creditagreement.htm


    
      

    


    $100,000,000

    


    CREDIT
AGREEMENT

    


    
      	 	 
      	 


    

    


    


    BERRY
PETROLEUM COMPANY

    as
Borrower

    


    and

    


    SOCIETE GENERALE

    as
Administrative Agent

    


    SG
AMERICAS SECURITIES, LLC and BNP PARIBAS SECURITIES CORP.

    as
Co-Lead Arrangers and Joint Book Runners

    


    BNP PARIBAS

    as
Documentation Agent

    


    and

    


    CERTAIN
FINANCIAL INSTITUTIONS

    as
Lenders

    


    
      	 	 
      	 


    

    


    


    July 30,
2008


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

     

    
      	 
      	 
      	 
      	
              Page

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      I - - Definitions and References

            	
              1

            
	 
      	
              Section
      1.1.

            	
              Defined
      Terms

            	
              1

            
	 
      	
              Section
      1.2.

            	
              Exhibits
      and Schedules; Additional Definitions

            	
              21

            
	 
      	
              Section
      1.3.

            	
              Amendment
      of Defined Instruments

            	
              21

            
	 
      	
              Section
      1.4.

            	
              References
      and Titles

            	
              21

            
	 
      	
              Section
      1.5.

            	
              Calculations
      and Determinations

            	
              21

            
	 
      	
              Section
      1.6.

            	
              Joint
      Preparation; Construction of Indemnities and Releases

            	
              22

            
	 
      	 
      	 
      	
               
      

            
	
              ARTICLE
      II - - The Loans and Letters of Credit

            	
              22

            
	 
      	
              Section
      2.1.

            	
              Commitments
      to Lend; Notes

            	
              22

            
	 
      	
              Section
      2.2.

            	
              Requests
      for New Loans

            	
              22

            
	 
      	
              Section
      2.3.

            	
              Continuations
      and Conversions of Existing Loans

            	
              23

            
	 
      	
              Section
      2.4.

            	
              Use
      of Proceeds

            	
              24

            
	 
      	
              Section
      2.5.

            	
              Interest
      Rates and Fees

            	
              24

            
	 
      	
              Section
      2.6.

            	
              Optional
      Prepayments

            	
              25

            
	 
      	
              Section
      2.7.

            	
              Mandatory
      Prepayments

            	
              25

            
	 
      	
              Section
      2.8.

            	
              Decrease
      in Aggregate Commitment

            	
              26

            
	 
      	
              Section
      2.9.

            	
              Obligations
      of Lenders Several

            	
              26

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      III - - Payments to Lenders

            	
              26

            
	 
      	
              Section
      3.1.

            	
              General
      Procedures

            	
              26

            
	 
      	
              Section
      3.2.

            	
              Increased
      Costs

            	
              27

            
	 
      	
              Section
      3.3.

            	
              Illegality

            	
              28

            
	 
      	
              Section
      3.4.

            	
              Funding
      Losses

            	
              28

            
	 
      	
              Section
      3.5.

            	
              Taxes

            	
              29

            
	 
      	
              Section
      3.6.

            	
              Alternative
      Rate of Interest

            	
              30

            
	 
      	
              Section
      3.7.

            	
              Mitigation
      Obligations; Replacement of Lenders

            	
              30

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      IV - - Conditions Precedent to Lending

            	
              32

            
	 
      	
              Section
      4.1.

            	
              Documents
      to be Delivered

            	
              32

            
	 
      	
              Section
      4.2.

            	
              Additional
      Conditions Precedent

            	
              35

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      V - - Representations and Warranties

            	
              36

            
	 
      	
              Section
      5.1.

            	
              No
      Default

            	
              36

            
	 
      	
              Section
      5.2.

            	
              Organization
      and Good Standing

            	
              36

            
	 
      	
              Section
      5.3.

            	
              Authorization

            	
              36

            
	 
      	
              Section
      5.4.

            	
              No
      Conflicts or Consents

            	
              36

            
	 
      	
              Section
      5.5.

            	
              Enforceable
      Obligations

            	
              37

            
	 
      	
              Section
      5.6.

            	
              Initial
      Financial Statements

            	
              37

            
	 
      	
              Section
      5.7.

            	
              Other
      Obligations and Restrictions

            	
              37

            
	 
      	
              Section
      5.8.

            	
              Full
      Disclosure

            	
              37

            
	 
      	
              Section
      5.9.

            	
              Litigation

            	
              38

            
	 
      	
              Section
      5.10.

            	
              Labor
      Disputes and Acts of God

            	
              38

            
	 
      	
              Section
      5.11.

            	
              ERISA
      Plans and Liabilities

            	
              38

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	 
      	
              Section
      5.12.

            	
              Environmental
      and Other Laws

            	
              39

            
	 
      	
              Section
      5.13.

            	
              Names
      and Places of Business

            	
              39

            
	 
      	
              Section
      5.14.

            	
              Borrower's
      Subsidiaries

            	
              39

            
	 
      	
              Section
      5.15.

            	
              Government
      Regulation

            	
              40

            
	 
      	
              Section
      5.16.

            	
              Solvency

            	
              40

            
	 
      	
              Section
      5.17.

            	
              Title
      to Properties; Licenses

            	
              40

            
	 
      	
              Section
      5.18.

            	
              Leases
      and Contracts; Performance of Obligations

            	
              40

            
	 
      	
              Section
      5.19.

            	
              Gas
      Imbalances, Prepayments

            	
              41

            
	 
      	
              Section
      5.20.

            	
              Operation
      of Mineral Interests

            	
              41

            
	 
      	
              Section
      5.21.

            	
              Regulation
      U

            	
              42

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      VI - - Affirmative Covenants of Borrower

            	
              42

            
	 
      	
              Section
      6.1.

            	
              Payment
      and Performance

            	
              42

            
	 
      	
              Section
      6.2.

            	
              Books,
      Financial Statements and Reports

            	
              42

            
	 
      	
              Section
      6.3.

            	
              Other
      Information and Inspections

            	
              45

            
	 
      	
              Section
      6.4.

            	
              Notice
      of Material Events and Change of Address

            	
              45

            
	 
      	
              Section
      6.5.

            	
              Maintenance
      of Properties

            	
              46

            
	 
      	
              Section
      6.6.

            	
              Maintenance
      of Existence and Qualifications

            	
              46

            
	 
      	
              Section
      6.7.

            	
              Payment
      of Trade Liabilities, Taxes, etc

            	
              46

            
	 
      	
              Section
      6.8.

            	
              Insurance

            	
              46

            
	 
      	
              Section
      6.9.

            	
              Performance
      on Borrower's Behalf

            	
              47

            
	 
      	
              Section
      6.10.

            	
              Interest

            	
              47

            
	 
      	
              Section
      6.11.

            	
              Compliance
      with Agreements and Law

            	
              47

            
	 
      	
              Section
      6.12.

            	
              Environmental
      Matters; Environmental Reviews

            	
              47

            
	 
      	
              Section
      6.13.

            	
              Evidence
      of Compliance

            	
              48

            
	 
      	
              Section
      6.14.

            	
              Bank
      Accounts; Offset

            	
              48

            
	 
      	
              Section
      6.15.

            	
              Guaranties
      of Borrower's Subsidiaries

            	
              48

            
	 
      	
              Section
      6.16.

            	
              Mortgaged
      Property Covenants

            	
              48

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      VII - - Negative Covenants of Borrower

            	
              49

            
	 
      	
              Section
      7.1.

            	
              Indebtedness

            	
              49

            
	 
      	
              Section
      7.2.

            	
              Limitation
      on Liens

            	
              49

            
	 
      	
              Section
      7.3.

            	
              Hedging
      Contracts

            	
              50

            
	 
      	
              Section
      7.4.

            	
              Limitation
      on Mergers, Issuances of Securities

            	
              52

            
	 
      	
              Section
      7.5.

            	
              Limitation
      on Sales of Property

            	
              52

            
	 
      	
              Section
      7.6.

            	
              Limitation
      on Dividends, Stock Repurchases and Subordinated Debt

            	
              53

            
	 
      	
              Section
      7.7.

            	
              Limitation
      on Acquisitions, Investments; and New Businesses

            	
              53

            
	 
      	
              Section
      7.8.

            	
              Limitation
      on Credit Extensions

            	
              54

            
	 
      	
              Section
      7.9.

            	
              Transactions
      with Affiliates

            	
              54

            
	 
      	
              Section
      7.10.

            	
              Prohibited
      Contracts

            	
              54

            
	 
      	
              Section
      7.11.

            	
              Current
      Ratio

            	
              55

            
	 
      	
              Section
      7.12.

            	
              EBITDAX
      to Total Funded Debt Ratio

            	
              55

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      VIII - - Events of Default and Remedies

            	
              55

            
	 
      	
              Section
      8.1.

            	
              Events
      of Default

            	
              55

            
	 
      	
              Section
      8.2.

            	
              Remedies

            	
              57

            
	 
      	
              Section
      8.3.

            	
              Application
      of Proceeds After Acceleration

            	
              58

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    
      	
              ARTICLE
      IX - - Administrative Agent

            	
              58

            
	 
      	
              Section
      9.1.

            	
              Appointment
      and Authority

            	
              58

            
	 
      	
              Section
      9.2.

            	
              Exculpation
      Provisions

            	
              58

            
	 
      	
              Section
      9.3.

            	
              Reliance
      by Administrative Agent

            	
              59

            
	 
      	
              Section
      9.4.

            	
              Non-Reliance
      on Administrative Agent and Other Lenders

            	
              59

            
	 
      	
              Section
      9.5.

            	
              Rights
      as Lender

            	
              60

            
	 
      	
              Section
      9.6.

            	
              Sharing
      of Set-Offs and Other Payments

            	
              60

            
	 
      	
              Section
      9.7.

            	
              Investments

            	
              60

            
	 
      	
              Section
      9.8.

            	
              Resignation
      of Administrative Agent

            	
              61

            
	 
      	
              Section
      9.9.

            	
              Delegation
      of Duties

            	
              61

            
	 
      	
              Section
      9.10.

            	
              No
      Other Duties, etc

            	
              61

            
	 
      	
              Section
      9.11.

            	
              Administrative
      Agent May File Proofs of Claim

            	
              62

            
	 
      	
              Section
      9.12.

            	
              Guaranty
      Matters

            	
              62

            
	 
      	 
      	 
      	 
      
	
              ARTICLE
      X - - Miscellaneous

            	
              62

            
	 
      	
              Section
      10.1.

            	
              Waivers
      and Amendments; Acknowledgments

            	
              62

            
	 
      	
              Section
      10.2.

            	
              Survival
      of Agreements; Cumulative Nature

            	
              64

            
	 
      	
              Section
      10.3.

            	
              Notices;
      Effectiveness; Electronic Communication

            	
              64

            
	 
      	
              Section
      10.4.

            	
              Payment
      of Expenses; Indemnity

            	
              65

            
	 
      	
              Section
      10.5.

            	
              Successors
      and Assigns; Assignments

            	
              67

            
	 
      	
              Section
      10.6.

            	
              Confidentiality

            	
              69

            
	 
      	
              Section
      10.7.

            	
              Governing
      Law; Submission to Process

            	
              70

            
	 
      	
              Section
      10.8.

            	
              Limitation
      on Interest

            	
              70

            
	 
      	
              Section
      10.9.

            	
              Termination;
      Limited Survival

            	
              70

            
	 
      	
              Section
      10.10.

            	
              Severability

            	
              71

            
	 
      	
              Section
      10.11.

            	
              Counterparts;
      Fax

            	
              71

            
	 
      	
              SECTION
      10.12.

            	
              WAIVER
      OF JURY TRIAL, PUNITIVE DAMAGES, ETC

            	
              71

            
	 
      	
              Section
      10.13.

            	
              USA
      Patriot Act

            	
              72

            


    

    

      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

    Schedules and
Exhibits:

    


    
      	
              Schedule
      1

            	
              -

            	 	
              Lenders
      Schedule

            
	
              Schedule
      2

            	
              -

            	 	
              Insurance
      Schedule

            
	
              Schedule
      3

            	
              -

            	 	
              Subject
      Drilling Rigs

            
	
              Schedule
      4

            	
              -

            	 	
              Addresses
      of Lenders for Notices

            
	 
      	 
      	 	 
      
	
              Exhibit
      A

            	
              -

            	 	
              Promissory
      Note

            
	
              Exhibit
      B

            	
              -

            	 	
              Borrowing
      Notice

            
	
              Exhibit
      C

            	
              -

            	 	
              Continuation/Conversion
      Notice

            
	
              Exhibit
      D

            	
              -

            	 	
              Compliance
      Certificate

            
	
              Exhibit
      E

            	
              -

            	 	
              Opinion
      of Counsel for Restricted Persons

            
	
              Exhibit
      F

            	
              -

            	 	
              Assignment
      and Assumption Agreement

            


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    CREDIT
AGREEMENT

     

     

    THIS
CREDIT AGREEMENT is made as of July 30, 2008, by and among BERRY PETROLEUM
COMPANY, a Delaware corporation (herein called "Borrower"), SOCIETE
GENERALE, individually and as administrative agent (herein called "Administrative
Agent"), and the Lenders referred to below.

     

    Borrower,
Lenders, and Administrative Agent hereby agree as follows:

     

     

    ARTICLE I
- - Definitions and
References

     

    Section
1.1.       Defined
Terms.  As used in this Agreement, each of the following terms
has the meaning given to such term in this Section 1.1 or in the sections and
subsections referred to below:

     

    "Act" has the meaning
given to such term in Section 10.13.

     

    "Adjusted Base Rate"
means, for any day, the Base Rate plus the Base Rate Margin for such day, provided that the
Adjusted Base Rate charged by any Person shall never exceed the Highest Lawful
Rate.

     

    "Adjusted EBITDAX"
means, for any period, EBITDAX for such period adjusted (a) as permitted and in
accordance with Article 11 of Regulation S-X promulgated by the SEC, and (b) to
give effect to any acquisition or divestiture made by Borrower or any of its
Consolidated subsidiaries during such period as if such transactions had
occurred on the first day of such period, regardless of whether the effect is
positive or negative.

     

    "Adjusted Eurodollar
Rate" means, for any Eurodollar Loan for any day during any Interest
Period therefor, the rate per annum equal to the sum of (a) the Eurodollar
Margin for such day plus (b) the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by Administrative Agent to be equal to
the quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar
Loan for such Interest Period by (ii) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period, provided that no
Adjusted Eurodollar Rate charged by any Person shall ever exceed the Highest
Lawful Rate.  The Adjusted Eurodollar Rate for any Eurodollar Loan
shall change whenever the Eurodollar Margin or the Reserve Requirement
changes.

     

    "Administrative Agent"
means SociEtE GEnErale, as Administrative Agent hereunder, and its
successors in such capacity.

     

    "Administrative
Questionnaire" means an Administrative Questionnaire in a form supplied
by Administrative Agent.

     

    "Affiliate" means, as
to any Person, each other Person that directly or indirectly (through one or
more intermediaries or otherwise) controls, is controlled by, or is under common
control with, such Person.  A Person shall be deemed to be "controlled
by" any other Person if such other Person possesses, directly or indirectly,
power


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    (a)           to
vote 10% or more of the Equity Interests in such Person (on a fully diluted
basis) having ordinary voting power for the election of directors or similar
managing group; or

     

    (b)           to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

     

    "Aggregate Commitment"
means the aggregate amount of the Commitments of the Lenders; provided that in no
event shall the Aggregate Commitment exceed the Maximum Credit
Amount.

     

    "Agreement" means this
Credit Agreement.

     

    "Applicable Lending
Office" means, with respect to each Lender, such Lender's Domestic
Lending Office in the case of Base Rate Loans and such Lender's Eurodollar
Lending Office in the case of Eurodollar Loans.

     

    "Approved Fund" means
any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender.

    


    "Assignment and
Assumption" means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.5), and accepted by Administrative Agent, in
substantially the form of Exhibit F or any other form approved by Administrative
Agent.

     

    "Availability" means
on any day during the Commitment Period, the unused portion of the Aggregate
Commitment, determined for such day by deducting the Facility Usage from the
Aggregate Commitment.

     

    "Base Rate" means,
for any day, the rate per annum equal to the higher of (a) the Federal Funds
Rate for such day plus one-half of one percent (0.5%) and (b) the Prime Rate for
such day.  Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate.  As used in this
definition, "Prime
Rate" means, at any time, the per annum rate of interest most recently
announced within Societe Generale at its principal office in New York, New York
as its Prime Rate, with the understanding that Societe Generale's Prime Rate is
one of its base rates and serves as the basis upon which effective rates of
interest are calculated for those loans making reference thereto, and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Societe Generale may designate.  Each
change in the Prime Rate will be effective on the day the change is announced
within Societe Generale.

     

    "Base Rate Loan" means
a Loan which does not bear interest at the Adjusted Eurodollar
Rate.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    "Base Rate Margin"
means on any day (a) on or before October 13, 2008, 4.00% per annum, and (b)
after October 13, 2008, 4.50% per annum.

     

    "Borrowing" means (a)
a borrowing of new Loans of a single Type, and in the case of Eurodollar Loans,
with the same Interest Period, pursuant to Section 2.2, or (b) a Continuation or
Conversion of existing Loans into a single Type (and, in the case of Eurodollar
Loans, with the same Interest Period) pursuant to Section 2.3.

     

    "Borrowing Notice"
means a written or telephonic request, or a written confirmation, made by
Borrower which meets the requirements of Section 2.2.

     

    "Business Day" means a
day, other than a Saturday or Sunday, on which commercial banks are open for
business with the public in New York, New York.  Any Business Day in
any way relating to Eurodollar Loans (such as the day on which an Interest
Period begins or ends) must also be a day on which, in the judgment of
Administrative Agent, significant transactions in dollars are carried out in the
interbank eurocurrency market.

     

    "Capital Lease" means
a lease with respect to which the lessee is required concurrently to recognize
the acquisition of an asset and the incurrence of a liability in accordance with
GAAP.

     

    "Capital Lease
Obligation" means, with respect to any Person and a Capital Lease, the
amount of the obligation of such Person as the lessee under such Capital Lease
which should, in accordance with GAAP, appear as a liability on the balance
sheet of such Person.

     

    "Capital Markets
Event" means (a) the consummation by Borrower of a public or private
offering of any of its Equity Interest or (b) the issuance by Borrower of any
high yield public or private notes in any amount.

     

    "Cash Equivalents"
means Investments in:

     

    (a)           marketable
obligations, maturing within twelve months after acquisition thereof, issued or
unconditionally guaranteed by the United States of America or an instrumentality
or agency thereof and entitled to the full faith and credit of the United States
of America;

     

    (b)           demand
deposits, and time deposits (including certificates of deposit) maturing within
twelve months from the date of deposit thereof, with any office of any Lender or
with a domestic office of any national or state bank or trust company which is
organized under the Laws of the United States of America or any state therein,
which has capital, surplus and undivided profits of at least $500,000,000, and
whose long term certificates of deposit are rated at least A2 by Moody's or A by
S & P;

     

    (c)           repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in subsection (a) above entered into with any commercial
bank meeting the specifications of subsection (b) above;

     

    (d)           open
market commercial paper, maturing within 270 days after acquisition thereof,
which are rated at least P-1 by Moody's or A-1 by S & P;
and


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (e)           money
market or other mutual funds substantially all of whose assets comprise
securities of the types described in subsections (a) through (d)
above.

     

    "Change in Law" means
the occurrence, after the date of this Agreement, of any of the following: (a)
the adoption or taking effect of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.

     

    "Change of Control"
means the occurrence of either of the following events: (a) any Person or two or
more Persons acting as a group shall acquire beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Securities Act of 1934, as amended,
and including holding proxies to vote for the election of directors other than
proxies held by Borrower's management or their designees to be voted in favor of
Persons nominated by Borrower's Board of Directors) of 30% or more of the
outstanding voting securities of Borrower, measured by voting power (including
both common stock and any preferred stock or other equity securities entitling
the holders thereof to vote with the holders of common stock in elections for
directors of Borrower) or (b) one-third or more of the directors of Borrower
shall consist of Persons not nominated by Borrower's Board of Directors (not
including as Board nominees any directors which the Board is obligated to
nominate pursuant to shareholders agreements, voting trust arrangements or
similar arrangements).

     

    "Closing Date" means
the date on which all of the conditions precedent set forth in Section 4.1 and
Section 4.2 shall have been satisfied or waived.

     

    "Commitment" means,
for each Lender, the obligation of such Lender to make Loans to Borrower in an
aggregate amount not exceeding the amount set forth on the Lenders Schedule or
as set forth in any Assignment and Assumption relating to any assignment that
has become effective pursuant to Section 10.5, as such amount may be modified
from time to time pursuant to the terms hereof; provided that no
Lender's Commitment shall ever exceed such Lender's Percentage Share of the
Aggregate Commitment.

     

    "Commitment Fee Rate"
means, on any day, 0.50% per annum.

     

    "Commitment Period"
means the period from and including the Closing Date until the Maturity Date
(or, if earlier, the day on which the obligations of Lenders to make Loans
hereunder have been terminated or the Notes first become due and payable in
full).

     

    "Compliance
Certificate" means a compliance certificate in the form of the attached
Exhibit D signed by the Chief Financial Officer, Treasurer or Controller of
Borrower.

     

    "Consolidated" refers
to the consolidation of any Person, in accordance with GAAP, with its properly
consolidated subsidiaries.  References herein to a Person's
Consolidated financial statements, financial position, financial condition,
liabilities, etc. refer to the consolidated financial statements, financial
position, financial condition, liabilities, etc. of such Person and its properly
consolidated subsidiaries.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    "Continuation" shall
refer to the continuation pursuant to Section 2.3 hereof of a Eurodollar Loan as
a Eurodollar Loan from one Interest Period to the next Interest
Period.

     

    "Continuation/Conversion
Notice" means a written or telephonic request, or a written confirmation,
made by Borrower which meets the requirements of Section 2.3.

     

    "Conversion" shall
refer to a conversion pursuant to Section 2.3 or ARTICLE III of one Type of Loan
into another Type of Loan.

     

    "Core Acquisitions and
Investments" means (i) acquisitions of Mineral Interests and acquisitions
of assets used in the producing, drilling, transportation, processing, refining
or marketing of petroleum products that are related to Borrower's producing
Mineral Interests, and (ii) acquisitions of or Investments in Persons engaged
primarily in the business of acquiring, developing and producing Mineral
Interests or transporting, processing, refining or marketing petroleum products
that are related to Borrower's producing Mineral Interests; provided that with
respect to any acquisition or Investment described in this clause (ii), either
(A) immediately after making such acquisition or Investment, Borrower shall own
at least fifty-one percent (51%) of the Equity Interests of such Person,
measured by voting power, or (B) such Person shall not be a publicly traded
entity and such acquisition or Investment shall be related to the business and
operations of Borrower or one of its Subsidiaries.

