SECOND AMENDED AND RESTATED CREDIT AGREEMENT

         THIS SECOND AMENDED AND RESTATED  CREDIT  AGREEMENT (the  "Agreement"),
dated as of June 1, 1998,  is among  MAGNUM  HUNTER  RESOURCES,  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"),  CIBC INC., a Delaware
corporation (in its individual  capacity,  "CIBC") as syndication agent (in such
capacity,  together  with its  successors  in such  capacity,  the  "Syndication
Agent"),  and PARIBAS,  a French bank acting  through its Houston Agency (in its
individual capacity, "Paribas"), as collateral agent (in such capacity, together
with  its  successors  in  such  capacity,   the  "Collateral   Agent")  and  as
documentation  agent (in such  capacity,  together  with its  successors in such
capacity, the "Documentation Agent").

                                R E C I T A L S:

         WHEREAS,  the  Borrower,  each  Bank then a party,  the  Administrative
Agent, the Documentation  Agent, and First Union National Bank of North Carolina
("First Union"),  as collateral agent and syndication  agent,  entered into that
certain  Amended and Restated  Credit  Agreement dated as of April 30, 1997 (the
"Original  Credit  Agreement")  pursuant  to  which  the  Banks  agreed  to make
revolving  credit loans available to the Borrower under the terms and provisions
stated therein; and

         WHEREAS,  the parties to the Original Credit  Agreement  entered into a
First  Amendment  to Amended  and  Restated  Credit  Agreement,  Resignation  of
Collateral Agent and Appointment of Substitute  Collateral Agent dated as of May
29, 1997 (the "First Amendment"); and

         WHEREAS,  the parties to the Original Credit Agreement and CIBC entered
into a Second  Amendment to Amended and Restated  Credit  Agreement  dated as of
September 30, 1997 (the "Second Amendment"); and

         WHEREAS,  as of October 1, 1997,  CIBC became a Bank under the Original
Credit Agreement as amended by the First Amendment; and

         WHEREAS, Bank of America National Trust and Savings Association ("BOA")
became a Bank  under the  Original  Credit  Agreement  as  amended  by the First
Amendment and the Second Amendment; and

         WHEREAS,  the parties to the Original Credit  Agreement,  as amended to
the date hereof,  entered into a Third  Amendment to Amended and Restated Credit
Agreement  dated as of December  15, 1997 and a Fourth  Amendment to Amended and
Restated Credit Agreement dated



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 1

<PAGE>



as of March 30, 1998 (together with the First Amendment,  the Second  Amendment,
and the Original Credit Agreement, the "Credit Agreement");

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

         WHEREAS, pursuant to this Agreement, Wells Fargo Bank (Texas), National
Association  and  Toronto  Dominion  (Texas),  Inc.  shall  each  become  a Bank
hereunder and BOA will no longer be a Bank or a party to 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:

SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 2

<PAGE>


                                    ARTICLE I

                                   Definitions

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

                  "Adjusted   Eurodollar  Rate"  means,  with  respect  to  each
         Eurodollar  Loan for any  Interest  Period,  a rate per annum  (rounded
         upwards, if necessary to the nearest integral multiple of the number of
         decimal  points  displayed on Telerate  Page 3750,  or any successor or
         similar  service,  or if  neither  such  Telerate  Page  3750  nor  any
         successor or similar  service is available  and such rate is determined
         using the Reference Bank, one  one-hundredth  of one percent  (1/100%),
         equal  to (i)  the  average  of the  offered  quotations  appearing  on
         Telerate  Page 3750 (or if such  Telerate  Page shall not be available,
         any   successor   or  similar   service  as  may  be  selected  by  the
         Administrative  Agent and the  Borrower) as of 11:00 a.m.,  London time
         (or as soon thereafter as  practicable),  two Eurodollar  Business Days
         prior to the  beginning of such  Interest  Period,  and (ii) if neither
         such  Telerate  Page  3750 nor any  successor  or  similar  service  is
         available,  then the  quotient  of (x) the  arithmetic  average  of the
         quotation by the Reference Bank (notified to the  Administrative  Agent
         by the  Reference  Bank) of the  rate of  interest  per  annum at which
         deposits in Dollars in immediately  available  funds are offered to the
         Reference Bank and two Eurodollar  Business Days prior to the beginning
         of such  Eurodollar  Interest  Period by prime  banks in the  interbank
         Eurodollar market as at or about 9:00 a.m.,  Houston time, for delivery
         on the first  day of such  Interest  Period,  in each case for a period
         equal to such  Interest  Period and in an amount  equal to the proposed
         Eurodollar Loan of the Reference Bank to which such Eurodollar Interest
         Period  relates,  divided by (y) the remainder of one minus the decimal
         equivalent of the applicable Reserve Requirement.

                  "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 10% or more of



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 3

<PAGE>



         any class of  voting  stock of such  Person;  or (c) 10% or more 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.

                  "Agent Letter" means the letter  agreement dated as of June 1,
         1998, among Bankers Trust and the Borrower.

                  "Amendment Letter" means the letter agreement dated as of June
         1, 1998, among Bankers Trust, CIBC, Paribas and the Borrower.

                  "Applicable   Margin"  means  the  margin  set  forth  in  the
         following grid and determined to be the applicable  percentage pursuant
         to the Borrowing  Percentage,  which Applicable  Margin shall change as
         and when the Borrowing Percentage changes:
<TABLE>
<CAPTION>
<S>                                                         <C>                      <C>    


Borrowing Percentage                                              Applicable                Applicable
                                                                  Margin for          Margin for Base
                                                          Eurodollar Loans                  Rate Loans
Greater than 75%                                                    1.50%                      0.25%
Greater than 50% but less than or equal to                          1.25%                       0%
75%
Greater than or equal to 25% but less than or                       1.00%                       0%
equal to 50%
Less than 25%                                                        .75%                       0%
========================================================  ==========================  =======================

</TABLE>

                  "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.

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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 4

<PAGE>



                  "Assignee" has the meaning assigned to it in Section 14.7(b).

                  "Assigning Bank" has the meaning assigned to it in Section 14.
                   7(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 14.7, in  substantially  the
          form of Exhibit "G" hereto,  or such other form as to which all of the
          parties hereto shall consent in writing.

                  "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.

                  "Base  Rate"  means,  for any day,  a rate per annum  (rounded
          upwards,  if necessary,  to the next 1/100 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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 5

<PAGE>



                  "Borrower  Pledge  Agreement"  means the  Second  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  Restricted  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 $65,000,000.

                  "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 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  Margin for Eurodollar and Base Rate Loans,
          the aggregate unpaid  principal  balance of the Loans then outstanding
          as a percentage of the Borrowing Base then in effect.

                  "Business Day" means (a) a day other than Saturday,  Sunday or
          a day on which commercial banks in New York and Dallas,  Texas are not
          authorized to be open or are 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  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 of one or more of
          the following  events:  (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,  become the Beneficial
          Owners of capital stock of the



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 6

<PAGE>



          Borrower through a purchase,  merger or other acquisition  transaction
          (in one  transaction or a series of related  transactions),  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,
          (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
          Restricted  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),  or (d) during any
          calendar year period,  individuals who at the beginning of such period
          constituted the board of directors of the Borrower  (together with any
          new  directors  whose  election to such board of  directors,  or whose
          nomination  for  election by the  stockholders  of the  Borrower,  was
          approved  by a vote of 66-2/3% of the  directors  then still in office
          who were either  directors  at the  beginning  of such period or whose
          election or nomination for election was previously so approved)  cease
          for any reason to  constitute  a majority of the board of directors of
          the Borrower then in office.

                  "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.

                  "Compliance  Certificate"  means a  certificate  of the  chief
          financial officer or chief accounting 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 14.7.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 7

<PAGE>



                  "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 and the
          Restricted Subsidiaries plus Unused Availability.

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

                  "Consolidated   EBITDA"  means,   for  the  Borrower  and  the
          Restricted  Subsidiaries on a consolidated  basis, with respect to any
          period for which a  determination  is to be made, the sum of (i) gross
          profit (revenues less cost of sales),  minus (ii) operating  expenses,
          minus (iii) general and administrative expenses, plus (iv) cash equity
          earnings  of any  unconsolidated  Subsidiary  of the  Borrower  or any
          partnership,  joint  venture or entity in which the Borrower or any of
          its Subsidiaries has an equity interest, plus (v) gains on the sale or
          other dispositions of assets,  plus (vi) interest,  dividends or other
          income, all of (i) through (vi) as determined in accordance with GAAP.

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

                  "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
          and the Restricted  Subsidiaries,  plus, if applicable,  the amount of
          any cumulative full-cost ceiling test write-downs.

                  "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  monetary  or
          financial  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 8

<PAGE>



          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.

                  "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 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, 1998.

                  "Dissenting Bank" has the meaning assigned to it in Section 2.
          8(b) 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,  approved  by  Borrower  which  approval  shall not 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 9

<PAGE>



          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,  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,  in each case as in  effect  from time to
          time.

                  "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" shall mean, with respect to each Eurodollar
          Loan for any  Eurodollar  Interest  Period,  a rate per annum (rounded
          upwards, if necessary,  to the nearest integral multiple of the number
          of decimal points displayed on Telerate Page 3750, or any successor or
          similar  service,  or if  neither  such  Telerate  Page  3750  nor any
          successor or similar  service is available and such rate is determined
          using the Reference Bank, one one-hundredth of one percent  (1/100%)),
          equal  to (i) the  average  of the  offered  quotations  appearing  on
          Telerate  Page 3750 (or if such  Telerate Page shall not be available,
          any   successor  or  similar   service  as  may  be  selected  by  the
          Administrative  Agent and the Borrower) as of 11:00 a.m.,  London time
          (or as soon thereafter as practicable),  two Eurodollar  Business Days
          prior to the beginning of such Eurodollar Interest Period, and (ii) if
          neither such Telerate  Page 3750 nor any successor or similar  service
          is available, then the



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 10

<PAGE>



          quotient  of  (x)  the  arithmetic  average  of the  quotation  by the
          Reference Bank (notified to the Administrative  Agent by the Reference
          Bank) of the rate of interest  per annum at which  deposits in Dollars
          in immediately  available  funds are offered to the Reference Bank two
          Eurodollar  Business  Days prior to the  beginning of such  Eurodollar
          Interest Period by prime banks in the interbank  Eurodollar  market as
          at or about 9:00 a.m.,  Houston time, for delivery on the first day of
          such Eurodollar  Interest  Period,  in each case for a period equal to
          such Eurodollar Interest Period and in an amount equal to the proposed
          Eurodollar  Loan  of such  Reference  Bank to  which  such  Eurodollar
          Interest Period relates, divided by (y) the remainder of one (1) minus
          the decimal equivalent of the applicable Reserve Requirement.

