EXHIBIT 10.1

                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement"),  dated as
of April 30, 1997, is among MAGNUM HUNTER RESOURCES, INC. (formerly named Magnum
Petroleum,  Inc.), a Nevada corporation (the "Borrower"),  each Bank (as defined
herein),  BANKERS TRUST COMPANY, (in its individual capacity,  "Bankers Trust"),
as administrative agent (in such capacity,  together with its successors in such
capacity, the "Administrative Agent"), and as an issuing bank (in such capacity,
together  with its  successors  in such  capacity,  an "Issuing  Bank"),  BANQUE
PARIBAS,  a French bank acting  through  its Houston  Agency (in its  individual
capacity,  "Paribas"),  as documentation agent (in such capacity,  together with
its successors in such capacity,  the  "Documentation  Agent"),  and FIRST UNION
NATIONAL  BANK OF  NORTH  CAROLINA,  a  national  banking  association,  (in its
individual capacity,
"First  Union")  as  collateral  agent  (in  such  capacity,  together  with its
successors in such capacity,  the "Collateral  Agent"), and as syndication agent
(in  such  capacity,   together  with  its  successors  in  such  capacity,  the
"Syndication Agent").

                                R E C I T A L S:

         WHEREAS, the Borrower, Wells Fargo Bank (Texas) National Association, a
national banking association  ("Wells Fargo"),  Paribas and certain of the Banks
have entered into the Prior Credit Agreement (as defined herein); and

         WHEREAS,  the Borrower  desires to increase the credit  available to it
under the Prior  Credit  Agreement  and to amend and  restate  the Prior  Credit
Agreement in its entirety by entering into this Agreement; and

         WHEREAS,  immediately  preceding  the  execution  and  delivery of this
Agreement,  (a) Wells Fargo resigned as agent under the Prior Credit  Agreement,
(b)  the  Banks  elected  Paribas  as  Documentation  Agent,  Bankers  Trust  as
Administrative  Agent and First  Union as  Collateral  Agent and as  Syndication
Agent,  and (c) Wells Fargo  executed and delivered one or more  assignments  of
liens in favor of First Union, as Collateral  Agent for the Banks and the Bridge
Lenders; and

         WHEREAS,  simultaneously  with  the  execution  and  delivery  of  this
Agreement (a) Bankers Trust and the other Banks are executing and delivering the
Bridge Loan Agreement (as hereinafter defined),  (b) Bankers Trust and the other
lenders  under the Bridge Loan  Agreement are funding to the Borrower the Bridge
Loan (as hereinafter defined) thereunder in the principal amount of $60,000,000,
(c) First Union, the administrative  agent under the Bridge Loan Agreement,  the
Banks and the  lenders  party to the Bridge Loan  Agreement  are  executing  and
delivering the  Intercreditor  Agreement (as  hereinafter  defined)  pursuant to
which First Union agrees to act as Collateral  Agent for the Banks hereunder and
the Bridge  Lenders (as  hereinafter  defined) and (d) the Borrower is executing
and delivering the Security  Documents (as hereinafter  defined) to, among other
things, confirm the grant of security interests and mortgages to the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 1

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Bridge   Lenders  as   contemplated   in  the  Bridge  Loan  Agreement  and  the
Intercreditor  Agreement and (e) each lender under the Prior Credit Agreement is
surrendering the instrument  evidencing its note or notes issued  thereunder and
the  Borrower is  executing  and  delivering  to such lender a new note or notes
hereunder that amends and restates such notes; and

         WHEREAS,  the Borrower and the Banks are willing to increase the credit
available under the Prior Credit Agreement and to consolidate, amend and restate
the Prior  Credit  Agreement  in its  entirety  upon and  subject  to the terms,
conditions and provisions of this Agreement;

         NOW  THEREFORE,  in  consideration  of  the  premises  and  the  mutual
covenants  and  promises  herein  contained  and for  other  good  and  valuable
considerations,  the receipt and  sufficiency of which are hereby  acknowledged,
the parties hereto agree as follows, intending to be legally bound:

                                    ARTICLE I

                                   Definitions

         Section 1.1      Definitions.  As used in this Agreement, the following
 terms have the following meanings:

                 "AAA" has the meaning assigned to it in Section 14.20(b) hereof

                  "Acquired  Properties"  means the real and  personal  property
         acquired by Borrower or one or more of the  Guarantors  pursuant to the
         Acquisition.

                  "Acquisition"  means  the  acquisition  by the  Borrower  or a
         Guarantor of certain Oil and Gas  Properties  and other  Property  from
         Sellers.

                  "Acquisition  Documents" means all documents,  instruments and
         agreements  executed and delivered in connection with the  Acquisition,
         including without limitation, the Purchase Agreement.

                  "Additional Costs" has the meaning specified in Section 5.1.

                  "Adjusted  Eurodollar Rate" means, for any Eurodollar Loan for
         any Interest Period therefor,  the rate per annum (rounded upwards,  if
         necessary,  to the nearest 1/16 of 1%) determined by the Administrative
         Agent to be equal to the Eurodollar  Rate for such  Eurodollar Loan for
         such Interest  Period  divided by 1 minus the Reserve  Requirement  for
         such Eurodollar Loan for such Interest Period.

                  "Affiliate" means, as to any Person, any other Person (a) that
         directly or indirectly, through one or more intermediaries, controls or
         is controlled  by, or is under common  control with,  such Person;  (b)
         that directly or indirectly  beneficially owns or holds five percent or
         more of any class of voting stock of such  Person;  or (c) five percent
         or more



AMENDED AND RESTATED CREDIT AGREEMENT - Page 2

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         of the voting  stock of which is  directly or  indirectly  beneficially
         owned or held by the Person in question.  The term "control"  means the
         possession,  directly  or  indirectly,  of the power to direct or cause
         direction of the management and policies of a Person,  whether  through
         the  ownership  of  voting  securities,   by  contract,  or  otherwise;
         provided, however, in no event shall any Agent, the Issuing Bank or any
         Bank be deemed an Affiliate of the Borrower or any of its Subsidiaries.

                  "Agent"   means   any  of  the   Administrative   Agent,   the
         Documentation  Agent, the Collateral  Agent and the Syndication  Agent;
         and "Agents" shall mean all of them.

                  "Agents  Letter"  means the letter  agreement  dated April 30,
         1997, between the Agents and the Borrower.

                  "Applicable  Base  Rate  Margin"  means  (i)  0.50%  until the
         Initial  Rate  Adjustment  Date and (ii) 0.00% on and after the Initial
         Rate Adjustment Date.

                  "Applicable Eurodollar Margin" means 2.50% until the Initial  
          Rate Adjustment Date.

                  On and after the Initial Rate Adjustment  Date, the Applicable
                  Eurodollar  Margin shall be as set forth in the following grid
                  and determined to be the applicable percentage pursuant to the
                  Borrowing Percentage, which Applicable Eurodollar Margin shall
                  change as and when the Borrowing Percentage changes:

================================================================================
Borrowing Percentage                                             Applicable
                                                              Eurodollar Margin
--------------------------------------------------------------------------------
Greater than or equal to 75%                                           1.75%
--------------------------------------------------------------------------------
Greater than or equal to 50% but less than                             1.50%
75%
--------------------------------------------------------------------------------
Greater than or equal to 25% but less than                             1.25%
50%
--------------------------------------------------------------------------------
Less than 25%                                                          1.00%
================================================================================


                  "Applicable  Lending Office" means for each Bank and each Type
          of Loan,  the Lending  Office of such Bank (or of an Affiliate of such
          Bank) designated for such Type of Loan below its name on the signature
          pages  hereof or such other office of such Bank (or of an Affiliate of
          such Bank) as such Bank may from time to time  specify to the Borrower
          and the Administrative  Agent as the office by which its Loans of such
          Type are to be made and maintained.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 3

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                  "Applicable  Rate" means: (a) during the period that a Loan is
          a Base Rate Loan, the Base Rate plus the Applicable  Base Rate Margin;
          and (b)  during  the  period  that a Loan is a  Eurodollar  Loan,  the
          Adjusted Eurodollar Rate plus the Applicable Eurodollar Margin.

                  "Assignee" has the meaning assigned to it in Section 14.8(b).

                  "Assigning Bank" has the meaning assigned to it in Section 14.
                   8(b).

                  "Assignment and Acceptance" means an assignment and acceptance
          entered  into  by  a  Bank  and  its  assignee  and  accepted  by  the
          Administrative  Agent pursuant to Section 14.8, in  substantially  the
          form of Exhibit "G" hereto,  or such other form as to which all of the
          parties hereto shall consent in writing.

                  "Assignment  of Liens" means one or more  assignments of liens
          executed  by  Wells  Fargo  in  favor  of  the  Collateral  Agent,  in
          substantially the form of Exhibit "H" hereto.

                  "Bank" means each bank or other lending institution that is or
          that may from time to time become a signatory hereto, any successor or
          assignee   thereof  and  solely  for  the  purposes  of  the  Security
          Documents,  any Person  holding Swap  Obligations of the Borrower that
          was previously a signatory to this Agreement.

                  "Base  Rate"  means,  for any day,  a rate per annum  (rounded
          upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
          (a) the Prime  Rate in effect on such day,  or (b) the  Federal  Funds
          Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
          Base  Rate due to a change  in the  Prime  Rate or the  Federal  Funds
          Effective  Rate shall be effective on the effective day of such change
          in the Prime Rate or the Federal Funds Effective  Rate,  respectively.
          If  for  any  reason  the   Administrative   Agent  determines  (which
          determination  shall be conclusive  absent  manifest error) that it is
          unable to ascertain the Federal Funds  Effective Rate, for any reason,
          including the  inability or failure of the Agent to obtain  sufficient
          quotations in accordance with the terms hereof, the Base Rate shall be
          determined  without regard to clause (b) of the first sentence of this
          definition,  as appropriate,  until the  circumstances  giving rise to
          such inability no longer exist.

                  "Base Rate Loans" means Loans the interest  rates on which are
          determined on the basis of the rates  referred to in the definition of
          "Base Rate" in this Section 1.1.

                  "Beneficial  Owner" shall be  determined  in  accordance  with
          Rules  13d-3 and 13d-5  promulgated  by the  Securities  and  Exchange
          Commission  under the Securities  Exchange Act of 1934, as amended and
          as it may be amended  from time to time,  or any  successor  provision
          thereto,  except  that a Person  shall be deemed  to have  "beneficial
          ownership"  of all shares  that such  Person has the right to acquire,
          whether  such  right is  exercisable  immediately  or only  after  the
          passage of time.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 4

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                  "Borrower  Pledge  Agreement"  means the Amended and  Restated
          Pledge  Agreement of the Borrower in favor of the Collateral Agent for
          the  benefit of itself,  the other  Agents,  the Banks and the Issuing
          Banks, in  substantially  the form of Exhibit "D" hereto,  as the same
          may be amended, supplemented, or modified.

                  "Borrowing Base" means an amount of indebtedness  which can be
          adequately  supported by the value of oil and gas reserves and assets,
          contracts and  throughput  attributable  to the  Mortgaged  Properties
          owned by Borrower and its  Subsidiaries in which the Collateral  Agent
          holds a perfected,  first  priority Lien, the values of which shall be
          determined and  redetermined by the Majority Banks, in the exercise of
          their sole  discretion,  in accordance with the terms hereof and their
          customary  practices  and  standards  for  the  valuation  of  similar
          property. The initial Borrowing Base shall be $130,000,000.

                  "Borrowing  Base  Deficiency"  means as of any date,  that the
          aggregate  outstanding  Loans  plus the  Letter of Credit  Liabilities
          exceed the Borrowing Base as determined by the Required Banks pursuant
          to Section  2.8 and as reduced  from time to time  pursuant to Section
          4.5(b).

                  "Borrowing Base Deficiency  Rate" means, the lesser of (a) the
          Maximum  Rate, or (b) the  Applicable  Rate in effect from day to day,
          plus [two] percent.

                  "Borrowing   Percentage"   shall  mean,  for  the  purpose  of
          determining the Applicable  Eurodollar  Margin,  the aggregate  unpaid
          principal balance of the Loans then outstanding as a percentage of the
          Borrowing Base then in effect.

                  "Bridge  Lenders" means,  collectively,  Paribas,  First Union
          Corporation and Bankers Trust and their successors and assigns.

                  "Bridge  Loan"  means  the  loan or loans  made by the  Bridge
          Lenders to the Borrower pursuant to the Bridge Loan Agreement.

                  "Bridge Loan Agreement" means that certain Senior Subordinated
          Credit  Agreement,  dated as of the date hereof among the Borrower and
          the Bridge Lenders, as amended.

                  "Business Day" means (a) a day other than Saturday,  Sunday or
          day on  which  commercial  banks in New  York  are not  authorized  or
          required to close, and, (b) with respect to all borrowings,  payments,
          Conversions,   Continuations,   Interest   Periods,   and  notices  in
          connection  with  Eurodollar  Loans,  any day which is a Business  Day
          described  in  clause  (a)  above  and  which  is also a day on  which
          dealings in Dollar  deposits  are carried out in the London  interbank
          market.

                  "Capital  Lease  Obligations"  means,  as to any  Person,  the
          obligations  of such Person to pay rent or other amounts under a lease
          of (or other agreement conveying the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 5

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          right to use) real and/or  personal  property,  which  obligations are
          required to be  classified  and  accounted for as a capital lease on a
          balance  sheet  of  such  Person  under  GAAP.  For  purposes  of this
          Agreement,  the amount of such Capital Lease  Obligations shall be the
          capitalized amount thereof, determined in accordance with GAAP.

                  "Change in  Control"  shall mean an  occurrence  where (a) any
          Person,  or any  Persons  acting  together  in a  manner  which  would
          constitute a "group" (a "Group") for purposes of Section  13(d) of the
          Securities  Exchange Act of 1934,  as amended and as it may be amended
          from time to time, or any successor  provision thereto,  together with
          any Affiliates  thereof,  (i) become the Beneficial  Owners of capital
          stock of the Borrower through a purchase,  merger or other acquisition
          transaction,  entitling  such  Person  or  Persons  and  its or  their
          Affiliates  to exercise more than 50% of the total voting power of all
          classes of the Borrower's  capital stock entitled to vote generally in
          the election of directors or (ii) shall  succeed in having  sufficient
          of its or their  nominees  who are not  supported by a majority of the
          then current  board of directors of the Borrower  elected to the board
          of directors of the Borrower  such that such  nominees,  when added to
          any  existing  directors  remaining  on the board of  directors of the
          Borrower  after  such  election  who are  Affiliates  of or  acting in
          concert  with any such  Persons,  shall  constitute  a majority of the
          board of directors of the Borrower,  (b) a plan is adopted relating to
          the liquidation or dissolution of the Borrower, (c) the Borrower shall
          consolidate with or merge into any other Person or convey, transfer or
          lease its  properties and assets  substantially  as an entirety to any
          Person other than a Subsidiary,  or any other Person shall consolidate
          with or  merge  into the  Borrower  (other  than,  in the case of this
          clause (c),  pursuant to any consolidation or merger where Persons who
          are Beneficial Owners of the Borrower's capital stock entitled to vote
          generally  in the  election of  directors  immediately  prior  thereto
          become  the  Beneficial  Owners  of  shares  of  capital  stock of the
          surviving corporation entitling such Persons to exercise more than 50%
          of  the  total  voting   power  of  all  classes  of  such   surviving
          corporation's capital stock entitled to vote generally in the election
          of directors or persons holding similar positions),  (d) Gary C. Evans
          shall  fail to own 5% or  more of the  outstanding  capital  stock  of
          Borrower  entitling  him to exercise  at least 5% of the total  voting
          power of all classes of the Borrower's  capital stock entitled to vote
          generally in the election of  directors,  or (e) a material  change in
          the  management  of the  Borrower  shall occur.  Without  limiting the
          foregoing,  a material  change in management of the Borrower  shall be
          deemed  to have  occurred  if  Gary C.  Evans  ceases  to be  actively
          involved in the day to day management of the Borrower.

                  "Closing Date" means the date on which the closing of the loan
          transactions contemplated by this Agreement occurs.

                  "Code"  means the Internal  Revenue Code of 1986,  as amended,
          and the regulations promulgated and rulings issued thereunder.

                  "Collateral" has the meaning specified in Section 6.1.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 6

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                  "Compliance  Certificate"  means a  certificate  of the  chief
          financial  officer or chief executive officer of the Borrower required
          under Section 9.1(c) hereof.

                  "Commitment"  means,  as to each Bank,  the obligation of such
          Bank to make Loans and  purchase  participations  in Letters of Credit
          pursuant to Section 3.1 in an  aggregate  principal  amount at any one
          time outstanding up to but not exceeding the amount set forth opposite
          the name of such Bank on the signature  pages hereof under the heading
          "Commitment,"  or in the Assignment  and Acceptance  pursuant to which
          such Bank assumed its Commitment, as applicable as the same may be (a)
          reduced pursuant to Section 2.7 or terminated  pursuant to Section 2.7
          or 12.2 and (b)  reduced or  increased  from time to time  pursuant to
          assignments by or to such Bank pursuant to Section 14.8.

                  "Consolidated  Current Assets" means, at any particular  time,
          all  amounts  which in  conformity  with GAAP,  would be  included  as
          current assets on a consolidated balance sheet of the Borrower.

                  "Consolidated  Current  Liabilities"  means, at any particular
          time, all amounts which, in conformity with GAAP, would be included as
          liabilities on a consolidated balance sheet of the Borrower; provided,
          however,  that the  current  portion  of  long-term  Debt  under  this
          Agreement  and the other Loan  Documents  and the Bridge Loan shall be
          excluded from the calculation of current liabilities.

                  "Consolidated  EBITDA" means,  for any period,  the sum of the
          following  for the  Borrower  determined  on a  consolidated  basis in
          accordance with GAAP and without  duplication:  (i)  Consolidated  Net
          Income for such period before  provision  for income taxes,  plus (ii)
          depreciation,  depletion,  amortization  and other  non-cash  charges,
          which in  determining  Consolidated  Net Income for such  period  were
          deducted  from gross  income,  plus (iii)  Interest  Expense  for such
          period.

                  "Consolidated   Interest   Coverage   Ratio"  means,   at  any
          particular time, the ratio of (a) Consolidated  EBITDA to (b) Interest
          Expense.

                  "Consolidated   Net  Income"  means,   for  any  period,   the
          consolidated  net  income  of  Borrower  and  its  Subsidiaries   from
          operations for such period determined in accordance with GAAP provided
          that there  shall be  excluded  therefrom:  (a) any net income (or net
          loss) of any Person in which Borrower has an ownership  interest other
          than the  Subsidiaries,  except to the extent that any such income has
          actually been  received by the Borrower in the form of cash  dividends
          or  similar  distributions;  (b) any net  gains  on the  sale or other
          disposition,  not in the ordinary  course of business,  of investments
          and other capital  assets,  provided that there shall also be excluded
          any related charges for taxes thereon and other costs  associated with
          the sale or other  disposition  thereof;  and (c) any net gain arising
          from the collection of proceeds of any insurance policy.




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                  "Consolidated  Net Worth" means,  at any particular  time, all
          amounts  which,  in  conformity  with  GAAP,   would  be  included  as
          stockholders' equity on a consolidated balance sheet of the Borrower.

                  "Consolidated  Tangible Net Worth"  means,  at any  particular
          time, all amounts which, in conformity with GAAP, would be included as
          Consolidated  Net Worth;  provided,  however,  there shall be excluded
          therefrom:  (a) the aggregate  amount of shares of any treasury stock,
          (b) any amount at which shares of capital stock of the Borrower appear
          as an asset on the Borrower's  balance sheet, (c) goodwill,  including
          any amounts,  however  designated,  that  represent  the excess of the
          purchase  price  paid for  assets  or stock  over the  value  assigned
          thereto,  (d) patents,  trademarks,  trade names, and copyrights,  (e)
          deferred  expenses  (excluding  bank related fees and  expenses),  (f)
          loans and advances,  other than travel and expense related advances to
          any stockholder, director, officer, or employee of the Borrower or any
          Affiliate of the Borrower not made in the ordinary course of business,
          and (g) all other assets which are properly  classified  as intangible
          assets.

                  "Contingent  Liabilities"  means,  as applied  to any  Person,
          those  direct or indirect  liabilities  of that Person with respect to
          any Debt, lease,  dividend,  letter of credit or other obligation (the
          "primary  obligations")  of another  Person (the  "primary  obligor"),
          including,  without limitation, any obligation of such Person, whether
          or not contingent,  (a) to purchase,  repurchase or otherwise  acquire
          such  primary  obligations  or any  property  constituting  direct  or
          indirect security therefor, or (b) to advance or provide funds (i) for
          the payment or discharge of any such  primary  obligation,  or (ii) to
          maintain  working  capital or equity capital of the primary obligor or
          otherwise to maintain  the net worth or solvency or any balance  sheet
          item,   level  of  income  or  financial   condition  of  the  primary
          obligation,  or (c)  to  purchase  property,  securities  or  services
          primarily  for the purpose of assuring  the owner of any such  primary
          obligation  of the ability of the primary  obligor to make  payment of
          such primary  obligation,  or (d) otherwise to assure or hold harmless
          the  owner of any such  primary  obligation  against  loss in  respect
          thereof.  The amount of any Contingent  Liabilities shall be deemed to
          be an amount equal to the stated or determinable amount of the primary
          obligation in respect of which such  Contingent  Liabilities  are made
          or, if not stated or determinable,  the maximum reasonably anticipated
          liability  in respect  thereof as  determined  by the Borrower in good
          faith.

                  "Continue," "Continuation," and "Continued" shall refer to the
          continuation  pursuant  to  Section  4.2  of a  Eurodollar  Loan  as a
          Eurodollar Loan from one Interest Period to the next Interest Period.

                  "Convert,"  "Conversion,"  and  "Converted"  shall  refer to a
          conversion  pursuant  to Section  4.2 or Article V of one Type of Loan
          into another Type of Loan.

                  "Current  Ratio" means,  at any particular  time, the ratio of
          Consolidated Current Assets to Consolidated Current Liabilities.




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                 "Debt" means as to any Person at any time (without duplication)
          (a) all Funded Debt and (b) all liabilities of such Person in  respect
          of unfunded vested benefits under any Plan.

                  "Debt to Capitalization  Ratio" means, at any particular time,
          the  ratio of (i)  Funded  Debt to (ii) the sum of Funded  Debt,  plus
          Consolidated Net Worth.

                  "Default"  means an Event of Default or the  occurrence  of an
          event or  condition  which with  notice or lapse of time or both would
          become an Event of Default.

                  "Default  Rate" means the lesser of (i) the Maximum  Rate,  or
          (ii) the sum of the  Applicable  Rate in effect from day to day,  plus
          two percent.

                  "Determination  Date" means each April 1 and October 1 of each
          year, commencing October 1, 1997.

                  "Dispute" has the meaning assigned to it in Section 14.20(a)  
          hereof.

                  "Dollars" and "$" mean lawful  money  of the  United States of
          America.

                  "Eligible  Assignee"  means any commercial  bank,  savings and
          loan association,  savings bank,  finance company,  insurance company,
          pension fund, mutual fund, or other financial  institution  (whether a
          corporation,   partnership,   or  other   entity)   approved   by  the
          Administrative   Agent,  which  approval  shall  not  be  unreasonably
          withheld or delayed,  and unless an Event of Default has  occurred and
          is continuing,  reasonably approved by Borrower to the extent required
          in Section  14.8,  such  approval by Borrower  not to be  unreasonably
          withheld or delayed.

                  "Engineering Reports"  shall  have  the  meaning  specified in
          subsection 2.8(a).

                  "Environmental  Laws" means any and all  federal,  state,  and
          local  laws,  regulations,  and  requirements  pertaining  to  health,
          safety,  or  the  environment,   including,  without  limitation,  the
          Comprehensive  Environmental Response,  Compensation and Liability Act
          of 1980, 42 U.S.C.  ss. 9601 et seq.,  the Resource  Conservation  and
          Recovery Act of 1976,  42 U.S.C.  ss. 6901 et seq.,  the  Occupational
          Safety and Health Act, 29 U.S.C.  ss. 651 et seq.,  the Clean Air Act,
          42 U.S.C. ss. 7401 et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et
          seq.,  and the Toxic  Substances  Control  Act, 15 U.S.C.  ss. 2601 et
          seq., as such laws,  regulations,  and  requirements may be amended or
          supplemented from time to time.

                  "Environmental  Liabilities"  means,  as to  any  Person,  all
          liabilities, obligations, responsibilities,  Remedial Actions, losses,
          damages,  punitive  damages,  consequential  damages,  treble damages,
          costs, and expenses  (including,  without  limitation,  all reasonable
          fees,  disbursements  and expenses of counsel,  expert and  consulting
          fees and  costs of  investigation  and  feasibility  studies),  fines,
          penalties,  sanctions,  and interest incurred as a result of any claim
          or demand, by any Person, whether based in contract,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 9

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          tort, implied or express warranty, strict liability, criminal or civil
          statute,  including any Environmental Law, permit,  order or agreement
          with  any  Governmental   Authority  or  other  Person,  arising  from
          environmental,   health  or  safety   conditions  or  the  Release  or
          threatened  Release  of a  Hazardous  Material  into the  environment,
          resulting from the past,  present, or future operations of such Person
          or its Affiliates.

                  "ERISA" means the Employee  Retirement  Income Security Act of
          1974, as amended from time to time, and the  regulations and published
          interpretations thereunder.

                  "ERISA  Affiliate"  means any corporation or trade or business
          which is a member of the same controlled group of corporations (within
          the meaning of Section 414(b) of the Code) as the Borrower or is under
          common control (within the meaning of Section 414(c) of the Code) with
          the Borrower.

                  "Eurodollar Loans" means Loans the interest rates on which are
          determined on the basis of the rates  referred to in the definition of
          "Adjusted Eurodollar Rate" in this Section 1.1.

                  "Eurodollar  Rate"  means,  for any  Eurodollar  Loan  for any
          Interest  Period  therefor,  the rate per annum (rounded  upwards,  if
          necessary,  to the nearest 1/16 of 1%) at which the Reference  Bank is
          offered  Dollar  deposits at or about 10:00 A.M.,  New York City time,
          two Business  Days prior to the first day of such  Interest  Period in
          the  interbank  eurodollar  market  where the  eurodollar  and foreign
          currency and exchange  operations in respect of its  Eurodollar  Loans
          are  then  being  conducted  for  delivery  on the  first  day of such
          Interest  Period  for a number  of days  comprised  therein  and in an
          amount  comparable to the principal  amount of the Eurodollar  Loan to
          which such Interest Period relates.

                  "Event of Default" has the meaning specified in Section 12.1.

                  "Excluded Subsidiaries"  means  Hunter  Butcher   nternational
          Limited Liability Company.

                  "Federal  Funds  Effective  Rate" shall mean, for any day, the
          weighted average of the rates on overnight federal funds  transactions
          with members of the Federal  Reserve System  arranged by federal funds
          brokers,  as  published  on the next  succeeding  Business  Day by the
          Federal Reserve Bank of New York, or, if such rate is not so published
          for any day which is a Business Day, the average of the quotations for
          the day of such transactions received by the Administrative Agent from
          three federal funds brokers of recognized standing selected by it.

                  "Funded Debt" means, as of any date of determination  (without
          duplication):  (a) all  obligations  of the  Borrower and the Material
          Subsidiaries  for borrowed money,  (b) all obligations of the Borrower
          and the Material Subsidiaries  evidenced by bonds, notes,  debentures,
          or other similar instruments,  (c) all obligations of the Borrower and
          the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 10

<PAGE>



          Material  Subsidiaries to pay the deferred  purchase price of property
          or services,  except trade accounts  payable of such Person arising in
          the ordinary  course of business that are not past due by more than 90
          days,  (d) all  Capital  Lease  Obligations  of the  Borrower  and the
          Material Subsidiaries,  (e) all obligations secured by a Lien existing
          on  property  owned by the  Borrower  and the  Material  Subsidiaries,
          whether or not the  obligations  secured  thereby have been assumed by
          the Borrower or are non-recourse to the credit of such Person, and (f)
          all  contractual   Contingent   Liabilities   and  all   reimbursement
          obligations  of the Borrower and the  Material  Subsidiaries  (whether
          contingent  or  otherwise)  in respect of letters of credit,  bankers'
          acceptances, surety or other bonds and similar instruments.

                  "GAAP" means generally accepted accounting principles, applied
          on a  consistent  basis,  as set forth in Opinions  of the  Accounting
          Principles  Board  of  the  American  Institute  of  Certified  Public
          Accountants and/or in statements of the Financial Accounting Standards
          Board and/or their  respective  successors and which are applicable in
          the  circumstances as of the date in question.  Accounting  principles
          are applied on a  "consistent  basis" when the  accounting  principles
          applied in a current period are comparable in all material respects to
          those accounting principles applied in a preceding period.

