is currently
or later becomes registered Intellectual Property.

(h)    In the event that any Material Intellectual Property is infringed upon or
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) promptly notify the
Administrative Agent after it learns thereof and, to the extent, in such
Grantor’s reasonable judgment, such Grantor determines it appropriate under the
circumstances, sue for infringement, misappropriation or dilution, to seek
injunctive relief where appropriate and to recover any and all damages for such
infringement, misappropriation or dilution.

Section 6.10.    Inventory and Equipment.

(a)    Except in connection with a disposition permitted under the Credit
Agreement, such Grantor shall not deliver any document evidencing any Equipment
(other than Equipment constituting Excluded Property) to any Person other than
the issuer of such document to claim the goods evidenced thereby or the
Administrative Agent.

(b)    If any Equipment (other than Equipment constituting Excluded Property) or
Inventory (other than Inventory constituting Excluded Property) having a value
in excess of $250,000, either individually or in the aggregate for all such
Equipment and Inventory, is in the possession or control of a third party,
including, without limitation, any warehouseman, bailee or agent, such Grantor
shall immediately notify the Administrative Agent thereof and shall join with
the Administrative Agent in promptly notifying the third party of the
Administrative Agent’s security interest and using commercially reasonable
efforts acting in good faith to obtain a written acknowledgment from the third
party that it is holding the Equipment or Inventory for the benefit, and subject
to the security interest, of the Administrative Agent. Such acknowledgment must
be reasonably satisfactory in form and substance to the Administrative Agent.

(c)    With respect to any item of Equipment (other than Equipment constituting
Excluded Property) that is covered by a certificate of title or ownership under
a statute of any jurisdiction under the law of which indication of a security
interest on such certificate is required as a condition of perfection thereof,
such Grantor shall promptly (i) provide to the Administrative Agent information
with respect to any such Equipment having a value in excess of $50,000
individually or $250,000 in the aggregate, (ii) upon the request of the
Administrative Agent, execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on each such certificate of title, and (iii) deliver to the
Administrative Agent copies of all such applications or other documents so filed
and copies of all such certificates of title issued indicating the security
interests created hereunder in the items of Equipment covered thereby.

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(d)    No Grantor shall, except upon prior written notice to the Administrative
Agent, permit any of the Inventory or Equipment (other than Inventory or
Equipment (i) deployed in the field and being utilized by the Grantors in the
ordinary course of business, (ii) in transit, (iii) out for repair or
refurbishment, (iv) with a fair market value of less than $25,000 or (v) in the
case of Inventory consisting of As-extracted collateral, stored adjacent to
wells operated by such Grantor) to be kept at a location other than those listed
on Schedule 5 or otherwise identified to the Administrative Agent in writing.

ARTICLE VII
REMEDIAL PROVISIONS

Section 7.01.    Investment Property.

(a)    Unless an Event of Default shall have occurred and be continuing and the
Administrative Agent shall have given notice to the relevant Grantor of the
Administrative Agent’s intent to exercise its corresponding rights pursuant to
Section 7.01(b), each Grantor shall be permitted to receive all cash dividends
paid in respect of the Pledged Securities and all payments made in respect of
the Pledged Notes, to the extent permitted in the Credit Agreement, and to
exercise all voting, corporate or other rights with respect to the Investment
Property; provided, that no vote shall be cast or other right exercised or
action taken which could impair the Collateral or which would result in any
violation of any provision of the Credit Agreement or any other Loan Document.

(b)    If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) the Administrative Agent shall have the
right to receive any and all cash dividends and distributions, payments or other
Proceeds paid in respect of the Investment Property and make application thereof
to the Secured Obligations in accordance with Section 10.02 of the Credit
Agreement, and (ii) any or all of the Investment Property shall be registered in
the name of the Administrative Agent or its nominee, and the Administrative
Agent or its nominee may thereafter exercise (x) all voting and other rights
pertaining to such Investment Property at any meeting of holders of the Stock of
the relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Investment Property as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other structure of any Issuer, or upon the exercise by any Grantor or the
Administrative Agent of any right, privilege or option pertaining to such
Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or delay in so
doing.

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(c)    Each Grantor hereby authorizes and instructs each Issuer of any
Investment Property pledged by such Grantor hereunder (and each Issuer party
hereto hereby agrees) to (i) comply with any instruction received by it from the
Administrative Agent in writing that (A) states that an Event of Default has
occurred and is continuing and (B) is otherwise in accordance with the terms of
this Agreement, without any other or further instructions from such Grantor, and
each Grantor agrees that each Issuer shall be fully protected in so complying,
and (ii) upon any such instruction by the Administrative Agent following the
occurrence and during the continuation of an Event of Default, pay any
dividends, distributions or other payments with respect to the Investment
Property directly to the Administrative Agent.

(d)    After the occurrence and during the continuation of an Event of Default,
if the Issuer of any Investment Property is the subject of bankruptcy,
insolvency, receivership, custodianship or other proceedings under the
supervision of any Governmental Authority, then all rights of the Grantor in
respect thereof to exercise the voting and other consensual rights which such
Grantor would otherwise be entitled to exercise with respect to the Investment
Property issued by such Issuer shall cease, and all such rights shall thereupon
become vested in the Administrative Agent who shall thereupon have the sole
right to exercise such voting and other consensual rights, but the
Administrative Agent shall have no duty to exercise any such voting or other
consensual rights and shall not be responsible for any failure to do so or delay
in so doing.

Section 7.02.    Collections on Accounts, Etc. The Administrative Agent hereby
authorizes each Grantor to collect upon the Accounts, Instruments, Chattel Paper
and Payment Intangibles, and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. Upon the request of the Administrative Agent at any time after
the occurrence and during the continuance of an Event of Default, each Grantor
shall notify the Account Debtors that the applicable Accounts, Chattel Paper and
Payment Intangibles have been assigned to the Administrative Agent for the
ratable benefit of the Secured Parties and that payments in respect thereof
shall be made directly to the Administrative Agent. During the existence of an
Event of Default, the Administrative Agent may in its own name or in the name of
others communicate with the Account Debtors to verify with them to its
satisfaction the existence, amount and terms of any Accounts, Chattel Paper or
Payment Intangibles.

Section 7.03.    Proceeds. If required by the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Accounts, Instruments, Chattel Paper and Payment Intangibles, when
collected or received by each Grantor, and any other cash or non-cash Proceeds
received by each Grantor upon the sale or other disposition of any Collateral,
shall be forthwith (and, in any event, within two Business Days) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent if required, in a special collateral account maintained by
the Administrative Agent, subject to withdrawal by the Administrative Agent for
the ratable benefit of the Secured Parties only, as hereinafter provided, and,
until so turned over, shall be held by such Grantor in trust for the
Administrative Agent for the ratable benefit of the Secured Parties, segregated
from other funds of any such Grantor. Each deposit of any such Proceeds shall be
accompanied by a report identifying in reasonable detail the nature and source
of the payments included in the deposit. All Proceeds (including, without
limitation, Proceeds constituting collections of Accounts, Chattel Paper,
Instruments) while held by the Administrative Agent (or by any Grantor in trust
for the Administrative Agent for the ratable benefit of the Secured Parties)
shall continue to be collateral security for all of the Secured Obligations and
shall not constitute payment thereof until applied as hereinafter provided. At
such intervals as may be agreed upon by each Grantor and the Administrative
Agent, or, if an Event of Default shall have occurred and be continuing, at any
time at the Administrative Agent’s election, the Administrative Agent shall
apply all or any part of the funds on deposit in said special collateral account
on account of the Secured Obligations in accordance with Section 10.02 of the
Credit Agreement and any part of such funds which the Administrative Agent
elects not so to apply and

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deems not required as collateral security for the Secured Obligations shall be
paid over from time to time by the Administrative Agent to each Grantor or to
whomsoever may be lawfully entitled to receive the same.