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

                  "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, on a consolidated  basis for the Borrower
          and the  Restricted  Subsidiaries,  as of any  date  of  determination
          (without duplication): (a) all obligations for borrowed money, (b) all
          obligations  evidenced by bonds, notes,  debentures,  or other similar
          instruments, (c) all obligations to pay the deferred purchase price of
          property or  services,  except trade  accounts  payable of such Person
          arising in the  ordinary  course of  business,  (d) all Capital  Lease
          Obligations,  (e)  all  obligations  secured  by a  Lien  existing  on
          property  owned  by the  Borrower  and  the  Restricted  Subsidiaries,
          whether or not the  obligations  secured  thereby have been assumed by
          the Borrower or are non-recourse to the credit of such Person, (f) all
          Contingent  Liabilities,  (g) all reimbursement  obligations  (whether
          contingent  or  otherwise)  in respect of letters of credit,  bankers'
          acceptances, surety or other bonds and similar instruments and (h) all
          Swap  Obligations  to the extent secured by cash deposited as a result
          of margin calls.  Funded Debt shall not include any obligations (other
          than those  described in subsection (h) above)  incurred in connection
          with Swap Obligations.

                  "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.  In the
          event any change in GAAP after the date hereof would materially affect
          the  calculation of the financial  covenants  contained in Article XI,
          the Borrower and the Required Banks agree to enter into good faith



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 11

<PAGE>



          negotiations  for an agreement to revise such  financial  covenants or
          the  definitions  of terms  used  therein  to take into  account  such
          changes in GAAP;  provided,  however,  that until the Borrower and the
          Required  Banks have entered into such an  agreement,  such  financial
          calculations  shall continue to be made in accordance  with GAAP as in
          effect immediately prior to such change.

                  "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 Restricted
          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 as a
          hazardous  substance under any Environmental Law,  including,  without
          limitation, asbestos, petroleum, and polychlorinated biphenyls.

                  "Hedge  Agreements"  shall have the  meaning  assigned to such
          term in Section 10.14.

                  "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.

                  "Indenture"  means that certain  Indenture dated as of May 29,
          1997,  executed by and among the Borrower,  the  Guarantors  and First
          Union  National  Bank of  North  Carolina,  as  trustee,  as  amended,
          modified or supplemented from time to time.

                  "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)  of Borrower and its  Restricted  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 12

<PAGE>



          numerically  corresponding  day in the first,  second,  third,  or, if
          available from all of the Banks,  the sixth or twelfth  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; and (d) 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.

                  "Knowledge" means either (a) actual knowledge of a responsible
          officer of the Borrower or a Restricted  Subsidiary of the Borrower or
          employee  of the  Borrower or a  Restricted  Subsidiary  charged  with
          responsibility for the matter at issue or in question or (b) knowledge
          that a prudent  responsible  officer of the  Borrower or a  Restricted
          Subsidiary of the Borrower or employee of the Borrower or a Restricted
          Subsidiary  charged with  responsibility for the matter at issue or in
          question could be expected to discover or otherwise become aware of in
          the  course  of  conducting   the   Borrower's   or  such   Restricted
          Subsidiary's business.

                  "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 or any  Restricted
          Subsidiary pursuant to Article III.

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




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 13

<PAGE>



                  "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;  provided, however, that a negative pledge is not a
          Lien for purposes of this Agreement or the other Loan Documents.

                  "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 totaling
          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  totaling  at least  75% of the
          amount of the Borrowing Base.

                  "Marketing  Debt" means Debt of the  Borrower in an amount not
          to exceed $4,000,000,  which Debt consists of the Borrower's  guaranty
          of  Marketing   LLC's  credit   facility.   Marketing  Debt  shall  be
          characterized   as  Debt  of  the  Borrower  solely  for  purposes  of
          calculating the Borrower's Debt to Capitalization  Ratio under Section
          11.3 hereof.

                  "Marketing LLC" means the limited  liability company formed by
          the Borrower or one of its  Subsidiaries  and NGTS that assumed all of
          NGTS's natural gas marketing operations.

                  "Marketing Note" means, collectively, one or more promissory 
          notes in the amount of $2,000,000 issued by the Borrower and payable
          to NGTS, which promissory notes shall be payable in cash or common 
          stock of the Borrower, at the sole option of Borrower.  The



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 14

<PAGE>



          amount  of the  Marketing  Note  shall not be  characterized  as Debt,
          including   for  purposes  of  computing   the   Borrower's   Debt  to
          Capitalization  Ratio  under  Section  11.3  hereof,  so  long  as the
          Marketing  Note is  payable,  at the sole option of the  Borrower,  in
          common stock of the Borrower.

                  "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 Restricted 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.

                  "Multi-employer  Plan" means a Multi-employer  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.

                  "NGTS" means Natural Gas Transmission Services, Inc.

                  "Net Cash Proceeds"  means in connection with (a) any issuance
          by the  Borrower or any of its  Restricted  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(d) 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.



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 15

<PAGE>



                  "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,  now  existing  or  hereafter
          arising,  whether  direct,   indirect,   related,  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.

                  "Original Closing Date" means the date on which the closing of
          the loan  transactions  contemplated by the Original Credit  Agreement
          occurred.

                  "Original Credit Agreement" is defined in the recitals hereto.

                  "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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 16

<PAGE>



                  "Permitted Investment in Marketing LLC" means an investment by
          the Borrower in Marketing LLC, in an amount not to exceed  $4,500,000,
          which investment consists of (a) approximately  $2,500,000 in cash and
          (b) the Marketing Note.

                  "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.

                  "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.

                  "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.

                  "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, 1998.

                  "Reference Bank" means Bankers Trust.

                  "Register" has the meaning assigned to it in Section 14.7(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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 17

<PAGE>



                  "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 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.

                  "Restricted Subsidiary" means each Subsidiary other than the
          Unrestricted Subsidiaries.

                  "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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 18

<PAGE>



          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.

                  "Senior  Unsecured  Debt" means up to  $140,000,000  of senior
          unsecured  Debt  issued by the  Borrower  pursuant to the terms of the
          Indenture upon the terms and conditions set forth therein.

                  "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 Second Amended and
          Restated Guaranty Agreement of the Restricted Subsidiaries 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 "F"
          hereto, as the same may be amended, supplemented, or modified.

                  "Subsidiary  Pledge  Agreement"  means the Second  Amended and
          Restated Pledge  Agreement of the Restricted  Subsidiaries 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 "E"
          hereto, as the same may be amended, supplemented, or modified.

                  "Swap Obligations" shall mean, with respect to any Person, (a)
          all  liabilities of such Person under  interest rate swap  agreements,
          interest rate cap agreements and interest rate collar agreements,  and
          all other  agreements or arrangements  designed to protect such Person
          against fluctuations in interest rates or currency exchange rates, and
          (b) all  liabilities of such Person under commodity  hedge,  commodity
          swap, exchange, forward, future, collar or cap agreements, fixed price
          agreements  and all  other  agreements  or  arrangements  designed  to
          protect such Person against fluctuations in commodity prices.

                  "Termination Date" means 12:00 P.M. New York, New York time on
          April 30, 2003, or such earlier date and time on which the Commitments
          terminate as provided in this Agreement.

                  "Trade  Guarantees"  means  Contingent  Liabilities in lieu of
          letters of credit  issued on behalf of the Marketing LLC and for which
          the Borrower or one of its Subsidiaries are severally,  or jointly and
          severally with one or more other Persons, or both, liable, which Trade
          Guarantees  shall not exceed an  aggregate of  $25,000,000.  Joint and
          several Trade Guarantees  shall be subject to written  indemnification
          agreements, in form and substance and from Persons satisfactory to the
          Agents,  in their sole  discretion,  the  effect of which  shall be to
          reduce the  liability of the Borrower to not more than a percentage of
          the joint and several  guarantee  equal to the Borrower's then current
          ownership  interest in Marketing LLC. Trade Guarantees will be treated
          as Debt solely for the purpose of computing the Borrower's



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 19

<PAGE>



          Debt to Capitalization  Ratio only to the extent such Trade Guarantees
          exceed   $15,000,000,   and  solely  for  purposes  of  computing  the
          Borrower's Debt to Capitalization Ratio under Section 11.3 hereof, the
          amount of joint and several Trade Guarantees that are characterized as
          Debt in  calculating  such ratio shall be reduced by giving  effect to
          the aforementioned written indemnification agreements. Notwithstanding
          the foregoing, the Majority Banks shall at all times reserve the right
          to include the entire amount of joint and several Trade Guarantees, or
          any portion  thereof,  as Debt in computing  the ratio,  based on such
          factors as the Majority Banks may from time to time deem material,  in
          their discretion;  provided,  however,  that an Agent on behalf of the
          Majority Banks must give the Borrower  written notice at least 90 days
          prior to the end of a fiscal  quarter in order for any amount of joint
          and  several  Trade  Guarantees  in excess of the  Borrower's  and its
          Subsidiaries' ratable share of such joint and several Trade Guarantees
          to  be  included  as  Debt  in  computing  the   Borrower's   Debt  to
          Capitalization Ratio for such fiscal quarter.

                  "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.

                  "Unrestricted   Subsidiaries"   means   (a)   Hunter   Butcher
          International  Limited Liability Company and (b) any future Subsidiary
          formed or acquired by the Borrower  that is designated by the board of
          directors of the  Borrower as an  Unrestricted  Subsidiary;  provided,
          however,  that no Subsidiary  shall be  designated as an  Unrestricted
          Subsidiary  if (i) a Default or Event of Default has  occurred  and is
          continuing, (ii) such Subsidiary's assets are pledged to the Agent and
          the Banks under this Agreement or any other Loan Document,  (iii) such
          Subsidiary's Oil and Gas Properties are included in the calculation of
          the Borrowing  Base, (iv) the creation or formation of such Subsidiary
          would not otherwise be permitted under Section 10.3 or 10.5 hereof, or
          (v) the creation, existence, or formation of such Subsidiary would not
          be permitted  under any other material  contract or agreement to which
          the Borrower is a party.

                  "Unused  Availability" means an amount equal to the difference
          between  the  Borrowing  Base  and (a)  outstanding  Loans,  plus  (b)
          outstanding Letter of Credit Liabilities.