                  "Gas Gathering  Systems" means the gas plant and those certain
          gas   gathering   systems   consisting  of  all   equipment,   assets,
          rights-of-way,  surface  leases,  contracts  and  related  assets more
          particularly described on Schedule 1.1 attached hereto.

                  "Governmental  Authority" means any nation or government,  any
          state or  political  subdivision  thereof  and any  entity  exercising
          executive,   legislative,   judicial,  regulatory,  or  administrative
          functions of or pertaining to government.

                  "Guarantor" means  each present and future Material Subsidiary
          of Borrower.

                  "Hazardous  Material"  means any  substance,  product,  waste,
          pollutant,  material,  chemical,  contaminant,  constituent,  or other
          material which is or becomes listed, regulated, or addressed under any
          Environmental Law, including, without limitation, asbestos, petroleum,
          and polychlorinated biphenyls.

                  "Hedge  Agreements"  shall have the  meaning  assigned to such
          term in Section 9.14.

                  "Hydrocarbons"  means  all  oil,  gas,  casinghead  gas,  drip
          gasoline, natural gasoline,  condensate,  distillate,  carbon dioxide,
          liquid hydrocarbons, gaseous hydrocarbons, and all other minerals, and
          all products obtained, refined or processed therefrom.

                  "Initial  Rate  Adjustment  Date"  means  the  date  that  the
          Borrower has repaid the Bridge Loan in full.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 11

<PAGE>



                  "Intercreditor  Agreement" means the  Intercreditor  Agreement
          executed by and among the  Administrative  Agent,  the  administrative
          agent  under the Bridge  Loan  Agreement,  the Banks,  and the lenders
          party  to the  Bridge  Loan  Agreement  in  substantially  the form of
          Exhibit  "I"  hereto,  as the same may be  amended,  supplemented,  or
          modified.

                  "Interest Expense" means, for any period, all interest on Debt
          (including  the  interest  portion of  payments  under  Capital  Lease
          Obligations  and any  capitalized  interest but excluding the non-cash
          accretion  of the  discount  and  amortization  of the Agents' and the
          Banks' fees hereunder and the fees of the agents and Lenders under the
          Bridge Loan Agreement) of Borrower and its Subsidiaries (determined on
          a  consolidated  basis) paid or accrued  during such period,  provided
          that  there  shall  be  added  to  "Interest   Expense"  any  fees  or
          commissions  payable in  connection  with any letters of credit during
          such period.

                  "Interest  Period" means, with respect to any Eurodollar Loan,
          each period commencing on the date such Loan is made or Converted from
          a Base  Rate  Loan  or,  in the  case of each  subsequent,  successive
          Interest Period  applicable to a Eurodollar  Loan, the last day of the
          next preceding  Interest  Period with respect to such Loan, and ending
          on the  numerically  corresponding  day in the first,  second or third
          calendar month  thereafter,  as the Borrower may select as provided in
          Section 4.1 or 4.2 hereof, except that each such Interest Period which
          commences on the last Business Day of a calendar  month (or on any day
          for which there is no numerically corresponding day in the appropriate
          subsequent  calendar  month) shall end on the last Business Day of the
          appropriate subsequent calendar month.

                  Notwithstanding the foregoing:  (a) each Interest Period which
                  would otherwise end on a day which is not a Business Day shall
                  end  on  the  next  succeeding   Business  Day  (or,  if  such
                  succeeding  Business Day falls in the next succeeding calendar
                  month,  on the next preceding  Business Day); (b) any Interest
                  Period which would  otherwise  extend  beyond the  Termination
                  Date shall end on the  Termination  Date; (c) no more than six
                  Interest  Periods for  Eurodollar  Loans shall be in effect at
                  the same time; (d) no Interest Period for any Eurodollar Loans
                  shall  have a  duration  of less  than one month  and,  if the
                  Interest Period for any Eurodollar  Loans would otherwise be a
                  shorter  period,  Eurodollar  Loans  shall  not  be  available
                  hereunder;  and (e) no  Interest  Period may  extend  beyond a
                  principal repayment date unless,  after giving effect thereto,
                  the aggregate  principal amount of the Eurodollar Loans having
                  Interest  Periods that end after such  principal  payment date
                  shall  be equal to or less  than the  Loans to be  outstanding
                  hereunder after such principal payment date.

                  "Issuing  Bank"  means,  with respect to any Letter of Credit,
          Bankers  Trust or any of its  Affiliates  or, with the approval of the
          Administrative  Agent,  any other Bank which  chooses to be an Issuing
          Bank  hereunder,  in its  capacity as issuer of each Letter of Credit,
          and any  successor  Issuing  Bank  appointed  pursuant to the terms of
          Section 3.9.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 12

<PAGE>




                  "L/C Application" has the meaning specified in Section 3.1.

                  "L/C Documents" has the meaning specified in Section 3.1.

                  "LC  Participation"  means,  with  respect  to any Bank at any
          time,  the amount of the  participating  interest held by such Bank in
          respect of a Letter of Credit.

                  "Letter of Credit"  means any standby  letter of credit issued
          by an Issuing Bank for the account of the Borrower pursuant to Article
          III.

                  "Letter  of  Credit  Liabilities"  means,  at  any  time,  the
          aggregate face amounts of all outstanding Letters of Credit.

                  "Letter  of  Credit  Request  Form"  means a  certificate,  in
          substantially the form of Exhibit "C" hereto,  properly  completed and
          signed by the Borrower requesting issuance of a Letter of Credit.

                  "Lien" means any lien, mortgage,  security interest, tax lien,
          financing  statement,  pledge,  charge,   hypothecation,   assignment,
          preference,  priority,  or other  encumbrance  of any  kind or  nature
          whatsoever  (including,  without  limitation,  any conditional sale or
          title retention agreement),  whether arising by contract, operation of
          law, or otherwise.

                  "Loan" means,  as to each Bank, the revolving  credit loans to
          be made by such Bank pursuant to Section 2.1.

                  "Loan  Documents"  means  this  Agreement  and all  promissory
          notes,  security agreements,  pledge agreements,  intercreditor and/or
          subordination  agreements,  deeds of trust,  mortgages,  fee  letters,
          assignments,   guaranties,   letters  of  credit,   letter  of  credit
          applications and other instruments, documents, and agreements executed
          and delivered  pursuant to or in connection  with this  Agreement,  as
          such instruments,  documents, and agreements may be amended, modified,
          renewed, extended, or supplemented from time to time.

                  "Loan Request Form" means a certificate,  in substantially the
          form of  Exhibit  "B"  hereto,  properly  completed  and signed by the
          Borrower requesting a Loan.

                  "Majority Banks" means at any time while no Loans or Letter of
          Credit Liabilities are outstanding, Banks having commitments totalling
          at least 75% of the  amount  of the  Borrowing  Base and,  at any time
          while Loans or Letter of Credit  Liabilities  are  outstanding,  Banks
          holding  Loans  and LC  Participations  totalling  at least 75% of the
          amount of the Borrowing Base.

                  "Material Subsidiary" means  each  Subsidiary  other  than the
          Excluded Subsidiaries.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 13

<PAGE>



                  "Maximum  Rate"  means,  at any time and with  respect  to any
          Bank, the maximum rate of interest under applicable law that such Bank
          may charge the  Borrower.  The Maximum Rate shall be  calculated  in a
          manner that takes into account any and all fees,  payments,  and other
          charges in  respect of the Loan  Documents  that  constitute  interest
          under  applicable  law.  Each change in any interest rate provided for
          herein  based upon the  Maximum  Rate  resulting  from a change in the
          Maximum Rate shall take effect  without  notice to the Borrower at the
          time of such change in the Maximum Rate.

                  "Mortgaged  Properties" means all right, title and interest of
          Borrower and its Subsidiaries in and to (i) the Oil and Gas Properties
          identified  on  Schedule  1.1(a)  hereof  and such  other  Oil and Gas
          Properties as may from time to time become  subject to the Lien of any
          Security  Document;  and (ii) the Gas Gathering Systems and such other
          assets and  properties as may from time to time become  subject to the
          Lien of any Security Document.

                  "Multiemployer  Plan" means a  multiemployer  plan  defined as
          such in Section 3(37) of ERISA to which  contributions  have been made
          by the Borrower or any ERISA  Affiliate  and which is covered by Title
          IV of ERISA.

                  "Net Cash Proceeds"  means in connection with (a) any issuance
          by the Borrower or any of its Subsidiaries of any Debt, equity or debt
          securities  or  instruments,  (b) the  incurrence of other loans other
          than as permitted by Section 10.1 or (c) the disposition of any assets
          permitted  by  Section  10.8,  the cash  proceeds  received  from such
          issuance or sale,  as  applicable,  net of all  reasonable  investment
          banking fees, legal fees,  accountants' fees,  underwriting  discounts
          and  commissions  and  other  customary  fees and  expenses,  actually
          incurred and satisfactorily documented in connection therewith.

                 "New Properties" shall have the meaning specified in subsection
          4.5(e) hereof.

                  "1996 Series A Preferred  Stock" means the one million  shares
          of the Borrower's 1996 Series A Convertible Preferred Stock, $.001 par
          value per share and a $10.00  stated  value per share with a quarterly
          rate of $.21875 per share.

                  "Note" means a promissory note of the Borrower  payable to the
          order of a Bank, in substantially the form of Exhibit "A" hereto,  and
          all  extensions,   renewals,   and   modifications   thereof  and  all
          substitutions therefor.

                  "Obligated  Party" means any Person who is or becomes party to
          any agreement that  guarantees or secures  payment and  performance of
          the Obligations or any part thereof.

                  "Obligations"   means  all  (a)  Swap  Obligations,   and  (b)
          obligations,  indebtedness,  and  liabilities  of the  Borrower to the
          Agents,  the  Issuing  Banks and the  Banks,  or any of them,  arising
          pursuant  to any of the Loan  Documents  (other  than any  obligations
          under Loan Documents to the extent such obligations relate exclusively
          to the Bridge Loan),



AMENDED AND RESTATED CREDIT AGREEMENT - Page 14

<PAGE>



          now existing or hereafter arising, whether direct, indirect,  related,
          unrelated,  fixed,  contingent,   liquidated,   unliquidated,   joint,
          several,  or joint and several,  including,  without  limitation,  the
          obligations,  indebtedness, and liabilities of the Borrower under this
          Agreement and the other Loan Documents (including, without limitation,
          all of Borrower's contingent  reimbursement  obligations in respect of
          Letters  of  Credit  but  limited  as   provided   in  the   preceding
          parenthetical  clause),  and all  interest  accruing  thereon  and all
          attorneys'  fees and other  expenses  incurred in the  enforcement  or
          collection thereof.

                  "Oil and Gas Properties" means and includes, collectively, (a)
          all  Hydrocarbons  prior to  severance,  and all leases,  licenses and
          other contracts or arrangements  granting interests in Hydrocarbons or
          proceeds  of  Hydrocarbons  prior  to  severance,   including  without
          limitation  all fee mineral  interests,  oil, gas and other  minerals,
          leases,  subleases,  farmouts,  royalties,  overriding royalties,  net
          profits interests,  production payments and similar mineral interests,
          and  all  unsevered   oil,  gas,  and  other  minerals  in,  under  or
          attributable to any of the foregoing properties and interests, (b) all
          leases,  licenses and other contracts or arrangements  granting rights
          to  explore  for  Hydrocarbons  on or under  partially  or  completely
          undeveloped acreage, and (c) all oil wells, gas wells, injection wells
          and other wells and all production therefrom.

                  "Operating   Lease"  means  any  lease  (other  than  a  lease
          constituting a Capital Lease Obligation) of real or personal property.

                  "Payment Notice" means a request for payment given pursuant to
          Section 4.5 hereof.

                  "Payor" has the meaning assigned to it in Section 4.8.

                  "PBGC" means the Pension Benefit  Guaranty  Corporation or any
          entity succeeding to all or any of its functions under ERISA.

                  "Permitted Debt" has the meaning specified in Section 10.1.

                  "Permitted Liens" has the meaning specified in Section 10.2.

                  "Person" means any  individual,  corporation,  business trust,
          association,   company,   partnership,   joint  venture,  Governmental
          Authority, or other entity.

                  "Plan" means any employee benefit or other plan established or
          maintained by the Borrower or any ERISA Affiliate and which is covered
          by Title IV of ERISA.

                  "Prime  Rate"  shall  mean  the  rate of  interest  per  annum
          publicly  announced from time to time by the  Administrative  Agent as
          its prime rate in effect at its  Principal  Office which may or not be
          the  lowest or best rate  offered by the  Administrative  Agent to its
          customers.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 15

<PAGE>




                  "Principal   Office"  means  the   principal   office  of  the
          Administrative  Agent,  presently  located at One Bankers Trust Plaza,
          130 Liberty Street, New York, New York 10006.

                  "Prior Credit  Agreement"  means that certain Credit Agreement
          dated as of June 28, 1996,  executed among the Borrower,  Wells Fargo,
          as agent,  Paribas, as co-agent,  and the other banks or other lending
          institutions   which   were   signatories   thereto,   as  amended  or
          supplemented from time to time.

                  "Prohibited Transaction"  means  any transaction  set forth in
          Section 406 of ERISA or Section 4975 of the Code.

                  "Property"  means  all  real  estate  and  other  tangible and
          intangible property.

                  "Purchase  Agreement"  means that  certain  Purchase  and Sale
          Agreement  dated February 27, 1997,  executed by and among Sellers and
          Magnum Hunter Production, Inc., a Texas corporation.

                  "Quarterly  Payment  Date"  means the last day of each  March,
          June, September and December of each year, the first of which shall be
          June 30, 1997.

                  "Reference Bank" means Bankers Trust.

                  "Register" has the meaning assigned to it in Section 14.8(d).

                  "Regulation D" means Regulation D of the Board of Governors of
          the Federal  Reserve System as the same may be amended or supplemented
          from time to time.

                  "Regulatory  Change"  means,  with  respect  to any Bank,  any
          change  after the date of this  Agreement  in United  States  federal,
          state, or foreign laws or regulations  (including Regulation D) or the
          adoption or making after such date of any interpretations, directives,
          or  requests  applying to a class of banks  including  such Bank of or
          under any United  States  federal  or state,  or any  foreign  laws or
          regulations  (whether  or not having the force of law) by any court or
          governmental or monetary  authority charged with the interpretation or
          administration thereof.

                  "Release"  means,  as  to  any  Person,  any  release,  spill,
          emission,    leaking,   pumping,    injection,    deposit,   disposal,
          disbursement,  leaching,  or migration of Hazardous Materials into the
          indoor or outdoor environment or into or out of property owned by such
          Person,  including,  without  limitation,  the  movement of  Hazardous
          Materials through or in the air, soil, surface water, ground water, or
          property.

                  "Remedial  Action" means all actions required to (a) clean up,
          remove,  treat, or otherwise address Hazardous Materials in the indoor
          or outdoor  environment,  (b) prevent the Release or threat of Release
          or minimize the further Release of Hazardous Materials



AMENDED AND RESTATED CREDIT AGREEMENT - Page 16

<PAGE>



          so that they do not migrate or endanger or threaten to endanger public
          health or welfare or the indoor or outdoor environment, or (c) perform
          pre-remedial  studies and investigations and post-remedial  monitoring
          and care.

                 "Reportable Event" means any of the events set forth in Section
          4043 of ERISA.

                  "Required Banks" means at any time while no Loans or Letter of
          Credit  Liabilities are outstanding,  Banks having at least 66-2/3% of
          the aggregate  amount of the Commitments  and, at any time while Loans
          or Letter of Credit  Liabilities  are  outstanding,  Banks  holding at
          least 66-2/3% of the  outstanding  aggregate  principal  amount of the
          Loans and LC Participations.

                  "Required Payment" has the meaning  assigned to it in  Section
          4.8.

                  "Reserve  Requirement"  means, for any Eurodollar Loan for any
          Interest Period  therefor,  the average maximum rate at which reserves
          (including  any  marginal,  supplemental  or emergency  reserves)  are
          required to be maintained during such Interest Period under Regulation
          D by member banks of the Federal  Reserve System in New York City with
          deposits exceeding  $1,000,000,000 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 by reason of
          any Regulatory  Change  against (i) any category of liabilities  which
          includes  deposits by reference to which the Adjusted  Eurodollar Rate
          is to be  determined,  or (ii) any category of extensions of credit or
          other assets which include Eurodollar Loans.

                  "RICO" means the Racketeer Influenced and Corrupt Organization
          Act of 1970, as amended from time to time.

                  "Security  Documents"  means  all  mortgages,  deeds of trust,
          security  agreements,   guaranties,   assignments  of  production  and
          financing  statements or such other  instruments  securing or ensuring
          payment and performance of the Obligations or any part thereof, as the
          same may be amended, supplemented, or modified from time to time.

                  "Sellers" means, collectively,  Burlington Resources Oil & Gas
          Company, a Delaware corporation,  and Glacier Park Company, a Delaware
          corporation.

                  "Stock Purchase Agreement" means the Stock Purchase Agreement,
          dated as of December 6, 1996,  among the Borrower and Trust Company of
          the West and TCW Asset Management Company, in the capacities described
          therein,  TCW Debt and Royalty  Fund IVB and TCW Debt and Royalty Fund
          IVC.

                  "Subordinated Debt" means Debt issued by the Borrower which is
          subordinated  to all Debt of the Borrower  owing to the Banks on terms
          and conditions satisfactory to



AMENDED AND RESTATED CREDIT AGREEMENT - Page 17

<PAGE>



          the  Banks,  the  proceeds  of which  shall be used to repay  Advances
          hereunder and to repay the Bridge Loan in its entirety.

                  "Subsidiary"   means  any  corporation,   partnership,   joint
          venture,  business  trust or other legal entity in which the Borrower,
          either directly or indirectly through one or more intermediaries, owns
          or  holds  beneficial  or  record  ownership  of  a  majority  of  the
          outstanding voting securities or equity interests therein.

                  "Subsidiary Guaranty Agreement" means the Amended and Restated
          Guaranty  Agreement  of the  Subsidiaries  (other  than  the  Excluded
          Subsidiaries)  in favor of the  Collateral  Agent for the  benefit  of
          itself, the other Agents, the Banks, the Issuing Banks, and the Bridge
          Lenders in substantially  the form of Exhibit "F" hereto,  as the same
          may be amended, supplemented, or modified.

                  "Subsidiary  Pledge  Agreement" means the Amended and Restated
          Pledge  Agreement  of  the  Material  Subsidiaries  in  favor  of  the
          Collateral  Agent for the  benefit of itself,  the other  Agents,  the
          Banks, the Issuing Banks and the Bridge Lenders,  in substantially the
          form of Exhibit "E" hereto, as the same may be amended,  supplemented,
          or modified.

                  "Swap  Obligations"  shall mean any indebtedness,  obligations
          and  liabilities  owed  by the  Borrower  to any  Bank  arising  under
          financial interest swap agreements entered into by Borrower to lock in
          interest   rates  payable  under  this  Agreement  or  commodity  swap
          agreements  or  similar  contractual  arrangements  intended  to hedge
          market  price  fluctuations  and  interest  rates  applicable  to this
          Agreement or crude oil,  natural gas or other  Hydrocarbons;  provided
          that (i) no such commodity swap agreement  shall be entered into which
          would require  Borrower to deliver,  or make cash settlement  payments
          based upon quantities of Hydrocarbons  which, in the aggregate for all
          such agreements,  would exceed 75% of the estimated  production during
          the  term  of such  agreements  from  that  portion  of the  Mortgaged
          Properties consisting of proved developed producing reserves, and (ii)
          such contracts shall not have a maturity exceeding two years,  without
          the prior consent of the Required Banks.

                  "Termination Date" means 12:00 P.M. New York, New York time on
          April 30, 2002, or such earlier date and time on which the Commitments
          terminate as provided in this Agreement.

                  "Type"  means  any  type  of  Loan (i.e.,  Base  Rate  Loan or
          Eurodollar Loan).

                  "UCC" means  the  Uniform Commercial Code as in  effect in the
          State of New York.

     Section 1.2 Other  Definitional  Provisions.  All definitions  contained in
this  Agreement  are equally  applicable to the singular and plural forms of the
terms  defined.  The words  "hereof,"  "herein,"  and  "hereunder"  and words of
similar import referring to this Agreement refer to this



AMENDED AND RESTATED CREDIT AGREEMENT - Page 18

<PAGE>



Agreement  as a whole and not to any  particular  provision  of this  Agreement.
Unless otherwise  specified,  all Article and Section references pertain to this
Agreement.  All  accounting  terms  not  specifically  defined  herein  shall be
construed  in  accordance  with GAAP.  Terms used herein that are defined in the
UCC, unless otherwise defined herein,  shall have the meanings  specified in the
UCC.

                                   ARTICLE II

                                      Loans

          Section 2.1  Commitments.  Subject to the terms and conditions of this
Agreement,  each Bank severally agrees to make one or more Loans to the Borrower
from time to time from the date hereof to and including the Termination  Date in
an aggregate  principal  amount at any time  outstanding up to but not exceeding
the  amount of such  Bank's  Commitment  as then in  effect,  provided  that the
aggregate  amount of all Loans at any time  outstanding  shall  not  exceed  the
lesser of (i) the  aggregate  amount of the  Commitments  minus the  outstanding
Letter of Credit Liabilities or (ii) the Borrowing Base (as reduced from time to
time pursuant to the terms of this Agreement)  minus the  outstanding  Letter of
Credit Liabilities.  Subject to the foregoing  limitations,  and the other terms
and provisions of this Agreement,  the Borrower may borrow,  repay, and reborrow
hereunder  the  amount  of the  Commitments  by means  of Base  Rate  Loans  and
Eurodollar Loans and, until the Termination Date, the Borrower may Convert Loans
of one Type into  Loans of  another  Type.  Loans of each Type made by each Bank
shall be made and maintained at such Bank's Applicable  Lending Office for Loans
of such Type.

          Section 2.2 Notes.  The  obligation of the Borrower to repay each Bank
for Loans made by such Bank and  interest  thereon  shall be evidenced by a Note
executed by the  Borrower,  payable to the order of such Bank,  in the principal
amount of such Bank's  Commitment,  and dated the date hereof or such later date
as may be required with respect to transactions contemplated by Section 14.8.

          Section 2.3      Repayment of Loans.    The Borrower shall repay  the 
unpaid principal amount of all Loans on the Termination Date.

          Section 2.4 Interest.  The unpaid  principal amount of the Loans shall
bear interest at a varying rate per annum equal from day to day to the lesser of
(a) the Maximum Rate, or (b) the Applicable  Rate. If at any time the Applicable
Rate for any Loan shall exceed the Maximum  Rate,  thereby  causing the interest
accruing on such Loan to be limited to the  Maximum  Rate,  then any  subsequent
reduction  in the  Applicable  Rate for such Loan  shall not  reduce the rate of
interest  on such Loan  below the  Maximum  Rate until the  aggregate  amount of
interest  accrued on such Loan equals the  aggregate  amount of  interest  which
would have accrued on such Loan if the Applicable  Rate had at all times been in
effect.  Accrued  and unpaid  interest  on the Loans shall be due and payable as
follows:




AMENDED AND RESTATED CREDIT AGREEMENT - Page 19

<PAGE>



                  (i)      in  the  case of Base Rate Loans, on  each  Quarterly
          Payment Date and on the Termination Date;

                  (ii) in the case of each  Eurodollar  Loan, on the last day of
          the  Interest  Period  with  respect  thereto  or in the  case  of any
          Interest  Period that  exceeds  three  months,  on the last day of the
          third month of the Interest Period and on the last day of the Interest
          Period with respect thereto;

                  (iii)  upon  the  payment  or  prepayment  of any  Loan or the
          Conversion  of any Loan to a Loan of  another  Type  (but  only on the
          principal amount so paid, prepaid, or Converted); and

                  (iv)     on the Termination Date.

Notwithstanding the foregoing, any outstanding principal of any Loan and (to the
fullest extent  permitted by law) any other amount payable by the Borrower under
this  Agreement  or any other  Loan  Document  that is not paid in full when due
(whether at stated maturity, by acceleration,  or otherwise) shall bear interest
at the Default  Rate for the period from and  including  the due date thereof to
but excluding the date the same is paid in full. Interest payable at the Default
Rate shall be payable from time to time on demand.

          Section 2.5 Use of  Proceeds.  The  proceeds of Loans shall be used by
the Borrower to repay  existing  Debt,  to finance the  Acquisition,  to develop
property, to support working capital and for general corporate purposes.

          Section  2.6  Commitment  Fee.  The  Borrower  agrees  to  pay  to the
Administrative  Agent for the account of each Bank a commitment fee on the daily
average  unused  portion of the amount  available  under such Bank's  Commitment
pursuant to the  Borrowing  Base (as reduced  from time to time  pursuant to the
terms of this  Agreement)  for the period  from and  including  the date of this
Agreement to and including the  Termination  Date, at the rate of  three-eighths
percent of one  percent  per annum,  such rate to be based on a 360 day year and
the actual number of days elapsed.  The accrued  commitment fee shall be payable
in arrears on each Quarterly Payment Date and on the Termination Date.

          Section 2.7  Reduction or  Termination  of  Commitments.  The Borrower
shall  have the right to  terminate  in whole or  reduce  in part the  available
Borrowing  Base or the unused  portion of the  Commitments  upon at least  three
Business  Days'  prior  notice  (which  notice  shall  be  irrevocable)  to  the
Administrative   Agent   specifying  the  effective  date  thereof,   whether  a
termination or reduction is being made, and the amount of any partial reduction,
provided,  however,  the Commitment shall never be reduced below an amount equal
to the outstanding Letter of Credit Liabilities. Each partial reduction shall be
in the amount of  $1,000,000  or an integral  multiple  thereof and the Borrower
shall  simultaneously  prepay the amount by which the unpaid principal amount of
the Loans plus the outstanding Letter of Credit  Liabilities  exceeds the lesser
of (i) an amount equal to the  Borrowing  Base, or (ii) the  Commitments  (after
giving effect to such notice) plus accrued and unpaid  interest on the principal
amount so prepaid. The



AMENDED AND RESTATED CREDIT AGREEMENT - Page 20

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Borrowing Base and/or the Commitments may not be reinstated after they have been
terminated or reduced.

          Section 2.8      Borrowing Base.

                  (a) The  Borrowing  Base  shall  be  cumulative  of all  other
          limitations  contained in this Agreement and the other Loan Documents.
          The  initial  Borrowing  Base  shall  be  $130,000,000,  and  shall be
          redetermined as provided herein and in connection with any issuance of
          Subordinated  Debt by the  Borrower.  In the event  that the  Borrower
          issues  $125,000,000 of Subordinated Debt, the Borrowing Base shall be
          permanently reduced to $75,000,000;  in the case of other issuances of
          Subordinated  Debt  by the  Borrower,  the  Borrowing  Base  shall  be
          redetermined,  in the  sole  discretion  of  the  Majority  Banks,  as
          provided herein. In addition, the Borrowing Base shall be redetermined
          semiannually on each Determination  Date,  commencing October 1, 1997.
          Upon delivery of the engineering  reserve  evaluation reports required
          by  subsections  9.1(l)  and  (m)   (collectively,   the  "Engineering
          Reports") and such other reports, data and supplemental information as
          may, from time to time, be reasonably  requested by the Administrative
          Agent  and the  Banks,  together  with a  certificate  from the  chief
          financial  officer of  Borrower  that,  to the best of such  officer's
          knowledge,  after making due inquiry (A) the factual  information upon
          which such Engineering Reports are based is true and correct,  (B) the
          certificate  identifies  the  Properties  covered  by the  Engineering
          Reports  that  have  not  been   previously   included  in  any  prior
          Engineering  Report,  and (C) no Mortgaged  Properties  have been sold
          since the last  Determination  Date, on each  Determination Date or on
          such other date as otherwise permitted  hereunder,  the Administrative
          Agent shall  redetermine  the Borrowing  Base in  accordance  with its
          customary  practices  and standards for loans secured by similar types
          of property. Within 45 days of its receipt of the Engineering Reports,
          the  Administrative  Agent shall provide such  redetermined  Borrowing
          Base in writing to the Banks.  Within ten days after their  receipt of
          such  information,  the  Banks  shall  give the  Administrative  Agent
          written  notice of whether  the Banks  approve  of the  Administrative
          Agent's  proposed  Borrowing  Base.  If, for any reason,  the Majority
          Banks  do  not   approve  of  the   proposed   Borrowing   Base,   the
          Administrative  Agent and the  Majority  Banks shall  consult with one
          another to determine the  Borrowing  Base that will be approved by the
          Majority  Banks.  The  Borrowing  Base  established  pursuant  to this
          subsection shall be effective as of the ensuing Determination Date and
          shall remain in effect until it is subsequently  redetermined pursuant
          to this subsection  2.8(a) or subsection  2.8(b). If a redetermination
          in 1997  results in an increase in the  Borrowing  Base,  the Borrower
          shall pay to the Administrative  Agent for the account of the Banks, a
          fee for such increase in the amount of  one-quarter  of one percent of
          the  increase;  in all other cases,  any increase  shall be subject to
          agreement of the Borrower and the Banks with respect to a fee, if any,
          for such increase.