Section 7.04.    New York UCC and Other Remedies.
  
(a)    If an Event of Default shall occur and be continuing, the Administrative
Agent, on behalf of the Secured Parties, may exercise in its discretion, in
addition to all other rights, remedies, powers and privileges granted to them in
this Agreement, the other Loan Documents, any Secured Swap Agreement and in any
other instrument or agreement securing, evidencing or relating to the Secured
Obligations, all rights, remedies, powers and privileges of a secured party
under the New York UCC (whether the New York UCC is in effect in the
jurisdiction where such rights, remedies, powers or privileges are asserted) or
any other applicable law or otherwise available at law or equity. Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law) to or upon any Grantor or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any other Secured Party or elsewhere upon such terms and conditions as it may
deem advisable and at such prices as it may deem best, for cash or on credit or
for future delivery without assumption of any credit risk. The Administrative
Agent or any other Secured Party shall have the right upon any such public sale
or sales, and, to the extent permitted by law, upon any such private sale or
sales, to purchase the whole or any part of the Collateral so sold, free of any
right or equity of redemption in any Grantor, which right or equity is hereby
waived and released. If an Event of Default shall occur and be continuing, each
Grantor further agrees, at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor’s premises
or elsewhere. Any such sale or transfer by the Administrative Agent either to
itself or to any other Person shall be absolutely free from any claim of right
by Grantor, including any equity or right of redemption, stay or appraisal which
Grantor has or may have under any rule of law, regulation or statute now
existing or hereafter adopted. Upon any such sale or transfer, the
Administrative Agent shall have the right to deliver, assign and transfer to the
purchaser or transferee thereof the Collateral so sold or transferred. The
Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 7.04, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the other Secured Parties hereunder,
including, without limitation, reasonable attorneys’ fees and disbursements, to
the payment in whole or in part of the Secured Obligations, in accordance with
Section 10.02 of the Credit Agreement, and only after such application and after
the payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-615 of the New York
UCC, need the Administrative Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against the Administrative Agent or
any other Secured Party arising out of the exercise by them of any rights
hereunder. If any notice of a proposed sale or other disposition of Collateral
shall be required by law, such notice shall be deemed reasonable and proper if
given at least 10 days before such sale or other disposition.

(b)    In the event that the Administrative Agent elects not to sell the
Collateral, the Administrative Agent retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner authorized or
permitted by law or in equity, and to apply the proceeds of the same towards
payment of the Secured Obligations. Each and every method of disposition of the
Collateral described in this Agreement

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shall constitute disposition in a commercially reasonable manner. The
Administrative Agent may appoint any Person as agent to perform any act or acts
necessary or incident to any sale or transfer of the Collateral.

Section 7.05.    Registration; Private Sales of Pledged Securities.
  
(a)    If the Administrative Agent shall determine to exercise its right to sell
any or all of the Pledged Securities pursuant to Section 7.04, and if in the
opinion of the Administrative Agent it is necessary or advisable to have the
Pledged Securities, or that portion thereof to be sold, registered under the
provisions of the Securities Act, the relevant Grantor will cause the Issuer
thereof to (i) execute and deliver, and cause the directors and officers of such
Issuer to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the Pledged Securities,
or that portion thereof to be sold, under the provisions of the Securities Act,
(ii) use its best efforts to cause the registration statement relating thereto
to become effective and to remain effective for a period of one year from the
date of the first public offering of the Pledged Securities, or that portion
thereof to be sold, and (iii) make all amendments thereto and/or to the related
prospectus which, in the opinion of the Administrative Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission applicable
thereto. Each Grantor agrees to cause such Issuer to comply with the provisions
of the securities or “Blue Sky” laws of any and all jurisdictions which the
Administrative Agent shall designate and to make available to its security
holders, as soon as practicable, an earnings statement (which need not be
audited) which will satisfy the provisions of Section 11(a) of the Securities
Act

(b)    Each Grantor recognizes that the Administrative Agent may be unable to
effect a public sale of any or all the Pledged Securities, by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise, and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to agree,
among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any of the Pledged
Securities for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

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(c)    Each Grantor agrees to use its commercially reasonable efforts to do or
cause to be done all such other acts as may be necessary to make such sale or
sales of all or any portion of the Pledged Securities pursuant to this Section
7.05 valid and binding and in compliance with any and all other applicable
Governmental Requirements. Each Grantor further agrees that a breach of any of
the covenants contained in this Section 7.05 will cause irreparable injury to
the Administrative Agent and the Secured Parties, that the Administrative Agent
and the Secured Parties have no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
7.05 shall be specifically enforceable against such Grantor, and such Grantor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.

Section 7.06.    Waiver; Deficiency. To the fullest extent permitted by
applicable law, each Grantor waives and agrees not to assert any rights or
privileges which it may acquire under Section 9-626 of the New York UCC. Each
Grantor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay its Secured
Obligations and the documented fees and disbursements of any attorneys employed
by the Administrative Agent or any other Secured Party to collect such
deficiency.

Section 7.07.    Non-Judicial Enforcement. The Administrative Agent may enforce
its rights hereunder without prior judicial process or judicial hearing, and to
the extent permitted by law, each Grantor expressly waives any and all legal
rights which might otherwise require the Administrative Agent to enforce its
rights by judicial process.

Section 7.08.    License. For the purpose of enabling the Administrative Agent
to exercise rights and remedies under this Agreement, each Grantor hereby grants
to the Administrative Agent, for the benefit of the Administrative Agent, an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to such Grantor) to use, license or sublicense any
Intellectual Property now owned or hereafter acquired by such Grantor, and
wherever the same may be located, and including in such license access to all
media in which any of the licensed items may be recorded or stored and to all
computer software and programs used for the compilation or printout thereof.

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ARTICLE VIII
TEH ADMINISTRATIVE AGENT

Section 8.01.    Administrative Agent’s Appointment as Attorney-in-Fact, Etc.

(a)    Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, 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 Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all reasonably appropriate action and to execute
any and all documents and instruments which may be reasonably necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any or all of the following:

(i)    pay or discharge taxes and Liens levied or placed on or threatened
against the Collateral, effect any repairs or any insurance called for by the
terms of this Agreement and pay all or any part of the premiums therefor and the
costs thereof;

(ii)    execute, in connection with any sale provided for in Section 7.04 or
Section 7.05, any endorsements, assignments or other instruments of conveyance
or transfer with respect to the Collateral; and

(iii)    (A) direct any party liable for any payment under any of the Collateral
to make payment of any and all moneys due or to become due thereunder directly
to the Administrative Agent or as the Administrative Agent shall direct; (B)
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Account, Instrument, General Intangible, Chattel Paper or Payment Intangible or
with respect to any other Collateral, and to file any claim or to take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account, Instrument or General Intangible or with
respect to any other Collateral whenever payable; (C) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (D) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (E) receive, change the address for delivery, open and
dispose of mail addressed to any Grantor, and to execute, assign and indorse
negotiable and other instruments for the payment of money, documents of title or
other evidences of payment, shipment or storage for any form of Collateral on
behalf of and in the name of any Grantor; (F) commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (G) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (H)
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Administrative
Agent may deem appropriate; and (I) generally, sell, transfer, pledge and make
any agreement with respect to or otherwise deal with any of the Collateral as
fully and

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completely as though the Administrative Agent were the absolute owner thereof
for all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things which
the Administrative Agent deems necessary to protect, preserve or realize upon
the Collateral and the Administrative Agent’s and the other Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.