          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 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.




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<PAGE>



                                   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:

                  (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 each
          third month during such Interest Period;



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<PAGE>



                  (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 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 equal to the
actual  daily  unused  portion  of  the  amount   available  under  such  Bank's
Commitment,  multiplied by the  percentage  set forth in the following  grid and
determined to be the applicable  percentage pursuant to the Borrowing Percentage
(which percentage shall change as and when the Borrowing Percentage changes) for
the period from and  including  the date of this  Agreement to and including the
Termination Date:


Borrowing Percentage                        Applicable Commitment Fee Percentage
Greater than or equal to 50%                                   .375%
Less than 50%                                                  .250%

The  commitment  fee shall be calculated  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  and in  integral  multiples  of  $500,000  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). Accrued and



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 22

<PAGE>



unpaid interest on the principal amount so prepaid will be due concurrently with
any such  prepayment.  The  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  $65,000,000  and  shall  be
          redetermined  from time to time as provided herein.  In addition,  the
          Borrowing Base shall be  redetermined  semiannually as provided below.
          Upon delivery of the engineering  reserve  evaluation reports required
          by subsection  9.1(j)  (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 or chief  accounting  officer of Borrower that, to the best of
          such officer's Knowledge,  (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 30
          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. For any redetermination of the Borrowing Base that results in an
          increase of the Borrowing Base,  approval of all of the Banks shall be
          required.  For  any  other  redeterminations  of the  Borrowing  Base,
          approval of the Majority  Banks shall be required.  The Borrowing Base
          established  pursuant to this subsection  2.8(a) shall be effective as
          of the date the Borrower is notified in writing by the  Administrative
          Agent of the requisite Bank approval.  In the event that any Bank does
          not approve a proposed  redetermination of the Borrowing Base, but the
          Required Banks do (each non-approving Bank in such case is hereinafter
          referred to as a "Dissenting  Bank"),  the Banks agree to maintain the
          Borrowing Base in effect immediately prior to the delivery of the most
          recent Engineering Reports until the earlier of: (a) the date on which
          the Borrower shall notify the  Administrative  Agent in writing of its
          willingness  to  accept  the  Borrowing  Base  as  determined  by  the
          Dissenting  Bank(s),  if  applicable,  (b) the date on which  Eligible
          Assignee or Assignees shall become party to this Agreement pursuant to
          Section 2.8(c) or (c) in cases of proposed decreases but not increases
          of the Borrowing Base, 75 days after the Borrower has been notified in
          writing of  Dissenting  Bank(s)  and neither of (a) or (b) above shall
          have occurred.  The new Borrowing Base shall be effective concurrently
          with the earlier to occur of (a), (b) or, if applicable, (c) above and
          shall remain in effect until it is subsequently  redetermined pursuant
          to this subsection 2.8(a) or subsection 2.8(b).



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 23

<PAGE>



                  (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)
          Majority  Banks. To request a special  determination  of the Borrowing
          Base, the 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 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.

                  (c) The  Administrative  Agent or the Borrower  may, but shall
          not be required to,  replace any  Dissenting  Bank(s) with an Eligible
          Assignee or Eligible  Assignees  within 75 days of the Borrower  being
          notified by the Administrative  Agent of the Dissenting Bank(s).  Upon
          payment to the  Dissenting  Bank(s) of all of (its)  (their) Loans and
          execution  and  delivery by the  Eligible  Assignee or Assignees of an
          Assignment and Acceptance, the Dissenting Bank(s) shall no longer be a
          Bank hereunder or have any Commitment or obligations to the Borrower.


                                   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 date that is 30 days  prior to 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 may be issued  for the  account of or used by the
Borrower or any Restricted Subsidiary,  shall have an expiration date not beyond
10 days prior to 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  as such  Issuing Bank may
require (collectively, the "L/C Documents").

          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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 24

<PAGE>



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 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 three  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 in the form of Exhibit C hereto  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).  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
Noon, 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  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 Noon,  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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 25

<PAGE>



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 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  Fees.  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  quarterly  in  arrears  on each
Quarterly Payment Date, 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  remains  outstanding,  based on a 360 day year, as applicable,
and the actual number of days elapsed,  or (ii) $350.  The Borrower shall pay to
the  Issuing  Bank for its own  account a  nonrefundable  Letter of Credit  fee,
payable  quarterly  in arrears,  in an amount equal to the lesser of (i) $500 or
(ii) 0.05% per annum of the face amount of such Letter of Credit, for the period
during which such Letter of Credit remains outstanding, based on a 360 day year,
as  applicable,  and the  actual  number of days  elapsed.  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 by such Issuing
Bank in issuing,  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;




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 26

<PAGE>



                  (e)  Payment  by the  Issuing  Bank under any Letter of Credit
          against  presentation  of a draft or  other  document  which  does not
          substantially 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.

          Notwithstanding  anything  to the  contrary  in  this  Agreement,  the
Borrower  shall not be obligated to reimburse  the Issuing Bank for any wrongful
payment or disbursement made by the Issuing Bank under the Letter of Credit as a
result of acts or omissions constituting gross negligence or willful misconduct,
as determined by a court of competent  jurisdiction,  on the part of the Issuing
Bank or any of its officers, directors, employees or agents.

          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, 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 27

<PAGE>



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  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 the lesser of (i)
the unused amount of the  Commitment or (ii) $500,000 and in integral  multiples
of $100,000.  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 12:00
Noon,  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 either
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 or wiring the funds to an account as designated by the
Borrower in writing.  All notices  under this Section shall be  irrevocable  and
shall be given not later than 12:00 Noon,  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,(ii)  except for  Conversions  into Base Rate Loans,  no Conversions  for
interest periods in excess of three months



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 28

<PAGE>



shall be made while a Default has occurred and is  continuing,  and (iii) except
for  Conversions  into Base Rate Loans,  no  Conversions  shall be made while an
Event of 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
one-month  Eurodollar  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 Noon, 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  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 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) the Borrower  shall be liable for any  compensation  due under
Section 5.5 with respect to  Eurodollar  Loans which are not prepaid on the last
day of the  Interest  Period  applicable  to such  Loans  and (b)  each  partial
prepayment  shall  be in the  principal  amount  of  $500,000  and  in  integral
multiples of $100,000.  All notices under this Section 4.4 shall be  irrevocable
and shall be given not later than 12:00 Noon,  New York,  New York,  time on the
day which is not less than one Business Day prior to such prepayment.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 29

<PAGE>



          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 according to the most recent Engineering Reports delivered to
          the Banks;  provided,  however,  that if the Majority  Banks,  for any
          reason,  disagree with the proposed  Borrowing Base value certified by
          the  Borrower,   then  the  Majority  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
          $2,000,000, 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 Event of Default has  occurred and is
          continuing, any remaining proceeds may be retained by the Borrower.

                  (c) 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  received from such  disposition  shall on the first Business
          Day after  receipt,  be applied to the  outstanding  Loans;  provided,
          however, that if no Borrowing Base



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 30

<PAGE>



          Deficiency shall exist as a result of such disposition and no Event of
          Default has occurred and is  continuing,  the Borrower may retain such
          funds.

                  (d)  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 semi-annual  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.

                  (e) If the Senior  Unsecured Debt shall at any time become due
          and  payable  prior to its stated  maturity as a result of a Change in
          Control,  then, at the option of the Required  Banks,  the Commitments
          shall be  canceled  and the  Borrower  shall  immediately  prepay  the
          outstanding Loans in full,  together with accrued interest to the date
          of such prepayment.

          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  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 Agents,  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. 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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 31

<PAGE>



each payment of commitment fee under Section 2.6 and letter of credit fees under
Section 3.5 (other than the 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  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 32

<PAGE>



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
and letter of credit  fees 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 or 366 days,
as  applicable,  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  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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 33

<PAGE>



          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 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:




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 34

<PAGE>



                  (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  cannot be 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.  Once such  limitations  are no  longer  relevant,  the Banks  agree,
subject  to the  terms  and  conditions  of this  Agreement,  to  promptly  make
Eurodollar Loans available to the Borrower.

          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 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 35

<PAGE>



          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.

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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 36

<PAGE>



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 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.

          Section 5.8 Replacement of Bank on Account of Taxes,  Increased Costs,
Eurodollar Lending Unlawful, Reserve Requirements, Certain Dissents, Etc. If (i)
the obligation of any Bank to make Eurodollar Loans has been suspended  pursuant
to the terms hereof,  or (ii) any Bank has demanded  compensation  under Section
4.9 or  Article V hereof,  then the  Borrower  shall  have the  right,  with the
assistance of the Administrative Agent, to seek and substitute one or more banks
which is an  Eligible  Assignee to assume all of the rights and  obligations  of
such Bank under the Loan Documents;  provided that any such assumption  shall be
made pursuant to the terms and conditions of Section 14.7 hereof.




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<PAGE>



                                   ARTICLE VI

                                    Security

          Section  6.1  Collateral.  To secure  full and  complete  payment  and
performance of the Obligations, the Borrower has executed and delivered or shall
execute  and  deliver or cause to be  executed  and has  granted or caused to be
granted or shall  grant or cause to be granted to the  Collateral  Agent for the
benefit  of  itself,  the other  Agents,  the  Issuing  Banks and the  Banks,  a
perfected  first  priority  Lien on  substantially  all of the  Property  of the
Borrower and its Restricted 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 Restricted  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,  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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 38

<PAGE>



          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
          Restricted  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  Restricted  Subsidiaries,  whether  now  owned  or
          hereafter acquired, and all products and proceeds thereof.

                  (g) All of the  outstanding  capital  stock of the  Restricted
          Subsidiaries,  whether  now  owned  or  hereafter  acquired,  and  all
          products  and  proceeds  thereof.  The  Collateral  Agent shall retain
          possession  of the  certificates  evidencing  the capital stock of the
          Restricted  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.

          Section  6.2  Security   Documents.   Borrower  and  each   Restricted
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.  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 Restricted 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.  After the  Original
Closing  Date,  Borrower  obtained and  delivered,  or caused to be obtained and
delivered, to the Collateral Agent (a) at the Collateral Agent's option, landman
title reviews,  title opinions,  reports and/or run sheets 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 had good and defensible
title to such  Mortgaged  Properties  including all  production of  Hydrocarbons
therefrom,  and (ii) the Security  Documents  created 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 39

<PAGE>



Banks and the Banks as to the  enforceability and form of the mortgages filed in
the States of New Mexico and Oklahoma.