                  (b) In addition to the  determinations  of the Borrowing  Base
          required pursuant to subsection 2.8(a), special determinations thereof
          may  be  made  for  any  reason  (but  not  more  than  once   between
          Determination  Dates) at the option of either (i) the Borrower or (ii)
          Required  Banks. To request a special  determination  of the Borrowing
          Base, the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 21

<PAGE>



          Person requesting such  determination  shall provide the Agent and the
          Borrower  with a  written  request  of such  determination.  Any  such
          special determination of the Borrowing Base shall be made by the Banks
          in consultation  with one another using their customary  standards for
          oil  and  gas  lending  and  shall  be  based  upon  the  most  recent
          Engineering  Reports  delivered  to the Banks by the Borrower and such
          other reports and data as the Banks may reasonably request.  The Agent
          shall notify the Borrower of the redetermined Borrowing Base within 45
          days of the Agent's receipt of the special  determination  request and
          the   redetermined   Borrowing  Base  shall  be  effective  upon  such
          notification.  If a redetermination  in 1997 results in an increase in
          the  Borrowing  Base,  the  Borrower  shall  pay to the  Agent for the
          account of Banks, a fee for such increase in the amount of one-quarter
          of one percent of the increase;  in all other cases any increase shall
          be subject to  agreement of the Borrower and the Banks with respect to
          a fee, if any, for such increase. If the redetermination  results in a
          decrease in the  Borrowing  Base,  the Borrower  shall repay the Loans
          within  six  months  of  such  redetermination  in six  equal  monthly
          installments,  each  in an  amount  equal  1/6 of the  Borrowing  Base
          Deficiency.


                                   ARTICLE III

                                Letters of Credit

          Section 3.1 Letters of Credit.  Subject to the terms and conditions of
this Agreement,  each Issuing Bank agrees to issue one or more Letters of Credit
for the  account of the  Borrower  from time to time from the date hereof to and
including the Termination Date; provided,  however,  that the outstanding Letter
of  Credit  Liabilities  shall  not  at  any  time  exceed  the  lesser  of  (1)
$20,000,000,  (2) an amount  equal to the  aggregate  amount of the  Commitments
minus the sum of the  outstanding  Loans,  or (3) the Borrowing Base (as reduced
from time to time) minus the sum of the outstanding Loans. Each Letter of Credit
shall have an expiration date not beyond the Termination  Date, shall be payable
in Dollars, must be satisfactory in form and substance to the applicable Issuing
Bank, and shall be issued pursuant to such documents and instruments (including,
without limitation,  such Issuing Bank's standard  application and agreement for
issuance of letters of credit as then in effect [each an "L/C  Application"]) as
such Issuing Bank may require (collectively,  the "L/C Documents"). No Letter of
Credit  shall  require  any  payment  by the  Issuing  Bank  to the  beneficiary
thereunder  pursuant  to a drawing  prior to the third  Business  Day  following
presentment of a draft and any related documents to the Issuing Bank.

          Section 3.2  Participation  by Banks. By the issuance of any Letter of
Credit and without any further action on the part of the applicable Issuing Bank
or any of the Banks in respect thereof,  each Issuing Bank hereby grants to each
Bank and each Bank hereby irrevocably agrees to acquire from each Issuing Bank a
participation  in each such  Letter of Credit and the  related  Letter of Credit
Liabilities,  effective upon the issuance  thereof without recourse or warranty,
equal to such Bank's pro rata part (based on the aggregate  Commitments) of such
Letter of Credit  and  Letter of Credit  Liabilities.  Each  Issuing  Bank shall
provide  a copy of each  Letter  of Credit to each  other  Bank  promptly  after
issuance.  This  agreement to grant and acquire  participations  is an agreement
between each Issuing Bank and the Banks, and neither Borrower



AMENDED AND RESTATED CREDIT AGREEMENT - Page 22

<PAGE>



nor any  beneficiary  of a Letter of Credit  shall be entitled to rely  thereon.
Borrower agrees that each Bank purchasing a participation  from any Issuing Bank
pursuant to this  Section  3.2 may  exercise  all its rights to payment  against
Borrower  including the right of setoff,  with respect to such  participation as
fully as if such Bank were the direct creditor of Borrower in the amount of such
participation.

          Section 3.3  Procedure for Issuing  Letters of Credit.  Each Letter of
Credit  shall be issued on at least five  Business  Days prior  notice  from the
Borrower to the applicable Issuing Bank (with a copy to the Agent) by means of a
Letter  of  Credit  Request  Form  describing  the  transaction  proposed  to be
supported thereby and specifying (a) the requested date of issuance (which shall
be a  Business  Day),  (b) the face  amount  of the  Letter of  Credit,  (c) the
expiration  date of the  Letter  of  Credit,  (d) the  name and  address  of the
beneficiary  and the account party,  and (e) the form of the draft and any other
documents  required to be presented  at the time of any drawing  (such notice to
set forth the exact wording of such documents or to attach copies thereof). Such
Issuing  Bank shall  notify each Bank of the contents of each such notice on the
day such notice is received by such  Issuing  Bank if received by 12:00 P.M. New
York,  New York time on a  Business  Day and  otherwise  on the next  succeeding
Business Day. Upon fulfillment of the applicable  conditions precedent contained
in Article VII,  such Issuing  Bank shall make the  applicable  Letter of Credit
available to Borrower or, if so requested by Borrower, to the beneficiary of the
Letter of Credit.

          Section 3.4 Reimbursements; Payments Constitute Loans. Each payment by
an Issuing Bank pursuant to a drawing under a Letter of Credit shall  constitute
and be deemed a Base Rate Loan by each Bank to the  Borrower  under such  Bank's
Note and this  Agreement  as of the day and time  such  payment  is made by such
Issuing  Bank and in the amount of such  Bank's pro rata share of such  payment;
provided,  however, if the applicable  conditions precedent contained in Section
7.2 are not satisfied on the date such payment is made,  the Borrower  shall pay
to the Administrative  Agent for the account of the Issuing Bank, prior to 12:00
P.M. New York, New York time on the Business Day immediately  following the date
such payment is made by the Issuing Bank,  the amount of such payment,  together
with interest thereon at the Base Rate plus the Applicable Base Rate Margin from
the date such  payment is made by the Issuing  Bank.  If the  Borrower  fails to
reimburse  the Issuing Bank for such drawing  prior to 12:00 P.M. New York,  New
York time on the  Business  Day  following  the date such payment is made by the
Issuing Bank, such amount shall bear interest at the Default Rate for the period
from and  including  the due date thereof to but  excluding the date the same is
paid in full.  Promptly on the Business Day immediately  following the date each
payment  is made by an  Issuing  Bank  pursuant  to a drawing  under a Letter of
Credit  and after  receipt of notice  from the  Issuing  Bank of the  Borrower's
failure to  reimburse  the Issuing  Bank for such payment and the amount of such
payment,  each Bank  will make  available  to the  Administrative  Agent for the
account of the Issuing Bank at the  Principal  Office in  immediately  available
funds, such Bank's pro rata share of such payment.  Each Bank hereby agrees that
its  obligation  to  participate  in each  Letter  of  Credit,  and to pay or to
reimburse  the Issuing Bank for its  participating  share of the drafts drawn or
amounts  otherwise paid thereunder,  is absolute,  irrevocable and unconditional
and shall not be affected by any circumstances  whatsoever  (including,  without
limitation, the occurrence or



AMENDED AND RESTATED CREDIT AGREEMENT - Page 23

<PAGE>



continuance  of any  Default or Event of  Default),  and that each such  payment
shall  be  made  without  offset,  abatement,  withholding  or  other  reduction
whatsoever.

          Section  3.5  Letter  of Credit  Fee.  The  Borrower  shall pay to the
Administrative  Agent for the  account  of the Banks  (to be shared  ratably)  a
nonrefundable  Letter of Credit fee payable on the date each Letter of Credit is
issued,  renewed or  extended  in an amount  equal to the  greater of (i) 1% per
annum of the face amount of such Letter of Credit,  for the period  during which
such Letter of Credit is  scheduled  to remain  outstanding,  based on a 360 day
year and the actual number of days elapsed, or (ii) $350. A nonrefundable fee in
the  amount  of  0.125% of the face  amount  of such  Letter of Credit  shall be
payable at the time of issuance by the Borrower to the  applicable  Issuing Bank
for its own account.  In addition to the foregoing  fees, the Borrower shall pay
or reimburse the applicable Issuing Bank for such normal and customary costs and
expenses as are incurred or charged by such Issuing Bank in issuing, negotiating
or  otherwise  effecting  payment  under,  transferring,  amending or  otherwise
administering any Letter of Credit.

          Section 3.6  Obligations  Absolute.  The  obligations  of the Borrower
under this Agreement and the other Loan Documents  (including without limitation
the obligation of the Borrower to reimburse the Issuing Bank for draws under any
Letter of Credit) shall be absolute,  unconditional,  and irrevocable, and shall
be performed  strictly in  accordance  with the terms of this  Agreement and the
other Loan  Documents  under all  circumstances  whatsoever,  including  without
limitation the following circumstances:

                  (a)      Any lack of validity  or enforceability of any Letter
          of Credit or any other Loan Document;

                  (b)     Any amendment or waiver of or any consent to departure
          from any Loan Document;

                  (c) The existence of any claim, set-off, counterclaim, defense
          or other rights which the Borrower,  any Obligated Party, or any other
          Person may have at any time against any  beneficiary  of any Letter of
          Credit,  the Issuing Bank, or any other Person,  whether in connection
          with  this  Agreement  or any other  Loan  Document  or any  unrelated
          transaction;

                  (d) Any statement,  draft,  or other document  presented under
          any Letter of Credit  proving to be forged,  fraudulent,  invalid,  or
          insufficient  in any respect or any statement  therein being untrue or
          inaccurate in any respect whatsoever;

                  (e)  Payment  by the  Issuing  Bank under any Letter of Credit
          against  presentation  of a draft or  other  document  which  does not
          comply with the terms of such Letter of Credit; or

                  (f)      Any   other  circumstance  or  happening  whatsoever,
          whether or not similar to any of the foregoing.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 24

<PAGE>



          Section 3.7 Limitation of Liability. The Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit with respect to
its use of such Letter of Credit.  Neither the Issuing Bank, any Agent, any Bank
nor any of  their  officers  or  directors  shall  have  any  responsibility  or
liability  to the Borrower or any other Person for: (a) the failure of any draft
to bear any  reference  or adequate  reference  to any Letter of Credit,  or the
failure of any documents to accompany any draft at  negotiation,  or the failure
of any  Person  to  surrender  or to take up any  Letter  of  Credit  or to send
documents apart from drafts as required by the terms of any Letter of Credit, or
the failure of any Person to note the amount of any  instrument on any Letter of
Credit, each of which requirements, if contained in any Letter of Credit itself,
it is  agreed  may be  waived  by  the  Issuing  Bank,  (b)  errors,  omissions,
interruptions,  or delays in transmission  or delivery of any messages,  (c) the
validity,  sufficiency,  or genuineness of any draft or other  document,  or any
endorsement(s)  thereon,  even if any such draft, document or endorsement should
in fact prove to be in any and all respects invalid,  insufficient,  fraudulent,
or forged or any statement  therein is untrue or inaccurate in any respect,  (d)
the  payment  by the  Issuing  Bank to the  beneficiary  of any Letter of Credit
against  presentation  of any draft or other  document that does not comply with
the terms of the Letter of Credit, or (e) any other  circumstance  whatsoever in
making or failing to make any payment under a Letter of Credit. The Issuing Bank
may  accept  documents  that  appear  on  their  face  to be in  order,  without
responsibility   for  further   investigation,   regardless  of  any  notice  or
information to the contrary.

          Section 3.8 Letter of Credit Documents.  Certain additional provisions
regarding the obligations,  liabilities,  rights, remedies and agreements of the
Borrower  and the Issuing  Bank  relative to the Letters of Credit  shall be set
forth in the L/C Documents.

          Section 3.9  Replacement  of the Issuing Bank.  Borrower may, with the
approval of Required Banks,  appoint a successor Issuing Bank hereunder upon the
condition  precedent  that such  successor  Issuing Bank shall become a party to
this  Agreement  and  expressly  agree to be bound by the terms  and  conditions
contained in this Agreement pertaining to the Issuing Bank. Upon the appointment
of a successor Issuing Bank, the Issuing Bank replaced by such successor Issuing
Bank shall cease to issue Letters of Credit but shall  continue to carry out its
obligations  hereunder and shall  continue to have the benefit of this Agreement
and the other Loan Documents with respect to the  outstanding  Letters of Credit
issued by it until all such  Letters of Credit  have  expired  and any  drawings
thereunder have been reimbursed in full.

                                   ARTICLE IV

                          Borrowing Procedure; Payments

          Section  4.1  Borrowing   Procedure.   The  Borrower  shall  give  the
Administrative  Agent notice by means of a Loan  Request Form of each  requested
Loan at least one Business Day before the requested  date of each Base Rate Loan
and at least three  Business Days before the requested  date of each  Eurodollar
Loan, specifying: (a) the requested date of such Loan (which shall be a Business
Day), (b) the amount of such Loan, (c) the Type of the Loan, and (d) in the case
of a Eurodollar  Loan,  the duration of the Interest  Period for such Loan.  The
Administrative  Agent at its option may accept  telephonic  requests  for Loans,
provided that such acceptance shall



AMENDED AND RESTATED CREDIT AGREEMENT - Page 25

<PAGE>



not  constitute a waiver of the  Administrative  Agent's  right to delivery of a
Loan Request Form in connection with subsequent  Loans.  Any telephonic  request
for a Loan by the  Borrower  shall be  promptly  confirmed  by  submission  of a
properly  completed  Loan  Request  Form to the  Agent.  Each Loan shall be in a
minimum  principal  amount of  $500,000  or an integral  multiple  thereof.  The
aggregate  principal  amount of Eurodollar Loans having the same Interest Period
shall be at least equal to $500,000.  The Administrative Agent shall notify each
Bank of the contents of each such notice. Not later than 1:00 P.M. New York, New
York time on the date  specified  for each Loan  hereunder,  each Bank will make
available to the  Administrative  Agent at the Principal  Office in  immediately
available  funds,  for the account of the  Borrower,  its pro rata share of each
Loan. After the Administrative  Agent's receipt of such funds and subject to the
other terms and conditions of this Agreement, the Administrative Agent will make
each Loan  available  to the Borrower by  depositing  the same,  in  immediately
available  funds,  in an account of the Borrower  (designated  by the  Borrower)
maintained with the  Administrative  Agent at the Principal Office.  All notices
under this Section shall be  irrevocable  and shall be given not later than 1:00
P.M.  New York,  New York,  time on the day which is not less than the number of
Business Days specified above for such notice.

          Section 4.2 Conversions and Continuations. The Borrower shall have the
right from time to time to Convert all or part of a Loan of one Type into a Loan
of another Type or to Continue  Eurodollar  Loans as Eurodollar  Loans by giving
the  Administrative  Agent  written  notice at least three  Business Days before
Conversion  into a Base  Rate  Loan  and at least  three  Business  Days  before
Conversion  into or  Continuation  of a  Eurodollar  Loan,  specifying:  (a) the
Conversion or  Continuation  date, (b) the amount of the Loan to be Converted or
Continued,  (c) in the case of  Conversions,  the  Type of Loan to be  Converted
into, and (d) in the case of a Continuation  of or Conversion  into a Eurodollar
Loan, the duration of the Interest Period applicable thereto;  provided that (i)
Eurodollar  Loans may only be Converted on the last day of the Interest  Period,
and (ii) except for Conversions  into Base Rate Loans,  no Conversions  shall be
made while a Default has occurred and is continuing.  The  Administrative  Agent
shall promptly notify each Bank of the contents of each such notice. All notices
under this Section shall be irrevocable  and shall be given not later than 12:00
P.M.  New York,  New York  time on the day which is not less than the  number of
Business Days  specified  above for such notice.  If the Borrower  shall fail to
give the Administrative  Agent the notice as specified above for Continuation or
Conversion  of a Eurodollar  Loan prior to the end of the  Interest  Period with
respect thereto,  such Eurodollar Loan shall be Converted  automatically  into a
Base  Rate Loan on the last day of the then  current  Interest  Period  for such
Eurodollar Loan.

          Section 4.3 Method of Payment.  All payments of  principal,  interest,
and other amounts to be made by the Borrower  under this Agreement and the other
Loan Documents shall be made to the Administrative Agent at the Principal Office
for the  account of each  Bank's  Applicable  Lending  Office in Dollars  and in
immediately  available funds, without setoff,  deduction,  or counterclaim,  not
later than 12:00 P.M., New York, New York time on the date on which such payment
shall  become due (each such payment made after such time on such due date to be
deemed to have been made on the next  succeeding  Business  Day).  The  Borrower
shall,  at the time of making each such payment,  specify to the  Administrative
Agent the sums payable by the Borrower  under this  Agreement and the other Loan
Documents to which such payment is to be



AMENDED AND RESTATED CREDIT AGREEMENT - Page 26

<PAGE>



applied (and in the event that the Borrower fails to so specify,  or if an Event
of Default has occurred and is continuing,  the  Administrative  Agent may apply
such payment to the  Obligations in such order and manner as it may elect in its
sole  discretion,  subject to Section 4.6 hereof).  Each payment received by the
Administrative  Agent under this  Agreement  or any other Loan  Document for the
account of a Bank shall be paid promptly to such Bank, in immediately  available
funds, for the account of such Bank's  Applicable  Lending Office.  Whenever any
payment under this  Agreement or any other Loan  Document  shall be stated to be
due on a day that is not a Business  Day,  such  payment may be made on the next
succeeding  Business  Day,  and such  extension  of time  shall in such  case be
included in the  computation of the payment of interest and  commitment  fee, as
the case may be.

          Section 4.4 Voluntary Prepayment.  The Borrower may, upon at least one
Business Day's prior notice to the Administrative Agent in the case of Base Rate
Loans and at least three Business Days' prior notice to the Administrative Agent
in the case of Eurodollar  Loans,  prepay the Loans in whole at any time or from
time to time in part without  premium or penalty (except as set forth in Section
5.5) but with  accrued  interest  to the date of  prepayment  on the  amount  so
prepaid,  provided that (a) Eurodollar Loans may be prepaid only on the last day
of the Interest Period for such Loans, and (b) each partial  prepayment shall be
in the principal amount of $500,000 or an integral multiple thereof. All notices
under this  Section 4.4 shall be  irrevocable  and shall be given not later than
12:00 P.M. New York, New York, time on the day which is not less than the number
of Business Days specified above for such notice.

          Section 4.5      Mandatory Prepayment or Addition of Collateral.

                  (a) If at any time a Borrowing  Base  Deficiency  exists,  the
          Administrative  Agent shall send the Borrower a Payment Notice and the
          Borrower shall immediately (except in the case of a redetermination of
          the Borrowing Base pursuant to Section  2.8(b)) prepay the outstanding
          Loans by the amount of the Borrowing Base Deficiency, plus accrued and
          unpaid  interest  on the  amount so prepaid  in  accordance  with this
          Section  4.5 unless  Borrower  exercises  the option to  increase  the
          Collateral  as provided by Section  4.6. If within 30 days of the date
          Borrower  receives a Payment  Notice the  Borrower has not prepaid the
          Loans by the amount of the Borrowing Base  Deficiency or complied with
          Section 4.6 hereof,  the amount of the Borrowing Base Deficiency shall
          be due and payable in six monthly installments,  each in the amount of
          one-sixth of the principal  amount of the Borrowing  Base  Deficiency,
          plus  accrued  and  unpaid  interest  thereon,  with  the  first  such
          installment  being  due and  payable  immediately  (and in any  event,
          within 33 days after Borrower received the Payment Notice). During any
          period of time in which a Borrowing  Base  Deficiency has occurred and
          is continuing,  the  Obligations  shall bear interest at the Borrowing
          Base Deficiency Rate.

                  (b) After a Borrowing Base has been determined,  upon the sale
          by the  Borrower  of any  Mortgaged  Property  (other than the sale of
          Hydrocarbons after severance in the ordinary course of business),  the
          Borrowing Base shall be reduced, effective on the date of consummation
          of such sale, by an amount which the Borrower  certifies in writing to
          the Banks is the Borrowing  Base value last assigned to such Mortgaged
          Property



AMENDED AND RESTATED CREDIT AGREEMENT - Page 27

<PAGE>



          according  to the most recent  Engineering  Reports  delivered  to the
          Banks; provided,  however, that if the Required Banks, for any reason,
          disagree  with the  proposed  Borrowing  Base value  certified  by the
          Borrower, then the Required Banks shall determine, which determination
          shall be conclusive  absent manifest  error,  the Borrowing Base value
          last assigned to such Mortgaged  Property according to the most recent
          Engineering Reports delivered to the Banks; provided, further, that no
          such  reduction  to  the  Borrowing  Base  shall  be  required  if the
          aggregate  net  sales  proceeds  of all  sales of  Mortgaged  Property
          occurring since the last  Determination Date do not exceed $1,000,000,
          and  provided  further,  that all such  sales  shall be subject to the
          provisions of Section 10.8. The net proceeds received from the sale of
          such Mortgaged Property shall on the first Business Day after receipt,
          be applied, to the extent that the sale of any such Mortgaged Property
          causes a Borrowing Base Deficiency to exist, to the outstanding  Loans
          in an amount required to eliminate the Borrowing Base  Deficiency.  So
          long as no Default  has  occurred  and is  continuing,  any  remaining
          proceeds may be retained by the Borrower.

                  (c) If,  subsequent to the Closing  Date,  unless the Required
          Banks and the Borrower shall otherwise  agree,  the Borrower or any of
          its  Subsidiaries  shall  issue any Debt,  capital  stock,  equivalent
          ownership  interests,  warrants  or  options  to  purchase  any of the
          foregoing,  including  without  limitation the  Subordinated  Debt, or
          shall incur any Debt other than Permitted  Debt,  100% of the Net Cash
          Proceeds  thereof shall on the first  Business Day after  receipt,  be
          applied (i) first, to the Bridge Loan, until such Bridge Loan has been
          repaid in full and (ii) second, to the outstanding Loans.

                  (d) If the  Borrower  shall  make any  disposition  of  assets
          (other than  dispositions  of  Hydrocarbons  in the ordinary course of
          business)  permitted  by  Section  10.8,  then  100% of the  Net  Cash
          Proceeds from such  disposition  shall on the first Business Day after
          receipt,  be applied (i) first, to the Bridge Loan,  unless  otherwise
          required to be applied to the  outstanding  Loans  pursuant to Section
          4.5(b) and (ii) second, to the outstanding Loans.

                  (e)  Within  ten days after  Borrower  has  received a Payment
          Notice,  Borrower  shall make a  prepayment  of principal on the Notes
          equal to the amount by which the outstanding  principal balance of the
          Loans exceeds the Borrowing Base as of such date.  Provided,  however,
          that  if the  Payment  Notice  and  demand  for  payment  is  made  in
          connection with a quarterly  redetermination  of the Borrowing Base no
          payment of the amount  specified  above shall be due if  Borrower  has
          notified  Administrative  Agent in  writing  (within  three days after
          Borrower has received the Payment  Notice) of  Borrower's  election to
          comply with  Section 4.6 hereof and has  provided  the  Administrative
          Agent with  complete  descriptions  of the Oil and Gas  Properties  or
          other properties or interests ("New  Properties") which Borrower shall
          add or cause to be added to the  Collateral  and  subject  to Liens in
          favor of the Administrative Agent for purposes of Section 4.6 hereof.

     Section 4.6 Borrower's Option to Increase Collateral. Within ten days after
the date on  which  the  Administrative  Agent  receives  notice  of  Borrower's
election to comply with this



AMENDED AND RESTATED CREDIT AGREEMENT - Page 28

<PAGE>



Section  4.6 in order to avoid a  prepayment  of amounts  required  pursuant  to
Section 4.5 hereof, Borrower shall grant to the Collateral Agent for the benefit
of itself, the Administrative  Agent, the Documentation Agent, the Issuing Banks
and the Banks, valid,  enforceable,  perfected,  first priority liens in the New
Properties,  subject to Security  Documents and  accompanied  by title  opinions
and/or  other  evidence of title,  each of which shall be in form and  substance
satisfactory to the Collateral Agent and the Banks. All such Collateral shall be
subject to a subordinate  Lien  securing the Bridge Loan. In addition,  Borrower
shall  deliver to the  Collateral  Agent upon request,  such other  information,
data, and reports  describing the New Properties and the reserves and production
related thereto, as the Collateral Agent and the Banks shall reasonably request.
Within a  reasonable  period of time after the date on which the  Administrative
Agent  receives  notice  of  Borrower's  election  hereunder,  the  Banks  shall
redetermine  (as of the  immediately  preceding  Determination  Date) and notify
Borrower of the Borrowing Base  determined as if the New Properties were part of
the  Collateral as of such  Determination  Date.  Within ten Business Days after
receipt of such notice,  Borrower  shall make a  prepayment  of principal on the
Loans equal to the amount (if any) by which the outstanding principal balance of
the Loans, as of such Determination  Date, exceeds the Borrowing Base as of such
Determination  Date as determined by the Banks  pursuant to this Section 4.6. No
redetermination  to increase the  Borrowing  Base shall be  effective  until the
Collateral Agent has valid,  perfected,  enforceable first priority Liens on the
New Properties that are to be part of the Collateral.

          Section  4.7  Pro  Rata  Treatment.  Except  to the  extent  otherwise
provided  herein:  (a) each Loan shall be made by the Banks under Section 2.1 or
deemed made by the Banks under Section 3.4, each payment of commitment fee under
Section 2.6 and letter of credit  fees under  Section 3.5 (other than the 0.125%
issuance fee payable to the Issuing Bank for its own account)  shall be made for
the account of the Banks,  and each  termination or reduction of the Commitments
under  Section 2.7 shall be applied to the  Commitments  of the Banks,  pro rata
according to the respective  unused  Commitments and each Letter of Credit shall
be deemed  participated  in by the Banks,  pro rata  according to the amounts of
their respective Commitments;  (b) the making,  Conversion,  and Continuation of
Loans of a particular Type (other than Conversions  provided for by Section 5.4)
shall be made pro rata among the Banks holding  Loans of such Type  according to
the amounts of their respective Commitments;  (c) each payment and prepayment of
principal of or interest on Loans by the Borrower of a particular  Type shall be
made to the  Administrative  Agent for the account of the Banks holding Loans of
such Type pro rata in accordance with the respective unpaid principal amounts of
such  Loans  held by such  Banks;  and  (d)  Interest  Periods  for  Loans  of a
particular  Type shall be allocated  among the Banks  holding Loans of such Type
pro rata according to the respective principal amounts held by such Banks.

          Section 4.8 Non-Receipt of Funds by the Administrative  Agent.  Unless
the Administrative Agent shall have been notified by a Bank or the Borrower (the
"Payor")  prior  to the  date on  which  such  Bank is to  make  payment  to the
Administrative Agent of the proceeds of a Loan to be made by it hereunder or the
Borrower is to make a payment to the Administrative Agent for the account of one
or more of the Banks,  as the case may be (such  payment being herein called the
"Required  Payment"),  which notice shall be effective  upon  receipt,  that the
Payor does not intend to make the Required Payment to the Administrative



AMENDED AND RESTATED CREDIT AGREEMENT - Page 29

<PAGE>



Agent,  the  Administrative  Agent may assume that the Required Payment has been
made and may, in reliance upon such  assumption  (but shall not be required to),
make the amount thereof available to the intended recipient on such date and, if
the Payor has not in fact made the Required Payment to the Administrative Agent,
the recipient of such payment shall, on demand, pay to the Agent the amount made
available  to it  together  with  interest  thereon  in  respect  of the  period
commencing on the date such amount was so made  available by the  Administrative
Agent until the date the Administrative Agent recovers such amount at a rate per
annum equal to the Federal Funds Rate for such period.