     

    "Current Assets" means
the sum of the current assets of Borrower and its Consolidated Subsidiaries at
such time, plus
the Availability at such time, but excluding, for purposes of this definition
any non-cash gains for any Hedging Contract resulting from the requirements at
such time of SFAS 133 or any replacement accounting standard.

     

    "Current Liabilities"
means the current liabilities of Borrower and its Consolidated Subsidiaries at
such time, but excluding for purposes of this definition, (i) any non-cash
losses or charges on any Hedging Contract resulting from the requirement at such
time of SFAS 133 or any replacement accounting standard and (ii) current
maturities of the Obligations.

     

    "Default" means any
Event of Default and any default, event or condition which would, with the
giving of any requisite notices and the passage of any requisite periods of
time, constitute an Event of Default.

     

    "Default Rate" means,
at the time in question (a) with respect to any Base Rate Loan, the rate per
annum equal to three percent (3%) above the Adjusted Base Rate then in effect
and (b) with respect to any Eurodollar Loan, the rate per annum equal to three
percent (3%) above the Adjusted Eurodollar Rate then in effect for such Loan,
provided in
each case that no Default Rate charged by any Person shall ever exceed the
Highest Lawful Rate.

     

    "Disclosure Letter"
means the letter of even date with the Agreement from Borrower to the
Agent.

     

    "Disclosure Report"
means either a notice given by Borrower under Section 6.4 or a certificate given
by Borrower's Chief Financial Officer under Section 6.2(b).


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    "Dividend" means any
dividend or other distribution made by a Restricted Person on or in respect of
any stock, partnership interest, or other equity interest in such Restricted
Person or any other Restricted Person (including any option or warrant to buy
such an equity interest), excluding Stock Repurchases.

     

    "Domestic Lending
Office" means, (a) with respect to any Lender, the office of such Lender
specified as its "Domestic Lending Office" below its name on the Lenders
Schedule, or such other office as such Lender may from time to time specify to
Borrower and Administrative Agent and (b) with respect to Administrative Agent,
the office, branch, or agency through which it administers this
Agreement.

     

    "Domestic Subsidiary"
means any Subsidiary that is organized under the laws of any political
subdivision of the United States.

     

    "EBITDAX" means, for
any period, the sum of (without duplication, and without giving effect to any
extraordinary losses or gains during such period) the following determined on a
Consolidated basis (1) Net Income during such period, plus (2) all interest
paid or accrued during such period on Indebtedness (including amortization of
original issue discount and the interest component of any deferred payment
obligations and capital lease obligations) which was deducted in determining
such Net Income, plus (3) all income
taxes which were deducted in determining such Net Income, plus (4) all
depreciation, amortization (including amortization of goodwill and debt issue
costs), depletion, accretion and other non-cash charges (including any provision
for the reduction in the carrying value of assets recorded in accordance with
GAAP) which were deducted in determining such Net Income, plus (5) all
exploration expenses which were deducted in determining such Net Income, minus (6) all
non-cash items of income which were included in determining such Net
Income.

     

    "Eligible Assignee"
means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d)
any other Person (other than a natural person), approved by (i) Administrative
Agent and (ii) unless a Default has occurred and is continuing, Borrower (each
such approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include Borrower or
any of Borrower's Affiliates or Subsidiaries.

    


    "Engineering Report"
means the Initial Engineering Report and each engineering report delivered
pursuant to Section 6.2.

     

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

    


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


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    "ERISA" means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statutes or statute, together with all rules and regulations
promulgated with respect thereto.

     

    "ERISA Affiliate"
means each Restricted Person and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with such Restricted Person, are treated as a
single employer under Section 414 of the Internal Revenue Code.

     

    "ERISA Plan" means any
employee pension benefit plan subject to Title IV of ERISA maintained by any
ERISA Affiliate with respect to which any Restricted Person has a fixed or
contingent liability.

     

    "Eurodollar Lending
Office" means, with respect to any Lender, the office of such Lender
specified as its "Eurodollar Lending Office" below its name on the Lenders
Schedule (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
Borrower and Administrative Agent.

     

    "Eurodollar Loan"
means a Loan that bears interest at the Adjusted Eurodollar Rate.

     

    "Eurodollar Margin"
means, on any day (a) on or before October 13, 2008, 3.00% per annum, and
(b) after October 13, 2008, 3.50% per annum.

     

    "Eurodollar Rate"
means, for any Eurodollar Loan within a Borrowing and with respect to the
related Interest Period therefor, (a) the interest rate per annum (carried out
to the fifth decimal place) equal to the applicable London interbank offered
rate for deposits in the requested currency appearing on the Reuters Reference
LIBOR01 page for such currency as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or (b) in the event the rate
referenced in the preceding subsection (a) does not appear on such page or
service or such page or service shall cease to be available, the rate per annum
(carried out to the fifth decimal place) equal to the rate determined by
Administrative Agent to be the offered rate on Page BBAM of the Bloomberg
Financial Market Information Service as of 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or (c) in the event the
rates referenced in the preceding subsections (a) and (b) are not available, the
rate per annum determined by Administrative Agent as the rate of interest at
which deposits in U.S. dollars (for delivery on the first day of such Interest
Period) in same day funds in the approximate amount of the applicable Eurodollar
Loan and with a term equivalent to such Interest Period would be offered by
Societe Generale or one of its Affiliate banks to major banks in the London
interbank market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.

     

    "Event of Default" has
the meaning given to such term in Section 8.1.

     

    "Excluded Taxes"
means, with respect to Administrative Agent, any Lender, LC Issuer or any other
recipient of any payment to be made by or on account of any obligation of
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its Applicable Lending Office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which Borrower is located;
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by Borrower under Section 3.7(b), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new lending office) or is attributable to such
Foreign Lender's failure or inability (other than as a result of a Change in
Law) to comply with Section 3.5(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from Borrower
with respect to such withholding tax pursuant to Section
3.5(a).


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    "Facility Usage"
means, at the time in question, the aggregate principal amount of outstanding
Loans.

     

    "Federal Funds Rate"
means, for any day, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of one percent) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if
the day for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate quoted to Administrative Agent on such day on
such transactions as determined by Administrative Agent.

     

    "Fee Letter" means
that certain Fee Letter dated July 15, 2008, between Administrative Agent, SG
Americas Securities, LLC, BNP Paribas, BNP Paribas Securities Corp., and
Borrower.

     

    "Fiscal Quarter" means
a three-month period ending on March 31, June 30, September 30 or December 31 of
any year.

     

    "Fiscal Year" means a
twelve-month period ending on December 31 of any year.

     

    "Foreign Lender" means
any Lender that is organized under the laws of a jurisdiction other than that in
which Borrower is resident for tax purposes.  For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

    


    "Four-Quarter Period"
means any period of four consecutive Fiscal Quarters.

     

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


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    "GAAP" means those
generally accepted accounting principles and practices which are recognized as
such by the Financial Accounting Standards Board (or any generally recognized
successor) and which, in the case of Borrower and its Consolidated Subsidiaries,
are applied for all periods after the date hereof in a manner consistent with
the manner in which such principles and practices were applied to the audited
Initial Financial Statements.  If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board
(or any such successor) in order for such principle or practice to continue as a
generally accepted accounting principle or practice, all reports and financial
statements required hereunder with respect to Borrower or with respect to
Borrower and its Consolidated Subsidiaries shall be prepared in accordance with
such change, which change shall be disclosed to Administrative Agent on the next
date on which financial statements are required to be delivered to Lenders
pursuant to Section 6.2(a); provided that, unless
the Majority Lenders shall otherwise agree in writing, no such change shall
modify or affect the manner in which compliance with the covenants contained in
Article VII are computed such that all such computations shall be conducted
utilizing financial information presented consistently with prior
periods.

     

    "Governmental
Authority" means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central
Bank).

     

    "Guarantor" means any
Person who has guaranteed some or all of the Obligations and who has been
accepted by Administrative Agent as a Guarantor or any Subsidiary of Borrower
which now or hereafter executes and delivers a guaranty to Administrative Agent
pursuant to Section 6.15.

     

    "Hazardous Materials"
means any substances regulated under any Environmental Law, whether as
pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous
substances or wastes, or otherwise.

     

    "Hedging Contract"
means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap transactions,
currency options, spot contracts, or any other similar transactions or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a "Master Agreement"),
including any such obligations or liabilities under any Master
Agreement.


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    "Highest Lawful Rate"
means, with respect to each Lender Party to whom Obligations are owed, the
maximum nonusurious rate of interest that such Lender Party is permitted under
applicable Law to contract for, take, charge, or receive with respect to such
Obligations.  All determinations herein of the Highest Lawful Rate, or
of any interest rate determined by reference to the Highest Lawful Rate, shall
be made separately for each Lender Party as appropriate to assure that the Loan
Documents are not construed to obligate any Person to pay interest to any Lender
Party at a rate in excess of the Highest Lawful Rate applicable to such Lender
Party.

     

    "Indebtedness" of any
Person means Liabilities in any of the following categories (without
duplication):

     

    (a)           Liabilities
for borrowed money,

     

    (b)        
  Liabilities constituting an obligation to pay the deferred purchase
price of property or services,

     

    (c)           Liabilities
evidenced by a bond, debenture, note or similar instrument,

     

    (d)           Liabilities
which (i) would under GAAP be shown on such Person's balance sheet as a
liability, and (ii) are payable more than one year from the date of creation
thereof (other than reserves for taxes and reserves for contingent
obligations),

     

    (e)           Liabilities
arising under Hedging Contracts,

     

    (f)       
    Liabilities constituting principal under leases
capitalized in accordance with GAAP,

     

    (g)           Liabilities
arising under conditional sales or other title retention
agreements,

     

    (h)           Liabilities
owing under direct or indirect guaranties of Liabilities of any other Person or
otherwise constituting obligations to purchase or acquire or to otherwise
protect or insure a creditor against loss in respect of Liabilities of any other
Person (such as obligations under working capital maintenance agreements,
agreements to keep-well, or agreements to purchase Liabilities, assets, goods,
securities or services), but excluding endorsements in the ordinary course of
business of negotiable instruments in the course of collection,

     

    (i)         
  Liabilities (for example, repurchase agreements, mandatorily
redeemable preferred stock and sale/leaseback agreements) consisting of an
obligation to purchase or redeem securities or other property, if such
Liabilities arises out of or in connection with the sale or issuance of the same
or similar securities or property,

     

    (j)         
  Liabilities with respect to letters of credit or applications or
reimbursement agreements therefor;

     

    (k)           Liabilities
with respect to payments received in consideration of oil, gas, or other
minerals yet to be acquired or produced at the time of payment (including
obligations under "take-or-pay" contracts to deliver gas in return for payments
already received and the undischarged balance of any production payment created
by such Person or for the creation of which such Person directly or indirectly
received payment),


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    (l)           
 Liabilities with respect to other obligations to deliver goods or services
in consideration of advance payments therefor; or

     

    (m)           Liabilities
with respect to bankers acceptances,

     

    provided, however,
that the "Indebtedness" of any Person shall not include Liabilities that were
incurred by such Person on ordinary trade terms to vendors, suppliers, or other
Persons providing goods and services for use by such Person in the ordinary
course of its business which are paid as required by Section 6.7.

     

    "Indemnified Taxes"
means Taxes other than Excluded Taxes.

     

    "Independent
Engineers" means an independent petroleum engineering firm chosen by
Borrower and acceptable to Administrative Agent.

     

    "Initial Engineering
Report" means the engineering reports concerning Mineral Interests of
Restricted Persons prepared by Degolyer and MacNaughton as of January 1, 2008
and Ryder Scott Company as of February 1, 2008.

     

    "Initial Financial
Statements" means the audited annual financial statements of Borrower
dated as of December 31, 2007 and the quarterly unaudited financial statements
of Borrower dated as of March 31, 2008.

     

    "Insolvent" means with
respect to any Person, that such Person (a) is insolvent (as such term is
defined in the United States Bankruptcy Code, Title 11 U.S.C., as amended (the
"Bankruptcy
Code"), and with all terms used in this Section that are defined in the
Bankruptcy Code having the meanings ascribed to those terms in the text and
interpretive case law applicable to the Bankruptcy Code), or (b) the sum of such
Person's debts, including absolute and contingent liabilities, the Obligations
or guarantees thereof, exceeds the value of such Person's assets, at a fair
valuation, and (c) such Person's capital is unreasonably small for the business
in which such Person is engaged and intends to be engaged.  Such
Person has incurred (whether under the Loan Documents or otherwise), or intends
to incur debts which will be beyond its ability to pay as such debts
mature.  In determining whether a Person is "Insolvent" all rights of
contribution of each Restricted Party against other Restricted Parties under the
Guaranty, at law, in equity or otherwise shall be taken into
account.

     

    "Insurance Schedule"
means Schedule 2 attached hereto.

     

    "Interest Payment
Date" means (a) with respect to each Base Rate Loan, the last day of each
Fiscal Quarter and (b) with respect to each Eurodollar Loan, the last day of the
Interest Period that is applicable thereto and, if such Interest Period is six
months in length, each date specified by Administrative Agent which is
approximately three months after such Interest Period begins.


    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    "Interest Period"
means, with respect to each particular Eurodollar Loan in a Borrowing, the
period specified in the Borrowing Notice or Continuation/Conversion Notice
applicable thereto, beginning on and including the date specified in such
Borrowing Notice or Continuation/Conversion Notice (which must be a Business
Day), and ending one, two, three, or six months thereafter, as Borrower may
elect in such notice; provided
that:  (a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day; (b) any Interest
Period which begins on the last Business Day in a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day in a calendar
month; and (c) notwithstanding the foregoing, any Interest Period which would
otherwise end after the last day of the Commitment Period shall end on the last
day of the Commitment Period (or, if the last day of the Commitment Period is
not a Business Day, on the next preceding Business Day).

     

    "Internal Revenue
Code" means the United States Internal Revenue Code of 1986, as amended
from time to time and any successor statute or statutes, together with all rules
and regulations promulgated with respect thereto.

     

    "Investment" means any
investment, made directly or indirectly, in any Person or any property, whether
by purchase, acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other
means.

     

    "Law" means any
statute, law, regulation, ordinance, rule, treaty, judgment, order, decree,
permit, concession, franchise, license, agreement or other governmental
restriction of the United States or any state or political subdivision thereof
or of any foreign country or any department, province or other political
subdivision thereof.  Any reference to a Law includes any amendment or
modification to such Law, and all regulations, rulings, and other Laws
promulgated under such Law.

     

    "Lender Parties" means
Administrative Agent and all Lenders.

     

    "Lenders" means each
signatory hereto (other than Borrower and any Restricted Person that is a party
hereto), including Societe Generale in its capacity as a Lender hereunder
rather than as Administrative Agent, and the successors of each such party as
holder of a Note.

     

    "Lenders Schedule"
means Schedule 1 hereto.

     

    "Liabilities" means,
as to any Person, all indebtedness, liabilities and obligations of such Person,
whether matured or unmatured, liquidated or unliquidated, primary or secondary,
direct or indirect, absolute, fixed or contingent, and whether or not required
to be considered pursuant to GAAP.

     

    "Lien" means, with
respect to any property or assets, any right or interest therein of a creditor
to secure Liabilities owed to it or any other arrangement with such creditor
which provides for the payment of such Liabilities out of such property or
assets or which allows such creditor to have such Liabilities satisfied out of
such property or assets prior to the general creditors of any owner thereof,
including any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional sale
agreement or lease substantially equivalent thereto, tax lien, mechanic's or
materialman's lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of
business.  "Lien" also means any filed financing statement, any
registration of a pledge (such as with an issuer of uncertificated securities),
or any other arrangement or action which would serve to perfect a Lien described
in the preceding sentence, regardless of whether such financing statement is
filed, such registration is made, or such arrangement or action is undertaken
before or after such Lien exists.


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    "Loan" means an
extension of credit by a Lender to Borrower under Article II as part of a
Borrowing and refers to a Base Rate Loan or a Eurodollar Loan.

     

    "Loan Documents" means
this Agreement, the Notes, and all other agreements, certificates, documents,
instruments and writings at any time delivered in connection herewith or
therewith (exclusive of term sheets and commitment letters).

     

    "Majority Lenders"
means two or more Lenders whose aggregate Percentage Shares equal or exceed
fifty-one percent (51%).

     

    "Material Adverse
Change" means a material and adverse change, from the state of affairs
presented in the Initial Financial Statements or as represented or warranted in
any Loan Document, to (a) Borrower's Consolidated financial condition, (b)
Borrower's Consolidated operations, properties or prospects, considered as a
whole, (c) Borrower's ability to timely pay the Obligations, (d) the
enforceability of the material terms of any Loan Documents, or (e) the rights
and remedies of Administrative Agent or Lenders under the Loan
Documents.

     

    "Material Subsidiary"
means a Subsidiary of Borrower that (a) owns assets representing five percent
(5%) of the market value of Borrower's Consolidated assets or (b) has EBITDAX
for the Four-Quarter Period most recently ended that equals or exceeds five
percent (5%) of Borrower's Consolidated EBITDAX for such period.

     

    "Maturity Date" means
the earlier of (a) December 31, 2008 and (b) the date of the occurrence of any
Capital Markets Event.

     

    "Maximum Credit
Amount" means $100,000,000.

     

    "Mineral Interests"
means rights, estates, titles, and interests in and to oil, gas, sulfur, or
other mineral leases and any mineral interests, royalty and overriding royalty
interest, production payment, net profits interests, mineral fee interests, and
other rights therein, including, without limitation, any reversionary or carried
interests relating to the foregoing, together with rights, titles, and interests
created by or arising under the terms of any unitization, communization, and
pooling agreements or arrangements, and all properties, rights and interests
covered thereby, whether arising by contract, by order, or by operation of Law,
which now or hereafter include all or any part of the foregoing.

     

    "Moody's" means
Moody's Investors Service, Inc. or its successor.


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    "Net Income" means,
for any period, the net income (or loss) of Borrower and its properly
consolidated Subsidiaries for such period, calculated on a consolidated
basis.

     

    "Net Worth" of any
Person means, as of any date, the remainder of all Consolidated assets of such
Person minus such Person's Consolidated liabilities, each as determined by GAAP,
but excluding, for purposes of this definition any assets and liabilities for
any Hedging Contract resulting from the requirements of SFAS 133 at such
time.

     

    "Non-Core Acquisitions and
Investments" means acquisitions and Investments that are not Core
Acquisitions and Investments.

     

    "Note" has the meaning
given to such term in Section 2.1.

     

    "Obligations" means
all Liabilities from time to time owing by any Restricted Person to any Lender
Party under or pursuant to any of the Loan Documents.  "Obligation"
means any part of the Obligations.

     

    "Organization
Documents" means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

     

    "Other Taxes" means
all present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, this Agreement or any other Loan
Document.

     

    "Participant" has the
meaning assigned to such term in clause (d) of Section 10.5.

     

    "Percentage Share"
means, with respect to any Lender, the percentage set forth below such Lender's
name on Lenders Schedule or as set forth in any Assignment and Assumption
relating to any assignment that has become effective pursuant to Section 10.5,
as such amount may be modified from time to time pursuant to the terms
hereof.  Notwithstanding the foregoing, if the Commitments of the
Lenders have been terminated or have expired, "Percentage
Share" shall mean with respect to any Lender, the percentage obtained by
dividing (i) the unpaid principal balance of such Lender's Loans at the time in
question by (ii) the aggregate unpaid principal balance of all Loans at such
time.

     

    "Permitted
Investments" means (a) Cash Equivalents, (b) property of the Restricted
Persons used in the ordinary course of business of the Restricted Persons, (c)
current assets arising from the sale or lease of goods and services in the
ordinary course of business by the Restricted Persons or from sales permitted
under Section 7.5, (d) investments, in an aggregate amount not to exceed
$4,000,000, in a Person engaged in the sole business of ownership and operation
of drilling rigs, and (e) sales or leases permitted under Section
7.5.


    
      
         


      

      
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    "Permitted Liens"
means:

     

    (a)           statutory
Liens for taxes, assessments or other governmental charges or levies which are
not yet delinquent or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP;

     

    (b)           landlords',
operators', carriers', warehousemen's, repairmen's, mechanics', materialmen's,
or other like Liens which do not secure Indebtedness, in each case only to the
extent arising in the ordinary course of business and only to the extent
securing obligations which are not delinquent or which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP;

     

    (c)           minor
defects and irregularities in title to any property, so long as such defects and
irregularities neither secure Indebtedness nor materially impair the value of
such property or the use of such property for the purposes for which such
property is held;

     

    (d)          deposits
of cash or securities to secure the performance of bids, acquisition agreements,
trade contracts, leases, statutory obligations and other obligations of a like
nature (excluding appeal bonds) incurred in the ordinary course of
business;

     

    (e)           Liens
under the Senior Security Documents;

     

    (f)           easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any property of Borrower or any of its Subsidiaries for the
purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real estate,
rights of way, facilities and equipment, that do not secure any monetary
obligations and that do not materially interfere with the future development of
such property or with cash flow from such property as reflected in the most
recent Engineering Report;

     

    (g)           Liens
under joint operating agreements, pooling or unitization agreements, partnership
agreements, oil and gas leases, farm-out agreements, division orders, contracts
for the sale, purchase, transportation, processing or exchange of oil, gas or
other hydrocarbons, unitization and pooling declarations and agreements, area of
mutual interest agreements, development agreements, joint ownership arrangements
or similar contractual arrangements arising in the ordinary course of the
business of Borrower or its Subsidiaries to secure amounts owing under such
agreements and contracts, which amounts are not more than 90 days past due or
are being contested in good faith by appropriate proceedings, if such reserve as
may be required by GAAP shall have been made therefor;

     

    (h)           (i)
Liens on fixed or capital assets acquired, constructed or improved by Borrower
or its Subsidiaries; provided that (A)
such Liens secure Indebtedness permitted under Section 7.1, (B) such Liens and
the Indebtedness secured thereby are incurred substantially simultaneously with
the acquisition, construction or improvement of such fixed or capital assets or
within 180 days thereafter, (C) such Liens do not at any time encumber any
property other than the property financed by such Indebtedness and (D) the
amount of Indebtedness secured thereby is not more than 100% of the purchase
price, and (ii) Liens in the nature of precautionary financing statements filed
against leased property by lessors holding Capital Lease Obligations included in
Indebtedness permitted under Section 7.1;


    
      
         


      

      
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    (i)           all
lessors' royalties, overriding royalties, net profits interests, carried
interests, production payments that do not constitute Indebtedness, reversionary
interests and other burdens on or deductions from the proceeds of production
with respect to each Mineral Interest (in each case) that do not operate to
reduce the net revenue interest for such Mineral Interest (if any) as reflected
in any Security Document or Engineering Report or increase the working interest
for such Mineral Interest (if any) as reflected in any Security Document or
Engineering Report without a corresponding increase in the corresponding net
revenue interest; .