          Section 6.4 Subsidiary Guaranty Agreement.  Each Restricted Subsidiary
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  Loans.  The  obligation  of each Bank to make its
initial  Loan under the  Original  Credit  Agreement  and of any Issuing Bank to
issue the initial  Letter of Credit  under the  Original  Credit  Agreement  was
subject,  among other things, to the condition precedent that the Administrative
Agent  received  on or before the day of such Loan or issuance of such Letter of
Credit  all  of  the  following,  in  form  and  substance  satisfactory  to the
Administrative Agent:

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

                  (b) 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;



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 40

<PAGE>



                  (c) 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;

                  (d) 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;

                  (e) 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;

                  (f) Form U-1 Purpose  Statement.  A Form U-1 Purpose Statement
          duly completed and executed by the Borrower;

                  (g) Title.  Evidence satisfactory in form and substance to the
          Administrative   Agent  and  the  Banks  that  the  Borrower  and  its
          Restricted  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;

                  (h) 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,
          satisfactory to the Banks, in their sole discretion;

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

                  (j) Engineering Reports.  Engineering Reports for all existing
          reserves  owned by the Borrower and for the  reserve(s) to be acquired
          by the Borrower 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

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

          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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 41

<PAGE>



          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 not be false or misleading in any material  respect 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.

          Section 7.3 Additional Conditions. The obligation of each Bank to make
the initial  Loan under this  Agreement or of any Issuing Bank to issue a Letter
of Credit under this Agreement is subject to the additional  condition precedent
that the  Administrative  Agent shall have received each of the following,  each
dated  (unless  otherwise  indicated)  the date  hereof,  if 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 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) Governmental Certificates. Certificates of 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,  each dated  within 10 days  prior to the date of the  initial
          Loan or issuance of a Letter of Credit under this Agreement;

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

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




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 42

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

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

                  (h)Fee Letters.  The Agents Letter and the Amendment 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;

                  (i) 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 and its
          Restricted  Subsidiaries  taken  as a  whole  or in  its  consolidated
          assets,  liabilities  and  properties  and there  shall be no material
          threatened or pending litigation  adversely affecting its consolidated
          property and no material  adverse  change  shall have  occurred in the
          consolidated financial condition,  business,  operations, or prospects
          of the Borrower and its Restricted Subsidiaries;

                  (j) 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;

                  (k)  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 7.4 Continued  Effectiveness  of Prior Credit  Agreement.  The
Prior Credit  Agreement  shall remain  effective  until the date that all of the
conditions  precedent  set  forth in  Section  7.2 and  Section  7.3  have  been
satisfied, which date is anticipated to be June 29, 1998.

                                  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  Restricted
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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 43

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failure to so qualify  would have a  material  adverse  effect on the  business,
condition (financial or otherwise),  operations, prospects, or properties of the
Borrower and the Restricted  Subsidiaries taken as a whole. 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.

          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, 1997. Such
financial  statements 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.  To the
Borrower's  Knowledge,  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.  To the  Borrower's  Knowledge,  there has been no material  adverse
change  in  the  business,  condition  (financial  or  otherwise),   operations,
prospects,  or properties of the Borrower and its Subsidiaries  taken as a whole
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 and each  Guarantor of the Loan  Documents to which
the Borrower or such Guarantor 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 such  Person 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 such  Person,  (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or decree of
any  Governmental  Authority or arbitrator,  or (iii) any material  agreement or
instrument  to which  such  Person  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 any
such Person.

          Section  8.4  Operation  of  Business.  The  Borrower  and each of its
Restricted  Subsidiaries  possess all licenses,  permits,  franchises,  patents,
copyrights, trademarks, and trade names, or rights thereto, necessary to conduct
their  respective  businesses  substantially  as now  conducted and as presently
proposed  to  be  conducted,   and  none  of  the  Borrower  or  the  Restricted
Subsidiaries  are in  violation  of any  material  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,   to  the  Borrower's   Knowledge,   there  is  no  action,   suit,
investigation,  or  proceeding  before  or  by  any  Governmental  Authority  or
arbitrator  pending,  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 and its



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Subsidiaries  (taken  as a whole)  or the  ability  of the  Borrower  to pay and
perform the Obligations.  To the Borrower's Knowledge,  there are no outstanding
judgments against the Borrower or any Subsidiary.

          Section  8.6  Rights  in  Properties;  Liens.  The  Borrower  and each
Restricted  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  statements  described  in  Section  8.2 other than  imperfections  or
burdens that do not in the aggregate  materially detract from the value thereof,
and none of the properties,  assets,  or leasehold  interests of the Borrower or
any Restricted Subsidiary is subject to any Lien, except the Permitted Liens.

          Section 8.7 Enforceability.  This Agreement constitutes, and the other
Loan Documents,  when delivered,  shall constitute the legal, valid, and binding
obligations  of the  Borrower  and  each  Guarantor,  enforceable  against  such
Persons,  respectively,  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 or
any  Guarantor  of this  Agreement  and the other  Loan  Documents  to which the
Borrower or such  Guarantor,  respectively,  is or may become a party or for the
validity  or  enforceability  thereof  except  where the  failure to obtain such
authorization,  approval or consent would not have a material  adverse effect on
the Borrower and its Subsidiaries taken as a whole.

          Section 8.9 Debt. The Borrower and its Restricted Subsidiaries have no
Debt, except (i) Permitted Debt provided for in Section 10.1 hereof, and (ii) 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, except such taxes or charges
which are being contested in good faith by appropriate proceedings and for which
adequate  reserves  have been set aside in  accordance  with GAAP.  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 45

<PAGE>



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.  To the  Borrower's  Knowledge,  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.  To the  Borrower's  Knowledge,
neither the Borrower nor any ERISA  Affiliate  has incurred any liability to the
PBGC under ERISA.

          Section 8.13 Disclosure.  To the Borrower's  Knowledge,  no statement,
information,  report,  representation,  or warranty  made by the Borrower or any
Guarantor 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 is false or misleading in any
material  respect  or omits to state any  material  fact  necessary  to make the
statements herein or therein not misleading in any material respect. There is no
fact known to the Borrower or any Guarantor which has a material adverse effect,
or which could reasonably be expected to have a material adverse effect,  on the
business,  condition  (financial  or  otherwise),   operations,   prospects,  or
properties  of the Borrower and its  Subsidiaries  taken as a whole 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 Unrestricted Subsidiary. All of the outstanding capital stock of
each  Restricted  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
material  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 and its Subsidiaries (taken as a whole), or the ability of the Borrower
or any Guarantor to pay and perform its obligations  under the Loan Documents to
which it is a party.  Neither the Borrower nor any  Restricted  Subsidiary is in
default in any respect in the performance,  observance, or fulfillment of any of
the obligations, covenants, or conditions contained in any material agreement or
instrument material to its business to which it is a party.



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          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 
Subsidiary 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.

          Section 8.20  Environmental Matters.  Except as disclosed on Schedule
 8.20 hereto:
  
                  (a) To the Borrower's  Knowledge,  except where the failure to
          obtain or comply could not  reasonably  be expected to have a material
          adverse effect on the consolidated  business condition of the Borrower
          and its Subsidiaries taken as a whole, 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) To the Borrower's  Knowledge,  except where the failure to
          obtain or comply could not  reasonably  be expected to have a material
          adverse effect on the consolidated  business condition of the Borrower
          and  its  Subsidiaries  taken  as  a  whole,  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) To the Borrower's  Knowledge,  except where the failure to
          obtain or comply could not  reasonably  be expected to have a material
          adverse effect on the consolidated  business condition of the Borrower
          and its  Subsidiaries  taken as a whole, 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 47

<PAGE>



          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) To the Borrower's Knowledge,  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) To the Borrower's  Knowledge,  except where the failure to
          obtain or comply could not  reasonably  be expected to have a material
          adverse effect on the consolidated  business condition of the Borrower
          and its  Subsidiaries  taken as a whole,  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 law. To
          the Borrower's  Knowledge,  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.

          Section  8.21  Y2K  Matters.   To  the   Borrower's   Knowledge,   any
reprogramming  required to permit the proper  functioning,  in and following the
year 2000, of (i) the Borrower's computer systems and (ii) equipment  containing
embedded microchips  (including systems and equipment supplied by others or with
which  Borrower's  systems  interface)  and the testing of all such  systems and
equipment, as so reprogrammed, will be completed by January 1, 1999. The cost to
the Borrower of such reprogramming and testing and of the reasonably foreseeable
consequences  of  year  2000 to the  Borrower  (including,  without  limitation,
reprogramming  errors and the failure of others'  systems or equipment) will not
result in a Default or have any material adverse effect.  Except for such of the
reprogramming  referred to in the preceding  sentence as may be  necessary,  the
computer and management information systems of the Borrower and its Subsidiaries
are and, with ordinary



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 48

<PAGE>



course upgrading and maintenance,  will continue to be, sufficient to permit the
Borrower to conduct its business without material adverse effect.