          Section  4.9  Withholding  Tax  Exemption.   Each  Bank  that  is  not
incorporated  under the laws of the United  States of America or a state thereof
agrees that it will  deliver to the Borrower  and the  Administrative  Agent two
duly completed copies of Form 1001 or 4224,  certifying in either case that such
Bank is entitled to receive  payments from the Borrower  under any Loan Document
without deduction or withholding of any United States federal income taxes. Each
Bank which so  delivers  a Form 1001 or 4224  further  undertakes  to deliver to
Borrower and the  Administrative  Agent two additional copies of such form (or a
successor  form) on or before the date such form expires or becomes  obsolete or
after the occurrence of any event  requiring a change in the most recent form so
delivered by it, and such amendments  thereto or extensions or renewals  thereof
as may be reasonably  requested by the Borrower or the Administrative  Agent, in
each case  certifying  that such Bank is entitled to receive  payments  from the
Borrower under any Loan Document without  deduction or withholding of any United
States federal income taxes,  unless an event (including  without limitation any
change in treaty, law or regulation) has occurred prior to the date on which any
such  delivery  would  otherwise  be  required  which  renders  all  such  forms
inapplicable  or  which  would  prevent  such  Bank  from  duly  completing  and
delivering  any such form with  respect to it and such Bank advises the Borrower
and the  Administrative  Agent that it is not capable of receiving such payments
without any deduction or withholding of United States federal income tax.

          Section 4.10 Computation of Interest. Interest on the Eurodollar Loans
shall be  computed  on the basis of a year of 360 days and the actual  number of
days elapsed  (including  the first day but  excluding the last day) unless such
calculation  would result in a usurious  rate, in which case  interest  shall be
calculated  on the  basis  of a year of 365 or 366  days,  as the  case  may be.
Interest  on Base Rate  Loans  and all other  amounts  payable  by the  Borrower
hereunder  shall be  computed  on the basis of a year of 365 days and the actual
number of days elapsed (including the first day but excluding the last day).

                                    ARTICLE V

                         Yield Protection and Illegality

          Section 5.1      Additional Costs.

                  (a) The Borrower  shall pay directly to each Bank from time to
          time  such  amounts  as such Bank may  determine  to be  necessary  to
          compensate  it for any costs  incurred  by such Bank  which  such Bank
          determines are attributable to its making or



AMENDED AND RESTATED CREDIT AGREEMENT - Page 30

<PAGE>



          maintaining  of any  Eurodollar  Loans  hereunder or its obligation to
          make any of such  Loans  hereunder,  or any  reduction  in any  amount
          receivable by such Bank hereunder in respect of any such Loans or such
          obligation   (such  increases  in  costs  and  reductions  in  amounts
          receivable being herein called "Additional Costs"), resulting from any
          Regulatory Change which:

                           (i)  changes  the basis of  taxation  of any  amounts
                  payable  to such Bank  under  this  Agreement  or its Notes in
                  respect of any of such Loans (other than taxes  imposed on the
                  overall  net  income  of such Bank or its  Applicable  Lending
                  Office for any Eurodollar  Loans by the  jurisdiction in which
                  such Bank has its principal office or such Applicable  Lending
                  Office);

                           (ii)  imposes  or  modifies   any  reserve,   special
                  deposit,   minimum   capital,   capital   ratio,   or  similar
                  requirement  relating  to any  extensions  of  credit or other
                  assets  of,  or any  deposits  with or  other  liabilities  or
                  commitments of, such Bank  (including any Eurodollar  Loans or
                  any  deposits  referred to in the  definition  of  "Eurodollar
                  Rate" in Section 1.1 hereof); or

                           (iii)  imposes  any other  condition  affecting  this
                  Agreement or the Notes or any of such  extensions of credit or
                  liabilities or commitments.

          Each Bank will notify the  Borrower of any event  occurring  after the
          date of this  Agreement  which will entitle such Bank to  compensation
          pursuant to this Section 5.1(a) as promptly as practicable  and in any
          event,  within  180  days,  after it  obtains  knowledge  thereof  and
          determines  to  request  such  compensation,   and  will  designate  a
          different  Applicable  Lending  Office for the Loans  affected by such
          event if such  designation  will  avoid  the need for,  or reduce  the
          amount of, such compensation and will not, in the sole opinion of such
          Bank,  violate  any  law,  rule,  or  regulation  or  be  in  any  way
          disadvantageous  to such Bank,  provided  that such Bank shall have no
          obligation  to so  designate  an  Applicable  Lending  Office  located
          outside the United States of America.  Borrower shall not be obligated
          to pay for any such  amounts if such Bank does not notify the Borrower
          that such  additional  amounts  are owing  within 180 days of the date
          such Bank  obtains  knowledge  thereof.  Each Bank  will  furnish  the
          Borrower with a certificate  setting forth the basis and the amount of
          each request of such Bank for compensation  under this Section 5.1(a).
          If any Bank requests compensation from the Borrower under this Section
          5.1(a),  the Borrower  may, by notice to such Bank (with a copy to the
          Administrative  Agent)  suspend the obligation of such Bank to make or
          Continue making, or Convert Loans into, Loans of the Type with respect
          to which such  compensation is requested  until the Regulatory  Change
          giving rise to such request  ceases to be in effect (in which case the
          provisions of Section 5.4 hereof shall be applicable).

                  (b) Without limiting the effect of the foregoing provisions of
          this  Section  5.1,  in the event  that,  by reason of any  Regulatory
          Change that becomes  effective after date hereof,  any Bank either (i)
          incurs  Additional  Costs based on or  measured by the excess  above a
          specified  level of the  amount of a  category  of  deposits  or other
          liabilities of such



AMENDED AND RESTATED CREDIT AGREEMENT - Page 31

<PAGE>



          Bank which  includes  deposits by reference to which the interest rate
          on Eurodollar  Loans is determined as provided in this  Agreement or a
          category of  extensions  of credit or other  assets of such Bank which
          includes  Eurodollar  Loans or (ii) becomes subject to restrictions on
          the amount of such a category of  liabilities  or assets  which it may
          hold,  then, if such Bank so elects by notice to the Borrower  (with a
          copy to the Administrative Agent), the obligation of such Bank to make
          or Continue making, or Convert Loans into,  Eurodollar Loans hereunder
          shall be suspended until such Regulatory Change ceases to be in effect
          (in  which  case  the  provisions  of  Section  5.4  hereof  shall  be
          applicable).

                  (c) Determinations and allocations by any Bank for purposes of
          this Section 5.1 of the effect of any  Regulatory  Change on its costs
          of maintaining its  obligations to make Eurodollar  Loans or of making
          or  maintaining  Eurodollar  Loans or on amounts  receivable  by it in
          respect of Eurodollar Loans, and of the additional amounts required to
          compensate  such Bank in respect  of any  Additional  Costs,  shall be
          conclusive, provided that such determinations and allocations are made
          on a reasonable basis.

     Section 5.2 Limitation on Types of Loans.  Anything  herein to the contrary
notwithstanding, if with respect to any Eurodollar Loans for any Interest Period
therefor:

                  (a) The Administrative  Agent determines (which  determination
          shall  be  conclusive)  that  quotations  of  interest  rates  for the
          relevant  deposits  referred to in the definition of "Eurodollar Rate"
          in Section 1.1 hereof are not being  provided in the relative  amounts
          or for the relative maturities for purposes of determining the rate of
          interest for Eurodollar Loans as provided in this Agreement; or

                  (b) Required Banks  determine  (which  determination  shall be
          conclusive)  and notify  the  Administrative  Agent that the  relevant
          rates of interest  referred to in the definition of "Eurodollar  Rate"
          in Section 1.1 hereof on the basis of which the rate of  interest  for
          such  Loans  for  such  Interest  Period  is to be  determined  do not
          accurately  reflect  the cost to the Banks of  making  or  maintaining
          Eurodollar Loans for such Interest Period;

then the  Administrative  Agent shall give the Borrower  prompt  notice  thereof
specifying  the  relevant  amounts  or  periods,  and so long as such  condition
remains in effect,  the Banks shall be under no  obligation  to make  additional
Eurodollar  Loans or to Convert  Base Rate Loans into  Eurodollar  Loans and the
Borrower  shall, on the last day(s) of the then current  Interest  Period(s) for
the outstanding Eurodollar Loans, either prepay such Eurodollar Loans or Convert
such Eurodollar  Loans into Base Rate Loans in accordance with the terms of this
Agreement.

          Section 5.3  Illegality.  Notwithstanding  any other provision of this
Agreement,  in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to (a) honor its obligation to make Eurodollar Loans hereunder or
(b) maintain  Eurodollar Loans  hereunder,  then such Bank shall promptly notify
the Borrower (with a copy to the  Administrative  Agent) thereof and such Bank's
obligation to make or maintain  Eurodollar  Loans and to Convert Base Rate Loans
into Eurodollar  Loans hereunder shall be suspended until such time as such Bank
may



AMENDED AND RESTATED CREDIT AGREEMENT - Page 32

<PAGE>



again  make and  maintain  Eurodollar  Loans (in which  case the  provisions  of
Section 5.4 hereof shall be applicable).

          Section 5.4 Treatment of Eurodollar  Loans. If the Eurodollar Loans of
any Bank are to be Converted pursuant to Section 5.1 or 5.3 hereof,  such Bank's
Eurodollar  Loans shall be  automatically  Converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for the Eurodollar Loans (or,
in the case of a Conversion  required by Section  5.1(b) or 6.3 hereof,  on such
earlier date as such Bank may specify to the Borrower  with a copy to the Agent)
and,  unless  and  until  such Bank  gives  notice as  provided  below  that the
circumstances  specified  in Section  5.1 or 5.3 hereof  which gave rise to such
Conversion no longer exist:

                  (a) To the extent that such Bank's  Eurodollar Loans have been
          so Converted,  all payments and  prepayments of principal  which would
          otherwise be applied to such Bank's  Eurodollar Loans shall be applied
          instead to its Base Rate Loans;

                  (b) All Loans which would  otherwise  be made or  Continued by
          such Bank as Eurodollar  Loans shall be made as or Converted into Base
          Rate  Loans  and all  Loans of such  Bank  which  would  otherwise  be
          Converted into  Eurodollar  Loans shall be Converted  instead into (or
          shall remain as) Base Rate Loans; and

If such Bank gives  notice to the  Borrower  (with a copy to the  Administrative
Agent) that the circumstances  specified in Section 5.1 or 5.3 hereof which gave
rise to the Conversion of such Bank's  Eurodollar Loans pursuant to this Section
5.4  no  longer  exist  (which  such  Bank  agrees  to  do  promptly  upon  such
circumstances ceasing to exist) at a time when Eurodollar Loans are outstanding,
such  Bank's  Base Rate Loans  shall be  automatically  Converted,  on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Eurodollar
Loans to the extent  necessary so that,  after giving effect thereto,  all Loans
held by the Banks  holding  Eurodollar  Loans and by such Bank are held pro rata
(as to principal amounts,  Types, and Interest Periods) in accordance with their
respective Commitments.

          Section 5.5 Compensation. The Borrower shall pay to the Administrative
Agent for the account of each Bank,  upon the  request of such Bank  through the
Administrative  Agent,  such  amount or amounts as shall be  sufficient  (in the
reasonable opinion of such Bank) to compensate it for any loss, cost, or expense
incurred by it as a result of:

                  (a) Any payment, prepayment or Conversion of a Eurodollar Loan
          for any reason (including, without limitation, the acceleration of the
          outstanding  Loans  pursuant to Section 12.2) on a date other than the
          last day of an Interest Period for such Loan; or

                  (b) Any  failure by the  Borrower  for any reason  (including,
          without limitation,  the failure of any conditions precedent specified
          in  Article  VII to be  satisfied)  to  borrow,  Convert,  or prepay a
          Eurodollar  Loan  on the  date  for  such  borrowing,  Conversion,  or
          prepayment, specified in the relevant notice of borrowing, prepayment,
          or Conversion under this Agreement.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 33

<PAGE>



Without limiting the effect of the preceding  sentence,  such compensation shall
include an amount  equal to the  excess,  if any,  of (i) the amount of interest
which otherwise would have accrued on the principal  amount so paid or Converted
or not borrowed  for the period from the date of such  payment,  Conversion,  or
failure to borrow to the last day of the  Interest  Period for such Loan (or, in
the case of a failure to borrow,  the Interest  Period for such Loan which would
have commenced on the date specified for such  borrowing) at the applicable rate
of interest for such Loan  provided for herein over (ii) the interest  component
of the amount such Bank would have bid in the London interbank market for Dollar
deposits of leading banks and amounts  comparable to such  principal  amount and
with maturities comparable to such period.

          Section 5.6 Capital Adequacy. If after the date hereof, any Bank shall
have determined that the adoption or implementation of any applicable law, rule,
or regulation  regarding capital adequacy,  or any change therein, or any change
in the  interpretation  or  administration  thereof by any central bank or other
Governmental   Authority  charged  with  the  interpretation  or  administration
thereof, or compliance by such Bank (or its parent) with any guideline, request,
or directive regarding capital adequacy (whether or not having the force of law)
of any  central  bank or other  Governmental  Authority,  has or would  have the
effect of reducing the rate of return on such Bank's (or its  parent's)  capital
as a consequence of its obligations  hereunder or the transactions  contemplated
hereby to a level below that which such Bank (or its parent) could have achieved
but for  such  adoption,  implementation,  change  or  compliance  (taking  into
consideration  such Bank's  policies  with  respect to capital  adequacy)  by an
amount  deemed by such Bank to be material,  then from time to time,  within ten
Business Days after demand by such Bank (with a copy to the Agent), the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank (or its parent) for such reduction;  provided,  however, Borrower shall not
be liable for any such  amounts  unless the Bank to which such  amounts  are due
gives Borrower notice thereof within 180 days of the date that such Bank obtains
knowledge that such additional compensation is owing. A certificate of such Bank
claiming compensation under this Section and setting forth the additional amount
or amounts to be paid to it hereunder  shall be  conclusive,  provided  that the
determination  thereof is made on a reasonable basis. In determining such amount
or amounts, such Bank may use any reasonable averaging and attribution methods.

          Section 5.7 Additional Costs in Respect of Letters of Credit.  If as a
result of any  Regulatory  Change  there shall be imposed,  modified,  or deemed
applicable any tax, reserve,  special deposit, or similar requirement against or
with respect to or measured by  reference  to Letters of Credit  issued or to be
issued hereunder or the commitments to issue or participate in Letters of Credit
hereunder,  and the result shall be to increase the cost to the Issuing Banks or
any Bank of issuing, maintaining or participating in any Letter of Credit or its
commitment to issue or participate in Letters of Credit  hereunder or reduce any
amount  receivable  by any Issuing Bank or any Bank  hereunder in respect of any
Letter of Credit  (which  increase in cost,  or reduction in amount  receivable,
shall be the result of such Issuing Bank's or such Bank's reasonable  allocation
of the  aggregate of such  increases or reductions  resulting  from such event),
then,  upon demand by such Issuing Bank or such Bank, the Borrower agrees to pay
such Issuing  Bank or such Bank,  from time to time as specified by such Issuing
Bank or such Bank, such additional  amounts as shall be sufficient to compensate
such Issuing Bank or such Bank for such



AMENDED AND RESTATED CREDIT AGREEMENT - Page 34

<PAGE>



increased costs or reductions in amount.  A statement as to such increased costs
or reductions in amount incurred by such Issuing Bank or such Bank, submitted by
such Issuing Bank or such Bank to the  Borrower,  shall be  conclusive as to the
amount thereof,  provided that the determination thereof is made on a reasonable
basis.

                                   ARTICLE VI

                                    Security

          Section  6.1  Collateral.  To secure  full and  complete  payment  and
performance of the Obligations,  the Borrower shall execute and deliver or cause
to be executed  and shall grant or cause to be granted to the  Collateral  Agent
for the benefit of itself,  the other Agents,  the Issuing Banks, the Banks, and
the Bridge Lenders or confirm that the Collateral Agent  possesses,  a perfected
first priority Lien on substantially all of the Property of the Borrower and its
Material  Subsidiaries whether now owned or hereafter acquired (which,  together
with any other  property and  collateral  which may now or hereafter  secure the
Obligations or any part thereof,  is sometimes herein called the  "Collateral"),
including the following:

                  (a)  The   Mortgaged   Properties,   which  shall  consist  of
          properties,  constituting  at least  80% of the  present  value of the
          Borrower's  and the Material  Subsidiaries  proved  reserves  (whether
          developed or undeveloped).

                  (b) All Hydrocarbons which are derived from or attributable to
          the  Mortgaged  Properties  or  which  are  purchased,   exchanged  or
          transported  in  connection  with the  operation of the Gas  Gathering
          Systems.

                  (c) All  accounts  (including  accounts  in the  form of joint
          interest billings), contract rights and general intangibles,  relating
          to the sale,  purchase,  exchange,  transportation  or  processing  of
          Hydrocarbons in connection with operation of the Gas Gathering Systems
          or produced or to be produced from the Mortgaged Properties, including
          without  limitation all operating  agreements and oil or gas purchase,
          sale and  transportation  contracts,  together  with all  accounts and
          proceeds  attributable to the sale of  Hydrocarbons  produced from the
          Mortgaged  Properties or any portion thereof or sold or transported in
          connection with the operation of the Gas Gathering Systems.

                  (d) All personal property and fixtures pertaining,  affixed or
          incidental to,  situated upon or used or useful in connection with all
          or any part of the Mortgaged Properties and the operating,  working or
          developing  thereof,  including  without  limitation  all  surface  or
          subsurface  machinery,  equipment,  facilities  or other  Property  of
          whatever  kind  or  nature  which  are  useful  for  the   production,
          treatment,  storage or transportation of any Hydrocarbons,  including,
          but not by way of limitation,  all oil wells, gas wells,  water wells,
          injection wells, other wells,  casing,  tubing,  rods, pumps,  pumping
          units and engines, Christmas trees, derricks, separators, gun barrels,
          flow  lines,   tanks,   gas  systems  (for  gathering,   treating  and
          compression),  water systems (for treating,  disposal and  injection),
          power plants,  poles, lines,  transformers,  starters and controllers,
          machine shops,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 35

<PAGE>



          tools,  storage  yards and  equipment  stored  therein,  buildings and
          camps, structures,  field separators,  liquid extraction plants, plant
          compressors,  field  gathering  systems,  pipelines,  tanks  and  tank
          batteries,   fixtures,  valves,  fittings,  parts,  engines,  boilers,
          meters,  apparatus,  appliances,  tools,  implements,  cables,  wires,
          towers,  telegraph,  telephone and other communication systems, roads,
          loading racks and shipping facilities.

                  (e) All logs,  drilling  reports,  geophysical  or  geological
          data,  division  orders,   transfer  orders,   operating   agreements,
          abstracts, title opinions, files, records, memoranda and other written
          information  in the  possession  or  control  of the  Borrower  or the
          Material   Subsidiaries   not  subject  to  specific   confidentiality
          agreements  binding upon Borrower or its Subsidiaries  relating to any
          wells included in the Mortgaged Properties.

                  (f) All accounts,  accounts  receivable,  investment property,
          chattel paper, documents,  instruments, and general intangibles of the
          Borrower and its Material Subsidiaries, whether now owned or hereafter
          acquired,  and all  products  and  proceeds  thereof,  pursuant to the
          Borrower Pledge Agreement and the Subsidiary Pledge Agreement.

                  (g)  All of the  outstanding  capital  stock  of the  Material
          Subsidiaries,  whether  now  owned  or  hereafter  acquired,  and  all
          products  and  proceeds  thereof,  pursuant  to  the  Borrower  Pledge
          Agreement and the Subsidiary  Pledge  Agreement.  The Collateral Agent
          shall retain  possession of the  certificates  evidencing  the capital
          stock of the Material  Subsidiaries,  together  with stock powers duly
          executed in blank.

                  (h)  All products and proceeds of any and all of the foregoing
          and  all  additions,   substitutions,  replacements,   accessions  and
          attachments to any and all of the foregoing.

          All Liens  granted by the Borrower to  Collateral  Agent in respect of
          the   above-described   property  shall  also  secure  the  Borrower's
          obligations in respect of the Bridge Loan on a subordinated  basis, to
          the satisfaction of the Banks, in their sole discretion.

          Section 6.2 Security  Documents.  Borrower and each  Subsidiary  shall
execute  and  cause to be  executed  such  deeds of trust,  mortgages,  security
agreements and other  documents and  instruments  including  without  limitation
Uniform  Commercial Code financing  statements,  as the Collateral Agent and the
Banks, in their sole discretion, deem necessary or desirable to create, evidence
and perfect the Collateral Agent's Liens in the Collateral  (including,  without
limitation,  the Liens securing the Bridge Loan). Borrower, the Collateral Agent
and the  Banks  agree  that  Schedules  1.1 and  1.1(b)  shall  be  amended  and
additional Security Documents executed from time to time to reflect the addition
of New Properties to the Collateral, such amendment to be made upon the granting
by Borrower or any  Subsidiary,  as the case may be, to the Collateral  Agent of
valid,  enforceable,  perfected  first  priority  Liens  on the  New  Properties
pursuant to Section 4.6 hereof.

     Section 6.3  Evidence of Title;  Legal  Opinions.  On or before the 30 days
after the  Closing  Date,  Borrower  shall  obtain and  deliver,  or cause to be
obtained and delivered, to the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 36

<PAGE>



Collateral  Agent (a) at the Collateral  Agent's option,  landman title reviews,
title opinions,  reports and/or runsheets dated a current date, addressed to the
Agents,  the Issuing Banks and the Banks and issued by landmen and/or  attorneys
acceptable to the  Administrative  Agent  competent in the  examination  of land
title,  relating to those Mortgaged Properties  identified by the Administrative
Agent,  and showing  that (i)  Borrower  has good and  defensible  title to such
Mortgaged  Properties  including all production of Hydrocarbons  therefrom,  and
(ii) the Security Documents create in favor of the Collateral Agent a perfected,
first  priority Lien on such  Mortgaged  Properties  including all production of
Hydrocarbons  therefrom;  and (b) an opinion of New  Mexico and  Oklahoma  legal
counsel  addressed  to the  Agents,  the  Issuing  Banks and the Banks as to the
enforceability and form of the mortgages to be filed in the States of New Mexico
and Oklahoma.

          Section 6.4 Subsidiary Guaranty Agreement. Each Subsidiary (other than
the Excluded Subsidiaries) of Borrower, whether now owned or hereafter acquired,
shall guarantee the prompt payment and  performance of the Obligations  pursuant
to the  Subsidiary  Guaranty  Agreement and shall  execute a counterpart  of the
Subsidiary Pledge Agreement.

          Section 6.5 Setoff.  If an Event of Default shall have occurred and is
continuing, each Agent, each Issuing Bank and each Bank are hereby authorized at
any time and from time to time,  without notice to the Borrower (any such notice
being hereby expressly waived by the Borrower), to set off and apply any and all
deposits  (general,  time or demand,  provisional or final) at any time held and
other  indebtedness  at any time owing by each Agent,  each Issuing Bank or such
Bank to or for the credit or the account of the Borrower  against any and all of
the obligations of the Borrower now or hereafter  existing under this Agreement,
the  Notes,  or any other  Loan  Document,  irrespective  of whether or not such
Agent,  such  Issuing  Bank or such Bank shall  have made any demand  under this
Agreement,  the Notes or any other Loan Document and although  such  obligations
may be unmatured.  Each Agent, each Issuing Bank and each Bank agree promptly to
notify the  Borrower  (with a copy to the  Administrative  Agent) after any such
setoff and application,  provided that the failure to give such notice shall not
affect the validity of such setoff and  application.  The rights and remedies of
each Agent,  each Issuing Bank and each Bank  hereunder are in addition to other
rights and  remedies  (including,  without  limitation,  other rights of setoff)
which each Agent, each Issuing Bank and each such Bank may have.

                                   ARTICLE VII

                              Conditions Precedent

          Section  7.1 Initial  Loan.  The  obligation  of each Bank to make its
initial  Loan or of any Issuing  Bank to issue the  initial  Letter of Credit is
subject to the  condition  precedent  that the  Administrative  Agent shall have
received on or before the day of such Loan or issuance of all of the  following,
each dated (unless  otherwise  indicated) the date hereof, in form and substance
satisfactory to the Administrative Agent:

                  (a)      Resolutions. Resolutions of the Board of Directors of
          the Borrower and each Obligated Party certified by its Secretary or an
          Assistant Secretary which authorize



AMENDED AND RESTATED CREDIT AGREEMENT - Page 37

<PAGE>



          the  execution, delivery,  and  performance by such Person of the Loan
          Documents to which such Person is or is to be a party;

                  (b)  Incumbency  Certificate.   A  certificate  of  incumbency
          certified by the  Secretary or an Assistant  Secretary of the Borrower
          and each Obligated Party  certifying the names of the officers of such
          Person  authorized  to sign this  Agreement and each of the other Loan
          Documents to which such Person is or is to be a party  (including  the
          certificates contemplated herein) together with specimen signatures of
          such officers;

                  (c) Articles of  Incorporation.  The articles of incorporation
          of the Borrower and each Obligated Party certified by the Secretary of
          State of the state of  incorporation  of such Person and dated  within
          ten days prior to the date of the initial Loan or issuance of a Letter
          of Credit;

                  (d) Bylaws.The bylaws of the Borrower and each Obligated Party
          certified by the Secretary or an Assistant Secretary of such Person;

                  (e)  Governmental   Certificates.   Certificates  of  (i)  the
          appropriate  government officials of the state of incorporation of the
          Borrower  and  each  Obligated  Party  as to the  existence  and  good
          standing of such Person, and (ii) the appropriate government officials
          in  each  jurisdiction  where  Borrower  or  any  Obligated  Party  is
          qualified to do business as to its good standing and  qualification to
          do business in such jurisdiction,  each dated within ten days prior to
          the date of the initial Loan or issuance of a Letter of Credit;

                  (f)  Notes.  The Notes executed by the Borrower;

                  (g)  Borrower Pledge Agreement.  The Borrower Pledge Agreement
          executed by the Borrower;

                  (h)  Subsidiary  Pledge  Agreement.   The  Subsidiary   Pledge
          Agreement executed by each Guarantor;

                  (i)  Financing Statements.   Uniform Commercial Code financing
          statements  executed by the Borrower and each  Guarantor  covering the
          Collateral;

                  (j)  Subsidiary Guaranty Agreement.   The  Subsidiary Guaranty
          Agreement executed by each Guarantor;

                  (k)  Stock Certificates.  The original certificates evidencing
          the  stock  pledged  by  Borrower  pursuant  to  the  Borrower  Pledge
          Agreement  and  by  Magnum Hunter  Production, Inc.  pursuant  to  the
          Subsidiary Pledge Agreement, together with stock powers duly  executed
          in blank by such Persons;




AMENDED AND RESTATED CREDIT AGREEMENT - Page 38

<PAGE>



                  (l)  Mortgages and Security Agreements.   Mortgages, deeds  of
          trust and security agreements  in form  and  substance satisfactory to
          the Agent and the Banks covering the Mortgaged Properties;

                  (m) Environmental   Due  Diligence.    The  completion  of   a
          satisfactory due  diligence review of all environmental matters by the
          Banks;

                  (n) Title.  Evidence satisfactory in form and substance to the
          Administrative   Agent  and  the  Banks  that  the  Borrower  and  its
          Subsidiaries  have  good and  marketable  title,  subject  to no other
          Liens,  to  Mortgaged  Properties  representing  at  least  80% of the
          discounted (at 10%) present value of the initial Borrowing Base;

                  (o) Fee Letter. The Agents Fee Letter executed by Borrower and
          evidence that all fees  due  and  payable  thereunder or under Section
          14.1, to the extent incurred, have been paid in full;

                  (p)  Acquisition.  A  certificate  from the president or chief
          financial officer of Borrower certifying that all conditions precedent
          to the  consummation  of the  Acquisition  for a purchase price not to
          exceed $145,000,000 shall have been satisfied,  and the Borrower's due
          diligence  in  connection  with  the  Acquisition  and the  terms  and
          conditions   contained   in  the   Acquisition   Documents   shall  be
          satisfactory in form and substance to the Agent;

                  (q) Acquisition Documents.  True,  correct and complete copies
          of all of the Acquisition Documents;

                  (r) Material Adverse Change.  No material adverse change shall
          have occurred since the date of the most recent  financial  statements
          delivered by Borrower to the  Administrative  Agent,  in the financial
          condition,  business,  operations, or prospects of the Borrower or any
          Material  Subsidiary or in its assets,  liabilities and properties and
          there shall be no material threatened or pending litigation  adversely
          affecting  its  property  and no material  adverse  change  shall have
          occurred  in  the  financial  condition,   business,   operations,  or
          prospects of the business to be acquired pursuant to the Acquisition;

                  (s)  Insurance Policies.   Copies   of  all insurance policies
          required by   Section 9.5, and a satisfactory review of such insurance
          policies   by  insurance  brokers  or  consultants  acceptable  to the
          Administrative Agent;

                  (t) UCC  Searches.  The results of a Uniform  Commercial  Code
          search  showing  all  financing  statements  and  other  documents  or
          instruments  on file against the Borrower and the  Guarantors  in such
          jurisdictions  as  the  Administrative  Agent  shall  determine,  such
          searches to be as of a date no more than ten days prior to the date of
          the initial Loan or issuance of a Letter of Credit;




AMENDED AND RESTATED CREDIT AGREEMENT - Page 39

<PAGE>



                  (u) Lien Releases.  Executed UCC-3 Termination  Statements and
          other Lien releases that release or assign to the Collateral Agent all
          Liens held by holders of Debt  not constituting Permitted Debt and all
          other Liens that do not constitute Permitted Liens;

                  (v) Lien Assignments.  Executed UCC-3 Assignments  that assign
          all Liens in favor of Wells  Fargo to  the Collateral Agent,  together
          with the Assignment of Liens in form and substance satisfactory to the
          Collateral Agent.

