AMENDED AND RESTATED CREDIT AGREEMENT

                                  BY AND AMONG

                         ENERGY CORPORATION OF AMERICA,

                           A WEST VIRGINIA CORPORATION

                                  AS BORROWER,

                     THE LENDERS THAT ARE SIGNATORIES HERETO

                                 AS THE LENDERS,

                                       AND

                           WELLS FARGO FOOTHILL, INC.

                    AS THE ARRANGER AND ADMINISTRATIVE AGENT

                        DATED  AS  OF  JUNE  10,  2004

<PAGE>

                           TABLE  OF  CONTENTS
<TABLE>
<CAPTION>
<C>  <S>                                           <C>
 1.    DEFINITIONS AND CONSTRUCTION . . . . . . .   1

 2.    LOAN AND TERMS OF PAYMENT. . . . . . . . .  27

 3.    CONDITIONS; TERMS OF AGREEMENT . . . . . .  49

 4.    INTENTIONALLY DELETED. . . . . . . . . . .  53

 5.    REPRESENTATIONS AND WARRANTIES . . . . . .  54

 6.    AFFIRMATIVE COVENANTS. . . . . . . . . . .  60

 7.    NEGATIVE COVENANTS . . . . . . . . . . . .  70

 8.    EVENTS OF DEFAULT. . . . . . . . . . . . .  75

 9.    THE LENDER GROUP'S RIGHTS AND REMEDIES . .  77

10.    TAXES AND EXPENSES . . . . . . . . . . . .  78

11.    WAIVERS; INDEMNIFICATION . . . . . . . . .  78

12.    NOTICES. . . . . . . . . . . . . . . . . .  79

13.    CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER  80

14.    ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS  81

15.    AMENDMENTS; WAIVERS. . . . . . . . . . . .  83

16.    AGENT; THE LENDER GROUP. . . . . . . . . .  85

17    GENERAL PROVISIONS . . . . . . . . . . . .   93

</TABLE>
                                     i
<PAGE>

<TABLE>
<CAPTION>
<S>                          <C>
EXHIBITS AND SCHEDULES
Exhibit A-1 . . . . . . . .  Form of Assignment and Acceptance
Exhibit C-1 . . . . . . . .  Form of Compliance Certificate
Exhibit I-1 . . . . . . . .  Form of Indenture Compliance Certificate
Exhibit L-1 . . . . . . . .  Form of LIBOR Notice


Schedule C-1. . . . . . . .  Commitments
Schedule D-1. . . . . . . .  Designated Account
Schedule L-1. . . . . . . .  Agent's Account
Schedule P-1. . . . . . . .  Partnerships
Schedule 2.7(a) . . . . . .  Cash Management Banks
Schedule 5.1(a) . . . . . .  Borrowing Base Properties
Schedule 5.1(b) . . . . . .  Material Contracts
Schedule 5.7. . . . . . . .  Chief Executive Office; FEIN
Schedule 5.8(b) . . . . . .  Capitalization of Borrower
Schedule 5.8(c) . . . . . .  Capitalization of Borrower's Subsidiaries
Schedule 5.10 . . . . . . .  Litigation
Schedule 5.14 . . . . . . .  Environmental Matters
Schedule 5.16 . . . . . . .  Intellectual Property
Schedule 5.18 . . . . . . .  Demand Deposit Accounts
Schedule 5.20 . . . . . . .  Permitted Indebtedness
Schedule 5.22 . . . . . . .  Taxes
Schedule 5.23 . . . . . . .  Insurance
Schedule 5.25 . . . . . . .  Claims and Liabilities
Schedule 5.26(b). . . . . .  Cumulative Imbalances in Gas Production
                             and "Take or Pay" Payments
Schedule 5.27 . . . . . . .  Non-Pledging Subsidiary Operators
Schedule 5.28 . . . . . . .  Hedging Agreements
Schedule 5.32 . . . . . . .  Defaulted Indenture Documents
Schedule 6.2(c) . . . . . .  Total Value of Total Proved Developed
                             Producing Preserves
Schedule 7.2. . . . . . . .  Liens
Schedule 7.13 . . . . . . .  Existing Investments
</TABLE>

                                     ii
<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT
                      -------------------------------------

     THIS  AMENDED  AND RESTATED CREDIT AGREEMENT (this "AGREEMENT"), is entered
into  as  of  June  10,  2004,  between  and among, on the one hand, the lenders
identified  on  the  signature  pages  hereof (such lenders, together with their
respective successors and assigns, are referred to hereinafter each individually
as  a "LENDER" and collectively as the "LENDERS"), WELLS FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
("AGENT"),  and,  on  the  other  hand,  ENERGY  CORPORATION  OF AMERICA, a West
Virginia  corporation  ("BORROWER").

                                    RECITALS

A.   Borrower  and  Agent  (formerly  known as Foothill Capital Corporation) and
     certain  lenders  identified  therein  are  party  to  that  certain Credit
     Agreement dated as of July 10, 2002 (as the same has been amended, modified
     or  supplemented, the "PRIOR CREDIT AGREEMENT") pursuant to which Agent and
     Lenders  extended  Borrower  a  revolving  credit  facility  of  up  to
     $50,000,000.00.

B.   Borrower  has  requested  that  the  revolving  credit  facility  for
     $50,000,000.00  be  extended  and  that  the  Lender  Group extend Borrower
     additional  credit  in  the  form  of  a  single  advance  term loan in the
     principal  amount of $50,000,000.00 thereby increasing the Total Commitment
     of  the  Lender  Group  from  $50,000,000  to  $100,000,000.

C.   As  a  result of the foregoing, and in consideration of the premises herein
     contained  and  other  good  and  valuable  consideration,  the receipt and
     sufficiency  of which are hereby acknowledged, the parties, intending to be
     legally bound, hereby agree to amend and restate the Prior Credit Agreement
     to  read  in  its  entirety  as  follows:

1.     DEFINITIONS  AND  CONSTRUCTION.

1.1     DEFINITIONS.  As  used in this Agreement, the following terms shall have
        -----------
the  following  definitions:

     "A&W"  means  Allegheny  &  Western  Energy  Corporation,  a  West Virginia
corporation.

     "ACCOUNT DEBTOR" means any Person who is or who may become obligated under,
with  respect  to,  or  on  account  of,  an  Account.

     "ACCOUNTS"  means  all  currently  existing and hereafter arising accounts,
contract  rights, and all other forms of obligations owing to Borrower or any of
its  Subsidiaries,  arising from its partnership interests or other interests in
the  Partnerships or from its membership interests or other interests in the LLC
or out of the sale or lease of goods, Hydrocarbons, or Oil and Gas Properties or
the  rendition  of services by Borrower or any of its Subsidiaries, irrespective
of  whether  earned by performance, and any and all credit insurance, guaranties
or  security  therefor.

     "ACH TRANSACTIONS" means any cash management or related services (including
the  Automated  Clearing  House processing of electronic funds transfers through
the  direct  Federal  Reserve  Fedline  system)  provided  by Wells Fargo or its
Affiliates  for  the  account  of  Borrower  or  its  Subsidiaries.

     "ADVANCES"  has  the  meaning  set  forth  in  SECTION  2.1(a).
                                                    ---------------

                                    -1-
<PAGE>

     "AFFILIATE" means, as applied to any Person, any other Person who, directly
or indirectly, controls, is controlled by, or is under common control with, such
Person.  For  purposes  of  this  definition,  "control"  means  the possession,
directly  or indirectly, of the power to direct the management and policies of a
Person,  whether  through  the  ownership  of  Stock, by contract, or otherwise;
provided,  however,  that,  in  any event, (a) any Person which owns directly or
------------------
indirectly  11.5% or more of the securities having ordinary voting power for the
election  of  directors  or  other  members of the governing body of a Person or
11.5% or more of the partnership or other ownership interests of a Person (other
than  as  a  limited  partner  of  such  Person) shall be deemed to control such
Person; (b) each director (or comparable manager) of a Person shall be deemed to
be  an  Affiliate  of  such Person; and (c) each partnership or joint venture in
which a Person is a partner or joint venturer shall be deemed to be an Affiliate
of  such  Person.

     "AGENT"  means  Foothill,  solely  in its capacity as agent for the Lenders
hereunder,  and  any  successor  thereto.

     "AGENT'S  ACCOUNT" means an account at a bank designated by Agent from time
to  time as the account into which Borrower shall make all payments to Agent for
the  benefit  of the Lender Group and into which the Lender Group shall make all
payments  to Agent under this Agreement and the other Loan Documents; unless and
until  Agent  notifies  Borrower  and  the Lender Group to the contrary, Agent's
Account  shall be that certain deposit account bearing account number 323-266193
and  maintained  by  Agent with The Chase Manhattan Bank, 4 New York Plaza, 15th
Floor,  New  York,  New  York  10004,  ABA  #021000021.

     "AGENT  ADVANCES"  has  the  meaning  set  forth  in  SECTION  2.3(e)(i).
                                                           ------------------

     "AGENT'S LIENS" means the Liens granted by Borrower and its Subsidiaries to
Agent  for  the  benefit  of  the  Lender  Group  under  the  Loan  Documents.
"AGENT-RELATED  PERSONS"  means  Agent  together  with its Affiliates, officers,
directors,  employees,  and  agents.

     "AGREEMENT"  has  the  meaning  set  forth  in  the  preamble  hereto.

     "APPLICABLE  MARGIN" means, on any day, and with respect to any Obligation,
the applicable per annum percentage set forth in the table shown below, based on
the  average  monthly  Total  Usage  for  the  immediately  preceding  month:

<TABLE>
<CAPTION>

<S>                               <C>               <C>
Average Monthly
Total Usage. . . . . . . . . . .  Base Rate Loans   LIBOR Rate Loans
--------------------------------  ----------------  -----------------
0 to $50,000,000.00 . . . . . .             0.25%              2.25%
50,000,000.01 to $85,000,000.00             0.50%              2.50%
Greater than $85,000,000.00. . .            0.75%              2.75%
</TABLE>

     It  is understood and agreed that for the period from and after the date of
the  first  Advance  and  the  initial  Term  Loan until the date of the initial
calculation  of  average monthly Total Usage, the Applicable Margin shall be (a)
..50%,  with respect to Base Rate Loans, and (b) 2.50% with respect to LIBOR Rate
Loans.

                                     -2-
<PAGE>

     "APPLICABLE  PREPAYMENT PREMIUM" means, as of any date of determination, an
amount  equal  to  (a)  during the period of time from and after the date of the
execution  and  delivery of this Agreement up to and including July 10, 2004, 2%
times  the Maximum Loan Amount, (b) during the period of time from and including
July  11,  2004  up  to  and  including July 10, 2005, 2% times the Maximum Loan
Amount, (c) during the period of time from and including July 11, 2005 up to and
including  July  10,  2006,  1.5%  times the Maximum Loan Amount, (d) during the
period  of  time  from  and including July 11, 2006 up to and including July 10,
2007,  1%  times the Maximum Loan Amount, and (e) during the period of time from
and  including  July  11, 2007 up to and including July 10, 2008, 0.5% times the
Maximum  Loan  Amount.

     "APPROVED  ENGINEER" means Ryder Scott Company Petroleum Consultants or any
other  independent petroleum engineer satisfactory to Lender. "ASSIGNEE" has the
meaning  set  forth  in  SECTION  14.1(a).
                         ----------------

     "ASSIGNMENT  AND  ACCEPTANCE"  means an Assignment and Acceptance Agreement
substantially  in  the  form  of  EXHIBIT  A-1.
                                  ------------

     "AUTHORIZED  PERSON"  means  any  officer  or  other  employee of Borrower.

     "AVAILABILITY"  means,  as  of any date of determination, if such date is a
Business  Day,  and  determined  at  the  close  of  business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount  that Borrower is entitled to borrow as Advances under SECTION 2.1 (after
                                                              -----------
giving  effect  to  all  then  outstanding Obligations (other than Bank Products
Obligations)  and  all  sublimits  and  reserves  applicable  hereunder).

     "BANK  PRODUCT"  means  any financial accommodation extended to Borrower or
its  Subsidiaries  by  a  Bank  Product  Provider  (other  than pursuant to this
Agreement) including: (a) credit cards, (b) credit card processing services, (c)
debit  cards,  (d)  purchase  cards,  (e) ACH Transactions, (f) cash management,
including  controlled  disbursement,  accounts  or services, or (g) transactions
under  Hedge  Agreements.

     "BANK  PRODUCT AGREEMENTS" means the Hedging Agreements and cash management
service agreements entered into from time to time by Borrower, its Subsidiaries,
the  Partnerships,  and  the LLC with a Bank Product Provider in connection with
the  obtaining  of  any  of  the  Bank  Products.

     "BANK  PRODUCT  OBLIGATIONS" means all obligations, liabilities, contingent
reimbursement  obligations,  fees,  and  expenses  owing  by  Borrower,  its
Subsidiaries,  the  Partnerships,  and  the  LLC  to  any  Bank Product Provider
pursuant  to  or  evidenced  by  the Bank Product Agreements and irrespective of
whether  for  the  payment  of  money,  whether  direct or indirect, absolute or
contingent,  due  or  to  become  due,  now  existing  or hereafter arising, and
including  all  such  amounts  that  Borrower  or any Subsidiary is obligated to
reimburse  to  Agent  or  any member of the Lender Group as a result of Agent or
such  member  of  the  Lender Group purchasing participations from, or executing
indemnities  or  reimbursement  obligations  to,  a  Bank  Product Provider with
respect  to the Bank Products provided by such Bank Product Provider to Borrower
or  its  Subsidiaries  pursuant  to  the  Bank  Product  Agreements.

     "BANK  PRODUCT  PROVIDER"  means  Wells  Fargo  or  any  of its Affiliates.

     "BANK  PRODUCT RESERVES" means, as of any date of determination, the amount
of  reserves  that Agent has established (based upon the Bank Product Provider's
reasonable determination of the credit exposure of Borrower and its Subsidiaries
in  respect  of  then  extant  Bank  Products)  in respect of Bank Products then
provided  or  outstanding.

     "BANKRUPTCY  CODE"  means  Title 11 of the United States Code, as in effect
from  time  to  time.

                                     -3-
<PAGE>

     "BASE  LIBOR  RATE"  means  the  rate  per  annum,  determined  by Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the  next  1/100%), to be the rate at which Dollar deposits (for delivery on the
first  day  of  the requested Interest Period) are offered to major banks in the
London  interbank  market  2  Business  Days  prior  to  the commencement of the
requested  Interest  Period,  for  a  term  and  in  an amount comparable to the
Interest  Period  and the amount of the LIBOR Rate Loan requested (whether as an
initial  LIBOR  Rate  Loan  or  as  a  continuation of a LIBOR Rate Loan or as a
conversion  of  a Base Rate Loan to a LIBOR Rate Loan) by Borrower in accordance
with  this  Agreement, which determination shall be conclusive in the absence of
manifest  error.

     "BASE RATE" means, the rate of interest announced within Wells Fargo at its
principal  office  in  San Francisco as its "prime rate", with the understanding
that  the  "prime  rate" is one of Wells Fargo's base rates (not necessarily the
lowest  of  such  rates)  and  serves as the basis upon which effective rates of
interest  are  calculated  for  those  loans  making  reference  thereto  and is
evidenced  by  the  recording  thereof  after  its announcement in such internal
publication  or  publications  as  Wells  Fargo  may  designate.

     "BASE  RATE  LOAN"  means the portion of the Advances or the Term Loan that
bears  interest  at  a  rate  determined  by  reference to the Base Rate. "BASIS
DIFFERENTIAL"  means,  in  the  case  of  any  Borrowing  Base  Properties,  the
difference between the NYMEX futures contract prices and the sales prices at the
delivery  point  where  the  oil  and  gas, as the case may be, produced by such
Borrowing  Base  Property  is  sold.

  "BENEFIT  PLAN" means a "defined benefit plan" (as defined in SECTION 3(35) of
                                                                -------------
ERISA)  for  which Borrower or any Subsidiary or ERISA Affiliate of Borrower has
been  an  "employer"  (as  defined in SECTION 3(5) of ERISA) within the past six
                                      ------------
years.

     "BOARD  OF DIRECTORS" means the board of directors (or comparable managers)
of  Borrower  or  any  committee thereof duly authorized to act on behalf of the
board  of  directors  (or  comparable  managers).

     "BOOK NET WORTH" means, as of any date of determination, all amounts which,
in  conformity  with  GAAP,  would  be  included  as  shareholder  equity  on  a
consolidated  balance  sheet  of  Borrower  and  its  Subsidiaries.

     "BOOKS"  means  all  of  Borrower's  and  its  Subsidiaries'  now  owned or
hereafter acquired books and records (including all of their Records indicating,
summarizing,  or  evidencing  their  assets  (including  the  Collateral)  or
liabilities,  all of Borrower's and its Subsidiaries' Records relating to its or
their business operations or financial condition, and all of its and their goods
or  general  intangibles  related  to  such  information).

     "BORROWER"  has  the  meaning  set forth in the preamble to this Agreement.

     "BORROWER'S  SECURITY  AGREEMENT"  means  the Amended and Restated Security
Agreement executed by Borrower assigning to Agent, and granting Agent a security
interest in, the Intercompany Notes, in form, scope, and substance acceptable to
Agent.

     "BORROWING"  means  a  borrowing  hereunder consisting of Advances (or term
loans,  in  the  case  of the Term Loan) made on the same day by the Lenders (or
Agent  on behalf thereof), or by Swing Lender in the case of a Swing Loan, or by
Agent  in  the  case  of  an  Agent  Advance.

     "BORROWING  BASE"  has  the  meaning  set  forth  in  SECTION  2.1(a).
                                                           ---------------

                                     -4-
<PAGE>

     "BORROWING  BASE PROPERTIES" means the Mortgaged Properties and the Oil and
Gas  Properties  of the Partnerships and the LLC, including, without limitation,
the  Oil  and  Gas  Properties  set  forth  on  SCHEDULE  5.1(a).
                                                ----------------

     "BUSINESS  DAY"  means any day that is not a Saturday, Sunday, or other day
on  which  national  banks  are  authorized or required to close in the state of
Georgia,  except  that,  if  a determination of a Business Day shall relate to a
LIBOR  Rate  Loan,  the  term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.

     "CAPITAL  EXPENDITURES"  means,  with respect to any Person for any period,
the  aggregate  of  all  expenditures by such Person and its Subsidiaries during
such period that are capital expenditures as determined in accordance with GAAP,
whether  such  expenditures  are  paid  in  cash  or  financed.

     "CAPITAL  LEASE"  means  a  lease  that  is  required to be capitalized for
financial  reporting  purposes  in  accordance  with  GAAP.

     "CAPITALIZED  LEASE OBLIGATION" means that portion of the obligations under
a  Capital  Lease  that  is  required to be capitalized in accordance with GAAP.

     "CASH  EQUIVALENTS"  means  (a)  marketable  direct  obligations  issued or
unconditionally  guaranteed by the United States or issued by any agency thereof
and  backed  by  the  full  faith  and credit of the United States, in each case
maturing  within  1  year  from  the date of acquisition thereof, (b) marketable
direct  obligations  issued  by  any state of the United States or any political
subdivision  of  any  such  state or any public instrumentality thereof maturing
within  1  year  from  the  date  of  acquisition  thereof  and,  at the time of
acquisition,  having  one  of  the  two  highest  ratings obtainable from either
Standard  &  Poor's  Rating  Group  ("S&P")  or  Moody's Investors Service, Inc.
("MOODY'S"),  (c)  commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1  from  S&P  or at least P-1 from Moody's, and (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
either  (i)  issued by any bank organized under the laws of the United States or
any state thereof having at the date of acquisition thereof combined capital and
surplus  of not less than $250,000,000, (e) Deposit Accounts maintained with (i)
any  bank that satisfies the criteria described in CLAUSE (D) above, or (ii) any
                                                   ----------
other bank organized under the laws of the United States or any state thereof so
long  as the amount maintained with any such other bank is less than or equal to
$100,000  and  is  insured by the Federal Deposit Insurance Corporation, and (f)
Investments in money market funds substantially all of whose assets are invested
in  the  types  of  assets  described  in  clauses  (a)  through  (e)  above.

     "CASH  MANAGEMENT  ACCOUNT"  has  the  meaning set forth in SECTION 2.7(a).
                                                                 ---------------

     "CASH  MANAGEMENT  AGREEMENTS" means the Cash Management Agreement executed
and  delivered  to  Agent  in  connection  with  the  Prior  Credit  Agreement.

     "CASH  MANAGEMENT  BANK"  has  the  meaning  set  forth  in SECTION 2.7(a).
                                                                 ---------------

     "CERCLA"  means  the  Comprehensive Environmental Response Corporation, and
Liability Act of 1980, 42 U.S.C. Section 9601, et. seq., as amended from time to
time.

     "CHANGE  OF  CONTROL" means (a) any "person" or "group" (within the meaning
of  Sections  13(d)  and 14(d) of the Exchange Act) becomes the beneficial owner
(as  defined  in  Rule 13d-3 under the Exchange Act), directly or indirectly, of
10%, or more, of the Stock of Borrower having the right to vote for the election
of  members  of  the Board of Directors, or (b) a majority of the members of the
Board  of  Directors  do  not  constitute  Continuing Directors, or (c) Borrower
ceases  to  own  and  control,  directly  or indirectly, 100% of the outstanding
capital  Stock  of  each  of  the  Pledging  Subsidiaries.

                                     -5-
<PAGE>

     "CLOSING  DATE" means the date of the making of the initial Advance or Term
Loan  (or  other extension of credit) hereunder or the date on which Agent sends
Borrower  a  written  notice  that each of the conditions precedent set forth in
SECTION  3.1  either  have  been  satisfied  or  have  been  waived.
------------

     "CLOSING  DATE  BUSINESS PLAN" means the set of Projections of Borrower and
its  Subsidiaries  for  the last fiscal quarter of fiscal year 2004, and for the
fiscal  year  end  of  2005,  in  form  and substance (including as to scope and
underlying  assumptions)  satisfactory  to  Lender.

     "CODE" means the Georgia Uniform Commercial Code, as in effect from time to
time;  provided,  however,  that  in  the  event  that,  by  reason of mandatory
       --------   -------
provisions  of  law,  any  or  all  of  the attachment, perfection, priority, or
remedies  with  respect  to  Agent's  Lien  on any Collateral is governed by the
Uniform  Commercial  Code  as enacted and in effect in a jurisdiction other than
the  State of Georgia, the term "Code" shall mean the Uniform Commercial Code as
enacted  and  in  effect  in  such other jurisdiction solely for purposes of the
provisions  thereof  relating  to  such  attachment,  perfection,  priority,  or
remedies.

     "COLLATERAL" means all assets and interests in assets and proceeds thereof,
now owned or hereafter acquired by Borrower or its Subsidiaries in or upon which
a  Lien  is  granted  under  any  of  the  Loan  Documents.

     "COLLATERAL  ACCESS  AGREEMENT"  means a landlord waiver, bailee letter, or
acknowledgement  agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in  Borrower's or its Subsidiaries' Books, Equipment or Inventory, in each case,
in  form  and  substance  satisfactory  to  Agent.

     "COLLECTIONS"  means  all cash, checks, notes, instruments, and other items
of  payment  (including  insurance  proceeds,  proceeds  of  cash  sales, rental
proceeds,  and  tax refunds) of Borrower and each of its Subsidiaries including,
its  rights  to  distributions  from  the  LLC  and  the  Partnerships.

     "COMMITMENT"  means,  with respect to each Lender, its Revolver Commitment,
its Term Loan Commitment, or its Total Commitment, as the context requires, and,
with  respect  to  all  Lenders,  their  Revolver  Commitments,  their Term Loan
Commitments,  or  their Total Commitments, as the context requires, in each case
as  such  Dollar  amounts  are  set  forth  beside  such Lender's name under the
applicable  heading  on  SCHEDULE C-1 or on the signature page of the Assignment
                         ------------
and  Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts  may  be  reduced or increased from time to time pursuant to assignments
made  in  accordance  with  the  provisions  of  SECTION  14.1.
                                                 -------------

     "COMPLIANCE  CERTIFICATE"  means a certificate substantially in the form of
EXHIBIT C-1 delivered by the president or chief financial officer of Borrower to
-----------
Agent.

     "CONTINUING  DIRECTOR"  means  (a) any member of the Board of Directors who
was  a director (or comparable manager) of Borrower on the Closing Date, and (b)
any  individual who becomes a member of the Board of Directors after the Closing
Date  if such individual was appointed or nominated for election to the Board of
Directors  by  a  majority  of  the Continuing Directors, but excluding any such
individual  originally  proposed  for  election  in  opposition  to the Board of
Directors  in  office  at  the  Closing Date in an actual or threatened election
contest  relating  to  the election of the directors (or comparable managers) of
Borrower  (as  such  terms  are  used in Rule 14a-11 under the Exchange Act) and
whose  initial assumption of office resulted from such contest or the settlement
thereof.

                                     -6-
<PAGE>

     "CONTRIBUTION  AGREEMENT"  means  the Amended and Restated Contribution and
Indemnification  Agreement  among  Borrower  and  the  Pledging  Subsidiaries.

     "CONTROL  AGREEMENT"  means  a  control  agreement,  in  form and substance
satisfactory  to  Agent,  executed  and  delivered by the Borrower or any of its
Subsidiaries,  Agent, and the applicable securities intermediary with respect to
a  Securities  Account  or  a  bank  with  respect  to  a  DDA.

     "DAILY  BALANCE" means, as of any date of determination and with respect to
any Obligation, the amount of such Obligation owed at the end of such day. "DDA"
means any checking or other demand deposit account maintained by Borrower or any
Subsidiary.

     "DEFAULT"  means  an  event, condition, or default that, with the giving of
notice,  the  passage  of  time,  or  both,  would  be  an  Event  of  Default.

     "DEFAULTING LENDER" means any Lender that fails to make any Advance or Term
Loan (or other extension of credit) that it is required to make hereunder on the
date  that  it  is  required  to  do  so  hereunder.

     "DEFAULTING  LENDER RATE" means (a) for the first 3 days from and after the
date  the  relevant  payment  is  due, the Base Rate, and (b) thereafter, at the
interest rate then applicable to Advances that are Base Rate Loans (inclusive of
the  Base  Rate  Margin  applicable  thereto).

     "DESIGNATED  ACCOUNT"  means  that  certain  DDA  of Borrower identified on
SCHEDULE D-1.
------------

     "DESIGNATED  ACCOUNT  BANK"  means  Harris  Bank.

     "DISBURSEMENT  LETTER" means an instructional letter executed and delivered
by  Borrower  to  Agent  regarding  the  extensions  of credit to be made on the
Closing  Date,  the  form  and  substance  of  which  is  satisfactory to Agent.

     "DOLLARS"  or  "$"  means  United  States  dollars.

     "EASTERN  AMERICAN"  means  Eastern  American  Energy  Corporation,  a West
Virginia  corporation.

     "EBITDAX"  means,  with  respect  to  any fiscal period, Borrower's and its
Subsidiaries'  consolidated  net earnings (or loss), as determined in accordance
with  GAAP,  minus extraordinary gains, plus extraordinary losses, minus gain on
sale  of  Permitted  Dispositions,  plus loss on sale of Permitted Dispositions,
plus  interest  expense, income taxes, depletion, depreciation and amortization,
exploration  and impairment expense, and valuation losses that recognize changes
in  the value of derivatives minus valuation gains that recognize changes in the
value of derivatives to the extent that such changes in the value of derivatives
were  included  in  consolidated  net earnings (or loss) plus cash received from
Permitted  Dispositions  to  the  extent  that  such  cash  is paid to Agent for
application  to  the  Obligations.

     "ELIGIBLE  PROVED  DEVELOPED  PRODUCING RESERVES" means the Eligible Proved
Developed  Producing  Reserves  of the Partnerships and the LLC and the Eligible
Proved  Developed  Producing  Reserves  of  the  Pledging  Subsidiaries,  the
Hydrocarbons from which are directly deliverable from the Wells to the Gathering
System  or to a transporter or buyer which is a non-Affiliate of Borrower or its
Subsidiaries.

                                    -7-
<PAGE>

     "ELIGIBLE  PROVED  DEVELOPED PRODUCING RESERVES OF THE PARTNERSHIPS AND THE
LLC"  means  the Proved Developed Producing Reserves of the Partnerships and the
LLC  that  (a) are identified on SCHEDULE 5.1(a), AND (b) comply in all material
                                 ----------------
respects  with  each  and  all  of  the  representations  and warranties made by
Borrower  to Agent in the Loan Documents.  An item of Proved Developed Producing
Reserves  of  the  Partnerships  and  the  LLC shall not be included in Eligible
Proved  Developed  Producing  Reserves  of  the  Partnerships  and  the  LLC if:

(i)  the  LLC  or  the  applicable  Partnership  is not Solvent or subject to an
     Insolvency  Proceeding;

(ii) it is not owned by the LLC or the applicable Partnership, or the LLC or the
     applicable  Partnership  does  not have good, valid, and indefeasible title
     thereto,  or  the  title  information relating thereto is not satisfactory;

(iii) Borrower and its Subsidiaries have not assigned to Agent and granted Agent
     a  first  priority perfected security interest in and to their interests in
     the  LLC  and  the  applicable  Partnership  and  their  share  of  monies,
     distributions,  profits  and  revenues  from  the  LLC and the Partnership;

(iv) any  consents or approvals required for Borrower or any of its Subsidiaries
     to  assign or grant a security interest in accordance with (iii) above have
     not  been  obtained  and  delivered  to  Agent;  or

(v)  it  is  subject  to  a  Lien in favor of a Person (other than Agent) or any
     order,  judgment,  writ,  or  decree  which either restricts or purports to
     restrict  the  ability  of  the  LLC or the applicable Partnership to grant
     Liens  to Persons on or in respect of its assets and properties; other than
     Permitted  Liens.

     "ELIGIBLE PROVED DEVELOPED PRODUCING RESERVES OF THE PLEDGING SUBSIDIARIES"
means  the Proved Developed Producing Reserves of the Pledging Subsidiaries that
(a)  are  subject  to a duly executed and recorded Mortgage that creates a valid
and  enforceable  first  priority perfected lien on and security interest in the
Oil  and  Gas  Properties  attributable  thereto; (b) are identified on SCHEDULE
                                                                        --------
5.1(a);  and  (c)  comply  in  all  material  respects  with each and all of the
-----
representations and warranties made by the Pledging Subsidiaries to Agent in the
Loan  Documents.  An item of Proved Developed Producing Reserves of the Pledging
Subsidiaries  shall  not  be  included  in  Eligible  Proved Developed Producing
Reserves  of  the  Pledging  Subsidiaries  if:

(i)  the  Pledging  Subsidiary  is  not  Solvent  or  subject  to  an Insolvency
     Proceeding;

(ii) it  is not owned by a Pledging Subsidiary or a Pledging Subsidiary does not
     have  good, valid, and indefeasible title thereto, or the title information
     relating  thereto  is  not  satisfactory  to  Agent;

(iii)  it  is  not  subject to a valid, enforceable and perfected first priority
     Lien and security interest in favor of Agent created by a duly executed and
     recorded  Mortgage;

(iv) any  consents  or  approvals  required  for its valid transfer, assignment,
     pledge  or  mortgage  have  not  been  obtained  and delivered to Agent; or

                                     -8-
<PAGE>

(v)  it  is  subject  to  a  Lien  in  favor  of  any third Person or any order,
     judgment,  writ,  or  decree which either restricts or purports to restrict
     the  ability  of  Borrower or a Pledging Subsidiary to grant Liens to other
     Persons on or in respect of its respective assets or properties, other than
     Permitted  Liens.

     "ELIGIBLE  TRANSFEREE" means (a) a commercial bank organized under the laws
of the United States, or any state thereof, and having total assets in excess of
$250,000,000,  (b)  a  commercial  bank  organized  under  the laws of any other
country  which  is  a  member  of  the Organization for Economic Cooperation and
Development  or  a political subdivision of any such country and which has total
assets  in  excess  of $250,000,000, provided that such bank is acting through a
branch  or agency located in the United States, (c) a finance company, insurance
company,  or  other  financial  institution  or  fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000,  (d)  any  Affiliate (other than individuals) of a Lender that was
party  hereto  as  of  the  Closing Date, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and Borrower, and
(f) during the continuation of an Event of Default, any other Person approved by
Agent.

     "ENERGY  BUSINESS"  means  (a)  the acquisition, exploration, exploitation,
development,  operation  and disposition of interests in Oil and Gas Properties;
(b)  the  gathering,  marketing,  treating,  processing,  storage,  selling  and
transporting  of  any  production  from  such interests or properties including,
without  limitation,  the marketing of Hydrocarbons obtained from third Persons;
(c)  any  business  relating  to or arising from exploration for or development,
production,  treatment,  processing,  storage,  transportation  or  marketing of
Hydrocarbons,  including without limitation (i) the production of electricity or
other  sources  of  power using oil, gas or other hydrocarbon products, and (ii)
providing services in support of or incidental to any such business or activity;
and  (d)  any activity that is ancillary or necessary or desirable to facilitate
the  activities  described  in  clauses  (a)  through  (c)  of  this definition.

     "ENVIRONMENTAL  ACTIONS"  means  any  complaint, summons, citation, notice,
directive,  order,  claim, litigation, investigation, judicial or administrative
proceeding,  judgment,  letter,  or  other  communication  from any Governmental
Authority,  or  any  third  party  involving violations of Environmental Laws or
releases  of  Hazardous Materials (a) from any assets, properties, or businesses
of  Borrower  or  its  Subsidiaries,  or  any  predecessor in interest, (b) from
adjoining  properties  or  businesses,  or (c) from or onto any facilities which
received  Hazardous  Materials generated by Borrower or its Subsidiaries, or any
predecessor  in  interest.

     "ENVIRONMENTAL  LAW"  means  any  applicable  federal,  state,  provincial,
foreign  or  local  statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of common
law  now  or hereafter in effect and in each case as amended, or any judicial or
administrative  interpretation thereof, including any judicial or administrative
order,  consent  decree  or  judgment,  in  each  case, to the extent binding on
Borrower  or  its  Subsidiaries,  relating to the environment, the effect of the
environment  on  employee  health,  or  Hazardous  Materials,  including  the
Comprehensive  Environmental  Response  Compensation  and  Liability Act, 42 USC
9601  et seq.; the Resource Conservation and Recovery Act, 42 USC  6901 et seq.;
the  Federal  Water  Pollution  Control  Act,  33  USC  1251  et seq.; the Toxic
Substances Control Act, 15 USC  2601 et seq.; the Clean Air Act, 42 USC  7401 et
seq.;  the  Safe Drinking Water Act, 42 USC  3803 et seq.; the Oil Pollution Act
of  1990,  33  USC  2701  et  seq.;  the  Emergency  Planning  and the Community
Right-to-Know  Act  of  1986,  42  USC  11001  et  seq.;  the Hazardous Material
Transportation Act, 49 USC  1801 et seq.; and the Occupational Safety and Health
Act,  29  USC  651  et seq. (to the extent it regulates occupational exposure to
Hazardous  Materials);  any  state  and  local  or  foreign  counterparts  or
equivalents,  in  each  case  as  amended  from  time  to  time.

                                     -9-
<PAGE>

     "ENVIRONMENTAL  LIABILITIES  AND  COSTS"  means  all  liabilities, monetary
obligations,  Remedial Actions, losses, damages, punitive damages, consequential
damages,  treble  damages,  costs  and  expenses (including all reasonable fees,
disbursements  and  expenses  of  counsel,  experts, or consultants and costs of
investigation  and  feasibility  studies),  fines,  penalties,  sanctions,  and
interest  incurred  as  a  result  of  any  claim  or demand by any Governmental
Authority  or  any  third  party,  and which relate to any Environmental Action.

     "ENVIRONMENTAL  LIEN" means any Lien in favor of any Governmental Authority
for  Environmental  Liabilities  and  Costs.

     "EQUIPMENT"  means  equipment  (as  that  term  is defined in the Code) and
includes all of Borrower's and each Subsidiary's now owned or hereafter acquired
right,  title, and interest with respect to equipment, machinery, machine tools,
motors,  furniture,  furnishings, fixtures, vehicles (including motor vehicles),
tools,  parts,  and  goods  (other  than  consumer  goods,  farm  products,  or
Inventory),  wherever  located,  including  all  attachments,  accessories,
accessions,  replacements,  substitutions, additions, and improvements to any of
the  foregoing.

     "ERISA"  means  the  Employee  Retirement  Income  Security Act of 1974, as
amended,  and  any  successor  statute  thereto.

     "ERISA AFFILIATE" means (a) any Person subject to ERISA whose employees are
treated  as  employed  by  the same employer as the employees of Borrower or its
Subsidiaries  under  IRC  Section  414(b),  (b) any trade or business subject to
ERISA  whose  employees  are  treated  as  employed  by the same employer as the
employees  of  Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for  purposes  of  Section  302  of  ERISA  and  Section  412  of  the  IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which  Borrower or any of its Subsidiaries is a member under IRC Section 414(m),
or  (d)  solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any  Person  subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower  or  any  of  its  Subsidiaries  under  IRC  Section  414(o).