                                   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 the
Administrative Agent for distribution to each Issuing Bank and each Bank:

                  (a) Annual Financial Statements.  As soon as available, and in
          any event  within  105 days after the end of each  fiscal  year of the
          Borrower,  beginning with the fiscal year ending  December 31, 1998, 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 nationally
          recognized standing selected by the Borrower,  to the effect that such
          report has been prepared in accordance with GAAP;

                  (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,  beginning  with the fiscal  quarter
          ending June 30, 1998, 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
          officer  or chief  accounting  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.  Within 15 days after the delivery
          of the  financial  statements  referred  to in  subsection  9.1(a) and
          subsection  9.1(b), a certificate of the chief  accounting  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 49

<PAGE>



          taken with respect thereto, and (ii) showing in reasonable detail the
          calculations demonstrating compliance with Article XI;

                  (d)  Notice  of  Litigation.  Promptly  upon  learning  of the
          occurrence of any commencement thereof,  notice of actions, suits, and
          proceedings before any Governmental  Authority or arbitrator affecting
          the Borrower or any Subsidiary  which, in the opinion of the Borrower,
          if  determined  adversely  to the Borrower or such  Subsidiary,  could
          reasonably  be  expected  to have a  material  adverse  effect  on the
          business, condition (financial or otherwise),  operations,  prospects,
          or properties of the Borrower and its Subsidiaries taken as a whole;

                  (e) Notice of Default.  Promptly  upon the Borrower  obtaining
          Knowledge of the  occurrence of any 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;

                  (f) ERISA Reports. Promptly after the filing or promptly after
          the Borrower obtaining Knowledge of the 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 10 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 or the chief  accounting  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;

                  (g) Notice of Material Adverse Change. As soon as possible and
          in any event  within 10 days  after the  occurrence  thereof,  written
          notice of any matter that, in the good faith opinion of the Borrower's
          management  after  exercising  reasonable  business  judgment  , could
          reasonably  be  expected  to have a  material  adverse  effect  on the
          business, condition (financial or otherwise),  operations,  prospects,
          or properties of the Borrower and its Subsidiaries taken as a whole;

                  (h) 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;




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 50

<PAGE>



                  (i) 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;

                  (j)      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; and

                           (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;

                  (k)  Quarterly   Production  and  Lease  Operating  Statement.
          Concurrently with the delivery of the Compliance  Certificate pursuant
          to Section 9.1(c),  a production  statement which  identifies the most
          recent  information   available  relating  to  the  gross  volumes  of
          Hydrocarbons produced in the aggregate from the Oil and Gas Properties
          of the Borrower  and the  Restricted  Subsidiaries  and a statement of
          revenues and expenses  attributable  to the Oil and Gas  Properties of
          the Borrower and the Restricted Subsidiaries for such calendar quarter
          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

                  (l)   Quarterly  Gas  Gathering   System   Operating   Report.
          Concurrently with the delivery of the Compliance  Certificate pursuant
          to Section  9.1(c),  an  operating  report which  identifies  the most
          recent information  available  relating to the aggregate  Hydrocarbons
          throughput  of  the  Gas  Gathering  Systems,  revenues  and  expenses
          attributable  to the Gas Gathering  Systems for such calendar  quarter
          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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 51

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          Section 9.2 Maintenance of Existence;  Conduct of Business. Subject to
the  provisions  of Section 10.3,  the Borrower will preserve and maintain,  and
will cause each  Restricted  Subsidiary 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 Restricted Subsidiary to conduct, its
business in an orderly and  efficient  manner in  accordance  with good business
practices.

          Section 9.3  Maintenance  of  Properties.  The Borrower will maintain,
keep, and preserve, and cause each Restricted 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 Restricted 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 Restricted  Subsidiary  shall be required to pay or
discharge any tax, levy,  assessment,  claim,  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 directly
or indirectly cause each of the Restricted  Subsidiaries to maintain,  insurance
with  financially  sound and reputable  insurance  companies in such amounts and
covering  such risks as is usually  carried by businesses of similar size to the
Borrower or such Restricted  Subsidiary engaged in similar businesses and owning
similar  properties  in the same  general  areas in which the  Borrower  and the
Restricted  Subsidiaries  operate,  provided that in any event the Borrower will
maintain and cause each Restricted Subsidiary to maintain workmen's compensation
insurance,  property insurance,  comprehensive general liability insurance,  and
products liability  insurance.  Each insurance policy covering  Collateral shall
provide that such policy will not be canceled 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 and the Issuing Banks.

          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 Restricted  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.



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          Section 9.7 Keeping Books and Records. The Borrower will maintain, and
will cause each  Restricted  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 Restricted  Subsidiary to comply,  in all material  respects with all
applicable laws,  rules,  regulations,  orders,  and decrees of any Governmental
Authority or arbitrator.

          Section 9.9 Compliance with Agreements.  The Borrower will comply, and
will cause each Restricted  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 Restricted  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 and the Banks in the Collateral.

          Section  9.11 ERISA.  The Borrower  will  comply,  and will cause each
Restricted 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 Restricted  Subsidiary 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 Restricted  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  Restricted
Subsidiary,  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 80% of the
present value of the Borrower's and the Restricted 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
Restricted 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 53

<PAGE>



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.


                                    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 Restricted Subsidiary 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) The Senior Unsecured Debt, the Marketing Debt, the Trade
          Guarantees, and the Marketing Note;

                  (d) 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
          Administrative Agent;

                  (e) Debt consisting of current liabilities for taxes and other
          assessments  incurred in the ordinary  course of business that are not
          delinquent  or are being  contested  in good faith and by  appropriate
          proceedings,  provided, that, adequate reserves have been set aside in
          accordance with GAAP;

                  (f) 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;

                  (g) Debt owed by the Borrower and the Restricted  Subsidiaries
          in  connection  with  Capital  Lease  Obligations  entered into in the
          ordinary course of business up to an aggregate amount of $7,500,000;



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                  (h) Debt owed by a  Restricted  Subsidiary  of the Borrower to
          the  Borrower  or to another  Restricted  Subsidiary  of the  Borrower
          provided  that any Debt owing to the Borrower  must be assigned to the
          Collateral Agent for the benefit of the Banks;

                  (i) Debt owed by the  Borrower  to any  Restricted  Subsidiary
          provided the Restricted  Subsidiary has assigned its rights under such
          Debt to the Collateral Agent for the benefit of the Banks;

                  (j) Debt  payable in cash or common  stock of the  Borrower or
          such  Restricted  Subsidiary,  at the  sole  option  of  such  Person;
          provided  that  (i) such  Debt  shall  not  exceed  $5,000,000  in the
          aggregate at any time,  and (ii) such Debt shall be subordinate to the
          Obligations on terms  reasonably  satisfactory  to the  Administrative
          Agent; and

                  (k) Debt not otherwise  permitted  pursuant to (a) through (j)
          above in an  aggregate  amount  not to exceed  $2,500,000  at any time
          outstanding (excluding, without limitation, existing Debt described on
          Schedule 8.9 hereto and Debt owed 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  Restricted  Subsidiary 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)  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  Restricted  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;

                  (d)  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;

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



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

                  (g) Liens on required  margin  collateral  in  accounts  which
          secure Swap  Obligations;  provided,  that the obligations  secured by
          such Liens shall not exceed $2,500,000 in the aggregate;

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

                  (i) Liens created in connection with (i) a $300,000 production
          payment  made  by  Borrower  to  American   Founders  Life   Insurance
          Company,(ii)  a  $750,000  production  payment  made  by  Borrower  to
          American   Founders  Life   Insurance   Company,   and  (iii)  similar
          arrangements with the prior written consent of the Required Banks;

                  (j) Liens arising  solely by virtue of any statutory or common
          law provision relating to banker's liens, rights of set-off or similar
          rights and remedies as to deposit  accounts or other funds  maintained
          with a  creditor  depository  institution;  provided,  that  (i)  such
          deposit account is not a dedicated cash collateral  account and is not
          subject to  restrictions  against  access by the Borrower in excess of
          those set forth by  regulations  promulgated  by the  Federal  Reserve
          Board,  and (ii) such deposit  account is not intended by the Borrower
          or any Subsidiary to provide collateral to the depository institution;

                  (k)  Liens  customarily  granted  pursuant  to  joint  venture
          agreements,  joint  operating  agreements  and pooling or  unitization
          agreements; and

                  (l) Inchoate Liens arising under ERISA.

          Section 10.3 Mergers,  Etc. The Borrower will not, and will not permit
any Restricted  Subsidiary to, become a party to a merger or  consolidation,  or
purchase or otherwise acquire all or substantially all of the business or assets
of any Person or all or  substantially  all of the shares or other  evidence  of
beneficial  ownership  of  any  Person,  or  wind-up,  dissolve,  or  liquidate;
provided, however, that:

                  (a)  the  Borrower  or  any  Restricted  Subsidiary  shall  be
          permitted  to become a party to a merger or  consolidation  or acquire
          all or  substantially  all  of the  assets  of  any  Person  or all or
          substantially  all of the shares or other beneficial  ownership of any
          Person,  so  long  as (i) no  Default  is  existing  or  would  result
          therefrom,  (ii) the  Borrower has given the  Administrative  Agent at
          least  10  days  prior  notice  of  such  merger,   consolidation   or
          acquisition,  (iii) the Borrower  has  provided to the  Administrative
          Agent calculations



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 56

<PAGE>



          demonstrating  the pro forma  compliance  with all financial and other
          covenants  contained  herein,  after  giving  effect  to such  merger,
          consolidation  or  acquisition,  based on the most recently  delivered
          financial statements,  (iv) the total cash consideration paid and Debt
          assumed or incurred by the Borrower or any  Restricted  Subsidiary  in
          connection  with all such  mergers,  consolidations  or  acquisitions,
          shall  not  exceed  $5,000,000,   plus  the  Permitted  Investment  in
          Marketing  LLC in any six-month  period,  and (v) the Borrower or such
          Restricted   Subsidiary,   as  the  case  may  be,  is  the  surviving
          corporation in such merger or consolidation; and

                  (b) any Restricted Subsidiary may be dissolved,  liquidated or
          merged into the Borrower or another Restricted Subsidiary,  so long as
          such dissolution,  liquidation or merger results in all assets of such
          Restricted   Subsidiary   being  owned  by  the  Borrower  or  another
          Restricted Subsidiary.

          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 Restricted  Subsidiaries to purchase or
otherwise  acquire  any  capital  stock of the  Borrower  or another  Restricted
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, and will not permit
any Restricted  Subsidiary to make, any advance,  loan,  extension of credit, or
capital  contribution to or investment in, or purchase or own any stock,  bonds,
notes,  debentures,  or other  securities  of,  any  Person  (other  than of the
Borrower or any Restricted  Subsidiary) in excess of $5,000,000 in the aggregate
per each  six-month  period  ending on March 31 and  September  30 of each year,
except the following:

                  (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;

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




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 57

<PAGE>



                  (d) (i)  investments  in stock or other  equity  or  ownership
          interest in any Restricted Subsidiary;  and (ii) loans and advances by
          the  Borrower  to or  in  the  Restricted  Subsidiaries  provided  the
          Borrower's  rights  under  such loans are  pledged  to the  Collateral
          Agent, for the benefit of the Banks;

                  (e) investments,  loans,  or advances made by any  Restricted
          Subsidiary in or to the Borrower or another Restricted Subsidiary;

                  (f) purchases permitted under Section 10.3 hereof;

                  (g) the purchase of up to 60% of the ownership interest of Tel
          Offshore Trust; and

                  (h) investments  made solely with common stock of the Borrower
          or a  Restricted  Subsidiary  so long as no  Change in  Control  would
          result therefrom.