                  (w) Opinion of Counsel.  A  favorable  opinion  of  Thompson &
          Knight,  special  legal  counsel  to  the  Borrower  and  the Material
          Subsidiaries,  as to such matters as the Agents  and their counsel may
          reasonably request; and
 
                  (x) Form U-1 Purpose Statement.   A Form U-1 Purpose Statement
          duly completed and executed by the Borrower.

                  (y) Bridge Loan.   Evidence  that  the  Bridge  Loan  has been
          funded.

                  (z) Engineering Reports.  Engineering Reports for all existing
          reserves  owned by the Borrower and for the  reserve(s) to be acquired
          by the Borrower  pursuant to the  Acquisition,  each of which shall be
          prepared by Ryder Scott Company Petroleum Engineers,  Gaffney, Cline &
          Associates,  Inc.,  Glenn  Harrison  Petroleum  Consultants,  Inc., or
          another independent  engineering firm acceptable to the Administrative
          Agent and each of which shall be  satisfactory  to the  Administrative
          Agent, in its sole discretion.

                  (aa) Financial Statements.  Audited  financial  statement   of
          the Borrower for the fiscal year  ending  December 31, 1996,  together
          with an unqualified opinion  from  a recognized independent accounting
          firm.

                  (bb) Repayment of Bank Debt.  Evidence  that all existing bank
          debt has been repaid in full as of the Closing Date.

                  (cc) Due  Diligence.  The  completion  of  a satisfactory  due
          diligence review of the  Borrower, including  without  limitation, its
          corporate legal structure.

                  (dd) Hedge  Agreements.  Copies  of  any   and  all  financial
          interest swap agreements or similar contractual  arrangements intended
          to hedge market price  fluctuations  and interest rates  applicable to
          this Agreement or crude oil, natural gas or other  Hydrocarbons,  each
          of which shall be satisfactory to the Banks, in their sole discretion.

                   (ee)  Commitment to Repay Bridge Loan.  An engagement  letter
          duly executed by a firm approved by the  Administrative  Agent for the
          arrangement  of financing  specifically  dedicated to the repayment of
          the Bridge  Loan,  which  engagement  letter shall  contain  terms and
          conditions  satisfactory  to the  Administrative  Agent,  in its  sole
          discretion.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 40

<PAGE>




                  (ff) Intercreditor  Agreement     The  executed  Intercreditor
          Agreement, in form  and substance satisfactory  to  the Banks in their
          sole discretion.

                  (gg) Additional  Documentation.   Such  additional  approvals,
          opinions, or documents  as  the  Administrative  Agent  or  its  legal
          counsel, Winstead Sechrest & Minick P.C., may reasonably request.

          Section 7.2 All Loans. The obligation of each Bank to make any Loan or
issue any Letter of Credit  (including  the initial Loan or issuance) is subject
to the following additional conditions precedent:

                  (a) Request for Loan or Letter of Credit.  The  Administrative
          Agent or the Issuing  Bank shall have  received,  in  accordance  with
          Section 4.1 or 3.3, as the case may be, a Loan  Request Form or Letter
          of  Credit  Request  Form,  dated  the date of such  Loan or Letter of
          Credit, executed by an authorized officer of the Borrower;

                  (b) No Default.   No  Default  shall   have  occurred  and  be
          continuing, or would result from such Loan or Letter of Credit, as the
          case may be;

                  (c) Representations and Warranties. All of the representations
          and warranties  contained in Article VIII hereof and in the other Loan
          Documents shall be true and correct on and as of the date of such Loan
          with  the  same  force  and  effect  as if  such  representations  and
          warranties had been made on and as of such date; and

                  (d) Additional Documentation.   The Administrative Agent shall
          have received such additional approvals, opinions, or documents as the
          Administrative Agent  or its legal counsel, Winstead Sechrest & Minick
          P.C., may reasonably request.

                                  ARTICLE VIII

                         Representations and Warranties

          To induce the Agents,  the  Issuing  Banks and the Banks to enter into
this Agreement,  the Borrower represents and warrants to the Agents, the Issuing
Banks and the Banks that:

          Section  8.1  Corporate  Existence.  The  Borrower  and each  Material
Subsidiary (a) is a corporation duly organized,  validly  existing,  and in good
standing under the laws of the  jurisdiction of its  incorporation;  (b) has all
requisite  corporate  power and  authority  to own its  assets  and carry on its
business as now being or as proposed to be conducted; and (c) is qualified to do
business in all  jurisdictions  in which the nature of its  business  makes such
qualification  necessary  and where  failure to so qualify would have a material
adverse effect on its business, condition (financial or otherwise),  operations,
prospects, or properties.  The Borrower has the corporate power and authority to
execute, deliver, and perform its obligations under this Agreement and the other
Loan Documents to which it is or may become a party.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 41

<PAGE>



          Section 8.2  Financial  Statements.  The Borrower has delivered to the
Administrative Agent audited  consolidated  financial statements of the Borrower
and its Subsidiaries as at and for the fiscal year ended December 31, 1996. Such
financial statements are true and correct, have been prepared in accordance with
GAAP, and fairly and accurately  present, on a consolidated basis, the financial
condition  of the  Borrower  and its  Subsidiaries  as of the  respective  dates
indicated  therein  and the results of  operations  for the  respective  periods
indicated  therein.  Neither the  Borrower nor any of its  Subsidiaries  has any
material  contingent  liabilities,  liabilities  for taxes,  unusual  forward or
long-term commitments,  or unrealized or anticipated losses from any unfavorable
commitments  except as scheduled  or referred to or reflected in such  financial
statements. There has been no material adverse change in the business, condition
(financial or otherwise),  operations,  prospects, or properties of the Borrower
or any of its  Subsidiaries  since the effective date of the most recent audited
financial statements delivered to the Agent and the Banks.

          Section 8.3 Corporate Action; No Breach. The execution,  delivery, and
performance  by the Borrower of this  Agreement and the other Loan  Documents to
which the  Borrower is or may become a party and  compliance  with the terms and
provisions  hereof  and  thereof  have been  duly  authorized  by all  requisite
corporate action on the part of the Borrower and do not and will not (a) violate
or conflict with, or result in a breach of, or require any consent under (i) the
articles of incorporation or bylaws of the Borrower or any of the  Subsidiaries,
(ii) any applicable law, rule, or regulation or any order, writ, injunction,  or
decree of any  Governmental  Authority or arbitrator,  or (iii) any agreement or
instrument  to which the  Borrower or any of the  Subsidiaries  is a party or by
which  any of  them  or any of  their  property  is  bound  or  subject,  or (b)
constitute a default under any such  agreement or  instrument,  or result in the
creation or  imposition  of any Lien (except as provided in Article VI) upon any
of the revenues or assets of the Borrower or any Subsidiary.

          Section  8.4  Operation  of  Business.  The  Borrower  and each of its
Subsidiaries possess all licenses,  permits,  franchises,  patents,  copyrights,
trademarks,  and  tradenames,  or rights  thereto,  necessary  to conduct  their
respective  businesses  substantially as now conducted and as presently proposed
to be  conducted,  and the  Borrower  and  each of its  Subsidiaries  are not in
violation of any valid rights of others with respect to any of the foregoing.

          Section 8.5 Litigation and Judgments.  Except as disclosed on Schedule
8.5 hereto, there is no action, suit, investigation,  or proceeding before or by
any  Governmental  Authority or arbitrator  pending,  or to the knowledge of the
Borrower,  threatened against or affecting the Borrower or any Subsidiary,  that
would, if adversely determined,  have a material adverse effect on the business,
condition (financial or otherwise),  operations, prospects, or properties of the
Borrower or any Subsidiary or the ability of the Borrower to pay and perform the
Obligations.  There are no  outstanding  judgments  against the  Borrower or any
Subsidiary.

          Section  8.6  Rights  in  Properties;  Liens.  The  Borrower  and each
Subsidiary have good and indefeasible  title to or valid leasehold  interests in
their  respective  properties  and  assets,  real and  personal,  including  the
properties, assets, and leasehold interests reflected in the financial



AMENDED AND RESTATED CREDIT AGREEMENT - Page 42

<PAGE>



statements  described  in Section 8.2, and none of the  properties,  assets,  or
leasehold  interests of the Borrower or any  Subsidiary  is subject to any Lien,
except the Permitted Liens.

          Section 8.7 Enforceability.  This Agreement constitutes, and the other
Loan Documents to which the Borrower is party, when delivered,  shall constitute
the legal, valid, and binding  obligations of the Borrower,  enforceable against
the Borrower in accordance  with their  respective  terms,  except as limited by
bankruptcy,  insolvency,  or other laws of general  application  relating to the
enforcement of creditors' rights.

          Section 8.8 Approvals. No authorization,  approval, or consent of, and
no filing or registration with, any Governmental  Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower of
this  Agreement  and the other Loan  Documents  to which the  Borrower is or may
become a party or for the validity or enforceability thereof.

          Section 8.9  Debt.  The Borrower and its Material Subsidiaries have no
Debt, except as disclosed on Schedule 8.9 hereto.

          Section 8.10 Taxes.  The Borrower and each  Subsidiary  have filed all
tax returns  (federal,  state,  and local)  required to be filed,  including all
income,  franchise,  employment,  property, and sales tax returns, and have paid
all  of  their  respective  liabilities  for  taxes,  assessments,  governmental
charges,  and other  levies that are due and payable.  The Borrower  knows of no
pending  investigation of the Borrower or any Subsidiary by any taxing authority
or of  any  pending  but  unassessed  tax  liability  of  the  Borrower  or  any
Subsidiary.

          Section 8.11 Use of Proceeds; Margin Securities.  Neither the Borrower
nor  any  Subsidiary  is  engaged  principally,  or  as  one  of  its  important
activities, in the business of extending credit for the purpose of purchasing or
carrying  margin stock (within the meaning of  Regulations  G, T, U, or X of the
Board of Governors of the Federal Reserve  System),  and no part of the proceeds
of any Loan  will be used to  purchase  or carry any  margin  stock or to extend
credit to others for the purpose of purchasing or carrying margin stock.

          Section 8.12 ERISA. The Borrower and each Subsidiary are in compliance
in all material  respects with all  applicable  provisions  of ERISA.  Neither a
Reportable  Event nor a Prohibited  Transaction  has occurred and is  continuing
with  respect  to any Plan.  No notice  of intent to  terminate  a Plan has been
filed, nor has any Plan been terminated. No circumstances exist which constitute
grounds entitling the PBGC to institute  proceedings to terminate,  or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings.
Neither  the  Borrower  nor any ERISA  Affiliate  has  completely  or  partially
withdrawn from a Multiemployer  Plan. The Borrower and each ERISA Affiliate have
met their minimum funding  requirements under ERISA with respect to all of their
Plans,  and the  present  value of all  vested  benefits  under each Plan do not
exceed the fair market value of all Plan assets  allocable to such benefits,  as
determined on the most recent  valuation date of the Plan and in accordance with
ERISA.  Neither the Borrower nor any ERISA  Affiliate has incurred any liability
to the PBGC under ERISA.




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<PAGE>



          Section  8.13   Disclosure.   No   statement,   information,   report,
representation,  or warranty  made by the  Borrower in this  Agreement or in any
other Loan Document or furnished to the  Administrative  Agent, the Issuing Bank
or any Bank in connection  with this Agreement or any  transaction  contemplated
hereby  contains any untrue  statement of a material  fact or omits to state any
material fact necessary to make the statements herein or therein not misleading.
There is no fact known to the Borrower which has a material  adverse effect,  or
which  might in the future  have a material  adverse  effect,  on the  business,
condition (financial or otherwise),  operations, prospects, or properties of the
Borrower  or any  Subsidiary  that  has not been  disclosed  in  writing  to the
Administrative Agent, the Issuing Bank and the Banks.

          Section 8.14 Subsidiaries. The Borrower has no Subsidiaries other than
those  listed  on  Schedule  8.14  hereto,  and  Schedule  8.14  sets  forth the
jurisdiction  of  incorporation  of  each  Subsidiary,  the  percentage  of  the
Borrower's  ownership of the  outstanding  voting stock of each  Subsidiary  and
designates each Excluded  Subsidiary.  All of the  outstanding  capital stock of
each Subsidiary has been validly issued, is fully paid, and is nonassessable.

          Section 8.15 Agreements.  Neither the Borrower nor any Subsidiary is a
party to any  indenture,  loan,  or credit  agreement,  or to any lease or other
agreement  or  instrument,  or subject to any charter or  corporate  restriction
which could have a material adverse effect on the business, condition (financial
or  otherwise),  operations,  prospects,  or  properties  of the Borrower or any
Subsidiary,  or the ability of the  Borrower to pay and perform its  obligations
under the Loan  Documents  to which it is a party.  Neither the Borrower nor any
Subsidiary  is in default  in any  respect in the  performance,  observance,  or
fulfillment of any of the obligations, covenants, or conditions contained in any
agreement or instrument material to its business to which it is a party.

          Section  8.16  Compliance  with Laws.  Neither  the  Borrower  nor any
Subsidiary is in violation in any material respect of any law, rule, regulation,
order, or decree of any Governmental Authority or arbitrator.

          Section  8.17  Inventory.  All  inventory  of the  Borrower  has  been
produced in substantial compliance with all applicable laws, rules, regulations,
and governmental standards,  including, without limitation, the minimum wage and
overtime  provisions  of the Fair Labor  Standards  Act,  as amended  (29 U.S.C.
ss.ss. 201-219), and the regulations promulgated thereunder.

          Section 8.18     Investment Company Act.  Neither the Borrower nor any
Subsidiar   is an  "investment company" within  the  meaning  of  the Investment
Company Act of 1940, as amended.
 
          Section 8.19 Public Utility Holding Company Act.  Neither the Borrower
nor any  Subsidiary  is a  "holding  company"  or a  "subsidiary  company"  of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within  the  meaning of the  Public  Utility  Holding  Company  Act of 1935,  as
amended.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 44

<PAGE>



     Section 8.20  Environmental  Matters.  Except as disclosed on Schedule 8.20
hereto:

                  (a) Except  where the  failure  to obtain or comply  could not
          reasonably  be  expected  to  have  a  material  adverse  effect,  the
          Borrower,  each Subsidiary,  and all of their  respective  Properties,
          assets, and operations are in compliance in all material respects with
          all  Environmental  Laws.  The  Borrower  is not aware of, nor has the
          Borrower received notice of, any past,  present, or future conditions,
          events,  activities,  practices, or incidents which may interfere with
          or prevent the compliance or continued  compliance of the Borrower and
          the Subsidiaries with all Environmental Laws;

                  (b) Except  where the  failure  to obtain or comply  could not
          reasonably be expected to have a material adverse effect, the Borrower
          and  each  Subsidiary  have  obtained  all  permits,   licenses,   and
          authorizations that are required under applicable  Environmental Laws,
          and have  received  no notice  that all such  permits  are not in good
          standing,  or  that  the  Borrower  and  its  Subsidiaries  are not in
          compliance with all of the terms and conditions of such permits;

                  (c) Except  where the  failure  to obtain or comply  could not
          reasonably be expected to have a material adverse effect, no Hazardous
          Materials  exist on,  about,  or within or have been used,  generated,
          stored,  transported,  disposed  of on,  or  Released  from any of the
          properties  or  assets of the  Borrower  or any  Subsidiary  except in
          amounts  that  would not  violate  applicable  law.  The use which the
          Borrower  and the  Subsidiaries  make  and  intend  to  make of  their
          respective   properties  and  assets  will  not  result  in  the  use,
          generation,  storage,  transportation,   accumulation,   disposal,  or
          Release  of any  Hazardous  Material  on,  in,  or from  any of  their
          properties  or  assets  except  in  amounts  that  would  not  violate
          applicable law;

                  (d) Neither the Borrower nor any of its  Subsidiaries  nor any
          of their respective currently or previously owned or leased properties
          or  operations  is subject to any  outstanding  or, to the best of its
          knowledge,  threatened  order from or agreement with any  Governmental
          Authority  or other  Person or subject  to any  judicial  or  docketed
          administrative  proceeding  with respect to (i) failure to comply with
          Environmental  Laws, (ii) Remedial Action,  or (iii) any Environmental
          Liabilities arising from a Release or threatened Release;

                  (e) Except  where the  failure  to obtain or comply  could not
          reasonably be expected to have a material adverse effect, there are no
          conditions  or   circumstances   associated   with  the  currently  or
          previously owned or leased properties or operations of the Borrower or
          any of its Subsidiaries that could reasonably be expected to give rise
          to any Environmental Liabilities;

                  (f)      Neither the Borrower nor any of its Subsidiaries is a
          treatment, storage, or  disposal facility requiring a permit under the
          Resource Conservation and  Recovery  Act,  42 U.S.C. ss. 6901 et seq.,
          regulations thereunder or any comparable provision of state



AMENDED AND RESTATED CREDIT AGREEMENT - Page 45

<PAGE>



          law.  The Borrower and its Subsidiaries are in  substantial compliance
          with  all  applicable  financial  responsibility  requirements  of all
          Environmental Laws;

                  (g) Neither the Borrower nor any of its Subsidiaries has filed
          or to the best of  Borrower's  knowledge,  failed  to file any  notice
          required under applicable Environmental Law reporting a Release; and

                  (h) The  Borrower  has  received no notice that a Lien arising
          under any  Environmental  Law has attached to any property or revenues
          of the Borrower or its Subsidiaries.

                                   ARTICLE IX

                               Positive Covenants

          The Borrower  covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or any
Issuing  Bank has any  obligation  to issue  Letters  of Credit  hereunder,  the
Borrower will perform and observe the following positive covenants:

          Section 9.1      Reporting Requirements.  The Borrower will furnish to
each Agent, each Issuing Bank and each Bank:

                  (a) Annual Financial Statements.  As soon as available, and in
          any event  within  100 days after the end of each  fiscal  year of the
          Borrower, beginning with the fiscal year ending December 31, 1997, (i)
          a copy of the annual audit report of the Borrower and the Subsidiaries
          for such fiscal year  containing,  on a  consolidated  basis,  balance
          sheets and statements of income,  retained earnings,  and cash flow as
          at the end of such fiscal year and for the 12-month period then ended,
          in each case  setting  forth in  comparative  form the figures for the
          preceding  fiscal  year,  all in  reasonable  detail and  audited  and
          certified by independent  certified  public  accountants of recognized
          standing  acceptable to the  Administrative  Agent, to the effect that
          such report has been  prepared  in  accordance  with GAAP;  and (ii) a
          certificate of such independent  certified  public  accountants to the
          Administrative  Agent (A) stating  that to their  knowledge no Default
          has occurred and is  continuing,  or if in their opinion a Default has
          occurred and is continuing,  a statement as to the nature thereof, and
          (B) confirming the calculations set forth in the officer's certificate
          delivered simultaneously therewith;

                  (b) Quarterly Financial Statements.  As soon as available, and
          in any event  within 50 days after the end of each of the  quarters of
          each fiscal year of the  Borrower,  a copy of an  unaudited  financial
          report  of the  Borrower  and the  Subsidiaries  as of the end of such
          fiscal  quarter  and for the  portion of the fiscal  year then  ended,
          containing,  on a consolidated basis, balance sheets and statements of
          income,  retained earnings,  and cash flow, in each case setting forth
          in comparative  form the figures for the  corresponding  period of the
          preceding fiscal year, all in reasonable detail certified by the chief
          financial



AMENDED AND RESTATED CREDIT AGREEMENT - Page 46

<PAGE>



          officer of the Borrower to have been prepared in accordance  with GAAP
          and to fairly  and  accurately  present  (subject  to  year-end  audit
          adjustments) the financial  condition and results of operations of the
          Borrower and the  Subsidiaries,  on a consolidated  basis, at the date
          and for the periods indicated therein;

                  (c) Compliance Certificate.  Concurrently with the delivery of
          each of the financial statements referred to in subsections 9.1(a) and
          (b), a certificate of the chief  executive  officer or chief financial
          officer of the Borrower (i) stating that to the best of such officer's
          knowledge, no Default has occurred and is continuing,  or if a Default
          has occurred and is  continuing,  a statement as to the nature thereof
          and the action that is proposed to be taken with respect thereto,  and
          (ii)  showing  in  reasonable  detail the  calculations  demonstrating
          compliance with Article XI;

                  (d)      Management Letters.  Promptly upon receipt thereof, a
          copy  of  any  management letter  or  written  report submitted to the
          Borrower or any Subsidiary by independent certified public accountants
          with  respect  to  the  business, condition  (financial or otherwise),
          operations, prospects, or properties of the Borrower or any Subsidiary

                  (e)  Notice of  Litigation.  Promptly  after the  commencement
          thereof,  notice of all actions,  suits,  and  proceedings  before any
          Governmental  Authority or  arbitrator  affecting  the Borrower or any
          Subsidiary  which,  if  determined  adversely  to the Borrower or such
          Subsidiary,  could have a  material  adverse  effect on the  business,
          condition  (financial  or  otherwise),   operations,   prospects,   or
          properties of the Borrower or such Subsidiary;

                  (f) Notice of Default.  As soon as  possible  and in any event
          within  five days  after the  occurrence  of each  Default,  a written
          notice  setting  forth the details of such Default and the action that
          the Borrower has taken and proposes to take with respect thereto;

                  (g)  ERISA  Reports.  Promptly  after the  filing  or  receipt
          thereof, copies of all reports,  including annual reports, and notices
          which the Borrower or any  Subsidiary  files with or receives from the
          PBGC or the U.S.  Department  of  Labor  under  ERISA;  and as soon as
          possible  and in any event  within five days after the Borrower or any
          Subsidiary  knows or has reason to know that any  Reportable  Event or
          Prohibited  Transaction  has occurred with respect to any Plan or that
          the PBGC or the  Borrower or any  Subsidiary  has  instituted  or will
          institute proceedings under Title IV of ERISA to terminate any Plan, a
          certificate  of the chief  financial  officer of the Borrower  setting
          forth  the  details  as  to  such   Reportable   Event  or  Prohibited
          Transaction  or Plan  termination  and the  action  that the  Borrower
          proposes to take with respect thereto;

                  (h) Reports to Other Creditors.  Promptly after the furnishing
          thereof, copies  of  any  statement  or  report furnished to any other
          party pursuant  to  the  terms  of  any  indenture, loan, or credit or
          similar agreement and not otherwise required to be furnished



AMENDED AND RESTATED CREDIT AGREEMENT - Page 47

<PAGE>



          to  the  Administrative Agent, the Issuing Bank and the Banks pursuant
          to any other clause of this Section 9.1;

                  (i) Notice of Material Adverse Change. As soon as possible and
          in any event within five days after the  occurrence  thereof,  written
          notice of any matter that could have a material  adverse effect on the
          business, condition (financial or otherwise),  operations,  prospects,
          or properties of the Borrower or any Subsidiary;

                  (j) Proxy  Statements,  Etc. As soon as  available  and in any
          event  within ten days of sending or filing  with the  Securities  and
          Exchange  Commission or successor  agency,  one copy of each financial
          statement,  report,  notice or proxy statement sent by the Borrower or
          any  Subsidiary  to its  stockholders  generally  and one copy of each
          regular,   periodic  or  special  report,  form  (including,   without
          limitation,  all 10-K and 10-Q filings),  registration  statement,  or
          prospectus filed by the Borrower or any Subsidiary with any securities
          exchange or the  Securities  and Exchange  Commission or any successor
          agency;

                  (k) General  Information.  Promptly,  such  other  information
          concerning the  Borrower or any Subsidiary as the Administrative Agent
         or any Bank may from time to time reasonably request;

                  (l)      Reserve Reports.

                           (i) On or  before  April 1 of each  calendar  year at
                  Borrower's  expense,  an annual  report in form and  substance
                  satisfactory  to  the  Administrative   Agent  and  the  Banks
                  prepared  by  an  independent  third  party  engineering  firm
                  acceptable to the Administrative  Agent and the Banks dated as
                  of December 31 of the preceding year,  reflecting the quantity
                  of  existing   proven  and  producing  oil  and  gas  reserves
                  attributable   to  the  Mortgaged   Properties   and  any  New
                  Properties  added since the last such annual report  submitted
                  to the Administrative Agent and the Banks, a projection of the
                  rate of  production  and net  operating  income  with  respect
                  thereto as of such  date,  and such  other  information  as is
                  customarily obtained from and provided in such reports;

                           (ii) On or before  October 1 of each calendar year at
                  Borrower's   expense,   a  report   in  form   and   substance
                  satisfactory  to  the  Administrative   Agent  and  the  Banks
                  prepared  by  Borrower  dated  as of  June  30 of  such  year,
                  reflecting  the quantity of existing  proven and producing oil
                  and gas reserves  attributable to the Mortgaged Properties and
                  any New Properties  submitted to the Administrative  Agent and
                  the Banks for the first six months of such year,  a projection
                  of the  rate of  production  and  net  operating  income  with
                  respect thereto as of such date, and such other information as
                  is customarily obtained from and provided in such reports; and




AMENDED AND RESTATED CREDIT AGREEMENT - Page 48

<PAGE>



                           (iii)  Concurrently  with the delivery of each of the
                  financial  statements  referred  to in  Subsection  9.1(b),  a
                  report   in   form   and   substance   satisfactory   to   the
                  Administrative  Agent  and the  Banks  prepared  by the  chief
                  petroleum engineer of the Borrower, reflecting the quantity of
                  existing   proven   and   producing   oil  and  gas   reserves
                  attributable   to  the  Mortgaged   Properties   and  any  New
                  Properties submitted to the Administrative Agent and the Banks
                  during the prior fiscal  quarter,  a projection of the rate of
                  production and net operating income with respect thereto as of
                  such  date,  and  such  other  information  as is  customarily
                  obtained from and provided in such reports;

                  (m) Gas  Gathering  System  Evaluation  Reports.  On or before
          April 1 of each calendar year at Borrower's  expense, a report in form
          and substance  satisfactory to the Administrative  Agent and the Banks
          prepared by Borrower  dated as of December 31 of the  preceding  year,
          reflecting  the quantity of existing  proven and producing oil and gas
          reserves connected to the Gas Gathering Systems,  total throughput for
          the Gas Gathering  Systems for the previous  twelve months,  new wells
          connected to the Gas Gathering  Systems during such period of time and
          such other information as the  Administrative  Agent and the Banks may
          request to evaluate  the Gas  Gathering  Systems,  including,  but not
          limited to,  anticipated  capital costs for  connecting new sources of
          supply to the Gas Gathering Systems;

                  (n) Monthly Production and Lease Operating  Statement.  Within
          60 days  after  the end of each  calendar  month  commencing  with the
          calendar  month ending March 31,  1997, a production  statement  which
          identifies the most recent information available relating to the gross
          volumes of Hydrocarbons  produced from the Mortgaged  Properties and a
          statement  of revenues  and  expenses  attributable  to the  Mortgaged
          Properties for such calendar month then ended,  such production report
          and  statement of revenues and expenses to be in a form and  substance
          reasonably satisfactory to the Administrative Agent and the Banks; and

                  (o) Monthly Gas Gathering System Operating  Report.  Within 60
          days after the end of each calendar month commencing with the calendar
          month ending March 31, 1997, an operating  report which identifies the
          most  recent  information   available  relating  to  the  Hydrocarbons
          throughput  of  the  Gas  Gathering  Systems,  revenues  and  expenses
          attributable to the Gas Gathering Systems for such calendar month then
          ended and such other information as the  Administrative  Agent and the
          Banks may request all in a form and substance reasonably  satisfactory
          to the Administrative Agent and the Banks.