     "EVENT  OF  DEFAULT"  has  the  meaning  set  forth  in  SECTION  8.
                                                              ----------

     "EXCESS  AVAILABILITY"  means  the amount, as of the date any determination
thereof is to be made, equal to Availability minus the aggregate amount, if any,
of all trade payables of Borrower and each of its Subsidiaries aged in excess of
60  days  past  invoice  date  unless  disputed  in  good  faith  by appropriate
proceedings diligently conducted and for which reserves adequate under GAAP have
been established and all book overdrafts in excess of their historical practices
with  respect  thereto,  in  each  case  as determined by Agent in its Permitted
Discretion.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as in effect from
time  to  time.

     "FEE LETTER" means that certain fee letter, dated as of even date herewith,
between  Borrower  and  Agent,  in  form  and  substance  satisfactory to Agent.

     "FEIN"  means  Federal  Employer  Identification  Number.

     "FILING  AUTHORIZATION LETTER" means a letter duly executed by Borrower and
each  Pledging  Subsidiary  authorizing  Agent  to  file  appropriate  financing
statements  in  such office or offices as may be necessary or, in the opinion of
Agent,  desirable  to  perfect  the security interests to be created by the Loan
Documents.

                                     -10-
<PAGE>

     "FOOTHILL"  means  Wells  Fargo  Foothill,  Inc., a California corporation.

     "FUNDING  DATE"  means  the  date  on  which  a  Borrowing  occurs.

     "GAAP"  means  generally  accepted  accounting principles as in effect from
time  to  time  in  the  United  States,  consistently  applied.

     "GATHERING  SYSTEMS"  means  all  right, title and interest of Borrower and
each  of its Subsidiaries and Affiliates in and to all (i) Hydrocarbon pipelines
through  which  any Hydrocarbons produced from any of the Wells flows to, or has
flowed  at  any  time  during the preceding twelve (12) month period immediately
preceding  the  date  of this Agreement, to a master/sales meter from which such
Hydrocarbons  can  be  sold  to,  or  delivered  for  further  transport  to,  a
non-Affiliate of Borrower or any of its Subsidiaries ("SUBJECT PIPELINES"); (ii)
meters,  compressors,  drips, stripping or other treatment plants or facilities,
drips  and  other facilities located on or used in connection with or related to
the  Subject  Pipelines; (iii) easements, rights of way, permits, licenses, road
boring agreements and similar contracts and grants pursuant to which the Subject
Pipelines  were  constructed  or  exist  (whether such rights are contained in a
separate  instrument  or  in an oil and gas lease or other instrument); and (iv)
all  accounts,  contract  rights  and  general  intangibles  related  to  the
Hydrocarbons  produced  from  the  Wells.

     "GOVERNING DOCUMENTS" means, with respect to any Person, the certificate or
articles  of  incorporation,  by-laws, or other organizational documents of such
Person.

     "GOVERNMENTAL  APPROVAL"  means  (a)  any authorization, consent, approval,
license, ruling, permit, tariff, rate, certification, waiver, exemption, filing,
variance,  claim,  order, judgment or decree of or with, (b) any required notice
to,  (c)  any  declaration  of  or with, or (d) any registration by or with, any
Governmental  Authority.

     "GOVERNMENTAL  AUTHORITY"  means  any  federal,  state,  local,  or  other
governmental  or  administrative  body,  instrumentality,  board, department, or
agency  or  any court, tribunal, administrative hearing body, arbitration panel,
commission,  or  other  similar  dispute-resolving  panel  or  body.

     "GOVERNMENTAL  RULE"  means  any statute, law, regulation, ordinance, rule,
judgment,  order,  decree,  permit,  concession,  grant,  franchise,  license,
agreement,  directive,  requirement of, or other governmental restriction or any
similar  binding  form  of  decision  of  or  determination  by,  or any binding
interpretation  or  administration  of any of the foregoing by, any Governmental
Authority,  whether  now  or  hereafter  in  effect.

     "HAZARDOUS  MATERIALS"  means (a) substances that are defined or listed in,
or  otherwise  classified  pursuant  to,  any  applicable laws or regulations as
"hazardous  substances,"  "hazardous  materials,"  "hazardous  wastes,"  "toxic
substances,"  or  any  other  formulation  intended to define, list, or classify
substances  by  reason  of  deleterious  properties  such  as  ignitability,
corrosivity,  reactivity,  carcinogenicity,  reproductive  toxicity,  or  "EP
toxicity",  (b)  oil,  petroleum,  or petroleum derived substances, natural gas,
natural  gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or  any  radioactive  materials,  and  (d)  asbestos  in  any form or electrical
equipment  that  contains  any  oil  or  dielectric  fluid  containing levels of
polychlorinated  biphenyls  in  excess  of  50  parts  per  million.

"     HEDGING AGREEMENT"  means (a) any hedging contract, forward contract, swap
agreement, futures contract or other hydrocarbon pricing protection agreement or
option  with  respect  to  any  such  transaction,  designed  to  hedge  against
fluctuations  in  Hydrocarbon  prices,  (b) any rate swap, rate cap, rate floor,
rate collar, forward rate agreement or other rate protection agreement or option
with  respect to any such transaction, designed to hedge against fluctuations in
interest  rates,  and  (c)  any  other  derivative  agreement  or  other similar
agreement  or  arrangement,  in  each  case  evidenced by an ISDA Agreement with
appropriate  schedule  and  confirmation.

                                     -11-
<PAGE>

     "HEDGING  OBLIGATIONS"  means,  with respect to any Person, all liabilities
(including  but not limited to obligations and liabilities arising in connection
with  or  as  a result of early or premature termination of a Hedging Agreement,
whether  or  not  occurring  as a result of a default thereunder) of such Person
under  a  Hedging  Agreement  whether  direct  or  by  a  guaranty.

     "HIGHEST  LAWFUL  RATE"  means  on any day, the maximum nonusurious rate of
interest  permitted  for  that day by whichever of applicable federal or Georgia
law  permits  the  higher  interest  rate,  stated  as  a  rate  per  annum.

     "HYDROCARBON  INTERESTS"  means  all rights, titles and interests in and to
oil  and  gas  leases,  oil,  gas  and mineral leases, other Hydrocarbon leases,
mineral  interests,  mineral  servitudes,  overriding royalty interests, royalty
interests,  net  profits  interests,  production  payment  interests,  and other
similar  interests.

     "HYDROCARBON  INTERESTS HEDGING AGREEMENT RESERVES" means as of any date of
determination,  reserves  in  an amount, if positive, equal to (a) the aggregate
Hedging Obligations of Borrower, its Subsidiaries and Affiliates to Bank Product
Providers  relating  to  commodities  or  commodity  prices,  minus  (b) (i) 60%
                                                              -----
multiplied  by  the PV-10 Value of the Total Proved Developed Producing Reserves
----------
as  set forth in the Reserve Report most recently delivered to Agent, calculated
in  a manner consistent with the determination of the Borrowing Base, minus (ii)
                                                                      -----
the  Maximum  Loan  Amount.

     "HYDROCARBONS"  means,  collectively,  oil,  gas,  casinghead  gas,  drip
gasoline,  natural  gasoline,  condensate,  distillate  and  all other liquid or
gaseous  hydrocarbons  and  related minerals and all products therefrom, in each
case  whether  in  a  natural  or  a  processed  state.

     "INDEBTEDNESS"  of  any  Person  means,  without  duplication,  (a)  all
obligations  of  such  Person  for borrowed money or with respect to deposits or
advances  of  any  kind,  (b) all obligations of such Person evidenced by bonds,
debentures,  notes  or  similar  instruments, (c) all obligations of such Person
upon  which  interest  charges are customarily paid, (d) all obligations of such
Person  under  conditional  sale or other title retention agreements relating to
Property  acquired by such Person, (e) all obligations of such Person in respect
of  the  deferred  purchase  price  of  Property  or services (excluding current
accounts  payable  incurred  in  the  ordinary  course  of  business),  (f)  all
Indebtedness  of others secured by (or for which the holder of such Indebtedness
has  an  existing  right, contingent or otherwise, to be secured by) any Lien on
Property  owned  or  acquired  by  such  Person, whether or not the Indebtedness
secured  thereby  has  been  assumed,  (g)  all  guarantees  by  such  Person of
Indebtedness  of  others,  (h) all Capitalized Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in  respect  of  letters of credit and letters of guaranty, (j) all obligations,
contingent  or otherwise, of such Person in respect of bankers' acceptances, (k)
all  obligations  of  such  Person  with respect to any arrangement, directly or
indirectly,  whereby  such Person shall sell or transfer any material asset, and
whereby such Person shall then or immediately thereafter rent or lease as lessee
such asset or any part thereof, (l) all recourse and support obligations of such
Person  with  respect to the sale or discount of any of its accounts receivable,
(m)  all  obligations  of  such  Person  with respect to any arrangement for the
purchase  of materials, supplies, other Property or services if such arrangement
by  its express terms requires that payment be made by such Person regardless of
whether  such  materials,  supplies, other Property or services are delivered or
furnished  to  it, (n) all obligations of such Person with respect to Production
Payments,  (o) net liabilities of such Person under all Hedging Obligations, (p)
all  obligations  of such Person under any prepayment for oil and gas production
or  other  similar  agreement,  and  (q)  all  obligations  of such Person under
operating  leases  which  require  such Person to make payments over the term of
such  lease  based  on  the  purchase  price  or appraised value of the Property
subject  to  such  lease  plus a marginal interest rate, and used primarily as a
financing  vehicle  for,  or to monetize, such Property. The Indebtedness of any
Person  shall  include  the  Indebtedness  of  any  other  entity (including any
partnership in which such Person is a general partner) to the extent such Person
is  liable  therefor as a result of such Person's ownership interest in or other
relationship  with  such  entity,  except  to  the  extent  the  terms  of  such
Indebtedness  provide  that  such  Person  is  not  liable  therefor.

                                     -12-
<PAGE>

     "INDEMNIFIED  LIABILITIES"  has  the  meaning  set  forth  in SECTION 11.3.
                                                                   -------------

     "INDEMNIFIED  PERSON"  has  the  meaning  set  forth  in  SECTION  11.3.
                                                               -------------

     "INDENTURE" means that certain Indenture dated May 23, 1997, between Energy
Corporation  of  America  and  Bank  of  New  York,  as  trustee.

     "INDENTURE COMPLIANCE CERTIFICATE" means a certificate substantially in the
form  of  EXHIBIT  I-1  delivered by the president or chief financial officer of
          ------------
Borrower  to  Agent.

     "INDENTURE  DOCUMENTS" means the Indenture, the Subordinated Notes, and all
other  documents  and  agreements  executed  in  connection  with the Indenture.

     "INITIAL  RESERVE  REPORT"  means the report delivered to Agent dated as of
January  1,  2004,  prepared  by  Ryder Scott Company Petroleum Consultants with
respect to the Oil and Gas Properties of Borrower, its Subsidiaries, the LLC and
the  Partnerships,  a true and correct copy of which has been delivered to Agent
and  the  Lenders.

     "INSOLVENCY  PROCEEDING"  means  any proceeding commenced by or against any
Person  under  any  provision of the Bankruptcy Code or under any other state or
federal  bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally with creditors,
or  proceedings  seeking  reorganization,  arrangement, or other similar relief.

     "INTANGIBLE  ASSETS" means, with respect to any Person, that portion of the
book  value  of all of such Person's assets that would be treated as intangibles
under  GAAP.

     "INTEREST  EXPENSE"  means,  for  any period, the aggregate of the interest
expense  of  Borrower  and  its  Subsidiaries  for  such period, determined on a
consolidated  basis  in  accordance  with  GAAP.

     "INTEREST  PERIOD"  means,  with  respect to each LIBOR Rate Loan, a period
commencing  on  the  date  of  the  making  of  such  LIBOR  Rate  Loan  (or the
continuation  of  a  LIBOR  Rate Loan or the conversion of a Base Rate Loan to a
LIBOR  Rate Loan) and ending 1, 3, 6 or 12 months thereafter; provided, however,
                                                              --------  -------
that  (a)  if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next  succeeding  Business Day, (b) interest shall accrue at the applicable rate
based  upon  the  LIBOR  Rate  from and including the first day of each Interest
Period  to, but excluding, the day on which any Interest Period expires, (c) any
Interest  Period  that  would  end  on a day that is not a Business Day shall be
extended  to  the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding  Business  Day,  (d) with respect to an Interest Period that begins on
the  last  Business  Day  of a calendar month (or on a day for which there is no
numerically  corresponding day in the calendar month at the end of such Interest
Period),  the Interest Period shall end on the last Business Day of the calendar
month  that  is 1, 3, 6 or 12 months after the date on which the Interest Period
began,  as  applicable,  and (e) Borrower may not elect an Interest Period which
will  end  after  the  Maturity  Date.

                                     -13-
<PAGE>

     "INTERCOMPANY  NOTES"  has  the meaning assigned that term in SECTION 7.13.
                                                                   ------------

     "INVENTORY"  means  all  Borrower's  and  each  Subsidiaries'  now owned or
hereafter  acquired  right,  title,  and  interest  with  respect  to inventory,
including  goods  held  for sale or lease or to be furnished under a contract of
service, goods that are leased by Borrower or any of its Subsidiaries as lessor,
goods that are furnished by Borrower or any of its Subsidiaries under a contract
of service, and raw materials, work in process, or materials used or consumed in
Borrower's  or  any  Subsidiaries'  business.

     "INVESTMENT"  means,  with  respect  to  any Person, any investment by such
Person  in  any  other  Person  (including  Affiliates)  in  the  form of loans,
guarantees,  advances,  or  capital  contributions  (excluding  (a)  commission,
travel,  and  similar  advances to officers and employees of such Person made in
the  ordinary  course  of  business,  and  (b) bona fide Accounts arising in the
ordinary  course of business consistent with past practices), purchases or other
acquisitions  for  consideration of Indebtedness, Stock, or all or substantially
all  of  the assets of such other Person (or of any division or business line of
such  other  Person),  and  any  other  items that are or would be classified as
investments  on  a  balance  sheet  prepared  in  accordance  with  GAAP.

     "IRC"  means  the  Internal Revenue Code of 1986, as in effect from time to
time.

     "ISSUING LENDER" means Foothill or any other Lender that, at the request of
Administrative  Borrower  and with the consent of Agent agrees, in such Lender's
sole  discretion, to become an Issuing Lender for the purpose of issuing L/Cs or
L/C  Undertakings  pursuant  to  SECTION  2.12.
                                 -------------

     "L/C"  has  the  meaning  set  forth  in  SECTION  2.12(a).
                                               ----------------

     "L/C DISBURSEMENT" means a payment made by the issuing Lender pursuant to a
Letter  of  Credit.

     "L/C  UNDERTAKING"  has  the  meaning  set  forth  in  SECTION  2.12(a).
                                                            ----------------
     "LENDER"  and  "LENDERS"  have  the  respective  meanings  set forth in the
preamble  to  this Agreement, and shall include any other Person made a party to
this  Agreement  in  accordance  with  the  provisions  of  SECTION  14.1.
                                                            -------------

     "LENDER  GROUP"  means,  individually and collectively, each of the Lenders
(including  the  Issuing  Lender)  and  Agent.

     "LENDER  GROUP  EXPENSES" means all (a) costs or expenses (including taxes,
and  insurance  premiums)  required  to  be  paid  by  Borrower  or  any  of its
Subsidiaries  under  any  of  the  Loan  Documents  that  are paid, advanced, or
incurred  by  the Lender Group, (b) fees or charges paid or incurred by Agent in
connection  with  the  Lender  Group's  transactions with Borrower or any of its
Subsidiaries,  including,  fees  or  charges  for  photocopying,  notarization,
couriers  and  messengers,  telecommunication, public record searches (including
tax  lien,  litigation,  and UCC searches and including searches with the patent
and  trademark  office,  the  copyright  office,  or  the  department  of  motor
vehicles),  filing,  recording,  publication,  appraisal  (including  periodic
collateral  appraisals  or  business  valuations  to  the extent of the fees and
charges  (and  up to the amount of any limitation) contained in this Agreement),
real  estate  surveys,  real  estate  title  policies  and  endorsements,  and
environmental  audits,  (c)  costs  and  expenses  incurred  by  Agent  in  the
disbursement  of funds to or for the account of Borrower or other members of the
Lender  Group  (by  wire transfer or otherwise), (d) charges paid or incurred by
Agent  resulting  from  the  dishonor

                                     -14-
<PAGE>

of  checks,  (e)  reasonable  costs  and expenses paid or incurred by the Lender
Group  to correct any default or enforce any provision of the Loan Documents, or
in  gaining possession of, maintaining, handling, preserving, storing, shipping,
selling,  preparing  for  sale,  or  advertising  to sell the Collateral, or any
portion  thereof,  irrespective of whether a sale is consummated, (f) audit fees
and  expenses  of Agent related to audit examinations of the Books to the extent
of  the  fees  and charges (and up to the amount of any limitation) contained in
this  Agreement,  (g) reasonable costs and expenses of third party claims or any
other  suit  paid  or incurred by the Lender Group in enforcing or defending the
Loan  Documents  or in connection with the transactions contemplated by the Loan
Documents  or  the  Lender  Group's  relationship  with  Borrower  or any of its
Subsidiaries,  (h)  Agent's  and  each  Lender's  reasonable  costs and expenses
(including  attorneys  fees)  incurred  in  advising,  structuring,  drafting,
reviewing,  administering,  syndicating, or amending the Loan Documents, and (i)
Agent's  and  each  Lender's reasonable costs and expenses (including attorneys,
accountants,  consultants,  and  other  advisors fees and expenses') incurred in
terminating, enforcing (including attorneys, accountants, consultants, and other
advisors  fees  and  expenses  incurred  in  connection  with  a  "workout,"  a
"restructuring,"  or  an  Insolvency  Proceeding  concerning  Borrower  or  its
Subsidiaries  or  in exercising rights or remedies under the Loan Documents), or
defending  the  Loan  Documents,  irrespective of whether suit is brought, or in
taking  any  Remedial  Action  concerning  the  Collateral.

     "LENDER-RELATED  PERSON"  means,  with  respect  to any Lender, such Lender
together  with such Lender's Affiliates, and the officers, directors, employees,
attorneys,  and  agents  of  such  Lender.

     "LETTER  OF  CREDIT"  means  an  L/C  or an L/C Undertaking, as the context
requires.

     "LETTER  OF  CREDIT  USAGE"  means,  as  of  any date of determination, the
aggregate  undrawn  amount of all outstanding Letters of Credit plus 100% of the
amount  of  outstanding time drafts accepted by an Underlying Issuer as a result
of  drawings  under  Underlying  Letters  of  Credit.

     "LIBOR  DEADLINE"  has  the  meaning  set  forth  in  SECTION  2.13(b)(i).
                                                           -------------------

     "LIBOR  NOTICE"  means  a  written  notice  in  the  form  of  EXHIBIT L-1.
                                                                    ------------

     "LIBOR  OPTION"  has  the  meaning  set  forth  in  SECTION  2.13(a).
                                                         ----------------

     "LIBOR  RATE" means, for each Interest Period for each LIBOR Rate Loan, the
rate  per  annum determined by Agent (rounded upwards, if necessary, to the next
1/100%)  by  dividing  (a)  the Base LIBOR Rate for such Interest Period, by (b)
100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of
the  effective  day  of  any  change  in  the  Reserve  Percentage.

     "LIBOR  RATE  LOAN"  means each portion of an Advance or the Term Loan that
bears  interest  at  a  rate  determined  by  reference  to  the  LIBOR  Rate.

     "LIEN"  means any interest in an asset securing an obligation owed to, or a
claim  by, any Person other than the owner of the asset, irrespective of whether
(a)  such  interest  is  based on the common law, statute, or contract, (b) such
interest  is recorded or perfected, and (c) such interest is contingent upon the
occurrence  of  some  future  event  or  events  or the existence of some future
circumstance or circumstances. Without limiting the generality of the foregoing,
the  term "Lien" includes the lien or security interest arising from a mortgage,
deed  of  trust,  encumbrance,  pledge,  hypothecation,  assignment,  deposit
arrangement,  security  agreement,  conditional sale or trust receipt, or from a
lease,  consignment,  or  bailment  for  security  purposes  and  also  includes
reservations,  exceptions,  encroachments,  easements, rights-of-way, covenants,
conditions,  restrictions,  leases,  and other title exceptions and encumbrances
affecting  Real  Property.

                                     -15-
<PAGE>

     "LLC"  means  A&W  LLC,  a  West  Virginia  limited  liability  company.

     "LLC  PLEDGE  AGREEMENT" means the Amended and Restated Pledge and Security
Agreement dated as of the Closing Date, executed by A&W in favor of the Agent or
otherwise  delivered  pursuant  to  the  Loan  Documents,  in  form,  scope, and
substance  acceptable  to  the  Agent.

     "LOAN  ACCOUNT"  has  the  meaning  set  forth  in  SECTION  2.10.
                                                         -------------

     "LOAN  DOCUMENTS"  means  this  Agreement, the Bank Product Agreements, the
Cash Management Agreements, the Control Agreements, the Disbursement Letter, the
Fee  Letter,  the  Intercompany Notes, the Letters of Credit, the Mortgages, the
Officers' Certificate, the Security Documents, the Subordination Agreements, any
note or notes executed by Borrower in connection with this Agreement and payable
to a member of the Lender Group, and any other agreement entered into, now or in
the  future, by Borrower and the Lender Group in connection with this Agreement.

     "MATERIAL  ADVERSE  CHANGE"  means  (a)  a  material  adverse change in the
business,  prospects,  operations, results of operations, assets, liabilities or
condition  (financial  or otherwise) of Borrower and its Subsidiaries taken as a
whole,  (b)  a  material  impairment  of  Borrower's or any of its Subsidiaries'
ability  to  perform  its  obligations under the Loan Documents to which it is a
party  or  of  the  Lender Group's ability to enforce the Obligations or realize
upon  the  Collateral,  or  (c)  a  material impairment of the enforceability or
priority  of  the Agent's Liens with respect to the Collateral as a result of an
action  or  failure  to  act on the part of Borrower or any of its Subsidiaries.

     "MATERIAL  CONTRACTS" means any supply, purchase, service, employment, tax,
indemnity,  gas marketing, farm-in agreement, farm-out agreement, gas imbalance,
operating,  unitization,  communitization,  partnership, joint venture, or other
agreement  of Borrower, its Subsidiaries, the LLC or any Partnership or by which
Borrower,  its  Subsidiaries,  the  LLC  or  any  Partnership  or  any  of their
respective  properties  are  otherwise bound, if such agreement (i) requires the
expenditure  of  over  $5,000,000.00  by the Borrower or any of its Subsidiaries
during  any  calendar year, or (ii) involves the sale of more than $5,000,000.00
in  Hydrocarbons  by  the  Borrower,  any  of  its Subsidiaries, the LLC, or any
Partnership, or (iii) involves a liability of Borrower, any of its Subsidiaries,
the  LLC,  or  any Partnership, in excess of $5,000,000.00, or (iv) is otherwise
determined by Agent, in its reasonable judgment, to be material to the business,
operations,  or  properties  of Borrower or any of its Subsidiaries, as the same
shall  be  amended,  modified  and supplemented and in effect from time to time.

     "MATURITY  DATE"  has  the  meaning  set  forth  in  SECTION  3.4.
                                                          ------------

     "MAXIMUM  LOAN  AMOUNT" means the lesser of (a) the amount permitted by the
terms  of  the  Indenture  or  (b)  $100,000,000.

     "MAXIMUM  REVOLVER  AMOUNT"  means  $50,000,000.00,  as  such amount may be
reduced  from  time  to  time  in  accordance  with  SECTION  6.23.
                                                     -------------

     "MORTGAGE" means a Mortgage, Deed of Trust, Assignment, Security Agreement,
Financing  Statement  and  Fixture  Filing,  dated  as  of  the  Closing Date or
otherwise delivered pursuant to the Loan Documents, in form, scope and substance
acceptable  to the Agent, executed and delivered by a Pledging Subsidiary or any
other  Subsidiary  of  Borrower, as amended, supplemented, restated or otherwise
modified  from  time  to time in accordance with the terms of this Agreement and
the  other  Loan  Documents.  The  term  "MORTGAGE"  shall include each Mortgage
Supplement  after  execution  and delivery of such Mortgage Supplement. The term
"MORTGAGES"  shall include each and every Mortgage executed and delivered by any
of  the  Pledging  Subsidiaries  hereunder.

                                     -16
<PAGE>

     "MORTGAGE  SUPPLEMENT"  means  a  supplement  to  any Mortgage, in form and
substance  satisfactory  to the Agent, pursuant to which any Pledging Subsidiary
will  grant a lien on additional Property subject to the terms of such Mortgage,
as  amended,  supplemented,  restated or otherwise modified from time to time in
accordance  with  the  terms  of  this  Agreement  and the other Loan Documents.

     "MORTGAGED  PROPERTIES"  means  all of the Oil and Gas Properties and other
collateral  purported  to  be  subject  to  the  Lien  of  the  Mortgages.

     "NET  OPERATING INCOME" means the projected revenue attributable to (a) the
general  partner  interests  of  the  Pledging Subsidiaries in the Partnerships'
interests  in  the  Eligible  Proved  Developed  Producing  Reserves  of  the
Partnerships,  (b)  the membership interests of the Pledging Subsidiaries in the
LLC's  interest  in the Eligible Proved Developed Producing Reserves of the LLC,
and  (c)  the  interests  of  the  Pledging  Subsidiaries in the Eligible Proved
Developed  Producing  Reserves  of  the  Pledging  Subsidiaries,  which  the
Partnerships,  the  LLC  and  the Pledging Subsidiaries can reasonably expect to
receive  from  the  sale of Hydrocarbons therefrom, as shown on the most current
Reserve  Report  net  of  royalties,  minus  production  and  severance  taxes
(including,  without  limitation,  any  "windfall  profits"  or  similar tax but
excluding  income  taxes),  and production expenses, and minus the amount of all
production revenue therefrom from the dates of such reports to the determination
date.

     "NON-PLEDGED  PROPERTIES" means Property of Borrower, its Subsidiaries, the
Partnerships,  and  the LLC which does not constitute Borrowing Base Properties,
the  Gathering  Systems,  or  assets  or  interests  subject to the Liens of the
Partnership  Pledge  Agreements,  the  LLC  Pledge  Agreement, or the Mortgages.

"NON-PREPAYMENT  PREMIUM  EVENT" means either (a) that a material dispute exists
between  Agent  and Borrower as to the Availability due to (i) a redetermination
of  the  Borrowing  Base  by the Agent or (ii) the establishment of a reserve by
Agent  under  SECTION  2.1(b)  (other  than due to an event described in SECTION
              ---------------                                            -------
2.1(b), CLAUSES (i) THROUGH (vi) inclusive, except that a material dispute as to
-----  ------------------------
the  amount  of  a  reserve established under SECTION 2.1(b) clauses (i) through
                                              --------------
(vi) inclusive shall be resolved by binding arbitration under SECTION 17.13) and
                                                              -------------
(x)  at  the  time  of such dispute there exists no Default, Event of Default or
Material  Adverse Change and (y) the Obligations are prepaid within 60 days from
the  date  Borrower  notifies  Agent in writing of such dispute, or (b) Borrower
requests  and  fails  to  receive within 30 days the consent of the Agent and/or
Lenders,  as  applicable, to a waiver of the prohibition of SECTION 7.1 to allow
                                                            -----------
Borrower to incur additional Indebtedness which as of the date of this Agreement
could  be  incurred  by  Borrower  without  a  breach  of the prohibition or the
incurrence  of  additional  Indebtedness  under  the  Indenture, except a credit
extension  of  a  type  described  in  the  definition of "Credit Facilities" as
drafted  in  the  Indenture  as of the date of the Agreement; provided, however,
that such Indebtedness to be incurred or utilized to prepay the Obligations must
be  funded  within  60  days  of the Borrower's receipt of written notice of the
Agent's  and/or  Lenders',  as appropriate, nonconsent to the incurrence of such
Indebtedness.

     "NON-RECOURSE DEBT" means Indebtedness as to which (a) neither Borrower nor
any Subsidiary (other than an Unrestricted Subsidiary) is directly or indirectly
liable  pursuant  to  the  terms  of  such Indebtedness, and (b) no default with
respect  to  such  Indebtedness  would  permit  (upon  notice,  lapse of time or
otherwise) any holder of any other Indebtedness of Borrower or any Subsidiary to
declare  a default on such other Indebtedness or cause the payment thereof to be
accelerated  or  payable  prior  to  its  stated  maturity.

     "NYMEX"  means  the  New  York  Mercantile  Exchange  or  its  successor.

                                     -17-
<PAGE>

"NYMEX PRICE" means, as of the date of the determination thereof, the average of
the  24  succeeding  monthly  futures contract prices, commencing with the month
during  which  the  determination  is  to  be  made,  for the category of Proved
Developed Producing Reserves included in the most recent Reserve Report provided
by  Borrower to Agent pursuant to SECTION 6.2 as quoted on the NYMEX, or, if the
                                  -----------
NYMEX no longer provides futures contract price quotes for 24 month periods, the
longest period of quotes of less than 24 months shall be used, and, if the NYMEX
no  longer  provides  such futures contract quotes or has ceased to operate, the
Agent  shall  designate  another  nationally  recognized commodities exchange to
replace  the  NYMEX.

"OBLIGATIONS"  means  (a)  all loans (including the Term Loan), Advances, debts,
principal, interest (including any interest that, but for the commencement of an
Insolvency Proceeding, would have accrued), contingent reimbursement obligations
with  respect to outstanding Letters of Credit, premiums, liabilities (including
all  amounts  charged  to Borrower's Loan Account pursuant hereto), obligations,
fees (including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the commencement of
an  Insolvency  Proceeding,  would  have  accrued),  lease payments, guaranties,
covenants,  and  duties  of any kind and description owing by Borrower or any of
the  Subsidiaries  to  the  Lender  Group  pursuant  to or evidenced by the Loan
Documents  (including,  without  limitation,  all claims for indemnity under the
Loan  Documents  including  claims  under  SECTION  11.3  of this Agreement) and
                                           -------------
irrespective  of  whether  for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and  including all interest not paid when due and all Lender Group Expenses that
Borrower or any of its Subsidiaries are required to pay or reimburse by the Loan
Documents,  by  law,  or  otherwise,  and (b) all Bank Product Obligations.  Any
reference  in  this  Agreement or in the Loan Documents to the Obligations shall
include  all  amendments,  changes,  extensions,  modifications,  renewals,
alterations,  replacements, substitutions, and supplements, thereto and thereof,
as  applicable,  both  prior  and  subsequent  to  any  Insolvency  Proceeding.

     "OFFICERS'  CERTIFICATE"  means  the  representations  and  warranties  of
officers form submitted by Agent to Borrower, together with Borrower's completed
responses  to  the  inquiries  set forth therein, the form and substance of such
responses  to  be  satisfactory  to  Agent.

     "OIL  AND  GAS  PROPERTIES" means the Hydrocarbon Interests; the Properties
now  or  hereafter  pooled or unitized with Hydrocarbon Interests; all presently
existing  or  future  unitization, pooling agreements and declarations of pooled
units  and  the  units  created  thereby (including without limitation all units
created under orders, regulations and rules of any Governmental Authority having
jurisdiction)  which may affect all or any portion of the Hydrocarbon Interests;
all  operating  agreements,  joint  venture  agreements,  contracts  and  other
agreements  which  relate to any of the Hydrocarbon Interests or the production,
sale,  purchase,  exchange or processing of Hydrocarbons from or attributable to
such  Hydrocarbon  Interests;  all  Hydrocarbons  in  and under and which may be
produced  and  saved  or  attributable  to  the Hydrocarbon Interests, the lands
covered  thereby  and all oil in tanks and all rents, issues, profits, proceeds,
products,  revenues  and  other  incomes from or attributable to the Hydrocarbon
Interests;  all  tenements,  profits a prendre, hereditaments, appurtenances and
Properties  in  anywise  appertaining,  belonging,  affixed or incidental to the
Hydrocarbon  Interests,  Properties,  rights,  titles,  interests  and  estates
described  or  referred  to  above,  including  any  and  all  Property, real or
personal,  now  owned  or hereinafter acquired and situated upon, used, held for
use or useful in connection with the operating, working or development of any of
such  Hydrocarbon  Interests  or  Property  (excluding drilling rigs, automotive
equipment  or  other  personal  Property  which  may be on such premises for the
purpose  of  drilling  a well or for other similar temporary uses) and including
any  and  all oil wells, gas wells, water wells, injection wells or other wells,
buildings,  structures,  fuel  separators,  liquid  extraction  plants,  plant
compressors,  pumps,  pumping  units,  field  gathering  systems, tanks and tank
batteries,  fixtures,  valves,  fittings, machinery and parts, engines, boilers,
meters,  apparatus,  equipment,  appliances,  tools,  implements, cables, wires,
towers,  casing,  tubing  and rods, surface leases, rights-of-way, easements and
servitudes  together with all additions, substitutions, replacements, accessions
and  attachments  to  any  and  all  of  the  foregoing.

                                     -18-
<PAGE>

     "ORIGINATING  LENDER"  has  the  meaning  set  forth  in  SECTION  14.1(e).
                                                               ----------------

     "OVERADVANCE"  has  the  meaning  set  forth  in  SECTION  2.5.
                                                       ------------

     "PARTICIPANT"  has  the  meaning  set  forth  in  SECTION  14.1(e).
                                                       ----------------

     "PARTNERSHIP  PLEDGE AGREEMENTS" means the Amended and Restated Partnership
Pledge  and  Security  Agreements  dated  as  of  the  Closing Date or otherwise
delivered  pursuant  to  the  Loan  Documents,  in  form,  scope,  and substance
acceptable  to  the Agent, executed by the Pledging Subsidiaries in favor of the
Agent.

     "PARTNERSHIPS"  means  those  partnerships  and  joint  ventures  listed on
SCHEDULE P-1.
-------------

     "PERMITTED  DISCRETION" means a determination made in good faith and in the
exercise  of  reasonable  business  judgment.

     "PERMITTED  DISPOSITIONS" means (a) sales or other dispositions by Borrower
or  its  Subsidiaries  of  Equipment  that  is  substantially  worn, damaged, or
obsolete  in  the  ordinary  course  of  business,  (b) sales by Borrower or its
Subsidiaries  of  Inventory and Hydrocarbons to buyers in the ordinary course of
business,  (c)  the  use or transfer of money or Cash Equivalents by Borrower or
its  Subsidiaries  in  a  manner  that  is  not  prohibited by the terms of this
Agreement  or  the  other  Loan  Documents, (d) the licensing by Borrower or its
Subsidiaries,  on a non-exclusive basis, of patents, trademarks, copyrights, and
other intellectual property rights in the ordinary course of business, (e) sales
of Non-Pledged Properties of the Pledging Subsidiaries having an aggregate value
not  exceeding  $2,000,000.00  in  any  fiscal year of Borrower provided (i) the
Non-Pledged  Property  subject  to  disposition  was  acquired  by  a  Pledging
Subsidiary  after  the  Closing  Date and (ii) the disposition does not expose a
Bank  Product  Provider  to increased risk under any Hedging Obligation, (f) the
abandonment,  farm-out, lease, or sublease of undeveloped Oil and Gas Properties
of  Borrower  or any of its Subsidiaries in the ordinary course of business, (g)
the  trade  or exchange by Borrower or any of its Subsidiaries of any of its Oil
and  Gas  Properties  (other  than  the  Borrowing  Base Properties, Non-Pledged
Properties,  and  the  Gathering  Systems)  for  Oil and Gas Properties owned by
another Person which the Board of Directors of Borrower determines in good faith
to be of approximately equivalent value; and (h) sales of Non-Pledged Properties
by  Borrower or a Subsidiary (other than a Pledging Subsidiary, the Partnerships
or  the  LLC) provided prior written notice of such sale or other disposition is
delivered to Agent setting forth the property sold or otherwise disposed of, its
value,  and  such  other  information  as  Agent  may  reasonably  request.

     "PERMITTED  INVESTMENTS"  means  (a)  investments  in Cash Equivalents, (b)
investments  in  negotiable  instruments  for  collection,  (c) advances made in
connection  with  purchases  of  goods  or  services  in  the ordinary course of
business,  (d)  investments  received  in  connection  with  the  bankruptcy  or
reorganization  of  suppliers  and  customers  and  in  settlement of delinquent
obligations  of  and other disputes with, customers and suppliers arising in the
ordinary  course  of  business,  (e)  investments  made  as a result of non-cash
consideration  of  an  asset  sale  that  was  made  pursuant  to  a  Permitted
Disposition,  (f)  acceptance  by  Borrower  of  notes  payable  from employees,
officers, or directors of Borrower or any of its Subsidiaries as payment for the
purchase  of  common  or  Class A stock by such employees; provided that (i) the
aggregate  principal  amount owing to Borrower under such notes shall not exceed
$1,600,000.00  at  any  one  time  outstanding,  and (ii) any such note shall be
secured by a pledge of the shares of stock purchased therewith, and (g) loans by
Borrower  to  officers,  directors  and  employees in connection with Borrower's
annual  drilling programs consistent with past practices up to but not exceeding
$2,000,000.00  in  the  aggregate  at  any  one  time  outstanding.