          Section 10.6  Limitation on Issuance of  Subsidiaries'  Capital Stock.
The Borrower will not permit any of its Restricted  Subsidiaries to, at any time
issue,  sell,  assign,  or  otherwise  dispose  of (a)  any of  such  Restricted
Subsidiary's  capital stock, (b) any securities  exchangeable for or convertible
into or  carrying  any rights to  acquire  any of such  Restricted  Subsidiary's
capital stock, or (c) any option, warrant, or other right to acquire any of such
Restricted  Subsidiary's  capital  stock;  provided,  however,  nothing  in this
Agreement of any of the Loan Documents shall restrict the Borrower or any of its
Restricted  Subsidiaries  from  issuing  stock  of the  Borrower  or  stock in a
Restricted  Subsidiary  which  is  convertible  into  stock of the  Borrower  in
connection  with any  purchase or  investment  in any Person  that is  otherwise
permitted under this Agreement.

          Section 10.7 Transactions With Affiliates. The Borrower will not enter
into,  and will  not  permit  any  Restricted  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 Restricted Subsidiary, except in the ordinary course of and pursuant to the
reasonable  requirements  of the  Borrower's  or  such  Restricted  Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Restricted  Subsidiary than would be obtained in a comparable  arm's-length
transaction  with a Person not an Affiliate  of the Borrower or such  Restricted
Subsidiary.

          Section 10.8 Disposition of Assets. The Borrower will not sell, lease,
assign, transfer, or otherwise dispose of any of its assets having a fair market
value in excess of $25,000,  or permit any  Restricted  Subsidiary to do so with
any of its assets,  except (a)  dispositions of Hydrocarbons and other inventory
in the ordinary course of business,  (b) dispositions of obsolete,  damaged,  or
worn  out  equipment,  (c)  sales  or  transfers  of  assets  from a  Restricted
Subsidiary or the Borrower to another Restricted  Subsidiary or the Borrower,(d)
sales of Mortgaged  Properties  having an aggregate  fair market value of 10% or
less of the then current  Borrowing  Base during any fiscal  year,  (e) sales of
other assets having a fair market value of not more than  $1,000,000  during any
fiscal year, or (f) the assignment or termination of any Swap Obligation.



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          Section 10.9 Sale and Leaseback. The Borrower will not enter into, and
will not permit any Restricted  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 $1,000,000 for the Borrower and its Restricted  Subsidiaries
during any fiscal year.

          Section 10.10  Prepayment of Debt.  The Borrower will not prepay,  and
will not permit any Restricted  Subsidiary to prepay,  any Debt,  except (a) the
Obligations, (b) the Marketing Note, (c) Debt to Affiliates that are Guarantors,
(d) Debt owed by the Borrower in connection  with Hunter  Butcher  International
LLC to Wells Fargo Trade Bank N.A., and (e) the Senior Unsecured Debt.

          Section 10.11 Nature of Business.  The Borrower will not, and will not
permit any  Restricted  Subsidiary to, engage in any business other than the oil
and gas  exploration  and  production,  gas gathering,  pipeline and processing,
marketing of  Hydrocarbons  and petroleum  property  management  and  consulting
businesses or activities  related  thereto 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  Restricted  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 Restricted Subsidiaries to, change its fiscal year or make any change
(a) in accounting treatment or material reporting 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 Agreements. The Borrower has not entered and shall
not enter into Swap Obligations as described under part (b) of the definition of
Swap Obligations herein ("Hedge Agreements"), provided that the Borrower and its
Subsidiaries  may enter into (a) Hedge Agreements which provide for a floor, but
not a cap in an amount not to exceed 100% of the  Borrower's  and the Restricted
Subsidiaries'  total projected  production from Oil and Gas Properties,  and (b)
Hedge Agreements  which provide for a cap,  provided such Hedge Agreements shall
not cover more than 85% of the Borrower's and the Restricted Subsidiaries' total
projected production from Oil and Gas Properties.




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                                   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, measured as of last day of
any calendar quarter for the 12 month period then ended, to be less than (a) 1.5
to 1.0 for the calendar  quarters  ending  March 31, 1998  through  December 31,
1998,  (b) 1.75 to 1.0 for the calendar  quarters  ending March 31, 1999 through
December 31, 1999, and (c) 2.00 to 1.0 for the calendar quarter ending March 31,
2000 and thereafter.

          Section 11.2 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  11.3 Debt to  Capitalization  Ratio.  The  Borrower  will not
permit  its Debt to  Capitalization  Ratio,  measured  as of the last day of any
calendar  quarter,  to be more than  0.80 to 1.0 from and after the date  hereof
through the Termination Date.


                                   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 any principal, any interest
          or other part of the Obligations within three days after the date due.

                  (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)
          or (i), 9.6, Section 10.1, 10.3, 10.4, 10.5, 10.6, 10.8, 10.9,  10.10,
          10.12, 10.14, or Article XI of this Agreement (for which there shall



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          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) or (i), 9.6, Section 10.1,
          10.3, 10.4, 10.5, 10.6, 10.8, 10.9, 10.10,  10.12, 10.14, or XI or the
          covenants to pay the  Obligations) and such failure shall continue for
          a period of ten days after  notice  thereof to the  Borrower  from the
          Administrative Agent.

                  (d) The Borrower, any Restricted 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 Restricted  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.

                  (f) The Borrower, any Restricted 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
          $500,000  against any of its assets or properties  unless the Borrower
          is in good faith contesting such action and taking  affirmative  steps
          to discharge  the same,  and adequate  reserves have been set aside in
          accordance with GAAP.

                  (g) A final  judgment or judgments for the payment of money in
          excess of $1,000,000 in the aggregate  shall be rendered by a court or
          courts against the Borrower,  any of its Restricted  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  Restricted  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 Restricted Subsidiary,  or any Obligated
          Party  shall fail to pay when due  (subject  to any  applicable  grace
          periods)  any  principal  of or  interest  on any Debt (other than the
          Obligations) the amount of which individually or in the aggregate



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          exceeds  $500,000,  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) With respect to any Plan,  (i) there shall be a deficiency
          of more than $500,000 in the aggregate in the Plan assets available to
          satisfy  the benefit  liabilities  under such plan on account of which
          the Borrower or any of its Subsidiaries could incur a liability to the
          Plan,  the PBGC,  or otherwise  which  exceeds or could  reasonably be
          expected to exceed $500,000 in the aggregate, and (ii) proceedings are
          or have  been  undertaken  to  terminate  such  Plan  or such  Plan is
          terminated  under Section 4041 or 4042 of ERISA or the Borrower or any
          of its  Subsidiaries  withdraws  from or institutes  steps to withdraw
          from such Plan under Section 4201 or 4204 of ERISA.

                  (k) The Borrower or any of its Restricted Subsidiaries, or any
          of their  properties,  revenues,  or assets  aggregating  $500,000  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) The holders of the Senior Unsecured Debt shall require the
          Borrower to purchase  all or a portion of the notes  issued  under the
          Indenture  pursuant  to a Change of Control  Offer (as  defined in the
          Indenture).

          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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 62

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          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,  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.



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<PAGE>



                                  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;

                  (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




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                  (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
Paribas to act as the  Collateral  Agent  hereunder  and under each of the other
Loan Documents.  Paribas  consents to such appointment and agrees to perform the
duties of the Collateral Agent as specified herein.  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.  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;

                  (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,



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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 CIBC 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 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



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<PAGE>



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 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.




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 67

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          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  at least a 30 day prior  written  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,  the Borrower with the consent of the remaining  Agents
shall as promptly as practicable appoint a successor. If no such successor Agent
shall have been so appointed by the Borrower and the remaining  Agents 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



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provisions  of this  Article  XIII 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 out-of-pocket 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 out-of-pocket  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  out-of-pocket  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  out-of-pocket  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.  All such
requests for payment  shall be  accompanied  by invoices  containing  reasonable
details.

          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 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)



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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. THE BORROWER'S  INDEMNITY SHALL EXCLUDE
ANY LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES TO THE EXTENT THEY RESULTED
FROM THE GROSS  NEGLIGENCE OR WILLFUL  MISCONDUCT OF SUCH  INDEMNIFIED  PARTY OR
RESULTED  FROM SUCH  INDEMNIFIED  PARTY'S OWN  UNEXCUSED  BREACH OF ANY MATERIAL
PROVISION OF ANY LOAN DOCUMENT, PROVIDED THAT IT IS THE INTENTION OF THE PARTIES
HERETO  THAT THE  INDEMNIFIED  PARTIES BE  INDEMNIFIED  IN THE CASE OF THEIR OWN
NEGLIGENCE.  THE ADMINISTRATIVE  AGENT, THE DOCUMENTATION  AGENT, THE COLLATERAL
AGENT, THE SYNDICATION AGENT, THE ISSUING BANK AND EACH BANK AGREE TO THE EXTENT
FEASIBLE,  AND TO THE  EXTENT A  CONFLICT  OF  INTEREST  DOES  NOT  EXIST IN THE
REASONABLE OPINION OF ANY OF THE ADMINISTRATIVE  AGENT, THE DOCUMENTATION AGENT,
THE COLLATERAL  AGENT,  THE SYNDICATION  AGENT, THE ISSUING BANK AND ANY BANK OR
THEIR COUNSEL,  TO USE THE SAME SINGLE COUNSEL (I.E. ONE LAW FIRM) IN CONNECTION
WITH ANY SUCH INVESTIGATION, LITIGATION OR OTHER PROCEEDING.

          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 AND
RELEASES,  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  AND  RELEASES  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.




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          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 Agent, the Issuing Banks and
the Banks and shall have no duty of disclosure,  duty of loyalty,  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 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 14.7     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; provided, however, that for
          purposes of this Section 14.7 if the survivor of a merger is obligated
          in respect of all obligations of the Borrower  hereunder and under all
          other Loan  Documents,  a merger  permitted  pursuant to Section  10.3
          hereof shall not be an assignment or transfer of the Borrower's rights
          or obligations  hereunder.  Any Bank may sell participations to one or
          more banks or other  financial  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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 71

<PAGE>



          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 payment of any amount payable in respect of the Loans
          of such Bank or (E) the  release  of all or  substantially  all of the
          Collateral or Obligated Party, except as otherwise provided for in any
          Loan Document.

                  (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,
          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) 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,
          (ii) 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 (iii)  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 other



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 72

<PAGE>



          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 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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 73

<PAGE>



          of such  Eligible  Assignee  in an  amount  equal  to the  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
          14.18.