          Section  9.2  Maintenance  of  Existence;  Conduct  of  Business.  The
Borrower will preserve and maintain,  and will cause each Subsidiary (other than
Excluded Subsidiaries) to preserve and maintain, its corporate existence and all
of its leases, privileges,  licenses, permits, franchises,  qualifications,  and
rights that are  necessary or desirable in the  Borrower's  reasonable  business
judgment,  and in the  ordinary  conduct  of its  business.  The  Borrower  will
conduct,  and will cause each Subsidiary to conduct,  its business in an orderly
and efficient manner in accordance with good business practices.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 49

<PAGE>




          Section 9.3  Maintenance  of  Properties.  The Borrower will maintain,
keep, and preserve,  and cause each Material  Subsidiary to maintain,  keep, and
preserve, all of its properties (tangible and intangible) necessary or useful in
the proper conduct of its business in good working order and condition.

          Section 9.4 Taxes and Claims. The Borrower will pay or discharge,  and
will cause each Subsidiary to pay or discharge,  at or before maturity or before
becoming delinquent (a) all taxes, levies, assessments, and governmental charges
imposed  on it or its  income or  profits  or any of its  property,  and (b) all
lawful claims for labor, material, and supplies,  which, if unpaid, might become
a Lien upon any of its property;  provided,  however,  that neither the Borrower
nor any  Subsidiary  shall  be  required  to pay or  discharge  any  tax,  levy,
assessment,  or  governmental  charge which is being  contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves have
been established.

          Section 9.5 Insurance. The Borrower will maintain, and will cause each
of the Subsidiaries to maintain,  insurance with financially sound and reputable
insurance  companies  in such  amounts  and  covering  such  risks as is usually
carried  by  corporations  engaged  in similar  businesses  and  owning  similar
properties in the same general areas in which the Borrower and the  Subsidiaries
operate,  provided  that in any event the Borrower  will maintain and cause each
Subsidiary to maintain workmen's  compensation  insurance,  property  insurance,
comprehensive  general liability insurance,  products liability  insurance,  and
business  interruption  insurance reasonably  satisfactory to the Administrative
Agent and the Banks.  Each insurance  policy covering  Collateral  shall provide
that such policy will not be cancelled or reduced without 30 days' prior written
notice to the Administrative  Agent. In the event an Event of Default occurs and
continues for a period of 90 days,  Borrower will cause,  within five days, each
insurance policy covering  Collateral to name the Collateral Agent as additional
insured and loss payee for the benefit of itself,  the other Agents,  the Banks,
the Issuing Banks and the Bridge Lenders.

          Section 9.6 Inspection Rights.  Upon reasonable prior notice,  oral or
written,  and during ordinary business hours, the Borrower will permit, and will
cause each  Subsidiary  to permit,  representatives  of each Agent,  the Issuing
Banks and each  Bank to  examine,  copy,  and make  extracts  from its books and
records,  to visit and inspect  its  properties,  and to discuss  its  business,
operations,   and  financial  condition  with  its  officers,   employees,   and
independent   certified  public  accountants.   Notwithstanding  the  foregoing,
following the occurrence of a Default,  the foregoing  restrictions  relating to
notice and normal business hours shall not apply.

          Section 9.7 Keeping Books and Records. The Borrower will maintain, and
will cause each  Subsidiary  to maintain,  proper books of record and account in
which full,  true, and correct  entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.

          Section 9.8 Compliance  with Laws. The Borrower will comply,  and will
cause each  Subsidiary to comply,  in all material  respects with all applicable
laws, rules,  regulations,  orders, and decrees of any Governmental Authority or
arbitrator.




AMENDED AND RESTATED CREDIT AGREEMENT - Page 50

<PAGE>



          Section 9.9 Compliance with Agreements.  The Borrower will comply, and
will  cause  each  Subsidiary  to  comply,  in all  material  respects  with all
agreements, contracts, and instruments binding on it or affecting its properties
or business.

          Section 9.10 Further  Assurances.  The Borrower  will,  and will cause
each Material  Subsidiary  to,  execute and deliver such further  agreements and
instruments   and  take  such  further   action  as  may  be  requested  by  the
Administrative  Agent to carry out the provisions and purposes of this Agreement
and the other Loan Documents and,  subject to Section 6.1, to create,  preserve,
and perfect  the Liens of the  Collateral  Agent for the benefit of itself,  the
other  Agents,  the  Issuing  Banks,  the Banks,  and the Bridge  Lenders in the
Collateral.

          Section  9.11 ERISA.  The Borrower  will  comply,  and will cause each
Subsidiary  to comply,  with all  minimum  funding  requirements,  and all other
material  requirements,  of ERISA, if applicable,  so as not to give rise to any
liability thereunder.

          Section 9.12 Subsidiary Security Agreement;  Subsidiary Guaranty.  The
Borrower shall cause each Person that becomes a Subsidiary  (other than Excluded
Subsidiaries)  after the date hereof to execute  and  deliver to the  Collateral
Agent a counterpart of each of the Subsidiary  Security Agreement and Subsidiary
Guaranty   within   15  days   after   such   Person   becomes   a   Subsidiary.
Contemporaneously with the execution and delivery of any such counterpart of the
Subsidiary  Security  Agreement,  Borrower shall deliver to the Collateral Agent
the original  certificates  evidencing  all  outstanding  capital  stock of such
Subsidiary  (other  than  Excluded  Subsidiaries),  together  with stock  powers
relating  thereto  duly  executed  in blank  and  such  other  documents  as the
Collateral Agent may reasonably request.

          Section 9.13 Collateral Maintenance;  Additional Mortgages. As of each
Determination  Date,  the  Borrower  shall  execute  or  cause  to  be  executed
additional  mortgages  or deeds of trust to the extent  necessary to provide the
Collateral  Agent with  first  priority  perfected  liens on at least 75% of the
present  value of the  Borrower's  and  Subsidiaries'  (other than the  Excluded
Subsidiaries)  proved reserves (whether developed or undeveloped).  In the event
that the Mortgaged Properties in which the Collateral Agent has a first priority
perfected Lien shall at any time  constitute  less than 80% of the present value
of the  Borrower's  and the  Subsidiaries'  (other than  Excluded  Subsidiaries)
proved  reserves  (whether  developed or  undeveloped),  the Borrower shall upon
request  from the  Collateral  Agent,  promptly  execute or cause to be executed
additional  mortgages and deeds of trust to the extent required to increase such
percentage  to at  least  80%.  Such  mortgages  and  deeds  of  trust  shall be
accompanied by title opinions  and/or other  evidence of title  satisfactory  in
form and substance to the Collateral Agent and the Banks. In addition,  Borrower
shall deliver to the Collateral Agent upon request, such other information, data
and reports  relating to the property  subject to the new mortgages and deeds of
trust and the  reserves and  production  related  thereto,  as the Agent and the
Banks shall reasonably request.

          Section  9.14  Hedging  Agreements.  If the  Borrower has not issued a
minimum of  $125,000,000  of  Subordinated  Debt on or before May 31, 1997,  the
Borrower  shall,  on or before June 30, 1997,  enter into  agreements or similar
contractual  arrangements intended to hedge market price fluctuations of oil and
natural gas ("Hedge Agreements") that cover at least 25%



AMENDED AND RESTATED CREDIT AGREEMENT - Page 51

<PAGE>



of its total  projected  production  from Oil and Gas  Properties  for a minimum
period of 12 months. After June 30, 1997, if the Subordinated Debt still has not
been issued,  the Borrower shall over the next six-month period enter into Hedge
Agreements such that at least 50% of its total  projected  production of Oil and
Gas Properties will be covered by Hedge Agreements through April 30, 1999.


                                    ARTICLE X

                               Negative Covenants

          The Borrower  covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or any
Issuing  Bank has any  obligation  to issue  Letters  of Credit  hereunder,  the
Borrower will perform and observe the following negative covenants:

          Section 10.1 Debt.  The Borrower will not incur,  create,  assume,  or
permit to  exist,  and will not  permit  any  Subsidiary  (other  than  Excluded
Subsidiaries) to incur, create, assume, or permit to exist, any Debt, except the
following (herein referred to as "Permitted Debt"):

                  (a)      Debt to the Agents, the Banks  and  the Issuing Banks
          pursuant to or in connection with the Loan Documents;

                  (b)      Existing Debt described on Schedule 8.9 hereto;

                  (c)      Debt to the Bridge Lenders provided that such Debt is
          subordinated pursuant to the terms of the Intercreditor Agreement;

                  (d)      The Subordinated Debt;

                  (e) Debt owed by the Borrower to an  Affiliate,  provided that
          such  Debt is fully  subordinated  to the  Obligations  pursuant  to a
          subordination  agreement  satisfactory  in form and  substance  to the
          Agent;

                  (f)      Debt consisting of current liabilities  for taxes and
          other assessments incurred in the ordinary course of business that are
          not delinquent;

                  (g)      Debt  owed by  the  Borrower  in  connection with its
          guaranty of the  obligations of  Hunter Butcher International,  LLC to
          Wells Fargo HSBC Trade Bank N.A.provided that the amount guaranteed by
          the Borrower does not exceed $3,000,000;

                  (h)      Debt owed by the Borrower  in connection with Capital
          Lease Obligations  entered  into in the ordinary course of business up
          to an aggregate amount of $2,500,000; and




AMENDED AND RESTATED CREDIT AGREEMENT - Page 52

<PAGE>



                  (i) Debt not otherwise  permitted  pursuant to (a) - (h) above
          in  an  aggregate  amount  not  to  exceed   $1,000,000  at  any  time
          outstanding (excluding, without limitation, existing Debt described on
          Schedule 8.9 hereto and Debt owed by the Borrower in  connection  with
          Capital Lease Obligations).

          Section 10.2 Limitation on Liens. The Borrower will not incur, create,
assume,  or permit to exist,  and will not permit  any  Subsidiary  (other  than
Excluded  Subsidiaries) to incur,  create,  assume, or permit to exist, any Lien
upon any of its property,  assets,  or revenues,  whether now owned or hereafter
acquired, except the following (herein referred to as "Permitted Liens"):

                  (a)      Liens  on   the  property described  on Schedule 10.2
          hereto to secure Permitted Debt;

                  (b)      Liens  in  favor of  the  Collateral  Agent  for  the
          benefit of itself, the   Documentation Agent, the Agent, the Banks and
          the Issuing Banks;

                  (c)      Liens in favor of  the  Bridge Lenders, provided such
          Liens are subordinated  to the Liens in favor of the Collateral Agent,
          pursuant to the terms of the Intercreditor Agreement;

                  (d)      Encumbrances consisting of minor  easements,   zoning
          restrictions,  or other  restrictions on the use of real property that
          do not (individually or in the aggregate)  materially affect the value
          of the assets  encumbered  thereby or materially impair the ability of
          the  Borrower  or  the  Subsidiaries  to  use  such  assets  in  their
          respective  businesses,  and none of which is violated in any material
          respect by existing or proposed structures or land use;

                  (e)      Liens for taxes, assessments, or  other  governmental
          charges which are not delinquent or which are being  contested in good
          faith and for which adequate reserves have been established;

                  (f)      Liens  of   mechanics,  materialmen,    warehousemen,
          carriers, or other similar  statutory  Liens securing obligations that
          are not yet due and are incurred in the ordinary course of business;

                  (g)      Liens resulting from good faith  deposits  to  secure
          payments of workmen's  compensation or other social security  programs
          or to secure the performance of tenders, statutory obligations, surety
          and appeal bonds, bids, contracts (other than for payment of Debt), or
          leases made in the ordinary course of business;

                  (h)      Liens on property  of  the Borrower  or  the Material
          Subsidiaries in  connection  with  Capital Lease Obligations permitted
          under Section 10.1(h); and

                  (i)      Liens  created  in  connection  with  (i)  a $300,000
          production  payment  made  by  Borrower  to  American  Founders   Life
          Insurance Company, and (ii) a $750,000



AMENDED AND RESTATED CREDIT AGREEMENT - Page 53

<PAGE>



          production   payment  made  by  Borrower  to  American  Founders  Life
          Insurance  Company,  with the prior  written  consent of the  Required
          Banks, similar arrangements.

          Section 10.3 Mergers,  Etc. The Borrower will not, and will not permit
any Subsidiary to, become a party to a merger or  consolidation,  or purchase or
otherwise acquire all or any part of the business or assets of any Person or any
shares or other  evidence of  beneficial  ownership  of any Person,  or wind-up,
dissolve,  or  liquidate  itself;  provided,   however,  the  Borrower  and  the
Subsidiaries  shall be entitled to acquire the  business or assets of any Person
or any shares or other evidence of beneficial ownership of any Person so long as
the total aggregate consideration - cash and noncash - for all such acquisitions
during any  12-month  period does not exceed  $1,000,000  and no Default is then
continuing.

          Section 10.4 Restricted Payments. The Borrower will not declare or pay
any  dividends  (other  than  dividends  in the form of stock) or make any other
payment or distribution  (whether in cash, property,  or obligations) on account
of its capital stock, or redeem,  purchase,  retire, or otherwise acquire any of
its capital stock,  or permit any of its  Subsidiaries  to purchase or otherwise
acquire any capital  stock of the Borrower or another  Subsidiary,  or set apart
any  money for a  sinking  or other  analogous  fund for any  dividend  or other
distribution on its capital stock or for any redemption,  purchase,  retirement,
or other  acquisition of any of its capital stock,  except so long as no Default
is  continuing  (i) dividends  approved in writing by Required  Banks as of each
Determination  Date, and (ii)  dividends  payable on the 1996 Series A Preferred
Stock.

          Section 10.5  Investments.  The Borrower  will not make,  and will not
permit any Material Subsidiary to make, any advance,  loan, extension of credit,
or capital  contribution  to or investment in, or purchase or own, or permit any
Subsidiary to purchase or own, any stock,  bonds,  notes,  debentures,  or other
securities  of,  (i) any  Excluded  Subsidiary  in  excess  of  $500,000  in the
aggregate,  or (ii) any Person in excess of $350,000 in the aggregate per fiscal
year of the Borrower, except:

                  (a) readily marketable direct obligations of the United States
          of America or  any  agency thereof with maturities of one year or less
          from the date of acquisition;

                  (b) fully insured  certificates  of deposit with maturities of
          one year or less from the date of acquisition issued by any commercial
          bank  operating  in the United  States of America  having  capital and
          surplus in excess of $250,000,000; and

                  (c)  commercial  paper of a domestic  issuer if at the time of
          purchase  such  paper  is  rated  in  one of the  two  highest  rating
          categories of Standard and Poor's, a division of McGraw-Hill,  Moody's
          Investor Service, Inc.

          Section 10.6  Limitation on Issuance of  Subsidiaries'  Capital Stock.
The Borrower  will not permit any of its Material  Subsidiaries  to, at any time
issue,  sell,  assign,  or  otherwise  dispose  of (a) any of such  Subsidiary's
capital  stock,  (b) any  securities  exchangeable  for or  convertible  into or
carrying any rights to acquire any of such  Subsidiary's  capital stock,  or (c)
any option,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 54

<PAGE>



warrant,  or other  right to  acquire  any of such  Subsidiary's  capital  stock
without the prior written consent of the Majority Banks.

          Section 10.7 Transactions With Affiliates. The Borrower will not enter
into,  and  will  not  permit  any  Material   Subsidiary  to  enter  into,  any
transaction,  including,  without limitation, the purchase, sale, or exchange of
property or the rendering of any service,  with any Affiliate of the Borrower or
such Subsidiary, except in the ordinary course of and pursuant to the reasonable
requirements of the Borrower's or such  Subsidiary's  business and upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary than would
be  obtained  in a  comparable  arm's-length  transaction  with a Person  not an
Affiliate of the Borrower or such Subsidiary.

          Section 10.8 Disposition of Assets. The Borrower will not sell, lease,
assign,  transfer,  or  otherwise  dispose of any of its  assets,  or permit any
Material Subsidiary to do so with any of its assets,  except (a) dispositions of
Hydrocarbons in the ordinary course of business,  (b)  dispositions of obsolete,
damaged,  or worn out  equipment,  (c) sales or  transfers  of  assets  from one
Guarantor to another Guarantor,  or (d) sales of assets having an aggregate fair
market value of 10% or less of the then current Borrowing Base during any fiscal
year.

          Section 10.9 Sale and Leaseback. The Borrower will not enter into, and
will not permit any Material  Subsidiary to enter into, any arrangement with any
Person  pursuant to which it leases  from such Person real or personal  property
that has been or is to be sold or transferred,  directly or indirectly, by it to
such Person,  except for any such arrangements which do not exceed the aggregate
amount of $500,000 for the Borrower and its Subsidiaries during any fiscal year.

          Section 10.10  Prepayment of Debt.  The Borrower will not prepay,  and
will not  permit any  Material  Subsidiary  to prepay,  any Debt in excess of an
aggregate amount of $50,000 during any fiscal year, except the Obligations.

          Section 10.11 Nature of Business.  The Borrower will not, and will not
permit any Material Subsidiary to, engage in any business other than the oil and
gas  exploration  and production,  gas gathering,  pipeline and processing,  and
petroleum  property  management  and  consulting  businesses  in which  they are
engaged on the date hereof.

          Section  10.12  Environmental  Protection.  The Borrower will not, and
will not  permit  any of its  Subsidiaries  to, (a) use (or permit any tenant to
use) any of their respective properties or assets for the handling,  processing,
storage, transportation, or disposal of any Hazardous Material except in amounts
that will not violate applicable law, (b) conduct any activity that is likely to
cause  a  Release  or  threatened  Release  of any  Hazardous  Material,  or (c)
otherwise  conduct any  activity or use any of their  respective  properties  or
assets in any manner  that is likely in any  material  respect  to  violate  any
Environmental Law or create any Environmental Liabilities for which the Borrower
or any of its Subsidiaries would be responsible.

          Section 10.13   Accounting. The Borrower will not, and will not permit
any of its  Subsidiaries to,  change  its  fiscal year or make any change (a) in
accounting treatment or reporting



AMENDED AND RESTATED CREDIT AGREEMENT - Page 55

<PAGE>



practices, except as required by GAAP and disclosed to the Administrative Agent,
or (b) in tax  reporting  treatment,  except as required by law and disclosed to
the Administrative Agent.

          Section 10.14 Hedge Agreement.  The Borrower has not entered and shall
not enter into, maintain agreements or similar contractual  arrangements,  other
than in form and substance as are satisfactory to the  Administrative  Agent and
the Banks,  intended to hedge market price  fluctuations  of oil and natural gas
that  cover  more than 75% of its total  projected  production  from Oil and Gas
Properties.

                                   ARTICLE XI

                               Financial Covenants

          The Borrower  covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Bank has any Commitment hereunder or the
Issuing  Bank has any  obligation  to issue  Letters  of Credit  hereunder,  the
Borrower will perform and observe the following financial covenants:

          Section 11.1  Consolidated  Interest Coverage Ratio. The Borrower will
not permit its Consolidated  Interest  Coverage Ratio to be less than (a) 2.0 to
1.0 at all times from the Closing  Date until June 30,  1998,  (b) 2.5 to 1.0 at
all times from June 30, 1998 until December 31, 1998, and (c) 2.75 to 1.0 at all
times thereafter,  calculated  quarterly (beginning April 30, 1997) for the four
quarters  then  ended as of the  last day of each  March,  June,  September  and
December.

          Section 11.2 Consolidated Tangible Net Worth. The Borrower will at all
times  maintain  Consolidated  Tangible Net Worth in an amount not less than the
sum of (i) 90% of the  Consolidated  Tangible Net Worth as of the Closing  Date,
plus  (ii) 90% of the  Consolidated  Net  Income  (to the  extent  positive)  of
Borrower  for each  fiscal year  ending  after  December  31,  1996,  calculated
quarterly as of the last day of each March, June,  September and December,  plus
(iii) 100% of the proceeds from issuances of equity by the Borrower,  minus (iv)
ceiling test  write-downs  and preferred  dividends  related to stock  purchased
pursuant to the Stock Purchase Agreement.

          Section 11.3 Current Ratio. Borrower will not permit its Current Ratio
to be less  than  1.0 to 1.0,  calculated  quarterly  as of the last day of each
March, June, September and December.

          Section 11.4 Debt to  Capitalization  Ratio.  Borrower will not permit
its Debt to  Capitalization  Ratio to be more than (a) 0.86 to 1.00 at all times
from the Closing Date until March 31,  1998,  (b) 0.75 to 1.00 at all times from
March 31, 1998 until  September 30, 1998 and (c) 0.70 to 1.00 from September 30,
1998 until the Termination Date, calculated quarterly as of the last day of each
March, June, September and December.

          Section 11.5     Capital Expenditures.  Borrower  will  not permit the
aggregate capital  expenditures (excluding acquisitions) of the Borrower and the
Subsidiaries to exceed (a) the greater of (i) the amount of capital expenditures
reflected in the Engineering Reports for such



AMENDED AND RESTATED CREDIT AGREEMENT - Page 56

<PAGE>



year and (ii)  $15,000,000  during the 1997 fiscal year,  (b) the greater of (i)
the amount of capital expenditures reflected in the Engineering Reports for such
year and (ii) $25,000,000  during the 1998 fiscal year and (c) thereafter not to
exceed the capital  expenditures in the Engineering Reports for such fiscal year
without the prior written consent of Majority Banks.

                                   ARTICLE XII

                                     Default

          Section 12.1     Events of Default.  Each  of  the following  shall be
         deemed an "Event of Default":

                  (a) The Borrower shall fail to pay when due the Obligations or
          any part thereof.

                  (b) Any  representation or warranty made or deemed made by the
          Borrower or any Obligated Party (or any of their respective  officers)
          in  any  Loan  Document  or in any  certificate,  report,  notice,  or
          financial  statement  furnished  at any time in  connection  with this
          Agreement  shall be false,  misleading,  or  erroneous in any material
          respect when made or deemed to have been made.

                  (c) The  Borrower  shall fail to perform,  observe,  or comply
          with any covenant,  agreement,  or term  contained in Section  9.1(e),
          (f),  (h) or (i),  9.5,  9.6,  9.10,  Article X, or Article XI of this
          Agreement (for which there shall be no grace);  or the Borrower or any
          Obligated  Party  shall fail to perform,  observe,  or comply with any
          other covenant,  agreement, or term contained in this Agreement or any
          other Loan  Document  (other  than those set forth in Section  9.1(e),
          (f), (h) or (i), 9.5, 9.6,  9.10,  Article X or XI or the covenants to
          pay the  Obligations)  and such failure shall continue for a period of
          ten days.

                  (d) The Borrower, any Subsidiary, or any Obligated Party shall
          commence a voluntary proceeding seeking  liquidation,  reorganization,
          or other  relief  with  respect  to  itself  or its  debts  under  any
          bankruptcy,  insolvency,  or other  similar  law now or  hereafter  in
          effect or seeking the appointment of a trustee, receiver,  liquidator,
          custodian,  or other similar  official of it or a substantial  part of
          its property or shall consent to any such relief or to the appointment
          of or taking possession by any such official in an involuntary case or
          other  proceeding  commenced  against  it  or  shall  make  a  general
          assignment for the benefit of creditors or shall generally fail to pay
          its debts as they  become  due or shall take any  corporate  action to
          authorize any of the foregoing.

                  (e) An involuntary  proceeding shall be commenced  against the
          Borrower, any Subsidiary,  or any Obligated Party seeking liquidation,
          reorganization,  or other relief with respect to it or its debts under
          any bankruptcy,  insolvency,  or other similar law now or hereafter in
          effect or seeking the appointment of a trustee, receiver,  liquidator,
          custodian or other similar  official for it or a  substantial  part of
          its property, and such involuntary proceeding shall remain undismissed
          and unstayed for a period of sixty days.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 57

<PAGE>




                  (f) The Borrower, any Subsidiary, or any Obligated Party shall
          fail to  discharge  within a period of 30 days after the  commencement
          thereof  any  attachment,  sequestration,  or  similar  proceeding  or
          proceedings  involving  an  aggregate  amount in  excess  of  $100,000
          against any of its assets or properties.

                  (g) A final  judgment or judgments for the payment of money in
          excess of  $100,000 in the  aggregate  shall be rendered by a court or
          courts against the Borrower, any of its Subsidiaries, or any Obligated
          Party and the same shall not be discharged (or provision  shall not be
          made for such discharge),  or a stay of execution thereof shall not be
          procured,  within  30 days  from  the date of  entry  thereof  and the
          Borrower or the  relevant  Subsidiary  or  Obligated  Party shall not,
          within said  period of 30 days,  or such longer  period  during  which
          execution of the same shall have been  stayed,  appeal  therefrom  and
          cause the execution thereof to be stayed during such appeal.

                  (h) The Borrower, any Subsidiary, or any Obligated Party shall
          fail to pay when due any  principal  of or interest on any Debt (other
          than the  Obligations)  the  amount  of which  individually  or in the
          aggregate  exceeds  $100,000,  or the  maturity of any such Debt shall
          have been accelerated, or any such Debt shall have been required to be
          prepaid prior to the stated maturity thereof,  or any event shall have
          occurred  that permits (or, with the giving of notice or lapse of time
          or both,  would  permit)  any  holder or  holders  of such Debt or any
          Person  acting on behalf of such holder or holders to  accelerate  the
          maturity thereof or require any such prepayment.

                  (i) This  Agreement or any other Loan Document  shall cease to
          be in full force and effect or shall be declared  null and void or the
          validity or enforceability thereof shall be contested or challenged by
          the Borrower, any Subsidiary,  any Obligated Party, or the Borrower or
          any  Obligated  Party shall deny that it has any further  liability or
          obligation  under any of the Loan  Documents,  or any lien or security
          interest  created by the Loan Documents  shall for any reason cease to
          be a valid,  first priority  perfected  security  interest in and lien
          upon any of the Collateral purported to be covered thereby.

                  (j) Any of the  following  events  shall  occur or exist  with
          respect to the  Borrower or any ERISA  Affiliate:  (i) any  Prohibited
          Transaction involving any Plan; (ii) any Reportable Event with respect
          to any Plan;  (iii) the filing under Section 4041 of ERISA of a notice
          of intent to terminate any Plan or the  termination of any Plan;  (iv)
          any event or circumstance that might constitute  grounds entitling the
          PBGC to  institute  proceedings  under  Section  4042 of ERISA for the
          termination of, or for the appointment of a trustee to administer, any
          Plan, or the institution by the PBGC of any such  proceedings;  or (v)
          complete or partial  withdrawal  under  Section  4201 or 4204 of ERISA
          from a  Multiemployer  Plan  or  the  reorganization,  insolvency,  or
          termination of any  Multiemployer  Plan; and in each case above,  such
          event or condition,  together with all other events or conditions,  if
          any,  have  subjected or could in the  reasonable  opinion of Required
          Banks subject the Borrower to any tax, penalty,  or other liability to
          a  Plan,  a  Multiemployer  Plan,  the  PBGC,  or  otherwise  (or  any
          combination thereof) which in the aggregate exceed or could reasonably
          be expected to exceed $250,000.



AMENDED AND RESTATED CREDIT AGREEMENT - Page 58

<PAGE>




                  (k) The Borrower or any of its Material  Subsidiaries,  or any
          of their  properties,  revenues,  or assets  aggregating  $100,000  or
          greater, shall become the subject of an order of forfeiture,  seizure,
          or  divestiture  (whether  under RICO or otherwise) and the same shall
          not have been  discharged  (or  provisions  shall not be made for such
          discharge) within 30 days from the date of entry thereof.

                  (l)      A Change in Control shall occur.

                  (m) A default  under the Bridge  Loan shall  occur;  provided,
          however, that no such default shall be deemed to exist for purposes of
          this  clause (m) so long as the Bridge  Lenders  shall have  agreed in
          writing to waive such default.

          Section  12.2  Remedies.  If any Event of Default  shall  occur and be
continuing,  the  Administrative  Agent may (and if directed by Required  Banks,
shall) do any one or more of the following:

                  (a)  Acceleration.  Declare all  outstanding  principal of and
          accrued and unpaid interest on the Notes and all other  obligations of
          the Borrower under the Loan Documents immediately due and payable, and
          the same shall thereupon become  immediately due and payable,  without
          notice,   demand,   presentment,   notice  of   dishonor,   notice  of
          acceleration,  notice  of  intent  to  accelerate,  protest,  or other
          formalities of any kind, all of which are hereby  expressly  waived by
          the Borrower.

                  (b) Termination of Commitments.  Terminate the Commitments and
          the  obligation  of  the  Issuing  Banks  to  issue Letters  of Credit
          hereunder without notice to the Borrower.

                  (c) Judgment.  Reduce any claim of any Agent, any Issuing Bank
          or any Bank to judgment.