Anything in this Section 8.01(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 8.01(a) unless an Event of Default
shall have occurred and be continuing.
(b)    If any Grantor fails to perform or comply with any of its agreements
contained herein within the applicable grace periods, the Administrative Agent,
at its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

(c)    The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 8.01, together with interest
thereon at the rate as provided in the Credit Agreement from the date of payment
by the Administrative Agent to the date reimbursed by the relevant Grantor,
shall be payable by such Grantor to the Administrative Agent on demand.

(d)    Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue and in compliance hereof. All powers, authorizations
and agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

Section 8.02.    Duty of Administrative Agent. The Administrative Agent’s sole
duty with respect to the custody, safekeeping and physical preservation of the
Collateral in its possession, under Section 9-207 of the New York UCC or
otherwise, shall be to deal with it in the same manner as the Administrative
Agent deals with similar property for its own account and shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which comparable secured parties accord comparable collateral. Neither the
Administrative Agent, any other Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the other Secured Parties hereunder
are solely to protect the Administrative Agent’s and the other Secured Parties’
interests in the Collateral and shall not impose any duty upon the
Administrative Agent or any other Secured Party to exercise any such powers. The
Administrative Agent and the other Secured Parties shall be accountable only for
amounts that they actually receive as a result of the exercise of such powers,
and neither they nor any of their officers, directors, employees or agents
(collectively, the “Indemnitees”) shall be responsible to any Grantor for any
act or failure to act hereunder, 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 EXCULPATION
SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES,
CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE

28

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DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE
JUDGMENT TO HAVE RESULTED PRIMARILY FROM THE GROSS NEGLIGENCE, BAD FAITH OR
WILLFUL MISCONDUCT OF SUCH INDEMNITEE. To the fullest extent permitted by
applicable law, the Administrative Agent shall be under no duty whatsoever to
make or give any presentment, notice of dishonor, protest, demand for
performance, notice of non-performance, notice of intent to accelerate, notice
of acceleration, or other notice or demand in connection with any Collateral or
the Secured Obligations, or to take any steps necessary to preserve any rights
against any Grantor or other Person or ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not it has or is deemed to have knowledge
of such matters. Each Grantor, to the extent permitted by applicable law, waives
any right of marshaling in respect of any and all Collateral, and waives any
right to require the Administrative Agent or any other Secured Party to proceed
against any Grantor or other Person, exhaust any Collateral or enforce any other
remedy which the Administrative Agent or any other Secured Party now has or may
hereafter have against each Guarantor, any Grantor or other Person.

Section 8.03.    Execution of Financing Statements. Pursuant to the New York UCC
and any other applicable law, each Grantor authorizes the Administrative Agent,
its counsel or its representative, at any time and from time to time, to file or
record financing statements, continuation statements, amendments thereto and
other filing or recording documents or instruments with respect to the
Collateral without the signature of such Grantor in such form and in such
offices as the Administrative Agent reasonably determines appropriate to perfect
the security interests of the Administrative Agent under this Agreement.
Additionally, each Grantor authorizes the Administrative Agent, its counsel or
its representative, at any time and from time to time, to file or record such
financing statements that describe the collateral covered thereby as “all assets
of the Grantor”, “all personal property of the Grantor” or words of similar
effect. A photographic or other reproduction of this Agreement shall be
sufficient as a financing statement or other filing or recording document or
instrument for filing or recording in any jurisdiction.

Section 8.04.    Authority of Administrative Agent. Each Grantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Agreement shall, as between the Administrative
Agent and the other Secured Parties, be governed by the Credit Agreement and by
such other agreements with respect thereto as may exist from time to time among
them, but, as between the Administrative Agent and the Grantors, the
Administrative Agent shall be conclusively presumed to be acting as agent for
the Secured Parties with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or entitlement, to make
any inquiry respecting such authority.

29

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ARTICLE IX
SUBORDINATION OF INDEBTEDNESS

Section 9.01.    Subordination of All Guarantor Claims. As used herein, the term
“Guarantor Claims” means all debts and obligations of the Borrower or any other
Grantor to any Grantor (other than the Borrower), whether such debts and
obligations now exist or are hereafter incurred or arise, or whether the
obligation of the debtor thereon be direct, contingent, primary, secondary,
several, joint and several, or otherwise, and irrespective of whether such debts
or obligations be evidenced by note, contract, open account, or otherwise, and
irrespective of the Person or Persons in whose favor such debts or obligations
may, at their inception, have been, or may hereafter be created, or the manner
in which they have been or may hereafter be acquired by. Each Grantor hereby
agrees that, upon the occurrence and during the continuance of an Event of
Default, unless otherwise agreed by the Administrative Agent, all Guarantor
Claims shall be fully subordinated to the indefeasible payment in full in cash
of the Secured Obligations

Section 9.02.    Claims in Bankruptcy. In the event of receivership, bankruptcy,
reorganization, arrangement, debtor’s relief or other insolvency proceedings
involving any Grantor, the Administrative Agent on behalf of the Secured Parties
shall have the right to prove their claim in any proceeding, so as to establish
their rights hereunder and receive directly from the receiver, trustee or other
court custodian, dividends and payments which would otherwise be payable upon
Guarantor Claims. Should any Agent or Secured Party receive, for application
upon the Secured Obligations, any such dividend or payment which is otherwise
payable to any Grantor, and which, as between such Grantor, shall constitute a
credit upon the Guarantor Claims, then upon the Termination Date, the intended
recipient shall become subrogated to the rights of the Administrative Agent and
the other Secured Parties to the extent that such payments to the Administrative
Agent and the other Secured Parties on the Guarantor Claims have contributed
toward the liquidation of the Secured Obligations, and such subrogation shall be
with respect to that proportion of the Secured Obligations which would have been
unpaid if the Administrative Agent and the other Secured Parties had not
received dividends or payments upon the Guarantor Claims.

Section 9.03.    Payments Held in Trust. In the event that notwithstanding
Section 9.01 and Section 9.02, any Grantor should receive any funds, payments,
claims or distributions which is prohibited by such Sections, then it agrees:
(a) to hold in trust for the Administrative Agent and the other Secured Parties
an amount equal to the amount of all funds, payments, claims or distributions so
received, and (b) that it shall have absolutely no dominion over the amount of
such funds, payments, claims or distributions except to pay them promptly to the
Administrative Agent, for the benefit of the Secured Parties; and each Grantor
covenants promptly to pay the same to the Administrative Agent.

Section 9.04.    Liens Subordinate. Each Grantor agrees that, until the
Termination Date, any Liens securing payment of the Guarantor Claims shall be
and remain inferior and subordinate to any Liens securing payment of the Secured
Obligations, regardless of whether such encumbrances in favor of such Grantor,
the Administrative Agent or any other Secured Party presently exist or are
hereafter created or attach. Without the prior written consent of the
Administrative Agent, no Grantor, until the Termination Date, shall (a) exercise
or enforce any creditor’s right it may have against any debtor in respect of the
Guarantor Claims, or (b) foreclose, repossess, sequester or otherwise take steps
or institute any action or proceeding (judicial or otherwise, including without
limitation the commencement of or joinder in any liquidation, bankruptcy,
rearrangement, debtor’s relief or insolvency proceeding) to enforce any Lien
held by it.

30

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Section 9.05.    Notation of Records. Upon the request of the Administrative
Agent, all promissory notes and all accounts receivable ledgers or other
evidence of the Guarantor Claims accepted by or held by any Grantor shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Agreement.