     

    (j)           rights
of first refusal, purchase options and similar rights granted pursuant to joint
operating agreements, joint ownership agreements, stockholders agreements,
organic documents and other similar agreements and documents which are described
in the Disclosure Letter;

     

    (k)          pre-judgment
Liens and judgment Liens provided no Event of Default has occurred under Section
8.1;

     

    (l)           customary
Liens for the fees, costs and expenses of trustees and escrow agents pursuant to
the indenture, escrow agreement or other similar agreement establishing such
trust or escrow arrangement;

     

    (m)          Liens
pursuant to merger agreements, stock purchase agreements, asset sale agreements
and similar agreements (i) limiting the transfer of properties and assets
pending consummation of the subject transaction and (ii) in respect of earnest
money deposits, good faith deposits, purchase price adjustment escrows and
similar deposits and escrow arrangements made or established thereunder;
and

     

    (n)          rights
reserved to or vested in any municipality or governmental, statutory or public
authority by the terms of any right, power, franchise, grant, license or permit,
or by any provision of law, to terminate such right, power, franchise, grant,
license or permit or to purchase, condemn, expropriate or recapture or to
designate a purchaser of any of the property of such Person; rights reserved to
or vested in any municipality or governmental, statutory or public authority to
control or regulate any property of such Person, or to use such property in a
manner which does not materially impair the use of such property for the
purposes for which it is held by such Person; and any obligation or duties
affecting the property of such Person to any municipality or governmental,
statutory or public authority with respect to any franchise, grant, license or
permit.

     

    "Permitted Subordinated
Debt" means Indebtedness in respect of subordinated notes issued by
Borrower from time to time, that complies with all of the following
requirements:

     

    (a)          such
Indebtedness is and shall remain unsecured at all times;


    
      
         


      

      
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    (b)           no
payment of principal of such Indebtedness is due on or before the Maturity Date
as in effect on the date such Indebtedness is issued (in this definition called
the "Date of
Issuance");

     

    (c)           the
financial covenants are no more restrictive with respect to the Restricted
Persons than the financial covenants under this Agreement and all of the
covenants and events of default governing such Indebtedness are not, taken as a
whole, materially more restrictive with respect to the Restricted Persons than
the covenants and Events of Default under this Agreement;

     

    (d)           on
the Date of Issuance and after giving effect to such Indebtedness Borrower is in
compliance on a pro forma basis with Section 7.11 and Section 7.12 of this
Agreement, calculated for the most recent Four-Quarter Period for which the
financial statements described in Section 6.2(b) are available to
Lender;

     

    (e)           no
Default or Event of Default exists on the Date of Issuance or will occur as a
result of the issuance of the subordinated notes evidencing such
Indebtedness;

     

    (f)      
     the payment of such Indebtedness is subordinated
to payment of the Obligations pursuant to a written agreement (whether contained
in the applicable indenture or a separate subordination agreement) in form and
substance acceptable to Administrative Agent, in its sole discretion;
and

     

    (g)           Borrower
shall have delivered to Administrative Agent a certificate in reasonable detail
reflecting compliance with the foregoing requirements.

     

    "Person" means an
individual, corporation, partnership, limited liability company, association,
joint stock company, trust or trustee thereof, estate or executor thereof,
unincorporated organization or joint venture, Governmental Authority or any
other legally recognizable entity.

     

    "Projected Gas
Production" means the projected production of gas (measured by BTU
equivalent, not sales price) for the term of the contracts or a particular
month, as applicable, from properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Developed Producing Reserves, as such production is
projected in the most recent report delivered pursuant to Section 6.2(d) or (e),
after deducting projected production from any properties or interests sold or
under contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
report meeting the requirements of such Section 6.2(d) or (e) above and
otherwise are satisfactory to Administrative Agent.

     

    "Projected NGL
Production" means the projected production of natural gas liquids
(measured by volume unit, not sales price) for the term of the contracts or a
particular month, as applicable, from properties and interests owned by any
Restricted Person which are located in or offshore of the United States and
which have attributable to them Proved Developed Producing Reserves, as such
production is projected in the most recent report delivered pursuant to Section
6.2(d) or (e), after deducting projected production from any properties or
interests sold or under contract for sale that had been included in such report
and after adding projected production from any properties or interests that had
not been reflected in such report but that are reflected in a separate or
supplemental report meeting the requirements of such Section 6.2(d) or (e) above
and otherwise are satisfactory to Administrative Agent.


    
      
         


      

      
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    "Projected Oil
Production" means the projected production of oil or gas (measured by
volume unit , not sales price) for the term of the contracts or a particular
month, as applicable, from properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Developed Producing Reserves, as such production is
projected in the most recent report delivered pursuant to Section 6.2(d) or (e),
after deducting projected production from any properties or interests sold or
under contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
report meeting the requirements of such Section 6.2(d) or (e) above and
otherwise are satisfactory to Administrative Agent.

     

    "Property" of any
Person means any and all property (whether real, personal, or mixed, tangible or
intangible) or other assets owned, leased or operated by such
Person.

     

    "Proved Reserves"
means "Proved Reserves" as defined in Definitions for Oil and Gas Reserves (in
this paragraph, the "Definitions") promulgated by the Society for Petroleum
Engineers (or any generally recognized successor) as in effect at the time in
question.  "Proved Developed Producing Reserves" are Proved Reserves,
which are categorized as both "Developed" and "Producing" in the
Definitions.

     

    "Rating Agency" means
either S & P or Moody's.

     

    "Regulation D" means
Regulation D of the Board of Governors of the Federal Reserve System as from
time to time in effect.

     

    "Related Parties"
means, with respect to any Person, such Person's Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person's Affiliates.

    


    "Required Lenders"
means two or more Lenders whose aggregate Percentage Shares equal or exceed
sixty-six and two-thirds percent (66 2/3%).

     

    "Reserve Requirement"
means, at any time, the maximum rate at which reserves (including any marginal,
special, supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal Reserve
System against "Eurocurrency liabilities" (as such term is used in Regulation
D).  Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be determined,
or (b) any category of extensions of credit or other assets which include
Eurodollar Loans.

     

    "Responsible Officer"
means, with respect to Borrower, the Chief Executive Officer, President, Chief
Operating Officer, or Chief Financial Officer of Borrower, and with respect to
any other Restricted Person, if such Restricted Person is a limited liability
company, a Manager of such Restricted Person, and if such Restricted Person is a
corporation, the President or Chief Financial Officer of such Restricted
Person.


    
      
         


      

      
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    "Restricted Person"
means any of Borrower and each Subsidiary of Borrower.

     

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

    


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

    


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

    


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

    


    "SEC" means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

     

    "Staff Engineers"
means petroleum engineers who are employees of Borrower or of a staffing company
that provides its employees to Borrower.

     

    "Stock Repurchase"
means any payment made by a Restricted Person to purchase, redeem, acquire or
retire any Equity Interest in such Restricted Person or any other Restricted
Person (including any option or warrant to purchase such an Equity
Interest).

     

    "Subsidiary" means,
with respect to any Person, any corporation, association, partnership, limited
liability company, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person,
provided that
associations, joint ventures or other relationships (a) which are established
pursuant to a standard form operating agreement or similar agreement or which
are partnerships for purposes of federal income taxation only, (b) which are not
corporations or partnerships (or subject to the Uniform Partnership Act) under
applicable state Law, and (c) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or relationships,
shall not be deemed to be "Subsidiaries" of such Person.

     

    "Taxes" means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable
thereto.


    
      
         


      

      
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    "Termination Event"
means (a) the occurrence with respect to any ERISA Plan of (i) a reportable
event described in Section 4043(b)(5) or (6) of ERISA or (ii) any other
reportable event described in Section 4043(b) of ERISA other than a reportable
event not subject to the provision for 30-day notice to the Pension Benefit
Guaranty Corporation pursuant to a waiver by such corporation under Section
4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an ERISA
Plan during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent to
terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any ERISA Plan.

     

    "Total Funded Debt"
means all Liabilities of the Restricted Persons of the types described in
clauses (a), (b), (c), (d), (f), (h), (j) of the definition of
Indebtedness.

     

    "Type" means, with
respect to any Loans, the characterization of such Loans as either Base Rate
Loans or Eurodollar Loans.

     

    "UCC" means the
Uniform Commercial Code in effect in the State of California from time to
time.

     

    "WF Agent" means Wells
Fargo Bank, National Association in its capacity as the administrative agent
under the WF Facility.

     

    "WF Collateral" means
the "Collateral" as defined in the WF Credit Agreement.

     

    "WF Credit Agreement"
means the Amended and Restated Credit Agreement dated as of July 15, 2008,
between Borrower, the WF Lenders, and Wells Fargo Bank, National Association, as
administrative agent and swing line lender

    


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

    


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

    


    "WF Lender Hedging
Obligations" means the "Lender Hedging Obligations" as defined in the WF
Credit Agreement.

     

    "WF Lenders" means the
lenders party to the WF Credit Agreement from time to time.

     

    "WF Security
Documents" means the "Security Documents" as defined in the WF Credit
Agreement.

     

    Section
1.2.       Exhibits and Schedules;
Additional Definitions.  All Exhibits and Schedules attached to
this Agreement are a part hereof for all purposes.


    
      
         


      

      
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    Section
1.3.       Amendment of Defined
Instruments.  Unless the context otherwise requires or unless
otherwise provided herein the terms defined in this Agreement which refer to a
particular agreement, instrument or document also refer to and include all
renewals, extensions, modifications, amendments and restatements of such
agreement, instrument or document, provided that nothing
contained in this section shall be construed to authorize any such renewal,
extension, modification, amendment or restatement.

     

    Section
1.4.       References and
Titles.  All references in this Agreement to Exhibits,
Schedules, articles, sections, subsections and other subdivisions refer to the
Exhibits, Schedules, articles, sections, subsections and other subdivisions of
this Agreement unless expressly provided otherwise.  Exhibits and
Schedules to any Loan Document shall be deemed incorporated by reference in such
Loan Document.  References to any document, instrument, or agreement
(a) shall include all exhibits, schedules, and other attachments thereto, and
(b) shall include all documents, instruments, or agreements issued or executed
in replacement thereof.  Titles appearing at the beginning of any
subdivisions are for convenience only and do not constitute any part of such
subdivisions and shall be disregarded in construing the language contained in
such subdivisions.  The words "this Agreement", "this instrument",
"herein", "hereof", "hereby", "hereunder" and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited.  The phrases "this section" and "this subsection" and
similar phrases refer only to the sections or subsections hereof in which such
phrases occur.  The word "or" is not exclusive, and the word
"including" (in its various forms) means "including without
limitation".  Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.  Accounting terms have the meanings assigned to them by
GAAP, as applied by the accounting entity to which they
refer.  References to "days" shall mean calendar days, unless the term
"Business Day" is used.  Unless otherwise specified, references herein
to any particular Person also refer to its successors and permitted
assigns.

     

    Section
1.5.       Calculations and
Determinations.  All calculations under the Loan Documents
shall be made on the basis of actual days elapsed (including the first day but
excluding the last) and a year of 360 days.  Each determination by a
Lender Party of amounts to be paid under Article III or any other matters which
are to be determined hereunder by a Lender Party (such as any Eurodollar Rate,
Adjusted Eurodollar Rate, Business Day, Interest Period, or Reserve Requirement)
shall, in the absence of manifest error, be conclusive and
binding.  Unless otherwise expressly provided herein or unless
Majority Lenders otherwise consent all financial statements and reports
furnished to any Lender Party hereunder shall be prepared and all financial
computations and determinations pursuant hereto shall be made in accordance with
GAAP.

     

    Section
1.6.       Joint Preparation;
Construction of Indemnities and Releases.  This Agreement and
the other Loan Documents have been reviewed and negotiated by sophisticated
parties with access to legal counsel and no rule of construction shall apply
hereto or thereto which would require or allow any Loan Document to be construed
against any party because of its role in drafting such Loan
Document.  All indemnification and release provisions of this
Agreement shall be construed broadly (and not narrowly) in favor of the Persons
receiving indemnification or being released.


    
      
         


      

      
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    ARTICLE
II - - The
Loans

     

    Section
2.1.       Commitments to Lend;
Notes.  Subject to the terms and conditions hereof, each Lender
agrees to make Loans to Borrower upon Borrower's request from time to time
during the Commitment Period, provided that (a)
subject to Section 3.3, Section 3.4, and Section 3.6, all Lenders are requested
to make Loans of the same Type in accordance with their respective Percentage
Shares and as part of the same Borrowing, and (b) after giving effect to such
Loans the Facility Usage then outstanding does not exceed the Aggregate
Commitment.  The aggregate amount of all Loans in any Borrowing of
Base Rate Loans must be greater than or equal to $500,000 or a higher integral
multiple of $100,000 or must equal the remaining Availability, and the aggregate
amount of all Loans in any Borrowing of Eurodollar Loans must be greater than or
equal to $3,000,000 or any higher integral multiple of $1,000,000 or must equal
the remaining Availability.  Borrower may have no more than ten
Borrowings of Eurodollar Loans outstanding at any time.  The
obligation of Borrower to repay to each Lender the aggregate amount of all Loans
made by such Lender, together with interest accruing in connection therewith,
shall be evidenced by a single promissory note (herein called such Lender's
"Note") made by
Borrower payable to the order of such Lender in the form of Exhibit A with
appropriate insertions.  The amount of principal owing on any Lender's
Note at any given time shall be the aggregate amount of all Loans theretofore
made by such Lender minus all payments of principal theretofore received by such
Lender on such Note.  Interest on each Note shall accrue and be due
and payable as provided herein and therein.  Each Note shall be due
and payable as provided herein and therein, and shall be due and payable in full
on the Maturity Date.  Subject to the terms and conditions hereof,
Borrower may borrow, repay, and reborrow hereunder.

     

    Section
2.2.       Requests for New
Loans.  Borrower
must give to Administrative Agent written or electronic notice (or telephonic
notice promptly confirmed in writing) of any requested Borrowing of new Loans to
be advanced by Lenders.  Each such notice constitutes a "Borrowing
Notice" hereunder and must:

     

    (a)           specify
(i) the aggregate amount of any such Borrowing of new Base Rate Loans and the
date on which such Base Rate Loans are to be advanced, or (ii) the aggregate
amount of any such Borrowing of new Eurodollar Loans, the date on which such
Eurodollar Loans are to be advanced (which shall be the first day of the
Interest Period which is to apply thereto), and the length of the applicable
Interest Period; and

     

    (b)           be
received by Administrative Agent not later than 1:00 a.m., New York, New York
time on, (i) the day on which any such Base Rate Loans are to be made, or (ii)
the third Business Day preceding the day on which any such Eurodollar Loans are
to be made.


    
      
         


      

      
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    Each such
written request or confirmation must be made in the form and substance of the
"Borrowing Notice" attached hereto as Exhibit B, duly completed.  Each
such telephonic request shall be deemed a representation, warranty,
acknowledgment and agreement by Borrower as to the matters which are required to
be set out in such written confirmation.  Upon receipt of any such
Borrowing Notice, Administrative Agent shall give each Lender prompt notice of
the terms thereof.  If all conditions precedent to such new Loans have
been met, each Lender will on the date requested promptly remit to
Administrative Agent at Administrative Agent's office in New York, New York the
amount of such Lender's new Loan in immediately available funds, and upon
receipt of such funds, unless to its actual knowledge any conditions precedent
to such Loans have been neither met nor waived as provided herein,
Administrative Agent shall promptly make such Loans available to
Borrower.  Unless Administrative Agent shall have received prompt
notice from a Lender that such Lender will not make available to Administrative
Agent such Lender's new Loan, Administrative Agent may in its discretion assume
that such Lender has made such Loan available to Administrative Agent in
accordance with this section and Administrative Agent may if it chooses, in
reliance upon such assumption, make such Loan available to
Borrower.  In such event, if a Lender has not in fact made its share
of the applicable Loan available to Administrative Agent, then the applicable
Lender and Borrower severally agree to pay to Administrative Agent forthwith on
demand such corresponding amount with interest thereon, for each day from and
including the date such amount is made available to Borrower to but excluding
the date of payment to Administrative Agent, at (i) in the case of a payment to
be made by such Lender, the greater of the Federal Funds Rate and a rate
determined by Administrative Agent in accordance with banking industry rules on
interbank compensation and (ii) in the case of a payment to be made by Borrower,
the interest rate applicable to Base Rate Loans.  If Borrower and such
Lender shall pay such interest to Administrative Agent for the same or an
overlapping period, Administrative Agent shall promptly remit to Borrower the
amount of such interest paid by Borrower for such period.  If such
Lender pays its share of the applicable Borrowing to Administrative Agent, then
the amount so paid shall constitute such Lender's Loan included in such
Borrowing.  Any payment by Borrower shall be without prejudice to any
claim Borrower may have against a Lender that shall have failed to make such
payment to Administrative Agent.

     

    Section
2.3.       Continuations and
Conversions of Existing Loans.  Borrower may make the following
elections with respect to Loans already outstanding: to convert Base Rate Loans
to Eurodollar Loans, to convert Eurodollar Loans to Base Rate Loans on the last
day of the Interest Period applicable thereto, and to continue Eurodollar Loans
beyond the expiration of such Interest Period by designating a new Interest
Period to take effect at the time of such expiration.  In making such
elections, Borrower may combine existing Loans made pursuant to separate
Borrowings into one new Borrowing or divide existing Loans made pursuant to one
Borrowing into separate new Borrowings, provided that
Borrower may have no more than ten Borrowings of Eurodollar Loans outstanding at
any time.  To make any such election, Borrower must give to
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of any such Conversion or Continuation of existing Loans, with a
separate notice given for each new Borrowing.  Each such notice
constitutes a "Continuation/Conversion Notice" hereunder and must:

     

    (a)           specify
the existing Loans which are to be Continued or Converted;

     

    (b)           specify
(i) the aggregate amount of any Borrowing of Base Rate Loans into which such
existing Loans are to be continued or converted and the date on which such
Continuation or Conversion is to occur, or (ii) the aggregate amount of any
Borrowing of Eurodollar Loans into which such existing Loans are to be continued
or converted, the date on which such Continuation or Conversion is to occur
(which shall be the first day of the Interest Period which is to apply to such
Eurodollar Loans), and the length of the applicable Interest Period;
and


    
      
         


      

      
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    (c)           be
received by Administrative Agent not later than 1:00 a.m., New York, New York
time, on (i) the day on which any such Continuation or Conversion to Base Rate
Loans is to occur, or (ii) the third Business Day preceding the day on which any
such Continuation or Conversion to Eurodollar Loans is to occur.

     

    Each such
written request or confirmation must be made in the form and substance of the
"Continuation/Conversion Notice" attached hereto as Exhibit C, duly
completed.  Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written
confirmation.  Upon receipt of any such Continuation/Conversion
Notice, Administrative Agent shall give each Lender prompt notice of the terms
thereof.  Each Continuation/Conversion Notice shall be irrevocable and
binding on Borrower.  During the continuance of any Default, Borrower
may not make any election to convert existing Loans into Eurodollar Loans or
continue existing Loans as Eurodollar Loans.  If (due to the existence
of a Default or for any other reason) Borrower fails to timely and properly give
any Continuation/Conversion Notice with respect to a Borrowing of existing
Eurodollar Loans at least three days prior to the end of the Interest Period
applicable thereto, such Eurodollar Loans shall automatically be converted into
Base Rate Loans at the end of such Interest Period.  No new funds
shall be repaid by Borrower or advanced by any Lender in connection with any
Continuation or Conversion of existing Loans pursuant to this section, and no
such Continuation or Conversion shall be deemed to be a new advance of funds for
any purpose; such Continuations and Conversions merely constitute a change in
the interest rate applicable to already outstanding Loans.

     

    Section
2.4.       Use of
Proceeds.  Borrower shall use all Loans to finance capital
expenditures, provide working capital for its operations and for other general
business purposes; Notwithstanding the foregoing, in no event shall the funds
from any Loan be used to make any acquisition, regardless of whether such
acquisition is permitted by this Agreement.  In no event shall the
funds from any Loan be used directly or indirectly by any Person for personal,
family, household or agricultural purposes or for the purpose, whether
immediate, incidental or ultimate, of purchasing, acquiring or carrying any
"margin stock" (as such term is defined in Regulation U promulgated by the Board
of Governors of the Federal Reserve System) or to extend credit to others
directly or indirectly for the purpose of purchasing or carrying any such margin
stock.  Borrower represents and warrants that Borrower is not engaged
principally, or as one of Borrower's important activities, in the business of
extending credit to others for the purpose of purchasing or carrying such margin
stock.

     

    Section
2.5.       Interest Rates and
Fees.

     

    (a)           Base Rate
Loans.  So long as no Event of Default has occurred and is
continuing, all Base Rate Loans (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the Adjusted Base Rate in effect on such day.  If an
Event of Default has occurred and is continuing, all Base Rate Loans (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date Borrower shall pay to the
holder hereof all unpaid interest which has accrued on the Base Rate Loans to
but not including such Interest Payment Date.

     

    
      
        
        

      

      
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    (b)           Eurodollar
Loans.  So long as no Event of Default has occurred and is
continuing, each Eurodollar Loan (exclusive of any past due principal or
interest) shall bear interest on each day during the related Interest Period at
the related Adjusted Eurodollar Rate in effect on such day.  If an
Event of Default has occurred and is continuing, all Eurodollar Loans (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date relating to such Eurodollar
Loan, Borrower shall pay to the holder hereof all unpaid interest which has
accrued on such Eurodollar Loan to but not including such Interest Payment
Date.

     

    (c)           Past Due Principal and
Interest.  All past due principal of and past due interest on
the Loans shall bear interest on each day outstanding at the Default Rate in
effect on such day, and such interest shall be due and payable daily as it
accrues.

     

    (d)           Commitment
Fees.  In consideration of each Lender's commitment to make
Loans, Borrower will pay to Administrative Agent for the account of each Lender
a commitment fee determined on a daily basis by applying the Commitment Fee Rate
to such Lender's Percentage Share of the Availability each day during the
Commitment Period.  This commitment fee shall be due and payable in
arrears on the last day of each Fiscal Quarter and at the end of the Commitment
Period.