          Section 14.8 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 14.9 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 Banks
having  commitments  totaling at least 51% of the amount of the  Borrowing  Base
(or, at any time while Loans or Letter of Credit  Liabilities  are  outstanding,
Banks holding Loans and LC Participations totaling at least 51% of the amount of
the Borrowing  Base) 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 VII; (e) change the percentage of the Commitments or of the
aggregate  unpaid principal amount of the Notes or the percentage 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  14.9;  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,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 74

<PAGE>



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

          Section 14.10 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,  but only if the  interest  cannot be
reduced and then  recaptured  pursuant to Section 2.4 hereof,  and solely to the
extent necessary so that the interest paid does not exceed the Maximum Rate, (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 14.11 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 14.12 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. ANY ACTION OR PROCEEDING AGAINST
THE BORROWER UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 75

<PAGE>



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 14.11. 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 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 14.13  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 14.14 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 14.15 Headings.  The headings, captions, and arrangements used
in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.

          Section  14.16  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 14.17 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 14.18 Treatment of Certain Information; Confidentiality.  Each
Bank, each Agent, and each Issuing Bank agree (on behalf of itself and each of
its affiliates, directors, officers,



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 76

<PAGE>



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  summons or subpoena 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 subsidiary,  affiliate, assignee or participant (or
prospective  assignee or  participant),  as the case may be, first  executes and
delivers to the  Borrower,  an  agreement  containing  provisions  substantially
identical to those contained in this Section 14.18; 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,  unless in
violation  of this  Section  14.18,  each  Bank  agrees  that  it  will  use its
reasonable  efforts  to  advise  the  Borrower  as soon as  practicable,  of any
disclosure of information in connection with (v) above.

          Section 14.19  WAIVER OF JURY TRIAL.  THE BORROWER, THE AGENTS,   THE
ISSUING   BANK  AND  EACH  BANK  EACH  HEREBY  IRREVOCABLY   AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

          Section 14.20  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.



               [Remainder of this page intentionally left blank.]



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 77

<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.


By:
     Chris Tong
     Senior Vice President and Chief Financial Officer

Address for Notices:

600 East Las Colinas Boulevard, Suite 1200
Irving, Texas   75039
Fax No.:             (972) 401-3110
Telephone No.:       (972) 401-0752

Attention:           Chris Tong


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) 250-6029 or 7351
Telephone No.:      (212) 250-7343

Attention:     James Cullen




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 78

<PAGE>



and

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


SYNDICATION AGENT:

CIBC INC.


By:
     Name:
     Title:

Address for Notices:
CIBC, Inc.
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, Georgia  30339
Fax No.:            (770) 319-4950
Telephone No.:      (770) 319-4814

Attention:  Pluria Howell




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 79

<PAGE>



DOCUMENTATION AGENT AND COLLATERAL
AGENT:

PARIBAS



By:
     Barton D. Schouest
     Group Vice President

                            - and -



By:
     Michael H. Fiuzat
     Assistant Vice President

Address for Notices:

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

Attention:  Leah Evans-Hughes




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 80

<PAGE>



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) 250-5817
Telephone No.:(212) 250-2428

Attention:    Joyce Shiu

and

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



SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 81

<PAGE>




                                                     BANKS:

                                                     PARIBAS



Commitment:                                          By:
$28,846,153.85                                          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




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 82

<PAGE>




                              BANKERS TRUST COMPANY
Commitment:
$28,846,153.85
                                                     By:
                                                     Name:
                                                     Title:

                              Address for Notices:
                              Bankers Trust Company
                             One Bankers Trust Plaza
                               130 Liberty Street
                            New York, New York 10006
                             Fax No.:    (212) 250-7351
                          Telephone No.: (212) 250-7343

                             Attention: James Cullen

                       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




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 83

<PAGE>





CIBC INC.
Commitment:
$28,846,153.85
By:
Name:
Title:

Address for Notices:
CIBC, Inc.
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, Georgia  30339
Fax No.:            (770) 319-4950
Telephone No.:      (770) 319-4814

Attention:  Pluria Howell

Lending Office for Base Rate Loans:
CIBC, Inc.
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, Georgia  30339
Fax No.:            (770) 319-4950
Telephone No.:      (770) 319-4814

Lending Office for Eurodollar Loans:
CIBC, Inc.
Two Paces West, Suite 1200
2727 Paces Ferry Road
Atlanta, Georgia  30339
Fax No.:            (770) 319-4950
Telephone No.:      (770) 319-4814






SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 84

<PAGE>




TORONTO DOMINION (TEXAS), INC.
Commitment:
$19,230,769.23

By:
Name:
Title:

Address for Notices:
The Toronto-Dominion Bank
909 Fannin Street, 17th Floor
Houston, Texas  77010
Fax No.:            (713) 951-9921
Telephone No.:      (713) 653-8281

Attention:  Azar Azarpour

Lending Office for Base Rate Loans:
Toronto Dominion (Texas), Inc.
909 Fannin Street, 17th Floor
Houston, Texas  77010
Fax No.:            (713) 951-9921
Telephone No.:      (713) 653-8281

Lending Office for Eurodollar Loans:
Toronto Dominion (Texas), Inc.
909 Fannin Street, 17th Floor
Houston, Texas  77010
Fax No.:            (713) 951-9921
Telephone No.:      (713) 653-8281




SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 85

<PAGE>





WELLS FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
Commitment:
$19,230,769.22

By:
Name:
Title:

Address for Notices:
Wells Fargo Bank (Texas), National Association
1445 Ross Avenue, Suite 400
Dallas, Texas  75202-2812
Fax No.:            (214) 777-4044
Telephone No.:      (214) 777-4026

Attention:  Charles D. Kirkham

Lending Office for Base Rate Loans:
Wells Fargo Bank (Texas), National Association
1445 Ross Avenue, Suite 400
Dallas, Texas  75202-2812
Fax No.:            (214) 777-4044
Telephone No.:      (214) 777-4026

Lending Office for Eurodollar Loans:
Wells Fargo Bank (Texas), National Association
1445 Ross Avenue, Suite 400
Dallas, Texas  75202-2812
Fax No.:            (214) 777-4044
Telephone No.:      (214) 777-4026





SECOND AMENDED AND RESTATED CREDIT AGREEMENT - Page 86

<PAGE>



                                INDEX TO EXHIBITS


  Exhibit         Description of Exhibit                             Section
 
    "A"           Form of Revolving Credit Note                         2.2
    "B"           Loan Request Form                                     4.1
    "C"           Letter of Credit Request Form                         3.3
    "D"           Borrower Pledge Agreement                             6.1(f)
    "E"           Subsidiary Pledge Agreement                           6.1(f)
    "F"           Subsidiary Guaranty Agreement                         6.4
    "G"           Assignment and Acceptance                            14.8


                               INDEX TO SCHEDULES


 Schedule         Description of Schedule                            Section

    8.5           Existing Litigation                                   8.5
    8.9           Existing Debt                                         8.9
   8.14           List of Subsidiaries                                  8.14
   8.20           Environmental Matters                                 8.20
   10.2           Existing Liens                                       10.2
    1.1           Gas Gathering Systems                                 1.1
  1.1(a)          Mortgaged Properties                                  1.1



<PAGE>



                                  SCHEDULE 1.1

                              Gas Gathering Systems



1. Panoma Gas Gathering System located in the Texas Panhandle and Western
   Oklahoma.

2. North Appleby  Gathering  System  located in  Nacogdoches  and Rusk Counties,
   Texas.

3. Longwood Gas Gathering System located in Caddo Parrish, Louisiana

4. McLean Gas Gathering Plant located in Shamrock, Texas.


<PAGE>



                                 SCHEDULE 1.1(a)

                              Mortgaged Properties



1. Appended hereto is a list of Oil and Gas Properties being acquired in the
   Acquisition; and

2. The Mortgaged  Properties  also include the Oil and Gas  Properties and
   other Collateral  described in Security  Documents existing on the date
   hereof,  including  Collateral described in amendments to mortgages and
   deeds of trust of even  date,  which  mortgages  and deeds of trust are
   Security  Documents  and which were  originally  for the benefit of the
   lenders under the Prior Credit Agreement.


<PAGE>



                                  SCHEDULE 8.5

                               Existing Litigation



     Hillin-Simon Oil & Gas v. Hunter Resources,  Inc., David H. Arrington Oil &
Gas, Inc., et al. In 1995, Hunter Resources,  Inc. acquired the capital stock of
David H. Arrington Texas and New Mexico,  Inc. and therefore assumed  operations
of certain properties  partially owned by David H. Arrington Texas & New Mexico,
Inc.  Hillin-Simon,  a  working  interest  owner in  certain  of the  properties
acquired from  Arrington has sued the defendants  maintaining  that the transfer
gives rise to a vote for a new operator of these properties.  The case is now in
discovery.


<PAGE>



                                  SCHEDULE 8.9

                                  Existing Debt


<TABLE>
<CAPTION>
<S>              <C>                              <C>                           <C>                 <C>    


Notes
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
Date of Note      Borrower                       Payee                           Original Principal   Outstanding at
                                                                                 Balance              June 28, 1998
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
8/30/97           Magnum Hunter Resources,       Bankers Trust                   N/A                  $53,700,000.00
                  Inc.
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
2/28/96           Magnum Hunter Resources,       Wells Fargo Bank                $32,607.00           $13,578.08
                  Inc.
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
9/30/93           Gruy Petroleum                 Law Firm of Shafer Davis        $80,673.79           $23,673.79
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
Production payments
------------------------------------------------ ------------------------------  -------------------  --------------------------
Date of           Grantor                        Grantee                         Original Principal   Outstanding at
Agreement                                                                        Balance              June 28, 1998
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
7/1/95            Magnum Hunter Resources,       American Founders               $300,000.00          $101,440.25
                  Inc.
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
11/1/96           Magnum Hunter Resources,       American Founders               $750,000.00          $567,050.57
                  Inc.
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
Capital leases
----------------- ------------------------------ ------------------------------  -------------------  --------------------------
Rental obligation                                                              Annual lease payments
------------------------------------------------ ---------------------------------------------------  --------------------------
Office and office machine rentals                                                           $265,896
-----------------------------------------------  ---------------------------------------------------  --------------------------
Truck rentals - estimate                                                                    $187,000
-----------------------------------------------  ---------------------------------------------------  --------------------------
Compressors - CSI, Ouachita & others                                                      $1,300,000
------------------------------------------------ ---------------------------------------------------  --------------------------
</TABLE>


<PAGE>



                                  SCHEDULE 8.14

                              List of Subsidiaries



                                                                Percentage of
 Name of                             Jurisdiction of          Voting Stock owned
 Subsidiary                          Incorporation              by the Borrower
Gruy Petroleum Management Co.           Texas                         100%
Magnum Hunter Production, Inc.          Texas                         100%
Hunter Gas Gathering, Inc.              Texas                         100%
ConMag Energy Corporation               Texas                         100%
Rampart Petroleum, Inc.                 Texas                         100%
Hunter Butcher International            Wyoming                        51%
Limited Liability Company *

======================================= ======================================  
*        An Unrestricted Subsidiary.