                                     -19-
<PAGE>

     "PERMITTED LIENS" means (a) Liens held by Agent, (b) Liens for unpaid taxes
that  either  (i)  are not yet delinquent, or (ii) do not constitute an Event of
Default  hereunder  and are the subject of Permitted Protests, (c) the interests
of  lessors  under  operating  leases,  (d) Liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business of Borrower or any of its
Subsidiaries  and not in connection with the borrowing of money, and which Liens
either (i) are for sums not yet delinquent, or (ii) are the subject of Permitted
Protests,  (e)  Liens  arising  from  deposits made in connection with obtaining
worker's  compensation or other unemployment insurance, (f) Liens or deposits to
secure  performance  of bids, tenders, or leases incurred in the ordinary course
of  business  of  Borrower or any of its Subsidiaries and not in connection with
the borrowing of money, (g) Liens granted as security for surety or appeal bonds
in  connection  with  obtaining such bonds in the ordinary course of business of
Borrower  or  any  of  its Subsidiaries, (h) with respect to any Property (other
than  the  Borrowing  Base Properties) from which Hydrocarbons may be severed or
extracted  in commercial quantities, Liens for farmout, farmin, joint operating,
and area of mutual interest agreements and/or similar arrangements that Borrower
determines  in  good  faith to be necessary for the economic development of such
Property  (other than the Borrowing Base Properties) and are customary and usual
for  the  area in which such Property (other than the Borrowing Base Properties)
is  located,  (i)  with  respect  to  any  Borrowing  Base Properties from which
Hydrocarbons  may  be  severed  or extracted in commercial quantities, Liens for
farm-out,  farm-in,  operating,  joint  operating,  and  area of mutual interest
agreements  and/or  similar  arrangements  that  the Borrower determines in good
faith  to  be  necessary  for  the  economic  development of such Borrowing Base
Properties and are customary and usual for the area in which such Borrowing Base
Properties  are  located; provided, however, that such Liens held by Borrower or
                          --------  -------
any of its Subsidiaries or Affiliates shall be expressly made subordinate to the
Liens  created  by  the  Security Documents pursuant to terms of a Subordination
Agreement,  (j)  Liens  associated  with  Production  Payments  now  existing or
hereafter  created  on  oil,  gas  or  mineral  leases  or interests (other than
Borrowing  Base  Properties)  now owned or hereafter acquired by the Borrower or
any  Subsidiary;  provided  (i)  such  Liens  are limited to the interest in the
Properties  subject  to  the  Production  Payment  and do not apply to any other
Property or assets of Borrower or any Subsidiary and (ii) such Liens only secure
the  Indebtedness  incurred  pursuant  to  the  Production  Payments,  and  (k)
royalties,  overriding  royalties,  revenue  interests, net revenue interest and
other  similar burdens now existing or hereafter acquired on oil, gas or mineral
leases  or  interests  now  owned  or  hereafter  acquired  by  Borrower  or any
Subsidiary  and, with respect to any Borrowing Base Properties, are reflected in
the  most  recent  Reserve  Report.

     "PERMITTED PROTEST" means the right of Borrower or any of its Subsidiaries,
as  applicable,  to  protest any Lien (other than any such Lien that secures the
Obligations), taxes (other than payroll taxes or taxes that are the subject of a
United  States federal tax lien), or rental payment, provided that (a) a reserve
with respect to such obligation is established on the Books in such amount as is
required  under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by Borrower or any of its Subsidiaries, as applicable, in good faith,
and  (c)  Agent is satisfied that, while any such protest is pending, there will
be  no  impairment  of  the  enforceability, validity, or priority of any of the
Agent's  Liens.

     "PERSON"  means natural persons, corporations, limited liability companies,
limited  partnerships,  general  partnerships,  limited  liability partnerships,
joint  ventures,  trusts,  land trusts, business trusts, or other organizations,
irrespective  of  whether  they are legal entities, and governments and agencies
and  political  subdivisions  thereof.

                                     -20-
<PAGE>

     "PERSONAL  PROPERTY COLLATERAL" means all Collateral other than Hydrocarbon
Interests  and  Real  Property.
     "PLEDGING  SUBSIDIARIES"  means  Eastern  American,  A&W  and  any  other
Subsidiary  of  Borrower that executes a Mortgage, LLC Pledge Agreement and/or a
Partnership  Pledge  Agreement.

     "PROJECTIONS"  means  Borrower's  forecasted (a) balance sheets, (b) profit
and  loss statements, and (c) cash flow statements, all prepared on a consistent
basis with Borrower's historical financial statements, together with appropriate
supporting  details  and  a  statement  of  underlying  assumptions.

     "PRODUCTION  PAYMENTS"  means  a  production payment (whether volumetric or
dollar denominated) or similar royalty, overriding royalty, net profits interest
or other similar interest in Oil and Gas Properties, or the right to receive all
or  a  portion  of  the  production  or the proceeds from the sale of production
attributable  to  such  Oil and Gas Properties where the holder of such interest
has  recourse  solely to such interest and the grantor or transferor thereof has
an express contractual obligation to produce and sell Hydrocarbons from such Oil
and  Gas  Properties,  or to cause such Oil and Gas Properties to be so operated
and  maintained,  in  each  case  in  a  reasonably  prudent  manner.

     "PROPERTY"  means  any  interest  in any kind of Property or asset, whether
real,  personal  or  mixed,  or  tangible  or  intangible.

"PRO  RATA  SHARE"  means,  as  of  any  date  of  determination:

(a)  with respect to a Lender's obligation to make Advances and receive payments
     of principal, interest, fees, costs, and expenses with respect thereto, (i)
     prior  to the Revolver Commitments being terminated or reduced to zero, the
     percentage  obtained  by dividing (y) such Lender's Revolver Commitment, by
     (z)  the  aggregate  Revolver Commitments of all Lenders, and (ii) from and
     after  the  time  that  the  Revolver  Commitments  have been terminated or
     reduced  to  zero,  the  percentage  obtained by dividing (y) the aggregate
     outstanding principal amount of such Lender's Advances by (z) the aggregate
     outstanding  principal  amount  of  all  Advances,

(b)  with  respect to a Lender's obligation to participate in Letters of Credit,
     to  reimburse  the  Issuing  Lender,  and  to receive payments of fees with
     respect  thereto, (i) prior to the Revolver Commitments being terminated or
     reduced  to  zero,  the  percentage  obtained by dividing (y) such Lender's
     Revolver  Commitment,  by  (z)  the  aggregate  Revolver Commitments of all
     Lenders,  and  (ii)  from  and after the time that the Revolver Commitments
     have  been  terminated  or  reduced  to  zero,  the  percentage obtained by
     dividing  (y)  the  aggregate outstanding principal amount of such Lender's
     Advances by (z) the aggregate outstanding principal amount of all Advances,

(c)  with  respect  to a Lender's obligation to make the Term Loan and receive
     payments  of  interest, fees, and principal with respect thereto, (i) prior
     to  the  making  of  the Term Loan, the percentage obtained by dividing (y)
     such  Lender's  Term  Loan  Commitment,  by (z) the aggregate amount of all
     Lenders'  Term  Loan Commitments, and (ii) from and after the making of the
     Term  Loan, the percentage obtained by dividing (y) the principal amount of
     such  Lender's  portion of the Term Loan by (z) the principal amount of the
     Term  Loan,  and

                                     -21-
<PAGE>


(d)  with  respect to all other matters as to a particular Lender (including the
indemnification   obligations   arising   under   SECTION 16.7),  the percentage
                                                   ------------
obtained  by dividing (i) such Lender's Revolver Commitment plus the outstanding
principal  amount  of  such  Lender's  portion  of  the  Term  Loan, by (ii) the
aggregate  amount  of  Total  Commitments  of  all  Lenders plus the outstanding
principal  amount  of  the  Term Loan; provided, however, that, in the event the
                                       --------  -------
Revolver Commitments have been terminated or reduced to zero, the Pro Rata Share
under  this  clause  shall  be  the  percentage  obtained  by  dividing  (A) the
outstanding  principal  amount  of  such  Lender's  Advances  plus such Lender's
ratable  portion of the Risk Participation Liability with respect to outstanding
Letters of Credit plus the outstanding principal amount of such Lender's portion
of  the  Term Loan, by (B) the outstanding principal amount of all Advances plus
the  aggregate  amount  of  the Risk Participation Liability with respect to the
outstanding  Letters  of  Credit  plus  the  principal  amount of the Term Loan.


     "PROVED  DEVELOPED  NON-PRODUCING  RESERVES"  means  those  Oil  and  Gas
Properties  of  the  Borrower,  the  Pledging  Subsidiaries,  the  LLC  and  the
Partnerships  designated as "proved developed non-producing" (in accordance with
the  Definitions  for Oil and Gas Reserves approved by the Board of Directors of
the  Society  for  Petroleum  Engineers,  Inc. from time to time) in the Reserve
Report.

     "PROVED  DEVELOPED  PRODUCING  RESERVES" means those Oil and Gas Properties
designated  as  "proved developed producing" (in accordance with the Definitions
for  Oil  and Gas Reserves approved by the Board of Directors of the Society for
Petroleum  Engineers,  Inc.),  from  time to time in the Reserve Report. "PROVED
DEVELOPED  PRODUCING  RESERVES  OF THE PARTNERSHIPS AND THE LLC" means those Oil
and  Gas  Properties  of  the  Partnerships  and  the  LLC designated as "proved
developed  producing"  (in  accordance  with  the  Definitions  for  Oil and Gas
Reserves  approved  by  the  Board  of  Directors  of  the Society for Petroleum
Engineers,  Inc.  from  time  to  time)  in  the  Reserve  Report  and  used  in
establishing  the  Borrowing  Base.

     "PROVED  DEVELOPED  PRODUCING  RESERVES OF THE PLEDGING SUBSIDIARIES" means
those  Oil and Gas Properties of the Pledging Subsidiaries designated as "proved
developed  producing"  (in  accordance  with  the  Definitions  for  Oil and Gas
Reserves  approved  by  the  Board  of  Directors  of  the Society for Petroleum
Engineers,  Inc.,  from  time  to  time)  in  the  Reserve  Report  and  used in
establishing  the  Borrowing  Base.

     "PROVED  UNDEVELOPED  RESERVES"  means  those Oil and Gas Properties of the
Pledging  Subsidiaries,  the  LLC  and  the  Partnerships  designated as "proved
undeveloped"  (in  accordance  with  the  Definitions  for  Oil and Gas Reserves
approved  by the Board of Directors of the Society for Petroleum Engineers, Inc.
from  time  to  time)  in  the  Reserve  Report.

     "PV-10  VALUE"  means,  as  of  the  date  of determination, the sum of the
present  values  of  the Net Operating Income expected to be received in each of
the  months  following  the  date  of  determination,  determined  as  follows:

(a)  the  Net Operating Income shall be determined on the lesser amount of (i) a
     ceiling  value  of  MmBTU  $4.50  -  and  Bbl - $$25.00 of Proved Developed
     Producing  Reserves  as of such date of determination, adjusting such price
     to  reflect the appropriate Basis Differential with respect to Hydrocarbons
     produced  from  the  Eligible  Proved  Producing  Reserves  of the Pledging
     Subsidiaries  and  the  Eligible Proved Developed Producing Reserves of the
     Partnerships  and  the  LLC,  as  determined  by  the Approved Engineer and
     approved  by  Agent  or  (ii) (x) on the basis of the contract price to the
     extent  contracts exist or (y) in the event that contracts do not exist, on
     the  basis  of  the  applicable  NYMEX  Price  for  the  category of Proved
     Developed  Producing  Reserves  as of such date of determination, adjusting
     such  price  to  reflect the appropriate Basis Differential with respect to
     Hydrocarbons  produced  from  the Eligible Proved Producing Reserves of the
     Pledging  Subsidiaries and the Eligible Proved Developed Producing Reserves
     of the Partnerships and the LLC, as determined by the Approved Engineer and
     approved  by  Agent;  and

                                     -22-
<PAGE>

(b)  the  present  value  of  each  such  Net  Operating  Income amount shall be
     determined  by discounting such Monthly Net Operating Income from the month
     in which it is expected to be received, on a monthly basis, to such date of
     determination  at  a  rate  of  10%  per  annum.

     "REAL  PROPERTY"  means any estates or interests in real property now owned
or  hereafter  acquired  by  Borrower  or  any  of  its  Subsidiaries  and  the
improvements  thereto.

     "RECORD"  means information that is inscribed on a tangible medium or which
is  stored  in  an  electronic or other medium and is retrievable in perceivable
form.

     "RELEASE"  means  a  "release",  as  such  term  is  defined  in  CERCLA.

     "REMEDIAL ACTION" means any action under Environmental Laws required to (a)
clean  up, remove, remediate, contain, treat, monitor, assess, evaluate, dispose
of,  abate,  or  in  any  other  way  address  pollutants  (including  Hazardous
Materials)  in  the  indoor  or  outdoor environment, (b) prevent the Release or
threat  of  a  Release  or  minimize  the  further Release of pollutants, or (c)
investigate  and determine if a remedial response is needed and to design such a
response  and  any  post-remedial  investigation,  monitoring,  operation,  and
maintenance  and  care.

     "REPLACEMENT  LENDER"  has  the  meaning  set  forth  in  SECTION  15.2(a).
                                                               ----------------

     "REPORT"  has  the  meaning  set  forth  in  SECTION  16.17.
                                                  --------------

     "REQUIRED  AVAILABILITY" means Excess Availability in an amount of not less
than  $10,000,000.00.

     "REQUIRED  LENDERS"  means,  at  any time, (a) Agent, and (b) Lenders whose
aggregate  Pro Rata Shares (calculated under clause (d) of the definition of Pro
Rata  Shares)  equal  or  exceed  66.67%.

     "RESERVE  PERCENTAGE"  means,  on  any  day,  for  any  Lender, the maximum
percentage  prescribed  by  the Board of Governors of the Federal Reserve System
(or  any  successor  Governmental  Authority)  for  determining  the  reserve
requirements  (including  any  basic,  supplemental,  marginal,  or  emergency
reserves)  that  are in effect on such date with respect to eurocurrency funding
(currently  referred  to  as  "eurocurrency liabilities") of that Lender, but so
long  as such Lender is not required or directed under applicable regulations to
maintain  such  reserves,  the  Reserve  Percentage  shall  be  zero.

     "RESERVE  REPORT"  means  the  Initial  Reserve Report and any other report
delivered  pursuant  to  SECTION  6.2, in form and substance satisfactory to the
                         ------------
Agent,  prepared  at  the  sole cost and expense of the Borrower by the Approved
Engineer,  which  shall  evaluate  the  oil and gas reserves attributable to the
Hydrocarbon  Interests owned directly by Borrower, its Subsidiaries, the LLC and
the  Partnerships,  as  of  the  immediately preceding January 1 or July 1. Each
Reserve  Report  shall  set  forth  volumes,  projections  of the future rate of
production, Hydrocarbon prices, escalation rates, discount rate assumptions, and
net  proceeds  of  production,  present value of the net proceeds of production,
estimated costs of Remedial Action, operating expenses and capital expenditures,
in  each  case  based upon updated economic assumptions reasonably acceptable to
the  Agent.

     "REVOLVER  COMMITMENT"  means,  with  respect  to each Lender, its Revolver
Commitment,  and,  with  respect  to all Lenders, their Revolver Commitments, in
each  case  as such Dollar amounts are set forth beside such Lender's name under
the  applicable  heading  on  SCHEDULE  C-1  or  on  the  signature  page of the
                              -------------
Assignment  and  Acceptance  pursuant  to  which  such  Lender  became  a Lender
hereunder,  as  such  amounts  may  be  reduced  or  increased from time to time
pursuant  to assignments made in accordance with the provisions of SECTION 14.1.
                                                                   ------------

                                     -23-
<PAGE>

     "REVOLVER USAGE" means, as of any date of determination, the sum of (a) the
then  extant  amount of outstanding Advances, plus (b) the then extant amount of
the  Letter  of  Credit  Usage.

     "RISK  PARTICIPATION  LIABILITY"  means,  as  to each Letter of Credit, all
reimbursement  obligations  of Borrower to the Issuing Lender with respect to an
L/C Undertaking, consisting of (a) the amount available to be drawn or which may
become available to be drawn, (b) all amounts that have been paid by the Issuing
Lender  to  the  Underlying  Issuer  to  the  extent not reimbursed by Borrower,
whether by the making of an Advance or otherwise, and (c) all accrued and unpaid
interest,  fees,  and  expenses  payable  with  respect  thereto.

     "SEC"  means  the  United States Securities and Exchange Commission and any
successor  thereto.

     "SECURITIES  ACCOUNT"  means a "securities account" as that term is defined
in  the  Code.

     "SECURITY  DOCUMENTS"  means  the  Mortgages,  the  Partnership  Pledge
Agreements,  the Borrower's Security Agreement, the LLC Pledge Agreement and all
other  security  documents  hereafter  delivered to Agent granting a Lien on any
asset  of  any  Person  to  secure  the  Obligations.

     "SETTLEMENT  AGREEMENT" means that certain Settlement Agreement dated as of
February  24, 2004 by and among Borrower, MacKay Shields LLC, a Delaware limited
liability  company,  Debt Strategies Fund, Inc., a Maryland corporation, Merrill
Lynch High Current Income Fund, a series of Merrill Lynch Variable Series Funds,
Inc., a New Jersey corporation, High Income Portfolio, a series of Merrill Lynch
Bond  Fund,  Inc., a Maryland corporation, Senior High Income Portfolio, Inc., a
Maryland  corporation,  High  Yield  Portfolio, a series of Merrill Lunch Series
Fund,  Inc.,  a New Jersey corporation, Income Strategies Portfolio, a series of
Merrill Lunch Global Investment Series, a Luxembourg entity, and U.S. High Yield
Fund,  a  series  of Merrill Lynch International Investments Funds, a Luxembourg
entity  (collectively,  the  "NOTEHOLDERS").

     "SOLVENT" means, with respect to any Person on a particular date, that such
Person  is  not  insolvent  (as  such  term is defined in the Uniform Fraudulent
Transfer  Act).

     "STOCK"  means all shares, options, warrants, interests, participations, or
other  equivalents  (regardless  of  how  designated) of or in a Person, whether
voting  or  nonvoting,  including  common  stock,  preferred stock, or any other
"equity  security"  (as such term is defined in Rule 3a11-1 of the General Rules
and  Regulations  promulgated  by  the  SEC  under  the  Exchange  Act).

     "SUBSIDIARY" of a Person means a corporation, limited liability company, or
other  entity  (other  than  Partnerships)  in  which  that  Person  directly or
indirectly  owns or controls the shares of Stock having ordinary voting power to
elect  a  majority  of  the  board  of  directors  (or  appoint other comparable
managers)  of  such  corporation,  limited  liability  company, or other entity.

     "SUBORDINATED  NOTES"  means  the  9.50% Senior Subordinated Notes due 2007
issued  by  Energy  Corporation  of  America  in  the  amount  of  $200,000,000.

     "SUBORDINATION  AGREEMENT"  means an agreement executed by a Person holding
or  having  the right to a Lien on any Collateral subordinating such Lien to the
Agent's  Liens,  all  in  form,  scope,  and  substance  satisfactory  to Agent.

                                     -24-
<PAGE>

     "SWING  LENDER"  means Foothill or any other Lender that, at the request of
Borrower and with the consent of Agent agrees, in such Lender's sole discretion,
to  become  the  Swing  Lender  under  SECTION  2.3(d).
                                       ---------------

     "SWING  LOAN"  has  the  meaning  set  forth  in  SECTION  2.3(d)(i).
                                                       ------------------

     "TAXES" means any and all present or future taxes, levies, imposts, duties,
deductions,  charges  or  withholdings  imposed  by  any Governmental Authority.

     "TERM  LOAN"  has  the  meaning  set  forth  in  SECTION  2.2.
                                                      ------------

     "TERM  LOAN  AMOUNT"  means  $50,000,000.

     "TERM  LOAN  COMMITMENT"  means, with respect to each Lender, its Term Loan
Commitment,  and,  with  respect to all Lenders, their Term Loan Commitments, in
each  case  as such Dollar amounts are set forth beside such Lender's name under
the  applicable  heading  on  SCHEDULE  C-1  or in the Assignment and Acceptance
                              -------------
pursuant  to which such Lender became a Lender hereunder, as such amounts may be
reduced  or  increased  from  time  to  time  pursuant  to  assignments  made in
accordance  with  the  provisions  of  SECTION  14.1.
                                       -------------

    "TOTAL COMMITMENT" means, with respect to each Lender, its Total Commitment,
and,  with respect to all Lenders, their Total Commitments, in each case as such
Dollar  amounts  are  set  forth  beside such Lender's name under the applicable
heading  on  SCHEDULE  C-1  attached  hereto  or  on  the  signature page of the
             -------------
Assignment  and  Acceptance  pursuant  to  which  such  Lender  became  a Lender
hereunder,  as  such  amounts  may  be  reduced  or  increased from time to time
pursuant  to  assignment made in accordance with the provisions of SECTION 14.1.
                                                                   ------------

     "TOTAL  PROVED  DEVELOPED  PRODUCING  RESERVES"  means the Proved Developed
Producing  Reserves  of  the  Partnerships  and the LLC and the Proved Developed
Producing  Reserves  of  the  Pledging  Subsidiaries.

     "TOTAL  USAGE"  means,  as of any date of determination, the sum of (a) the
then  extant  amount of outstanding Advances, plus (b) the then extant amount of
the  Letter  of  Credit Usage, plus (c) the then extant amount of the Term Loan.

     "TOTAL  VALUE"  means an amount equal to the sum of (a) with respect to the
LLC  and  each  Partnership,  the  PV-10  Value of the Eligible Proved Developed
Producing Reserves of the Partnerships and the LLC multiplied (i) in the case of
the Partnerships, by the general partnership interest of the applicable Pledging
Subsidiary  in  such  Partnership,  and  (ii)  in  the  case  of  the LLC by the
membership  interest  of  A&W  in  the LLC plus (b) with respect to the Pledging
Subsidiaries,  the  PV-10  Value  of  the  Eligible  Proved  Developed Producing
Reserves  of  the  Pledging  Subsidiaries.

     "UNDERLYING ISSUER" means a third Person which is the beneficiary of an L/C
Undertaking and which has issued a letter of credit at the request of Lender for
the  benefit  of  Borrower.

     "UNDERLYING LETTER OF CREDIT" means a letter of credit that has been issued
by  an  Underlying  Issuer.

     "UNITED  STATES"  means  the  United  States  of  America.

                                     -25-
<PAGE>

     "UNRESTRICTED  SUBSIDIARY"  has  the  meaning  assigned  that  term  in the
Indenture  as  in  effect  on  the  date  of  this  Agreement.

     "VOIDABLE  TRANSFER"  has  the  meaning  set  forth  in  SECTION  17.7.
                                                              -------------

     "WELLS"  means any existing oil or gas well which is producing Hydrocarbons
from  the  Mortgaged  Properties.

     "WELLS  FARGO"  means  Wells  Fargo  Bank, National Association, a national
banking  association.

1.2     ACCOUNTING  TERMS.  All accounting terms not specifically defined herein
        -----------------
shall  be  construed  in  accordance  with  GAAP.  When  used  herein,  the term
"financial  statements" shall include the notes and schedules thereto.  Whenever
the  term  "Borrower"  is  used  in respect of a financial covenant or a related
definition,  it  shall  be understood to mean Borrower and its Subsidiaries on a
consolidated  basis  unless  the  context  clearly  requires  otherwise.

1.3     CODE.  Any  terms  used  in  this Agreement that are defined in the Code
        ----
shall be construed and defined as set forth in the Code unless otherwise defined
herein;  provided,  however,  that to the extent that the Code is used to define
any  term  herein  and such term is defined differently in different Articles of
the  Code,  the  definition  of  such  term contained in Article 9 shall govern.

1.4     CONSTRUCTION.  Unless  the  context  of this Agreement or any other Loan
        ------------
Document  clearly  requires  otherwise,  references  to  the  plural include the
singular,  references  to  the singular include the plural, the terms "includes"
and  "including" are not limiting, and the term "or" has, except where otherwise
indicated,  the inclusive meaning represented by the phrase "and/or."  The words
"hereof,"  "herein,"  "hereby," "hereunder," and similar terms in this Agreement
or  any other Loan Document refer to this Agreement or such other Loan Document,
as  the  case  may  be,  as  a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be.  Section, subsection,
clause,  schedule,  and  exhibit  references herein are to this Agreement unless
otherwise  specified.  Any  reference  in  this  Agreement  or in the other Loan
Documents  to  any  agreement,  instrument,  or  document  shall  include  all
alterations,  amendments,  changes,  extensions,  modifications,  renewals,
replacements,  substitutions, joinders, and supplements, thereto and thereof, as
applicable  (subject  to  any  restrictions  on  such  alterations,  amendments,
changes,  extensions,  modifications,  renewals,  replacements,  substitutions,
joinders,  and  supplements  set  forth  herein).  Any  reference  herein to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full  in cash (or cash collateralization in accordance with the terms hereof) of
all Obligations other than contingent indemnification Obligations and other than
any  Bank  Product Obligations that, at such time, are allowed by the applicable
Bank Product Provider to remain outstanding and are not required to be repaid or
cash collateralized pursuant to the provisions of this Agreement.  Any reference
herein  to any Person shall be construed to include such Person's successors and
assigns.  Any  requirement  of  a  writing contained herein or in the other Loan
Documents  shall  be  satisfied  by  the transmission of a Record and any Record
transmitted  shall  constitute  a representation and warranty as to the accuracy
and  completeness  of  the  information  contained  therein.

1.5     SCHEDULES  AND  EXHIBITS.  All of the schedules and exhibits attached to
        ------------------------
this  Agreement  shall  be  deemed  incorporated  herein  by  reference.

                                     -26-
<PAGE>

2.     LOAN  AND  TERMS  OF  PAYMENT

2.1     REVOLVER  ADVANCES.
        ------------------

     (a)  Subject  to the terms and conditions of this Agreement, and during the
term  of  this  Agreement,  each  Lender  with  a  Revolver  Commitment  agrees
(severally,  not jointly or jointly and severally) to make advances ("ADVANCES")
to Borrower in an amount at any one time outstanding not to exceed such Lender's
Pro  Rata  Share  of  an  amount equal to the lesser of (i) the Maximum Revolver
Amount  less  the  Letter  of  Credit  Usage, or (ii) the Borrowing Base then in
effect  less  the  Letter  of  Credit  Usage. For purposes of this Agreement and
subject to the provisions of SECTION 2.16of this Agreement, "Borrowing Base," as
                             ------------
of  any  date  of  determination,  shall  mean  the  result  of:

(w)  an  amount equal to 60% of the PV-10 Value of the Eligible Proved Developed
     Producing  Reserves  of  the  Pledging  Subsidiaries  directly owned by the
     Pledging  Subsidiaries, as reflected in the most recent report delivered in
     accordance  with  SECTION  6.2,  plus
                       ------------

(x)  an  amount with respect to each Partnership equal to 60% of the PV-10 Value
     of  the Eligible Proved Developed Producing Reserves directly owned by such
     Partnership  multiplied by the general partnership interest of the Pledging
     Subsidiary  in  such  partnership,  plus

(y)  an  amount  with  respect to the LLC equal to 60% of the PV-10 Value of the
     Eligible  Proved  Developed  Producing  Reserves  directly owned by the LLC
     multiplied  by  the  membership  interest  of  A&W  in  the  LLC,  minus

(z)  the sum of (i) the Bank Products Reserves, and (ii) the aggregate amount of
     reserves,  if  any,  established  by  Lender  under  SECTION  2.1(b).
                                                          ---------------

(b)     Anything  to the contrary in this SECTION 2.1 notwithstanding, the Agent
                                          -----------
shall  have the right to establish reserves in such amounts, and with respect to
such  matters,  as  Agent,  in its Permitted Discretion, shall deem necessary or
appropriate  against  the Borrowing Base including, but not limited to, reserves
based upon (i) past due or accrued taxes or other governmental charges including
ad  valorem, personal property, production, severance, and other taxes which may
have  priority  over the Liens or security interests of Agent in the Collateral;
(ii)  Liens relating to the Collateral in favor of third Persons; (iii) deposits
which  are  due  or scheduled to become due during the immediately following 180
day  period  under  deposit,  escrow  or  other  arrangements  concerning costs,
expenses  and  liabilities  relating  to  the  plugging  and  abandonment of the
Borrowing  Base  Properties; (iv) estimates of present or future operating costs
and  expenses,  royalty  and  overriding  payments  and other costs and expenses
associated  with the maintenance and operation of the Borrowing Base Properties;
(v)  estimates  of  present and future costs, expenses, deposits and liabilities
related to the plugging and abandonment of the Borrowing Base Properties (net of
the  amount thereof which has been taken into account in the most recent Reserve
Report),  (vi)  without duplication of the foregoing, amounts owing by Borrower,
any of its Subsidiaries, the LLC or the Partnerships to any Person to the extent
secured  by  a  Lien  on,  or trust (constructive or otherwise) over, any of the
Collateral  (including  proceeds  thereof  or  collections  from  the  sale  of
Hydrocarbons  or Hydrocarbon Interests which may from time to time come into the
possession  of Agent or the Lender Group or its agents), which Lien or trust, in
the  determination  of  Agent, has a reasonable possibility of having a priority
superior  to  the  Agent's  Liens  (such  as  landlord  liens, ad valorem taxes,
production  taxes, severance taxes, sales taxes, collections attributable to the
sale  of Hydrocarbons or Hydrocarbon Interests of Persons other than Borrower or
any  of  its  Subsidiaries)  in  and  to  such  item  of Collateral, proceeds or
collection,  and  (vii)  Hydrocarbon  Interest  Hedging  Agreement  Reserves.

                                     -27-
<PAGE>

(c)     The  Lenders  with Revolver Commitments shall have no obligation to make
additional Advances hereunder to the extent such additional Advances would cause
the  Revolver  Usage  to  exceed  the  Maximum  Revolver  Amount.

(d)     Amounts  borrowed pursuant to this Section may be repaid and, subject to
the  terms  and  conditions of this Agreement, reborrowed at any time during the
term  of  this  Agreement.

2.2     TERM  LOAN.  Subject  to  the terms and conditions of this Agreement, on
        ----------
the  Closing Date each Lender with a Term Loan Commitment agrees (severally, not
jointly  or  jointly  and severally) to make term loans (collectively, the "TERM
LOAN")  to  Borrower  in  an amount equal to such Lender's Pro Rata Share of the
Term  Loan  Amount.  The Term Loan shall be repaid on the following dates and in
the  following  amounts:

<TABLE>
<CAPTION>

<S>            <C>

     Date. . .     Installment Amount
-------------     -------------------
July 10, 2005     $         1,000,000
-------------     -------------------
July 10, 2006     $         1,000,000
-------------     -------------------
July 10, 2007     $         1,000,000
-------------     -------------------
</TABLE>

THE  OUTSTANDING  UNPAID  PRINCIPAL  BALANCE AND ALL ACCRUED AND UNPAID INTEREST
UNDER  THE TERM LOAN SHALL BE DUE AND PAYABLE ON THE DATE OF TERMINATION OF THIS
AGREEMENT, WHETHER BY ITS TERMS, BY PREPAYMENT, OR BY ACCELERATION.  ALL AMOUNTS
OUTSTANDING  UNDER  THE  TERM  LOAN  SHALL  CONSTITUTE  OBLIGATIONS.

2.3     BORROWING  PROCEDURES.
        ---------------------
(a)     PROCEDURE FOR BORROWING.  Each Borrowing shall be made by an irrevocable
        -----------------------
     written  request  by  an Authorized Person delivered to Agent.  Such notice
must  be  received  by  Agent  no later than 10:00 a.m. (California time) on the
Business Day prior to the date that is the requested Funding Date specifying (i)
the  amount  of such Borrowing, and (ii) the requested Funding Date, which shall
be  a Business Day; provided, however, that in the case of a request for a Swing
                    --------  -------
Loan in an amount of $5,000,000.00, or less, such notice will be timely received
if  it  is  received  by Agent no later than 10:00 a.m. (California time) on the
Business  Day  that  is the requested Funding Date) specifying (i) the amount of
such  Borrowing,  and (ii) the requested Funding Date, which shall be a Business
Day.  At  Agent's  election,  in  lieu of delivering the above-described written
request,  any Authorized Person may give Agent telephonic notice of such request
by  the  required  time.  In  such  circumstances, Borrower agrees that any such
telephonic  notice will be confirmed in writing within 24 hours of the giving of
such  telephonic  notice,  but  the failure to provide such written confirmation
shall  not  affect  the  validity  of  the  request.

(b)     AGENT'S  ELECTION.  Promptly  after receipt of a request for a Borrowing
        -----------------
pursuant  to  SECTION  2.3(a), Agent shall elect, in its discretion, (i) to have
              ---------------
the  terms  of  SECTION 2.3(c) apply to such requested Borrowing, or (ii) if the
                --------------
Borrowing  is  for  an  Advance,  to  request  Swing Lender to make a Swing Loan
pursuant  to  the  terms  of  SECTION  2.3(d)  in  the  amount  of the requested
                              ---------------
Borrowing;  provided,  however,  that  if  Swing  Lender  declines  in  its sole
            --------   -------
discretion to make a Swing Loan pursuant to SECTION 2.3(d), Agent shall elect to
                                            --------------
     have  the  terms  of  SECTION  2.3(c)  apply  to  such requested Borrowing.
                           ---------------

(c)     MAKING  OF  LOANS.
        -----------------
(i)     In  the  event  that Agent shall elect to have the terms of this SECTION
                                                                         -------
2.3(c)  apply  to  a  requested  Borrowing  as described in SECTION 2.3(b), then
  ----                                                      --------------
promptly  after receipt of a request for a Borrowing pursuant to SECTION 2.3(a),
  ---                                                            --------------
Agent  shall  notify  the Lenders, not later than 1:00 p.m. (California time) on
the  Business  Day immediately preceding the Funding Date applicable thereto, by
telecopy,  telephone,  or  other  similar form of transmission, of the requested
Borrowing.  Each Lender shall make the amount of such Lender's Pro Rata Share of
     the  requested Borrowing available to Agent in immediately available funds,
to  Agent's  Account, not later than 10:00 a.m. (California time) on the Funding
Date applicable thereto.  After Agent's receipt of the proceeds of such Advances
(or the Term Loan, as applicable), upon satisfaction of the conditions precedent
set  forth  in SECTION 3 hereof, Agent shall make the proceeds thereof available
               ---------
to Borrower on the applicable Funding Date by transferring immediately available
funds equal to such proceeds received by Agent to Borrower's Designated Account;
provided,  however,  that,  subject  to  the provisions of SECTION 2.3(i), Agent
--------   -------                                         --------------
shall not request any Lender to make, and no Lender shall have the obligation to
make,  any  Advance (or its portion of the Term Loan) if Agent shall have actual
knowledge  that (1) one or more of the applicable conditions precedent set forth
in  SECTION  3  will  not  be  satisfied  on  the requested Funding Date for the
    ----------
applicable Borrowing unless such condition has been waived, or (2) the requested
Borrowing  would  exceed  the  Availability  on  such  Funding  Date.

(ii)  Unless Agent receives notice from a Lender on or prior to the Closing Date
or,  with  respect  to any Borrowing after the Closing Date, at least 1 Business
Day  prior  to  the  date  of  such  Borrowing,  that  such Lender will not make
available  as  and  when  required  hereunder  to  Agent  for  the  account  of
Borrower  the amount of that Lender's Pro Rata Share of the Borrowing, Agent may
assume  that each Lender has made or will make such amount available to Agent in
immediately  available funds on the Funding Date and Agent may (but shall not be
so  required),  in  reliance upon such assumption, make available to Borrower on
such  date  a  corresponding  amount.  If and to the extent any Lender shall not
have  made its full amount available to Agent in immediately available funds and
Agent  in  such  circumstances  has made available to Borrower such amount, that
Lender  shall  on  the Business Day following such Funding Date make such amount
available  to  Agent,  together  with interest at the Defaulting Lender Rate for
each  day  during  such  period.  A notice submitted by Agent to any Lender with
respect  to  amounts  owing  under  this  subsection shall be conclusive, absent
manifest  error.  If  such  amount  is  so made available, such payment to Agent
shall  constitute  such  Lender's  Advance  (or  portion  of  the  Term Loan, as
applicable)  on  the  date  of Borrowing for all purposes of this Agreement.  If
such  amount  is  not  made available to Agent on the Business Day following the
Funding  Date,  Agent  will  notify  Borrower  of such failure to fund and, upon
demand  by  Agent,  Borrower shall pay such amount to Agent for Agent's account,
together  with  interest  thereon  for  each  day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the time
to  the  Advances  (or  portion  of the Term Loan, as applicable) composing such
Borrowing.  The  failure  of  any  Lender to make any Advance (or portion of the
Term Loan, as applicable) on any Funding Date shall not relieve any other Lender
of  any obligation hereunder to make an Advance (or portion of the Term Loan, as
applicable)  on  such  Funding  Date, but no Lender shall be responsible for the
failure of any other Lender to make the Advance (or portion of the Term Loan, as
applicable)  to  be  made  by  such  other  Lender  on  any  Funding  Date.