     

    (e)           Additional Fees.  In
addition to all other amounts due to Administrative Agent under the Loan
Documents, Borrower will pay fees to Administrative Agent as described in the
Fee Letter.

     

    Section
2.6.       Optional
Prepayments.  Borrower may from time to time and without
premium or penalty prepay the Notes, in whole or in part, so long as the
aggregate amount of Base Rate Loans prepaid at any time must be equal to
$500,000 or a higher integral multiple of $100,000, and the aggregate amount of
Eurodollar Loans prepaid at any time must be equal to $3,000,000 or any higher
integral multiple of $1,000,000, provided that if
Borrower prepays any Base Rate Loan, it shall give notice to Administrative
Agent at least one Business Day's prior notice to the date such prepayment is
made and further provided that if
Borrower prepays any Eurodollar Loan, it shall give notice to Administrative
Agent at least three Business Days' prior to the date such prepayment is made
and pay to Lenders any amounts due under Section 3.4.

     

    Section
2.7.       Mandatory
Prepayments.

     

    (a)           If
at any time the Facility Usage is in excess of the Aggregate Commitment (such
excess being herein called a "Deficiency"),
Borrower shall prepay the principal of the Obligations in an aggregate amount at
least equal to such Deficiency in a single installment due and payable one
business day after the date on which such notice is given to
Borrower.

     

    (b)           Each
prepayment of principal under this section shall be accompanied by all interest
then accrued and unpaid on the principal so prepaid and any amounts due under
Section 3.4.  Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such
prepayment.

     

    
      
        
        

      

      
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    Section
2.8.       Decrease in Aggregate
Commitment.  Borrower may at any time reduce the Aggregate
Commitment in whole, or in part ratably among the Lenders in the amount of
$5,000,000 or any higher integral multiple of $1,000,000, upon at least three
Business Days' written notice to Administrative Agent, which notice shall
specify the amount of any such reduction, provided, however,
that the amount of the Aggregate Commitment may not be reduced below the
Facility Usage and may not be reinstated.

     

    Section
2.9.       Obligations of Lenders
Several. The obligations of the Lenders hereunder to make Loans and to
make payments pursuant to Section 2.2 are several and not joint.  The
failure of any Lender to make any Loan or to make any payment under Section
10.4(b) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Loan or to make
its payment under Section 10.4(b).

     

     

    ARTICLE
III -  - Payments
to Lenders

     

    Section
3.1.       General
Procedures.  Borrower will make each payment which it owes
under the Loan Documents to Administrative Agent for the account of the Lender
Party to whom such payment is owed, in lawful money of the United States of
America, without set-off, deduction or counterclaim, and in immediately
available funds.  Each such payment must be received by Administrative
Agent not later than 1:00 a.m., New York, New York time, on the date such
payment becomes due and payable.  Any payment received by
Administrative Agent after such time will be deemed to have been made on the
next following Business Day.  Should any such payment become due and
payable on a day other than a Business Day, the maturity of such payment shall
be extended to the next succeeding Business Day, and, in the case of a payment
of principal or past due interest, interest shall accrue and be payable thereon
for the period of such extension as provided in the Loan Document under which
such payment is due.  Each payment under a Loan Document shall be due
and payable at the place set forth for Administrative Agent on the Lenders
Schedule. When Administrative Agent collects or receives money on account of the
Obligations, Administrative Agent shall distribute all money so collected or
received, and each Lender Party shall apply all such money so distributed, as
follows (except as otherwise provided in Section 8.3):

     

    (a)           first,
for the payment of all Obligations which are then due (and if such money is
insufficient to pay all such Obligations, first to any reimbursements due to
Administrative Agent under Section 6.9 or 10.4 and then to the partial payment
of all other Obligations then due in proportion to the amounts thereof, or as
Lender Parties shall otherwise agree);

     

    (b)           then
for the prepayment of amounts owing under the Loan Documents (other than
principal on the Notes) if so specified by Borrower;

     

    (c)           then
for the prepayment of principal on the Notes, together with accrued and unpaid
interest on the principal so prepaid; and

     

    (d)           last,
for the payment or prepayment of any other Obligations.

    

      
        
           


        

        
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    All
payments applied to principal or interest on any Note shall be applied first to
any interest then due and payable, then to principal then due and payable, and
last to any prepayment of principal and interest in compliance with Sections 2.6
and 2.7.  All distributions of amounts described in any of subsections
(b), (c) or (d) above shall be made by Administrative Agent pro rata to each
Lender Party then owed Obligations described in such subsection in proportion to
all amounts owed to all Lender Parties which are described in such subsection;
provided that
if any Lender then owes payments to Administrative Agent under Section 10.4(b),
any amounts otherwise distributable under this section to such Lender shall be
deemed to belong to Administrative Agent, to the extent of such unpaid payments,
and Administrative Agent shall apply such amounts to make such unpaid payments
rather than distribute such amounts to such Lender.

     

    Section
3.2.       Increased
Costs.

     

    (a)           Increased Costs
Generally.  If any Change in Law shall:

     

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

     

    (ii)       subject
any Lender to any Tax of any kind whatsoever with respect to this Agreement or
any Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Indemnified Taxes or Other Taxes
covered by Section 3.5 and the imposition of, or any change in the rate of, any
Excluded Tax payable by such Lender); or

     

    (iii)      impose
on any Lender or the London interbank market any other condition, cost or
expense affecting this Agreement or Eurodollar Loans made by such
Lender;

     

    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
such Lender hereunder (whether of principal, interest or any other amount) then,
upon request of such Lender, Borrower will pay to such Lender such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.

     

    (b)           Capital
Requirements.  If any Lender determines that any Change in Law
affecting such Lender or any lending office of such Lender or such Lender's
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender to a level below
that which such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy),
then from time to time Borrower will pay to such Lender such additional amount
or amounts as will compensate such Lender or such Lender's holding company for
any such reduction suffered.


    
      
         


      

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

     

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

     

    Section
3.3.       Illegality.  If
any Change in Law after the date hereof shall make it unlawful for any Lender
Party to fund or maintain Eurodollar Loans, then, upon notice by such Lender
Party to Borrower and Administrative Agent, (a) Borrower's right to elect
Eurodollar Loans from such Lender Party shall be suspended to the extent and for
the duration of such illegality, (b) all Eurodollar Loans of such Lender Party
which are then the subject of any Borrowing Notice and which cannot be lawfully
funded shall be funded as Base Rate Loans of such Lender Party, and (c) all
Eurodollar Loans of such Lender Party shall be converted automatically to Base
Rate Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by
Law.  If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, Borrower shall pay to such Lender Party such amounts, if any, as may be
required pursuant to Section 3.4.

     

    Section
3.4.       Funding
Losses.  In addition to its other obligations hereunder,
Borrower will indemnify each Lender Party against, and reimburse each Lender
Party on demand for, any loss or expense incurred or sustained by such Lender
Party (including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by a Lender Party to fund or
maintain Eurodollar Loans), as a result of (a) any payment or prepayment
(whether authorized or required hereunder or otherwise) of all or a portion of a
Eurodollar Loan on a day other than the day on which the applicable Interest
Period ends, (b) any payment or prepayment, whether required hereunder or
otherwise, of a Loan made after the delivery, but before the effective date, of
a Continuation/Conversion Notice requesting the continuation of outstanding
Eurodollar Loans as, or the conversion of outstanding Base Rate Loans to,
Eurodollar Loans, if such payment or prepayment prevents such Continuation/
Conversion Notice from becoming fully effective, (c) the failure of any Loan to
be made or of any Continuation/Conversion Notice requesting the continuation of
outstanding Eurodollar Loans as, or the conversion of outstanding Base Rate
Loans to, Eurodollar Loans to become effective due to any condition precedent
not being satisfied or due to any other action or inaction of any Restricted
Person, (d) any Conversion (whether authorized or required hereunder or
otherwise) of all or any portion of any Eurodollar Loan into a Base Rate Loan or
into a different Eurodollar Loan on a day other than the day on which the
applicable Interest Period ends, or (e) any assignment of a Eurodollar Loan on a
day other than the last day of the Interest Period therefor as a result of a
request by Borrower pursuant to Section 3.7(b).  Such indemnification
shall be on an after-tax basis.

     

    
      
        
        

      

      
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    Section
3.5.       Taxes.

     

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

     

    (b)          Payment of Other Taxes by
Borrower.  Without limiting the provisions of paragraph (a)
above, Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

     

    (c)           Indemnification by
Borrower.  Borrower shall indemnify Administrative Agent, and
each Lender, within ten (10) days after demand therefor, for the full amount of
any Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by Administrative Agent or such Lender, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority.  A
certificate as to the amount of such payment or liability delivered to Borrower
by a Lender (with a copy to Administrative Agent), or by Administrative Agent on
its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.

     

    (d)           Evidence of
Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower shall deliver to Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Administrative Agent.

     

    (e)           Status of
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to Borrower (with a copy to Administrative Agent), at the time or
times prescribed by applicable law or reasonably requested by Borrower or
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any
Lender, if requested by Borrower or Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by
Borrower or Administrative Agent as will enable Borrower or Administrative Agent
to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.


    
      
         


      

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

    


    (i)        duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States of America is a
party,

     

    (ii)       duly
completed copies of Internal Revenue Service Form W-8ECI,

     

    (iii)      in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a "bank" within the meaning of
section 881(c)(3)(A) of the Internal Revenue Code, (B) a "10 percent
shareholder" of Borrower within the meaning of section 881(c)(3)(B) of the
Internal Revenue Code, or (C) a "controlled foreign corporation" described in
section 881(c)(3)(C) of the Internal Revenue Code and (y) duly completed copies
of  Internal Revenue Service Form W-8BEN, or

     

    (iv)     any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit Borrower to determine the withholding or deduction required to be
made.

     

    (f)           Treatment of Certain
Refunds.  If Administrative Agent or a Lender receives a refund
of any Taxes or Other Taxes as to which it has been indemnified by Borrower or
with respect to which Borrower has paid additional amounts pursuant to this
Section, it shall pay to Borrower an amount equal to such refund (but only to
the extent of indemnity payments made, or additional amounts paid, by Borrower
under this Section with respect to the Taxes or Other Taxes giving rise to such
refund), net of all out-of-pocket expenses of Administrative Agent or such
Lender, as the case may be, and without interest (other than any interest paid
by the relevant Governmental Authority with respect to such refund), provided that
Borrower, upon the request of Administrative Agent or such Lender, agrees to
repay the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to Administrative Agent
or such Lender in the event Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority.  This subsection
shall not be construed to require Administrative Agent or any Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to Borrower or any other Person.


    
      
         


      

      
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    Section
3.6.       Alternative Rate of
Interest.  If prior to the commencement of any Interest Period
for a Borrowing of Eurodollar Loans:

     

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

     

    (b)           Administrative
Agent is advised by Required Lenders that the Eurodollar Rate for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their Loans included in such Borrowing for such Interest
Period;

     

    then
Administrative Agent shall give notice thereof to Borrower and Lenders by
telephone or facsimile as promptly as practicable thereafter and, until
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Continuation/Conversion Notice that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Borrowing of Eurodollar Loans shall be ineffective and shall be deemed a
request to continue such Borrowing as a Borrowing of Base Rate Loans and (ii) if
any Borrowing Notice requests a Borrowing of Eurodollar Loans, such Borrowing
shall be made as a Borrowing of Base Rate Loans.  Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Loans.

     

    Section
3.7.       Mitigation Obligations;
Replacement of Lenders.

     

    (a)           Designation of a Different
Lending Office. If any Lender requests compensation under Section 3.2, or
requires Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.5, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.2 or 3.5, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such
Lender.  Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

     

    (b)           Replacement of
Lenders.  If any Lender requests compensation under Section
3.2, or if any Lender gives notice to Borrower under Section 3.3 that it is
unlawful for such Lender to fund or maintain Eurodollar Loans, or if Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.5, or if any
Lender defaults in its obligation to fund Loans hereunder, or if any Lender has
been deemed insolvent or becomes the subject of a bankruptcy or insolvency
proceeding, or if, in connection with any consent or approval of any proposed
amendment, modification, waiver, or consent that requires consent of each
Lender, the consent of Required Lenders shall have been obtained but any Lender
has not so consented or approved (any such Lender, a "Non-Consenting
Lender"), then Borrower may, at its sole expense and effort, upon notice
to such Lender and Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.5), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided
that:


    
      
         


      

      
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    (i)        Borrower
shall have paid to Administrative Agent the assignment fee specified in Section
10.5;

     

    (ii)       such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder and under the other Loan Documents (including
any amounts under Section 3.4) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or Borrower (in the case of
all other amounts);

     

    (iii)      (A)
in the case of any such assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignees shall have agreed to, and shall
be sufficient (together with all other consenting Lenders) to cause the adoption
of, the applicable departure, waiver or amendment of the Loan Documents and (B)
in the case of any such assignment resulting from a claim for compensation under
Section 3.2 or payments required to be made pursuant to Section 3.5, such
assignment will result in a reduction in such compensation or payments
thereafter and (C) in the case of any assignment due to illegality, such
assignee can fund and maintain Eurodollar Loans; and

     

    (iv)     
such assignment does not conflict with applicable law.

     

    A Lender
shall not be required to make any such assignment or delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances
entitling Borrower to require such assignment and delegation cease to
apply.  In connection with any such replacement, if any such Lender
does not execute and deliver to Administrative Agent a duly executed assignment
specified in Section 10.5 reflecting such replacement within five (5) Business
Days of the date on which the assignee Lender executes and delivers such
assignment to such Lender, then such Lender shall be deemed to have executed and
delivered such assignment without any action on the part of such
Lender.

     

     

    ARTICLE
IV - - Conditions
Precedent to Lending

     

    Section
4.1.       Documents to be
Delivered.  No Lender has any obligation to make its first Loan
under this Agreement unless Administrative Agent shall have received all of the
following, at Administrative Agent's office in New York, New York, duly executed
and delivered and in form, substance and date satisfactory to Administrative
Agent:

     

    (a)           Loan
Documents.  Administrative Agent shall have received
counterparts of each Loan Document originally executed and delivered by each
applicable Restricted Person and Lenders and in such numbers as Administrative
Agent or its counsel may reasonably request.

     

    (b)           Organizational Documents;
Incumbency.  Administrative Agent shall have received (i)
copies of each Organizational Document executed and delivered by each Restricted
Person, as applicable, and, to the extent applicable, certified as of a recent
date by the appropriate governmental official, each dated the Closing Date or a
recent date prior thereto; (ii) signature and incumbency certificates of the
officers of such Person executing the Loan Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar governing body of each
Restricted Person approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by an Responsible Officer as being in full
force and effect without modification or amendment; (iv) an existence and good
standing certificate from the applicable Governmental Authority of each
Restricted Person's jurisdiction of incorporation, organization or formation and
in each jurisdiction in which it owns real property, each dated a recent date
prior to the Closing Date; and (v) such other documents as Administrative Agent
may reasonably request.


    
      
         


      

      
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    (c)           Closing
Certificate.  Administrative Agent shall have received a
"Closing Certificate" of a Responsible Officer of Borrower, of even date with
this Agreement, in which such officer certifies to the satisfaction of each of
the conditions set out in Section 4.1 and Section 4.2.

     

    (d)           Governmental Authorizations
and Consents.  Each Restricted Person shall have obtained all
Governmental Authorizations and all consents of other Persons, in each case that
are necessary or advisable in connection with the transactions contemplated by
the Loan Documents and each of the foregoing shall be in full force and effect
and in form and substance reasonably satisfactory to Administrative
Agent.  All applicable waiting periods shall have expired without any
action being taken or threatened by any competent authority which would
restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Loan Documents or the financing thereof and no action,
request for stay, petition for review or rehearing, reconsideration, or appeal
with respect to any of the foregoing shall be pending, and the time for any
applicable agency to take action to set aside its consent on its own motion
shall have expired.

     

    (e)           Environmental
Reports.  To the extent not already provided to Administrative
Agent under the WF Facility, Administrative Agent shall have received reports
and other information, in form, scope and substance reasonably satisfactory to
Administrative Agent, regarding environmental matters relating to Borrower's
material real property assets.

     

    (f)      
     Evidence of
Insurance.  Administrative Agent shall have received a
certificate from Borrower's insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant to
Section 6.8 is in full force and effect and that Administrative Agent has been
named as additional insured thereunder as its interests may appear and to the
extent required under Section 6.8.

     

    (g)           Opinion of
Counsel.  Administrative Agent shall have received originally
executed copies of the favorable written opinion of Musick, Peeler & Garrett
LLP, counsel to Restricted Persons, in the form of Exhibit E and opining as to
such other matters as Administrative Agent may reasonably request at least three
days prior to the Closing Date, dated as of the Closing Date and otherwise in
form and substance reasonably satisfactory to Administrative Agent (and each
Restricted Person hereby instructs such counsel to deliver such opinions to
Administrative Agent and Lenders).


    
      
         


      

      
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    (h)           Fees.  Administrative
Agent shall have received all commitment, facility, agency, recording, filing,
and other fees required to be paid to Administrative Agent or any Lender
pursuant to any Loan Documents or any commitment agreement heretofore entered
into.

     

    (i)         
  Financial
Statements.  Lenders shall have received the Initial Financial
Statements, which shall be in form and substance reasonably satisfactory to
Administrative Agent, together with a certificate by a Responsible Officer
certifying the Initial Financial Statements.

     

    (j)         
  Initial
Engineering Report.  To the extent not already provided to
Lenders under the WF Facility, Lenders shall have received the Initial
Engineering Report, which shall be in form and substance reasonably satisfactory
to Administrative Agent.

     

    (k)           Additional Loan
Documents.  To the extent not already provided to Lenders under
the WF Facility, Lenders shall have received copies of the WF Credit Agreement,
the SG Money Market Credit Agreement, and each other agreement, instrument, or
document executed by Borrower or any of its Subsidiaries or any of their
Responsible Officers at any time in connection with the WF Credit Agreement or
the SG Money Market Credit Agreement on or before the date hereof.

     

    (l)         
  No
Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs the financing hereunder or any of
the other transactions contemplated by the Loan Documents, or that could
reasonably be expected to cause a Material Adverse Change.

     

    (m)           Completion of
Proceedings.  All partnership, corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent and its counsel shall be reasonably satisfactory in form
and substance to Administrative Agent and such counsel, and Administrative Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably
request.

     

    (n)           Material Adverse
Change.  No event or circumstance shall have occurred or be
continuing since the date of the Initial Financial Statements that has had, or
could be reasonably expected to cause, either individually or in the aggregate,
a Material Adverse Change.

     

    (o)           Due
Diligence.  Administrative Agent and Lenders shall have
completed satisfactory due diligence review of the assets, liabilities,
business, operations and condition (financial or otherwise) of the Restricted
Persons, including, a review of their Mineral Interests and all legal,
financial, accounting, governmental, environmental, tax and regulatory matters,
and fiduciary aspects of the proposed financing.

     

    (p)           USA Patriot
Act.  Each Lender that is subject to the Act shall have
received such information requested by such Lender in order to comply with the
Act.

     

    
      
        
        

      

      
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    (q)           Other
Documentation.  Administrative Agent shall have received all
documents and instruments which Administrative Agent has then reasonably
requested, in addition to those described in this Section 4.1.  All
such additional documents and instruments shall be reasonably satisfactory to
Administrative Agent in form, substance and date.  For purposes of
determining compliance with the conditions specified in this Section 4.1, each
Lender that has executed and delivered this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.

     

    Section
4.2.       Additional Conditions
Precedent.  No Lender has any obligation to make any Loan
(including its first) as part of any Borrowing unless the following conditions
precedent have been satisfied:

     

    (a)           Administrative
Agent shall have received all appropriate evidence required by Administrative
Agent and Lenders in their sole discretion necessary to determine that the WF
Facility has been fully funded and is in full force and effect on the date of
such Borrowing.

     

    (b)           All
representations and warranties made by any Restricted Person in any Loan
Document shall be true and correct in all material respects on and as of the
date of such Loan as if such representations and warranties had been made as of
the date of such Borrowing, except to the extent that such representation or
warranty was made as of a specific date or updated, modified or supplemented as
of a subsequent date with the consent of Required Lenders and Administrative
Agent, in which cases such representations and warranties shall have been true
and correct in all material respects on and of such earlier date.

     

    (c)           No
Default shall exist at the date of such Borrowing.

     

    (d)           No
Material Adverse Change shall have occurred to, and no event or circumstance
shall have occurred that could reasonably be expected to cause a Material
Adverse Change to, Borrower's Consolidated financial condition or businesses
since the date of the Initial Financial Statements.

     

    (e)           Each
Restricted Person shall have performed and complied with all agreements and
conditions required in the Loan Documents to be performed or complied with by it
on or prior to the date of such Borrowing.

     

    (f)           The
making of such Loan shall not be prohibited by any Law and shall not subject any
Lender to any penalty or other onerous condition under or pursuant to any such
Law.

     

    (g)           Administrative
Agent shall have received all documents and instruments which Administrative
Agent has then reasonably requested, in addition to those described in Section
4.1 (including opinions of legal counsel for Restricted Persons and
Administrative Agent; corporate documents and records; documents evidencing
governmental authorizations, consents, approvals, licenses and exemptions; and
certificates of public officials and of officers and representatives of Borrower
and other Persons), as to (i) the accuracy and validity of or compliance with
all representations, warranties and covenants made by any Restricted Person in
this Agreement and the other Loan Documents, (ii) the satisfaction of all
conditions contained herein or therein, and (iii) all other matters pertaining
hereto and thereto.  All such additional documents and instruments
shall be reasonably satisfactory to Administrative Agent in form, substance and
date.


    
      
         


      

      
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    ARTICLE V
- - Representations
and Warranties

     

    To
confirm each Lender's understanding concerning Restricted Persons and Restricted
Persons' businesses, properties and obligations and to induce each Lender to
enter into this Agreement and to extend credit hereunder, Borrower represents
and warrants to each Lender that:

     

    Section
5.1.       No
Default.  No event has occurred and is continuing which
constitutes a Default.

     

    Section
5.2.       Organization and Good
Standing.  Each Restricted Person is duly organized, validly
existing and in good standing under the Laws of its jurisdiction of
organization, having all powers required to carry on its business and enter into
and carry out the transactions contemplated hereby.  Each Restricted
Person is duly qualified, in good standing, and authorized to do business in all
other jurisdictions within the United States wherein the character of the
properties owned or held by it or the nature of the business transacted by it
makes such qualification necessary.  Each Restricted Person has taken
all actions and procedures customarily taken in order to enter, for the purpose
of conducting business or owning property, each jurisdiction outside the United
States wherein the character of the properties owned or held by it or the nature
of the business transacted by it makes such actions and procedures
desirable.