ARTICLE X
MISCELLANEOUS

Section 10.01.    Waiver. No failure on the part of the Administrative Agent or
any Secured Party 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 and the Secured Parties 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) of the
Credit Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given; provided that any waiver,
amendment, supplement or modification changing the obligations of the
Administrative Agent shall also require the execution and delivery of such
amendment by the Administrative Agent. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent or any Secured Party may have had notice or knowledge of such Default at
the time.

Section 10.02.    Notices. All notices, requests and other communications
provided for herein shall be given in the manner and subject to the terms of
Section 12.01 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1 (or at such other address as the
Administrative Agent shall have been notified).

Section 10.03.    Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their successors and
assigns; provided that the Guarantors shall not be permitted to assign this
Agreement without the prior consent of the Administrative Agent (and any
attempted assignment or transfer without such consent shall be null and void).

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Section 10.04.    Severability. Any provision of this Agreement 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. 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.

Section 10.05.    Counterparts. 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.

Section 10.06.    Survival; Revival; Reinstatement.
  
(a)    All covenants, agreements, representations and warranties made by the
Grantors 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 making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent or any Secured Party 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 until the
Termination Date.

(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 other Secured Parties’ 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 each Grantor shall take such
action as may be reasonably requested by the Administrative Agent and the other
Secured Parties to effect such reinstatement.

    

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Section 10.07.    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.

Section 10.08.    No Oral Agreements. 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.

Section 10.09.    Governing Law; Submission to Jurisdiction.

(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 THIS AGREEMENT AND ANY
OTHER 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 of the Credit Agreement or Schedule 1 hereto OR SUCH
OTHER ADDRESS AS IS SPECIFIED PURSUANT TO SECTION 12.01 of the Credit agreement
(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

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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 10.09.

Section 10.10.    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,
ONDITIONS 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 10.11.    Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 8.14 of the
Credit Agreement and is not a signatory hereto shall become a Grantor for all
purposes of this Agreement upon execution and delivery by such Subsidiary of an
Assumption Agreement in the form of Annex I hereto.

Section 10.12.    Set-Off. 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
10.12 are in addition to other rights and remedies (including other rights of
setoff) which such Lender or its Affiliates may have.

Section 10.13.    Releases.

(a)    Release Upon Termination Date. The grant of a security interest hereunder
and all of rights, powers and remedies in connection herewith shall remain in
full force and effect until the Termination Date, at which time the
Administrative Agent shall (i) retransfer and deliver all Collateral in its
possession to the Grantors, and (ii) execute a written release or termination
statement and reassigned to the Grantors without recourse or warranty any
remaining Collateral and all rights conveyed hereby. Upon the Termination Date,
the Administrative Agent, at the written request and expense of the Borrower,
will promptly release, reassign

34

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and transfer the Collateral to the Grantors and declare this Agreement to be
terminated and of no further force or effect.

(b)    Further Assurances. If any of the Collateral shall be sold, transferred
or otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases or
other documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral and the capital stock of such Grantor. At the
request and sole expense of the Borrower, a Grantor shall be released from its
obligations hereunder in the event that all the capital stock of such Grantor
shall be sold, transferred or otherwise disposed of in a transaction permitted
by the Credit Agreement; provided that the Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the date of the
proposed release, a written request for release identifying the relevant Grantor
and the terms of the sale or other disposition in reasonable detail, including
the price thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents.

(c)    Retention in Satisfaction. Except as may be expressly applicable pursuant
to Section 9-620 of the New York UCC, no action taken or omission to act by the
Administrative Agent or the other Secured Parties hereunder, including, without
limitation, any exercise of voting or consensual rights or any other action
taken or inaction, shall be deemed to constitute a retention of the Collateral
in satisfaction of the Secured Obligations or otherwise to be in full
satisfaction of the Secured Obligations, and the Secured Obligations shall
remain in full force and effect, until the Administrative Agent and the other
Secured Parties shall have applied payments (including, without limitation,
collections from Collateral) towards the Secured Obligations in the full amount
then outstanding or until such subsequent time as is provided in Section
10.13(a).

Section 10.14.    No Third Party Beneficiaries. This Agreement, the other Loan
Documents 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 or any Secured Party for any reason whatsoever.
There are no third party beneficiaries.

    

35

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Section 10.15    Amendment and Restatement. This Agreement represents an
amendment and restatement of the Existing Security Agreement. Any security
interests granted in favor of the Existing Agent under the Existing Security
Agreement continue, without duplication, under this Agreement, and the execution
of this Agreement does not indicate a satisfaction, novation or discharge
thereof.

[Signatures begin on next page.]

36

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IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.
BORROWER:
MILLER ENERGY RESOURCES, INC.
 
 
 
By: /s/ Scott M. Boruff
 
Name: Scott M. Boruff
 
Title: Chief Executive Officer
 
 
GUARANTORS:
MILLER DRILLING, TN LLC
 
 
 
By: MILLER ENERGY RESOURCES, INC.,
 
its sole member
 
 
 
By: /s/ Scott M. Boruff
 
Name: Scott M. Boruff
 
Title: Chief Executive Officer
 
 
 
MILLER ENERGY SERVICES, LLC
 
 
 
By: MILLER ENERGY RESOURCES, INC.
 
its Sole Manager
 
 
 
By: /s/ Scott M. Boruff
 
Name: Scott M. Boruff
 
Title: Chief Executive Officer
 
 
 
MILLER ENERGY GP, LLC
 
 
 
By: MILLER ENERGY RESOURCES, INC,,
 
its Sole Manager
 
 
 
By: /s/ Scott M. Boruff
 
Name: Scott M. Boruff
 
Title: Chief Executive Officer

Signature Page
Guarantee and Collateral Agreement

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

 
MILLER RIG & EQUIPMENT, LLC
 
 
 
By: MILLER ENERGY RESOURCES, INC.
 
Its Sole Manager
 
 
 
By: /s/ Scott M. Boruff
 
Name: Scott M. Boruff
 
Title: Chief Executive Officer
 
 
 
COOK INLET ENERGY, LLC
 
 
 
By: /s/ David M. Hall
 
Name: David M. Hall
 
Title: Manager and Chief Executive Officer
 
 
 
EAST TENNESSEE CONSULTANTS, INC.
 
 
 
By: /s/ Eugene D. Lockyear
 
Name: Eugene D. Lockyear
 
Title: Vice President and Secretary
 
 
 
EAST TENNESSEE CONSULTANTS II, L.L.C.
 
 
 
By: /s/ Eugene D. Lockyear
 
Title Manager and Secretary

Signature Page
Guarantee and Collateral Agreement

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Acknowledged and Agreed to as of the date hereof by:
 
 
ADMINISTRATIVE AGENT:
APOLLO INVESTMENT CORPORATION,
 
as Administrative Agent for the Lenders
 
 
 
By: APOLLO INVESTMENT MANAGEMENT, L.P.
 