                  (d)  Foreclosure.  Foreclose  or  otherwise  enforce  any Lien
          granted to the Collateral  Agent for the benefit of itself,  the other
          Agents,  the  Banks  and the  Issuing  Banks  to  secure  payment  and
          performance  of the  Obligations  in accordance  with the terms of the
          Loan Documents.

                  (e)  Rights. Exercise any and all rights and remedies afforded
          by the laws of the State of New York or any other jurisdiction, by any
          of the Loan Documents, by equity, or otherwise.

Provided,  however,  that  upon the  occurrence  of an Event  of  Default  under
subsection (d) or (e) of Section 12.1,  the  Commitments of all of the Banks and
the   obligation  of  the  Issuing  Banks  to  issue  Letters  of  Credit  shall
automatically terminate, and the outstanding principal of and accrued and unpaid
interest on the Notes and all other  obligations  of the Borrower under the Loan
Documents  shall  thereupon  become  immediately due and payable without notice,
demand,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 59

<PAGE>



presentment,  notice of dishonor,  notice of  acceleration,  notice of intent to
accelerate,  protest,  or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.

          Section  12.3 Letters of Credit.  If any Event of Default  shall occur
and be continuing,  Borrower shall, if requested by the Administrative Agent for
the Required Banks,  immediately  deposit with and pledge to the  Administrative
Agent cash or cash equivalent  investments in an amount equal to the outstanding
Letter of Credit Liabilities as security for the Obligations.

          Section 12.4 Performance by the Administrative  Agent. If the Borrower
shall fail to perform any covenant or agreement in accordance  with the terms of
the Loan Documents,  the Administrative  Agent may, at the direction of Required
Banks, perform or attempt to perform such covenant or agreement on behalf of the
Borrower.   In  such  event,   the  Borrower   shall,  at  the  request  of  the
Administrative  Agent,  promptly pay any amount  expended by the  Administrative
Agent or the Banks in connection with such performance or attempted  performance
to the  Administrative  Agent at the  Principal  Office,  together with interest
thereon at the Default Rate from and including the date of such  expenditure  to
but excluding the date such  expenditure  is paid in full.  Notwithstanding  the
foregoing,  it is expressly  agreed that neither the  Administrative  Agent, the
Issuing  Bank nor any Bank shall have any  liability or  responsibility  for the
performance of any obligation of the Borrower under this Agreement or any of the
other Loan Documents.

                                  ARTICLE XIII

                                Agency Provisions

          Section 13.1  Appointment and Powers of the  Administrative  Agent. In
order to expedite the various transactions  contemplated by this Agreement,  the
other  Agents,  the Banks and the Issuing Banks hereby  irrevocably  appoint and
authorize Bankers Trust to act as their Administrative Agent hereunder and under
each of the other Loan Documents. Bankers Trust consents to such appointment and
agrees to perform the duties of the  Administrative  Agent as specified  herein.
The other Agents, the Banks and the Issuing Banks authorize and direct the Agent
to take  such  action  in their  name and on their  behalf  under  the terms and
provisions  of the  Loan  Documents  and to  exercise  such  rights  and  powers
thereunder as are  specifically  delegated to or required of the  Administrative
Agent for the other Agents, the Banks and the Issuing Banks,  together with such
rights and powers as are reasonably incidental thereto. The Administrative Agent
is hereby expressly  authorized to act as follows as the Administrative Agent on
behalf of itself, the other Agents, the other Banks and the Issuing Banks:

                  (a) To  receive  on  behalf of each  Agent,  the Banks and the
          Issuing  Banks  any  payment  of  principal,  interest,  fees or other
          amounts  paid  pursuant  to  this  Agreement  and  the  Notes  and  to
          distribute to each Agent, each Bank and/or each Issuing Bank its share
          of all payments so received as provided in this Agreement;

                  (b)  To receive all documents  and items to be furnished under
          the Loan Documents;



AMENDED AND RESTATED CREDIT AGREEMENT - Page 60

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                  (c)  To act as nominee  for and  on behalf  of the Agents, the
          Banks and the Issuing Banks in and under the Loan Documents;

                  (d)  To arrange for  the means  whereby the funds of the Banks
          are to be made available to the Borrower;

                  (e) To  distribute  to the  Agents,  the Banks and the Issuing
          Banks information, requests, notices, payments, prepayments, documents
          and other  items  received  from the  Borrower,  the  other  Obligated
          Parties, and other Persons;

                  (f)  To  execute  and  deliver  to  the  Borrower,  the  other
          Obligated  Parties,   and  other  Persons,   all  requests,   demands,
          approvals,  notices,  and consents received from the Agents, the Banks
          and the Issuing Banks;

                  (g) To the extent permitted by the Loan Documents, to exercise
          on behalf of each Agent,  each Bank and each  Issuing  Bank all rights
          and  remedies  of such  Persons  upon the  occurrence  of any Event of
          Default; and

                  (h) To take such other actions as may be requested by Required
          Banks.

          Section 13.2 Appointment and Powers of the Collateral  Agent. In order
to expedite the various transactions  contemplated by this agreement,  the other
Agents, the Banks and the Issuing Banks hereby irrevocably appoint and authorize
First Union to act as the Collateral Agent hereunder and under each of the other
Loan Documents.  First Union consents to such  appointment and agrees to perform
the  duties  of  the  Collateral  Agent  as  specified  herein.  Subject  to the
provisions of the Intercreditor  Agreement,  the other Agents, the Banks and the
Issuing Banks  authorize and direct the Collateral  Agent to take such action in
their  name and on their  behalf  under  the terms  and  provisions  of the Loan
Documents and to exercise such rights and powers  thereunder as are specifically
delegated to or required of the Collateral Agent for the other Agents, the Banks
and the Issuing  Banks,  together with such rights and powers as are  reasonably
incidental  thereto.  Subject to the provisions of the Intercreditor  Agreement,
the  Collateral  Agent is hereby  expressly  authorized to act as follows as the
Collateral Agent on behalf of itself,  the other Agents, the other Banks and the
Issuing Banks:

                  (a) To  receive  all  documents  and  items  relating  to  the
          Collateral to be furnished under the Loan Documents;

                  (b) To  distribute  to the  Agents,  the Banks and the Issuing
          Banks information, requests, notices, payments, prepayments, documents
          and other  items  received  from the  Borrower,  the  other  Obligated
          Parties, and other Persons;

                  (c) To the extent  permitted by the Loan Documents and subject
          to Section 13.3 below, to exercise on behalf of each Agent,  each Bank
          and each Issuing Bank all rights and remedies of such Persons upon the
          occurrence of any Event of Default;




AMENDED AND RESTATED CREDIT AGREEMENT - Page 61

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                  (d) To  accept,  execute,  and  deliver  the  Borrower  Pledge
          Agreement,  the Subsidiary Pledge Agreement,  the Subsidiary  Guaranty
          and the other  Security  Documents  as the secured  party,  including,
          without limitation all UCC financing statements; and

                  (e) To take such other actions as may be requested by Required
          Banks.

          Section  13.3  Immunity.   Neither  the  Agents,   nor  any  of  their
Affiliates, officers, directors, employees, attorneys, or agents shall be liable
for any  action  taken  or  omitted  to be  taken  by any of them  hereunder  or
otherwise in connection  with this  Agreement or any of the other Loan Documents
except  for its or their own gross  negligence  or willful  misconduct.  Without
limiting the generality of the preceding sentence, the Agents, (i) may treat the
payee of any Note as the holder thereof until the Administrative  Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form  satisfactory  to the  Administrative  Agent;  (ii) shall have no duties or
responsibilities  except those  expressly  set forth in this  Agreement  and the
other Loan  Documents,  and shall not by reason of this  Agreement  or any other
Loan  Document be a trustee or  fiduciary  for any Bank or Issuing  Bank;  (iii)
shall not be required to  initiate  any  litigation  or  collection  proceedings
hereunder  or under any other Loan  Document  except to the extent  requested by
Required Banks;  (iv) shall not be responsible to the Banks or the Issuing Banks
for any recitals,  statements,  representations or warranties  contained in this
Agreement  or any other Loan  Document,  or any  certificate  or other  document
referred to or provided for in, or received by any of them under, this Agreement
or  any  other  Loan  Document,  or  for  the  value,  validity,  effectiveness,
enforceability,  or  sufficiency of this Agreement or any other Loan Document or
any other  document  referred  to or  provided  for herein or therein or for any
failure by any Person to perform any of its obligations hereunder or thereunder;
(v) may  consult  with  legal  counsel  (including  counsel  for the  Borrower),
independent public  accountants,  and other experts selected by it and shall not
be liable  for any  action  taken or  omitted to be taken in good faith by it in
accordance with the advice of such counsel,  accountants,  or experts;  and (vi)
shall incur no liability under or in respect of any Loan Document by acting upon
any notice, consent,  certificate, or other instrument or writing believed by it
to be  genuine  and  signed or sent by the proper  party or  parties.  As to any
matters not expressly provided for by this Agreement,  the Agents,  shall in all
cases be fully protected in acting,  or in refraining from acting,  hereunder in
accordance with instructions  signed by Required Banks, and such instructions of
Required Banks and any action taken or failure to act pursuant  thereto shall be
binding on all of the Banks; provided,  however, that no Agent shall be required
to take any action which  exposes  such Agent to personal  liability or which is
contrary to this Agreement or any other Loan Document or applicable law.

          Section  13.4  Rights of Each  Agent as a Bank.  With  respect  to its
Commitment,  the Loans made by it and the Notes issued to it,  Paribas,  Bankers
Trust and First Union in their capacity as a Bank hereunder  shall have the same
rights  and powers  hereunder  as any other  Bank and may  exercise  the same as
though it were not acting as an agent or an Issuing Bank, and the term "Bank" or
"Banks" shall, unless the context otherwise indicates, include such agent in its
individual  capacity.  The Agents and their  Affiliates  may (without  having to
account  therefor to any Bank or any Issuing Bank) accept  deposits  from,  lend
money to, act as trustee under  indentures of, provide merchant banking services
to, and generally engage in any kind of business



AMENDED AND RESTATED CREDIT AGREEMENT - Page 62

<PAGE>



with the Borrower,  any of its Subsidiaries,  any other Obligated Party, and any
other Person who may do business with or own  securities  of the  Borrower,  any
Subsidiary,  or any other  Obligated  Party,  all as if it were not acting as an
agent  hereunder  and without any duty to account  therefor to the other agents,
the Banks or the Issuing Banks.

          Section 13.5  Sharing of  Payments,  Etc. If any Bank shall obtain any
payment  of any  principal  of or  interest  on any Loan  made by it under  this
Agreement or payment of any other  obligation under the Loan Documents then owed
by the Borrower or any other  Obligated Party to such Bank,  whether  voluntary,
involuntary,  through  the  exercise  of any  right of  setoff,  banker's  lien,
counterclaim  or similar right,  or otherwise,  in excess of its pro rata share,
such Bank shall  promptly  purchase from the other Banks  participations  in the
Loans held by them  hereunder in such amounts,  and make such other  adjustments
from time to time as shall be necessary to cause such  purchasing  Bank to share
the excess payment  ratably with each of the other Banks in accordance  with its
pro rata portion  thereof.  To such end, all of the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess  payment is  thereafter  rescinded  or must
otherwise  be  restored.  The  Borrower  agrees,  to the  fullest  extent it may
effectively  do  so  under  applicable  law,  that  any  Bank  so  purchasing  a
participation  in the Loans made by the other Banks may  exercise  all rights of
setoff,  banker's  lien,  counterclaim,  or similar  rights with respect to such
participation  as fully as if such  Bank  were a direct  holder  of Loans to the
Borrower in the amount of such  participation.  Nothing  contained  herein shall
require  any Bank to  exercise  any such right or shall  affect the right of any
Bank to  exercise,  and retain the benefits of  exercising,  any such right with
respect to any other indebtedness or obligation of the Borrower.

          Section 13.6 INDEMNIFICATION.  THE BANKS HEREBY AGREE TO INDEMNIFY THE
AGENTS, FROM AND HOLD THE AGENTS, AND THE ISSUING BANKS HARMLESS AGAINST (TO THE
EXTENT NOT REIMBURSED  UNDER  SECTIONS 14.1 AND 14.2,  BUT WITHOUT  LIMITING THE
OBLIGATIONS OF THE BORROWER UNDER SECTIONS 14.1 AND 14.2), RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE COMMITMENTS, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES,  PENALTIES,  ACTIONS, JUDGMENTS,  DEFICIENCIES,  SUITS, COSTS, EXPENSES
(INCLUDING  ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER
WHICH MAY BE IMPOSED ON,  INCURRED  BY, OR ASSERTED  AGAINST THE AGENTS,  OR ANY
ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN  DOCUMENTS
OR ANY ACTION  TAKEN OR OMITTED TO BE TAKEN BY THE AGENTS,  OR ANY ISSUING  BANK
UNDER OR IN RESPECT OF ANY OF THE LOAN  DOCUMENTS;  PROVIDED,  FURTHER,  THAT NO
BANK SHALL BE LIABLE FOR ANY PORTION OF THE  FOREGOING  TO THE EXTENT  CAUSED BY
SUCH AGENT'S,  OR SUCH ISSUING  BANK'S GROSS  NEGLIGENCE OR WILLFUL  MISCONDUCT.
WITHOUT  LIMITATION OF THE FOREGOING,  IT IS THE EXPRESS  INTENTION OF THE BANKS
THAT THE AGENTS,  AND THE ISSUING BANKS SHALL BE INDEMNIFIED  HEREUNDER FROM AND
HELD HARMLESS AGAINST ALL OF SUCH  LIABILITIES,  OBLIGATIONS,  LOSSES,  DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS,  DEFICIENCIES,  SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), AND



AMENDED AND RESTATED CREDIT AGREEMENT - Page 63

<PAGE>



DISBURSEMENTS  OF ANY KIND OR NATURE  DIRECTLY OR  INDIRECTLY  ARISING OUT OF OR
RESULTING  FROM THE  SOLE OR  CONTRIBUTORY  NEGLIGENCE  OF SUCH  AGENT,  OR SUCH
ISSUING BANK.  WITHOUT  LIMITING ANY OTHER PROVISION OF THIS SECTION,  EACH BANK
AGREES TO REIMBURSE  EACH AGENT,  AND EACH ISSUING BANK PROMPTLY UPON DEMAND FOR
ITS PRO RATA SHARE  (CALCULATED ON THE BASIS OF THE  COMMITMENTS) OF ANY AND ALL
OUT-OF-POCKET  EXPENSES  (INCLUDING  ATTORNEYS' FEES) INCURRED BY SUCH AGENT, OR
SUCH ISSUING  BANK IN  CONNECTION  WITH THE  PREPARATION,  EXECUTION,  DELIVERY,
ADMINISTRATION,   MODIFICATION,   AMENDMENT  OR  ENFORCEMENT   (WHETHER  THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR  RESPONSIBILITIES  UNDER, THE LOAN DOCUMENTS,  TO THE EXTENT THAT SUCH
AGENT, OR SUCH ISSUING BANK IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.

          Section 13.7 Independent  Credit  Decisions.  Each Bank agrees that it
has  independently  and without  reliance on any Agent,  any Issuing Bank or any
other  Bank,  and  based on such  documents  and  information  as it has  deemed
appropriate,  made its own credit analysis of the Borrower and decision to enter
into this Agreement and that it will,  independently  and without  reliance upon
any Agent, any Issuing Bank or any other Bank, and based upon such documents and
information as it shall deem  appropriate at the time,  continue to make its own
analysis and  decisions in taking or not taking  action under this  Agreement or
any of the other Loan  Documents.  No Agent  shall be  required  to keep  itself
informed as to the  performance  or  observance by the Borrower or any Obligated
Party of this  Agreement or any other Loan Document or to inspect the properties
or books of the Borrower or any Obligated Party. Except for notices, reports and
other documents and information  expressly required to be furnished to the Banks
by the Agents,  hereunder or under the other Loan Documents, no Agent shall have
any duty or  responsibility  to provide the  Issuing  Banks or any Bank with any
credit,  financial  or  other  information  concerning  the  affairs,  financial
condition  or business of the Borrower or any  Obligated  Party (or any of their
Affiliates)  which may come into the  possession of the Agents,  or any of their
Affiliates.

          Section  13.8  Several   Commitments.   The   Commitments   and  other
obligations  of the Banks under this  Agreement are several.  The default by any
Bank in making a Loan in accordance  with its  Commitment  shall not relieve the
other  Banks of their  obligations  under  this  Agreement.  In the event of any
default  by any Bank in  making  any  Loan,  each  nondefaulting  Bank  shall be
obligated  to make its Loan but shall not be  obligated  to  advance  the amount
which the defaulting Bank was required to advance  hereunder.  In no event shall
any Bank be  required  to  advance  an  amount  or  amounts  which  shall in the
aggregate  exceed such Bank's  Commitment.  No Bank shall be responsible for any
act or omission of any other Bank.

          Section  13.9  Successor   Agent.   Subject  to  the  appointment  and
acceptance of a successor Agent, as provided below, any of the Agents may resign
at any time by giving notice thereof to the other agents, the Banks, the Issuing
Banks and the  Borrower and any Agent may be removed at any time with or without
cause by Required Banks. Upon any such resignation or removal,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 64

<PAGE>



Required Banks will have the right to appoint a successor Agent. If no successor
Agent shall have been so  appointed  by Required  Banks and shall have  accepted
such  appointment  within 30 days after the retiring Agent's giving of notice of
resignation  or the  Required  Banks'  removal of the retiring  Agent,  then the
retiring  Agent may, on behalf of the Banks,  appoint a successor  Agent,  which
shall be a  commercial  bank  organized  under the laws of the United  States of
America or any State thereof and having combined capital and surplus of at least
$100,000,000.  In the  event  the  successor  Agent  is not at the  time  of its
appointment,  a Bank hereunder,  the Borrower shall have the right to consent to
the  successor  Agent,  which  consent  shall not be  unreasonably  withheld  or
delayed.  Upon the  acceptance  of its  appointment  as  successor  Agent,  such
successor  Agent shall  thereupon  succeed to and become vested with all rights,
powers,  privileges,  immunities,  and duties of the resigning or removed Agent,
and the  resigning  or removed  Agent  shall be  discharged  from its duties and
obligations under this Agreement and the other Loan Documents. After any Agent's
resignation  or removal  as Agent,  the  provisions  of this  Article  XIV shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was the Agent.


                                   ARTICLE XIV

                                  Miscellaneous

          Section 14.1  Expenses.  The Borrower  hereby agrees to pay on demand:
(a) all reasonable costs and expenses of the Administrative Agent, in connection
with the preparation, negotiation, execution, and delivery of this Agreement and
the other Loan Documents and any and all  amendments,  modifications,  renewals,
extensions, and supplements thereof and thereto, including,  without limitation,
the reasonable fees and expenses of legal counsel for the Administrative  Agent,
(b) all costs and expenses of the Agents,  and the Issuing  Banks in  connection
with any  Default  and the  enforcement  of this  Agreement  or any  other  Loan
Document,  including,  without  limitation,  the reasonable fees and expenses of
legal counsel for the Agents,  and the Issuing Banks,  (c) all transfer,  stamp,
documentary,  or other  similar  taxes,  assessments,  or charges  levied by any
Governmental  Authority  in respect of this  Agreement  or any of the other Loan
Documents, (d) all costs, expenses,  assessments,  and other charges incurred in
connection  with any  filing,  registration,  recording,  or  perfection  of any
security  interest  or Lien  contemplated  by this  Agreement  or any other Loan
Document,  and (e) all other  reasonable  costs  and  expenses  incurred  by the
Administrative  Agent,  in  connection  with this  Agreement  or any other  Loan
Document,  including,  without limitation,  all reasonable costs,  expenses, and
other charges incurred  following the occurrence and during the continuance of a
Default in  connection  with  obtaining any audit or appraisal in respect of the
Collateral.

          Section 14.2 INDEMNIFICATION. THE BORROWER SHALL INDEMNIFY THE AGENTS,
THE ISSUING BANKS AND EACH BANK AND EACH AFFILIATE  THEREOF AND THEIR RESPECTIVE
OFFICERS,  DIRECTORS,  EMPLOYEES,  ATTORNEYS,  AND AGENTS FROM, AND HOLD EACH OF
THEM  HARMLESS  AGAINST,  ANY  AND ALL  LOSSES,  LIABILITIES,  CLAIMS,  DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING



AMENDED AND RESTATED CREDIT AGREEMENT - Page 65

<PAGE>



ATTORNEYS'  FEES) TO WHICH ANY OF THEM MAY  BECOME  SUBJECT  WHICH  DIRECTLY  OR
INDIRECTLY  ARISE FROM OR RELATE TO (A) THE  NEGOTIATION,  EXECUTION,  DELIVERY,
PERFORMANCE,  ADMINISTRATION,  OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS,  (B)
ANY OF THE  TRANSACTIONS  CONTEMPLATED BY THE LOAN DOCUMENTS,  (C) ANY BREACH BY
THE  BORROWER OF ANY  REPRESENTATION,  WARRANTY,  COVENANT,  OR OTHER  AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS,  (D) THE PRESENCE,  RELEASE,  THREATENED
RELEASE,  DISPOSAL,  REMOVAL,  OR CLEANUP OF ANY HAZARDOUS  MATERIAL LOCATED ON,
ABOUT,  WITHIN,  OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR
ANY  SUBSIDIARY,  OR (E) ANY  INVESTIGATION,  LITIGATION,  OR OTHER  PROCEEDING,
INCLUDING,  WITHOUT LIMITATION,  ANY THREATENED  INVESTIGATION,  LITIGATION,  OR
OTHER  PROCEEDING  RELATING  TO ANY  OF  THE  FOREGOING.  WITHOUT  LIMITING  ANY
PROVISION  OF THIS  AGREEMENT OR OF ANY OTHER LOAN  DOCUMENT,  IT IS THE EXPRESS
INTENTION OF THE PARTIES  HERETO THAT EACH PERSON TO BE  INDEMNIFIED  UNDER THIS
SECTION SHALL BE INDEMNIFIED  FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES,
LIABILITIES,  CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,  DISBURSEMENTS,  COSTS, AND
EXPENSES  (INCLUDING  ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE
OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.

          Section 14.3 LIMITATION OF LIABILITY.  NO AGENT, ANY ISSUING BANK, ANY
BANK, OR ANY AFFILIATE,  OFFICER, DIRECTOR, EMPLOYEE, ATTORNEY, OR AGENT THEREOF
SHALL HAVE ANY  LIABILITY  WITH  RESPECT  TO, AND THE  BORROWER  HEREBY  WAIVES,
RELEASES,  AND AGREES NOT TO SUE ANY OF THEM UPON,  ANY CLAIM FOR ANY SPECIAL OR
PUNITIVE  DAMAGES  SUFFERED  OR INCURRED BY THE  BORROWER  IN  CONNECTION  WITH,
ARISING OUT OF, OR IN ANY WAY RELATED  TO,  THIS  AGREEMENT  OR ANY OF THE OTHER
LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS.  THE BORROWER HEREBY WAIVES,  RELEASES,  AND AGREES
NOT TO SUE ANY AGENT,  ANY ISSUING BANK, OR ANY BANK OR ANY OF THEIR  RESPECTIVE
AFFILIATES,  OFFICERS, DIRECTORS,  EMPLOYEES,  ATTORNEYS, OR AGENTS FOR PUNITIVE
DAMAGES IN RESPECT OF ANY CLAIM IN  CONNECTION  WITH,  ARISING OUT OF, OR IN ANY
WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.

          Section 14.4 No Duty.  All  attorneys,  accountants,  appraisers,  and
other professional  Persons and consultants  retained by the Agents, the Issuing
Banks and the Banks shall have the right to act  exclusively  in the interest of
the Agent, the Documentation Agent, the Collateral Agents, the Issuing Banks and
the Banks and shall have no duty of disclosure, duty of loyalty,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 66

<PAGE>



duty of care, or other duty or  obligation  of any type or nature  whatsoever to
the Borrower or any of the Borrower's shareholders or any other Person.

          Section 14.5 No Fiduciary  Relationship.  The relationship between the
Borrower  and each Bank is solely that of debtor and  creditor,  and neither any
Agent,  any  Issuing  Bank  nor any  Bank has any  fiduciary  or  other  special
relationship  with the  Borrower,  and no term or  condition  of any of the Loan
Documents  shall  be  construed  so as to  deem  the  relationship  between  the
Borrower,  any  Agent,  any  Issuing  Bank or any Bank to be other  than that of
debtor and creditor.

          Section 14.6 Equitable  Relief.  The Borrower  recognizes  that in the
event the Borrower fails to pay,  perform,  observe,  or discharge any or all of
the  Obligations,  any  remedy at law may prove to be  inadequate  relief to the
Agents,  the Issuing Banks and the Banks. The Borrower  therefore agrees that if
the  Agents,  the Issuing  Banks or the Banks so  request,  shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving actual damages.

          Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of
any Agent,  any Issuing Bank or any Bank to exercise and no delay in exercising,
and no course of dealing with respect to, any right,  power,  or privilege under
this  Agreement  shall  operate  as a waiver  thereof,  nor shall any  single or
partial exercise of any right, power, or privilege under this Agreement preclude
any other or further exercise thereof or the exercise of any other right, power,
or  privilege.  The rights and remedies  provided for in this  Agreement and the
other Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.

          Section 14.8     Successors and Assigns.

                  (a) This  Agreement  shall be  binding  upon and  inure to the
          benefit of the  parties  hereto and their  respective  successors  and
          assigns.  The Borrower may not assign or transfer any of its rights or
          obligations  hereunder  without  the  prior  written  consent  of  the
          Administrative  Agent  and  all  of  the  Banks.  Any  Bank  may  sell
          participations to one or more banks or other institutions in or to all
          or a portion of its rights and  obligations  under this  Agreement and
          the other Loan  Documents  (including,  without  limitation,  all or a
          portion  of its  Commitments  and the  Loans  owing to it);  provided,
          however, that (i) such Bank's obligations under this Agreement and the
          other Loan Documents (including,  without limitation, its Commitments)
          shall remain unchanged, (ii) such Bank shall remain solely responsible
          to the Borrower for the  performance of such  obligations,  (iii) such
          Bank shall  remain the  holder of its Notes for all  purposes  of this
          Agreement,  (iv)  the  Borrower  shall  continue  to deal  solely  and
          directly  with such Bank in  connection  with such  Bank's  rights and
          obligations under this Agreement and the other Loan Documents, and (v)
          such  Bank  shall  not  sell  a  participation  that  conveys  to  the
          participant the right to vote or give or withhold  consents under this
          Agreement  or any other  Loan  Document,  other than the right to vote
          upon or consent to (A) any  increase of such Bank's  Commitments,  (B)
          any reduction of the  principal  amount of, or interest to be paid on,
          the Loans of such Bank,  (C) any  reduction of any  commitment  fee or
          other  amount  payable to such Bank under any Loan  Document,  (D) any
          postponement of any date for the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 67

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          payment of any amount  payable in respect of the Loans of such Bank or
          (E) any release of Collateral or Obligated Party.

                  (b) The  Borrower  and each of the Banks  agree  that any Bank
          (the "Assigning  Bank") may, with the  Administrative  Agent's consent
          and unless an Event of Default has occurred,  the  Borrower's  consent
          (except that no consent shall be required with respect to  assignments
          by the Banks during the first six months  after the date hereof,  each
          of the Banks agreeing to use  reasonable  efforts to keep the Borrower
          advised of any  potential  assignees),  which  consent of the Borrower
          shall not be unreasonably  withheld or delayed,  at any time assign to
          one or more Eligible Assignees all, or a proportionate part of all, of
          its rights and  obligations  under this  Agreement  and the other Loan
          Documents (including,  without limitation,  its Commitments and Loans)
          (each an "Assignee");  provided, however, that (i) any such assignment
          made within the first 120 days after the date hereof  shall be made by
          all Banks on a pro rata basis, (ii) each such assignment shall be of a
          consistent,  and not a  varying,  percentage  of all of the  assigning
          Bank's  Commitments,  rights and obligations  under this Agreement and
          the other Loan Documents, (iii) except in the case of an assignment of
          all of a Bank's rights and  obligations  under this  Agreement and the
          other Loan  Documents,  the amount of the Commitments of the assigning
          Bank being assigned pursuant to each assignment  (determined as of the
          date of the Assignment and Acceptance with respect to such assignment)
          shall in no event be less than  $5,000,000,  and (iv) the  parties  to
          each such assignment  shall execute and deliver to the  Administrative
          Agent for its  acceptance  and  recording  in the Register (as defined
          below), an Assignment and Acceptance,  together with the Notes subject
          to such assignment, and a processing and recordation fee of $2,500, to
          be paid by the Assignee.  Upon such execution,  delivery,  acceptance,
          and  recording,  from and after the effective  date  specified in each
          Assignment and Acceptance, which effective date shall be at least five
          Business Days after the execution thereof, or, if so specified in such
          Assignment  and  Acceptance,  the date of  acceptance  thereof  by the
          Administrative  Agent,  (x) the assignee  thereunder  shall be a party
          hereto as a "Bank"  and,  to the extent  that  rights and  obligations
          hereunder  have been  assigned to it pursuant to such  Assignment  and
          Acceptance,  have the rights and  obligations  of a Bank hereunder and
          under  the  Loan  Documents  and (y)  the  Bank  that  is an  assignor
          thereunder shall, to the extent that rights and obligations  hereunder
          have been assigned by it pursuant to such  Assignment and  Acceptance,
          relinquish its rights and be released from its obligations  under this
          Agreement  and  the  other  Loan  Documents  (and,  in the  case of an
          Assignment and Acceptance  covering all or the remaining  portion of a
          Bank's  rights and  obligations  under the Loan  Documents,  such Bank
          shall cease to be a party thereto).