     

    Section
5.3.       Authorization.  Each
Restricted Person has duly taken all action necessary to authorize the execution
and delivery by it of the Loan Documents to which it is a party and to authorize
the consummation of the transactions contemplated thereby and the performance of
its obligations thereunder.  Borrower is duly authorized to borrow
funds hereunder.

     

    Section
5.4.       No Conflicts or
Consents.  The execution and delivery by the various Restricted
Persons of the Loan Documents to which each is a party, the performance by each
of its obligations under such Loan Documents, and the consummation of the
transactions contemplated by the various Loan Documents, do not and will not (a)
conflict with any provision of (i) any Law, (ii) the organizational documents of
any Restricted Person, or (iii) any agreement, judgment, license, order or
permit applicable to or binding upon any Restricted Person in any material
respect, (b) result in the acceleration of any Indebtedness owed by any
Restricted Person, or (c) result in or require the creation of any Lien upon any
assets or properties of any Restricted Person except as expressly contemplated
or permitted in the Loan Documents.  Except as expressly contemplated
in the Loan Documents no consent, approval, authorization or order of, and no
notice to or filing with, any Governmental Authority or third party is required
in connection with the execution, delivery or performance by any Restricted
Person of any Loan Document or to consummate any transactions contemplated by
the Loan Documents.

     

    Section
5.5.       Enforceable
Obligations.  This Agreement is, and the other Loan Documents
when duly executed and delivered will be, legal, valid and binding obligations
of each Restricted Person which is a party hereto or thereto, enforceable in
accordance with their terms except as such enforcement may be limited by
bankruptcy, insolvency or similar Laws of general application relating to the
enforcement of creditors' rights.

     

    
      
        
        

      

      
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    Section
5.6.       Initial Financial
Statements.  Borrower has heretofore delivered to each Lender
true, correct and complete copies of the Initial Financial
Statements.  The Initial Financial Statements fairly present
Borrower's Consolidated financial position at the respective dates thereof and
the Consolidated results of Borrower's operations and Borrower's Consolidated
cash flows for the respective periods thereof.  Since the date of the
annual Initial Financial Statements no Material Adverse Change has occurred,
except as reflected in the quarterly Initial Financial Statements or in Section
5.6 of the Disclosure Letter.  All Initial Financial Statements were
prepared in accordance with GAAP.

     

    Section
5.7.       Other Obligations and
Restrictions.  No Restricted Person has any outstanding
Liabilities of any kind (including contingent obligations, tax assessments, and
unusual forward or long-term commitments) which are, in the aggregate, material
to Borrower or material with respect to Borrower's Consolidated financial
condition and not shown in the Initial Financial Statements or disclosed in
Section 5.7 of the Disclosure Letter or a Disclosure Report.  Except
as shown in the Initial Financial Statements or disclosed in Section 5.7 of the
Disclosure Letter or a Disclosure Report, no Restricted Person is subject to or
restricted by any franchise, contract, deed, charter restriction, or other
instrument or restriction which could reasonably be expected to cause a Material
Adverse Change.

     

    Section
5.8.       Full
Disclosure.  No certificate, statement or other information
delivered herewith or heretofore by any Restricted Person to any Lender in
connection with the negotiation of this Agreement or in connection with any
transaction contemplated hereby (excluding projections, estimates and
Engineering Reports) contains any untrue statement of a material fact or omits
to state any material fact known to any Restricted Person (other than
industry-wide risks normally associated with the types of businesses conducted
by Restricted Persons) necessary to make the statements contained herein or
therein not misleading as of the date made or deemed made; provided that, with
respect to the estimates, projections and pro forma financial information
contained in the materials referenced above, Borrower only represents that they
are based upon good faith estimates and assumptions believed by management of
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount.  There is no fact known to any
Restricted Person (other than industry-wide risks normally associated with the
types of businesses conducted by Restricted Persons) that has not been disclosed
to each Lender in writing which could reasonably be expected to cause a Material
Adverse Change.  There are no statements or conclusions in any
Engineering Report which are based upon or include misleading information or
fail to take into account material information regarding the matters reported
therein, it being understood that each Engineering Report is necessarily based
upon professional opinions, estimates and projections and that Borrower does not
warrant that such opinions, estimates and projections will ultimately prove to
have been accurate. Borrower has heretofore delivered to each Lender true,
correct and complete copies of the Initial Engineering Report.


    
      
         


      

      
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    Section
5.9.       Litigation.  Except
as disclosed in the Initial Financial Statements or in Section 5.9 of the
Disclosure Letter:  (a) there are no actions, suits or legal,
equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person or
affecting any Property of any Restricted Person before any Governmental
Authority which could reasonably be expected to cause a Material Adverse Change,
(b) there are no outstanding judgments, injunctions, writs, rulings or orders by
any such Governmental Authority against any Restricted Person or any Restricted
Person's stockholders, partners, directors or officers or any of its material
Property which could reasonably be expected to cause a Material Adverse Change,
and (c) there are no cease and desist, noncompliance orders or notices from the
California Division of Oil, Gas and Geothermal Resources or other Governmental
Authorities which could reasonably be expected to cause a Material Adverse
Change.

     

    Section
5.10.     Labor Disputes and Acts of
God.  Except as disclosed in Section 5.10 of the Disclosure
Letter or a Disclosure Report, neither the business nor the Properties of any
Restricted Person has been affected by any fire, explosion, accident, strike,
lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act
of God or of the public enemy or other casualty (whether or not covered by
insurance), which could reasonably be expected to cause a Material Adverse
Change.

     

    Section
5.11.     ERISA Plans and
Liabilities.  All currently existing ERISA Plans are listed in
Section 5.11 of the Disclosure Letter or a Disclosure Report.  Except
as disclosed in the Initial Financial Statements or in Section 5.11 of the
Disclosure Letter or a Disclosure Report, no Termination Event has occurred with
respect to any ERISA Plan and all ERISA Affiliates are in compliance with ERISA
in all material respects.  No ERISA Affiliate is required to
contribute to, or has any other absolute or contingent liability in respect of,
any "multiemployer plan" as defined in Section 4001 of ERISA.  Except
as set forth in Section 5.11 of the Disclosure Letter or a Disclosure
Report:  (a) no "accumulated funding deficiency" (as defined in
Section 412(a) of the Internal Revenue Code) exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his delegate,
and (b) the current value of each ERISA Plan's benefits does not exceed the
current value of such ERISA Plan's assets available for the payment of such
benefits by more than $500,000.

     

    Section
5.12.     Environmental and Other
Laws.  Except as disclosed in Section 5.12 of the Disclosure
Letter or a Disclosure Report: (a) Restricted Persons are conducting their
businesses in material compliance with all applicable Laws, including
Environmental Laws, and have and are in compliance with all material licenses,
permits and bonds required under any such Laws; (b) none of the operations or
properties of any Restricted Person is the subject of federal, state or local
investigation evaluating whether any material remedial action is needed to
respond to a release of any Hazardous Materials into the environment or to the
improper storage or disposal (including storage or disposal at offsite
locations) of any Hazardous Materials; (c) no Restricted Person (and to the best
knowledge of Borrower, no other Person) has filed any notice under any Law
indicating that any Restricted Person is responsible for the improper release
into the environment, or the improper storage or disposal, of any material
amount of any Hazardous Materials or that any Hazardous Materials have been
improperly released, or are improperly stored or disposed of, upon any property
of any Restricted Person; (d) no Restricted Person has transported or arranged
for the transportation of any Hazardous Material to any location which is (i)
listed on the National Priorities List under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, listed for
possible inclusion on such National Priorities List by the Environmental
Protection Agency in its Comprehensive Environmental Response, Compensation and
Liability Information System List, or listed on any similar state list or (ii)
the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against any Restricted Person for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims (whether under Environmental Laws or otherwise); and (e) no
Restricted Person otherwise has any known material contingent liability under
any Environmental Laws or in connection with the release into the environment,
or the storage or disposal, of any Hazardous Materials.  Each
Restricted Person undertook, at the time of its acquisition of each of its
material properties, all appropriate inquiry into the previous ownership and
uses of the Property and any potential environmental liabilities associated
therewith.


    
      
         


      

      
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    Section
5.13.     Names and Places of
Business.  No Restricted Person has, during the preceding five
years, had, been known by, or used any other trade or fictitious name, except as
disclosed in Section 5.13 of the Disclosure Letter or a Disclosure
Report.  Except as otherwise indicated in Section 5.13 of the
Disclosure Letter or a Disclosure Report, the chief executive office and
principal place of business of each Restricted Person are (and for the preceding
five years have been) located at the address of Borrower set out on the
signature pages hereto.  Except as indicated in Section 5.13 of the
Disclosure Letter or a Disclosure Report, no Restricted Person has any other
office or place of business.

     

    Section
5.14.     Borrower's
Subsidiaries.  Borrower does not presently have any Subsidiary
or own any stock in any other corporation or association except those listed in
Section 5.14 of the Disclosure Letter or a Disclosure Report.  Neither
Borrower nor any Restricted Person is a member of any general or limited
partnership, joint venture or association of any type whatsoever except those
listed in Section 5.14 of the Disclosure Letter or a Disclosure Report, and
associations, joint ventures or other relationships (a) which are established
pursuant to a standard form operating agreement or similar agreement or which
are partnerships for purposes of federal income taxation only, (b) which are not
corporations or partnerships (or subject to the Uniform Partnership Act) under
applicable state Law, and (c) whose businesses are limited to the exploration,
development and operation of oil, gas or mineral properties and interests owned
directly by the parties in such associations, joint ventures or
relationships.  Except as otherwise revealed in a Disclosure Report,
Borrower owns, directly or indirectly, the Equity Interest in each of its
Subsidiaries which is indicated in Section 5.14 of the Disclosure
Letter.

     

    Section
5.15.     Government
Regulation.  Neither Borrower nor any other Restricted Person
owing Obligations is subject to regulation under the Federal Power Act, the
Investment Company Act of 1940 (as any of the preceding acts have been amended)
or any other Law which regulates the incurring by such Person of Indebtedness,
including Laws relating to common contract carriers or the sale of electricity,
gas, steam, water or other public utility services.

     

    Section
5.16.     Solvency.  Upon
giving effect to the issuance of the Notes, the execution of the Loan Documents
by Borrower and each Guarantor and the consummation of the transactions
contemplated hereby, no Restricted Person will be Insolvent.

     

    
      
        
        

      

      
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    Section
5.17.     Title to Properties;
Licenses.  Except for those Mineral Interests disposed of in
accordance with this Agreement and oil and gas leases that have expired in
accordance with their terms, each Restricted Person has (a) good and defensible
title to, or valid leasehold interests in, all of its Mineral Interests covered
by the most recently delivered Engineering Report, free and clear of all Liens,
encumbrances, or adverse claims other than Permitted Liens; and (b) good and
valid title to, or valid leasehold interests in, licenses of, or rights to use,
all other Property owned or leased by such Restricted Person, free and clear of
all Liens, encumbrances, or adverse claims other than Permitted Liens, except in
the case of clauses (a) and (b) of this section, defects in title or adverse
claims which could not reasonably be expected to cause a Material Adverse
Change; provided that no
representation or warranty is made in this section with respect to any Mineral
Interest to which no Proved Reserves are properly attributed.  Other
than changes which arise pursuant to non-consent provisions of operating
agreements or other agreements (if any) described in Exhibit A to any Senior
Security Document and except for properties disposed of in compliance with this
Agreement or leases that have expired in accordance with their terms: (x) each
Restricted Person owns the net interests in production attributable to the wells
and units of such Restricted Person evaluated in the most recently delivered
Engineering Report subject to Permitted Liens and (y) the ownership of such
properties does not in the aggregate in any material respect obligate such
Restricted Person to bear the costs and expenses relating to the maintenance,
development and operations of such properties in an amount materially in excess
of the working interest of such properties set forth in such Engineering
Report.  Upon delivery of each Engineering Report furnished to the
Lenders pursuant to Section 6.2(d) and (e), the statements made in the preceding
sentences of this section and in Section 5.8 shall be true with respect to such
Engineering Report.  Each Restricted Person possesses all licenses,
permits, franchises, or otherwise has valid rights, rights to use all patents,
copyrights, trademarks and trade names, and other intellectual property (or
otherwise possesses the right to use such intellectual property without
violation of the rights of any other Person) which are necessary to carry out
its business as presently conducted and as presently proposed to be conducted
hereafter, and no Restricted Person is in violation in any material respect of
the terms under which it possesses such intellectual property or the right to
use such intellectual property.

     

    Section
5.18.     Leases and Contracts;
Performance of Obligations.  Except for those Mineral Interests
disposed of in accordance with this Agreement and oil and gas leases that have
expired in accordance with their terms, the leases, contracts, servitudes and
other agreements forming a part of the Mineral Interests of the Restricted
Persons covered by the most recently delivered Engineering Report are in full
force and effect unless (i) disputed in good faith by appropriate proceedings
and for which adequate reserves have been maintained in accordance with GAAP, or
(ii) the failure to be in full force and effect could not reasonably be expected
to cause a Material Adverse Change.  All rents, royalties and other
payments due and payable under such leases, contracts, servitudes and other
agreements, or under any Permitted Liens, or otherwise attendant to the
ownership or operation of any Mineral Interests covered by the most recently
delivered Engineering Report, have been properly and timely paid or will be paid
prior to delinquency unless (i) disputed in good faith by appropriate
proceedings and for which adequate reserves have been maintained in accordance
with GAAP or (ii) the failure to pay could not reasonably be expected to cause a
Material Adverse Change.  No Restricted Person is in default with
respect to its obligations (and no Restricted Person is aware of any default by
any third party with respect to such third party's obligations) under any such
leases, contracts, servitudes and other agreements, or under any Permitted
Liens, or otherwise attendant to the ownership or operation of any part of the
Mineral Interests covered by the Engineering Report, where such failure could
reasonably be expected to cause a Material Adverse Change.  No
Restricted Person is currently accounting for any royalties, or overriding
royalties or other payments out of production, on a basis (other than delivery
in kind) less favorable to such Restricted Person than proceeds received by such
Restricted Person (calculated at the well) from sale of production, and no
Restricted Person has any liability (or alleged liability) to account for the
same on any such less favorable basis.


    
      
         


      

      
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    Section
5.19.     Gas Imbalances,
Prepayments.  Except as listed on the Disclosure Letter, on a
net basis there are no gas imbalances, take or pay or other prepayments
(excluding firm transportation contracts entered into in the ordinary course of
business) which would require Borrower or any of its Subsidiaries to deliver
Mineral Interests produced from the Oil and Gas Properties at some future time
without then or thereafter receiving full payment therefor exceeding 1 Bcf of
gas or the energy equivalent for oil in the aggregate.  Except for
contracts listed in the Disclosure Letter or included in the most recently
delivered Engineering Report (with respect to all of which contracts Borrower
represents that it or its Subsidiaries are receiving a price for all production
sold thereunder which is computed substantially in accordance with the terms of
the relevant contract and are not having deliveries curtailed substantially
below the subject property's delivery capacity except as disclosed in the
Disclosure Letter or the most recently delivered Engineering Report), no
material agreements exist which are not cancelable on 120 days notice or less
without penalty or detriment for the sale of production from Borrower's or its
Subsidiaries' Mineral Interests (including, without limitation, calls on or
other rights to purchase, production, whether or not the same are currently
being exercised) that (a) pertain to the sale of production at a fixed price and
(b) have a maturity or expiry date of longer than six (6) months.

     

    Section
5.20.     Operation of Mineral
Interests. Except for those Mineral Interests disposed of in accordance
with this Agreement and oil and gas leases that have expired in accordance with
their terms, the Mineral Interests covered by the most recently delivered
Engineering Report (and all properties unitized therewith) are being (and, to
the extent the same could adversely affect the ownership or operation of the
Mineral Interests covered by the most recently delivered Engineering Report
after the date hereof, have in the past been) maintained, operated and developed
in a good and workmanlike manner, in accordance with prudent industry standards
and in conformity with all applicable Laws and in conformity with all oil, gas
or other mineral leases and other contracts and agreements forming a part of the
Mineral Interest covered by the most recently delivered Engineering Report and
in conformity with the Permitted Liens except where the failure to do so could
not reasonably be expect to have a Material Adverse Change.  No
Mineral Interest covered by the most recently delivered Engineering Report is
subject to having allowable production after the date hereof reduced below the
full and regular allowable (including the maximum permissible tolerance) because
of any overproduction (whether or not the same was permissible at the time)
prior to the date hereof and none of the wells located on the Mineral Interests
covered by the most recently delivered Engineering Report (or properties
unitized therewith) are or will be deviated from the vertical more than the
maximum permitted by applicable laws, regulations, rules and orders, and such
wells are bottomed under and producing from, with the well bores wholly within,
the Mineral Interests covered by the most recently delivered Engineering Report
(or, in the case of wells located on properties unitized therewith, such
unitized properties) except where such matter could not reasonably be expect to
have a Material Adverse Change.  Each Restricted Person has all
governmental licenses, permits and bonds necessary or appropriate to own and
operate its Mineral Interests covered by the most recently delivered Engineering
Report, and no Restricted Person has received notice of any violations in
respect of any such licenses or permits, except where the failure to do, or any
such violation, so could not reasonably be expect to have a Material Adverse
Change.


    
      
         


      

      
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    Section
5.21.     Regulation
U.  None of Borrower or its Subsidiaries are engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock, and no proceeds of any Loans will be used for a purpose which violates
Regulation U.

     

     

    ARTICLE
VI - - Affirmative
Covenants of Borrower

     

    To
conform with the terms and conditions under which each Lender is willing to have
credit outstanding to Borrower, and to induce each Lender to enter into this
Agreement and extend credit hereunder, Borrower warrants, covenants and agrees
that until the full and final payment of the Obligations and the termination of
this Agreement, unless Majority Lenders have previously agreed
otherwise:

     

    Section
6.1.       Payment and
Performance.  Borrower will pay all amounts due under the Loan
Documents in accordance with the terms thereof and will observe, perform and
comply with every covenant, term and condition expressed or implied in the Loan
Documents.  Borrower will cause each other Restricted Person to
observe, perform and comply with every such term, covenant and condition in any
Loan Document.

     

    Section
6.2.       Books, Financial Statements
and Reports.  Each Restricted Person will at all times maintain
full and accurate books of account and records.  Borrower will
maintain and will cause its Subsidiaries to maintain a standard system of
accounting, will maintain its Fiscal Year, and will furnish the following
statements and reports to each Lender Party at Borrower's expense to the extent
that such statements and reports have not been furnished to such Lender Party
under the WF Facility, except as to the Compliance Certificate:

     

    (a)           As
soon as available, and in any event within ninety (90) days after the end of
each Fiscal Year, complete Consolidated and consolidating financial statements
of Borrower together with all notes thereto, prepared in reasonable detail in
accordance with GAAP, together with an unqualified opinion, based on an audit
using generally accepted auditing standards, by independent certified public
accountants selected by Borrower and acceptable to Majority Lenders, stating
that such Consolidated financial statements have been so
prepared.  These financial statements shall contain a Consolidated and
consolidating balance sheet as of the end of such Fiscal Year and Consolidated
and consolidating statements of earnings, of cash flows, and of changes in
owners' equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year.

     

    (b)           As
soon as available, and in any event within forty-five (45) days after the end of
the first three Fiscal Quarters in each Fiscal Year, Borrower's Consolidated and
consolidating balance sheet as of the end of such Fiscal Quarter and
Consolidated and consolidating statements of Borrower's earnings and cash flows
for the period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, all in reasonable detail and prepared in accordance with
GAAP, subject to changes resulting from normal year-end
adjustments.  In addition, Borrower will, together with each such set
of financial statements and each set of financial statements furnished under
subsection (a) of this section, furnish a Compliance Certificate signed by the
Chief Financial Officer, Treasurer or Controller of Borrower stating that such
financial statements are accurate and complete (subject to normal year-end
adjustments), stating that he has reviewed the Loan Documents, containing
calculations showing compliance (or non-compliance) at the end of such Fiscal
Quarter with the requirements of Section 7.11 and Section 7.12 and stating that
no Default exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any such
Default.


    
      
         


      

      
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    (c)           As
soon as available, and in any event within fifteen (15) days after the date
required to be delivered to the SEC, Borrower will deliver copies of all
financial statements, reports, notices and proxy statements sent by any
Restricted Person to its stockholders and all registration statements, periodic
reports and other statements and schedules filed by any Restricted Person with
any securities exchange, the SEC or any similar governmental
authority.  Documents required to be delivered pursuant to Section
6.2(a), (b) or (c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Borrower posts such documents, or provides a link thereto, on Borrower's website
on the Internet at the website address listed in the Disclosure Letter; or (ii)
on which such documents are posted on Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, including, but not
limited to any filings made on EDGAR to which each Lender and Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by Administrative Agent); provided that: (x)
Borrower shall deliver paper copies of such documents to Administrative Agent or
any Lender that requests Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by Administrative Agent or
such Lender and (y) Borrower shall notify (which may be by facsimile or
electronic mail) Administrative Agent and each Lender of the posting of any such
documents and provide to Administrative Agent by electronic mail electronic
versions (i.e.,
soft copies) of such documents.  Notwithstanding anything contained
herein, in every instance Borrower shall be required to provide paper copies of
the Compliance Certificates required by Section 6.2(b) to Administrative Agent
and each of the Lenders.  Except for such Compliance Certificates,
Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by Borrower with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.

     

    (d)           By
March 15 of each year, Borrower will deliver an Engineering Report prepared by
Independent Engineers as of January 1 of such year, concerning all oil and gas
properties and interests owned by any Restricted Person which are located in or
offshore of the United States and which have attributable to them Proved
Reserves.  This report shall be satisfactory to Administrative Agent,
shall contain sufficient information to enable Borrower to meet the reporting
requirements concerning oil and gas reserves contained in Regulations S-K and
S-X promulgated by the SEC and shall contain information and analysis comparable
in scope to that contained in the Initial Engineering Report.


    
      
         


      

      
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    (e)           By
September 15 of each year, commencing September 15, 2008, Borrower will deliver
an engineering report prepared by Staff Engineers consistent in form and scope
of the Engineering Reports described in (d) above, as of July 1 of such
year.

     

    (f)           Together
with each Engineering Report required under Section 2.9(d) and each Engineering
Report required under Section 2.9(e), Borrower will furnish lease operating
statements for twelve consecutive calendar months then ended, which include
lease operating statements for such period and for each month during such
period, for properties covered by such Engineering Report.