                                     -29-
<PAGE>

(iii)   Agent  shall  not  be  obligated  to transfer to a Defaulting Lender any
payments  made by Borrower to Agent for the Defaulting Lender's benefit, and, in
the  absence of such transfer to the Defaulting Lender, Agent shall transfer any
such  payments  to  each  other non-Defaulting Lender member of the Lender Group
ratably  in  accordance with their Commitments (but only to the extent that such
Defaulting Lender's Advance was funded by the other members of the Lender Group)
     or,  if  so  directed by Borrower and if no Default or Event of Default has
occurred  and  is continuing (and to the extent such Defaulting Lender's Advance
was  not  funded by the Lender Group), retain same to be re-advanced to Borrower
as  if  such  Defaulting  Lender  had made Advances to Borrower.  Subject to the
foregoing,  Agent may hold and, in its Permitted Discretion, re-lend to Borrower
for  the  account  of  such  Defaulting  Lender  the amount of all such payments
received  and  retained  by  Agent  for  the  account of such Defaulting Lender.
Solely  for  the purposes of voting or consenting to matters with respect to the
Loan  Documents, such Defaulting Lender shall be deemed not to be a "Lender" and
such  Lender's Commitment shall be deemed to be zero.  This Section shall remain
effective  with  respect  to  such  Lender  until (x) the Obligations under this
Agreement  shall  have  been  declared  or shall have become immediately due and
payable,  (y)  the non-Defaulting Lenders, Agent, and Borrower shall have waived
such  Defaulting Lender's default in writing, or (z) the Defaulting Lender makes
its Pro Rata Share of the applicable Advance and pays to Agent all amounts owing
by  Defaulting  Lender  in respect thereof.  The operation of this Section shall
not  be  construed to increase or otherwise affect the Commitment of any Lender,
to  relieve  or  excuse  the  performance by such Defaulting Lender or any other
Lender  of  its  duties  and  obligations hereunder, or to relieve or excuse the
performance  by  Borrower of its duties and obligations hereunder to Agent or to
the  Lenders other than such Defaulting Lender.  Any such failure to fund by any
Defaulting  Lender  shall constitute a material breach by such Defaulting Lender
of  this Agreement and shall entitle Borrower at its option, upon written notice
to  Agent,  to  arrange for a substitute Lender to assume the Commitment of such
Defaulting  Lender,  such  substitute  Lender  to  be  acceptable  to Agent.  In
connection  with  the  arrangement  of  such a substitute Lender, the Defaulting
Lender  shall  have  no  right to refuse to be replaced hereunder, and agrees to
execute  and  deliver a completed form of Assignment and Acceptance Agreement in
favor  of  the  substitute  Lender  (and  agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) subject only to being
repaid  its  share  of  the  outstanding  Obligations  (other  than Bank Product
Obligation,  but  including  an  assumption  of  its  Pro Rata Share of the Risk
Participation  Liability) without any premium or penalty of any kind whatsoever;
provided  further,  however,  that any such assumption of the Commitment of such
--------  -------   -------
Defaulting  Lender  shall  not  be  deemed  to constitute a waiver of any of the
Lender  Group's  or  Borrower's  rights  or remedies against any such Defaulting
Lender  arising  out  of  or  in  relation  to  such  failure  to  fund.

                                     -30-
<PAGE>

(d)     MAKING  OF  SWING  LOANS.
        ------------------------

(i)     In  the  event Agent shall elect, with the consent of Swing Lender, as a
Lender,  to have the terms of this SECTION 2.3(d) apply to a requested Borrowing
                                   --------------
as described in SECTION 2.3(b), Swing Lender as a Lender shall make such Advance
                --------------
in  the  amount  of  such  Borrowing (any such Advance made solely by Swing
Lender as a Lender pursuant to this SECTION 2.3(d) being referred to as a "SWING
                                    --------------
LOAN"  and  such  Advances  being  referred  to  collectively  as "SWING LOANS")
available  to  Borrower  on  the Funding Date applicable thereto by transferring
immediately  available  funds to Borrower's Designated Account.  Each Swing Loan
shall be deemed to be an Advance hereunder and shall be subject to all the terms
and  conditions  applicable  to  other  Advances, except that no such Swing Loan
shall  be  eligible  to  be a LIBOR Rate Loan and all payments on any Swing Loan
shall be payable to Swing Lender as a Lender solely for its own account (and for
the  account  of  the  holder of any participation interest with respect to such
Swing  Loan).  Subject  to  the  provisions  of  SECTION 2.3(i), Agent shall not
                                                 --------------
request Swing Lender as a Lender to make, and Swing Lender as a Lender shall not
make,  any  Swing Loan if Agent has actual knowledge that (i) one or more of the
applicable  conditions precedent set forth in SECTION 3 will not be satisfied on
                                              ---------
the  requested  Funding  Date for the applicable Borrowing unless such condition
has  been  waived, or (ii) the requested Borrowing would exceed the Availability
on  such Funding Date.  Swing Lender as a Lender shall not otherwise be required
to  determine whether the applicable conditions precedent set forth in SECTION 3
                                                                       ---------
have  been  satisfied on the Funding Date applicable thereto prior to making, in
its  sole  discretion,  any  Swing  Loan.

(ii)    The  Swing  Loans  shall  be  secured  by  the Agent's Liens, constitute
Obligations  hereunder,  and  bear  interest at the rate applicable from time to
time  to  Advances  that  are  Base  Rate  Loans.

(e)     AGENT  ADVANCES.
        ---------------

(i)     Agent  hereby  is  authorized  by Borrower and the Lenders, from time to
time  in  Agent's  sole  discretion,  (1)  after  the  occurrence and during the
continuance  of a Default or an Event of Default, or (2) at any time that any of
the  other  applicable conditions precedent set forth in SECTION 3 have not been
                                                         ---------
satisfied,  to make Advances to Borrower on behalf of the Lenders that Agent, in
its Permitted Discretion deems necessary or desirable (A) to preserve or protect
     the  Collateral,  or  any portion thereof, (B) to enhance the likelihood of
repayment  of  the  Obligations,  or  (C)  to pay any other amount chargeable to
Borrower  pursuant  to  the  terms  of  this  Agreement,  including Lender Group
Expenses  and  the costs, fees, and expenses described in SECTION 10 (any of the
                                                          ----------
Advances  described  in  this  SECTION  2.3(e)  shall  be  referred to as "AGENT
                               ---------------
ADVANCES").  Each  Agent Advance is an Advance hereunder and shall be subject to
all  the  terms and conditions applicable to other Advances, except that no such
Agent Advance shall be eligible to be a LIBOR Rate Loan and all payments thereon
shall be payable to Agent solely for its own account (and for the account of the
holder  of  any  participation  interest  with  respect  to such Agent Advance).

(ii)    The  Agent  Advances  shall  be  repayable  on demand and secured by the
Agent's  Liens  granted  to  Agent  under  the  Loan Documents, shall constitute
Advances  and  Obligations  hereunder,  and  shall  bear  interest  at  the rate
applicable  from  time  to  time  to  Advances  that  are  Base  Rate  Loans.

                                     -31-
<PAGE>

(f)     SETTLEMENT.  It  is  agreed  that  each  Lender's  funded portion of the
        ----------
Advances  is  intended  by the Lenders to equal, at all times, such Lender's Pro
Rata  Share of the outstanding Advances.  Such agreement notwithstanding, Agent,
Swing  Lender, and the other Lenders agree (which agreement shall not be for the
benefit  of  or  enforceable  by  Borrower)  that  in  order  to  facilitate the
administration  of this Agreement and the other Loan Documents, settlement among
them  as  to  the  Advances,  the Swing Loans, and the Agent Advances shall take
place  on  a  periodic  basis  in  accordance  with  the  following  provisions:

(i)     Agent  shall  request  settlement  ("SETTLEMENT")  with the Lenders on a
weekly  basis,  or  on  a  more frequent basis if so determined by Agent, (1) on
behalf  of  Swing  Lender,  with respect to each outstanding Swing Loan, (2) for
itself,  with respect to each Agent Advance, and (3) with respect to Collections
received,  as  to each by notifying the Lenders by telecopy, telephone, or other
similar  form  of transmission, of such requested Settlement, no later than 2:00
p.m. (California time) on the Business Day immediately prior to the date of such
     requested  Settlement  (the  date  of  such  requested Settlement being the
"SETTLEMENT  DATE").  Such  notice  of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, and Agent Advances
for  the  period  since  the  prior  Settlement  Date.  Subject to the terms and
conditions  contained herein (including SECTION 2.3(c)(iii)):  (y) if a Lender's
                                        -------------------
balance  of the Advances (including Swing Loans and Agent Advances) exceeds such
Lender's  Pro  Rata  Share  of  the  Advances  (including  Swing Loans and Agent
Advances) as of a Settlement Date, then Agent shall, by no later than 12:00 p.m.
(California  time)  on  the  Settlement  Date, transfer in immediately available
funds  to  the  account of such Lender (as such Lender may designate), an amount
such  that  each  such Lender shall, upon receipt of such amount, have as of the
Settlement  Date,  its Pro Rata Share of the Advances (including Swing Loans and
Agent  Advances) and (z) if a Lender's balance of the Advances, Swing Loans, and
Agent  Advances  is  less  than  such  Lender's  Pro  Rata Share of the Advances
(including  Swing Loans and Agent Advances) as of a Settlement Date, such Lender
shall no later than 12:00 p.m. (California time) on the Settlement Date transfer
in  immediately available funds to the Agent's Account, an amount such that each
such Lender shall, upon transfer of such amount, have as of the Settlement Date,
its  Pro  Rata  Share  of  the  Advances, Swing Loans, and Agent Advances.  Such
amounts  made  available  to Agent under clause (z) of the immediately preceding
sentence  shall  be  applied against the amounts of the applicable Swing Loan or
Agent Advance and, together with the portion of such Swing Loan or Agent Advance
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such  Lenders.  If  any such amount is not made available to Agent by any Lender
on  the  Settlement  Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from  such  Lender together with interest thereon at the Defaulting Lender Rate.
(ii)    In  determining whether a Lender's balance of the Advances, Swing Loans,
and  Agent  Advances  is  less than, equal to, or greater than such Lender's Pro
Rata  Share  of the Advances, Swing Loans, and Agent Advances as of a Settlement
Date, Agent shall, as part of the relevant Settlement, apply to such balance the
portion  of  payments actually received in good funds by Agent with respect
to  principal,  interest,  fees payable by Borrower and allocable to the Lenders
hereunder,  and proceeds of Collateral.  To the extent that a net amount is owed
to  any such Lender after such application, such net amount shall be distributed
by  Agent  to  that  Lender  as  part  of  such  next  Settlement.

                                     -32-
<PAGE>

(iii)   Between  Settlement  Dates,  Agent,  to  the extent no Agent Advances or
Swing  Loans are outstanding, may pay over to Swing Lender any payments received
by  Agent,  that in accordance with the terms of this Agreement would be applied
to  the  reduction  of  the Advances, for application to Swing Lender's Pro Rata
Share  of  the  Advances.  If,  as  of any Settlement Date, Collections received
since  the then immediately preceding Settlement Date have been applied to Swing
Lender's  Pro  Rata Share of the Advances other than to Swing Loans, as provided
for  in  the previous sentence, Swing Lender shall pay to Agent for the accounts
of  the  Lenders,  and  Agent  shall  pay  to  the Lenders, to be applied to the
outstanding  Advances  of  such  Lenders, an amount such that each Lender shall,
upon  receipt  of  such  amount,  have, as of such Settlement Date, its Pro Rata
Share of the Advances.  During the period between Settlement Dates, Swing Lender
with respect to Swing Loans, Agent with respect to Agent Advances, and each
Lender  (subject  to  the  effect  of  agreements  between  Agent and individual
Lenders) with respect to the Advances other than Swing Loans and Agent Advances,
shall be entitled to interest at the applicable rate or rates payable under this
Agreement  on  the daily amount of funds employed by Swing Lender, Agent, or the
Lenders,  as  applicable.

(g)     NOTATION.  Agent  shall  record on its books the principal amount of the
        --------
Advances  (or  portion  of  the  Term Loan, as applicable) owing to each Lender,
including  the  Swing  Loans  owing to Swing Lender, and Agent Advances owing to
Agent,  and  the  interests  therein  of each Lender, from time to time and such
records shall, absent manifest error, conclusively be presumed to be correct and
accurate.  In addition, each Lender is authorized, at such Lender's option,
to  note  the date and amount of each payment or prepayment of principal of such
Lender's  Advances (or portion of the Term Loan, as applicable) in its books and
records,  including  computer  records,  such  books  and  records  constituting
conclusive  evidence,  absent manifest error, of the accuracy of the information
contained  therein.  There  shall  be no promissory notes evidencing the payment
obligations  of  Borrower  to  Lenders.

(h)     LENDERS'  FAILURE  TO PERFORM.  All Advances (other than Swing Loans and
        -----------------------------
Agent Advances) shall be made by the Lenders contemporaneously and in accordance
with  their  Pro Rata Shares.  It is understood that (i) no Lender shall be
responsible  for  any  failure  by any other Lender to perform its obligation to
make  any  Advance  (or  other  extension  of  credit)  hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any  other  Lender  to perform its obligations hereunder, and (ii) no failure by
any  Lender  to  perform its obligations hereunder shall excuse any other Lender
from  its  obligations  hereunder.

(i)  OPTIONAL  OVERADVANCES.  Any  contrary  provision  of  this  Agreement
     ----------------------
notwithstanding,  the  Lenders  hereby  authorize  Agent  or  Swing  Lender,  as
applicable,  and Agent or Swing Lender, as applicable, may, but is not obligated
to,  knowingly  and  intentionally,  continue  to make Advances (including Swing
Loans)  to  Borrower notwithstanding that an Overadvance exists or thereby would
be  created,  so  long  as (i) after giving effect to such Advances (including a
Swing  Loan),  the outstanding Revolver Usage does not exceed the Borrowing Base
by more than $5,000,000.00, (ii) after giving effect to such Advances (including
     a  Swing  Loan)  the  outstanding  Revolver Usage (except for and excluding
amounts  charged  to  the  Loan  Account  for  interest,  fees,  or Lender Group
Expenses)  does not exceed the Maximum Revolver Amount, and (iii) at the time of
the making of any such Advance (including a Swing Loan), Agent does not believe,
in  good faith, that the Overadvance created by such Advance will be outstanding
for  more  than 90 days.  The foregoing provisions are for the exclusive benefit
of Agent, Swing Lender, and the Lenders and are not intended to benefit Borrower
in any way.  The Advances and Swing Loans, as applicable, that are made pursuant
to  this SECTION 2.3(i) shall be subject to the same terms and conditions as any
         --------------
other  Advance  or  Swing  Loan,  as  applicable,  except that they shall not be
eligible  for the LIBOR Option and the rate of interest applicable thereto shall
be the rate applicable to Advances that are Base Rate Loans under SECTION 2.6(c)
                                                                  --------------
hereof  without  regard  to  the  presence  or  absence of a Default or Event of
Default.

                                     -33-
<PAGE>

(i)  In the event Agent obtains actual knowledge that the Revolver Usage exceeds
the  amounts  permitted by the preceding paragraph, regardless of the amount of,
or  reason  for,  such excess, Agent shall notify Lenders as soon as practicable
(and  prior  to  making any (or any additional) intentional Overadvances (except
for  and  excluding  amounts  charged to the Loan Account for interest, fees, or
Lender Group Expenses) unless Agent determines that prior notice would result in
imminent  harm  to  the  Collateral or its value), and the Lenders with Revolver
Commitments thereupon shall, together with Agent, jointly determine the terms of
arrangements  that  shall  be  implemented with Borrower and intended to reduce,
within  a  reasonable  time, the outstanding principal amount of the Advances to
Borrower  to  an amount permitted by the preceding paragraph. In the event Agent
or  any  Lender  disagrees  over  the  terms  of  reduction  or repayment of any
Overadvance,  the  terms  of reduction or repayment thereof shall be implemented
according  to  the  determination  of  the  Required  Lenders.

(ii)  Each  Lender  with a Revolver Commitment shall be obligated to settle with
Agent  as  provided  in  SECTION 2.3(f) for the amount of such Lender's Pro Rata
                         --------------
Share  of  any  unintentional Overadvances by Agent reported to such Lender, any
intentional  Overadvances  made  as permitted under this SECTION 2.3(i), and any
                                                         --------------
Overadvances  resulting from the charging to the Loan Account of interest, fees,
or  Lender  Group  Expenses.

2.4     PAYMENTS.
        --------

(a)     PAYMENTS  BY  BORROWER.
        ----------------------

(i)  Except  as  otherwise  expressly  provided herein, all payments by Borrower
     shall  be  made  to Agent's Account for the account of the Lender Group and
     shall  be  made  in  immediately  available funds, no later than 11:00 a.m.
     (California  time)  on  the  date specified herein. Any payment received by
     Agent later than 11:00 a.m. (California time), shall be deemed to have been
     received  on  the following Business Day and any applicable interest or fee
     shall  continue  to  accrue  until  such  following  Business  Day.

(ii) Unless  Agent  receives notice from Borrower prior to the date on which any
     payment  is  due to the Lenders that Borrower will not make such payment in
     full as and when required, Agent may assume that Borrower has made (or will
     make)  such  payment in full to Agent on such date in immediately available
     funds  and  Agent may (but shall not be so required), in reliance upon such
     assumption,  distribute  to each Lender on such due date an amount equal to
     the  amount  then  due  such Lender. If and to the extent Borrower does not
     make  such  payment  in  full  to  Agent  on the date when due, each Lender
     severally  shall  repay  to Agent on demand such amount distributed to such
     Lender,  together  with  interest thereon at the Defaulting Lender Rate for
     each  day from the date such amount is distributed to such Lender until the
     date  repaid.

                                     -34-
<PAGE>

(b)     APPORTIONMENT  AND  APPLICATION.
        -------------------------------

(i)  Except  as otherwise provided with respect to Defaulting Lenders and except
     as  otherwise  provided  in the Loan Documents (including letter agreements
     between  Agent  and  individual  Lenders), aggregate principal and interest
     payments  shall  be apportioned ratably among the Lenders (according to the
     unpaid  principal  balance of the Obligations to which such payments relate
     held  by each Lender) and payments of fees and expenses (other than fees or
     expenses  that are for Agent's separate account, after giving effect to any
     letter  agreements  between  Agent  and  individual  Lenders)  shall  be
     apportioned  ratably  among the Lenders having a Pro Rata Share of the type
     of Commitment or Obligation to which a particular fee relates. All payments
     shall  be  remitted  to  Agent  and  all such payments (other than payments
     received  while  no  Default  or  Event  of  Default  has  occurred  and is
     continuing  and  which  relate  to  the payment of principal or interest of
     specific  Obligations or which relate to the payment of specific fees), and
     all  proceeds  of  Accounts or other Collateral received by Agent, shall be
     applied  as  follows:

     (A)  first,  to  pay  any Lender Group Expenses then due to Agent under the
          -----
          Loan  Documents,  until  paid  in  full,


     (B)  second, to pay any Lender Group Expenses then due to the Lenders under
          ------
          the  Loan  Documents,  on  a  ratable  basis,  until  paid  in  full,


     (C)  third,  to  pay any fees then due to Agent (for its separate accounts,
           -----
          after giving effect to any letter  agreements  between  Agent  and the
          individual Lenders) under the  Loan  Documents  until  paid  in  full,


     (D)  fourth,  to  pay any fees then due to any or all of the Lenders (after
          ------
          giving effect to any letter agreements  between  Agent  and individual
          Lenders) under the Loan  Documents, on a ratable basis, until paid  in
          full,

     (E) fifth, to pay interest due in respect of all Agent Advances, until paid
         -----
         in  full,

     (F)  sixth,  ratably  to pay interest due in respect of the Advances (other
           -----
           than  Agent  Advances),  the  Swing  Loans, and the Term Loan  until
           paid in full,

     (G) seventh, to pay the principal of all Agent Advances until paid in full,
         -------

     (H)  eighth,  ratably  to  pay  all  principal amounts then due and payable
          ------
         (other than as a result of an acceleration thereof) with respect to the
         Term  Loan  until  paid  in  full,

     (I)  ninth,  to  pay  the  principal of all Swing Loans until paid in full,
          -----

     (J)  tenth,  so long as no Event of Default has occurred and is continuing,
           -----
          and  at Agent's election (which election Agent agrees will not be made

          if  an  Overadvance would be created thereby), to pay amounts then due

          and  owing  in respect of Bank Product Obligations until paid in full,

                                     -35-
<PAGE>

     (K)  eleventh,  so  long  as  no  Event  of  Default  has  occurred  and is
          --------
          continuing, to pay the principal of  all  Advances until paid in full,

     (L) twelfth, so long as no Event of Default has occurred and is continuing,
         -------
         to  pay  any  other  Obligations  until  paid  in  full,

     (M)  thirteenth,  if an Event of Default has occurred and is continuing, to
          ----------
          pay amounts to Agent, to be held by Agent, for the benefit of the Bank
          Product  Providers,  as  cash collateral in an amount up to the amount
          determined  by  Agent  in  its  Permitted  Discretion  as  the  amount
          necessary  to  secure  the  Bank  Product Obligations,

     (N)  fourteenth,  if  an  Event  of Default has occurred and is continuing,
          ----------
          ratably  (i)  to pay the principal of all Advances until paid in full,
          and  (ii)  to  Agent,  to be held by Agent, for the ratable benefit of
          Issuing Lender and those Lenders having a Revolver Commitment, as cash
          collateral  in  an  amount  up to  105%  of  the  then  extant  Letter
          of  Credit  Usage  until  paid in full,

     (O)  fifteenth,  if  an Event of Default has occurred and is continuing, to
         ---------
          pay the outstanding principal balance of the Term Loan (in the inverse
          order  of  the  maturity of the installments due thereunder) until the
          Term  Loan  is  paid  in full,

     (P)  sixteenth,  if  an Event of Default has occurred and is continuing, to
          ---------
          pay  any  other  Obligations,  and

     (Q)  seventeenth,  to  Borrower  (to be wired to the Designated Account) or
          -----------
          such  other  Person  entitled  thereto  under  applicable  law.

          (ii)  Agent  promptly shall distribute to each Lender, pursuant to the
          applicable  wire  instructions  received  from each Lender in writing,
          such  funds  as it may be entitled to receive, subject to a Settlement
          delay  as  provided  in SECTION  2.3(f).
                                  ---------------

          (iii)  In each instance, so long as no Default or Event of Default has
          occurred  and  is  continuing,  SECTION  2.4(b) shall not be deemed to
                                          --------------
          apply  to  any payment made by Borrower to Agent specified by Borrower
          to be for the payment of specific Obligations then due and payable (or
          prepayable)  under  any provision  of  this  Agreement.

          (iv)  For  purposes  of the foregoing, "paid in full" means payment of
          all  amounts  owing  under  the  Loan Documents according to the terms
          thereof,  including  loan  fees,  service  fees,  professional  fees,
          interest  (and  specifically  including  interest  accrued  after  the
          commencement of any Insolvency Proceeding), default interest, interest
          on  interest,  and  expense  reimbursements, whether or not any of the
          foregoing  would  be  or  is  allowed  or  disallowed  in  whole or in
          part  in  any  Insolvency  Proceeding.

          (v)  In the event of a direct conflict between the priority provisions
          of this  SECTION  2.4 and other provisions contained in any other Loan
                   ------------
          Document, it is the intention of the parties hereto that such priority
          provisions  in such documents shall be read together and construed, to
          the  fullest extent possible, to be in concert with each other. In the
          event  of  any actual, irreconcilable conflict that cannot be resolved
          as  aforesaid,  the  terms  and  provisions  of this SECTION 2.4 shall
                                                               ------------
          control  and  govern.

                                     -36-
<PAGE>

2.5     OVERADVANCES.  If  at  any  time  or  for  any  reason,  the  amount of
         ------------
Obligations  (other than Bank Product Obligations) owed by Borrower to the Agent
and  the  Lender Group pursuant to SECTIONS 2.1, 2.2 AND 2.12 is greater than an
                                   --------------------------
amount  equal  to  the  lower  of  (a)  the Maximum Loan Amount, or (b) the then
current  Borrowing  Base  (an "OVERADVANCE"), Borrower, within five (5) Business
Days from the date of each such occurrence, shall notify the Agent that Borrower
shall  take  one  of  the  following  actions:

(a)     execute  and  deliver,  and/or  cause  the Pledging Subsidiaries or any
other Subsidiary to execute and deliver to the Agent within sixty (60) days from
and  after  the date of the occurrence of such Overadvance, supplemental or
additional  Mortgages,  in  form and substance satisfactory to the Agent and its
counsel, securing payment of the Obligations and covering Oil and Gas Properties
directly  owned  by Borrower, the Pledging Subsidiaries or such other Subsidiary
which  are  not  then  covered  by any Loan Document and which are of a type and
nature satisfactory to the Agent, and having a value (as determined by the Agent
in  its  sole  discretion),  in addition to other Oil and Gas Properties already
subject  to  a  Mortgage,  sufficient  to eliminate the Overadvance, all as more
particularly  described  in  SECTIONS  6.21(c)  AND  d);  or
                             --------------------------

(b)     make  a  payment  with  respect  to  the  Obligations,  in an aggregate
principal  amount  sufficient to eliminate such Overadvance within ten (10) days
after  the  date  of  the occurrence of such Overadvance (and the Borrower shall
make  such  payment  within  such  ten-day  period).

If the Borrower shall elect to execute and deliver, and/or to cause the Pledging
Subsidiaries  or  any  other  Subsidiary  to execute and deliver supplemental or
additional  Security  Documents  to  the  Agent pursuant to CLAUSE (A), it shall
                                                            ----------
provide  the  Agent  with  descriptions of the additional assets to be mortgaged
(together  with  current  valuations,  engineering  reports,  Security Documents
described  in  CLAUSE  (A)  and  title  evidence  applicable  thereto  and other
               -----------
documents  including  opinions  of  counsel,  each of which shall be in form and
substance reasonably satisfactory to the Agent) within sixty (60) days after the
date  of  the  occurrence  of such Overadvance.  Such supplemental or additional
Security  Documents  shall  be  subject  to  the  terms of SECTION 6.21.  If the
                                                           ------------
Borrower fails to give the required notice that it shall take any of the actions
described  in  this SECTION 2.5 within such five (5) Business Day period or take
                    -----------
the  applicable  action in SUBCLAUSES (A) or (B) above within such sixty (60) or
                           --------------    ---
ten (10) day (as applicable) period, in each case from and after the date of the
occurrence  of  the  Overadvance,  then  without any necessity for notice to the
Borrower or any other person, the Borrower shall become obligated immediately to
pay  Obligations  in  an  aggregate  principal  amount  equal  to the applicable
Overadvance.

2.6     INTEREST  RATES  AND  LETTER  OF  CREDIT  FEE:  RATES,  PAYMENTS,  AND
          ----------------------------------------------------------------------
CALCULATIONS.
------------

(a)     INTEREST  RATES.  Except  as  provided  in  clause  (c)  below,  all
        ---------------
Obligations  (except  for  undrawn Letters of Credit and except for Bank Product
Obligations)  that  have  been charged to the Loan Account pursuant to the terms
hereof  shall  bear interest on the Daily Balance thereof as follows: (i) if the
relevant Obligation is a LIBOR Rate Loan, at a per annum rate equal to the LIBOR
     Rate  plus the Applicable Margin, (ii) if the relevant Obligation is a Base
Rate  Loan,  at  a  per  annum  rate  equal to the Base Rate plus the Applicable
Margin, and (iii) otherwise, at a per annum rate equal to the Base Rate plus the
Applicable  Rate  Margin  for  Base  Rate  Loans.

(b)     LETTER  OF  CREDIT  FEE.  Borrower  shall  pay  Agent (for the ratable
        -----------------------
benefit  of  the  Lenders  with  a  Revolver  Commitment,  subject to any letter
agreement  between  Agent  and  individual  Lenders), a Letter of Credit fee (in
addition  to  the  charges,  commissions,  fees,  and costs set forth in SECTION
                                                                         -------
2.12(E))  which  shall accrue at a rate equal to 2.25% per annum times the Daily
-------
Balance  of  the  undrawn  amount  of  all  outstanding  Letters  of  Credit.

                                     -37-
<PAGE>

(c)     DEFAULT  RATE.  Upon  the occurrence and during the continuation of an
        -------------
Event  of  Default  (and  at  the  election  of  Agent or the Required Lenders),

(i)  all  Obligations  (except  for  undrawn  Letters of Credit and Bank Product
Obligations)  that  have  been charged to the Loan Account pursuant to the terms
hereof  shall  bear  interest  on  the Daily Balance thereof at a per annum rate
equal  to  4  percentage  points  above  the per annum rate otherwise applicable
hereunder,  and

(ii)     the  Letter  of  Credit fee provided for above shall be increased to 4
percentage  points  above  the  per  annum  rate otherwise applicable hereunder.

(d)     PAYMENT.  Except  as  provided  to  the  contrary  in  SECTION 2.11 or
          -------                                              ------------
SECTION  2.13(a),  interest,  Letter  of Credit fees, and all other fees payable
----------------
hereunder  shall  be due and payable, in arrears, on the first day of each month
at  any  time  that Obligations or Commitments are outstanding.  Borrower hereby
authorizes Agent, from time to time, without prior notice to Borrower, to charge
     all interest and fees (when due and payable), all Lender Group Expenses (as
and  when  incurred),  all charges, commissions, fees, and costs provided for in
SECTION  2.12(e)  (as and when accrued or incurred), all fees and costs provided
----------------
for in SECTION 2.11 (as and when accrued or incurred), and all other payments as
       ------------
and  when due and payable under any Loan Document (including the amounts due and
payable  with respect to the Term Loan and including any amounts due and payable
to  the  Bank  Product Providers in respect of Bank Products up to the amount of
the then extant Bank Products Reserve) to Borrower's Loan Account, which amounts
thereafter  shall constitute Advances hereunder and shall accrue interest at the
rate  then  applicable  to  Advances  hereunder.  Any interest not paid when due
shall  be  compounded  by  being  charged  to  Borrower's Loan Account and shall
thereafter  constitute  Advances hereunder and shall accrue interest at the rate
then  applicable  to  Advances  that  are  Base  Rate  Loans  hereunder.

(e)     COMPUTATION.  All  interest  and  fees  chargeable  under  the  Loan
        -----------
Documents shall be computed on the basis of a 360 day year for the actual number
     of  days  elapsed.  In the event the Base Rate is changed from time to time
hereafter,  the  rates  of  interest  hereunder  based  upon  the  Base  Rate
automatically and immediately shall be increased or decreased by an amount equal
to  such  change  in  the  Base  Rate.

(f)     INTENT  TO  LIMIT  CHARGES  TO  MAXIMUM LAWFUL RATE.  Borrower and the
        ---------------------------------------------------
Lender  Group  hereby  agree  and  stipulate  that the only charges imposed upon
Borrower for the use of money in connection with this Agreement are and shall be
the specific interest and fees described in this Article 2 and in any other Loan
Document.  Notwithstanding  the foregoing, Borrower and the Lender Group further
agree  and  stipulate  that  all  agency  fees, syndication fees, facility fees,
underwriting fees, default charges, late charges, funding or "breakage" charges,
increased  cost  charges,  the  Applicable  Prepayment  Premium,  "float"  or
"clearance"  charges,  attorneys'  fees and reimbursement for costs and expenses
paid  by  the Agent or the Lender Group to third parties or for damages incurred
by  the  Agent  or  the Lender Group are charges to compensate the Agent and the
Lender  Group  for  underwriting and administrative services and costs or losses
performed  or  incurred,  and to be performed and incurred, by the Agent and the
Lender  Group in connection with this Agreement and the other Loan Documents. In
no  event  shall  the  amount of interest and other charges for the use of money
payable  under  this  Agreement exceed the maximum amounts permissible under any
law that a court of competent jurisdiction shall, in a final determination, deem
applicable.  Borrower  and  the  Lender  Group, in executing and delivering this
Agreement,  intend legally to agree upon the rate or rates of interest and other
charges  for  the use of money and manner of payment stated within it; provided,
however, that, anything contained herein to the contrary notwithstanding, if the
amount  of  such  interest  and  other charges for the use of money or manner of
payment  exceeds  the  maximum amount allowable under applicable law, then, ipso
facto as of the date of this Agreement, Borrower is and shall be liable only for
the  payment  of  such  maximum  as  allowed  by  law, and payment received from
Borrower  in excess of such legal maximum whenever received, shall be applied to
reduce  the  principal  balance of the Obligations to the extent of such excess.

                                     -38-
<PAGE>

2.7     CASH  MANAGEMENT.
         ----------------

(a)     Borrower  shall (i) establish and maintain cash management services of
a  type and on terms satisfactory to Agent at one or more of the banks set forth
on SCHEDULE 2.7(a) (each a "CASH MANAGEMENT BANK"), and shall request in writing
   ---------------
and  otherwise take such reasonable steps, if necessary, to ensure that all
Account  Debtors  of  Borrower and the Pledging Subsidiaries, forward payment of
the amounts owed by them directly to such Cash Management Bank, and (ii) deposit
or  cause  to  be  deposited  promptly, and in any event no later than the first
Business Day after the date of receipt thereof, all Collections (including those
sent  directly by Account Debtors to a Cash Management Bank) into a bank account
subject  to a Control Agreement (a "CASH MANAGEMENT ACCOUNT") at one of the Cash
Management  Banks.

(b)     Each Cash Management Bank shall establish and maintain Cash Management
Agreements  with  Agent  and  Borrower, in form and substance acceptable to
Agent.  Each  such  Cash Management Agreement shall provide, among other things,
that  (i)  all  items  of  payment deposited in such Cash Management Account and
proceeds  thereof  are  held  by  such  Cash  Management  Bank  as  agent  or
bailee-in-possession  for  Agent, (ii) the Cash Management Bank has no rights of
setoff  or  recoupment or any other claim against the applicable Cash Management
Account,  other  than for payment of its service fees and other charges directly
related  to  the administration of such Cash Management Account and for returned
checks  or  other  items of payment, and (iii) upon notice from Agent under such
Cash Management Agreement, the Cash Management Bank will immediately thereafter,
until  notified  to the contrary in writing by the Agent, forward by daily sweep
(aa)  an amount equal to seventeen and one-half percent (17.5%) (the "Borrower's
Estimated  Percentage")  of  all  amounts  deposited  in  the  applicable  Cash
Management  Account  to  the  Agent's  Account  and  (bb) an amount equal to the
remaining eighty-two and one-half percent (82.5%) of all other amounts deposited
in  the  applicable  Cash  Management  Account to Eastern American's account no.
251-090-7  at  Harris  Bank.

(c)     So  long  as  no  Default  or  Event  of  Default  has occurred and is
continuing,  Borrower  may  amend  SCHEDULE  2.7(a)  to  add  or  replace a Cash
                                   ----------------
Management  Bank  or  Cash  Management Account; provided, however, that (i) such
                                                --------  -------
prospective  Cash Management Bank shall be satisfactory to Agent and Agent shall
have  consented  in  writing  in  advance to the opening of such Cash Management
Account with the prospective Cash Management Bank, and (ii) prior to the time of
the  opening of such Cash Management Account, Borrower and such prospective
Cash  Management  Bank  shall  have  executed  and  delivered  to  Agent  a Cash
Management  Agreement.  Borrower  shall  close  any  of  their  Cash  Management
Accounts  (and establish replacement cash management accounts in accordance with
the  foregoing sentence) promptly and in any event within 30 days of notice from
Agent  that  the  creditworthiness  of  any  Cash  Management  Bank is no longer
acceptable  in Agent's reasonable judgment, or as promptly as practicable and in
any  event  within  60 days of notice from Agent that the operating performance,
funds transfer, or availability procedures or performance of the Cash Management
Bank  with  respect  to  Cash Management Accounts or Agent's liability under any
Cash Management Agreement with such Cash Management Bank is no longer acceptable
in  Agent's  reasonable  judgment.

                                     -39-
<PAGE>

(d)     The  Cash  Management Accounts shall be cash collateral accounts, with
Borrower's  ownership  interest in all cash, checks and similar items of payment
in  such  accounts securing payment of the Obligations, and in which Borrower is
hereby  deemed  to  have  granted  a  Lien  to  Agent.

(e)     Agent  shall  be  entitled  to deliver and maintain the notice of cash
transfer ("CASH TRANSFER NOTICE") provided for in clause (iii) of SECTION 2.7(b)
                                                                  --------------
at  any  time, in the Agent's sole and absolute discretion, that either (i)
an  Event  of  Default  has  occurred  and  is  continuing,  or  (ii) the Excess
Availability is Five Million Dollars ($5,000,000) or less (each such time period
a  "CASH SWEEP PERIOD").  Once a Cash Sweep Period has been established by Agent
it  shall  remain  in effect until the conditions giving rise to such Cash Sweep
Period no longer exist and Borrower has delivered to Agent a certificate to such
effect  requesting  a  termination  of  such  Cash  Sweep  Period.

(f)     During  any  Cash  Sweep  Period,  Borrower  shall  on a monthly basis
deliver  to  Agent a report (each a "MONTHLY FUNDS OWNERSHIP REPORT") reflecting
(i)  the  actual percentage of ownership by Borrower, the Pledging Subsidiaries,
the  LLC  and  the  Partnerships  of  all  funds derived from the Borrowing Base
Properties  deposited  to all Cash Management Banks during the preceding monthly
time  period and (ii) the aggregate amount of such deposits (i.e., the ownership
percentage  of Borrower, the Pledging Subsidiaries and the Pledging Subsidiaries
in the LLC and the Partnerships for such month expressed as a decimal multiplied
by the aggregate amount of all deposits to all Cash Management Banks during
such  month  the  "BORROWER'S  MONTHLY DEPOSIT") in the Cash Management Account.

(g)     In  the  event a Monthly Funds Ownership Report reflects that during a
Cash  Sweep  Period  Borrower's Estimated Percentage has resulted in deposits to
the  Agent's  Account  during  the  preceding  month in excess of the Borrower's
Monthly  Deposit  for  such month, Agent shall, upon request of Borrower, within
five  (5)  Business  Days,  return to Borrower's control by wire transfer to the
Designated  Account  an  amount  equal  to  the  positive difference between the
Borrower's  Monthly  Deposit  for  such  month and the aggregate deposits to the
Agent's  Account  during  such  monthly  time  period.