 
 
By: ACC MANAGEMENT, LLC, its General Partner
 
 
 
By: /s/ Ted Goldthorpe
 
Name: Ted Goldthorpe
 
Title: President

Signature Page
Guarantee and Collateral Agreement

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Schedule 1
NOTICE ADDRESSES OF GUARANTORS

Cook Inlet Energy, LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

East Tennessee Consultants, Inc.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

East Tennessee Consultants II, L.L.C.
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

Miller Rig & Equipment, LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

Miller Drilling, TN LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

Miller Energy GP, LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

Miller Energy Services, LLC
9721 Cogdill Road, Suite 302
Knoxville, TN 37932
Attn: General Counsel

Schedule 1 - 1
093331-3792-Active.15202978.6

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

Schedule 2
DESCRIPTION OF PLEDGED SECURITIES
Pledged Securities:
Owner
Issuer
Class of Stock or other Equity Interest
Ownership Interest/No. of Shares/Units
Certificated or Uncertificated
Miller Energy Resources, Inc.
Cook Inlet Energy, LLC
Membership interest in LLC
100%
Uncertificated
Miller Energy Resources, Inc.
East Tennessee Consultants, Inc.
Common Stock
1000 shares, 100%
Certificated (004)
Miller Energy Resources, Inc.
East Tennessee Consultants II, L.L.C.
Membership interest in LLC
100%
Uncertificated
Miller Energy Resources, Inc.
Miller Drilling, TN LLC
Membership interest in LLC
100%
Uncertificated
Miller Energy Resources, Inc.
Miller Energy Services, LLC
Membership interest in LLC
100%
Uncertificated
Miller Energy Resources, Inc.
Miller Energy GP, LLC
Membership interest in LLC
100%
Uncertificated
Miller Energy Resources, Inc.
Miller Rig & Equipment, LLC
Membership interest in LLC
100%
Uncertificated

Pledged Notes:
NONE.

Schedule 2 - 1
093331-3792-Active.15202978.6

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Schedule 3
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
GRANTOR
FILING OFFICE FOR UCC FINANCING STATEMENT(S)
Miller Energy Resources, Inc.
State of Tennessee Secretary of State
Cook Inlet Energy, LLC
Central UCC Office, Department of Natural Resources (Alaska)
East Tennessee Consultants, Inc.
State of Tennessee Secretary of State
East Tennessee Consultants II, L.L.C.
State of Tennessee Secretary of State
Miller Drilling, TN LLC
State of Tennessee Secretary of State
Miller Energy Services, LLC
State of Delaware Secretary of State
Miller Rig & Equipment, LLC
State of Delaware Secretary of State
Miller Energy GP, LLC
State of Delaware Secretary of State

Delivery to Administrative Agent of Pledged Securities
Owner
Issuer
Class of Stock or other Equity Interest
Ownership Interest/No. of Shares/Units
Certificated or Uncertificated
Miller Energy Resources, Inc.
East Tennessee Consultants, Inc.
Common Stock
1000 shares, 100%
Certificated (004)

Delivery to Administrative Agent of Possessory Collateral

Schedule 3 - 1
093331-3792-Active.15202978.6

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

Schedule 4
LEGAL NAME, JURISDICTION OF ORGANIZATION, ORGANIZATIONAL IDENTIFICATION NUMBER,
TAXPAYOR IDENTIFICATION NUMBER, LOCATION OF CHIEF EXECUTIVE OFFICE, PRIOR NAMES
AND PRIOR CHIEF EXECUTIVE OFFICE
Full Legal Name:
Miller Energy Resources, Inc.
Jurisdiction of Organization:
Tennessee
Organizational Identification Number:
TN Sec of State: 000047469, TN Franchise & Excise: 318131492, TN State
Unemployment: 01785271

Federal Tax Identification Number:
62-1028629
Executive Officer/Corporate Headquarters:
9721 Cogdill Road, Suite 302, Knoxville, TN 37932
Prior Names:
Miller Petroleum, Inc.
Prior Chief Executive Office:
3651 Baker HIghway, Huntsville, TN 37756

Full Legal Name:
Cook Inlet Energy, LLC
Jurisdiction of Organization:
Alaska
Organizational 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)
Federal Tax Identification Number:
27-0146643
Executive Officer/Corporate Headquarters:
601 W. 5th Avenue, Suite 310, Anchorage, AK 99503
Prior Names:
None
Prior Chief Executive Office:
4141 B Street, Suite 302, Anchorage, AK 99503

Full Legal Name:
East Tennessee Consultants, Inc.
Jurisdiction of Organization:
Tennessee
Organizational Identification Number:
Tennessee Secretary of State 000128322
Federal Tax Identification Number:
62-1163108
Executive Officer/Corporate Headquarters:
9534 Morgan County Highway, Sunbright, TN 37872
Prior Names:
None
Prior Chief Executive Office:
None

Full Legal Name:
East Tennessee Consultants II, L.L.C.
Jurisdiction of Organization:
Tennessee
Organizational Identification Number:
Tennessee Secretary of State 000322422
Federal Tax Identification Number:
62-1640107
Executive Officer/Corporate Headquarters:
9534 Morgan County Highway, Sunbright, TN 37872
Prior Names:
None
Prior Chief Executive Office:
None

Schedule 4 - 1
093331-3792-Active.15202978.6

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

Full Legal Name:
Miller Rig & Equipment, LLC
Jurisdiction of Organization:
Delaware
Organizational Identification Number:
DE 4613262
Federal Tax Identification Number:
26-363872
Executive Officer/Corporate Headquarters:
3651 Baker Highway, Huntsville, TN 37756
Prior Names:
None
Prior Chief Executive Office:
None

Full Legal Name:
Miller Drilling, TN LLC
Jurisdiction of Organization:
Tennessee
Organizational Identification Number:
TN Sec of State: 000581094; TN State Unemployment: 06246855
Federal Tax Identification Number:
26-2808891
Executive Officer/Corporate Headquarters:
3651 Baker Highway, Huntsville, TN 37756
Prior Names:
None
Prior Chief Executive Office:
None

Full Legal Name:
Miller Energy GP, LLC
Jurisdiction of Organization:
Delaware
Organizational Identification Number:
DE 4671347
Federal Tax Identification Number:
26-4590999
Executive Officer/Corporate Headquarters:
3651 Baker Highway, Huntsville, TN 37756
Prior Names:
None
Prior Chief Executive Office:
None

Full Legal Name:
Miller Energy Services, LLC
Jurisdiction of Organization:
Delaware
Organizational Identification Number:
DE 4613258
Federal Tax Identification Number:
26-3638670
Executive Officer/Corporate Headquarters:
3651 Baker Highway, Huntsville, TN 37756
Prior Names:
None
Prior Chief Executive Office:
None

Schedule 4 - 1

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

Schedule 5
COLLATERAL LOCATIONS
GRANTOR
COLLATERAL
COLLATERAL LOCATION OR PLACE OF BUSINESS (INCLUDING CHIEF EXECUTIVE OFFICE)
OWNER/LESSOR (IF LEASE)
Miller Energy Resources, Inc., Miller Drilling, TN LLC,
Miller Energy Services, LLC, Miller Rig & Equipment, LLC, Miller Energy GP, LLC
Equipment, Documents, Inventory
3651 Baker Highway, Huntsville, TN 37756
Owned
Miller Energy Resources, Inc.
Equipment, Instruments, Documents
9721 Cogdill Road, Suite 302, Knoxville, TN 37932
Lessor: Pellissippi Pointe II< LLC
Miller Energy Resources, Inc.
Equipment
670 Chicken Bristle Road, Robbins, TN 37852
Owned
Cook Inlet Energy, LLC
Equipment
601 W. 5th Avenue, Suite 310, Anchorage, AK 99501
Lessor: Peach Investments LLC
East Tennessee Consultants, Inc., East Tennessee Consultants II, L.L.C.
Equipment
9534 Morgan County Highway, Sunbright, TN 37872
Owned
Cook Inlet Energy, LLC
Inventory
Drift River Facility, Alaska, Township 6 North, Range 17 West. Sections 13 and
24, Seward Meridian
Lessor: Drift River Facility
Cook Inlet Energy, LLC
Inventory
CIPL Pipeline
 