     

    (g)           Together
with each set of financial statements furnished under subsections (a) and (b) of
this section, Borrower will furnish a report (in form reasonably satisfactory to
Administrative Agent) of all Hedging Contracts of Borrower and each of its
Subsidiaries, setting forth the type, term, effective date, termination date and
notional amounts or volumes and the counterparty to each such
agreement.

     

    (h)           As
soon as available, and in any event within forty-five (45) days after the end of
each calendar quarter, Borrower will deliver a report describing by lease or
unit the gross volume of production and sales attributable to production during
such quarter from the properties described in the most recent Engineering Report
and describing the related severance taxes, other taxes, leasehold operating
expenses and capital costs attributable thereto and incurred during such
quarter.

     

    (i)         
  When Borrower or a Consolidated subsidiary of Borrower acquires
assets during a Four-Quarter Period and such assets are included in the
calculation of Adjusted EBITDAX for such Four-Quarter Period, Borrower shall
deliver to Administrative Agent and Lenders, together with the financial
statements described in Section 6.2(b), pro forma financial statements of
Borrower for such period prepared on a Consolidated basis as if such assets had
been acquired by Borrower or such subsidiary on the first day of such
Four-Quarter Period.

     

    (j)          
 Concurrently with the reports referred to in Section 6.2(d), Borrower will
deliver a report describing material gas imbalances and curtailments of
production affecting any Properties of any Restricted Person.

     

    Section
6.3.       Other Information and
Inspections.  Each Restricted Person will furnish to each
Lender any information which Administrative Agent may from time to time
reasonably request concerning any provision of the Loan Documents or any matter
in connection with Restricted Persons' businesses, properties, prospects,
financial condition and operations.  Each Restricted Person will
permit representatives appointed by Administrative Agent (including independent
accountants, auditors, Administrative Agents, attorneys, appraisers and any
other Persons) to visit and inspect during normal business hours any of such
Restricted Person's property, including its books of account, other books and
records, and any facilities or other business assets, and to make extra copies
therefrom and photocopies and photographs thereof, and to write down and record
any information such representatives obtain, and each Restricted Person shall
permit Administrative Agent or its representatives to investigate and verify the
accuracy of the information furnished to Administrative Agent or any Lender in
connection with the Loan Documents and to discuss all such matters with its
officers, employees and representatives.


    
      
         


      

      
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    Section
6.4.       Notice of Material Events
and Change of Address.  Borrower will promptly notify each
Lender in writing, stating that such notice is being given pursuant to this
Agreement, of:

     

    (a)           occurrence
of any Material Adverse Change,

     

    (b)           the
occurrence of any Default,

     

    (c)           the
acceleration of the maturity of any Indebtedness owed by any Restricted Person
or of any default by any Restricted Person under any indenture, mortgage,
agreement, contract or other instrument to which any of them is a party or by
which any of them or any of their properties is bound, if such acceleration or
default could cause a Material Adverse Change,

     

    (d)           the
occurrence of any Termination Event,

     

    (e)           any
claim of $10,000,000 or more, any notice of potential liability under any
Environmental Laws which might exceed such amount, or any other material adverse
claim asserted against any Restricted Person or with respect to any Restricted
Person's properties, and

     

    (f)           the
filing of any suit or proceeding against any Restricted Person in which an
adverse decision could reasonably be expected to cause a Material Adverse
Change.

     

    Upon the
occurrence of any of the foregoing Restricted Persons will take all necessary or
appropriate steps to remedy promptly any such Material Adverse Change, Default,
acceleration, default or Termination Event, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all controversies
on account of any of the foregoing.  Borrower will also notify
Administrative Agent and Administrative Agent's counsel in writing at least
twenty Business Days prior to the date that any Restricted Person changes its
name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records.

     

    Section
6.5.       Maintenance of
Properties.  Each Restricted Person will maintain, preserve,
protect, and keep all property used or useful in the conduct of its business in
good condition and in compliance with all applicable Laws in all material
respects, and will from time to time make all repairs, renewals and replacements
needed to enable the business and operations carried on in connection therewith
to be promptly and advantageously conducted at all times.

     

    Section
6.6.       Maintenance of Existence and
Qualifications.  Each Restricted Person will maintain and
preserve its existence and its rights and franchises in full force and effect
and will qualify to do business in all states or jurisdictions where required by
applicable Law, except where the failure so to qualify will not cause a Material
Adverse Change.  The foregoing shall not restrict (i) any merger or
consolidation permitted by Section 7.4 or (ii) the liquidation or dissolution of
any Subsidiary if Borrower determines in good faith that such liquidation or
dissolution is in the best interests of Borrower and is not materially
disadvantageous to the Lenders.


    
      
         


      

      
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    Section
6.7.       Payment of Trade
Liabilities, Taxes, etc.  Each Restricted Person will (a)
timely file all required tax returns; (b) timely pay all taxes, assessments, and
other governmental charges or levies imposed upon it or upon its income, profits
or property; (c) pay all Liabilities owed by it on ordinary trade terms to
vendors, suppliers and other Persons providing goods and services used by it in
the ordinary course of its business within a period of time after the invoice
date that is customary in the oil and gas industry; (d) pay and discharge when
due all other Liabilities now or hereafter owed by it; and (e) maintain
appropriate accruals and reserves for all of the foregoing in accordance with
GAAP.  Each Restricted Person may, however, delay paying or
discharging any of the foregoing so long as (i) it is in good faith contesting
the validity thereof by appropriate proceedings and has set aside on its books
adequate reserves therefor or (ii) the nonpayment or nondischarge could not
reasonably be expected to cause a Material Adverse Change.

     

    Section
6.8.       Insurance.

     

    (a)           Each
Restricted Person shall at all times maintain (at its own expense) insurance for
its property in accordance with the Insurance Schedule in at least such amounts,
with at least such limitations on deductibles, and against such risks, in such
form and with such financially sound and reputable insurers as shall be
reasonably satisfactory to Administrative Agent from time to time. Each
Restricted Person shall at all times maintain insurance against its liability
for injury to persons or property in accordance with the Insurance Schedule,
which insurance shall be by financially sound and reputable
insurers.

     

    (b)           All
insurance policies shall be modified or endorsed as necessary to (A) name
Administrative Agent as additional insured on policies insuring against
liability for injury to persons or property and (B) prevent any expiration, or
cancellation of the coverage provided by such policies without at least thirty
(30) days prior written notice to Administrative Agent by the
insurer.  Each Restricted Person shall, if so requested by
Administrative Agent, deliver to Administrative Agent original or duplicate
policies of such insurance and, as often as Administrative Agent may reasonably
request, a report of a reputable insurance broker with respect to such
insurance.  Reimbursement under any liability insurance maintained by
Restricted Persons pursuant to this Section 6.8 may be paid directly to the
Person who has incurred the liability covered by such insurance.

     

    Section
6.9.       Performance on Borrower's
Behalf.  If any Restricted Person fails to pay any taxes,
insurance premiums, expenses, attorneys' fees or other amounts it is required to
pay under any Loan Document, Administrative Agent may pay the
same.  Borrower shall immediately reimburse Administrative Agent for
any such payments and each amount paid by Administrative Agent shall constitute
an Obligation owed hereunder which is due and payable on the date such amount is
paid by Administrative Agent.

     

    Section
6.10.     Interest.  Borrower
hereby promises to each Lender Party to pay interest at the Default Rate
applicable to Base Rate Loans on all Obligations (including Obligations to pay
fees or to reimburse or indemnify any Lender) which Borrower has in this
Agreement promised to pay to such Lender Party and which are not paid when
due.  Such interest shall accrue from the date such Obligations become
due until they are paid.


    
      
         


      

      
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    Section
6.11.     Compliance with Agreements
and Law.  Each Restricted Person will perform all material
obligations it is required to perform under the terms of each indenture,
mortgage, deed of trust, security agreement, lease, franchise, agreement,
contract or other instrument or obligation to which it is a party or by which it
or any of its properties is bound, except when failure to do so could not
reasonably be expected to cause a Material Adverse Change.  Each
Restricted Person will conduct its business and affairs in compliance with all
Laws applicable thereto and will maintain in good standing all licenses that may
be necessary or appropriate to carry on its business.

     

    Section
6.12.     Environmental Matters;
Environmental Reviews.

     

    (a)           Except
in each case where failure to do so could not reasonably be expected to cause a
Material Adverse Change, each Restricted Person will comply in all material
respects with all Environmental Laws now or hereafter applicable to such
Restricted Person, as well as all contractual obligations and agreements with
respect to environmental remediation or other environmental matters, and shall
obtain, at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect.  Except in each case where failure to do so could not
reasonably be expected to cause a Material Adverse Change, no Restricted Person
will do anything or permit anything to be done which will subject any of its
properties to any remedial obligations under, or result in noncompliance with
applicable permits and licenses issued under, any applicable Environmental Laws,
assuming disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances.  Upon Administrative Agent's
reasonable request, at any time and from time to time, Borrower will provide at
its own expense an environmental inspection of any of the Restricted Persons'
material real properties and audit of their environmental compliance procedures
and practices, in each case from an engineering or consulting firm reasonably
acceptable to Administrative Agent.  Administrative Agent and Lenders
will use their best efforts to protect any attorney client privilege that exists
with respect to reports or audits prepared by such engineers or
consultants.

     

    (b)           Borrower
will promptly furnish to Administrative Agent all written notices of violation,
orders, claims, citations, complaints, penalty assessments, suits or other
proceedings received by any Restricted Person, or of which Borrower otherwise
has notice, pending or threatened against any Restricted Person by any
Governmental Authority with respect to any alleged violation of or
non-compliance with any Environmental Laws or relating to potential
responsibility with respect to any investigation or clean-up of Hazardous
Material at any location, in each case which involves a claim or liability in
excess of $10,000,000.

     

    Section
6.13.     Evidence of
Compliance.  Each Restricted Person will furnish to each Lender
at such Restricted Person's or Borrower's expense all evidence which
Administrative Agent from time to time reasonably requests in writing as to the
accuracy and validity of or compliance with all representations, warranties and
covenants made by any Restricted Person in the Loan Documents, the satisfaction
of all conditions contained therein, and all other matters pertaining
thereto.

     

    Section
6.14.     Bank Accounts;
Offset.  To secure the repayment of the Obligations Borrower
hereby grants to each Lender a security interest, a lien, and a right of offset,
each of which shall be in addition to all other interests, liens, and rights of
any Lender at common Law, under the Loan Documents, or otherwise, and each of
which shall be upon and against (a) any and all moneys, securities or other
property (and the proceeds therefrom) of Borrower now or hereafter held or
received by or in transit to any Lender from or for the account of Borrower,
whether for safekeeping, custody, pledge, transmission, collection or otherwise,
(b) any and all deposits (general or special, time or demand, provisional or
final) of Borrower with any Lender, and (c) any other credits and claims of
Borrower at any time existing against any Lender, including claims under
certificates of deposit.  At any time and from time to time after the
occurrence of any Default, each Lender is hereby authorized to foreclose upon,
or to offset against the Obligations then due and payable (in either case
without notice to Borrower), any and all items hereinabove referred
to.  The remedies of foreclosure and offset are separate and
cumulative, and either may be exercised independently of the other without
regard to procedures or restrictions applicable to the other.


    
      
         


      

      
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    Section
6.15.     Guaranties of Borrower's
Subsidiaries.  Each Domestic Subsidiary of Borrower that is a
Material Subsidiary now existing or created, acquired or coming into existence
after the date hereof shall, promptly upon request by Administrative Agent,
execute and deliver to Administrative Agent an absolute and unconditional
guaranty of the timely repayment of the Obligations and the due and punctual
performance of the obligations of Borrower hereunder, which guaranty shall be
satisfactory to Administrative Agent in form and substance.  Each such
Domestic Subsidiary of Borrower that is a Material Subsidiary existing on the
date hereof shall duly execute and deliver such a guaranty prior to the making
of any Loan hereunder.  Borrower will cause each such Domestic
Subsidiary to deliver to Administrative Agent, simultaneously with its delivery
of such a guaranty, written evidence satisfactory to Administrative Agent and
its counsel that such Domestic Subsidiary has taken all company action necessary
to duly approve and authorize its execution, delivery and performance of such
guaranty and any other documents which it is required to execute.

     

    Section
6.16.     Mineral
Interests.  Each Restricted Person will carry out its sales of
production, will operate the Mineral Interests, and will otherwise deal with the
Mineral Interests and the production therefrom, in such a way that the
representations and warranties in Section 5.18 through 5.20 remain true and
correct at, and as of, all times that this Agreement is in effect (and not just
at, and as of, the times such representations and warranties are
made).

     

     

    ARTICLE
VII -  Negative
Covenants of Borrower

     

    To
conform with the terms and conditions under which each Lender is willing to have
credit outstanding to Borrower, and to induce each Lender to enter into this
Agreement and make the Loans, Borrower warrants, covenants and agrees that until
the full and final payment of the Obligations and the termination of this
Agreement, unless Majority Lenders have previously agreed
otherwise:

     

    Section
7.1.       Indebtedness.  No
Restricted Person will in any manner owe or be liable for Indebtedness
except:

     

    (a)           the
Obligations;


    
      
         


      

      
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    (b)           Liabilities
for taxes and governmental assessments in the ordinary course of business that
are not yet due;

     

    (c)           Indebtedness
arising under Hedging Contracts permitted under Section 7.3;

     

    (d)           Liability
for that certain royalty associated with production from Borrower's Formax
properties;

     

    (e)           Permitted
Subordinated Debt;

     

    (f)       
    WF Facility Obligations;

     

    (g)           SG
Money Market Facility Obligations;

     

    (h)           intercompany
Indebtedness arising from loans made by (i) Borrower to its wholly-owned
Subsidiaries that are Guarantors, or (ii) any Subsidiary of Borrower to
Borrower; provided, however
that upon the request of Administrative Agent at any time, any such Indebtedness
shall be evidenced by promissory notes having terms reasonably satisfactory to
Administrative Agent, and the sole originally executed counterparts of which
shall be pledged and delivered to Administrative Agent, for the benefit of
Administrative Agent and Lenders, as security for the
Obligations; and

     

    (i)        
   miscellaneous items of Indebtedness not described in
subsections (a) through (h) the outstanding amount of which does not in the
aggregate (taking into account all such Indebtedness of all Restricted Persons)
exceed at any one time an amount equal to five percent (5%) of the Net Worth of
Borrower at such time.

     

    Section
7.2.       Limitation on
Liens.  Except for Permitted Liens, no Restricted Person will
create, assume or permit to exist any Lien upon any of the properties or assets
which it now owns or hereafter acquires.

     

    Section
7.3.       Hedging
Contracts.  No Restricted Person will be a party to or in any
manner be liable on any Hedging Contract except:

     

    (a)           Oil.  Contracts
entered into with the purpose and effect of fixing prices on oil expected to be
produced, sold or transported by Restricted Persons from its oil and gas
properties, provided
that at all times: (i) no such contract fixes a price for a term of more
than 60 months except (x) contracts that are directly hedged to offset a longer
term fixed rate contract and (y) contracts covering oil and gas properties in
the Midway-Sunset Field which have a term not to exceed 84 months; (ii) the
aggregate monthly production covered by all such contracts (determined, in the
case of contracts that are not settled on a monthly basis, by a monthly
proration acceptable to Administrative Agent) for any single month does not in
the aggregate exceed 90% of Restricted Persons' aggregate Projected Oil
Production anticipated to be sold in the ordinary course of Restricted Persons'
businesses for such month, and the aggregate monthly production covered by all
such contracts having a term of more than 60 months but not more than 84 months
shall not in the aggregate exceed 60% of the Restricted Persons' aggregate
Projected Oil Production from the Midway-Sunset Field anticipated to be sold in
the ordinary course of such Persons' business for such month, (iii) except for
letters of credit and the WF Collateral under the WF Security Documents with
respect to WF Lender Hedging Obligations, no such contract requires any
Restricted Person to put up money, assets or other security against the event of
its nonperformance prior to actual default by such Restricted Person in
performing its obligations thereunder, and (iv) each such contract is with a
counterparty or has a guarantor of the obligation of the counterparty who
(unless such counterparty is a WF Lender or one of its Affiliates) at the time
the contract is made has long-term obligations rated A1 by Moody's or A+ by S
& P, or better, respectively, by either Rating Agency.


    
      
         


      

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

    


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

    


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


    
      
         


      

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

     

    (f)        
   Put
Options; Cap Transactions.  Notwithstanding the foregoing
provisions of this Section 7.3, there shall be no limitations on the purchase by
the Restricted Persons of put options or floor transactions with respect to oil,
gas, natural gas liquids or electricity produced by, call options or cap
transactions with respect to gas expected to be purchased by, or cap
transactions with respect to principal balances of indebtedness of, the
Restricted Person; provided, however,
that any such put or call options or cap or floor transactions shall be solely
for hedging, and not for speculative purposes, and the Restricted Person shall
have no obligations thereunder other than payment of the applicable premium for
any such put or call options or cap or floor transactions.

    


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


    
      
         


      

      
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    Section
7.5.       Limitation on Sales of
Property.  No Restricted Person will sell, transfer, lease,
exchange, alienate or dispose of any of its material assets or properties or any
material interest therein or portions thereof, or discount, sell, pledge or
assign any notes payable to it, accounts receivable or future income, except, to
the extent not otherwise forbidden under the WF Security Documents:

     

    (a)           equipment
which is worthless or obsolete or which is replaced by equipment of equal
suitability and value;

     

    (b)           inventory
(including oil and gas sold as produced and seismic data) which is sold in the
ordinary course of business on ordinary trade terms;

     

    (c)           capital
stock of any of Borrower's Subsidiaries which is transferred to Borrower or a
wholly owned Subsidiary of Borrower;

     

    (d)           interests
in oil and gas properties or portions thereof, to which no Proved Reserves of
oil, gas or other liquid or gaseous hydrocarbons are properly
attributed;

     

    (e)           leases
of drilling rigs in the ordinary course of business and sales of drilling rigs
that are under options for sale on the Closing Date which are described in
Schedule 3;

     

    (f)           exchanges
of (i) Restricted Persons' oil and gas leasehold interests in non-producing
zones to which no Proved Reserves of oil, gas or other liquid or gaseous
hydrocarbons are properly attributed, whether or not such interests are subject
to Liens created under the WF Security Documents in favor of WF Agent, for
(ii) other oil and
gas leasehold interests in producing or non-producing zones owned by other
Persons;

     

    (g)           exchanges
and transfers of Mineral Interests located in the DJ Basin in Colorado owned by
Restricted Persons (in this Section called the "Berry DJ Properties") for
Mineral Interests located therein by Rosewood Resources (in this Section called
"Rosewood DJ Properties"); provided that the
aggregate amount of Rosewood DJ Properties received in exchange for Berry DJ
Properties shall have a value equivalent to the Berry DJ Properties so
exchanged;

     

    (h)           transfers
among Borrower and Guarantors;


    
      
         


      

      
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    (i)           sales
and dispositions of other property for a purchase price paid in cash or Mineral
Interests in an amount at least equal to the fair market value
thereof.

     

    Section
7.6.       Limitation on Dividends,
Stock Repurchases and Subordinated Debt.

     

    (a)           No
Restricted Person will declare or make any Dividends or Stock Repurchases other
than (i) Dividends payable to Borrower or Subsidiaries of Borrower, (ii) Stock
Repurchases by Borrower; provided that the
aggregate amount paid by Borrower in connection therewith does not exceed
$35,000,000 during any Four-Quarter Period, (iii) so long as no Default has
occurred and is continuing or will occur as a result thereof, Dividends payable
to Borrower's shareholders, to the extent that the aggregate value of all such
Dividends made during any Four-Quarter Period does not exceed the greater of
$20,000,000 or seventy-five percent (75%) of Net Income for such Four-Quarter
Period, and (iv) Dividends and Stock Repurchases made with the net cash proceeds
received from a substantially concurrent issue of new shares of its common stock
or other common Equity Interests.

     

    (b)           No
Restricted Person shall make any payment of principal, interest or fees on
Permitted Subordinated Debt, except to the extent expressly permitted by the
applicable subordination agreement with Administrative Agent.

     

    Section
7.7.       Limitation on Acquisitions,
Investments; and New Businesses.  Except as expressly permitted
by this section, no Restricted Person will make any acquisitions of, or capital
contributions to, or other Investments in any Person or property; provided that the
Restricted Persons (i) may make Permitted Investments and Core Acquisitions and
Investments without limitation, and (ii) may make Non-Core Acquisitions and
Investments so long as the aggregate amount expended on Non-Core Acquisitions
and Investments during the period from the date hereof until the Maturity Date
never exceeds 10% of Borrower's Net Worth at any time during such
period.  No Restricted Person will engage directly or indirectly in
any business or conduct any operations except in connection with or incidental
to its present businesses and operations and transactions permitted by Section
7.8.

     

    Section
7.8.       Limitation on Credit
Extensions.  Except for Permitted Investments, no Restricted
Person will extend credit, make advances or make loans other than normal and
prudent extensions of credit to customers buying goods and services in the
ordinary course of business, which extensions shall not be for longer periods
than those extended by similar businesses operated in a normal and prudent
manner.

     

    Section
7.9.       Transactions with
Affiliates.  Neither Borrower nor any of its Subsidiaries nor
any Guarantor will engage in any material transaction with any of its Affiliates
on terms which are less favorable to it than those which would have been
obtainable at the time in arm's-length dealing with Persons other than such
Affiliates, provided that such
restriction shall not apply to transactions among Borrower and its wholly owned
Subsidiaries.

     

    Section
7.10.     Prohibited
Contracts.