(h)     In  the  event a Monthly Funds Ownership Report reflects that during a
Cash  Sweep  Period  Borrower's Estimated Percentage has resulted in deposits to
the  Agent's  Account  during  the  preceding  month of less than the Borrower's
Monthly Deposit for such month, Agent shall promptly, in accordance with SECTION
                                                                         -------
2.3(e) of this Agreement, make an Advance for the account of Borrower to be
------
credited to the Agent's Account in an amount equal to the positive excess of the
Borrower's  Monthly  Deposit for such month over the amount deposited to Agent's
Account  for  such  month  as  a  result of the Borrower's Estimated Percentage.

2.8     CREDITING  PAYMENTS;  COLLECTION FEE.  The receipt of any payment item
          ------------------------------------
by  Agent (whether from transfers to Agent by the Cash Management Banks pursuant
to  the  Cash  Management  Agreements  or  otherwise)  shall not be considered a
payment  on  account  unless such payment item is a wire transfer of immediately
available  federal  funds  made  to the Agent's Account or unless and until such
payment  item is honored when presented for payment. Should any payment item not
be honored when presented for payment, then Borrower shall be deemed not to have
made  such payment and interest shall be calculated accordingly. Anything to the
contrary  contained  herein  notwithstanding,  any  payment item shall be deemed
received  by Agent only if it is received into the Agent's Account on a Business
Day  on  or before 11:00 a.m. (California time). If any payment item is received
into  the  Agent's Account on a non-Business Day or after 11:00 a.m. (California
time) on a Business Day, it shall be deemed to have been received by Agent as of
the  opening  of  business  on  the  immediately  following  Business  Day.  As
consideration  for  Agent's  processing  of  all Collections, from and after the
Closing Date, Agent shall be entitled to charge Borrower a collection fee in the
amount  of  $1500  a  month  (the  "COLLECTION  FEE").  The  Collection  Fee  is
acknowledged  by  the parties to constitute an integral aspect of the pricing of
the  financing  of Borrower and shall apply irrespective of whether or not there
are  any  outstanding  monetary  Obligations.  The parties acknowledge and agree
that  the economic benefit of the foregoing provisions of this SECTION 2.8 shall
                                                               -----------
be  for  the  exclusive  benefit  of  Agent.

                                     -40-
<PAGE>

2.9     DESIGNATED ACCOUNT.  Agent is authorized to make the Advances, and the
          ------------------
     Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under  this  Agreement based upon telephonic or other instructions received from
anyone  purporting  to  be  an  Authorized  Person,  or  without instructions if
pursuant  to  SECTION  2.6(d).  Borrower  agrees  to  establish and maintain the
              ---------------
Designated Account with the Designated Account Bank for the purpose of receiving
the  proceeds  of  the  Advances  requested by Borrower and made by Agent or the
Lenders  hereunder.  Unless otherwise agreed by Agent and Borrower, any Advance,
Agent  Advance,  or  Swing  Loan  requested by Borrower and made by Agent or the
Lenders  hereunder  shall  be  made  to  the  Designated  Account.

2.10    MAINTENANCE  OF  LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS.  Agent shall
          --------------------------------------------------------
maintain an account on its books in the name of Borrower (the "LOAN ACCOUNT") on
which Borrower will be charged with the Term Loan, all Advances (including Agent
Advances  and  Swing  Loans)  made  by  Agent,  Swing  Lender, or the Lenders to
Borrower  or  for  Borrower's  account,  the Letters of Credit issued by Issuing
Lender  for Borrower's account, and with all other payment Obligations hereunder
or  under  the  other  Loan  Documents  (except  for  Bank Product Obligations),
including,  accrued  interest, fees and expenses, and Lender Group Expenses.  In
accordance with SECTION 2.8, the Loan Account will be credited with all payments
                -----------
received by Agent from Borrower or for Borrower's account, including all amounts
received  in  the  Agent's  Account  from any Cash Management Bank.  Agent shall
render  statements  regarding the Loan Account to Borrower, including principal,
interest,  fees,  and  including  an  itemization  of  all  charges and expenses
constituting  Lender  Group  Expenses  owing,  and  such  statements  shall  be
conclusively  presumed  to  be  correct  and  accurate and constitute an account
stated  between  Borrower  and  the  Lender  Group  unless, within 30 days after
receipt  thereof  by Borrower, Borrower shall deliver to Agent written objection
thereto  describing  the  error  or  errors  contained  in  any such statements.

2.11    FEES.  Borrower  shall  pay  to  Agent the following fees and charges,
          ----
which  fees  and  charges  shall  be  non-refundable  when paid (irrespective of
whether  this Agreement is terminated thereafter) and shall be apportioned among
the  Lenders in accordance with the terms of letter agreements between Agent and
individual  Lenders:

(a)     UNUSED  LINE  FEE.  On  the first day of each month during the term of
        -----------------
this  Agreement,  an  unused  line  fee  in  the amount equal to one-half of one
percent  (0.50%) per annum times the result of (a) the Maximum Loan Amount, less
(b)  the  sum of (i) the average Daily Balance of Advances that were outstanding
during  the  immediately preceding month, plus (ii) the average Daily Balance of
the  Term Loan that was outstanding during the immediately preceding month, plus
(iii)  the  average  Daily  Balance  of  the  Letter  of Credit Usage during the
immediately  preceding  month,

(b)     FEE  LETTER  FEES.  As and when due and payable under the terms of the
        -----------------
Fee  Letter,  Borrower  shall pay to Agent the fees set forth in the Fee Letter,
and

(c)     AUDIT,  APPRAISAL, AND VALUATION CHARGES.  For the separate account of
          ----------------------------------------
Agent, audit, appraisal, and valuation fees and charges as follows, (i) a fee of
$850  per  day, per auditor, plus out-of-pocket expenses for each financial
audit of Borrower performed by personnel employed by Agent, (ii) a fee of $1,500
per  day  per  appraiser, plus out-of-pocket expenses, for each appraisal of the
Collateral  performed  by  personnel  employed  by  Agent,  and (iii) the actual
charges  paid or incurred by Agent if it elects to employ the services of one or
more  third  Persons  to  perform  financial audits of Borrower, to appraise the
Collateral, or any portion thereof, or to assess  Borrower's business valuation.

                                     -41-
<PAGE>

2.12     LETTERS  OF  CREDIT.
         -------------------

(a)     Subject  to  the  terms and conditions of this Agreement, the Issuing
Lender  agrees  to issue letters of credit for the account of Borrower (each, an
"L/C")  or  to  purchase  participations or execute indemnities or reimbursement
obligations  (each  such  undertaking,  an  "L/C  UNDERTAKING")  with respect to
letters  of  credit  issued by an Underlying Issuer (as of the Closing Date, the
prospective Underlying Issuer is to be Wells Fargo) for the account of Borrower.
To  request the issuance of a Letter of Credit, (or the amendment, renewal,
or extension of an outstanding Letter of Credit), Borrower shall hand deliver or
telecopy  (or transmit by electronic communication, if arrangements for doing so
have  been  approved  by  the  Issuing  Lender)  to the Issuing Lender and Agent
(reasonably in advance of the requested date of issuance, amendment, renewal, or
extension)  a  notice  requesting  the  issuance  of  a  Letter  of  Credit,  or
identifying  the  Letter of Credit to be amended, renewed, or extended, the date
of  issuance, amendment, renewal, or extension, the date on which such Letter of
Credit  is  to expire, the amount of such Letter of Credit, the name and address
of  the  beneficiary  thereof  (or  of  the  Underlying  Letter  of  Credit,  as
applicable), and such other information as shall be necessary to prepare, amend,
renew,  or  extend  such  Letter of Credit.  If requested by the Issuing Lender,
Borrower  also  shall  be an applicant under the application with respect to any
Underlying  Letter  of  Credit  that is to be the subject of a Letter of Credit.
The  Issuing  Lender shall have no obligation to issue a Letter of Credit if any
of  the  following  would  result after giving effect to the requested Letter of
Credit:

     (i)  the  Letter  of  Credit Usage would exceed the Borrowing Base less the
          amount  of  outstanding  Advances,  or

     (ii)  the  Letter  of  Credit  Usage  would  exceed  $5,000,000.00  or

     (iii)  the  Letter of Credit Usage would exceed the Maximum Revolver Amount
          less  the  then  extant  amount  of  outstanding  Advances.

     Borrower and the Lender Group acknowledge and agree that certain Underlying
Letters  of  Credit  may be issued to support letters of credit that already are
outstanding  as  of  the Closing Date.  Each Letter of Credit (and corresponding
Underlying  Letter  of  Credit)  shall have an expiry date no later than 30 days
prior  to  the  Maturity  Date and all such Letters of Credit (and corresponding
Underlying  Letter  of  Credit) shall be in form and substance acceptable to the
Issuing  Lender  (in  the  exercise  of its Permitted Discretion), including the
requirement  that the amounts payable thereunder must be payable in Dollars.  If
Issuing  Lender is obligated to advance funds under a Letter of Credit, Borrower
immediately shall reimburse such L/C Disbursement to Issuing Lender by paying to
Agent  an  amount  equal  to  such  L/C  Disbursement not later than 11:00 a.m.,
California  time,  on  the  date that such L/C Disbursement is made, if Borrower
shall  have received written or telephonic notice of such L/C Disbursement prior
to  10:00  a.m.,  California time, on such date, or, if such notice has not been
received  by Borrower prior to such time on such date, then not later than 11:00
a.m., California time, on the following Business Day and, in the absence of such
reimbursement,  the  L/C  Disbursement  immediately  and  automatically shall be
deemed  to  be  an Advance hereunder and, thereafter, shall bear interest at the
rate  then  applicable  to  Advances under this Agreement.  To the extent an L/C
Disbursement  is  deemed  to  be  an Advance hereunder, Borrower's obligation to
reimburse  such  L/C  Disbursement  shall  be  discharged  and  replaced  by the
resulting  Advance.  Promptly  following  receipt  by  Agent of any payment from
Borrower  pursuant to this paragraph, Agent shall distribute such payment to the
Issuing  Lender  or,  to  the extent that Lenders have made payments pursuant to
SECTION  2.12(c)  to  reimburse the Issuing Lender, then to such Lenders and the
----------------
Issuing  Lender  as  their  interest  may  appear.

                                     -42-
<PAGE>

(b)     Promptly  following  receipt of a notice of L/C Disbursement pursuant
to  SECTION  2.12(a),  each Lender with a Revolver Commitment agrees to fund its
    ----------------
Pro  Rata  Share of any Advance deemed made pursuant to the foregoing subsection
on  the  same terms and conditions as if Borrower had requested such Advance and
Agent  shall  promptly  pay to Issuing Lender the amounts so received by it from
the  Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter
of  Credit  increasing the amount thereof) and without any further action on the
part of the Issuing Lender or the Lenders with Revolver Commitments, the Issuing
Lender  shall  be  deemed  to  have  granted  to  each  Lender  with  a Revolver
Commitment,  and  each Lender with a Revolver Commitment shall be deemed to have
purchased,  a  participation in each Letter of Credit, in an amount equal to its
Pro Rata Share of the Risk Participation Liability of such Letter of Credit, and
each  such Lender agrees to pay to Agent, for the account of the Issuing Lender,
such  Lender's  Pro  Rata Share of any payments made by the Issuing Lender under
such  Letter  of  Credit.  In consideration and in furtherance of the foregoing,
each  Lender  with  a  Revolver Commitment hereby absolutely and unconditionally
agrees to pay to Agent, for the account of the Issuing Lender, such Lender's Pro
Rata  Share  of  each  L/C  Disbursement  made  by  the  Issuing  Lender and not
reimbursed  by  Borrower  on  the  date  due  as  provided in clause (a) of this
Section, or of any reimbursement payment required to be refunded to Borrower for
any reason.  Each Lender with a Revolver Commitment acknowledges and agrees that
its  obligation  to  deliver to Agent, for the account of the Issuing Lender, an
amount  equal  to its respective Pro Rata Share of each L/C Disbursement made by
the  Issuing  Lender  pursuant  to  this  SECTION  2.12(b) shall be absolute and
                                          ----------------
unconditional  and  such remittance shall be made notwithstanding the occurrence
or  continuation of an Event of Default or Default or the failure to satisfy any
condition  set  forth  in  SECTION  3  hereof.  If any such Lender fails to make
                           ----------
available  to  Agent  the  amount  of  such  Lender's Pro Rata Share of each L/C
Disbursement  made  by the Issuing Lender in respect of such Letter of Credit as
provided  in this Section, such Lender shall be deemed to be a Defaulting Lender
and  Agent  (for the account of the Issuing Lender) shall be entitled to recover
such  amount  on  demand  from such Lender together with interest thereon at the
Defaulting  Lender  Rate  until  paid  in  full.

(c)     Borrower  hereby  agrees  to  indemnify,  save,  defend, and hold the
Lender Group harmless from any loss, cost, expense, or liability, and reasonable
attorneys fees incurred by the Lender Group arising out of or in connection
with  any  Letter  of  Credit;  provided,  however,  that  Borrower shall not be
                                --------   -------
obligated  hereunder  to  indemnify for any loss, cost, expense, or liability to
the  extent  that it caused by the gross negligence or willful misconduct of the
Issuing  Lender  or any other member of the Lender Group.  Borrower agrees to be
bound  by  the  Underlying  Issuer's  regulations  and  interpretations  of  any
Underlying  Letter  of  Credit or by Issuing Lender's interpretations of any L/C
issued  by  Issuing  Lender  to  or  for  Borrower's  account,  even though this
interpretation  may  be  different from Borrower's own, and Borrower understands
and  agrees that the Lender Group shall not be liable for any error, negligence,
or  mistake,  whether  of  omission  or  commission,  in  following  Borrower's
instructions  or  those  contained in the Letter of Credit or any modifications,
amendments,  or  supplements  thereto.  Borrower  understands  that  the  L/C
Undertakings  may  require Issuing Lender to indemnify the Underlying Issuer for
certain  costs  or  liabilities  arising  out of claims by Borrower against such
Underlying  Issuer.  Borrower hereby agrees to indemnify, save, defend, and hold
the  Lender  Group  harmless  with respect to any loss, cost, expense (including
reasonable  attorneys fees), or liability incurred by the Lender Group under any
L/C  Undertaking  as  a  result  of  the  Lender  Group's indemnification of any
Underlying  Issuer;  provided,  however,  that  Borrower  shall not be obligated
                     --------   -------
hereunder  to  indemnify for any loss, cost, expense, or liability to the extent
that  it  caused  by  the  gross negligence or willful misconduct of the Issuing
Lender  or  any  other member of the Lender Group.  Borrower hereby acknowledges
and  agrees  that  neither  the  Lender  Group  nor  the Issuing Lender shall be
responsible  for  delays, errors, or omissions resulting from the malfunction of
equipment  in  connection  with  any  Letter  of  Credit.

                                     -43-
<PAGE>

(d)     Borrower  hereby  authorizes  and  directs  any  Underlying Issuer to
deliver to the Issuing Lender all instruments, documents, and other writings and
     property  received  by  such  Underlying Issuer pursuant to such Underlying
Letter  of  Credit and to accept and rely upon the Issuing Lender's instructions
with respect to all matters arising in connection with such Underlying Letter of
Credit  and  the  related  application.

(e)     Any  and  all  charges,  commissions, fees, and costs incurred by the
Issuing  Lender  relating  to Underlying Letters of Credit shall be Lender Group
Expenses for purposes of this Agreement and immediately shall be reimbursable by
Borrower  to  Agent for the account of the Issuing Lender; it being acknowledged
and agreed by Borrower that, as of the Closing Date, the issuance charge imposed
by the prospective Underlying Issuer is .825% per annum times the face amount of
each  Underlying Letter of Credit, that such issuance charge may be changed from
time  to time, and that the Underlying Issuer also imposes a schedule of charges
for  amendments,  extensions,  drawings,  and  renewals.

(f)     If  by  reason  of  (i)  any  change  after  the  Closing Date in any
applicable  law, treaty, rule, or regulation or any change in the interpretation
or  application thereof by any Governmental Authority, or (ii) compliance by the
Underlying  Issuer  or  the  Lender  Group  with  any  direction,  request,  or
requirement  (irrespective  of  whether  having  the  force  of  law)  of  any
Governmental  Authority  or  monetary  authority  including, Regulation D of the
Federal  Reserve  Board  as  from  time  to  time  in  effect (and any successor
thereto):

     (i)  any reserve, deposit, or similar requirement is or shall be imposed or
          modified  in  respect  of  any  Letter  of Credit issued hereunder, or

     (ii)  there  shall  be imposed on the Underlying Issuer or the Lender Group
          any  other  condition regarding any Underlying Letter of Credit or any
          Letter  of  Credit  issued  pursuant  hereto;

and the result of the foregoing is to increase, directly or indirectly, the cost
to  the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of  Credit  or  to reduce the amount receivable in respect thereof by the Lender
Group,  then,  and  in any such case, Agent may, at any time within a reasonable
period  after the additional cost is incurred or the amount received is reduced,
notify  Borrower,  and  Borrower  shall  pay on demand such amounts as Agent may
specify  to be necessary to compensate the Lender Group for such additional cost
or  reduced receipt, together with interest on such amount from the date of such
demand  until  payment  in  full thereof at the rate then applicable to the Base
Rate  Loans hereunder.  The determination by Agent of any amount due pursuant to
this  Section,  as  set  forth  in  a  certificate setting forth the calculation
thereof  in reasonable detail, shall, in the absence of manifest or demonstrable
error,  be  final  and  conclusive  and  binding  on  all of the parties hereto.

2.13     LIBOR  OPTION.
         -------------

(a)     Interest  and  Interest  Payment  Dates.  In  lieu of having interest
           ---------------------------------------
charged  at  the  rate  based upon the Base Rate, Borrower shall have the option
(the "LIBOR OPTION") to have interest on all or a portion of the Advances or the
Term  Loan  be  charged  at  a  rate  of  interest  based  upon  the LIBOR Rate.
Interest  on  LIBOR  Rate Loans shall be payable on the earliest of (i) the last
day  of the Interest Period applicable thereto (provided, however, that, subject
                                                --------  -------

                                     -44-
<PAGE>

to  the  following  clauses  (ii)  and (iii), in the case of any Interest Period
greater  than  3  months  in  duration,  interest  shall  be  payable at 3 month
intervals  after  the  commencement of the applicable Interest Period and on the
last day of such Interest Period), (ii) the occurrence of an Event of Default in
consequence  of  which  the  Required  Lenders  or  Agent on behalf thereof have
elected  to accelerate the maturity of all or any portion of the Obligations, or
(iii)  termination  of this Agreement pursuant to the terms hereof.  On the last
day  of  each applicable Interest Period, unless Borrower properly has exercised
the  LIBOR  Option  with  respect  thereto, the interest rate applicable to such
LIBOR  Rate  Loan  automatically  shall  convert  to  the  rate of interest then
applicable  to  Base Rate Loans of the same type hereunder.  At any time that an
Event  of  Default has occurred and is continuing, Borrower no longer shall have
the  option  to  request  that Advances or the Term Loan bear interest at a rate
based upon the LIBOR Rate and Agent shall have the right to convert the interest
rate  on  all  outstanding  LIBOR Rate Loans to the rate then applicable to Base
Rate  Loans  hereunder.

(b)     LIBOR  ELECTION.
        ---------------
     (i) Borrower may, at any time and from time to time, so long as no Event of
          Default  has  occurred  and is continuing, elect to exercise the LIBOR
          Option  by  notifying  Agent  prior to 11:00 a.m. (California time) at
          least  3  Business  Days  prior  to  the  commencement of the proposed
          Interest  Period (the "LIBOR DEADLINE"). Notice of Borrower's election
          of  the  LIBOR  Option  for a permitted portion of the Advances or the
          Term  Loan  and  an  Interest Period pursuant to this Section shall be
          made  by  delivery to Agent of a LIBOR Notice received by Agent before
          the  LIBOR  Deadline, or by telephonic notice received by Agent before
          the  LIBOR  Deadline  (to be confirmed by delivery to Agent of a LIBOR
          Notice  received  by Agent prior to 5:00 p.m. (California time) on the
          same  day). Promptly upon its receipt of each such LIBOR Notice, Agent
          shall  provide a copy thereof to each of the Lenders having a Revolver
          Commitment  or  Term  Loan  Commitment.

     (ii)  Each  LIBOR  Notice  shall be irrevocable and binding on Borrower. In
          connection  with  each  LIBOR  Rate  Loan,  Borrower  shall indemnify,
          defend,  and  hold  Agent  and  the Lenders harmless against any loss,
          cost,  or  expense  incurred by Agent or any Lender as a result of (a)
          the  payment of any principal of any LIBOR Rate Loan other than on the
          last  day  of  an  Interest  Period applicable thereto (including as a
          result  of  an Event of Default), (b) the conversion of any LIBOR Rate
          Loan  other  than  on  the  last day of the Interest Period applicable
          thereto, or (c) the failure to borrow, convert, continue or prepay any
          LIBOR  Rate  Loan  on the date specified in any LIBOR Notice delivered
          pursuant  hereto  (such  losses,  costs,  and  expenses, collectively,
          "FUNDING  LOSSES"). Funding Losses shall, with respect to Agent or any
          Lender,  be  deemed  to  equal  the amount determined by Agent or such
          Lender  to  be  the excess, if any, of (i) the amount of interest that
          would have accrued on the principal amount of such LIBOR Rate Loan had
          such  event  not  occurred,  at  the  LIBOR  Rate that would have been
          applicable  thereto, for the period from the date of such event to the
          last day of the then current Interest Period therefor (or, in the case
          of  a  failure  to  borrow,  convert, or continue, for the period that
          would  have  been the Interest Period therefor), minus (ii) the amount
          of interest that would accrue on such principal amount for such period
          at  the interest rate which Agent or such Lender would be offered were
          it  to be offered, at the commencement of such period, Dollar deposits
          of  a  comparable  amount and period in the London interbank market. A
          certificate  of  Agent or a Lender delivered to Borrower setting forth
          any amount or amounts that Agent or such Lender is entitled to receive
          pursuant  to  this  SECTION  2.13  shall be conclusive absent manifest
                              -------------
          error.

                                     -45-
<PAGE>

     (iii) Borrower shall have not more than 7 LIBOR Rate Loans in effect at any
          given time. Borrower only may exercise the LIBOR Option for LIBOR Rate
          Loans  of  at least $5,000,000 and integral multiples of $5,000,000 in
          excess  thereof.

(c)     PREPAYMENTS.  Borrower  may  prepay  LIBOR  Rate  Loans  at any time;
        -----------
provided,  however,  that  in the event that LIBOR Rate Loans are prepaid on any
--------   -------
date  that  is  not  the  last  day  of  the Interest Period applicable thereto,
including  as  a  result  of  any  automatic  prepayment  through  the  required
application by Agent of proceeds of Borrower's and its Subsidiaries' Collections
in  accordance with SECTION 2.4(b) or for any other reason, including early
                    --------------
termination  of the term of this Agreement or acceleration of all or any portion
of  the  Obligations  pursuant  to  the  terms hereof, Borrower shall indemnify,
defend,  and  hold Agent and the Lenders and their Participants harmless against
any  and  all  Funding  Losses  in  accordance  with  clause  (b)(ii)  above.

(d)     SPECIAL  PROVISIONS  APPLICABLE  TO  LIBOR  RATE.
           ------------------------------------------------

     (i) The LIBOR Rate may be adjusted by Agent with respect to any Lender on a
          prospective  basis  to  take  into account any additional or increased
          costs  to  such  Lender  of  maintaining  or  obtaining any eurodollar
          deposits  or  increased  costs,  in  each  case,  due  to  changes  in
          applicable  law  occurring  subsequent to the commencement of the then
          applicable  Interest  Period,  including  changes  in tax laws (except
          changes  of  general  applicability  in corporate income tax laws) and
          changes  in the reserve requirements imposed by the Board of Governors
          of  the  Federal  Reserve  System  (or  any  successor), excluding the
          Reserve Percentage, which additional or increased costs would increase
          the  cost  of funding loans bearing interest at the LIBOR Rate. In any
          such  event,  the affected Lender shall give Borrower and Agent notice
          of  such  a  determination  and  adjustment  and  Agent promptly shall
          transmit  the notice to each other Lender and, upon its receipt of the
          notice  from  the  affected  Lender,  Borrower  may, by notice to such
          affected  Lender  (y)  require  such  Lender  to furnish to Borrower a
          statement  setting  forth  the basis for adjusting such LIBOR Rate and
          the method for determining the amount of such adjustment, or (z) repay
          the  LIBOR  Rate  Loans  with respect to which such adjustment is made
          (together  with  any  amounts  due  under  clause  (b)(ii)  above).

     (ii)  In  the  event  that  any  change  in  market  conditions or any law,
          regulation,  treaty,  or  directive,  or  any change therein or in the
          interpretation  of  application  thereof,  shall at any time after the
          date hereof, in the reasonable opinion of any Lender, make it unlawful
          or  impractical  for such Lender to fund or maintain LIBOR Advances or
          to  continue  such  funding  or maintaining, or to determine or charge
          interest  rates  at  the  LIBOR Rate, such Lender shall give notice of
          such  changed  circumstances  to Agent and Borrower and Agent promptly
          shall  transmit the notice to each other Lender and (y) in the case of
          any  LIBOR  Rate  Loans  of such Lender that are outstanding, the date
          specified  in  such Lender's notice shall be deemed to be the last day
          of the Interest Period of such LIBOR Rate Loans, and interest upon the
          LIBOR  Rate  Loans  of such Lender thereafter shall accrue interest at
          the  rate  then  applicable to Base Rate Loans, and (z) Borrower shall
          not be entitled to elect the LIBOR Option until such Lender determines
          that  it  would  no  longer  be  unlawful  or  impractical  to  do so.

                                     -46-
<PAGE>

(e)     NO  REQUIREMENT  OF  MATCHED  FUNDING.  Anything  to  the  contrary
           -------------------------------------
contained  herein  notwithstanding,  neither  Agent,  nor any Lender, nor any of
their  Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate.  The  provisions  of  this  Section  shall  apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the  LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount  of  the  LIBOR  Rate  Loans.

2.14     CAPITAL  REQUIREMENTS.  If,  after  the  date  hereof,  any  Lender
         ---------------------
determines  that  (i)  the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any  change  in  the  interpretation  or application thereof by any Governmental
Authority  charged  with  the administration thereof, or (ii) compliance by such
Lender  or  its  parent  bank  holding  company  with  any guideline, request or
directive  of  any such entity regarding capital adequacy (whether or not having
the  force  of  law),  has the effect of reducing the return on such Lender's or
such  holding  company's  capital  as a consequence of such Lender's Commitments
hereunder  to a level below that which such Lender or such holding company could
have  achieved  but  for  such  adoption,  change,  or  compliance  (taking into
consideration  such  Lender's  or  such holding company's then existing policies
with  respect  to  capital  adequacy  and  assuming the full utilization of such
entity's  capital) by any amount deemed by such Lender to be material, then such
Lender may notify Borrower and Agent thereof.  Following receipt of such notice,
Borrower  agrees  to  pay  such Lender on demand the amount of such reduction of
return  of  capital  as and when such reduction is determined, payable within 90
days  after presentation by such Lender of a statement in the amount and setting
forth in reasonable detail such Lender's calculation thereof and the assumptions
upon  which such calculation was based (which statement shall be deemed true and
correct absent manifest error).  In determining such amount, such Lender may use
any  reasonable  averaging  and  attribution  methods.

2.15)     INTENTIONALLY  DELETED.
          ----------------------

2.61     BORROWING  BASE.
         ---------------

(a)     DETERMINATION OF THE BORROWING BASE.  During the period from the date
        -----------------------------------
hereof  to  the  date  of  the  first  determination  of  the  Borrowing  Base
pursuant  to  the further provisions of this SECTION 2.16, the initial amount of
                                             ------------
the  Borrowing  Base  will be an amount set by the Agent on the Closing Date and
acknowledged  by  the  Borrower  (the  "INITIAL  BORROWING  BASE").

(b)     ANNUAL  SCHEDULED  DETERMINATIONS  OF  THE BORROWING BASE.  Promptly
        ---------------------------------------------------------
after  July  1 of each calendar year (commencing July 1, 2004), and in any event
prior  to  September  1 of each calendar year, the Borrower shall furnish to the
Agent  a  report in form and substance satisfactory to the Agent, prepared by an
Approved  Engineer,  which  report  shall be dated as of July 1 of such calendar
year  and shall set forth the oil and gas reserves attributable to the Borrowing
Base  Properties,  and  a projection of the rate of production and net operating
income  with  respect  thereto,  as  of such date, together with additional data
concerning  pricing,  hedging,  operating  costs,  quantities  and purchasers of
production,  and  other  information  and engineering and geological data as the
Agent may reasonably request.  Within forty-five (45) days after receipt of such
     report  and  information  and  its  review and approval by Agent, the Agent
shall,  by  written  notice  to  the  Borrower, designate the new Borrowing Base
available  to  the  Borrower.

(c)     SEMI-ANNUAL  SCHEDULED  DETERMINATION  OF  THE  BORROWING  BASE.  In
        ---------------------------------------------------------------
addition,  promptly after January 1 of each calendar year (commencing January 1,
2005),  and  in any event prior to March 1st of each calendar year, the Borrower
shall furnish to Agent a report in form and substance satisfactory to the Agent,
prepared  (i)  prior  to  the  occurrence of an Event of Default or in the event
Excess  Availability is greater than $25,000,000.00, by the Borrower's petroleum
engineers  and  (ii) after the occurrence of an Event of Default or in the event

                                     -47-
<PAGE>

Excess Availability is less than $25,000,000.00 by an Approved Engineer, and, in
either  case,  reviewed and approved by Agent, which report shall be dated as of
January  1  of  such  calendar year and shall set forth the oil and gas reserves
attributable  to  the Borrowing Base Properties, and a projection of the rate of
production  and  net  operating  income  with  respect thereto, as of such date,
together  with  additional  data  concerning  pricing, hedging, operating costs,
quantities  and  purchasers of production, and other information and engineering
and geological data as the Agent may reasonably request.  Within forty-five (45)
days  after  receipt  of such report and information by Agent and its review and
approval by Agent, the Agent shall, by written notice to the Borrower, designate
the  new  Borrowing  Base  available  to  the  Borrower.

(d     DISCRETIONARY  DETERMINATION OF THE BORROWING BASE.  The Agent shall
       --------------------------------------------------
have  the right to redetermine the Borrowing Base at any time that the Agent, in
its  sole  discretion,  believes  that  there  has been an adverse change in the
market  condition  of  the  Energy  Business  or  in the condition (financial or
otherwise)  or  operations  of  the Borrower and its Subsidiaries.  If the Agent
shall  elect  to  make  a  discretionary  redetermination  of the Borrowing Base
pursuant  to  the  provisions of this SECTION 2.16(d), the Borrower shall within
                                      ---------------
thirty (30) days of receipt of a request therefor from the Agent, deliver to the
Agent  such  updated  engineering,  production, operating, and other data as the
Agent  or  any  Lender  may  reasonably  request.  The  Agent  shall approve and
designate the new Borrowing Base in accordance with the procedures and standards
described  in  SECTION  2.16(b)  AND  (g).
               --------------------------

(e)     EXCLUSIONS.  The  Agent  may  exclude  any  oil  and gas reserves or
        ----------
portion  of  production therefrom or any income from any other Property from the
Borrowing  Base,  at  any  time,  because  title  information  is not reasonably
satisfactory  or  such  oil  and  gas  reserves  are  not  Mortgaged Properties.

(f)     QUARTERLY  ADJUSTMENTS.  In  addition to the re-determination of the
        ----------------------
Borrowing  Base as provided above, the valuation of the oil and gas reserves set
forth  in  the  most  recent  Reserve  Report shall be adjusted quarterly by the
Agent,  based  upon the quarterly pricing report provided by the Borrower to the
Agent  pursuant  to SECTION 6.2, such revaluation to be made by the Agent within
                    -----------
five  (5)  Business Days of its receipt of each such report, and the Agent shall
promptly  notify  in  writing  the  Borrower  of  the  revalued  Borrowing Base.

(g)     GENERAL  PROVISIONS  WITH  RESPECT  TO  THE  BORROWING  BASE.  The
        ------------------------------------------------------------
determination  of  the  Borrowing  Base  shall  be made by the Agent taking into
consideration  the  PV-10  Value  of  the  Eligible  Proved  Developed Producing
Reserves  of  the  Pledging  Subsidiaries  and  the  Eligible  Proved  Developed
Producing  Reserves  of  the  Partnerships  and the LLC as reflected in the most
recent  Reserve  Report  or  other  report  or  information  provided under this
Agreement,  and  any  other relevant information obtained by or delivered to the
Agent  and  the  Lender  Group,  all  in  accordance with the provisions of this
SECTION  2.16,  together  with  such  other  credit  factors (including, without
-------------
limitation,  the assets, liabilities, cash flow, hedged and unhedged exposure to
price,  and  interest rate changes, business, properties, prospects, management,
and  ownership  of  Borrower, its Subsidiaries, the LLC, or the Partnerships) as
Agent  in  its  discretion  deem  significant.

2.17  NOTELESS  AGREEMENT.  No promissory notes shall evidence the payment
      -------------------
obligations  of  any Advances or the Term Loan to Borrower. Agent shall maintain
in  accordance  with  its  usual  practice  an  account or accounts on its books
evidencing  the  obligations  of  Borrower resulting from the Term Loan and each
Advance  made by Agent from time to time, including the amounts of principal and
interest  payable  and  paid to Lender hereunder. The entries maintained in said
accounts  shall be prima facie evidence of the existence and amounts of the Term
Loan  and  the  Advances  made by Agent and the payment obligations of Borrower;
provided,  however,  that  the failure of Agent to maintain such accounts or any
error therein shall not in any manner affect the obligation of Borrower to repay
the  Advances  and  the  Term  Loan.