Schedule 5 - 1
093331-3792-Active.15202978.6

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

Schedule 6
CERTAIN PROPERTY
AIRCRAFT
Loan Party
Type of Aircraft
Manufacturer Make and Model
Serial No.
N Number
Make and Model of Engines
Serial No. of Engines
Miller Energy Resources, Inc.
Jet
Hawker Siddeley BH 125-400A
NA-756
N624Mp
Honeywell TFE731-3C (two)
80254, 80250

VEHICLES

Loan Party
Type of Vehicle
Make and Model
Serial No.
State of Registration and Registration Number
State of Issuance of Certificate of Title
East Tennessee Consultants, Inc.
Pickup Truck
95 Chevy 2500
Truck #611
7GCGK24KOSE275969
H/181158
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
1999 Chev 3/4 ton P/U #615
1GCGK24U5XE243222
H/102792
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
1982 GMC P/U #692
1GTEK24L4CF71146
H181154
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
1982 GMC P/U #603
2GTEK34L3C1531590
H181153
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
2003 Chevy Silverado-Unit #620
1GCHK24U03E367669
H136128
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
2003 Chevy P/U-Unit #621
2GCEK19T731302543
H186733
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
2006 Chev Silverado PU #623
1GCHK29U76E13686
1H13144
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
2006 Chev Silverado PU #622
1GCHK29U56E151846
1H13143
Tennessee
East Tennessee Consultants, Inc.
Towed Trailer
25' gooseneck trailer #624
1H9FG25206M4139485
T922056
Tennessee
East Tennessee Consultants, Inc.
Lesabre
2002 Buick
#636
1G4HP54K72U294446
590-RNM
Tennessee
East Tennessee Consultants, Inc.
Water
Truck
1991 Mack water truck #637
2M2P264Y1MC009621
H902393
Tennessee
East Tennessee Consultants, Inc.
Pickup Truck
2008 Dodge Ram-150
Vanilla
#638
1D7HU18N58S584933
8H19734
Tennessee

Schedule 6 - 1
093331-3792-Active.15202978.6

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

East Tennessee Consultants, Inc.
Pickup Truck
2008 Dodge-Ram-150
Grey
#639
1D7HU18228J231223
8H19540
Tennessee
East Tennessee Consultants II, LLC
Winch Truck
1995 Ford Winch truck #692
1FDXF80C8SVA18334
H611778
Tennessee
East Tennessee Consultants II, LLC
Rig
1981 Ford W/S Meal Rig #693
1FDNR70U3BVJ37150
WDO229
Tennessee
East Tennessee Consultants, Inc.
Trailer
1998 Hurst Trailer
1H9T31623W1057204
T1959943
Tennessee
East Tennessee Consultants, Inc.
Pickup
Truck
03 Chevy 1500
4 Door
1GCGK13U53F237386
84H1378
Tennessee
East Tennessee Consultants, Inc.
Pickup
Truck
00 Chevy 1500
1GCEK19T6YE290293
84H1379
Tennessee
East Tennessee Consultants, Inc.
Pickup
Truck
03 Chevy 1500
1GCEK14T73Z319762
050H132
Tennessee
East Tennessee Consultants, Inc.
Truck
1996 Ford 350
Bucket Truck
1FDJF37H5TEB08603
053H1421
Tennessee
East Tennessee Consultants, Inc.
Pickup
Truck
1987 Ford 250
1FTHF2610HNA96921
J6204Y
Tennessee
Miller Energy Resources, Inc.
SUV
1994 Toyota Land Cruiser
JT3DJ81W0R0078084
52541204
Tennessee
 
 
 
 
 
 
Miller Energy Resources, Inc.
SUV
2001 Chevrolet Suburban
3GNFK16T41G270655
63838415
Tennessee
 
 
 
 
 
 
Miller Energy Resources, Inc.
SUV
2008 Cadillac Escalade
1GYFK66868R206381
86285815
Tennessee
Miller Energy Resources, Inc.
Truck
1987 Ford Vacuum Truck
1FDWK70U2HVA64583
75889684
Tennessee
Miller Energy Resources, Inc.
Truck
Ford 550
1FDAF567F6XEC20262
35596275
Georgia
[currently replacing certificate of title and transferring to TN]
Miller Energy Resources, Inc.
Sedan
2003 Mercedes SL500
WDBSK75F63F033772
79267126
Tennessee
Miller Energy Resources, Inc.
Truck
1993 Kodak Winch Truck
1GBL7H1M5PJ108728
6297955-01
Tennessee
Miller Energy Resources, Inc.
Bus
Bus Prevost Royal Motorcoach
2PCW33496Y1027084
80861250
Tennessee
Miller Energy Resources, Inc.
Truck
1992 International 4700
1HSSCNKN1NH409551
68911745
Tennessee
Miller Energy Resources, Inc.
Truck
1985 Int'l Truck (Kelso)
1HT2BDUR1FHA42923
87071721
Tennessee
Miller Energy Resources, Inc.
Truck
1995 GMB Topkick Dump Truck
1GDJC34K0SE506258
79267064
Tennessee
Miller Energy Resources, Inc.
All-Terrain Vehicle
2011 Polaris ATV RZRS4 EPS
4XAXY76A7BB072926
81868047
Tennessee

Schedule 6 - 1

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

Miller Energy Resources, Inc.
Truck
1991 International Truck
2HTTUGJT1MC046084
87339739
Tennessee
Miller Energy Resources, Inc.
Self-Propelled Rig
2007 Atlas Copco RD20 III
1CYDGV5887T047843
86323967
Tennessee
Miller Energy Resources, Inc.
Truck
1995 Ford Smeal 12R
1FTYS95W5SVA58433
79266692
Tennessee
Cook Inlet Energy LLC
Pickup Truck
1993 Ford F350
2FTJW36H8PLB01629
AK778828
[Transfer from Forcenergy to CIE pending]
Alaska
Cook Inlet Energy LLC
ATV
1999 Honda Fourtrax
47BTE2243X4004503
Certificate of Origin: 016871159
Alaska
Cook Inlet Energy LLC
Snowmobile
1999 SkiDoo Scandic
1430-00047
Certificate of Origin: B-0665014
Alaska
Cook Inlet Energy LLC
Crew Cab Flatbed Truck
2000 Ford F550
1FDAW57F31EB36746
AK894764
[Transfer from Forcenergy to CIE pending]
Alaska
Cook Inlet Energy LLC
Extended Cab Pickup
1997 Ford F250
1FTHX26F6VEC56000
AK1240999
[Transfer from Forcenergy to CIE pending]
Alaska
Cook Inlet Energy LLC
ATV
2001 Honda Rubicon
47BTE260314029254
Certificate of Origin 020365247
Alaska
Cook Inlet Energy LLC
16’ Spill Response Boat
Honda Jet Lowe Boat
OMCL0928J001
AK 1067360
Alaska
Cook Inlet Energy LLC
(Scout Lake Contractors)
Fuel Truck
1988 Int’l S1954
1HTLDZ5N7JH584462
AK993246
Alaska
Cook Inlet Energy LLC
Vac Truck
1974 Int’l (White)
25947DGA18253
AK 670271
Alaska
Cook Inlet Energy LLC
Vac Truck
2002 Freightliner
1FVHBXAK62HJ35014
AK2677139
Alaska
Cook Inlet Energy LLC
#2 Crew Cab Pickup
2002 Ford F350
1FTSW31F72EB31928
AK1173639
Alaska
Cook Inlet Energy LLC
#3 Crew Cab Pickup
2002 Ford F350
3FTSW31FX2MA14709
AK1173641
Alaska
Cook Inlet Energy LLC
#4 Crew Cab Pickup
2002 Ford F350
1FTSW31F02EB30720
AK1173638
Alaska
Cook Inlet Energy LLC
#5 Crew Cab Pickup
2002 Ford F350
1FTSW31F32EA97115
AK1173640
Alaska
Cook Inlet Energy, LLC
SUV
2011 Kia Sorento
5XYKTCA16BG127874
AK3596245
Alaska
Miller Energy Resources, Inc.
Truck
1986 Mack; Model R60, Body Type DS
1M2N179Y2GA004491
TITLE NO. 798172811
Tennessee
Miller Energy Resources, Inc.
Pickup Truck
2011 Landrover
SALMF1E42BA348454
82800074
Tennessee
Miller Petroleum Inc.
Pickup Truck
2010 Ford F150
1FTFW1EV3AFB86148
 80875305
Tennessee
Miller Energy Resources, Inc.
Crane
1985 Smeal CC
1CYDCG28XFT031802
75889628
Tennessee
Miller Energy Resources, Inc.
Pickup Truck
2008 Dodge Ram 1500
1D7HU18N58S605411
78193471
Tennessee
Miller Energy Resources, Inc.
Pickup Truck
2008 Dodge Ram 350
3D7MX48A78G137130
87502958
Tennessee