     

    (a)           Except
as expressly provided for in the Loan Documents, no Restricted Person will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on (i) the ability of any Subsidiary of
Borrower to (1) pay dividends or make other distributions to Borrower, (2) to
redeem equity interests held in it by Borrower, (3) to repay loans and other
indebtedness owing by it to Borrower, or (4) to transfer any of its assets to
Borrower or (ii) on the ability of any Restricted Person to grant Administrative
Agent and Lenders liens on its Property, except:


    
      
         


      

      
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    (A)          any
customary encumbrance or restriction with respect to a Subsidiary imposed
pursuant to a merger agreement or an agreement entered into for the sale or
disposition of all or substantially all the capital stock or assets of such
Subsidiary pending the closing of such sale or disposition; and

     

    (B)           with
respect to the above clauses (i)(4) and clause (iv) only,

     

    (i)           any
such encumbrance or restriction consisting of customary nonassignment provisions
(including provisions forbidding subletting or sublicensing) in agreements,
leases governing leasehold interests and licenses to the extent such provisions
restrict the transfer of the agreement, lease or license or the property leased,
or licensed thereunder;

     

    (ii)          customary
restrictions contained in asset sale agreements limiting the transfer of such
assets pending the closing of such sale;

     

    (iii)         restrictions
in the instruments creating a Permitted Lien described in clause (d) or (h) of
the definition of Permitted Lien, limiting Liens on the property subject to such
Permitted Lien;

     

    (iv)        
restrictions on Equity Interests constituting minority Investments permitted by
Section 7.7;

     

    (v)         
existing restrictions with respect to a Person acquired by Borrower or any of
its Subsidiaries (except to the extent such restrictions were put in place in
connection with or in contemplation of such acquisition), which restrictions are
not applicable to any Person, or the properties or assets of any Person other
than the Person, or the property or assets of the Person, so acquired;
and

     

    (vi)         customary
supermajority voting provisions and other customary provisions with respect to
the disposition or distribution of assets, each contained in corporate charters,
bylaws, stockholders' agreements, limited liability company agreements,
partnership agreements, joint venture agreements and other similar agreements
entered into in the ordinary course of business of Borrower and its
Subsidiaries.

     

    (b)           Except
as permitted by Section 5.19, no Restricted Person will enter into any
"take-or-pay" contract or other contract or arrangement for the purchase of
goods or services which obligates it to pay for such goods or services
regardless of whether they are delivered or furnished to it, excluding firm
transportation contracts entered into in the ordinary course of business. No
Restricted Person will amend or permit any amendment to any contract or lease
which releases, qualifies, limits, makes contingent or otherwise detrimentally
affects the rights and benefits of Administrative Agent or any Lender under or
acquired pursuant to any Security Documents.  No ERISA Affiliate will
incur any obligation to contribute to any "multiemployer plan" as defined in
Section 4001 of ERISA.


    
      
         


      

      
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    Section
7.11.     Current
Ratio.  Beginning with the Fiscal Quarter ending September 30,
2008, the ratio of Borrower's Current Assets to Borrower's Current Liabilities
will never be less than 1.0 to 1.0.

     

    Section
7.12.     EBITDAX to Total Funded Debt
Ratio.  Beginning with the Fiscal Quarter ending September 30,
2008, the ratio of (a) Total Funded Debt to (b) Adjusted EBITDAX for the
Four-Quarter Period then ended, will not be greater than 3.5 to 1.0 at the end
of any Fiscal Quarter.

     

     

    ARTICLE
VIII - - Events of
Default and Remedies

     

    Section
8.1.       Events of
Default.  Each of the following events constitutes an Event of
Default under this Agreement:

     

    (a)           Any
Restricted Person fails to pay any principal component of any Obligation when
due and payable, whether at a date for the payment of a fixed installment or as
a contingent or other payment becomes due and payable or as a result of
acceleration or otherwise;

     

    (b)           Any
Restricted Person fails to pay any Obligation (other than the Obligations in
subsection (a) above) when due and payable, whether at a date for the payment of
a fixed installment or as a contingent or other payment becomes due and payable
or as a result of acceleration or otherwise, within three Business Days after
the same becomes due;

     

    (c)           Any
"default" or "event of default" occurs under any Loan Document which defines
either such term, and the same is not remedied within the applicable period of
grace (if any) provided in such Loan Document;

     

    (d)           Any
Restricted Person fails to duly observe, perform or comply with any covenant,
agreement or provision of Section 6.4 or Article VII;

     

    (e)           Any
Restricted Person fails (other than as referred to in subsections (a), (b), (c)
or (d) above) to duly observe, perform or comply with any covenant, agreement,
condition or provision of any Loan Document, and such failure remains unremedied
for a period of thirty (30) days after notice of such failure is given by
Administrative Agent to Borrower;

     

    (f)       
    Any representation or warranty previously, presently or
hereafter made in writing by or on behalf of any Restricted Person in connection
with any Loan Document shall prove to have been false or incorrect in any
material respect on any date on or as of which made, or any Loan Document at any
time ceases to be valid, binding and enforceable as warranted in Section 5.5 for
any reason other than its release or subordination by Administrative
Agent;

     

    (g)           Any
Restricted Person (i) fails to pay any portion, when such portion is due, (A) of
any of its Indebtedness owing under the WF Facility or under the SG Money Market
Facility, or (B) any of its other Indebtedness in excess of $25,000,000, or (ii)
breaches or defaults in the performance of any agreement or instrument by which
the WF Facility, the SG Money Market Facility or any such other Indebtedness in
excess of $25,000,000 is issued, evidenced,
governed, or secured, and any such failure, breach or default continues beyond
any applicable period of grace provided therefor;


    
      
         


      

      
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    (h)           Either
(i) any "accumulated funding deficiency" (as defined in Section 412(a) of the
Internal Revenue Code) in excess of $5,000,000 exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his delegate, or
(ii) any Termination Event occurs with respect to any ERISA Plan and the then
current value of such ERISA Plan's benefit liabilities exceeds the then current
value of such ERISA Plan's assets available for the payment of such benefit
liabilities by more than $5,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the withdrawing employer's
proportionate share of such excess exceeds such amount);

     

    (i)        
   Any Change of Control occurs; and

     

    (j)         
  Any Restricted Person:

     

    (i)         
   suffers the entry against it of a judgment, decree or order
for relief by a Governmental Authority of competent jurisdiction in an
involuntary proceeding commenced under any applicable bankruptcy, insolvency or
other similar Law of any jurisdiction now or hereafter in effect, including the
federal Bankruptcy Code, as from time to time amended, or has any such
proceeding commenced against it which remains undismissed for a period of sixty
days; or

     

    (ii)         
  commences a voluntary case under any applicable bankruptcy,
insolvency or similar Law now or hereafter in effect, including the federal
Bankruptcy Code, as from time to time amended; or applies for or consents to the
entry of an order for relief in an involuntary case under any such Law; or makes
a general assignment for the benefit of creditors; or fails generally to pay (or
admits in writing its inability to pay) its debts as such debts become due; or
takes corporate or other action to authorize any of the foregoing;
or

     

    (iii)        
  suffers the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official of
all or a substantial part of its assets in a proceeding brought against or
initiated by it, and such appointment or taking possession is neither made
ineffective nor discharged within sixty days after the making thereof, or such
appointment or taking possession is at any time consented to, requested by, or
acquiesced to by it; or

     

    (iv)        
  suffers the entry against it of a final judgment for the payment of
money in excess of $5,000,000 (not covered by insurance satisfactory to
Administrative Agent in its discretion), unless the same is discharged within
sixty days after the date of entry thereof or an appeal or appropriate
proceeding for review thereof is taken within such period and a stay of
execution pending such appeal is obtained; or

     

    (v)       
    suffers a writ or warrant of attachment or any similar
process to be issued by any Governmental Authority against all or any
substantial part of its assets, and such writ or warrant of attachment or any
similar process is not stayed or released within sixty days after the entry or
levy thereof or after any stay is vacated or set aside.


    
      
         


      

      
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    Upon the
occurrence of an Event of Default described in subsection (j)(i), (j)(ii) or
(j)(iii) of this section with respect to Borrower, all of the Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Borrower and each Restricted Person who at any time ratifies or approves this
Agreement.  Upon any such acceleration, any obligation of any Lender
to make any further Loans hereunder shall be permanently
terminated.  During the continuance of any other Event of Default,
Administrative Agent at any time and from time to time may (and upon written
instructions from Majority Lenders, Administrative Agent shall), without notice
to Borrower or any other Restricted Person, do either or both of the
following:  (1) terminate any obligation of Lenders to make Loans
hereunder and (2) declare any or all of the Obligations immediately due and
payable, and all such Obligations shall thereupon be immediately due and
payable, without demand, presentment, notice of demand or of dishonor and
nonpayment, protest, notice of protest, notice of intention to accelerate,
declaration or notice of acceleration, or any other notice or declaration of any
kind, all of which are hereby expressly waived by Borrower and each Restricted
Person who at any time ratifies or approves this Agreement.

     

    Section
8.2.       Remedies.  If
any Default shall occur and be continuing, each Lender Party may protect and
enforce its rights under the Loan Documents by any appropriate proceedings,
including proceedings for specific performance of any covenant or agreement
contained in any Loan Document, and each Lender Party may enforce the payment of
any Obligations due it or enforce any other legal or equitable right which it
may have.  All rights, remedies and powers conferred upon Lender
Parties under the Loan Documents shall be deemed cumulative and not exclusive of
any other rights, remedies or powers available under the Loan Documents or at
Law or in equity.

     

    Section
8.3.       Application of Proceeds
After Acceleration.  After the exercise of remedies provided
for in Section 8.2 (or after the Loans have automatically become immediately due
and payable), any amounts received on account of the Obligations shall be
applied by Administrative Agent in the following order:

     

    First, to payment of
that portion of the Obligations constituting fees, indemnities, expenses and
other amounts (including fees, charges and disbursements of counsel to
Administrative Agent (including fees and time charges for attorneys who may be
employees of Agent) and amounts payable under Article III) payable
to Administrative Agent in its capacity as such;

     

    Second, to payment of
that portion of the Obligations constituting fees, indemnities and other amounts
(other than principal and interest) payable to Lenders (including fees, charges
and disbursements of counsel to the respective Lenders and amounts payable under
Article III),
ratably among them in proportion to the respective amounts described in this
clause Second
payable to them;


    
      
         


      

      
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    Third, to payment of
that portion of the Obligations constituting accrued and unpaid interest on the
Loans, ratably among Lenders in proportion to the respective amounts described
in this clause Third payable to
them;

     

    Fourth, to payment of
that portion of the Obligations constituting unpaid principal of the Loans,
ratably among Lenders in proportion to the respective amounts described in this
clause Fourth
held by them; and

     

    Last, the balance, if
any, after all of the Obligations have been indefeasibly paid in full, to
Borrower or as otherwise required by Law.

     

     

    ARTICLE
IX - - Administrative Agent

     

    Section
9.1.       Appointment and
Authority.  Each of the Lenders hereby irrevocably appoints
Societe Generale to act on its behalf as Administrative Agent hereunder and
under the other Loan Documents and authorizes Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to
Administrative Agent by the terms hereof or thereof, together with such actions
and powers as are reasonably incidental thereto.  The provisions of
this Article are solely for the benefit of Administrative Agent and the Lenders,
and neither Borrower nor any other Restricted Person shall have rights as a
third party beneficiary of any of such provisions.

     

    Section
9.2.       Exculpation
Provisions.  Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents.  Without limiting the generality of the foregoing,
Administrative Agent:

     

    (a)           shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

     

    (b)           shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage
of Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that
Administrative Agent shall not be required to take any action that, in its
opinion or the opinion of its counsel, may expose Administrative Agent to
liability or that is contrary to any Loan Document or applicable law;
and

     

    (c)           shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to Borrower or any of its Affiliates that is communicated
to or obtained by the Person serving as Administrative Agent or any of its
Affiliates in any capacity.

     

    Administrative
Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Administrative Agent
shall believe in good faith shall be necessary under the circumstances as
provided in Sections 10.1 and 8.2) or (ii) in the absence of its own gross
negligence or willful misconduct.  Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing
such Default is given to Administrative Agent by Borrower or a
Lender.


    
      
         


      

      
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    Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to Administrative
Agent.

     

    Section
9.3.       Reliance by Administrative
Agent.  Administrative Agent shall be entitled to rely upon,
and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person.  Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to have been made by the proper Person, and shall not incur any liability
for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, that by its terms must be fulfilled to the
satisfaction of a Lender, Administrative Agent may presume that such condition
is satisfactory to such Lender unless Administrative Agent shall have received
notice to the contrary from such Lender prior to the making of such
Loan.  Administrative Agent may consult with legal counsel (who may be
counsel for Borrower), independent accountants and other experts selected by it,
and shall not be liable for any action taken or not taken by it in accordance
with the advice of any such counsel, accountants or experts.

     

    Section
9.4.       Non-Reliance on
Administrative Agent and Other Lenders. Each Lender acknowledges
that it has, independently and without reliance upon Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.  Each Lender also acknowledges
that it will, independently and without reliance upon Administrative Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.

     

    Section
9.5.       Rights as
Lender.  The Person serving as Administrative Agent hereunder
shall have the same rights and powers in its capacity as a Lender as any other
Lender and may exercise the same as though it were not Administrative Agent and
the term "Lender" or "Lenders" shall, unless otherwise expressly indicated or
unless the context otherwise requires, include the Person serving as
Administrative Agent hereunder in its individual capacity.  Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with Borrower or any Subsidiary or other Affiliate thereof
as if such Person were not Administrative Agent hereunder and without any duty
to account therefor to the Lenders.


    
      
         


      

      
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    Section
9.6.       Sharing of Set-Offs and
Other Payments.  Each Lender Party agrees that if it shall,
whether through the rights of banker's lien, set off, or counterclaim against
Borrower or otherwise, obtain payment of a portion of the aggregate Obligations
owed to it, taking into account all distributions made by Administrative Agent
under Section 3.1, and such payment causes such Lender Party to have received
more than it would have received had such payment been received by
Administrative Agent and distributed pursuant to Section 3.1, then (a) it shall
be deemed to have simultaneously purchased and shall be obligated to purchase
interests in the Obligations as necessary to cause all Lender Parties to share
all payments as provided for in Section 3.1, and (b) such other adjustments
shall be made from time to time as shall be equitable to ensure that
Administrative Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however,
that nothing herein contained shall in any way affect the right of any Lender
Party to obtain payment (whether by exercise of rights of banker's lien, set-off
or counterclaim or otherwise) of indebtedness other than the
Obligations.  Borrower expressly consents to the foregoing
arrangements and agrees that any holder of any such interest or other
participation in the Obligations, whether or not acquired pursuant to the
foregoing arrangements, may to the fullest extent permitted by Law exercise any
and all rights of banker's lien, set-off, or counterclaim as fully as if such
holder were a holder of the Obligations in the amount of such interest or other
participation.  If all or any part of any funds transferred pursuant
to this section is thereafter recovered from the seller under this section which
received the same, the purchase provided for in this section shall be deemed to
have been rescinded to the extent of such recovery, together with interest, if
any, if interest is required pursuant to the order of a Governmental Authority
order to be paid on account of the possession of such funds prior to such
recovery.

     

    Section
9.7.       Investments.  Whenever
Administrative Agent in good faith determines that it is uncertain about how to
distribute to Lender Parties any funds which it has received, or whenever
Administrative Agent in good faith determines that there is any dispute among
Lender Parties about how such funds should be distributed, Administrative Agent
may choose to defer distribution of the funds which are the subject of such
uncertainty or dispute.  If Administrative Agent in good faith
believes that the uncertainty or dispute will not be promptly resolved, or if
Administrative Agent is otherwise required to invest funds pending distribution
to Lender Parties, Administrative Agent shall invest such funds pending
distribution; all interest on any such Investment shall be distributed upon the
distribution of such Investment and in the same proportion and to the same
Persons as such Investment.  All moneys received by Administrative
Agent for distribution to Lender Parties (other than to the Person who is
Administrative Agent in its separate capacity as a Lender Party) shall be held
by Administrative Agent pending such distribution solely as Administrative Agent
for such Lender Parties, and Administrative Agent shall have no equitable title
to any portion thereof.

     

    Section
9.8.       Resignation of
Administrative Agent.  Administrative Agent may at any time
give notice of its resignation to the Lenders and Borrower.  Upon
receipt of any such notice of resignation, Required Lenders shall have the
right, in consultation with Borrower, to appoint a successor, which shall be a
bank with an office in the United States, or an Affiliate of any such bank with
an office in the United States.  If no such successor shall have been
so appointed by Required Lenders and shall have accepted such appointment within
30 days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may on behalf of the Lenders, appoint a
successor Administrative Agent meeting the qualifications set forth above; provided that if
Administrative Agent shall notify Borrower and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (2) all payments,
communications and determinations provided to be made by, to or through
Administrative Agent shall instead be made by or to each Lender directly, until
such time as Required Lenders appoint a successor Administrative Agent as
provided for above in this Section.  Upon the acceptance of a
successor's appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent.  The fees
payable by Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between Borrower and
such successor.  After the retiring Administrative Agent's resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.4 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative
Agent.


    
      
         


      

      
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    Section
9.9.       Delegation of
Duties.  Administrative Agent may perform any and all of its
duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub-agents appointed by Administrative
Agent.  Administrative Agent and any such sub-agent may perform any
and all of its duties and exercise its rights and powers by or through their
respective Related Parties.  The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

     

    Section
9.10.     No Other Duties,
etc.  Anything herein to the contrary notwithstanding, none of
the Joint Bookrunners, the Co-Lead Arrangers or the Documentation Agents listed
on the cover page hereof shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as Administrative Agent or a Lender hereunder.

     

    Section
9.11.     Administrative Agent May
File Proofs of Claim.  In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to any Restricted
Person, Administrative Agent (irrespective of whether the principal of any Loan
shall then be due and payable as herein expressed or by declaration or otherwise
and irrespective of whether Administrative Agent shall have made any demand on
Borrower) shall be entitled and empowered, by intervention in such proceeding or
otherwise

     

    (a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans and all other Obligations that are owing and
unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of Lenders and Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
Lenders and Administrative Agent and their respective agents and counsel and all
other amounts due Lenders and Administrative Agent under Section 2.5 and 10.4)
allowed in such judicial proceeding; and


    
      
         


      

      
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    (b)           to
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to Administrative Agent and, in the event that
Administrative Agent shall consent to the making of such payments directly to
Lenders, to pay to Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of Administrative Agent and
its agents and counsel, and any other amounts due Administrative Agent under
Sections 2.5 and 10.4.  Nothing contained herein shall be deemed to
authorize Administrative Agent to authorize or consent to or accept or adopt on
behalf of any Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Obligations or the rights of any Lender or to
authorize Administrative Agent to vote in respect of the claim of any Lender in
any such proceeding.

     

    Section
9.12.     Guaranty
Matters.  Each Lender hereby irrevocably authorizes
Administrative Agent, at its option and in its discretion, to release any
Guarantor from its obligations under any guaranty if such Person ceases to be a
Subsidiary as a result of a transaction permitted hereunder.  Upon
request by Administrative Agent at any time, each Lender will confirm in writing
Administrative Agent's authority to release any Guarantor from its obligations
under any guaranty pursuant to this Section 9.12.

     

     

    ARTICLE X
- - Miscellaneous

     

    Section
10.1.     Waivers and Amendments;
Acknowledgments.

     

    (a)           Waivers and
Amendments.  No failure or delay (whether by course of conduct
or otherwise) by any Lender in exercising any right, power or remedy which such
Lender Party may have under any of the Loan Documents shall operate as a waiver
thereof or of any other right, power or remedy, nor shall any single or partial
exercise by any Lender Party of any such right, power or remedy preclude any
other or further exercise thereof or of any other right, power or
remedy.  No waiver of any provision of any Loan Document and no
consent to any departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing.  No
notice to or demand on any Restricted Person shall in any case of itself entitle
any Restricted Person to any other or further notice or demand in similar or
other circumstances.  This Agreement and the other Loan Documents set
forth the entire understanding between the parties hereto with respect to the
transactions contemplated herein and therein and supersede all prior discussions
and understandings with respect to the subject matter hereof and thereof, and no
waiver, consent, release, modification or amendment of or supplement to this
Agreement or the other Loan Documents shall be valid or effective against any
party hereto unless the same is in writing and signed by (i) if such party is
Borrower, by Borrower, (ii) if such party is Administrative Agent, by
Administrative Agent, and (iii) if such party is a Lender, by such Lender or by
Administrative Agent on behalf of Lenders with the written consent of Majority
Lenders (which consent has already been given as to the termination of the Loan
Documents as provided in Section 10.9.  Notwithstanding the foregoing
or anything to the contrary herein, Administrative Agent shall not, without the
prior consent of each individual Lender, execute and deliver on behalf of such
Lender any waiver or amendment which would:  (1) waive any of the
conditions specified in Section 4.1 (provided that
Administrative Agent may in its discretion withdraw any request it has made
under Section 4.1(q)), (2) increase the maximum amount which such Lender is
committed hereunder to lend, (3) reduce any fees payable to such Lender
hereunder, or the principal of, or rate of interest on, such Lender's Note, (4)
postpone any date fixed for any payment of any such fees, principal or interest,
(5) amend the definition herein of "Majority Lenders" or "Required Lenders" or
otherwise change the aggregate amount of Percentage Shares which is required for
Administrative Agent, Lenders or any of them to take any particular action under
the Loan Documents, (6) amend the definition of "Maximum Credit Amount" to mean
an amount higher than $100,000,000, (7) release Borrower from its obligation to
pay such Lender's Note or any Guarantor from its guaranty of such payment, or
(8) amend this Section 10.1(a).


    
      
         


      

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

     

    (c)           Joint
Acknowledgment.  This
written Agreement and the other
Loan Documents represent the final agreement between the parties and may not be
contradicted by evidence of prior, contemporaneous, or subsequent oral
agreements of the parties.


    
      
         


      

      
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    There
are no unwritten oral agreements between the parties.

     

    Section
10.2.     Survival of Agreements;
Cumulative Nature.  All of Restricted Persons' various
representations, warranties, covenants and agreements in the Loan Documents
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the performance hereof and thereof, including the making or
granting of the Loans and the delivery of the Notes and the other Loan
Documents, and shall further survive until all of the Obligations are paid in
full to each Lender Party and all of Lender Parties' obligations to Borrower are
terminated.  All statements and agreements contained in any
certificate or other instrument delivered by any Restricted Person to any Lender
Party under any Loan Document shall be deemed representations and warranties by
Borrower or agreements and covenants of Borrower under this
Agreement.  The representations, warranties, indemnities, and
covenants made by Restricted Persons in the Loan Documents, and the rights,
powers, and privileges granted to Lender Parties in the Loan Documents, are
cumulative, and, except for expressly specified waivers and consents, no Loan
Document shall be construed in the context of another to diminish, nullify, or
otherwise reduce the benefit to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or privilege.  In
particular and without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained shall apply to
any similar representation, warranty, indemnity, or covenant contained in any
other Loan Document, and each such similar representation, warranty, indemnity,
or covenant shall be subject only to those exceptions which are expressly made
applicable to it by the terms of the various Loan Documents.

     

    Section
10.3.     Notices; Effectiveness;
Electronic Communication.

     

    (a)           Notices
Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

     

    (i)      
 if to Borrower or any other Restricted Person or Administrative Agent; to
the address, facsimile number, electronic mail address or telephone number
specified for such Person on the signature pages hereto;

     

    (ii)      
if to any other Lender Party, to it at its address, facsimile number, electronic
mail address or telephone number as specified on the Lenders
Schedule.