                  (c) Any Bank  may at any  time  pledge  or  assign  all or any
          portion  of its  rights  under  this  Agreement  and  the  other  Loan
          Documents to any federal  reserve bank without notice to or consent of
          the  Borrower.   No  such  pledge  or  assignment  shall  release  the
          transferor lender from its obligations hereunder.

                  (d) By executing  and delivering an Assignment and Acceptance,
          the Bank that  is  an  assignor thereunder and the assignee thereunder
          confirm to and agree with each



AMENDED AND RESTATED CREDIT AGREEMENT - Page 68

<PAGE>



          other  and the other  parties  hereto as  follows:  (i) other  than as
          provided in such Assignment and Acceptance,  such assigning Bank makes
          no  representation  or  warranty  and assumes no  responsibility  with
          respect to any statements,  warranties,  or representations made in or
          in  connection  with the Loan  Documents or the  execution,  legality,
          validity, and enforceability,  genuineness,  sufficiency,  or value of
          the Loan  Documents  or any other  instrument  or  document  furnished
          pursuant thereto;  (ii) such assigning Bank makes no representation or
          warranty and assumes no  responsibility  with respect to the financial
          condition of the Borrower or any Obligated Party or the performance or
          observance by the Borrower or any Obligated  Party of its  obligations
          under the Loan  Documents;  (iii) such  assignee  confirms that it has
          received a copy of the other Loan  Documents,  together with copies of
          the  financial  statements  referred  to in Section 8.2 and such other
          documents and information as it has deemed appropriate to make its own
          credit  analysis  and  decision  to enter  into  such  Assignment  and
          Acceptance;   (iv)  such  assignee  will,  independently  and  without
          reliance upon the  Administrative  Agent or such assignor 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 this Agreement and the other Loan  Documents;  (v)
          such  assignee  confirms  that it is an Eligible  Assignee;  (vi) such
          assignee appoints and authorizes the Administrative Agent to take such
          action as agent on its behalf and exercise  such powers under the Loan
          Documents as are  delegated to the  Administrative  Agent by the terms
          thereof,  together  with  such  powers  as are  reasonably  incidental
          thereto;  and (vii)  such  assignee  agrees  that it will  perform  in
          accordance with their terms all of the obligations  which by the terms
          of the Loan  Documents  (including  the  Intercreditor  Agreement) are
          required to be performed by it as a Bank.

                  (e) The  Administrative  Agent shall maintain at its Principal
          Office  a copy of each  Assignment  and  Acceptance  delivered  to and
          accepted  by it and a register  for the  recordation  of the names and
          addresses of the Banks and the Commitments of, and principal amount of
          the Loans owing to, each Bank from time to time (the "Register").  The
          entries  in the  Register  shall be  conclusive  and  binding  for all
          purposes,  absent manifest error, and the Borrower, the Administrative
          Agent, the Issuing Bank and the Banks may treat each Person whose name
          is recorded in the Register as a Bank hereunder for all purposes under
          the Loan Documents.  The Register shall be available for inspection by
          the Borrower,  the Issuing Bank or any Bank at any reasonable time and
          from time to time upon reasonable prior notice.

                  (f) Upon its receipt of an Assignment and Acceptance  executed
          by an assigning Bank and assignee  representing that it is an Eligible
          Assignee,  together  with any Note  subject  to such  assignment,  the
          Administrative Agent shall, if such Assignment and Acceptance has been
          completed and is in substantially the form of Exhibit "G" hereto,  (i)
          accept such  Assignment and  Acceptance,  (ii) record the  information
          contained  therein  in the  Register,  and (iii) give  prompt  written
          notice  thereof to the  Borrower.  Within five Business Days after its
          receipt of such notice,  the Borrower,  at its expense,  shall execute
          and  deliver  to  the   Administrative   Agent  in  exchange  for  the
          surrendered  Notes new Notes to the order of such Eligible Assignee in
          an amount equal to the



AMENDED AND RESTATED CREDIT AGREEMENT - Page 69

<PAGE>



          Commitments  assumed by it pursuant to such  Assignment and Acceptance
          and, if the assigning Bank has retained a portion of its  Commitments,
          new Notes to the order of the assigning Bank in an amount equal to the
          Commitments  retained by it hereunder (each such promissory note shall
          constitute  a "Note" for  purposes  of the Loan  Documents).  Such new
          Notes shall be in an  aggregate  principal  amount of the  surrendered
          Notes,  shall be  dated  the  effective  date of such  Assignment  and
          Acceptance,  and  shall  otherwise  be in  substantially  the  form of
          Exhibit "A" hereto.

                  (g) Any  Bank  may,  in  connection  with  any  assignment  or
          participation or proposed assignment or participation pursuant to this
          Section,  disclose to the assignee or participant or proposed assignee
          or  participant,  any  information  relating  to the  Borrower  or its
          Subsidiaries furnished to such Bank by or on behalf of the Borrower or
          its  Subsidiaries,  subject,  however,  to the  provisions  of Section
          14.20.

                  (h) If the Bridge Loan is not repaid in full on or before June
          30, 1997,  each Bank and each Agent agrees to attempt to syndicate (by
          means  of  assignments  of  the  Loans)  the  Loans  made  under  this
          Agreement.

          Section 14.9 Survival. All representations and warranties made in this
Agreement  or  any  other  Loan  Document  or in  any  document,  statement,  or
certificate  furnished  in  connection  with this  Agreement  shall  survive the
execution and delivery of this  Agreement and the other Loan  Documents,  and no
investigation  by any Agents,  any Issuing Bank or any Bank or any closing shall
affect  the  representations  and  warranties  or the right of the  Agents,  any
Issuing Bank or any Bank to rely upon them. Without prejudice to the survival of
any other obligation of the Borrower hereunder,  the obligations of the Borrower
under Article V and Sections 14.1 and 14.2 shall survive  repayment of the Notes
and termination of the Commitments.

          Section 14.10 Amendments, Etc. No amendment or waiver of any provision
of this  Agreement,  the Notes, or any other Loan Document to which the Borrower
is a party, nor any consent to any departure by the Borrower therefrom, shall in
any event be  effective  unless  the same  shall be agreed  or  consented  to by
Required  Banks and the  Borrower,  and each such  waiver  or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given; provided, that no amendment,  waiver, or consent shall, unless in writing
and signed by all of the Banks and the Borrower,  do any of the  following:  (a)
increase  the  Commitments  of the Banks or subject the Banks to any  additional
obligations;  (b) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable to the Banks hereunder; (c) postpone any date fixed for
any  payment of  principal  of, or  interest  on, the Notes or any fees or other
amounts  payable  to the  Banks  hereunder;  (d)  waive  any  of the  conditions
specified in Article VIII;  (e) change the  percentage of the  Commitments or of
the aggregate  unpaid principal amount of the Notes or the number of Banks which
shall be  required  for the Banks or any of them to take any  action  under this
Agreement;  (f) change any  provision  contained in this Section  14.11;  or (g)
release any  Collateral  or  Obligated  Party.  Notwithstanding  anything to the
contrary  contained in this Section,  no amendment,  waiver, or consent shall be
made with respect to Article XIII hereof  without the prior  written  consent of
the Agent and no amendment, waiver,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 70

<PAGE>



or consent  shall be made with  respect to Article III hereof  without the prior
written consent of the Issuing Banks.

          Notwithstanding  the foregoing  provisions of this Section  14.10,  no
amendment  to  this  Agreement  or  any  Security  Document  and no  release  of
Collateral  shall be effective  unless made in compliance with provisions of the
Intercreditor Agreement.

          Section 14.11 Maximum Interest Rate. No provision of this Agreement or
of any other Loan  Document  shall  require  the  payment or the  collection  of
interest in excess of the maximum  amount  permitted by  applicable  law. If any
excess  of  interest  in such  respect  is  hereby  provided  for,  or  shall be
adjudicated  to be so provided,  in any Loan Document or otherwise in connection
with this loan  transaction,  the  provisions  of this Section  shall govern and
prevail and neither the Borrower nor the sureties,  guarantors,  successors,  or
assigns of the  Borrower  shall be  obligated  to pay the excess  amount of such
interest or any other excess sum paid for the use, forbearance,  or detention of
sums loaned pursuant hereto. In the event any Bank ever receives,  collects,  or
applies as interest  any such sum,  such amount  which would be in excess of the
maximum  amount  permitted by  applicable  law shall be applied as a payment and
reduction of the principal of the indebtedness  evidenced by the Notes;  and, if
the  principal of the Notes has been paid in full,  any  remaining  excess shall
forthwith be paid to the Borrower.  In  determining  whether or not the interest
paid or payable  exceeds the Maximum Rate, the Borrower and each Bank shall,  to
the extent  permitted by  applicable  law, (a)  characterize  any  non-principal
payment as an expense,  fee, or premium  rather  than as  interest,  (b) exclude
voluntary  prepayments  and the  effects  thereof,  and (c)  amortize,  prorate,
allocate,  and spread in equal or  unequal  parts the total  amount of  interest
throughout the entire  contemplated  term of the  indebtedness  evidenced by the
Notes so that interest for the entire term does not exceed the Maximum Rate.

          Section 14.12 Notices. All notices and other  communications  provided
for in this  Agreement  and the other Loan  Documents to which the Borrower is a
party shall be given or made by telecopy or in writing and telecopied, mailed by
certified mail return receipt requested,  or delivered to the intended recipient
at the "Address for Notices"  specified  below its name on the  signature  pages
hereof; or, as to any party at such other address as shall be designated by such
party in a notice to each other party  given in  accordance  with this  Section.
Except as otherwise provided in this Agreement, all such communications shall be
deemed to have  been  duly  given  when  transmitted  by  telecopy,  subject  to
telephone  confirmation of receipt, or when personally delivered or, in the case
of a mailed  notice,  when duly  deposited  in the mails,  in each case given or
addressed as aforesaid;  provided,  however, notices to the Administrative Agent
pursuant  to Article II and III shall not be  effective  until  received  by the
Administrative Agent.

          Section 14.13 GOVERNING LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH THE LAWS OF THE STATE OF
NEW YORK AND THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT
HAS BEEN ENTERED INTO IN NEW YORK COUNTY,  NEW YORK, AND IT SHALL BE PERFORMABLE
FOR ALL PURPOSES IN NEW YORK COUNTY,  NEW YORK.  SUBJECT TO SECTION  14.20,  ANY
ACTION OR PROCEEDING AGAINST THE BORROWER UNDER OR IN CONNECTION



AMENDED AND RESTATED CREDIT AGREEMENT - Page 71

<PAGE>



WITH ANY OF THE LOAN  DOCUMENTS  MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT IN
NEW YORK COUNTY,  NEW YORK. THE BORROWER  HEREBY  IRREVOCABLY (A) SUBMITS TO THE
NONEXCLUSIVE  JURISDICTION  OF SUCH COURTS,  AND (B) WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER  HAVE AS TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING  BROUGHT
IN ANY SUCH COURT OR THAT ANY SUCH COURT IS AN INCONVENIENT  FORUM. THE BORROWER
AGREES THAT SERVICE OF PROCESS  UPON IT MAY BE MADE BY  CERTIFIED OR  REGISTERED
MAIL,  RETURN  RECEIPT  REQUESTED,  AT ITS ADDRESS  SPECIFIED OR  DETERMINED  IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 14.13. NOTHING HEREIN OR IN ANY OF THE
OTHER LOAN DOCUMENTS  SHALL AFFECT THE RIGHT OF THE AGENTS,  THE ISSUING BANK OR
ANY BANK TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW OR SUBJECT TO
SECTION 14.20, SHALL LIMIT THE RIGHT OF THE AGENTS, ANY ISSUING BANK OR ANY BANK
TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR WITH RESPECT TO ANY OF
ITS PROPERTY IN COURTS IN OTHER  JURISDICTIONS.  ANY ACTION OR PROCEEDING BY THE
BORROWER AGAINST THE AGENTS,  ANY ISSUING BANK OR ANY BANK SHALL BE BROUGHT ONLY
IN A COURT LOCATED IN NEW YORK COUNTY, NEW YORK.

          Section 14.14  Counterparts.  This Agreement may be executed in one or
more counterparts,  each of which shall be deemed an original,  but all of which
together shall constitute one and the same instrument.

          Section 14.15 Severability.  Any provision of this Agreement held by a
court of competent  jurisdiction to be invalid or unenforceable shall not impair
or invalidate  the remainder of this  Agreement and the effect  thereof shall be
confined to the provision held to be invalid or illegal.

          Section 14.16 Headings. The headings,  captions, and arrangements used
in  this  Agreement  are  for   convenience   only  and  shall  not  affect  the
interpretation of this Agreement.

          Section  14.17  Construction.  The Borrower,  the Agents,  the Issuing
Banks and each Bank  acknowledge  that each of them has had the benefit of legal
counsel of its own choice and has been  afforded an  opportunity  to review this
Agreement  and the other Loan  Documents  with its legal  counsel  and that this
Agreement and the other Loan Documents  shall be construed as if jointly drafted
by the parties hereto.

          Section 14.18 Independence of Covenants. All covenants hereunder shall
be given  independent  effect so that if a particular action or condition is not
permitted  by any of such  covenants,  the fact that it would be permitted by an
exception to, or be otherwise  within the limitations of, another covenant shall
not avoid the  occurrence of a Default if such action is taken or such condition
exists.

          Section 14.19 Treatment of Certain Information; Confidentiality.  Each
Bank, each Agent, and each  Issuing  Bank agree (on behalf of itself and each of
its affiliates, directors,



AMENDED AND RESTATED CREDIT AGREEMENT - Page 72

<PAGE>



officers,  employees and  representatives)  to keep  confidential any non-public
information  supplied to it by Borrower pursuant to this Agreement that Borrower
identifies to such Bank,  such Agent,  each Issuing Bank (as the case may be) as
confidential at the time Borrower so supplies such information,  provided,  that
nothing  herein shall limit the  disclosure of any such  information  (i) to the
extent  required by statute,  rule,  regulation  or  judicial  process,  (ii) to
counsel for any of the Banks,  each  Issuing  Bank or each Agent,  (iii) to bank
examiners,  auditors or accountants, (iv) to the Agents, any Issuing Bank or any
other Bank,  (v) in connection  with any  litigation to which any one or more of
the Banks,  any Agent,  or any Issuing Bank is a party,  (vi) to a subsidiary or
affiliate  of  such  Person,  or  (vii)  to  any  assignee  or  participant  (or
prospective assignee or participant) so long as such assignee or participant (or
prospective  assignee  or  participant)  first  executes  and  delivers  to  the
respective  Bank  an  acknowledgement  to the  effect  that it is  bound  by the
provisions of this Section 14.20, which  acknowledgement may be included as part
of the respective  assignment or participation  agreement pursuant to which such
assignee  or  participant  acquires  an  interest  in the Loans  hereunder;  and
provided,  further,  that in no event shall any Bank,  any Issuing  Bank, or any
Agent be  obligated or required to return any  materials  furnished to it by the
Borrower.

          Section 14.20    Arbitration.

                  (a)  Arbitration.  Upon the demand of any party,  any  Dispute
          shall be resolved by binding  arbitration  (except as set forth in (e)
          below) in  accordance  with the terms of this  Agreement.  A "Dispute"
          shall mean any  action,  dispute,  claim or  controversy  of any kind,
          whether  in  contract  or tort,  statutory  or  common  law,  legal or
          equitable,  now existing or hereafter  arising  under or in connection
          with, or in any way pertaining to, any of the Loan  Documents,  or any
          past,  present or future  extensions  of credit and other  activities,
          transactions or obligations of any kind related directly or indirectly
          to any of the Loan Documents, including without limitation, any of the
          foregoing  arising in connection  with the exercise of any  self-help,
          ancillary or other remedies pursuant to any of the Loan Documents. Any
          party may by  summary  proceedings  bring an action in court to compel
          arbitration of a Dispute.  Any party who fails or refuses to submit to
          arbitration  following  a lawful  demand by any other party shall bear
          all costs and  expenses  incurred  by such other  party in  compelling
          arbitration of any Dispute.

                  (b)  Governing  Rules.   Arbitration   proceedings   shall  be
          administered by the American  Arbitration  Association ("AAA") or such
          other  administrator  as the  parties  shall  mutually  agree  upon in
          accordance  with the AAA Commercial  Arbitration  Rules.  All Disputes
          submitted  to  arbitration  shall be resolved in  accordance  with the
          Federal   Arbitration  Act  (Title  9  of  the  United  States  Code),
          notwithstanding  any conflicting choice of law provision in any of the
          Loan Documents.  The  arbitration  shall be conducted at a location in
          New York selected by the AAA or other  administrator.  If there is any
          inconsistency  between the terms hereof and any such rules,  the terms
          and  procedures  set forth  herein  shall  control.  All  statutes  of
          limitation  applicable to any Dispute  shall apply to any  arbitration
          proceeding.  All discovery  activities  shall be expressly  limited to
          matters directly relevant to the Dispute being arbitrated. Judgment



AMENDED AND RESTATED CREDIT AGREEMENT - Page 73

<PAGE>



          upon any award rendered in an arbitration  may be entered in any court
          having jurisdiction;  provided however,  that nothing contained herein
          shall be  deemed  to be a waiver  by any  party  that is a bank of the
          protections  afforded  to it under  12  U.S.C.  ss.91  or any  similar
          applicable state law.

                  (c)   No   Waiver;   Provisional   Remedies,   Self-Help   and
          Foreclosure. No provision hereof shall limit the right of any party to
          exercise  self-help  remedies such as setoff,  foreclosure  against or
          sale of any real or personal  property  collateral or security,  or to
          obtain provisional or ancillary remedies, including without limitation
          injunctive  relief,  sequestration,  attachment,  garnishment  or  the
          appointment  of a  receiver,  from a court of  competent  jurisdiction
          before,  after or during  the  pendency  of any  arbitration  or other
          proceeding.  The exercise of any such remedy shall not waive the right
          of any party to compel arbitration hereunder.

                  (d) Arbitrator  Qualifications and Powers Awards.  Arbitrators
          must be active members of the New York State Bar with expertise in the
          substantive  laws  applicable  to the subject  matter of the  Dispute.
          Arbitrators  are empowered to resolve  Disputes by summary  rulings in
          response  to motions  filed  prior to the final  arbitration  hearing.
          Arbitrators  (i) shall  resolve all  Disputes in  accordance  with the
          substantive law of the state of New York, (ii) may grant any remedy or
          relief  that a court of the  state of New  York  could  order or grant
          within the scope hereof and such  ancillary  relief as is necessary to
          make  effective  any  award,  and (iii)  shall have the power to award
          recovery of all costs and fees,  to impose  sanctions and to take such
          other actions as they deem  necessary to the same extent a judge could
          pursuant to the Federal Rules of Civil  Procedure,  the New York Rules
          of Civil  Procedure or other  applicable law. Any Dispute in which the
          amount in  controversy  is  $5,000,000  or less  shall be decided by a
          single  arbitrator  who shall  not  render  an award of  greater  than
          $5,000,000   (including  damages,   costs,  fees  and  expenses).   By
          submission to a single  arbitrator,  each party  expressly  waives any
          right or claim to recover more than  $5,000,000.  Any Dispute in which
          the  amount in  controversy  exceeds  $5,000,000  shall be  decided by
          majority vote of a panel of three arbitrators;  provided however, that
          all three  arbitrators  must actively  participate in all hearings and
          deliberations.

                  (e) Judicial  Review.  Notwithstanding  anything herein to the
          contrary,  in any  arbitration  in which  the  amount  in  controversy
          exceeds  $5,000,000,   the  arbitrators  shall  be  required  to  make
          specific,  written  findings of fact and  conclusions  of law. In such
          arbitrations (i) the arbitrators  shall not have the power to make any
          award which is not supported by substantial evidence or which is based
          on legal  error,  (ii) an award shall not be binding  upon the parties
          unless the findings of fact are supported by substantial  evidence and
          the  conclusions of law are not erroneous under the substantive law of
          the state of New York, and (iii) the parties shall have in addition to
          the grounds  referred to in the Federal  Arbitration Act for vacating,
          modifying or correcting  an award the right to judicial  review of (A)
          whether the findings of fact rendered by the arbitrators are supported
          by substantial  evidence,  and (B) whether the  conclusions of law are
          erroneous



AMENDED AND RESTATED CREDIT AGREEMENT - Page 74

<PAGE>



          under  the  substantive  law  of  the  state  of  New  York.  Judgment
          confirming  an award in such a  proceeding  may be  entered  only if a
          court  determines the award is supported by  substantial  evidence and
          not based on legal error under the substantive law of the state of New
          York.

                  (f) Miscellaneous. To the maximum extent practicable, the AAA,
          the  arbitrators  and the  parties  shall take all action  required to
          conclude any arbitration  proceedings within 180 days of the filing of
          the  Dispute  with  the  AAA.  No  arbitrator  or  other  party  to an
          arbitration proceeding may disclose the existence,  content or results
          thereof,  except for disclosures of information by a party required in
          the ordinary course of its business, by applicable law or regulations,
          or to the extent  necessary to exercise any judicial review rights set
          forth herein. If more than one agreement for arbitration by or between
          the  parties  potentially  applies  to  a  Dispute,   the  arbitration
          provisions most directly  related to the Loan Documents or the subject
          matter of the Dispute shall control.  This arbitration provision shall
          survive  termination,  amendment  or  expiration  of any  of the  Loan
          Documents or any relationship between the parties.

          Section 14.21 NO ORAL AGREEMENTS.  THIS WRITTEN AGREEMENT,  THE NOTES,
THE  OTHER  LOAN  DOCUMENTS,  AND THE  INSTRUMENTS  AND  DOCUMENTS  EXECUTED  IN
CONNECTION  HEREWITH,  REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE  CONTRADICTED BY EVIDENCE OF PRIOR,  CONTEMPORANEOUS,  OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL  AGREEMENTS  BETWEEN THE
PARTIES.

          Section 14.22 Certain Fees.  Notwithstanding anything contained herein
to the  contrary,  the Borrower may pay certain fees  (whether in cash or by the
issuance  of  warrants,  stock or other  equity)  owing  under the  Bridge  Loan
Agreement as it exists on the date hereof.



               [Remainder of this page intentionally left blank.]



AMENDED AND RESTATED CREDIT AGREEMENT - Page 75

<PAGE>



          IN  WITNESS  WHEREOF,  the  parties  hereto  have duly  executed  this
Agreement as of the day and year first above written.

BORROWER:

MAGNUM HUNTER RESOURCES, INC.
(formerly known as Magnum Petroleum, Inc.)


By:
     Gary C. Evans
     President

Address for Notices:

600 East Las Colinas Boulevard, Suite 1200
Irving, Texas   75039
Fax No.:         (214) 401-3110
Telephone No.:       (214) 401-0752

Attention:           Gary C. Evans


ADMINISTRATIVE AGENT:

BANKERS TRUST COMPANY



By
     Name:
     Title:

Addresses for Notices:

Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, New York  10006
Fax No.:         (212) 250-6314
Telephone No.:       (212) 250-2500

Attention:           James Cullen




AMENDED AND RESTATED CREDIT AGREEMENT - Page 76

<PAGE>



and

Bankers Trust Company
Two Houston Center
909 Fannin Street, Suite 3000
Houston, Texas  77010
Attention:           Richard Doleshek

DOCUMENTATION AGENT:

BANQUE PARIBAS



By:
     Barton D. Schouest
     Group Vice President

                            - and -



By:
     Michael H. Fiuzat
     Assistant Vice President

Address for Notices:

Banque Paribas
1200 Smith Street, Suite 3100
Houston, Texas   77002
Fax No.:         (713) 659-5305
Telephone No.:       (713) 659-4811

Attention:           Leah Evans-Hughes




AMENDED AND RESTATED CREDIT AGREEMENT - Page 77

<PAGE>



COLLATERAL AGENT:

FIRST UNION NATIONAL BANK OF NORTH
CAROLINA



By:
     Michael J. Kolosowsky
     Vice President

Address for Notices:
First Union Corporation of North Carolina
1001 Fannin, Suite 2255
Houston, Texas  77002
Attention:  Paul N. Riddle
Fax No.:  713/650-6354
Telephone No.:  713/650-3716

ISSUING BANK:

BANKERS TRUST COMPANY


By
     Name:
     Title:

Addresses for Notices:

Bankers Trust Company
One Bankers Trust Plaza
130 Liberty Street
New York, New York  10006
Fax No.:         (212) 250-6314
Telephone No.:       (212) 250-2500

Attention:           James Cullen

and

Bankers Trust Company
Two Houston Center
909 Fannin Street, Suite 3000
Houston, Texas  77010
Attention:           Richard Doleshek



AMENDED AND RESTATED CREDIT AGREEMENT - Page 78

<PAGE>




                                     BANKS:

                                 BANQUE PARIBAS



Commitment:                                     By:
$43,333,333.33                                       Barton D. Schouest
                                                     Group Vice President

                                     - and -





                                                By:
                                                     Michael H. Fiuzat
                                                     Assistant Vice President

                                            Address for Notices:

                                                1200 Smith Street, Suite 3100
                                                Houston, Texas   77002
                                                Fax No.:        (713) 659-5305
                                                Telephone No:   (713) 659-4811
                                                Attention:     Leah Evans-Hughes

                                            Lending Office for Base Rate Loans:

                                                1200 Smith Street, Suite 3100
                                                Houston, Texas   77002
                                                Fax No.:        (713) 659-5305
                                                Telephone No.:  (713) 659-4811
                                                Attention:     Leah Evans-Hughes

                                            Lending Office for Eurodollar Loans:

                                                1200 Smith Street, Suite 3100
                                                Houston, Texas   77002
                                                Fax No.:        (713) 659-5305
                                                Telephone No.:  (713) 659-4811
                                                Attention:     Leah Evans-Hughes





AMENDED AND RESTATED CREDIT AGREEMENT - Page 79

<PAGE>



                                               FIRST UNION NATIONAL BANK
                                               OF NORTH CAROLINA
Commitment:
$43,333,333.33

                                                By:
                                                     Michael J. Kolosowsky
                                                     Vice President

                                     Address for Notices:
                                     First Union Corporation of North Carolina
                                     1001 Fannin, Suite 2255
                                     Houston, Texas  77002
                                     Attention:  Paul N. Riddle
                                     Fax No.:  713/650-6354
                                     Telephone No.:  713/650-3716

                                     Lending Office for Base Rate Loans:
                                     First Union National Bank of North Carolina
                                     301 S. College Street
                                     Charlotte, NC  28288
                                     Fax No.:  713/650-6354
                                     Telephone No.:  713/650-1044
                                     Attention:  Debbie Blank

                                     Lending Office for Eurodollar Loans:
                                     First Union National Bank of North Carolina
                                     301 S. College Street
                                     Charlotte, NC  28288
                                     Fax No.:  713/650-6354
                                     Telephone No.:  713/650-1044
                                     Attention:  Debbie Blank





AMENDED AND RESTATED CREDIT AGREEMENT - Page 80

<PAGE>



                                      BANKERS TRUST COMPANY
Commitment:
$43,333,333.34
                                      By:
                                            Name:
                                            Title:

                                      Address for Notices:
                                      Bankers Trust Company
                                      One Bankers Trust Plaza
                                      130 Liberty Street
                                      New York, New York  10006
                                      Fax No.:            (212) 250-6314
                                      Telephone No.:      (212) 250-2500


                                      Lending Office for Base Rate Loans:
                                      Bankers Trust Company
                                      One Bankers Trust Plaza
                                      130 Liberty Street
                                      New York, New York  10006


                                      Lending Office for Eurodollar Loans:
                                      Bankers Trust Company
                                      One Bankers Trust Plaza
                                      130 Liberty Street
                                      New York, New York  10006


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AMENDED AND RESTATED CREDIT AGREEMENT - Page 81