Schedule 6 - 1

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

Miller Energy Resources, Inc.
Pickup Truck
2003 Chevy Silverado
1gchk23133f190357
84134584
Tennessee
Miller Energy Resources, Inc.
Pickup Truck
2008 Ford F250
1FTSX21R88EA61415
83434524
Tennessee
Miller Energy Resources, Inc.
Vacuum Truck
1993 Kenworth
1XKWDB0X3PS585313
61600987
Tennessee
Miller Energy Resources, Inc.
Vacuum Truck
1986 Kenworth
2NKCL20X4GM329051
78132844
Tennessee
Miller Energy Resources, Inc.
Winch
Truck
2007 Sterling
2FWJA3CV57AW81930
86291057
Tennessee
Miller Energy Resources, Inc.
Winch Truck
2007 Sterling
2FWJA3CV77AW81931
86291056
Tennessee
Miller Energy Resources, Inc.
Winch
Truck
1995 Ford F70
1FDF70J9SVA732714
87066066
Tennessee
Miller Energy Resources, Inc.
Rig
1991 RD20
44KCD8488MWZ17393
86323968
Tennessee
Miller Energy Resources, Inc.
Truck
2001 Dodge Q35
1B7MC33691J590267
87906674
Tennessee
Cook Inlet Energy, LLC
Trailer
Altor Trailer for XQ350 Generator
1A9BS20261P450703
0203120402
Washington
Cook Inlet Energy, LLC
Trailer
Karavan Spill Response Boat Trailer
5KTBS191X1F02761
1067360
Alaska
Cook Inlet Energy, LLC
Pickup Truck
2005 Chevy Tool Box Truck
1GBJK34UX5E303007
3774145
Alaska
Cook Inlet Energy, LLC
Crew Cab Pick Up Truck
2008 Ford F350
1FTWW31R28ED84160
4239720
Alaska

Vehicles Subject to Optional Title with no Certificate of Title Currently
Present

Each of the following vehicles is believed to be subject to an Alaska titling
statute that permits but does not require titling of certain construction
equipment. No certificate of title is in the possession of any Borrower. It is
not known whether certificates of title have ever been issued for these
vehicles.

Loan Party
Type of Vehicle
Make and Model
Serial No.
State of Registration and Registration Number
State of Issuance of Certificate of Title
Cook Inlet Energy LLC
Bucket Loader
Caterpillar 966
1SL01399
N/A
N/A
Cook Inlet Energy LLC
Generator
Caterpillar XQ350
E46-JVN89
N/A
N/A

Vehicles with no Title Currently Present

The certificates of title regarding the following vehicles cannot be located. It
is not known at this time whether they are lost, misplaced, or were never
issued.

Loan Party
Type of Vehicle
Make and Model
Serial No.
State of Registration and Registration Number
State of Issuance of Certificate of Title
East Tennessee Consultants, Inc.
Bulldozer
John Deere 450E Dozer #619
TO450EC741418
N/A
N/A - Certificate of title lost or not currently available

Schedule 6 - 1

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

East Tennessee Consultants II, LLC
Grader
1957 Motor Grader #696
70D3602
N/A
N/A - Certificate of title lost or not currently available
East Tennessee Consultants II, LLC
Winch Truck
Winch truck #691
Unknown
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
Vulcan Trailers
Unknown
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
1979 Axtec 30' Trailer
Unknown
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
35 Ton Oil Field Lowboy Flatbed Trailer
Unknown
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Truck
1986 Mack R686ST
Unknown
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
Freehauf Lowboy Trailer
FW114584
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
1981 Dickerson
Oilfield Float
1D950TLD8BS002122
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy LLC
Spill Trailer with Spill Equipment in it
Spill Response Van
53126
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
Flatbed Trailer T-79
120151L
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy LLC
Vac Truck
Int’l 4070B
103322228
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy LLC
Mack Truck
End Dump
DML821SX001023
N/A
N/A - Certificate of title lost or not currently available
Miller Energy Resources, Inc.
Trailer
2011 Shorelander ATV Trailer
1MDFHAM10BA461727
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
#1 Portable Housing Unit
2 bedroom and Office
REMS12560401253
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
#2 Portable Housing Unit
2 bedroom and Office
REMS12560401254
N/A
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Actor Portable
Tools Storage
 
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Excavator
1994 Hitachi EX150
1333489
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Frost Fighter
Totem Diesel 500,000 BTU
1120046
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Frost Fighter Trailer
Totem Diesel 1,000,000 BTU
GJ513785
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Air Compressor
I/R 185
4FVCABAA41U319265
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Equipment Trailer
15 Ton
 
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Crawler with Winch
Caterpiller D6
 
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
International Dynamic Trailer with Loading Ramp
12,000 lbs
 
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Polaris 4x4 ATV
2013 Brutus HD
4XA2M9JD0D7331801
 
N/A - Certificate of title lost or not currently available
Cook Inlet Energy, LLC
Polaris 4x4 ATV
2013 Brutus HD
4XA2M9JDXD7330106
 
N/A - Certificate of title lost or not currently available

Schedule 6 - 1

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

Schedule 7

SECURITIES ACCOUNTS, COMMODITY ACCOUNTS AND DEPOSIT ACCOUNTS
MILLER ENERGY RESOURCES
 BANK ACCOUNT LISTING 1/14/14
 
 
 
 
 
BANK NAME
ACCT NAME
ACCT TYPE
BANK ACCT #
GL ACCT #
GL COMPANY
Balance 1/13/14
SunTrust
Miller Energy Income 2009-A LP
Checking
1000096035075
1020
00MEI
             404.19
Fifth Third Bank
Miller Energy Resources INC Tennessee Operations
Checking
7238394311 & 7239738250
1012
00MPI
        25,893.33
First National Bank Oneida
Miller Energy Resources INC
Checking
717553
1015
00MPI
          1,395.09
SunTrust
Miller Energy Resources INC
Checking
1000110221859
1020
00MPI
   2,720,516.06
SunTrust
Miller Petroleum INC
CD
17545176068
1029
00MPI
      100,392.55
Plains Capital Bank
Miller Petroleum INC
Checking
3100036882
1031
00MPI
        30,086.37
Fifth Third Bank
Miller Energy Resources INC
Checking
7240059779
1040
00MPI
          8,333.81
First National Bank Oneida
Miller Energy Resources INC
CD
56739
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56943
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
57016
1910
00MPI
          1,002.80
First National Bank Oneida
Miller Energy Resources INC
CD
57039
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
57107
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
57111
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Services Inc.
CD
43904
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
56150
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
56290
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
56303
1910
00MPI
          1,546.73
First National Bank Oneida
Miller Energy Resources INC
CD
57146
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Services Inc.
CD
87035
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
6743
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7085368
1910
00MPI
          1,023.77
First National Bank Oneida
Miller Services Inc.
CD
7086267
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Services Inc.
CD
56506
1910
00MPI
          1,588.57