     

    Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to
the extent provided in subsection (b) below, shall be effective as provided in
said subsection (b).


    
      
         


      

      
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    (b)           Electronic
Communications.  Notices and other communications to the
Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Article II if
such Lender has notified Administrative Agent that it is incapable of receiving
notices under such Article by electronic
communication.  Administrative Agent or Borrower or any other
Restricted Person may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications.

     

    Unless
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender's receipt of
an acknowledgement from the intended recipient (such as by the "return receipt
requested" function, as available, return e-mail or other written
acknowledgement), provided that if such
notice or other communication is not sent during the normal business hours of
the recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient, and (ii)
notices or communications posted to an Internet or intranet website shall be
deemed received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of notification that such
notice or communication is available and identifying the website address
therefor.

     

    (c)           Change of Address,
Etc.  Each of Borrower, any other Restricted Person and
Administrative Agent may change its address, facsimile or telephone number for
notices and other communications hereunder by notice to the other parties
hereto.  Each other Lender Party may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to
Borrower and Administrative Agent.

     

    Section
10.4.     Payment of Expenses;
Indemnity.

     

    (a)           Payment of
Expenses.  Whether or not the transactions contemplated by this
Agreement are consummated, Borrower will promptly (and in any event, within 30
days after any invoice or other statement or notice) pay: (i) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Loan Documents or any other document or transaction referred to herein or
therein, (ii) all reasonable costs and expenses incurred by or on behalf of
Administrative Agent (including without limitation attorneys' fees and
engineering fees, travel costs and miscellaneous expenses) in connection with
(1) the negotiation, preparation, execution and delivery of the Loan Documents,
and any and all consents, waivers or other documents or instruments relating
thereto, (2) the borrowings hereunder and other action reasonably required in
the course of administration hereof, (3) monitoring or confirming (or
preparation or negotiation of any document related to) any Restricted Person's
compliance with any covenants or conditions contained in this Agreement or in
any Loan Document, and (iii) all reasonable costs and expenses incurred by or on
behalf of any Lender Party (including without limitation attorneys' fees,
consultants' fees and accounting fees) in connection with the preservation of
any rights under the Loan Documents or the defense or enforcement of any of the
Loan Documents (including this section), any attempt to cure any breach
thereunder by any Restricted Person, or the defense of any Lender Party's
exercise of its rights thereunder.  In addition to the foregoing,
until all Obligations have been paid in full, Borrower will also pay or
reimburse Administrative Agent for all reasonable out-of-pocket costs and
expenses of Administrative Agent or its sub-agents or employees in connection
with the continuing administration of the Loans and the related due diligence of
Administrative Agent, including reasonable travel and miscellaneous expenses and
fees and expenses of Administrative Agent's outside counsel, reserve engineers
and consultants engaged in connection with the Loan Documents.


    
      
         


      

      
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    (b)           Reimbursement by
Lenders.  To the extent
that Borrower for any reason fails to indefeasibly pay any amount required under
paragraph (a) or (b) of this Section to be paid by it to Administrative Agent
(or any sub-agent thereof) or any Related Party of Administrative Agent, each
Lender severally agrees to pay to Administrative Agent (or any such sub-agent)
or such Related Party, as the case may be, such Lender's Percentage Share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against Administrative
Agent (or any such sub-agent) in its capacity as such, or any Related Party of
Administrative Agent acting for Administrative Agent (or any such sub-agent) in
connection with such capacity.  The obligations of the Lenders under
this paragraph (c) are subject to the provisions of Section 2.9.

     

    (c)           Indemnity.  Borrower agrees to
indemnify each Lender Party, upon demand, from and against any and all
liabilities, obligations, broker's fees, claims, losses, damages, penalties,
fines, actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of
any kind or nature whatsoever (in this section collectively called "liabilities
and costs") which to any extent (in whole or in part) may be imposed on,
incurred by, or asserted against such Lender Party growing out of, resulting
from or in any other way associated with the Loan Documents and the transactions
and events (including the enforcement or defense thereof) at any time associated
therewith or contemplated therein (whether arising in contract or in tort or
otherwise).  Among other things, the foregoing indemnification covers
all liabilities and costs incurred by any Lender Party related to any breach of
a Loan Document by a Restricted Person, any bodily injury to any Person or
damage to any Person's property, or any violation or noncompliance with any
Environmental Laws by any Lender Party or any other Person or any liabilities or
duties of any Lender Party or any other Person with respect to Hazardous
Materials found in or released into the environment.

     

    The
foregoing indemnification shall apply whether or not such liabilities and costs
are in any way or to any extent owed, in whole or in part, under any claim or
theory of strict liability or caused, in whole or in part by any negligent act
or omission of any kind by any Lender Party,


    
      
         


      

      
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    provided only that no
Lender Party shall be entitled under this section to receive indemnification for
that portion, if any, of any liabilities and costs which is proximately caused
by its own individual gross negligence or willful misconduct, as determined in a
final judgment.  If any Person (including Borrower or any of its
Affiliates) ever alleges such gross negligence or willful misconduct by any
Lender Party, the indemnification provided for in this section shall nonetheless
be paid upon demand, subject to later adjustment or reimbursement, until such
time as a court of competent jurisdiction enters a final judgment as to the
extent and effect of the alleged gross negligence or willful
misconduct.  As used in this section the term "Lender Party" shall
refer not only to each Person designated as such in Section 1.1 but also to each
director, officer, Administrative Agent, agent, advisor, trustee, attorney,
employee, representative and Affiliate of or for such Person.

     

    Section
10.5.     Successors and Assigns;
Assignments.

     

    (a)           Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Borrower nor any
other Restricted Person may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of Administrative Agent
and each Lender, and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in accordance
with the provisions of paragraph (b) of this Section, (ii) by way of
participation in accordance with the provisions of paragraph (d) of this Section
or (iii) by way of pledge or assignment of a security interest subject to the
restrictions of paragraph (f) of this Section (and any other attempted
assignment or transfer by any party hereto shall be null and
void).  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in paragraph (d) of this Section and, to the extent expressly
contemplated hereby, the Related Parties of each of Administrative Agent and the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement.

    


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

    


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

    


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


    
      
         


      

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

    


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

    


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

    


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

    


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


    
      
         


      

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

    


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

    


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

    


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


    
      
         


      

      
        69

        
          

        

      

      
         


      

    


    Section
10.7.     Governing Law; Submission to
Process.  Except to the extent that the law of another
jurisdiction is expressly elected in a Loan Document, the Loan Documents shall
be deemed contracts and instruments made under the laws of the State of
California and shall be construed and enforced in accordance with and governed
by the laws of the State of California and the laws of the United States of
America, without regard to principles of conflicts of law.  Borrower
hereby irrevocably submits itself to the non-exclusive jurisdiction of the state
and federal courts sitting in the Northern District of California for the United
States District Court and agrees and consents that service of process may be
made upon it in any legal proceeding relating to the Loan Documents or the
Obligations by any means allowed under California or federal law.

     

    Section
10.8.     Limitation on
Interest.  Lender Parties, Restricted Persons and the other
parties to the Loan Documents intend to contract in strict compliance with
applicable usury Law from time to time in effect.  In furtherance
thereof such persons stipulate and agree that none of the terms and provisions
contained in the Loan Documents shall ever be construed to provide for interest
in excess of the maximum amount of interest permitted to be contracted for,
charged, or received by applicable Law from time to time in
effect.  Neither any Restricted Person nor any present or future
guarantors, endorsers, or other Persons hereafter becoming liable for payment of
any Obligation shall ever be liable for unearned interest thereon or shall ever
be required to pay interest thereon in excess of the maximum amount that may be
lawfully contracted for, charged, or received under applicable Law from time to
time in effect, and the provisions of this section shall control over all other
provisions of the Loan Documents which may be in conflict or apparent conflict
herewith.

     

    Section
10.9.     Termination; Limited
Survival.  In its sole and absolute discretion Borrower may at
any time that no Obligations are owing elect in a written notice delivered to
Administrative Agent to terminate this Agreement.  Upon receipt by
Administrative Agent of such a notice, if no Obligations are then owing, this
Agreement and all other Loan Documents shall thereupon be terminated and the
parties thereto released from all prospective obligations thereunder, except as
otherwise provided in such Loan Documents.  Notwithstanding the
foregoing or anything herein to the contrary, any waivers or admissions made by
any Restricted Person in any Loan Document, any Obligations under Sections 3.2
through Section 3.5, and any obligations which any Person may have to indemnify
or compensate any Lender Party shall survive any termination of this Agreement
or any other Loan Document.  At the request and expense of Borrower,
Administrative Agent shall prepare and execute all necessary instruments to
reflect and effect such termination of the Loan
Documents.  Administrative Agent is hereby authorized to execute all
such instruments on behalf of all Lenders, without the joinder of or further
action by any Lender.

     

    Section
10.10.   Severability.  If
any term or provision of any Loan Document shall be determined to be illegal or
unenforceable all other terms and provisions of the Loan Documents shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable Law.

     

    Section
10.11.   Counterparts;
Fax.  This Agreement may be separately executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to constitute one and the same
Agreement.  This Agreement and the Loan Documents may be validly
executed and delivered by facsimile or other electronic
transmission.


    
      
         


      

      
        70

        
          

        

      

      
         


      

    


    Section
10.12.    WAIVER OF JURY TRIAL,
PUNITIVE DAMAGES, ETC.  BORROWER AND EACH LENDER PARTY HEREBY
KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND IRREVOCABLY (A) WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR DIRECTLY OR INDIRECTLY AT ANY TIME
ARISING OUT OF, UNDER OR IN CONNECTION WITH THE LOAN DOCUMENTS OR ANY
TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED THEREWITH, BEFORE OR AFTER
MATURITY; (B) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT
MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY "SPECIAL DAMAGES", AS
DEFINED BELOW, (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR
ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D) ACKNOWLEDGES THAT IT HAS BEEN
INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE
TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.  AS USED IN THIS
SECTION, "SPECIAL
DAMAGES" INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE
DAMAGES (REGARDLESS OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS
WHICH ANY PARTY HERETO HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER
PARTY HERETO.  NO "ADMINISTRATIVE AGENT" REFERRED TO IN 10.4 ABOVE,
AND NO "LENDER PARTY" REFERRED TO IN SECTION 10.4 ABOVE, SHALL BE LIABLE FOR ANY
DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

     

    Section
10.13.    USA Patriot
Act.  Each Lender that is subject to the Act (as hereinafter
defined) and Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies Borrower that pursuant to the requirements of the USA Patriot
Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"), it is required to obtain, verify and record information that identifies
Borrower, which information includes the name and address of Borrower and other
information that will allow such Lender or Administrative Agent, as applicable,
to identify Borrower in accordance with the Act.


    
      
         


      

      
        71

        
          

        

      

      
         


      

    


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

    


    


    
      	 
      	
              BERRY
      PETROLEUM COMPANY,

            
	 
      	
              Borrower

            
	 	 
	 	 
	 
      	
              By:

            	 
      
	 
      	 
      	
              Steven B. Wilson

            
	 
      	 
      	
              Treasurer

            


    

     

     

    
      	 
      	
              Address:

            
	 
      	
              1999
      Broadway, Suite 3700

            
	 
      	
              Denver,
      Colorado 80202

            
	 
      	
              Attention:

            	 
      Shawn
      Canaday
	 	 	 
	 	 	 
	 
      	
              Telephone:

            	 
      403/999-4000
	 
      	
              Fax:

            	 
      403/999-4100
	 
      	
              Email:

            	 
      smc@bry.com


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      	 
      	
              SOCIETE GENERALE,
      as Administrative Agent

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

     

    
      	 
      	
              SOCIETE GENERALE,
      as a Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	 
      	
              BNP PARIBAS,
      as a Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    SCHEDULE
1

    


    


    LENDERS
SCHEDULE

    


    


    
      	
              LENDER

               

               

            	
              PERCENTAGE
      SHARE

               

               

            	
              COMMITMENT
      AMOUNT*

               

            
	
              Societe Generale

               

            	
              50%

               

            	
              $50,000,000

               

            
	
              BNP
      Paribas

               

            	
              50%

               

            	
              $50,000,000

               

            
	
              TOTAL

               

            	
              100%

               

            	
              $100,000,000

               

            


    

    


    


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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SCHEDULE
2

    


    


    INSURANCE
SCHEDULE


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    SCHEDULE
3

    


    


    SUBJECT DRILLING
RIGS

    


    RIG 1

    


    MAST: Lee C. Moore 127eH x
13e6eW Cantilever Mast 236,000#  Hook Load Capacity

    SUBSTRUCTURE: Gee Bee Welding
12e 6eH x 38eL Box Type Sub 250,000#  Setback

    DRAWWORKS:  Superior
400 HP Drawworks, Lebus 1 1/8e Line, TSM 22S Water Brake, Crown-O-Matic
Hydraulic Catheads.

    ENGINE: (New) Detroit Series
60 450 HP Diesel Engine.

    MUD PUMPS: (2) Gardner Denver
PZ8 Triplex Pumps p/b (New) Detroit Series 2000 Engines

    GENERATORS: (2) Caterpillar
SR-4 210 KW p/b (1) Caterpillar 3306 and (1) Caterpillar  3406 Diesel
Engines

    BLOCK / HOOK: Sowa Model
0636-4 150-Ton w/ (4) 36e Sheaves

    ROTARY TABLE: National C-175,
17 1/2"

    SWIVEL: Ideco
TL200

    BOP RAMS: (New) Townsend 11"
Double 3,000 PSI

    BOP ANNULAR: (New) Townsend
11e 3,000 Type 90 Annular

    CHOKE MANIFOLD: (New)
3,000#

    CLOSING UNIT: Mayco Electric
5-Station

    MUD PIT: (New) 6e 6eH x 11'W x
45eL  570 BBL (5) Compartments, Swaco Linear Motion Shaker (2) Mission
Magnum Mixing Pumps, 7.5 HP Mud Agitator, Degasser, Mud Hopper Mud Guns,
Walkways and Rails.

    FUEL TANK: 5,000
Gallons

    WATER TANK: 400
BBL

    DOGHOUSE: 9'W x
16'L

    DRILL PIPE: 8,000 FT (New)
4.5" E 16.60#

    DRILL COLLARS: (26)
(New)  6 1/2" (12) (New)  8"

    SPINNERS:    (New)
Graychain Hyd Drill Pipe Spinner, Foster Kelly Spinner

    


    RIG 5

    


    DRAWWORKS: One (1) Cooper
LTO-550 Single Drum

    CARRIER: Cooper LTO-550 Self
Propelled

    ENGINE: One (1) Detroit Series
60

    MAST:  One (1)
Premco 112e, 300,000# Static Hook Load Mast w/(6) Sheave Crown and Racking
Board,

    SUBSTRUCTURE:  One
(1) 10eH Box Type Substucture w/ Mud Boat Ramp 5eH x 30eL V-Door, Stairs &
Safety Rails

    MUD PUMPS: Two (2)
Gardner-Denver PZ-8 Triplex

    ENGINES: Two (2) (New) Detroit
Series 60

    GENERATORS: One (2) Detroit
Series 60 Diesel Engines w/Marathon 350KW

    BLOCK / HOOK: One (1)
McKissick 150-Ton

    ROTARY TABLE: One (1) Cooper
27-1/2e Rotary Table w/Master Bushing,

    SWIVEL: One (1) Gardner-Denver
SW-200 200-Ton

    BOP RAMS: One (1) Townsend 11e
3000 PSI Double

    BOP ANNULAR: One (1) Townsend
11e 3,000 PSI

    CHOKE MANIFOLD: 3,000
PSI

    MUD PITS: (New) 800
BBL

    SHALE SHAKER: (New) Derrick
Linear Motion Shaker

    DESANDER: One (1) Mud Cleaner
c/w 8 each Desilter Cones

    FUEL TANK:  One (1)
6000 gallon

    WATER TANK: One (1) 280
bbl

    DOGHOUSE: One (1) Dog House 8'
x 8' x 16'

    DRILL PIPE:  6000 FT
4e E 14.40#

    DRILL COLLARS:  (16)
6 1/2"

    MISCELLANEOUS: Pipe Spinner,
Kelly Spinner, and Miscellaneous Handling Tools


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    RIG 9

    DRAWWORKS: Gardner Denver 1000
HP Electric Drawworks w/ (2) 600 HP Electric Motors.

    MAST: Partec 136e Boot Strap,
Rated 480,000# Static Hook Load Capacity.

    SUBSTRUCTURE: Partec 21e Box
Substructure w/ 4e Skid Structure, 80e Long.

    GENERATORS: (3) (New) Detroit
Series 2000 Diesel Engines w/600 Volt Generators for SCR.

    SCR: (1) (New) Omron
3x3

    TOP DRIVE: (New) Tesco 250T
A/C Drive

    MUD PUMPS: (2) (New) 1300 HP
China F1300 Triplex, Belt Driven w/ (2) GE 752 Hi torque motors.

    ROTARY TABLE: Rebuilt National
23e

    SWIVEL: Rebuilt Gardner Denver
300 Ton

    BLOCK/HOOK: Rebuilt Gardner
Denver 300 Ton unitized

    BOP RAMS: (New) China 11e
5000# Double Ram BOP

    BOP ANNULAR: (New) China 11e
5000# Annular

    CHOKE MANIFOLD: 5000# Choke
Manifold

    CLOSING UNIT: (New) 5 Station
110 Gallon Closing Unit

    MUD SYSTEM: (New) 800 BBL Mud System w/ 6
x 8 centrifugal mixing pumps, low pressure mixing guns, shaker,
agitators.

    SHALE SHAKER: (2) (New)
Derrick Linear Motion Shale Shaker

    FUEL TANK: (New) 12,000
gallon

    WATER TANK: (New) 500
BBL

    DOGHOUSE: (New) 10' x 8' x
30'

    DRILL PIPE: 13,000e (New) 4.5e
G105 16.60#

    DRILL COLLARS: (21) New
6.5"

    MISCELLANEOUS: Toolpusheres
quarters, Catwalk, Six (6) Pipe Racks, Pipe Spinner, Kelly Spinner, and
Miscellaneous Handling Tools.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    SCHEDULE
4

    


    


    ADDRESSES
OF LENDERS FOR NOTICES

    


    
      	
              SOCIeTE GENERALE

            
	
              1111
      Bagby, Suite 2020

            
	
              Houston,
      Texas 77002

            
	
              Attention:

            	
              Cameron Null

            
	
              Tel:

            	
              713.759.6347

            
	
              Fax:

            	
              713.650.0824

            
	
              Email:

            	
              cameron.null@sgcib.com

            
	 
      	 
      
	 
      	 
      
	
              BNP PARIBAS

            
	
              1200
      Smith Street

            
	
              Suite
      3100

            
	
              Houston,
      Texas 77002

            
	
              Attention:

            	
              Robert Long

            
	
              Tel:

            	
              713.982.1165

            
	
              Fax:

            	
              713.659.6915

            
	
              Email:

            	
              robert.j.long@americas.bnpparibas.com

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
A

     

     

    PROMISSORY
NOTE

     

    [_______________],
2008

     

     

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

    


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

    


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

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

    


    
      
        	 
      	
                BERRY
      PETROLEUM COMPANY

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              


      


      
        
           


        

        
          
          

          
            

          

        

        
           


        

      

EXHIBIT
B

    


    


    BORROWING
NOTICE

    


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

    


    
      	
              Aggregate
      amount of Borrowing:

            	
              $

            	 
      
	 
      	 
      
	
              Type
      of Loans in Borrowing:

            	 
      


    

     

    
      	
              Date
      on which Loans are to be advanced:

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

            	 
      	
              months

            


    

    


    If
combined with existing Loans

    see
attached Continuation/Conversion Notice.

    


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

    


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

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

    


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

    


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

    


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

    


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

    


    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
C

    


    


    CONTINUATION/CONVERSION
NOTICE

    


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

    


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

    


    Existing
Borrowing(s) to be continued or converted:

    


    $____________
of Eurodollar Loans with Interest Period ending _____________

    


    $____________
of Base Rate Loans

    


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

    


    
      	
              Aggregate
      amount of Borrowing:

            	
              $

            	 
      
	 
      	 
      
	
              Type
      of Loans in new Borrowing:

            	 
      


    

     

    
      	
              Date
      of Continuation or Conversion:

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

            	 
      	
              months

            


    

    


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

    


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

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

    


    IN
WITNESS WHEREOF this instrument is executed as of
__________________.

    


    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
D

    


    


    CERTIFICATE
ACCOMPANYING

    FINANCIAL
STATEMENTS

     

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

    


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

    


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

    


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

    


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

    


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

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

    


    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
E

    


    


    OPINION OF COUNSEL FOR
RESTRICTED PERSONS


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
F

    


    


    ASSIGNMENT
AND ASSUMPTION

    


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

    


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

    


    
      
        
          	
                  1.

                	
                  Assignor:       
      _______________________

                


        

        


        
          	
                  2.

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

                


        

        


        
          	
                  3.

                	
                  Borrower:        
      Berry Petroleum Company

                


        

        


        
          	
                  4.

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

                


        

      

      

        
          
             


          

          
            
            

            
              

            

          

          
             


          

        


        
          	
                  5.

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

                


        

        


        
          	
                  6.

                	
                  Assigned
      Interest:

                


        

      

    

     

    
      	
              Aggregate

              Amount
      of

              Commitment/Loans

              for all Lenders*

            	
              Amount
      of

              Commitment/Loans

              Assigned

            	
              Percentage

              Assigned
      of

              Commitment/Loans

            
	 
      	 
      	 
      
	
              $

            	
              $

            	
              %

            
	
              $

            	
              $

            	
              %

            
	
              $

            	
              $

            	
              %

            


    

    


    [7.           Trade
Date:     __________________]

    


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

    


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

    


    
      	 
      	
              ASSIGNOR

            
	 
      	
              [NAME
      OF ASSIGNOR]

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	
              ASSIGNEE

            
	 
      	
              [NAME
      OF ASSIGNEE]

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    [Consented
to and] Accepted:

    


    SOCIETE GENERALE,

    as
Administrative Agent

    


    
      	
              By:

            	 
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      
	 
      	 
      	 
      
	
              [Consented
      to:]

            	 
      
	 
      	 
      	 
      
	
              By:

            	 
      	 
      
	 
      	
              Name:

            	 
      
	 
      	
              Title:

            	 
      


    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    ANNEX 1
TO ASSIGNMENT

    AND
ASSUMPTION

    


    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ASSUMPTION

    


    1.         Representations and
Warranties.

    


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

    


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


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


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

    


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