                                     -48-
<PAGE>

3.     CONDITIONS;  TERMS  OF  AGREEMENT.

3.1     CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT.  The obligation
        -------------------------------------------------------
     of  the  Lender Group (or any member thereof) to make the initial extension
of  credit  provided  for  hereunder,  is  subject  to  the  fulfillment, to the
satisfaction  of  Agent and each Lender (the making of such initial extension of
credit by a Lender being conclusively deemed to be the satisfaction or waiver of
the  following),  of  each  of  the  following  of  the  conditions  precedent:

(a)     the  Closing  Date shall occur on or before a date ninety (90) days from
the date of this Agreement, unless extended by Agent at its sole discretion, for
     an  additional  period  of  time  not  to  exceed  ninety  (90)  days;

(b)     Agent  shall  have received a Filing Authorization Letter, duly executed
by  Borrower  and  each Pledging Subsidiary, together with appropriate financing
statements  duly  filed  in such office or offices as maybe necessary or, in the
opinion  of  Agent,  desirable  to  perfect  the  Agent's  Liens  in  and to the
Collateral  and  Agent shall have received searches reflecting the filing of all
such  financing  statements;

(c)     Agent  shall  have received each of the following documents, in form and
substance  satisfactory to Agent, duly executed, and each such document shall be
in  full  force  and  effect:

        (i)  the  Contribution  Agreement,

        (ii)  the  Disbursement  Letter,

        (iii)  the  Fee  Letter,

        (iv)  the  Officers'  Certificate,

        (v)  the  Partnership  Pledge  Agreement,

        (vi)  the  Borrower's  Security  Agreement,

        (vii)  the  LLC  Pledge  Agreement,

        (viii)  the  Intercompany  Notes,  and

        (ix)  Subordination  Agreements,  as  may  be  required  by  Agent;

(d)     Agent  shall  have  received (i) counterparts of duly executed Mortgages
encumbering  Oil and Gas Properties of the Pledging Subsidiaries constituting at
least  80%  of  the  Total  Proved  Developed Producing Reserves of the Pledging
Subsidiaries  to  which  value  is  given  in  the  determination of the Initial
Borrowing  Base duly executed on behalf of each record owner of such Oil and Gas
Properties  and evidence of the completion (or satisfactory arrangements for the
completion)  of  all  recordings  and  filings  of  such  Mortgage(s)  as may be
necessary  or,  in the reasonable opinion of the Agent, desirable effectively to
create a valid, perfected first priority Lien against the Oil and Gas Properties

                                     -49-
<PAGE>

purported  to  be  covered thereby, except as a result of a Permitted Lien;
and  (ii)  duly  executed Partnership Pledge Agreements and LLC Pledge Agreement
assigning  to  Agent,  and granting to Agent a first perfected priority security
interest  in, partnership interests in Partnerships and the membership interests
in  the  LLC  having  Oil and Gas Properties constituting at least 80% the Total
Proved  Developed Producing Reserves of the Partnerships to which value is given
in  the  determination  of  the  Initial  Borrowing  Base  and  evidence  of the
completion  of  all recordings and filings of such create valid, perfected first
priority  Liens  in  such  partnership  interests;

(e)     Agent  shall  have  received  counterparts  of  duly  executed Mortgages
encumbering the Gathering Systems duly executed and delivered by each Subsidiary
and/or  Affiliate  of  Borrower owning the Gathering Systems or any part thereof
and  evidence of the completion (or satisfactory arrangement for the completion)
of  all recordings and filings of such Mortgage(s) as may be necessary or in the
reasonable  opinion  of  the  Agent,  desirable  effectively  to create a valid,
perfected  first  priority  Lien  on  the  Gathering  Systems;

(f)     The  Borrowing  Base  Properties,  the  Gathering Systems, and the other
Collateral  shall  be  free and clear of all Liens, except Permitted Liens.  All
filings,  notices, recordings and other action necessary to perfect the Liens in
the  Collateral  shall have been made, given or accomplished or arrangements for
the completion thereof satisfactory to the Agent and its counsel shall have been
made;

(g)     Agent shall have received copies of all Governmental Approvals and third
party  consents and approvals necessary or, in the sole discretion of the Agent,
advisable  in  connection  with (i) the mortgaging and pledging of the Mortgaged
Properties,  and  the  other  Collateral,  (ii)  the pledging of the partnership
interests in the Partnerships, (iii) the pledging of the membership interests in
the  LLC  and (iv) the operations of the Borrower, its Subsidiaries, the LLC and
the  Partnerships.  All such Governmental Approvals and third party consents and
approvals  shall  be  in  full  force  and  effect;

(h)     Agent  and  Lenders  shall have received certificates, dated the Closing
Date,  from  the  Borrower's  insurers certifying (i) compliance with all of the
insurance  required by SECTION 6.8 hereof and by the Security Documents and (ii)
                       -----------
that  such  insurance  is  in  full  force  and  effect;

(i)     Agent  and  Lenders  shall have received and shall be satisfied with the
contents,  results  and  scope  of  the  Initial  Reserve  Report;

(j)     Agent shall have completed and be satisfied with the results of a review
of  the Borrowing Base Properties and the other Collateral and the status of the
title  and  the  environmental  condition  of  the  Borrowing  Base  Properties;

(k)     Borrower  shall  have  delivered  to  the  Agent  copies  of all Hedging
Agreements  currently  in existence to which Borrower or any of its Subsidiaries
is  a  party;

(l)     Agent  shall  have received a certificate from the Secretary of Borrower
and  each  of its Subsidiaries:  (i)attesting to the resolutions of its Board of
Directors authorizing its execution, delivery, and performance of this Agreement
and  the  other Loan Documents to which it is a party, (ii) authorizing specific
officers  of  such  party  to  execute  the  same,  and  (iii)  attesting to the
incumbency  and  signatures  of  its  specific  officers;

                                     -50-
<PAGE>

(m)     Agent shall have received copies of the Governing Documents of Borrower,
each of its Subsidiaries, the LLC and the Partnerships, as amended, modified, or
supplemented  to  the  Closing Date, certified by an appropriate officer of each
such  entity;

(n)     Agent  shall  have  received  a  certificate  of  status with respect to
Borrower,  each  of its Subsidiaries, the LLC and the Partnerships, dated within
10  days  of  the Closing Date, such certificate to be issued by the appropriate
officer  of  the  jurisdiction of organization of such entity, which certificate
shall  indicate  that  such  entity  is  in  good standing in such jurisdiction;

(o)     Agent  shall  have  received  certificates  of  status  with  respect to
Borrower,  each  of  its  Subsidiaries, the LLC and the Partnerships, each dated
within  30  days  of  the  Closing  Date,  such certificates to be issued by the
appropriate  officer  of  the  jurisdictions  (other  than  the  jurisdiction of
organization  of  such  entity)  in  which  its  failure to be duly qualified or
licensed  would  constitute  a Material Adverse Change, which certificates shall
indicate  that  such  entity  is  in  good  standing  in  such  jurisdictions;

(p)     Agent  shall have received a certificate of insurance, together with the
endorsements  thereto, as are required by SECTION 6.8, the form and substance of
                                          -----------
which  shall  be  satisfactory  to  Agent;

(q)     Agent  shall  have received Collateral Access Agreements with respect to
Borrower's  corporate  headquarters  located  at 4643 South Ulster Street, Suite
1100,  Denver, Colorado 80237 and Eastern American's headquarters located at 501
56th  Street,  Charleston,  West  Virginia  25304;

(r)     Agent  shall  have  received  opinions of Borrower's counsel in form and
substance  satisfactory  to  Lender;

(s)     Agent shall have received satisfactory evidence (including a certificate
of  the chief financial officer of Borrower) that all tax returns required to be
filed  by  Borrower, each of its Subsidiaries, the LLC and the Partnerships have
been timely filed and all taxes upon Borrower, its Subsidiaries, the LLC and the
Partnerships  or  their  respective  properties,  assets, income, and franchises
(including  Real  Property  taxes, sales taxes and payroll taxes) have been paid
prior  to  delinquency,  except  such  taxes that are the subject of a Permitted
Protest;

(t)     Borrower shall have the Required Availability after giving effect to the
initial  extensions of credit hereunder and the payment of all fees and expenses
required  to be paid by Borrower on the Closing Date under this Agreement or the
other  Loan  Documents;

(u)     Agent  shall  have  completed  its  business,  legal, and collateral due
diligence,  including  a collateral audit and review of the Books and Records of
Borrower,  its  Subsidiaries,  the  LLC and the Partnership, and verification of
Borrower's  representations  and  warranties to the Lender Group, the results of
which  shall  be  satisfactory  to  Agent;

(v)     Agent  shall  have  received  completed reference checks with respect to
Borrower's  senior management, the results of which are satisfactory to Agent in
its  sole  discretion;

(w)     Lender  shall  have  received  Borrower's  Closing  Date  Business Plan;

(x)     Borrower shall pay all Lender Group Expenses incurred in connection with
the  transactions  evidenced  by  this  Agreement;

                                     -51-
<PAGE>

(y)     Borrower  shall  have  received  all  licenses, approvals or evidence of
other  actions  required  by  any Person or Governmental Authority in connection
with  the  execution  and  delivery  by  Borrower  and  its Subsidiaries of this
Agreement  or  any  other  Loan  Document  or  with  the  consummation  of  the
transactions  contemplated  hereby  and  thereby;

(z)     Agent  shall  have received an Indenture Compliance Certificate from the
chief  financial  officer  or  president  of  Borrower  certifying  that (i) the
Advances  and  the  Term  Loan  will not result in a default or event of default
under  the Indenture and (ii) demonstrating, in reasonable detail, compliance by
Borrower  with  the  Fixed  Charge  Coverage Ratio (as defined in the Indenture)
requirement  set  forth in SECTION 4.7 (i) of the Indenture, after giving effect
                           ---------------
to  the  Advances  and  the  Term  Loan;  and

(aa)     all  other  documents  and  legal  matters  in  connection  with  the
transactions contemplated by this Agreement shall have been delivered, executed,
or  recorded  and  shall  be in form and substance satisfactory to Agent and its
counsel.

3.2     INTENTIONALLY  DELETED.
        -----------------------

3.3     CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT.  The obligation of the
        ------------------------------------------------
Lender  Group  (or  any  member  thereof) to make any Advances (or to extend any
other  credit hereunder) shall be subject to the following conditions precedent:

(a)     the  representations  and warranties contained in this Agreement and the
other  Loan  Documents shall be true and correct in all material respects on and
as  of  the  date  of such extension of credit, as though made on and as of such
date  (except  to  the  extent  that  such representations and warranties relate
solely  to  an  earlier  date);

(b)     no  Default or Event of Default shall have occurred and be continuing on
the  date  of  such extension of credit, nor shall either result from the making
thereof;

(c)     no  injunction,  writ,  restraining  order, or other order of any nature
prohibiting,  directly  or  indirectly,  the extending of such credit shall have
been  issued and remain in force by any Governmental Authority against Borrower,
Agent,  any  Lender,  or  any  of  their  Affiliates;

(d)     the requested borrowing will not result in a default or event of default
under  the  Indenture  or  the  Settlement  Agreement;  and

(e)     no  Material  Adverse  Change  shall  have  occurred.

3.4     TERM.  This  Agreement  shall  become  effective  upon the execution and
        ----
delivery  hereof by Borrower, Agent and Lenders and shall continue in full force
and  effect  for  a  term  ending  on  July 10, 2008 (the "MATURITY DATE").  The
foregoing  notwithstanding,  the Lender Group, upon the election of the Required
Lenders,  shall have the right to terminate its obligations under this Agreement
immediately  and  without notice upon the occurrence and during the continuation
of  an  Event  of  Default.

3.5     EFFECT  OF  TERMINATION.  On  the date of termination of this Agreement,
        -----------------------
all Obligations (including contingent reimbursement obligations of Borrower with
respect  to  any  outstanding  Letters of Credit and including all Bank Products
Obligations)  immediately  shall become due and payable without notice or demand
(including  (a) either (i) providing cash collateral to be held by Agent for the
benefit  of  those Lenders with a Revolver Commitment in an amount equal to 105%
of  the then extant Letter of Credit Usage, or (ii) causing the original Letters
of  Credit  to  be returned to Issuing Lender, and (b) providing cash collateral

                                     -52-
<PAGE>

(in  an  amount  determined  by  Agent  as  sufficient to satisfy the reasonably
estimated  credit  exposure)  to  be  held  by Agent for the benefit of the Bank
Product  Providers  with  respect to the then extant Bank Products Obligations).
No  termination  of this Agreement, however, shall relieve or discharge Borrower
of  its duties, Obligations, or covenants hereunder and the Agent's Liens in the
Collateral  shall  remain  in  effect  until all Obligations have been fully and
finally  discharged  and  the  Lender  Group's obligations to provide additional
credit  hereunder have been terminated.  When this Agreement has been terminated
and all of the Obligations have been fully and finally discharged and the Lender
Group's  obligations  to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrower's sole expense, execute and
deliver  any  UCC  termination  statements,  lien  releases,  mortgage releases,
re-assignments  of  trademarks,  discharges  of  security  interests,  and other
similar  discharge or release documents (and, if applicable, in recordable form)
as  are reasonably necessary to release, as of record, the Agent's Liens and all
notices  of  security interests and liens previously filed by Agent with respect
to  the  Obligations.

3.6     EARLY  TERMINATION  BY  BORROWER.  Borrower  has the option, at any time
        --------------------------------
upon  90  days  prior  written  notice  by  Borrower to Agent, to terminate this
Agreement  by paying to Agent, for the benefit of the Lender Group, in cash, the
Obligations  (including  (a)  either (i) providing cash collateral to be held by
Agent  for  the benefit of those Lenders with a Revolver Commitment in an amount
equal  to  105%  of  the then extant Letter of Credit Usage, or (ii) causing the
original  Letters  of  Credit  to be returned to Issuing Lender in full, and (b)
providing  cash  collateral  (in  an amount determined by Agent as sufficient to
satisfy  the  reasonably  estimated credit exposure) to be held by Agent for the
benefit  of  the  Bank  Product  Providers  with respect to the then extant Bank
Products  Obligations),  in  full,  together  with,  in  the  absence  of  a
Non-Prepayment Premium Event, the Applicable Prepayment Premium (to be allocated
based upon letter agreements between Agent and individual Lenders).  If Borrower
has  sent  a  notice  of termination pursuant to the provisions of this Section,
then  the  Commitments  shall terminate and Borrower shall be obligated to repay
the  Obligations  (including (a) either (i) providing cash collateral to be held
by  Agent  for  the  benefit  of  those Lenders with a Revolver Commitment in an
amount  equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the  original  Letters  of Credit to be returned to the Issuing Lender, in full,
and  (b)  providing  cash  collateral  (in  an  amount  determined  by  Agent as
sufficient  to  satisfy  the reasonably estimated credit exposure) to be held by
Agent  for  the  benefit  of the Bank Product Providers with respect to the then
extant  Bank  Products Obligations), in full, together with, in the absence of a
Non-Prepayment Premium Event, the Applicable Prepayment Premium, on the date set
forth as the date of termination of this Agreement in such notice.  In the event
of  the  termination  of  this Agreement and repayment of the Obligations at any
time prior to the Maturity Date, for any other reason, including (a) termination
upon  the election of the Required Lenders to terminate after the occurrence and
during  the  continuation  of  an  Event of Default, (b) foreclosure and sale of
Collateral,  (c)  sale  of  the  Collateral in any Insolvency Proceeding, or (d)
restructure, reorganization or compromise of the Obligations by the confirmation
of  a  plan  of reorganization, or any other plan of compromise, restructure, or
arrangement  in any Insolvency Proceeding, then, in view of the impracticability
and  extreme  difficulty  of  ascertaining  the  actual amount of damages to the
Lender  Group  or  profits  lost  by  the Lender Group as a result of such early
termination,  and  by  mutual  agreement  of  the  parties  as  to  a reasonable
estimation  and  calculation of the lost profits or damages of the Lender Group,
Borrower  shall  pay the Applicable Prepayment Premium to Agent (to be allocated
based  upon letter agreements between Agent and individual Lenders), measured as
of  the date of such termination; provided, however, the Lender Group waives the
Applicable Prepayment Premium in the event such early termination results from a
financing  provided  by  Wells  Fargo  Bank,  N.A.,  or  any  of its affiliates.

4.     INTENTIONALLY  DELETED.

                                     -53-
<PAGE>

5.     REPRESENTATIONS  AND  WARRANTIES.
     In  order to induce the Lender Group to enter into this Agreement, Borrower
makes  the  following  representations  and warranties to the Lender Group which
shall  be  true, correct, and complete, in all material respects, as of the date
hereof,  and  shall be true, correct, and complete, in all material respects, as
of the Closing Date, and at and as of the date of the making of each Advance (or
other extension of credit) made thereafter, as though made on and as of the date
of  such  Advance (or other extension of credit) (except to the extent that such
representations  and  warranties  relate  solely  to  an  earlier date) and such
representations  and warranties shall survive the execution and delivery of this
Agreement:

5.1     NO  ENCUMBRANCES.  Borrower,  Pledging  Subsidiaries,  the  LLC, and the
        ----------------
Partnerships have good, valid and indefeasible title to its Collateral, free and
clear  of  Liens  except  for  Permitted  Liens,  including  but not limited to:

(a)     the  Borrowing  Base  Properties  and  the working interests and the net
revenue  interests  with  respect  thereto  listed  on  SCHEDULE  5.1(a);  and
                                                        ----------------

(b)     all  rights  under  the  Material  Contracts  listed on SCHEDULE 5.1(b).
                                                                ---------------

5.2     INTENTIONALLY  DELETED.
        ----------------------

5.3     INTENTIONALLY  DELETED.
        ----------------------

5.4     INTENTIONALLY  DELETED.
        ----------------------

5.5     INTENTIONALLY  DELETED.
        ----------------------

5.6     INTENTIONALLY  DELETED.
        ----------------------

5.7     LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN.  The chief executive office of
        ----------------------------------------
Borrower  and  its  Subsidiaries is located at the address indicated in SCHEDULE
                                                                        --------
5.7,  and  the  FEIN  for Borrower and each of its Subsidiaries is identified in
---
SCHEDULE  5.7.
------------

5.8     DUE  ORGANIZATION  AND  QUALIFICATION;  SUBSIDIARIES.
        ----------------------------------------------------

(a)     Borrower and each of its Subsidiaries is duly organized and existing and
in  good  standing  under  the  laws of the jurisdiction of its organization and
qualified  to  do  business  in  each state where the failure to be so qualified
reasonably  could  be  expected  to  have  a  Material  Adverse  Change.

(b)     Set  forth on SCHEDULE 5.8(b), is a complete and accurate description of
                      ---------------
the authorized capital Stock of Borrower, by class, and, as of the Closing Date,
a  description  of  the  number of shares of each such class that are issued and
outstanding.  Other  than  as  described  on  SCHEDULE  5.8(b),  there  are  no
                                              ----------------
subscriptions,  options, warrants, or calls relating to any shares of Borrower's
capital  Stock,  including  any  right  of  conversion  or  exchange  under  any
outstanding  security  or  other  instrument.  Borrower  is  not  subject to any
obligation  (contingent  or  otherwise)  to  repurchase  or otherwise acquire or
retire  any  shares  of  its  capital  Stock or any security convertible into or
exchangeable  for  any  of  its  capital  Stock.

                                     -54-
<PAGE>

(c)     Set  forth  on  SCHEDULE  5.8(c),  is  a  complete  and accurate list of
                        ----------------
Borrower's  direct  and  indirect Subsidiaries, showing: (i) the jurisdiction of
their  organization;  (ii)  the  number  of  shares  of each class of common and
preferred  Stock  authorized for each of such Subsidiaries; and (iii) the number
and  the  percentage of the outstanding shares of each such class owned directly
or  indirectly  by  Borrower.  All of the outstanding capital Stock of each such
Subsidiary  has  been  validly  issued  and  is  fully  paid and non-assessable.

(d)     Except  as  set  forth  on  SCHEDULE 5.8(c), there are no subscriptions,
                                    ---------------
options,  warrants,  or calls relating to any shares of Borrower's Subsidiaries'
capital  Stock,  including  any  right  of  conversion  or  exchange  under  any
outstanding  security  or  other  instrument.  Neither  Borrower  nor any of its
Subsidiaries  is  subject  to  any  obligation  (contingent  or  otherwise)  to
repurchase  or  otherwise  acquire  or retire any shares of any capital Stock or
any  security  convertible  into  or  exchangeable  for  any such capital Stock.

5.9     DUE  AUTHORIZATION;  NO  CONFLICT.
        ---------------------------------

(a)     The  execution,  delivery, and performance by Borrower of this Agreement
and  by  Borrower  and  each  of its Subsidiaries of the other Loan Documents to
which  it  is  a  party have been duly authorized by all necessary action on the
part  of  Borrower  and  its  Subsidiaries.

(b)     The  execution,  delivery,  and  performance by Borrower and each of its
Subsidiaries  of this Agreement and the Loan Documents to which it is a party do
not  and  will  not (i) violate any provision of federal, state, or local law or
regulation  applicable  to  Borrower  or  any of its Subsidiaries, the Governing
Documents  of  Borrower  or  any of its Subsidiaries, or any order, judgment, or
decree  of  any court or other Governmental Authority binding on Borrower or any
of  its  Subsidiaries,  (ii) conflict with, result in a breach of, or constitute
(with  due  notice  or  lapse  of  time  or  both)  a default under any material
contractual  obligation  of Borrower or any of its Subsidiaries, (iii) result in
or  require the creation or imposition of any Lien of any nature whatsoever upon
any  properties  or  assets  of  Borrower or any of its Subsidiaries, other than
Permitted  Liens, or (iv) require any approval of interestholders of Borrower or
any  of  its  Subsidiaries  or  any  approval or consent of any Person under any
material  contractual  obligation  of  Borrower  or  any  of  its  Subsidiaries.

(c)     Other  than the filing of financing statements, fixture filings, and the
recordation  of  the  Mortgages,  the  execution,  delivery,  and performance by
Borrower  and  each  of  its  Subsidiaries  of this Agreement and the other Loan
Documents  to  which  it is a party do not and will not require any registration
with,  consent,  or  approval  of, or notice to, or other action with or by, any
Governmental  Authority  or  other  Person.

(d)     This  Agreement  and the other Loan Documents to which Borrower and each
of  its Subsidiaries is a party, and all other documents contemplated hereby and
thereby,  when  executed  and delivered by Borrower and each of its Subsidiaries
will  be  the  legally  valid  and  binding  obligations  of  Borrower  and  its
Subsidiaries,  enforceable  against  Borrower  and  each  such  Subsidiary  in
accordance  with their respective terms, except as enforcement may be limited by
equitable  principles  or by bankruptcy, insolvency, reorganization, moratorium,
or  similar  laws  relating  to  or  limiting  creditors'  rights  generally.

(e)     The  Agent's  Liens  are  validly created, perfected, and first priority
Liens,  subject  only  to  Permitted  Liens.

                                     -55-
<PAGE>

5.10     LITIGATION.  Other than those matters disclosed on SCHEDULE 5.10, there
         ----------                                         -------------
     are  no actions, suits, or proceedings pending or, to the best knowledge of
Borrower,  threatened  against Borrower, any of its Subsidiaries, the LLC or any
Partnership  except for (a) matters that are fully covered by insurance (subject
to  customary deductibles), and (b) matters arising after the Closing Date that,
if  decided  adversely  to  Borrower,  any  of  its Subsidiaries, the LLC or any
Partnership,  as  applicable,  reasonably  could  not be expected to result in a
Material  Adverse  Change.

5.11     NO  MATERIAL  ADVERSE  CHANGE.  All  financial  statements  relating to
         -----------------------------
Borrower  and its Subsidiaries that have been delivered by Borrower to Agent and
the  Lenders  have been prepared in accordance with GAAP (except, in the case of
unaudited  financial  statements,  for  the  lack of footnotes and schedules and
being  subject to year-end audit adjustments) and present fairly in all material
respects,  the  financial  condition  of Borrower and its Subsidiaries as of the
date thereof and results of operations for the period then ended.  There has not
been  a  Material  Adverse  Change with respect to Borrower and its Subsidiaries
taken  as a whole since the date of the latest financial statements submitted to
the  Lender  Group  on  or  before  the  Closing  Date.

5.12     FRAUDULENT  TRANSFER.
         --------------------

(a)     Borrower  and  each  of  the  Pledging  Subsidiaries  is  Solvent.

(b)     The  value  of  all  properties  of  each  of  Borrower and the Pledging
Subsidiaries  at  their  present  fair  saleable  value on a going concern basis
(i.e.,  the  amount that may be realized within a reasonable time, considered to
be  six  months  to  one  year, either through collection or sale at the regular
market  value,  conceiving  the  latter as the amount that could be obtained for
such properties within such period by a capable and diligent businessman from an
interested  buyer who is willing to purchase under ordinary selling conditions),
exceeds  the  amount  of  all  its  debts and liabilities (including contingent,
subordinated,  unmatured  and  unliquidated  liabilities);

(c)     Neither  Borrower  nor any of the Pledging Subsidiaries has unreasonably
small  capital  with  which  to  conduct  its  business operations as heretofore
conducted;

(d)     Each  of Borrower and the Pledging Subsidiaries has sufficient cash flow
to  enable  it  to  pay  its  debts  as  they  mature;  and

(e)     No transfer of property is being made by Borrower or any of the Pledging
Subsidiaries  and  no  obligation  is  being  incurred by Borrower or any of the
Pledging  Subsidiaries  in connection with the transactions contemplated by this
Agreement  or  the  other  Loan  Documents  with the intent to hinder, delay, or
defraud  either  present  or future creditors of Borrower or any of the Pledging
Subsidiaries.

5.13     EMPLOYEE  BENEFITS.  Neither  Borrower, nor any of its Subsidiaries, or
         ------------------
any  of  their  ERISA  Affiliates  maintains or contributes to any Benefit Plan.

5.14     ENVIRONMENTAL  CONDITION.  Except as set forth on SCHEDULE 5.14, (a) to
         ------------------------                          -------------
Borrower's knowledge, none of the properties or assets of Borrower or any of its
Subsidiaries  has  ever  been  used by Borrower or any of its Subsidiaries or by
previous  owners  or operators in the disposal of, or to produce, store, handle,
treat,  release,  or  transport,  any  Hazardous  Materials,  where  such  use,
production, storage, handling, treatment, release or transport was in violation,
in  any  material  respect,  of  applicable Environmental Law, (b) to Borrower's
knowledge,  none  of  the  properties  or  assets  of  Borrower  or  any  of its
Subsidiaries  has  ever  been designated or identified in any manner pursuant to
any environmental protection statute as a Hazardous Materials disposal site, (c)
neither  Borrower  nor  any  of its Subsidiaries has received notice that a Lien
arising  under any Environmental Law has attached to any revenues or to any Real
Property  or  Oil and Gas Properties owned or operated by Borrower or any of its
Subsidiaries,  and (d) neither Borrower nor any of its Subsidiaries has received
a  summons,  citation, notice, or directive from the United States Environmental
Protection  Agency  or any other federal or state governmental agency concerning
any  action  or omission by Borrower or any of its Subsidiaries resulting in the
releasing  or  disposing  of  Hazardous  Materials  into  the  environment.

                                     -56-
<PAGE>

5.15     BROKERAGE  FEES.  Neither  Borrower  nor  any  of  its Subsidiaries has
         ---------------
utilized  the  services  of  any  broker or finder in connection with Borrower's
obtaining  financing from the Lender Group under this Agreement and no brokerage
commission  or finders fee is payable by Borrower or any of its Subsidiaries  in
connection  herewith.

5.16     INTELLECTUAL  PROPERTY.  Borrower and each of its Subsidiaries owns, or
         ----------------------
holds  licenses  in,  all  trademarks,  trade names, copyrights, patents, patent
rights,  and  licenses  that  are  necessary  to  the conduct of its business as
currently  conducted.  Attached  hereto as SCHEDULE 5.16 is a true, correct, and
                                           -------------
complete  listing  of  all  material  patents,  patent applications, trademarks,
trademark  applications,  copyrights,  and  copyright  registrations as to which
Borrower  or  any  of its Subsidiaries is the owner or is an exclusive licensee.

5.17     LEASES.  Borrower  and  its Subsidiaries enjoy peaceful and undisturbed
         ------
possession  under  all  leases  material  to  the  business  of Borrower and its
Subsidiaries  and  to  which  Borrower  or any of its Subsidiaries is a party or
under which Borrower and its Subsidiaries are operating.  All of such leases are
valid  and  subsisting  and  no  material  default  by  Borrower  or  any of its
Subsidiaries  exists  under  any  of  them.

5.18     DDAS.  Set  forth  on SCHEDULE 5.18 are all of the DDAs of Borrower and
         ----                  -------------
its  Subsidiaries,  including,  with respect to each depository (i) the name and
address  of  such  depository,  and  (ii)  the  account  numbers of the accounts
maintained  with  such  depository.

5.19     COMPLETE  DISCLOSURE.  All  factual  information  (taken  as  a  whole)
         --------------------
furnished  by  or on behalf of Borrower and its Subsidiaries in writing to Agent
or any Lender (including all information contained in the Schedules hereto or in
the  other Loan Documents) for purposes of or in connection with this Agreement,
the  other  Loan Documents or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or  on  behalf  of  Borrower and its Subsidiaries in writing to the Agent or any
Lender  will  be, true and accurate, in all material respects, on the date as of
which  such  information is dated or certified and not incomplete by omitting to
state  any  fact  necessary  to  make  such  information  (taken as a whole) not
misleading  in  any  material respect at such time in light of the circumstances
under  which  such  information  was provided.  On the Closing Date, the Closing
Date  Projections  represent,  and as of the date on which any other Projections
are  delivered  to  Agent, such additional Projections represent Borrower's good
faith  best  estimate of the future performance of Borrower and its Subsidiaries
for  the  periods  covered  thereby.

5.20     PERMITTED  INDEBTEDNESS.  Set  forth  on  SCHEDULE  5.20  is a true and
         -----------------------                   --------------
complete  list  of all Indebtedness of Borrower and its Subsidiaries outstanding
immediately  prior  to  the Closing Date that is to remain outstanding after the
Closing  Date  and  such  Schedule  accurately  reflects the aggregate principal
amount  of  such  Indebtedness  and  the  principal  terms  thereof.

5.21     INVESTMENT AND HOLDING COMPANY STATUS.  Neither Borrower nor any of its
         -------------------------------------
Subsidiaries  is  (a)  an  "investment  company"  as  defined  in, or subject to
regulation  under,  the  Investment  Company  Act  of 1940, as amended, or (b) a
"holding  company",  or  a  "subsidiary  company"  of a "holding company," or an
"affiliate"  of  a  "holding company" or of a "subsidiary company" of a "holding
company"  as  defined  in,  or  subject  to regulation under, the Public Utility
Holding  Company  Act  of  1935,  as  amended.

                                     -57-
<PAGE>

5.22     TAXES.  Except  as set forth in SCHEDULE 5.22, Borrower and each of its
         -----                           -------------
Subsidiaries  has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by  appropriate  proceedings  and  for which Borrower has set aside on its books
adequate  reserves  or  (b)  to  the  extent that the failure to do so could not
reasonably  be  expected  to  result  in  a  Material  Adverse  Change.

5.23     INSURANCE.  SCHEDULE  5.23  sets  forth  a description of all insurance
         ---------   --------------
maintained  by  or  on behalf of Borrower and its Subsidiaries as of the Closing
Date.  As  of  the  Closing Date, all premiums in respect of such insurance have
been  paid.

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

5.25     CLAIMS  AND LIABILITIES.  Except as disclosed in SCHEDULE 5.25, neither
         -----------------------                          -------------
Borrower nor any of its Subsidiaries nor any of the Partnerships nor the LLC has
accrued  any liabilities under gas purchase contracts for gas not taken, but for
which it is liable to pay if not made up and which, if not paid, would result in
a  Material  Adverse  Change.  Except  as  disclosed in SCHEDULE 5.25, no claims
                                                        -------------
exist  against  Borrower,  any  of  its  Subsidiaries,  the  LLC  or  any of the
Partnerships  for  gas  imbalances  which  claims  if adversely determined could
result  in  a  Material  Adverse  Change.  No  purchaser  of product supplied by
Borrower,  any  of  its Subsidiaries, the LLC or any of the Partnerships has any
claim  against  Borrower,  any  of  its  Subsidiaries,  the  LLC  or  any of the
Partnerships  for  product paid for, but for which delivery was not taken as and
when  paid  for,  which claim if adversely determined could result in a Material
Adverse  Change.

5.26     BORROWING  BASE  PROPERTIES.
         ---------------------------
(a)     Each of the Pledging Subsidiaries, the LLC, and each of the Partnerships
     has  good and indefeasible title to all its Borrowing Base Properties which
are  Hydrocarbon  Interests  and good title to all its Borrowing Base Properties
which  are  personal  property,  free  and  clear of Liens (other than Permitted
Liens).  With  respect  to  the  Borrowing Base Properties set forth on SCHEDULE
                                                                        --------
5.1(a),  after  giving  full  effect  to  the  Permitted  Liens, the net revenue
------
interest is no less than that designated for the Pledging Subsidiaries, the LLC,
and  the  Partnerships  in and to such Borrowing Base Properties and the working
interest is no greater than as set forth for the Pledging Subsidiaries, the LLC,
and  the Partnerships in and to such Borrowing Base Properties, and there are no
"back-in"  or  "reversionary" interests held by third parties which could reduce
the  net  revenue  interest  or  increase  the  working interest of the Pledging
Subsidiaries,  the  LLC,  or  the Partnerships in such Borrowing Base Properties
except  as  expressly  set  forth  in  SCHEDULE  5.1(a).  All  wells drilled and
                                       ----------------
Hydrocarbons produced with respect to the Borrowing Base Properties were drilled
and  produced  in  compliance  in  all  material  respects  with  all applicable
Governmental  Rules.  All of the Borrowing Base Properties described in SCHEDULE
                                                                        --------
5.1(a),  are  covered  by  the  Initial  Reserve  Report and other reports which
------
Borrower  has  previously  delivered to and which have been relied upon by Agent
------
and  Lenders  in  connection with this Agreement and are covered by Mortgages or
are  owned  by  (i) Partnerships in which the Pledging Subsidiaries have granted
security  interests  to Agent pursuant to a Partnership Pledge Agreement or (ii)

                                     -38-
<PAGE>

by LLC in which A&W has granted a security interest to Agent pursuant to the LLC
Pledge  Agreement.  No  bills are past due and do not give rise to a Lien (other
than Liens arising in the ordinary course of business for sums which are not yet
due  and  payable under customary agreements or arising by operation of law) and
taxes  have  been  paid with respect to the Borrowing Base Properties other than
those  which  are the subject of a bona fide dispute which is being contested in
good  faith  by  the  Pledging  Subsidiaries,  the  LLC,  or the Partnerships by
appropriate  proceedings  as to which a reserve is established in an amount that
is satisfactory to Agent (and if a Lien secures the same or may secure the same,
such  Lien  is  subject  to  a  Permitted  Protest).

(b)     All of the marketing arrangements of the Pledging Subsidiaries, the LLC,
and  the  Partnerships  with respect to the Borrowing Base Properties are valid,
enforceable  and in full force and effect.  As of the date of this Agreement and
thereafter through the Closing Date there do not exist any cumulative imbalances
in gas production or receipt of "take or pay" payments except as disclosed as to
both  existence  and  extent  on  SCHEDULE  5.26(b)  attached  hereto.
                                  -----------------

(c)     There  has  not been any Material Adverse Change in any of the Borrowing
Base  Properties  since  the  date  of  the  most  recent  Reserve  Report.

5.27     OPERATIONS  OF BORROWING BASE PROPERTIES.  A Pledging Subsidiary is the
         ----------------------------------------
operator  of  each  of  the  Borrowing  Base  Properties  except as set forth in
SCHEDULE  5.27.
       -------

5.28     HEDGING  AGREEMENT.  SCHEDULE 5.28 sets forth as of the Closing Date, a
         ------------------   -------------
true and complete list of all Hedging Agreements (including commodity price swap
agreements, forward agreements or contracts of sale which provide for prepayment
for  deferred shipment or delivery of oil, gas or other commodities) of Borrower
and  its  Subsidiaries,  the  material  terms thereof (including the type, term,
effective date, termination date, and notional amounts or volumes), the net mark
to  market  value  thereof,  all  credit  support  agreements  relating  thereto
(including  any  margin  required or supplied), and the counterpart to each such
agreement.  Borrower  has  delivered  true  and  correct  copies  of each of the
Hedging  Agreements  to  Agent  prior  to  the  date  of  this  Agreement.

5.29     OPERATING  COSTS.  As  of  the  Closing  Date,  all  costs and expenses
         ----------------
incurred  in connection with the operation of the Borrowing Base Properties have
been  fully  paid  and  discharged by the Pledging Subsidiaries, the LLC and the
Partnerships,  except  (a)  normal costs and expenses incurred in operating such
Borrowing  Base  Properties for which the Pledging Subsidiaries, the LLC and the
Partnerships  have  not  yet  been  billed, (b) costs and expenses which are the
subject  of  a  bona  fide dispute which is being contested in good faith by the
Pledging  Subsidiaries, the LLC or Partnerships by appropriate proceedings as to
which a reserve is established on the books of such Pledging Subsidiary, the LLC
or  such  Partnerships in an amount that is satisfactory to Agent (and if a Lien
secures  or  may  secure  such  obligation,  such Lien is subject to a Permitted
Protest).

5.30     LEASES.  The  oil  and  gas  leases,  farm-out  agreements,  and  other
         ------
agreements  associated  with the Borrowing Base Properties are in full force and
effect  in  accordance  with  their respective terms and there exist no material
violations  or  defaults  in  the  performance  of  any  obligation  thereunder.
Additionally,  Borrower  is  not aware of any event that with notice or lapse of
time or both would constitute a material violation or default under any such oil
and  gas  leases,  farm-out  agreements,  or  other  agreements.

5.31     MATERIAL  CONTRACTS.  Set  forth  on  SCHEDULE 5.1(b) is a complete and
         -------------------                   ---------------
correct  list  of  all Material Contracts in effect or to be in effect as of the
Closing  Date.  Borrower  has delivered to the Agent true and complete copies of
each  Material Contract, as each may have been amended, that have been requested
by the Agent.  Each of the Material Contracts is in full force and effect and no
default  exists  under  the  terms  of  any  of  the  Material  Contracts.

                                     -59-
<PAGE>

5.32     INDENTURE-SENIOR  DEBT.  The  Indenture  Documents,  true  and complete
         ----------------------
copies of which have been furnished to Agent, have not been amended or otherwise
modified,  and  are  in  full force and effect.  Except as disclosed in SCHEDULE
                                                                        --------
5.32,  there  exists  no  event of default under any of the Indenture Documents.
----
The  Obligations  constitute  "SENIOR DEBT" under the Indenture and Borrower has
advised  Trustee  under  the  Indenture  that the Obligations constitute "SENIOR
DEBT".

5.33     COMMON  ENTERPRISE.  The  successful operation and condition of each of
         ------------------
the  Borrower and the Pledging Subsidiaries (the "OBLIGORS") is dependent on the
continued  successful performance of the functions of the group of Obligors as a
whole  and  the successful operation of each of the Obligors is dependent on the
successful  performance  and  operation  of  each  other  Obligor.  Each Obligor
expects  to  derive  benefit (and its board of directors or other governing body
has  determined  that it may reasonably be expected to derive benefit), directly
and  indirectly, from successful operations of each of the other Obligors.  Each
Obligor  expects  to  derive  benefit  (and  the  boards  of  directors or other
governing body of each Obligor has determined that it may reasonably be expected
to  derive  benefit),  directly  and indirectly, from the credit extended by the
Lender  Group  to  Borrower  hereunder, both in their separate capacities and as
members  of the group of companies.  Each Obligor has determined that execution,
delivery,  and  performance of this Agreement and any other Loan Documents to be
executed  by  such Obligor is within its purpose, will be of direct and indirect
benefit  to  such  Obligor,  and  is  in  its  best  interest.

5.34     GATHERING  SYSTEMS.  The  Gathering  Systems  covered  by the Mortgages
         ------------------
grant  to  Agent,  for  the  benefit  of  Lenders,  a  perfected  lien  upon all
transportation  facilities necessary to transport Hydrocarbons produced from the
Wells  included  within  the Mortgaged Properties to a transit point for sale or
transportation  by  a  Person  who is not an affiliate of Borrower or any of its
Subsidiaries.