Schedule 7 - 1
093331-3792-Active.15202978.6

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

First National Bank Oneida
Miller Services Inc.
CD
7096910
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
7097629
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Services Inc.
CD
56508
1910
00MPI
          1,588.57
First National Bank Oneida
Miller Energy Resources INC
CD
56533
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
56582
1910
00MPI
          1,002.27
First National Bank Oneida
Miller Services Inc.
CD
56607
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56641
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56674
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56707
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56708
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
57166
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
57179
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
6704
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
87232
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87273
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87272
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87318
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87385
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87480
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
88154
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
88424
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
88425
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
88427
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
88423
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56753
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56824
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
56889
1910
00MPI
          1,002.15
First National Bank Oneida
Miller Energy Resources INC
CD
56914
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
87170
1910
00MPI
          1,000.00

Schedule 7 - 1

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

First National Bank Oneida
Miller Energy Resources INC
CD
6707
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
6708
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
6709
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
88426
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
6970
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7067
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7079
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7359
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7394
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Energy Resources INC
CD
7100597
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Energy Resources INC
CD
7101330
1910
00MPI
          1,000.00
First National Bank Oneida
Miller Services Inc.
CD
547806359
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
547806407
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
547806471
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
547806477
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
547806479
1910
00MPI
          1,500.00
First National Bank Oneida
Miller Services Inc.
CD
547806666
1910
00MPI
          1,500.00
SunTrust
Miller Energy Resources INC
CD
17545724928
1910
00MPI
        20,021.77
SunTrust
Miller Energy Resources INC
CD
17545724931
1910
00MPI
        20,021.77
SunTrust
Miller Energy Resources INC
CD
17545724944
1910
00MPI
        20,021.77
SunTrust
Miller Energy Resources INC
CD
17545835901
1910
00MPI
          4,803.20
SunTrust
Miller Petroleum INC
Trust Acct
7935708
1910
00MPI
        11,100.00
SunTrust
Miller Petroleum INC
CD
17545176039
1920
00MPI
      180,706.58
SunTrust
Cook Inlet Energy LLC
Checking
1000096036123
1010
CIE12
0
Fifth Third
Miller Energy Resources Alaska Operations
Checking
7238394329
1012
CIE12
   5,421,070.59
First National Bank Alaska
Cook Inlet Energy LLC
Checking
30830376
1030
CIE12
      253,327.39
First National Bank Alaska
Cook Inlet Energy LLC
Savings
70579842
1040
CIE12
          7,223.41
First National Bank Alaska
Cook Inlet Energy LLC
Checking
30898175
1060
CIE12
 closed account

Schedule 7 - 1

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

First National Bank Alaska
Cook Inlet Energy LLC
Checking
30925549
1080
CIE12
        15,729.89
First National Bank Alaska
Cook Inlet Energy LLC
Checking
70673652
1901
CIE12
      585,492.08
First National Bank Alaska
Cook Inlet Energy LLC
CD
61212870
1901
CIE12
      200,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61225560
1901
CIE12
      324,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61237836
1901
CIE12
   1,000,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61228422
1910
CIE12
 Closed
First National Bank Alaska
Cook Inlet Energy LLC
CD
61231842
1910
CIE12
 Closed
First National Bank Alaska
Cook Inlet Energy LLC
CD
61222806
1910
CIE12
      225,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61229052
1910
CIE12
        25,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61285577
1910
CIE12
        31,250.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61228908
1910
CIE12
        50,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61235586
1910
CIE12
        12,500.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61227306
1910
CIE12
      250,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61440140
1910
CIE13
   1,200,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61212852
1920
CIE12
      500,000.00
First National Bank Alaska
Cook Inlet Energy LLC
CD
61212843
1920
CIE12
      100,000.00
Progressive Savings Bank
East Tennessee Consultants INC
Checking
2734044
1007
EINC0
        72,495.48
Citizens Bank
East Tennessee Consultants INC PDC Oil Account
Checking
0015990
1008
EINC0
      230,672.31
Citizens Bank
East Tennessee Consultants INC Oil Account
Checking
0016006
1009
EINC0
      276,893.51
SunTrust
East Tennessee Consultants INC
Checking
0007020490715
1010
EINC0
             354.86
Regions Bank
East Tennessee Consultants INC
Checking
0082627428
1030
EINC0
      124,029.38
Regions Bank
East Tennessee Consultants INC
Checking
93325622
1040
EINC0
      468,334.71
Progressive Savings Bank
East Tennessee Consultants INC
CD
2306328
1815
EINC0
        10,000.00
Progressive Savings Bank
East Tennessee Consultants INC
CD
2308223
1816
EINC0
        60,000.00
Progressive Savings Bank
East Tennessee Consultants LLC
CD
2306166
1815
ELLC0
        10,000.00
Progressive Savings Bank
East Tennessee Consultants LLC
CD
2308247
1816
ELLC0
        70,000.00
SunTrust
Miller Drilling TN LLC
Checking
1000112660484
1010
MDT00
0
First National Bank Oneida
Miller Drilling TN LLC
Checking
724856
1050
MDT00
      151,212.20

Schedule 7 - 1

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

First National Bank Oneida
Miller Energy Services LLC
Checking
733063
1010
MES00
634.05

Schedule 7 - 1

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

Schedule 8

LETTERS OF CREDIT

NONE

Schedule 8 - 1
093331-3792-Active.15202978.6

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

Schedule 9

INTELLECTUAL PROPERTY

PATENTS AND PATENT LICENSES
NONE

TRADEMARKS AND TRADEMARK LICENSES
Mark
Description
Type
MILLER ENERGY RESOURCES
Text mark
Common-law
[millgraphic1.jpg]
Miller Energy Resources flame logo
Common-law
EAST TENNESSEE CONSULTANTS
Text mark
Common-law
COOK INLET ENERGY
Text mark
Common-law
MILLER DRILLING
Text mark
Common-law
[ciegraphic1.jpg]

Cook Inlet Energy logo
Common -law

COPYRIGHTS
NONE

IP LICENSES

NONE

Schedule 9

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

Schedule 10

DRILLING RIGS

Loan Party
Type of Rig
Manufacturer Make and Model
Engine Capacity
Miller Energy Resources, Inc.
Platform Drilling Rig (up to 20,000 ft)
1320 National Drawworks Custom Rig (Rig #35 - currently located in Alaska)
2000 Horsepower
Miller Energy Resources, Inc.*
Drilling rig (up to 6000 ft)
Atlas Copco RD20 rig (Rig #34 - currently located in Alaska)
 760 Horsepower
Miller Energy Resources, Inc.
Drilling rig (up to 5500 ft)
INGERSOL Rand Model RD20 long tower derrick
 700 Horsepower
Miller Energy Resources, Inc.
Service rig (up to 6000 ft)
1974 Int’l Witchtek rig
 175 Horsepower

* Indicates Rig is subject to Certificate of Title.

Workover rigs are not included on this schedule.     

Schedule 10

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

SCHEDULE 11

COMMERCIAL TORT CLAIMS
NONE.

Schedule 11