<PAGE>



                                  SCHEDULE 8.20

                              Environmental Matters



<PAGE>



                                  SCHEDULE 10.2

                                 Existing Liens



1.       That certain  Conveyance of Production  Payment from Hunter  Resources,
         Inc., a Pennsylvania  corporation ("Grantor") to American Founders Life
         Insurance  Company, a Texas corporation  ("Grantee")  effective July 1,
         1995,  in  the  original  amount  of  Three  Hundred  Thousand  Dollars
         ($300,000)  payable  out of 50% of the net  revenue  interest  owned by
         Grantor  in and under the oil,  gas and  mineral  leases  and the lands
         covered thereby as described in Exhibit A thereto.

2.       That certain  Conveyance of Production  Payment from Magnum  Petroleum,
         Inc.,  a Nevada  corporation  ("Grantor")  to  American  Founders  Life
         Insurance Company, a Texas corporation  ("Grantee")  effective November
         1, 1996, in the original amount of Seven Hundred Fifty Thousand Dollars
         ($750,000)  payable  out of 50% of the net  revenue  interest  owned by
         Grantor  in and under the oil,  gas and  mineral  leases  and the lands
         covered thereby as described in Exhibit A thereto.

3.       That certain lien in favor of Wells Fargo Bank, N.A. on that certain
         1996 GMC Suburban.


<PAGE>






******************************************************************************





                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT


                                      among





                             BANKERS TRUST COMPANY,
                   AS ADMINISTRATIVE AGENT AND AS ISSUING BANK


                                   CIBC INC.,
                              AS SYNDICATION AGENT,


                                    PARIBAS,
                 AS DOCUMENTATION AGENT AND AS COLLATERAL AGENT,


                       THE SEVERAL FINANCIAL INSTITUTIONS
                         FROM TIME TO TIME PARTY HERETO


                                       and


                          MAGNUM HUNTER RESOURCES, INC.


                            Dated as of June 1, 1998





******************************************************************************


<PAGE>
                                                                               

                                TABLE OF CONTENTS

                                                                                
                                                                            Page

ARTICLE I

 Definitions...................................................................2
        Section 1.1         Definitions........................................2
        Section 1.2         Other Definitional Provisions.....................19

ARTICLE II

         Loans................................................................20
         Section 2.1         Commitments......................................20
         Section 2.2         Notes............................................20
         Section 2.3         Repayment of Loans...............................20
         Section 2.4         Interest.........................................20
         Section 2.5         Use of Proceeds..................................21
         Section 2.6         Commitment Fee...................................21
         Section 2.7         Reduction or Termination of Commitments..........21
         Section 2.8         Borrowing Base...................................22

ARTICLE III

         Letters of Credit....................................................23
         Section 3.1         Letters of Credit................................23
         Section 3.2         Participation by Banks...........................23
         Section 3.3         Procedure for Issuing Letters of Credit..........24
         Section 3.4         Reimbursements; Payments Constitute Loans........24
         Section 3.5         Letter of Credit Fees............................25
         Section 3.6         Obligations Absolute.............................25
         Section 3.7         Limitation of Liability..........................26
         Section 3.8         Letter of Credit Documents.......................26
         Section 3.9         Replacement of the Issuing Bank..................26

ARTICLE IV

         Borrowing Procedure; Payments........................................27
         Section 4.1         Borrowing Procedure..............................27
         Section 4.2         Conversions and Continuations....................27
         Section 4.3         Method of Payment................................28
         Section 4.4         Voluntary Prepayment.............................28
         Section 4.5         Mandatory Prepayment or ddition of Collateral....29
         Section 4.6         Borrower's Option to Increase Collateral.........30
         Section 4.7         Pro Rata Treatment...............................30
         Section 4.8         Non-Receipt of Funds by the Administrative Agent.31
         Section 4.9         Withholding Tax Exemption........................31
         Section 4.10        Computation of Interest..........................32

ARTICLE V

         Yield Protection and Illegality......................................32
         Section 5.1         Additional Costs.................................32
         Section 5.2         Limitation on Types of Loans.....................33
         Section 5.3         Illegality.......................................34

                                       -i-

<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                            Page

         Section 5.4         Treatment of Eurodollar Loans....................34
         Section 5.5         Compensation.....................................35
         Section 5.6         Capital Adequacy.................................35
         Section 5.7         Additional Costs in Respect of Letters of Credit.36
         Section 5.8         Replacement of Bank on Account of Taxes, 
                             Increased Costs, Eurodollar Lending
                             Unlawful, Reserve Requirements, Certain
                             Dissents, Etc....................................36

ARTICLE VI

         Security.............................................................37
         Section 6.1         Collateral.......................................37
         Section 6.2         Security Documents...............................38
         Section 6.3         Evidence of Title; Legal Opinions................38
         Section 6.4         Subsidiary Guaranty Agreement....................39
         Section 6.5         Setoff...........................................39

ARTICLE VII

         Conditions Precedent.................................................39
         Section 7.1         Initial Loans....................................39
         Section 7.2         All Loans........................................40
         Section 7.3         Additional Conditions............................41

ARTICLE VIII

         Representations and Warranties.......................................42
         Section 8.1         Corporate Existence..............................42
         Section 8.2         Financial Statements.............................43
         Section 8.3         Corporate Action; No Breach......................43
         Section 8.4         Operation of Business............................43
         Section 8.5         Litigation and Judgments.........................43
         Section 8.6         Rights in Properties; Liens......................44
         Section 8.7         Enforceability...................................44
         Section 8.8         Approvals........................................44
         Section 8.9         Debt.............................................44
         Section 8.10        Taxes............................................44
         Section 8.11        Use of Proceeds; Margin Securities...............44
         Section 8.12        ERISA............................................44
         Section 8.13        Disclosure.......................................45
         Section 8.14        Subsidiaries.....................................45
         Section 8.15        Agreements.......................................45
         Section 8.16        Compliance with Laws.............................45
         Section 8.17        Inventory........................................46
         Section 8.18        Investment Company Act...........................46
         Section 8.19        Public Utility Holding Company Act...............46
         Section 8.20        Environmental Matters............................46
         Section 8.21        Y2K Matters......................................47


                                      -ii-

<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                   
                                                                            Page
ARTICLE IX

         Positive Covenants...................................................48
         Section 9.1         Reporting Requirements...........................48
         Section 9.2         Maintenance of Existence; Conduct of Business....50
         Section 9.3         Maintenance of Properties........................51
         Section 9.4         Taxes and Claims.................................51
         Section 9.5         Insurance........................................51
         Section 9.6         Inspection Rights................................51
         Section 9.7         Keeping Books and Records........................51
         Section 9.8         Compliance with Laws.............................52
         Section 9.9         Compliance with Agreements.......................52
         Section 9.10        Further Assurances...............................52
         Section 9.11        ERISA............................................52
         Section 9.12        Subsidiary Security Agreement; Subsidiary 
                             Guaranty.........................................52
         Section 9.13        Collateral Maintenance; Additional Mortgages.....52

ARTICLE X

         Negative Covenants...................................................53
         Section 10.1        Debt.............................................53
         Section 10.2        Limitation on Liens..............................54
         Section 10.3        Mergers, Etc.....................................55
         Section 10.4        Restricted Payments..............................56
         Section 10.5        Investments......................................56
         Section 10.6        Limitation on Issuance of Subsidiaries'
                             Capital Stock....................................57
         Section 10.7        Transactions With Affiliates.....................57
         Section 10.8        Disposition of Assets............................57
         Section 10.9        Sale and Leaseback...............................58
         Section 10.10       Prepayment of Debt...............................58
         Section 10.11       Nature of Business...............................58
         Section 10.12       Environmental Protection.........................58
         Section 10.13       Accounting.......................................58

ARTICLE XI

         Financial Covenants..................................................59
         Section 11.1        Consolidated Interest Coverage Ratio.............59
         Section 11.2        Current Ratio....................................59
         Section 11.3      Debt to Capitalization Ratio.......................59
                                   

ARTICLE XII

         Default..............................................................59
         Section 12.1        Events of Default................................59
         Section 12.2        Remedies.........................................61
         Section 12.3        Letters of Credit................................62
         Section 12.4        Performance by the Administrative Agent..........62


                                      -iii-

<PAGE>


                                TABLE OF CONTENTS
                                   (Continued)

                                                                            Page
ARTICLE XIII

         Agency Provisions....................................................63
         Section 13.1        Appointment and Powers of the 
                             Administrative Agent.............................63
         Section 13.2        Appointment and Powers of the Collateral Agent...64
         Section 13.3        Immunity.........................................64
         Section 13.4        Rights of Each Agent as a Bank...................65
         Section 13.5        Sharing of Payments, Etc.........................65
         Section 13.6        INDEMNIFICATION..................................66
         Section 13.7        Independent Credit Decisions.....................67
         Section 13.8        Several Commitments..............................67
         Section 13.9        Successor Agent..................................67

ARTICLE XIV

         Miscellaneous........................................................68
         Section 14.1        Expenses.........................................68
         Section 14.2        INDEMNIFICATION..................................68
         Section 14.3        LIMITATION OF LIABILITY..........................69
         Section 14.4        No Duty..........................................70
         Section 14.5        No Fiduciary Relationship........................70
         Section 14.6        No Waiver; Cumulative Remedies...................70
         Section 14.7        Successors and Assigns...........................70
         Section 14.8        Survival.........................................73
         Section 14.9        Amendments, Etc..................................73
         Section 14.10       Maximum Interest Rate............................74
         Section 14.11       Notices..........................................74
         Section 14.12       GOVERNING LAW; VENUE; SERVICE OF PROCESS.........74
         Section 14.13       Counterparts.....................................75
         Section 14.14       Severability.....................................75
         Section 14.15       Headings.........................................75
         Section 14.16       Construction.....................................75
         Section 14.17       Independence of Covenants........................75
         Section 14.18       Treatment of Certain Information;Confidentiality.75
         Section 14.19       WAIVER OF JURY TRIAL.............................76
         Section 14.20       NO ORAL AGREEMENTS...............................76


                                      -iv-