6.     AFFIRMATIVE  COVENANTS.

     Borrower  covenants  and agrees that, so long as any credit hereunder shall
be available and until full and final payment of the Obligations, Borrower shall
do,  and  shall  cause  each  of  its  Subsidiaries to do, all of the following:

6.1     ACCOUNTING  SYSTEM.  Maintain  a  system  of  accounting  that  enables
        ------------------
Borrower  to  produce  financial statements in accordance with GAAP and maintain
records  pertaining  to  the Collateral that contain information as from time to
time reasonably may be requested by Agent.  Borrower also shall maintain a joint
     interest  billing  and  remittance  system  with respect to the Oil and Gas
Properties  of Borrower, its Subsidiaries, the LLC and the Partnerships on which
Borrower  or  any  of  its  Subsidiaries  is the operator and other systems that
enable  Borrower  to  show,  among  other  things,  the  value,  revenues  and
profits/losses  of  the Oil and Gas Properties of Borrower and its Subsidiaries,
volume  of  production,  and  value  of  sales  of  Hydrocarbon  production, and
positions  and  liability  exposure  of  Borrower and its Subsidiaries under the
Hedging  Agreements  on  a  separate  company-by-company  basis, as well as on a
consolidated  basis.

6.2     COLLATERAL REPORTING.  Provide Agent (and if so requested by Agent, with
        --------------------
copies  for  each Lender) with the following documents at the following times in
form  satisfactory  to  Agent:

(a)     by  September 1st of each year, a Reserve Report prepared by an Approved
Engineer  and  reviewed  and approved by Agent; and by March 1st of each year, a
Reserve  Report prepared by Borrower or an Approved Engineer, as applicable, and
reviewed  and  approved  by  Agent,  all in accordance with the terms of SECTION
                                                                         -------
2.16;
-----

                                     -60-
<PAGE>

(b)     with  the  delivery  of  each  Reserve Report, Borrower shall provide to
Agent,  a  certificate from the president or chief financial officer of Borrower
certifying that, to the best of his knowledge:  (i) the information contained in
such  Reserve Report and any other information delivered in connection therewith
is  true  and  correct;  (ii) each of the Pledging Subsidiaries, the LLC and the
Partnerships  own  good  and  defensible  title to its Borrowing Base Properties
evaluated  in such Reserve Report and are free of all Liens except for Permitted
Liens;  (iii)  except  as  set  forth on an exhibit to the certificate, on a net
basis there are no gas imbalances, take or pay or other prepayments with respect
to  the  Borrowing  Base Properties evaluated in such Reserve Report which would
require  the  Pledging  Subsidiaries,  the  LLC  or  the Partnerships to deliver
Hydrocarbons  produced  from  such Borrowing Base Properties at some future time
without  then  or  thereafter  receiving full payment therefor; (iv) none of the
Borrowing  Base  Properties  has  been sold since the date of the last Borrowing
Base  determination; (v) if requested by Agent, attached to the certificate is a
list  of all Persons disbursing proceeds to Borrower, the Pledging Subsidiaries,
the  LLC  or  the  Partnerships from the Borrowing Base Properties; and (vi) set
forth  on  a  schedule  attached to the certificate is the [PV-10 Value] Reserve
Report  value of all Borrowing Base Properties together with a list of the Wells
that  are  owned  by  the  Partnerships  and  the  LLC;

(c)     as  soon as available and in any event within 10 Business Days after the
end of each quarter-annual period, a report setting forth, in form substantially
similar to the form set forth on SCHEDULE 6.2(c), the calculation as of the last
                                 ---------------
Business  Day of the quarter-annual period preceding the date of the delivery by
the  Borrower  of  such  report, of the Total Value as determined by the Reserve
Report  most  recently delivered by the Borrower under SECTION 6.2(a), each such
                                                       --------------
report shall be accompanied by a certificate of the president or chief financial
officer  of  Borrower certifying to the completeness and accuracy of the report,
including  the  calculation  of  the  Total  Value comprising the Borrowing Base
Properties;

(d)     as  soon  as  available and in any event within 30 days after the end of
each  month,  a  report  setting  forth  the  amount  of  "funds held for future
distribution"  as  of  the  close  of  the month reported on as reflected in the
monthly  financial  statements of Borrower, together with a certificate from the
president  or  chief  financial officer of Borrower certifying that Borrower and
the  Pledging  Subsidiaries  have  paid  and  are  current  with  respect to all
royalties, overriding royalties and operating expenses relating to the Borrowing
Base  Properties  except  for  those  which  are subject to a Permitted Protest;

(e)     upon  request  by  Agent  from time to time, copies of lease files, well
files  and  contract files (including production reports on each Well, marketing
contracts,  and information regarding locations of and equipment located on each
Well)  of  each  of the Pledging Subsidiaries, the LLC and the Partnerships with
respect  to  the  Borrowing  Base  Properties;

(f)     such other information reports, statements, materials and data as to the
wells  operated  by the Pledging Subsidiaries, the LLC or the Partnerships or in
which  the  Pledging  Subsidiaries,  the  LLC  or Partnerships otherwise have an
interest  and  the  accounting  and  billing procedures utilized by the Pledging
Subsidiaries  in  connection with such wells as shall be reasonably requested by
Agent  including,  without  limitation,  relevant  computer  programs, disks and
tapes;  and

(g)     such  other  reports  as  to the Collateral or the business or financial
condition of Borrower, each of its Subsidiaries, the LLC and the Partnerships as
Agent  may  reasonably  request  from  time  to  time.

                                     -61-
<PAGE>

6.3     FINANCIAL  STATEMENTS,  REPORTS,  CERTIFICATES.  Deliver  to Agent, with
        ----------------------------------------------
copies  to  each  Lender:

(a)     as soon as available, but in any event (i) prior to the occurrence of an
     Event  of  Default,  within 45 days after the end of each fiscal quarter of
each  fiscal  year  of  Borrower  and  (ii)  after the occurrence of an Event of
Default  within  30  days  after  the  end  of  each  calendar  month:

          (i)  a  company prepared consolidated balance sheet, income statement,
          and  statement  of  cash  flow covering Borrower and its Subsidiaries'
          operations  during  such  period,

          (ii)  a company prepared report detailing the aggregate amount of cash
          dividends  made  by  the  Borrower from July 2002 through such period,

          (iii)  a  company  prepared  report  detailing the aggregate amount of
          common  and  Class  A stock of Borrower repurchased by Borrower during
          the  immediately  preceding  twelve  month  period,

          (iv)  a  certificate signed by the chief financial officer of Borrower
          to  the  effect  that:

               A.  the financial statements and reports delivered hereunder have
          been  prepared  in  accordance  with  GAAP  (except  for  the  lack of
          footnotes  and being subject to year-end audit adjustments) and fairly
          present  in  all material respects the financial condition of Borrower
          and  its  Subsidiaries,

               B.  the  representations  and  warranties  of  Borrower  and  its
          Subsidiaries  contained in this Agreement and the other Loan Documents
          are true and correct in all material respects on and as of the date of
          such certificate, as though made on and as of such date (except to the
          extent  that  such  representations and warranties relate solely to an
          earlier  date),

               C. there does not exist any condition or event that constitutes a
          Default  or Event of Default (or, to the extent of any non-compliance,
          describing  such  non-compliance  as  to  which  he  or  she  may have
          knowledge  and  what action Borrower has taken, is taking, or proposes
          to  take  with  respect  thereto),  and

          (v)  a  Compliance  Certificate  demonstrating,  in reasonable detail,
          compliance  at  the  end  of such period with the applicable financial
          covenants  contained  in  SECTION  7.20,
                                    -------------

          (vi)  a  company  prepared  report  (A)  listing  all  of  the Hedging
          Agreements  of  Borrower,  its  Subsidiaries  and  Affiliates  and (B)
          detailing the aggregate amount of Hedging Obligations of Borrower, its
          Subsidiaries  and  Affiliates  under  the  Hedging  Agreements,

(b)     as  soon  as available, but in any event within 90 days after the end of
each  of  Borrower's  fiscal  years,

                                     -62-
<PAGE>

          (i)  financial  statements  of  Borrower and its Subsidiaries for each
          such  fiscal year, audited by independent certified public accountants
          reasonably  acceptable  to  Agent  and  certified,  without  any
          qualifications,  by  such  accountants  to  have  been  prepared  in
          accordance  with  GAAP (such audited financial statements to include a
          balance  sheet,  income  statement, and statement of cash flow and, if
          prepared,  such  accountants'  letter  to  management),

          (ii)  a certificate of such accountants addressed to Agent and Lenders
          stating  that  such accountants do not have knowledge of the existence
          of  any  Default  or  Event  of  Default  under  SECTION  7.20,
                                                           -------------

(c)     as soon as available, but in any event within 30 days prior to the start
     of  each  of  Borrower's  fiscal  years,

          (i) copies of Borrower's Projections, in form and substance (including
          as  to scope and underlying assumptions) satisfactory to Agent, in its
          sole  discretion, for the forthcoming fiscal year, quarter by quarter,
          certified  by  the  chief  financial officer of Borrower as being such
          officer's  good  faith  best  estimate of the financial performance of
          Borrower  and  its  Subsidiaries  during  the  period covered thereby,

(d)     if  and  when  filed  by  Borrower,

          (i)  10-Q  quarterly  reports,  Form 10-K annual reports, and Form 8-K
          current  reports,

          (ii)  any  other  filings  made  by  Borrower  with  the  SEC,

          (iii)  copies  of  Borrower's  federal  income  tax  returns,  and any
          amendments  thereto,  filed  with  the  Internal  Revenue Service, and

          (iv)  any  other  information  that  is  provided  by  Borrower to its
          shareholders  generally,

(e)     if  and  when  filed by Borrower and as requested by Agent, satisfactory
evidence  of  payment  of applicable excise taxes in each jurisdictions in which
(i)  Borrower or any of its Subsidiaries conducts business or is required to pay
any  such  excise  tax,  (ii)  where  the  failure  by  Borrower  or  any of its
Subsidiaries to pay any such applicable excise tax would result in a Lien on the
properties  or  assets of Borrower, or (iii) where Borrower's failure to pay any
such  applicable excise tax reasonably could be expected to result in a Material
Adverse  Change,

(f)     as  soon  as  Borrower  has  knowledge  of  any  event or condition that
constitutes  a Default or an Event of Default, notice thereof and a statement of
the  curative  action  that  Borrower proposes to take with respect thereto, and

(g)     upon  the  request  of  Agent,  any  other  report  reasonably requested
relating  to  the  financial  condition  of  Borrower  and  its  Subsidiaries.

In  addition  to  the financial statements referred to above, Borrower agrees to
deliver  financial  statements prepared on both a consolidated and consolidating
basis  and  that  no  Subsidiary  of  Borrower  (other  than  Eastern  Capital
Corporation),  will have a fiscal year different from that of Borrower. Borrower
agrees  that  its  independent  certified  public  accountants  are  authorized

                                     -63-
<PAGE>

to communicate with Agent and to release to Agent whatever financial information
concerning  Borrower  and  its  Subsidiaries  that Agent reasonably may request.
Borrower  waives the right to assert a confidential relationship, if any, it may
have  with  any  accounting  firm  or  service  bureau  in  connection  with any
information requested by Agent pursuant to or in accordance with this Agreement,
and  agrees  that Agent may contact directly any such accounting firm or service
bureau  in  order  to  obtain  such  information.

6.4     INTENTIONALLY  DELETED.
        ----------------------

6.5     INTENTIONALLY  DELETED.
        ----------------------

6.6     MAINTENANCE  OF PROPERTIES.  Maintain and preserve all of its properties
        --------------------------
which  are  necessary  or  useful  in the proper conduct to its business in good
working  order and condition, ordinary wear and tear excepted, and comply at all
times  with the provisions of all leases to which it is a party as lessee, so as
to  prevent  any  loss  or  forfeiture  thereof  or  thereunder.

6.7     TAXES.  Cause  all  assessments  and  taxes,  whether real, personal, or
        -----
otherwise,  due  or payable by, or imposed, levied, or assessed against Borrower
or  any  of  its  Subsidiaries or any of their assets to be paid in full, before
delinquency  or  before  the  expiration  of any extension period, except to the
extent  that  the  validity  of such assessment or tax shall be the subject of a
Permitted Protest.  Borrower will make, and will cause its Subsidiaries to make,
timely  payment or deposit of all tax payments and withholding taxes required of
it by applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability,  and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower and each
of  its Subsidiaries has made such payments or deposits.  Borrower shall deliver
satisfactory evidence of payment of applicable excise taxes in each jurisdiction
in  which  Borrower  or  any  Subsidiary is required to pay any such excise tax.

6.8     INSURANCE.
        ---------

(a)     At  Borrower's  expense,  maintain insurance respecting its property and
assets  wherever located, covering loss or damage by fire, theft, explosion, and
all  other  hazards and risks as ordinarily are insured against by other Persons
engaged  in  the  same or similar businesses.  Borrower also shall maintain, and
shall  cause each of its Subsidiaries to maintain, business interruption, public
liability,  and  product  liability  insurance,  as  well  as  insurance against
larceny,  embezzlement,  and  criminal  misappropriation.  All  such policies of
insurance  shall  be  in  such  amounts and with such insurance companies as are
reasonably  satisfactory  to  Agent.  Borrower  shall deliver copies of all such
policies  to  Agent with a satisfactory lender's loss payable endorsement naming
Agent  as sole loss payee or additional insured, as appropriate.  Each policy of
insurance  or  endorsement  shall contain a clause requiring the insurer to give
not less than 30 days prior written notice to Agent in the event of cancellation
of  the  policy  for  any  reason  whatsoever.

(b)     Borrower  shall  give  Agent  prompt  notice of any loss covered by such
insurance.  With  respect  to  the  Mortgaged  Properties,  Agent shall have the
exclusive  right  to adjust any losses payable under any such insurance policies
in  excess  of  $50,000,  without  any  liability  to  Borrower  or  any  of its
Subsidiaries  whatsoever in respect of such adjustments.  Any monies received as
payment  for  any  loss  under  any insurance policy mentioned above (other than
liability  insurance  policies)  or  as payment of any award or compensation for
condemnation  or  taking  by  eminent  domain, shall be paid over to Agent to be
applied  at  the  option of the Required Lenders either to the prepayment of the
Obligations  or  shall  be  disbursed  to  Borrower  under  staged payment terms
reasonably  satisfactory  to the Required Lenders for application to the cost of
repairs,  replacements,  or  restorations.  Any  such  repairs, replacements, or
restorations  shall  be  effected  with  reasonable promptness and shall be of a
value  at  least  equal to the value of the items or property destroyed prior to
such  damage  or  destruction.

                                     -64-
<PAGE>

(c)     Neither  Borrower  nor  any Subsidiary shall take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained  under  this  SECTION  6.8, unless Agent is included thereon as named
                         ------------
insured with the loss payable to Agent under a lender's loss payable endorsement
or  its  equivalent.  Borrower  immediately  shall  notify  Agent  whenever such
separate  insurance  is  taken  out,  specifying the insurer thereunder and full
particulars  as to the policies evidencing the same, and copies of such policies
promptly  shall  be  provided  to  Agent.

6.9     HEDGING  AGREEMENTS.  Borrower  will,  and  will  cause  each  Pledging
        -------------------
Subsidiary,  the  Partnerships  and  the  LLC  (for  purpose of this Section the
Borrower,  Pledging  Subsidiaries,  the  Partnerships and the LLC are called the
"Borrowing  Base  Entities") to, maintain in effect at all times on a continuous
basis  one  or  more  Hedging  Agreements  with  respect  to  their  natural gas
production  with  the  Bank  Product  Provider  or  other  investment  grade
counterparties,  rated  Aa3  or  better  by  Moody's,  A+ or better according to
Standard  &  Poor's, or the equivalent by a rating agency acceptable to Agent or
other Persons acceptable to Lender which Hedging Agreements taken together shall
at  all  times  extend  at  least  twelve  (12) months into the future and cover
aggregate  notional  volumes  of  natural gas equal to not less than 30% and not
more  than  70%  of  the  forecasted  natural  gas  production  from Oil and Gas
Properties  of  the  Borrowing  Base  Entities,  classified  as Proved Developed
Producing Reserves as of the date of the most recent Reserve Report. The Hedging
Agreements  shall  be  used  solely  as  a  part  of normal and prudent business
operations  as a risk management strategy and/or hedge against changes resulting
from  market  conditions  related  to  the  Borrowing Base Entities' oil and gas
operations and not as a means to speculate for investment purposes on trends and
shifts  in  financial  or  commodities  markets.  Borrower  shall  notify  Agent
immediately  upon  becoming  aware  (in  any  event  not later than the close of
business  on the same Business Day) that the production of natural gas by any of
the  Borrowing  Base Entities could reasonably be expected to be insufficient to
meet  its  obligations  under  any  Hedging  Agreements.

6.10     COMPLIANCE WITH LAWS.  Comply with all Governmental Rules applicable to
         --------------------
Borrower,  each  of  its  Subsidiaries,  and  their  respective  Properties.

6.11     PAYMENT  OF  TRADE  LIABILITIES.  Within sixty (60) days after the same
         -------------------------------
become  due  pay  all  liabilities  and  debt  owed  by Borrower and each of its
Subsidiaries  on  ordinary  trade  terms to vendors, suppliers and other Persons
providing  goods  and  services  used  by  Borrower  and  each Subsidiary in the
ordinary  course  of  its  business.

6.12     BROKERAGE  COMMISSIONS.  Pay  any  and  all  brokerage  commission  or
         ----------------------
finder's fees incurred in connection with or as a result of Borrower's obtaining
financing  from  the  Lender  Group  under  this Agreement.  Borrower agrees and
acknowledges  that  payment  of  all  such brokerage commissions or finders fees
shall  be the sole responsibility of Borrower, and Borrower agrees to indemnify,
defend,  and hold Agent and the Lender Group harmless from and against any claim
of  any  broker or finder arising out of Borrower's obtaining financing from the
Lender  Group  under  this  Agreement.

6.13     EXISTENCE.  At all times preserve and keep in full force and effect the
         ---------
valid  existence  and good standing of Borrower and each of its Subsidiaries and
any  rights  and  franchises  material  to  the  business  of  Borrower  and its
Subsidiaries.

                                     -65-
<PAGE>

6.14     ENVIRONMENTAL.
         -------------

(a)     Keep  any  property  either  owned or operated by Borrower or any of its
Subsidiaries  free  of  any Environmental Liens or post bonds or other financial
assurances  sufficient to satisfy the obligations or liability evidenced by such
Environmental  Liens,  (b)  comply, in all material respects, with Environmental
Laws  and  provide  to  Agent  documentation  of  such  compliance  which  Agent
reasonably  requests,  (c)  promptly  notify Agent of any release of a Hazardous
Material  of  any reportable quantity from or onto property owned or operated by
Borrower  or  any  of its Subsidiaries and take any Remedial Actions required to
abate  said  release  or  otherwise  to  come  into  compliance  with applicable
Environmental  Law, and (d) promptly provide Agent with written notice within 10
days  of  the receipt of any of the following:  (i) notice that an Environmental
Lien  has been filed against any of the real or personal property of Borrower or
any of its Subsidiaries, (ii) commencement of any Environmental Action or notice
     that  an  Environmental Action will be filed against Borrower or any of its
Subsidiaries, and (iii) notice of a violation, citation, or other administrative
order which reasonably could be expected to result in a Material Adverse Change.

6.15     DISCLOSURE  UPDATES.  Promptly  and  in  no event later than 5 Business
         -------------------
Days  after  obtaining  knowledge  thereof,  (a)  notify  Agent  if  any written
information, exhibit, or report furnished to Agent or the Lender Group contained
any  untrue  statement  of a material fact or omitted to state any material fact
necessary  to  make  the statements contained therein not misleading in light of
the  circumstances  in  which made, and (b) correct any defect or error that may
be  discovered  therein  or  in  any  Loan  Document  or  in  the  execution,
acknowledgement,  filing, or recordation thereof.  The foregoing to the contrary
notwithstanding,  any  notification pursuant to the foregoing provision will not
cure  or  remedy  the effect of the prior untrue statement of a material fact or
omission of any material fact nor shall any such notification have the affect of
amending  or  modifying  this  Agreement  or  any  of  the  Schedules  hereto.

6.16     NOTICES  OF  MATERIAL  EVENTS.  Promptly, and in any event within three
         -----------------------------
(3)  Business  Days  upon  Borrower's  becoming  aware  of the following events,
furnish  to  Agent  and  each  Lender  written  notice  of  the  following:

(a)     the  occurrence  of  any  Default;

(b)     (i)  the  filing or commencement of any action, suit or proceeding by or
before  any  arbitrator or Governmental Authority against or affecting Borrower,
any  of  its  Subsidiaries,  the  LLC  or  any  of  the Partnerships or (ii) the
occurrence  of  any  adverse  development  with  respect  to any action, suit or
proceeding  previously  disclosed  to  the Agent or the Lenders pursuant to this
Agreement,  in  each case if such action, suit or proceeding could reasonably be
expected  to  result  in  a  Material  Adverse  Change;

(c)     (i)  any claim by any Person against Borrower or any of its Subsidiaries
of  nonpayment of, or (ii) any attempt by any Person to collect upon or enforce,
any  accounts payable of Borrower or any of its Subsidiaries, in the case of any
single  account payable in excess of $500,000.00, or in the case of all accounts
payable  in  the  aggregate  in  excess  of  $3,000,000.00;

(d)     (i)  any  and all enforcement, cleanup, removal or other governmental or
regulatory  actions  instituted,  completed or threatened or other environmental
claims  against  Borrower  or any of its Subsidiaries or any of their respective
Properties pursuant to any applicable Environmental Laws which could result in a
Material  Adverse Change, and (ii) any environmental or similar condition on any
real property adjoining or in the vicinity of the property of Borrower or any of
its  Subsidiaries that could reasonably be anticipated to cause such property or
any  part  thereof  to be subject to any material restrictions on the ownership,
occupancy, transferability or use of such property under any Environmental Laws;
and

                                     -66-
<PAGE>

(e)     any  other  development that results in, or could reasonably be expected
to  result  in,  a  Material  Adverse  Change.  Each notice delivered under this
SECTION  6.16  shall  be  accompanied  by  a statement of the president or chief
-------------
financial  officer  of  Borrower  setting  forth  the  details  of  the event or
development  requiring  such notice and any action taken or proposed to be taken
with  respect  thereto.

6.17     INFORMATION  REGARDING  COLLATERAL.  Promptly,  and in any event within
         ----------------------------------
five  (5) Business Days upon becoming aware of the following changes, furnish to
the  Agent written notice of any change (i) in the corporate name of Borrower or
any  of  its  Subsidiaries  or  in any trade name used by Borrower or any of its
Subsidiaries  to  identify it in the conduct of its business or in the ownership
of  its  properties,  (ii)  in  the  location  of  Borrower's  or  any  of  its
Subsidiaries'  chief  executive  office,  its  principal  place of business, any
office  in  which  it  maintains  books or records relating to Collateral or any
office  or  facility at which Collateral is located (including the establishment
of  any  such  new  office  or  facility),  (iii)  in  Borrower's,  any  of  its
Subsidiaries',  the  LLC's  or  any  of  the  Partnership's  identity, corporate
structure,  or jurisdiction of incorporation, organization or formation, or (iv)
in  Borrower's, any of its Subsidiaries', the LLC's or any Partnership's Federal
Taxpayer  Identification  Number.  Borrower  agrees  not to effect or permit any
change  referred  to in the preceding sentence unless all filings have been made
under  the  Uniform  Commercial Code or otherwise that are required in order for
the  Agent to continue at all times following such change to have a valid, legal
and  perfected liens and security interest in all the Collateral.  Borrower also
agrees promptly to notify the Agent if any material portion of the Collateral is
     damaged  or  destroyed.

6.18     PAYMENT  OF  INDEBTEDNESS.  Pay  the  Indebtedness  of Borrower and its
         -------------------------
Subsidiaries  and  other  obligations, including Tax liabilities of Borrower and
its  Subsidiaries, before the same shall become delinquent or in default, except
where  (a)  the  validity  or amount thereof is being contested in good faith by
appropriate  proceedings,  (b)  Borrower  has  set  aside  on its books adequate
reserves  with  respect  thereto  in  accordance  with  GAAP,  (c)  such contest
effectively  suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and (d) the failure to make payment pending
such  contest  could  not reasonably be expected to result in a Material Adverse
Change.

6.19     BOOKS  AND  RECORDS;  INSPECTION  AND  AUDIT  RIGHTS.
         ----------------------------------------------------

(a)     Keep  proper books of record and account in which full, true and correct
entries  are  made  of all dealings and transactions in relation to the business
and  activities of Borrower and its Subsidiaries. Borrower will permit, and will
cause  each of its Subsidiaries to permit, any representatives designated by the
Agent  or  any  Lender  to  visit and inspect the properties of Borrower and its
Subsidiaries,  to examine and make extracts from their books and records, and to
discuss  their  affairs,  finances  and  condition  with  their  officers  and
independent accountants, all at such reasonable times and as often as reasonably
requested.  Borrower  shall  pay  any reasonable fees of such independent public
accountant  incurred in connection with the Agent's or such Lender's exercise of
its  rights  pursuant  to  this  Section.  Furthermore, Borrower will permit the
Agent  or any Lender, or its agents, at the cost and expense of the Borrower, to
enter  upon  the  Mortgaged Properties and all parts thereof, for the purpose of
investigating  and  inspecting  the  condition  and operation thereof, and shall
permit  reasonable  access to the field offices and other offices, including the
principal  place  of  business,  of Borrower and its Subsidiaries to inspect and
examine  the  Mortgaged  Properties  and  the  records  of  Borrower  and  its
Subsidiaries  with  respect  thereto.

                                     -67-
<PAGE>

(b)     Without  limiting  the  generality  of  SECTION  6.19(a),  permit  any
                                                ----------------
representatives designated by the Agent (including any consultants, accountants,
engineers, lawyers and appraisers retained by the Agent) to conduct evaluations,
inspections  of  the  Borrowing  Base  Properties  or  of  the Borrower's or any
Approved  Engineer's  assessment  of the condition or value thereof, all at such
reasonable  times  and  as often as reasonably requested. Borrower shall pay the
reasonable  fees  and  expenses  of any representatives retained by the Agent to
conduct  any  such  evaluation  or  inspection.

6.20     USE  OF  PROCEEDS AND LETTERS OF CREDIT.  The proceeds of the Term Loan
         ---------------------------------------
and Advances will be used by Borrower, subject to the terms of SECTION 7.20 only
                                                               ------------
for  (a)  the  payment  of  all  of  Borrower's  indebtedness,  liabilities  and
obligations under the Settlement Agreement and (b) the advancing of loans to the
Pledging  Subsidiaries  in  each  instance  in aggregate amounts at any one time
outstanding  not  to  exceed such Pledging Subsidiary's portion of the Borrowing
Base.  The  Pledging  Subsidiaries  may  use the proceeds of such loans from the
Borrower  for  lawful corporate purposes of each Pledging Subsidiary. No part of
the  proceeds  of the Term Loan or any Advance will be used, whether directly or
indirectly,  for  any purpose that entails a violation of any of the regulations
of  the  Board,  including  Regulations  G,  U and X.  Letters of Credit will be
issued only to support normal and customary oil and gas operations undertaken by
the  Pledging  Subsidiaries  in  the  ordinary  course  of  business.

6.21     FURTHER  ASSURANCES.
         -------------------

(a)     Execute,  and cause the appropriate Subsidiaries to execute, any and all
further  documents,  financing  statements, agreements and instruments, and take
all  such  further  actions  (including  the  filing  and recording of financing
statements,  fixture  filings,  mortgages,  deeds of trust and other documents),
which  may be required under any applicable law, or which the Agent may request,
to  effectuate  the transactions contemplated by the Loan Documents or to grant,
preserve,  protect or perfect the Liens created or intended to be created by the
Loan  Documents or the validity or priority of any such Lien, all at the expense
of the Borrower. Borrower also agrees to provide to the Agent, from time to time
upon  request  of  the  Agent,  information  which  is  in the possession of the
Borrower  or otherwise reasonably obtainable by it, satisfactory to the Agent as
to the ownership of the Collateral, and the perfection and priority of the Liens
created  or  intended  to  be  created  by  the  Loan  Documents.

(b)     Borrower  hereby  authorizes  the Agent to file one or more financing or
continuation  statements, and amendments thereto, relative to all or any part of
the  Collateral  without  the  signature  of Borrower or any of its Subsidiaries
where  permitted  by  law.  A  carbon, photographic or other reproduction of the
Loan  Documents  or  any financing statement covering the Collateral or any part
thereof  shall  be  sufficient  as a financing statement where permitted by law.

(c)     Without  limiting  any  other  provision of this SECTION 6.21, take such
                                                         ------------
actions  and  execute  and  deliver  such documents and instruments as the Agent
shall  require  to  ensure  that  the  Agent  shall, at all times, have received
currently  effective, duly executed Loan Documents encumbering (i) the Gathering
Systems  and  (ii)  Oil  and  Gas  Properties  of  Borrower and its Subsidiaries
constituting  80%  of the value of the Total Proved Developed Producing Reserves
as reflected in the Initial Reserve Report (with accompanying letters in lieu of
transfer  orders)  and  satisfactory  title  evidence  in  form  and  substance
reasonably  acceptable  to the Agent in its business judgment as to ownership of
such  Gathering  Systems  and  Oil  and  Gas  Properties.

                                     -68-
<PAGE>

(d)     If  the Agent shall determine that, as of the date of any Borrowing Base
redetermination, Borrower shall have failed to comply with the preceding SECTION
                                                                         -------
6.21(c),  the  Agent  may  notify  the  Borrower in writing of such failure and,
-------
within  thirty  (30)  days  from and after receipt of such written notice by the
Borrower,  the  Borrower  shall  cause  the  Pledging  Subsidiaries or any other
Subsidiary  of  Borrower to, execute and deliver to the Agent for the benefit of
the  Lender  Group  supplemental  or additional Mortgages, in form and substance
satisfactory  to  the Agent and its counsel, securing payment of the Obligations
and  covering  additional Oil and Gas Properties of the Pledging Subsidiaries or
such other Subsidiary not then encumbered by any Mortgage (together with current
valuations,  engineering reports, and title evidence (which title evidence shall
be  consistent  with  customarily accepted title information in the geographical
region  in which such additional Oil and Gas Properties are situated) applicable
to  the  additional  Oil  and  Gas  Properties  to  be  mortgaged and such other
documents as the Agent may require, including opinions of counsel, each of which
shall  be  in form and substance reasonably satisfactory to the Agent) such that
the  Agent  shall  have  received  currently  effective  duly executed Mortgages
encumbering  Oil  and  Gas  Properties  of  Borrower  or any of its Subsidiaries
constituting at least 80% of the Total Proved Developed Producing Reserves (with
accompanying letters in lieu of transfer orders) and satisfactory title evidence
(which  title  evidence  shall  be  consistent  with  customarily accepted title
information  in  the  geographical  region  in which such additional Oil and Gas
Properties  are  situated)  as  to  ownership  of  such  additional  Oil and Gas
Properties.

6.22     MAINTENANCE  AND  OPERATION  OF  BORROWING BASE PROPERTIES.  Consistent
         ----------------------------------------------------------
with  the  standards  of  a  reasonably  prudent  operator:

(a)     maintain, develop, and operate the Borrowing Base Properties and the oil
and  gas  gathering  assets  of  Borrower  and  its  Subsidiaries  in a good and
workmanlike manner, and observe and comply with all of the terms and provisions,
express  or implied, of all Hydrocarbon Interests relating to the Borrowing Base
Properties  so  long  as  the  Hydrocarbon  Interests  are  capable of producing
Hydrocarbons and accompanying elements in quantities and at prices providing for
continued  efficient  and  profitable  operation  of  business;

(b)     comply  in  all  material  respects  with the Material Contracts and all
other  contracts  and agreements applicable to or relating to the Borrowing Base
Properties  or the production and sale of Hydrocarbons and accompanying elements
therefrom;

(c)     at  all times, maintain, preserve, and keep all operating Equipment used
with  respect to the Borrowing Base Properties, and oil and gas gathering assets
of  Borrower and its Subsidiaries in proper repair, working order and condition,
and make all necessary or appropriate repairs, renewals, replacements, additions
and improvements thereto so that the efficiency of the operating Equipment shall
at  all  times  be  properly  preserved  and  maintained;  and

(d)     with respect to the Borrowing Base Properties, and oil and gas gathering
assets  of  Borrower  and its Subsidiaries which are operated by operators other
than  Borrower  or  its Subsidiaries, seek to enforce the operators' contractual
obligations  to  maintain,  develop,  and operate such properties subject to the
applicable  operating  agreements.


6.23     COLLATERAL  VALUE.  Within  sixty  (60)days  after  a Reserve Report or
         -----------------
other  report or information is delivered pursuant to SECTION 6.2 that shows the
                                                      -----------
Total Value is less than $175,000,000.00, either (a) execute, and/or cause to be
executed  and  delivered  to  the Agent supplemental or additional Mortgages, in
form  and  substance satisfactory to the Agent and its counsel, securing payment
of  the  Obligations and covering other Oil and Gas Properties directly owned by
Borrower,  one  or  more  of  the  Pledging  Subsidiaries  or  any  other
Subsidiary  of  Borrower which are not then covered by any Mortgage and having a
value  (as determined by Agent in its sole discretion), in addition to the other
Oil  and  Gas  Properties already subject to a Mortgage, sufficient to cause the
Total  Value  to  exceed  $175,000,000.00,  or  (b) reduce the Total Usage to an
amount  equal  to  57%  of  the  newly  established  Total  Value.

                                     -69-
<PAGE>

6.24     OBLIGATION  TO  PAY.  Borrower  hereby  unconditionally promises to pay
         -------------------
Agent  for  the  benefit  of  the  Lenders,  in  accordance  with  the terms and
conditions  of  this  Credit  Agreement  including,  without limitation, SECTION
                                                                         -------
2.6(d)  hereof,  the  Obligations,  and  to  pay  the Obligations in full on the
------
Maturity  Date.

6.25     INDENTURE.  Borrower  shall  perform  and  observe  all  the  terms and
         ---------
provisions of each of the Indenture Documents to be performed or observed by it,
at  the  times  and  in  the  manner  provided  therein.

7.     NEGATIVE  COVENANTS.

     Borrower  covenants  and agrees that, so long as any credit hereunder shall
be  available and until full and final payment of the Obligations, Borrower will
not,  and  will  not  permit any of its Subsidiaries to do any of the following:

7.1     INDEBTEDNESS.  Create,  incur,  assume,  permit, guarantee, or otherwise
        ------------
become  or  remain,  directly  or  indirectly,  liable  with  respect  to  any
Indebtedness,  except:

(a)     Indebtedness  evidenced  by this Agreement and the other Loan Documents,
together with Indebtedness owed to Underlying Issuers with respect to Underlying
     Letters  of  Credit;

(b)     Indebtedness  of  Borrower  and  its  Subsidiaries set forth on SCHEDULE
                                                                        --------
5.20;
-----

(c)     refinancings,  renewals,  or  extensions of Indebtedness permitted under
clause  (b)  of  this  SECTION  7.1 (and continuance or renewal of any Permitted
                       ------------
Liens  associated  therewith)  so  long as: (i) the terms and conditions of such
refinancings,  renewals,  or  extensions do not, in Agent's reasonable judgment,
materially  impair  the prospects of repayment of the Obligations by Borrower or
materially impair Borrower's creditworthiness, (ii) such refinancings, renewals,
or  extensions  do  not  result  in  an  increase in the principal amount of the
Indebtedness  so  refinanced,  renewed,  or  extended  or add one or more of the
Borrower's  Subsidiaries  or  Affiliates  as liable with respect thereto if such
additional  Subsidiary or Affiliate were not liable with respect to the original
Indebtedness,  (iii) such refinancings, renewals, or extensions do not result in
a shortening of the average weighted maturity of the Indebtedness so refinanced,
renewed,  or  extended,  nor  are  they on terms or conditions, that, taken as a
whole,  are  materially more burdensome or restrictive to the Borrower, and (iv)
if the Indebtedness that is refinanced, renewed, or extended was subordinated in
right  of  payment  to  the  Obligations,  then  the terms and conditions of the
refinancing, renewal, or extension Indebtedness must include subordination terms
and  conditions  that are at least as favorable to Agent and the Lender Group as
those that were applicable to the refinanced, renewed, or extended Indebtedness;

(d)     Indebtedness  of Borrower not secured by or subject to a Lien in respect
of  performance,  completion,  guarantee,  surety,  or  similar  bonds, banker's
acceptances, bills of exchange, or letters of credit provided by Borrower in the
ordinary  course of its Energy Business provided that such Indebtedness does not
exceed  $2,000,000.00  in  the  aggregate  at  any  one  time  outstanding;

                                     -70-
<PAGE>

(e)     accounts  payable  or other obligations of Borrower and its Subsidiaries
to  trade  creditors  created  in  the ordinary course of its Energy Business in
connection  with  the  obtaining  of  goods  and services provided that all such
obligations  and  liabilities  are  paid  within  60  days  when  due;

(f)     Indebtedness  of  Borrower  consisting  of  obligations  in  respect  of
purchase  price  adjustments,  guaranties  or indemnities in connection with the
acquisition  of  assets  or  Permitted  Dispositions;

(g)     Nonrecourse  Debt  of  any  Unrestricted  Subsidiary  provided  such
Nonrecourse  Debt  is incurred in connection with an acquisition of assets by an
Unrestricted  Subsidiary  permitted  under  SECTION  7.13;
                                            -------------

(h)     Unsecured  Indebtedness  of  the  Subsidiaries  to  Borrower;

(i)     Hedging  Obligations  of  the  Borrower  and its Subsidiaries, provided:
                                                                       ---------

(i)     Hedging Obligations of Borrower and its Subsidiaries other than those of
     the  Pledging  Subsidiaries,  the  Partnerships,  and  the  LLC  and of the
Borrower  relating  thereto  (which  are  subject  to the restriction under (ii)
below)  shall  only  be  under  contracts entered into in the ordinary course of
business  for the purpose of limiting risks that arise in the ordinary course of
business  of  Borrower  and  its  Subsidiaries  and  not  for  the  purpose  of
speculation;  and

(ii)     Hedging Obligations of the Pledging Subsidiaries, the Partnerships, and
the  LLC  and  of  the  Borrower relating thereto shall only be permitted to the
extent  set  forth  in  Section  6.9;
                        ------------

(j)     additional  Indebtedness  of Borrower not to exceed $5,000,000.00 in the
aggregate  during  the  term  of  this  Agreement  provided  that  the terms and
conditions  of  such  Indebtedness  are  reasonably  satisfactory  to Agent; and

(k)     liabilities  of  Borrower resulting from the sale of Production Payments
with  respect  to oil, gas, or mineral leases or interests (other than Borrowing
Base  Properties)  to  the  extent  Borrower  does  not  transfer control of the
interest sold to the buyer, and such liabilities are recorded in accordance with
GAAP.

7.2     LIENS.  Create,  incur,  assume,  or  permit  to  exist,  directly  or
        -----
indirectly,  any  Lien  on  or  with  respect to any of its assets, of any kind,
        -
whether  now  owned  or  hereafter acquired, or any income or profits therefrom,
except  for:

(a)     Permitted  Liens  (including  Liens  that  are replacements of Permitted
Liens  to  the  extent that the original Indebtedness is refinanced, renewed, or
extended under SECTION 7.1(e) and so long as the replacement Liens only encumber
               --------------
those  assets  that  secured the refinanced, renewed, or extended Indebtedness);

(b)     any  Lien  on  Borrowing  Base  Properties  existing on the date of this
Agreement  and  set forth on SCHEDULE 7.2; provided that (i) such Lien shall not
                             ------------
apply  to  any  other  Property or asset of Borrower or any Subsidiary, and (ii)
such  Lien  shall  secure only those obligations which it secures on the date of
this  Agreement;  and

                                     -71-
<PAGE>

(c)     any  Lien  existing  on  any  Property or asset prior to the acquisition
thereof  by the Borrower or any Subsidiary (other than Pledging Subsidiaries) or
existing  on any Property or asset of any Person that becomes a Subsidiary after
the  date  of this Agreement prior to the time such Person becomes a Subsidiary;
provided  that (i) such Lien is not created in contemplation of or in connection
with  such acquisition or such Person becoming a Subsidiary, as the case may be,
(ii)  such  Lien  shall not apply to any other Property or assets of Borrower or
any Subsidiary, and (iii) such Lien shall secure only those obligations which it
secures  on  the  date  of  such  acquisition  or the date such Person becomes a
Subsidiary;

(d)     Liens  on  fixed  or capital assets acquired, constructed or improved by
Borrower or any Subsidiary which do not constitute Collateral; provided that (i)
such  security  interests secure Indebtedness permitted by clause (j) of SECTION
                                                                         -------
7.1,  (ii)  such  security  interests  and  the Indebtedness secured thereby are
---
incurred  prior to or within 90 days after such acquisition or the completion of
such  asset,  (iii)  the Indebtedness secured thereby does not exceed 75% of the
cost  of  acquiring  or  improving such Oil and Gas Property or fixed or capital
asset,  and (iv) such Lien does not apply to any other Property or assets of the
Borrower  or  any  of  its  Subsidiaries.

(e)     Liens  securing  Non-Recourse Debt permitted by SECTION 7.1 provided the
                                                        -----------
Lien  is  limited to the assets acquired by the Unrestricted Subsidiary with the
proceeds  of  the  Non-Recourse  Debt.

7.3     RESTRICTIONS  ON  FUNDAMENTAL  CHANGES.
        --------------------------------------

(a)     Enter  into  any  merger,  consolidation,  reorganization,  or
recapitalization, or reclassify its Stock, except to the extent permitted by the
terms  of  SECTION  7.11.
           -------------

(b)     Liquidate,  wind  up,  or  dissolve itself (or suffer any liquidation or
dissolution).

(c)     Convey, sell, lease, license, assign, transfer, or otherwise dispose of,
in  one  transaction or a series of transactions, all or any substantial part of
its  assets.

7.4     DISPOSAL  OF  ASSETS.  Other  than Permitted Dispositions, convey, sell,
        --------------------
lease,  license,  assign, transfer, or otherwise dispose of any of the assets of
Borrower  or  any  of  its  Subsidiaries.

7.5     CHANGE  NAME.  Change  Borrower's  or  any  Subsidiaries'  name,  FEIN,
        ------------
corporate  structure  or  identity,  or  add  any new fictitious name; provided,
however,  that  Borrower  or any of its Subsidiaries may change its name upon at
least  30  days  prior written notice by Borrower to Agent of such change and so
long  as,  at  the  time  of  such  written  notification,  Borrower or any such
Subsidiary  provides  any  financing  statements or fixture filings necessary to
perfect  and  continue  perfected  Agent's  Liens.

7.6     GUARANTEE.  Guarantee or otherwise become in any way liable with respect
        ---------
to  the  obligations of any third Person except by endorsement of instruments or
items of payment for deposit to the account of Borrower or which are transmitted
or turned over to Agent; provided, however, that Borrower may execute guarantees
of  Indebtedness  of  its  Subsidiaries  to  the extent the Indebtedness of such
Subsidiary  is  permitted  by  the  terms  of  this  Agreement.

7.7     NATURE  OF  BUSINESS.  Make  any  change  in  the  principal  nature  of
        --------------------
Borrower's  or  any  Subsidiaries'  business.

                                     -72-
<PAGE>

7.8     PREPAYMENTS  AND  AMENDMENTS.
        ----------------------------

(a)     Except  in  connection  with  a refinancing permitted by SECTION 7.1(c),
                                                                 --------------
prepay,  redeem,  defease,  purchase,  or  otherwise acquire any Indebtedness of
Borrower  or  any  of its Subsidiaries, other than the Obligations in accordance
with  this  Agreement.

(b)     Except  in  connection  with  a refinancing permitted by SECTION 7.1(c),
                                                                 --------------
directly  or  indirectly,  amend,  modify, alter, increase, or change any of the
terms  or conditions of any agreement, instrument, document, indenture, or other
writing  evidencing  or concerning Indebtedness permitted under SECTIONS 7.1(b);
                                                                ---------------
provided,  however,  so  long as no Default or Event of Default exists, Borrower
may  redeem  or  repurchase  the  Subordinated  Notes.

7.9     CHANGE  OF  CONTROL.  Cause,  permit, or suffer, directly or indirectly,
        -------------------
any  Change  of  Control.

7.10     INTENTIONALLY  DELETED.
         ----------------------

7.11     DISTRIBUTIONS.  Other  than distributions or declaration and payment of
         -------------
dividends  by  a Subsidiary to Borrower, make any distribution or declare or pay
any  dividends  (in  cash  or  other  property,  other than common Stock) on, or
purchase,  acquire,  redeem,  or  retire  any of Borrower's Stock, of any class,
whether  now  or hereafter outstanding; provided, however, so long as no Default
or  Event  of Default has occurred and is continuing, the foregoing restrictions
shall  not  apply  to:

(a)     Borrower's  paying  cash  dividends  in  an  aggregate  not  exceeding
$12,000,000.00  during  the  term  of  this  Agreement;

(b)     any  Subsidiary  paying  cash  dividends  to  the  Borrower or any other
Subsidiary at such times and in such amounts during any fiscal year, as shall be
necessary  to  permit  Borrower  to  discharge  its  permitted  liabilities;

(c)     Borrower's  repurchasing  common  and Class A stock of Borrower owned by
employees  who  terminate  their employment or whose employment is terminated by
Borrower  consistent  with  the  existing  programs between the Borrower and its
employees  in  an  amount  which  when added to the amounts expended by Borrower
pursuant  to  SECTION  7.11(d)  does not exceed $2,000,000.00 in any twelve (12)
              ---------------
month  period;  and

(d)     Borrower's  repurchasing  common  and Class A stock of Borrower owned by
officers,  employees and directors of Borrower consistent with existing programs
and  practices of Borrower in an amount which when added to the amounts expended
by  Borrower  pursuant  to  SECTION 7.11(c) does not exceed $2,000,000.00 in any
                            ---------------
twelve  (12)  month  period.

7.12     ACCOUNTING  METHODS.  Modify  or change its method of accounting (other
         -------------------
than  as may be required to conform to GAAP) or enter into, modify, or terminate
any agreement currently existing, or at any time hereafter entered into with any
     third  party  accounting  firm  or  service  bureau  for the preparation or
storage  of the accounting records of Borrower and its Subsidiaries without said
accounting  firm  or  service  bureau  agreeing  to  provide  Agent  information
regarding  the  Collateral  or  the  financial condition of the Borrower and its
Subsidiaries.

7.13     INVESTMENTS.  Directly  or  indirectly, make or acquire any Investment,
         -----------
or incur any liabilities (including contingent obligations) for or in connection
with  any  Investment,  except:

(a)     Permitted  Investments;

                                     -73-
<PAGE>

(b)     unsecured  loans  and  advances  (including  loans  and advances made by
Borrower  to  Pledging  Subsidiaries  with  the  proceeds  of  the Term Loan and
Advances)  from  Borrower  to  the  Pledging Subsidiaries provided that (i) each
Pledging  Subsidiary  executes  and  delivers to Borrower a promissory note (the
"INTERCOMPANY NOTES") evidencing such loans and advances payable to the order of
-------------------
Borrower, all in form, scope, and content acceptable to Agent, and (ii) Borrower
pledges  and assigns the Intercompany Notes to Agent as security for the payment
of  the  Obligations  pursuant to the Borrower's Security Agreement and endorses
the  Intercompany  Notes  to  the  order  of  Agent,  all  in  a form and manner
satisfactory  to  Agent;

(c)     Investments  by  Borrower  and/or any Subsidiary made or entered into in
the  ordinary  course  of  the  Energy  Business;  provided:

          (i)  immediately  before  and  immediately  after giving effect to the
          Investment,  Excess  Availability  exceeds  $10,000,000.00;  and

          (ii)  immediately  before  and  immediately after giving effect to the
          Investment,  no  Default  or  Event  of  Default  exists;

(d)     capital  expenditures  by  Borrower and the Subsidiaries with respect to
the  assets  used or useful in the Energy Business conducted by Borrower and the
Subsidiaries,  to  the  extent  permitted  by  SECTION  7.20(b);
                                               ----------------

(e)     Investments  by  Borrower  in  its  Subsidiaries;

(f)     Investments  by  an  Unrestricted  Subsidiary  with  the  proceeds  of
Non-Recourse  Debt;  and

(g)     Investments  of Borrower and the Subsidiaries existing as of the date of
this  Agreement  and  reflected  on  SCHEDULE  7.13.
                                     --------------

7.14     TRANSACTIONS  WITH  AFFILIATES.  Directly  or  indirectly enter into or
         ------------------------------
permit  to  exist  any  transaction  with  any  Affiliate of Borrower except for
transactions  that  are in the ordinary course of Borrower's business, upon fair
and  reasonable  terms, that are fully disclosed to Lender, and that are no less
favorable to Borrower than would be obtained in an arm's length transaction with
     a  non-Affiliate; provided, however, that Borrower and its Subsidiaries may
engage  in drilling program transactions with Borrower's officers, employees and
directors  consistent  with  past  practices  of  Borrower.

7.15     SUSPENSION.  Suspend  or  go  out  of  a  substantial  portion  of  its
         ----------
business.

7.16     INTENTIONALLY  DELETED.
         ----------------------

7.17     USE  OF  PROCEEDS.  Use  the proceeds of the Term Loan and the Advances
         -----------------
for  any  purpose other than (a) on the Closing Date, to pay transactional fees,
costs,  and  expenses incurred in connection with this Agreement, the other Loan
Documents,  and  the  transactions  contemplated  hereby  and  thereby,  and (b)
thereafter,  only  for  the  purposes  set  forth  in  SECTION  6.20.
                                                       -------------

7.18     CHANGE  IN  LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND EQUIPMENT
         -----------------------------------------------------------------------
WITH  BAILEES.  Relocate  its  chief  executive office to a new location without
-------------
Borrower  providing  30  days prior written notification thereof to Agent and so
long  as,  at  the time of such written notification, the Borrower or applicable
Subsidiary  provides  any  financing  statements or fixture filings necessary to
perfect  and  continue  perfected the Agent's Liens and also provides to Agent a
Collateral  Access  Agreement  with  respect  to  such  new  location.

                                     -74-

7.19     SECURITIES  ACCOUNTS.  Establish  or  maintain  any  Securities Account
         --------------------
unless  Agent  shall  have  received  a  Control  Agreement  in  respect of such
Securities  Account.  Borrower will not transfer, and will not permit any of its
Subsidiaries  to  transfer,  assets  out  of  any  Securities Account; provided,
however,  that, so long as no Event of Default has occurred and is continuing or
would  result therefrom, Borrower may use such assets (and the proceeds thereof)
to  the  extent  not  prohibited  by  this  Agreement.

7.20     FINANCIAL  COVENANTS.
         --------------------

(a)     Fail  to  maintain:

          (i)  Minimum  EBITDAX.  EBITDAX  in an amount equal to or greater than
          $30,000,000.00  at  the close of each fiscal quarter of Borrower after
          the  date  hereof. Compliance of the foregoing covenant will be tested
          quarterly  on  a  rolling  four  quarter  basis.

          (ii)  Book  Net  Worth.  Book Net Worth of at least $32,000,000 at the
          close  of  each  fiscal  quarter  of  Borrower  after the date hereof.
          Compliance  of  the  foregoing  covenant  will  be  tested  quarterly.

(b)     Make:

          (i)  Capital  Expenditures.  Upon  Excess  Availability  falling below
          $10,000,000.00, capital expenditures in any fiscal year of Borrower in
          an  amount  in  excess of 120% of the Projections for such fiscal year
          delivered  to Agent in accordance with the terms of this Agreement and
          approved  by  Agent.

7.21     INTENTIONALLY  DELETED.
         ----------------------

AMENDMENTS  TO  INDENTURE.  Amend  or otherwise modify the Subordinated Notes or
-------------------------
the  Indenture in any respect or permit any such amendment or modification which
would (a) change any provision relating to guaranties of the Subordinated Notes,
(b)  provide  for any collateral to secure the Subordinated Notes, or (c) change
any  provision  relating  to  the subordination of the Subordinated Notes or any
guaranties  thereof.

8.     EVENTS  OF  DEFAULT.

     Any  one  or  more  of  the  following  events shall constitute an event of
default  (each,  an  "EVENT  OF  DEFAULT")  under  this  Agreement:

8.1     If Borrower or any of its Subsidiaries fails to pay when due and payable
or when declared due and payable, all or any portion of the Obligations (whether
of  principal,  interest  (including  any  interest  which,  but  for  the
provisions of the Bankruptcy Code, would have accrued on such amounts), fees and
charges  due  Agent  or  any member of the Lender Group, reimbursement of Lender
Expenses,  or  other  amounts  constituting  Obligations);

8.2     If  Borrower  or  any  of  its  Subsidiaries  fails to perform, keep, or
observe  (a) any term, provision, condition, covenant, or agreement contained in
SECTIONS  6.1,  6.2,  6.3,  6.6,  6.7, 6.10, 6.11, 6.12, 6.14, 6.15, 6.16, 6.17,
--------------------------------------------------------------------------------
6.19, 6.21, OR 6.22 of this Agreement and such failure continues for a period of
-------------------
fifteen  (15)  days after the date of failure; or (b) any other term, provision,
condition,  covenant,  or  agreement  in this Agreement or any of the other Loan
Documents;

                                     -75-
<PAGE>

8.3     If any material portion of Borrower's or any of its Subsidiaries' assets
is  attached,  seized,  subjected to a writ or distress warrant, levied upon, or
comes  into  the  possession  of  any  third  Person;

8.4     If  an  Insolvency  Proceeding  is  commenced  by Borrower or any of its
Subsidiaries;

8.5     If  an Insolvency Proceeding is commenced against Borrower or any of its
Subsidiaries,  and  any  of the following events occur:  (a) the Borrower or any
Subsidiary  consents to the institution of the Insolvency Proceeding against it,
(b)  the  petition  commencing  the  Insolvency  Proceeding  is  not  timely
controverted;  provided,  however, that during the pendency of such period, each
member of the Lender Group shall be relieved of its obligations to extend credit
hereunder,  (c)  the  petition  commencing  the  Insolvency  Proceeding  is  not
dismissed  within  45 calendar days of the date of the filing thereof; provided,
however,  that,  during  the  pendency  of  such  period,  Agent  (including any
successor  agent) and each other member of the Lender Group shall be relieved of
its  obligation  to extend credit hereunder, (d) an interim trustee is appointed
to take possession of all or any substantial portion of the properties or assets
of, or to operate all or any substantial portion of the business of, Borrower or
any  of  its  Subsidiaries,  or  (e) an order for relief shall have been entered
therein;

8.6     If  Borrower  or  any of its Subsidiaries is enjoined, restrained, or in
any  way prevented by court order from continuing to conduct all or any material
part  of  its  business  affairs;

8.7     If a notice of Lien, levy, or assessment is filed of record with respect
to  any  Borrower's  or any of its Subsidiaries' assets by the United States, or
any  department,  agency,  or  instrumentality thereof, or by any state, county,
municipal,  or  governmental  agency, or if any taxes or debts owing at any time
hereafter  to any one or more of such entities becomes a Lien, whether choate or
otherwise,  upon  Borrower's  or any of its Subsidiaries' assets and the same is
not  paid  before  such  payment  is  delinquent;

8.8     If  a  judgment  or  other  claim becomes a Lien or encumbrance upon any
material  portion  of  Borrower's  or  any  of  its  Subsidiaries'  assets;

8.9     If there is a default in any material agreement to which Borrower or any
of its Subsidiaries is a party and such default (a) occurs at the final maturity
of  the  obligations  thereunder,  or  (b) results in a right by the other party
thereto,  irrespective  of  whether exercised, to accelerate the maturity of the
Borrower's  or  its  Subsidiaries'  obligations  thereunder,  to  terminate such
agreement, or to refuse to renew such agreement pursuant to an automatic renewal
right  therein;

8.10     If  Borrower or any of its Subsidiaries makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to the
payment  of  the  Obligations, except to the extent such payment is permitted by
the  terms  of  the  subordination  provisions  applicable to such Indebtedness;

8.11     If any misstatement or misrepresentation exists now or hereafter in any
warranty,  representation,  statement,  or  Record  made  to the Lender Group by
Borrower,  its  Subsidiaries,  or  any  officer, employee, agent, or director of
Borrower  or  any  of  its  Subsidiaries;

8.12     INTENTIONALLY  DELETED;
         ----------------------

                                     -76-
<PAGE>

8.13     If  this Agreement or any other Loan Document that purports to create a
Lien,  shall, for any reason, fail or cease to create a valid and perfected and,
except  to  the  extent permitted by the terms hereof or thereof, first priority
Lien  on  or  security  interest  in  the  Collateral covered hereby or thereby;

8.14     Any  provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested  by  Borrower  or  any  of  its Subsidiaries, or a proceeding shall be
commenced  by  Borrower  or  any  of  its  Subsidiaries,  or by any Governmental
Authority  having jurisdiction over Borrower or any of its Subsidiaries, seeking
to  establish  the invalidity or unenforceability thereof, or Borrower or any of
its  Subsidiaries  shall deny that Borrower or such Subsidiary has any liability
or  obligation  purported  to  be  created  under  any  Loan  Document;  or

8.15     Any event, circumstance, or condition occurs which constitutes an event
of  default  under  any  of  the  Indenture  Documents.

9.     THE  LENDER  GROUP'S  RIGHTS  AND  REMEDIES.

9.1     RIGHTS  AND REMEDIES.  Upon the occurrence, and during the continuation,
        --------------------
of  an  Event  of  Default,  the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct Agent to
do  any  one  or more of the following on behalf of the Lender Group (and Agent,
acting  upon  the  instructions  of  the  Required Lenders, shall do the same on
behalf  of  the  Lender  Group),  all  of  which  are  authorized  by  Borrower:

(a)     Declare  all Obligations, whether evidenced by this Agreement, by any of
the  other  Loan Documents, or otherwise, immediately due and payable; provided,
however,  that  upon the occurrence of any Event of Default described in SECTION
                                                                         -------
8.4  or  SECTION 8.5, all Commitments shall automatically and immediately expire
         -----------
and  all  Obligations  shall  automatically  become  immediately due and payable
without  notice  or  demand  of  any  kind;

(b)     Cease  advancing  money  or  extending  credit  to or for the benefit of
Borrower  under  this  Agreement,  under any of the Loan Documents, or under any
other  agreement  between  any  Obligor  and  the  Lender  Group;

(c)     Terminate  this  Agreement and any of the other Loan Documents as to any
future liability or obligation of the Lender Group, but without affecting any of
the  Agent's  Liens  in  the  Collateral  and without affecting the Obligations;

(d)     Settle  or  adjust disputes and claims directly with Account Debtors for
amounts and upon terms which Agent considers advisable, and in such cases, Agent
will  credit  the  Loan  Account  with only the net amounts received by Agent in
payment  of  such  disputed  Accounts  after deducting all Lender Group Expenses
incurred  or  expended  in  connection  therewith;

(e)     Without  notice  to  or  demand upon Borrower, make such payments and do
such  acts  as  Agent considers necessary or reasonable to protect its liens and
security  interests  in  the  Collateral;

(f)     Without  notice  to  Borrower  (such notice being expressly waived), and
without  constituting  a  retention  of  any  collateral  in  satisfaction of an
obligation  (within  the  meaning  of  the  Code),  set  off  and  apply  to the
Obligations any and all (i) balances and deposits of Borrower held by the Lender
Group  (including any amounts received in the Cash Management Accounts), or (ii)
Indebtedness  at  any time owing to or for the credit or the account of Borrower
held  by  the  Lender  Group;

                                     -77-
<PAGE>

(g)     Hold,  as cash collateral, any and all balances and deposits of Borrower
held  by  the  Lender  Group,  and  any  amounts received in the Cash Management
Accounts,  to  secure  the  full  and final repayment of all of the Obligations;

(h)     Pursue any and all remedies afforded Agent and/or the Lender Group under
the  Loan  Documents;  and

(i)     The  Lender  Group shall have all other rights and remedies available to
it  at  law  or  in  equity  pursuant  to  any  other  Loan  Documents.

9.2     REMEDIES  CUMULATIVE.  The rights and remedies of the Lender Group under
        --------------------
this  Agreement,  the  other  Loan  Documents, and all other agreements shall be
cumulative.  The  Lender  Group  shall  have  all  other rights and remedies not
inconsistent  herewith  as  provided  under  the  Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and  no  waiver  by  the  Lender Group of any Event of Default shall be deemed a
continuing  waiver.  No  delay  by  the  Lender Group shall constitute a waiver,
election,  or  acquiescence  by  it.

10.     TAXES  AND  EXPENSES.

     If  Borrower  fails to pay any monies (whether taxes, royalties, overriding
royalties,  operating costs or expenses, assessments, insurance premiums, or, in
the  case  of  leased properties or assets, rents or other amounts payable under
such  leases) due to third Persons, or fails to make any deposits or furnish any
required  proof  of  payment or deposit, all as required under the terms of this
Agreement,  then,  Agent,  in  its  sole  discretion and without prior notice to
Borrower,  may  do any or all of the following:  (a) make payment of the same or
any  part  thereof, (b) set up such reserves in Borrower's Loan Account as Agent
deems  necessary  to  protect the Lender Group from the exposure created by such
failure,  or  (c)  in the case of the failure to comply with SECTION 6.8 hereof,
                                                             -----------
obtain  and maintain insurance policies of the type described in SECTION 6.8 and
                                                                 -----------
take  any action with respect to such policies as Agent deems prudent.  Any such
amounts  paid  by  Agent  shall  constitute  Lender  Group Expenses and any such
payments  shall  not constitute an agreement by the Lender Group to make similar
payments  in  the future or a waiver by the Lender Group of any Event of Default
under this Agreement.  Agent need not inquire as to, or contest the validity of,
any  such expense, tax, or Lien and the receipt of the usual official notice for
the  payment  thereof shall be conclusive evidence that the same was validly due
and  owing.

11.     WAIVERS;  INDEMNIFICATION.

11.1    DEMAND;  PROTEST.  Borrower  waives  demand, protest, notice of protest,
        ----------------
notice  of  default or dishonor, notice of payment and nonpayment, nonpayment at
maturity,  release,  compromise, settlement, extension, or renewal of documents,
instruments,  chattel paper, and guarantees at any time held by the Lender Group
on  which  Borrower  may  in  any  way  be  liable.

11.2    THE  LENDER  GROUP'S  LIABILITY  FOR COLLATERAL.  Borrower hereby agrees
        -----------------------------------------------
that:  (a)  so  long  as the Lender Group complies with its obligations, if any,
under  the  Code,  Agent shall not in any way or manner be liable or responsible
for:  (i)  the  safekeeping  of  the Collateral, (ii) any loss or damage thereto
occurring  or  arising  in  any  manner  or  fashion  from  any cause, (iii) any
diminution  in  the  value  thereof,  or (iv) any act or default of any carrier,
warehouseman,  bailee,  forwarding  agency, or other Person, and (b) all risk of
loss,  damage,  or  destruction  of  the  Collateral shall be borne by Borrower.

                                     -78-
<PAGE>

11.3    INDEMNIFICATION.  Borrower  shall  pay,  indemnify, defend, and hold the
        ---------------
Agent-Related  Persons,  the Lender-Related Persons with respect to each Lender,
each  Participant,  and each of their respective officers, directors, employees,
agents,  and  attorneys-in-fact (each, an "INDEMNIFIED PERSON") harmless (to the
fullest  extent  permitted by law) from and against any and all claims, demands,
suits,  actions,  investigations,  proceedings,  and damages, and all reasonable
attorneys  fees and disbursements and other costs and expenses actually incurred
in  connection  therewith  or  in  connection  with  the  enforcement  of  this
indemnification  (as and when they are incurred and irrespective of whether suit
is  brought),  at any time asserted against, imposed upon, or incurred by any of
them  (a)  in  connection  with  or  as a result of or related to the execution,
delivery,  enforcement,  performance,  or  administration  (including  any
restructuring  or  workout  with  respect  hereto) of this Agreement, any of the
other  Loan Documents, or the transactions contemplated hereby or thereby or the
monitoring  of Borrower's and its Subsidiaries' compliance with the terms of the
Loan  Documents,  and  (b)  with  respect  to  any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds  of  the  credit  provided  hereunder  (irrespective  of  whether  any
Indemnified  Person  is  a  party  thereto),  or  any  act,  omission, event, or
circumstance in any manner related thereto (all the foregoing, collectively, the
"INDEMNIFIED  LIABILITIES").  The  foregoing  to  the  contrary notwithstanding,
Borrower  shall  have no obligation to any Indemnified Person under this SECTION
                                                                         -------
11.3  with  respect  to  any  Indemnified  Liability  that  a court of competent
----
jurisdiction  finally  determines  to have resulted from the gross negligence or
willful misconduct of such Indemnified Person.  This provision shall survive the
termination  of  this  Agreement  and  the repayment of the Obligations.  If any
Indemnified  Person  makes  any  payment  to  any  other Indemnified Person with
respect  to  an  Indemnified  Liability  as  to  which  Borrower was required to
indemnify  the Indemnified Person receiving such payment, the Indemnified Person
making  such  payment  is  entitled to be indemnified and reimbursed by Borrower
with  respect  thereto.  WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY
TO  EACH  INDEMNIFIED  PERSON  WITH  RESPECT TO INDEMNIFIED LIABILITIES WHICH IN
WHOLE  OR IN PART ARE CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF
SUCH  INDEMNIFIED  PERSON  OR  OF  ANY  OTHER  PERSON.

12.     NOTICES.

     Unless  otherwise  provided  in  this  Agreement, all notices or demands by
Borrower  or  Agent  to  the  other relating to this Agreement or any other Loan
Document  shall  be  in  writing  and (except for financial statements and other
informational  documents which may be sent by first-class mail, postage prepaid)
shall  be  personally delivered or sent by registered or certified mail (postage
prepaid,  return receipt requested), overnight courier, electronic mail (at such
email addresses as Borrower or Agent, as applicable, may designate to each other
in  accordance herewith), or telefacsimile to Borrower in care of Borrower or to
Agent,  as  the  case  may  be,  at  its  address  set  forth  below:

If  to  Borrower:     Energy  Corporation  of  America
                      4643  South  Ulster  Street,  Suite  1100
                      Denver,  Colorado  80237
                      Attn:  Michael  S.  Fletcher
                      Fax  No.  303.694.2763

with  copies  to:     Goodwin  &  Goodwin,  LLP
                      330  Summers  Street,  Suite  1500
                      Charleston,  West  Virginia  25301-1678
                      Attn:  Tammy  J.  Owen,  Esq.
                      Fax  No.  304.344.9692

If  to  Agent:        WELLS  FARGO  FOOTHILL,  INC.
                      2450  Colorado  Avenue
                      Suite  3000  West
                      Santa  Monica,  California  90404
                      Attn:  Business  Finance  Division  Manager
                      Fax  No.  310.453.7443

                                     -79-
<PAGE>

with  copies  to:     Wells  Fargo  Foothill,  Inc.
                      400  Northpark  Town  Center
                      1000  Abernathy  Road,  Suite  1450
                      Atlanta,  Georgia  30328
                      Attn:  Business  Division  Manager
                      Fax  No.  770.508.1375

with  copies  to:     Munsch  Hardt  Kopf  &  Harr,  P.C.
                      4000  Fountain  Place
                      1445  Ross  Avenue
                      Dallas,  Texas  75202-2790
                      Attn:  William  A.  Lang,  Esq.
                      Fax  No.  214.855.7584

Agent  and  Borrower may change the address at which they are to receive notices
hereunder,  by  notice  in  writing  in  the foregoing manner given to the other
party.  All  notices  or  demands sent in accordance with this SECTION 12, other
                                                               ----------
than  notices  by  Agent  in  connection  with  enforcement  rights  against the
Collateral  under  the  provisions  of the Code, shall be deemed received on the
earlier  of  the  date  of  actual  receipt or 3 Business Days after the deposit
thereof  in the mail.  Borrower acknowledges and agrees that notices sent by the
Lender  Group  in  connection  with  the  exercise of enforcement rights against
Collateral  under the provisions of the Code shall be deemed sent when deposited
in  the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile  or  any  other  method  set  forth  above.

13.     CHOICE  OF  LAW  AND  VENUE;  JURY  TRIAL  WAIVER.

(a)     THE  VALIDITY  OF  THIS  AGREEMENT  AND THE OTHER LOAN DOCUMENTS (UNLESS
EXPRESSLY  PROVIDED  TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH
OTHER  LOAN  DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF
AND  THEREOF,  AND  THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH RESPECT TO
ALL  MATTERS  ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR THERETO SHALL
BE  DETERMINED  UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE  STATE  OF  GEORGIA.

(b)     THE  PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION
WITH  THIS  AGREEMENT  AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS
LOCATED  IN  THE COUNTY OF FULTON, STATE OF GEORGIA, PROVIDED, HOWEVER, THAT ANY
                                                     --------  -------
SUIT  SEEKING  ENFORCEMENT  AGAINST  ANY  COLLATERAL  OR  OTHER  PROPERTY MAY BE
BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS
TO  BRING  SUCH  ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
BORROWER  AND  EACH  MEMBER  OF  THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED
UNDER  APPLICABLE  LAW,  ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM
                                                                           -----
NON  CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
---  ----------
ACCORDANCE  WITH  THIS  SECTION  13(b).
                        --------------

                                     -80-
<PAGE>

BORROWER  AND  EACH  MEMBER  OF  THE  LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF  ANY  OF  THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING  CONTRACT  CLAIMS,  TORT  CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON  LAW  OR  STATUTORY CLAIMS.  BORROWER AND EACH MEMBER OF THE LENDER GROUP
REPRESENT  THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY
WAIVES  ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE
EVENT  OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT
TO  A  TRIAL  BY  THE  COURT.

14.     ASSIGNMENTS  AND  PARTICIPATIONS;  SUCCESSORS.

14.1     ASSIGNMENTS  AND  PARTICIPATIONS.
        --------------------------------

(a)     Except  as provided in SECTION 14.1(h), any Lender may, with the written
                               ---------------
consent of Agent (provided that no written consent of Agent shall be required in
     connection  with  any  assignment and delegation by a Lender to an Eligible
Transferee),  assign  and delegate to one or more assignees (each an "ASSIGNEE")
all,  or  any  ratable  part of all, of the Obligations, the Commitments and the
other  rights  and obligations of such Lender hereunder and under the other Loan
Documents,  in a minimum amount of $10,000,000; provided, however, that Borrower
                                                --------  -------
and  Agent  may  continue  to  deal  solely  and  directly  with  such Lender in
connection with the interest so assigned to an Assignee until (i) written notice
of  such  assignment, together with payment instructions, addresses, and related
information  with respect to the Assignee, have been given to Borrower and Agent
by  such  Lender  and  the  Assignee,  (ii)  such  Lender  and its Assignee have
delivered  to  Borrower  and  Agent  an  Assignment  and  Acceptance in form and
substance  satisfactory  to Agent, and (iii) the assignor Lender or Assignee has
paid  to  Agent  for  Agent's separate account a processing fee in the amount of
$5,000.  Anything  contained herein to the contrary notwithstanding, the consent
of  Agent  shall not be required (and payment of any fees shall not be required)
if  such  assignment  is  in  connection  with  any merger, consolidation, sale,
transfer, or other disposition of all or any substantial portion of the business
or  loan  portfolio  of  such  Lender.

(b)     From  and after the date that Agent notifies the assignor Lender (with a
copy to Borrower) that it has received an executed Assignment and Acceptance and
payment  of  the  above-referenced  processing  fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have  been assigned to it pursuant to such Assignment and Acceptance, shall have
the  rights  and  obligations of a Lender under the Loan Documents, and (ii) the
assignor  Lender  shall, to the extent that rights and obligations hereunder and
under  the  other  Loan  Documents  have  been  assigned  by it pursuant to such
Assignment and Acceptance, relinquish its rights (except with respect to SECTION
                                                                         -------
11.3  hereof)  and be released from its obligations under this Agreement (and in
----
the  case  of an Assignment and Acceptance covering all or the remaining portion
of  an  assigning  Lender's  rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto and thereto),
and  such  assignment shall affect a novation between Borrower and the Assignee.

(c)     By  executing and delivering an Assignment and Acceptance, the assigning
Lender  thereunder  and  the  Assignee thereunder confirm to and agree with each
other  and  the  other parties hereto as follows:  (1) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty  and  assumes  no  responsibility  with  respect  to  any  statements,
warranties  or  representations  made in or in connection with this Agreement or

                                     -81-
<PAGE>

the  execution,  legality, validity, enforceability, genuineness, sufficiency or
value  of  this  Agreement or any other Loan Document furnished pursuant hereto,
(2)  such  assigning  Lender  makes no representation or warranty and assumes no
responsibility  with  respect  to  the  financial  condition  of Borrower or the
performance  or  observance  by  Borrower  of  any of its obligations under this
Agreement  or  any  other  Loan  Document  furnished  pursuant  hereto, (3) such
Assignee  confirms  that it has received a copy of this Agreement, together with
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,
(4)  such  Assignee  will,  independently  and without reliance upon Agent, such
assigning  Lender  or  any  other  Lender,  and  based  on  such  documents  and
information  as  it shall deem appropriate at the time, continue to make its own
credit  decisions  in taking or not taking action under this Agreement, (5) such
Assignee appoints and authorizes Agent to take such actions and to exercise such
powers  under  this  Agreement  as  are delegated to Agent, by the terms hereof,
together  with  such  powers  as are reasonably incidental thereto, and (6) such
Assignee  agrees  that it will perform all of the obligations which by the terms
of  this  Agreement  are  required  to  be  performed  by  it  as  a  Lender.

(d)     Immediately upon each Assignee's making its processing fee payment under
the  Assignment  and  Acceptance and receipt and acknowledgment by Agent of such
fully  executed  Assignment and Acceptance, this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of  the  Assignee  and  the  resulting  adjustment  of  the  Commitments arising
therefrom.  The  Commitment  allocated  to  each  Assignee  shall  reduce  such
Commitments  of  the  assigning  Lender  pro  tanto.

(e)     Any  Lender  may at any time, with the written consent of Agent, sell to
one  or  more  commercial  banks,  financial  institutions, or other Persons not
Affiliates  of  such  Lender  (a  "PARTICIPANT")  participating interests in its
Obligations,  the  Commitment, and the other rights and interests of that Lender
(the  "ORIGINATING  LENDER")  hereunder  and  under  the  other  Loan  Documents
(provided  that no written consent of Agent shall be required in connection with
any  sale  of  any  such  participating  interests  by  a  Lender to an Eligible
Transferee);  provided,  however, that (i) the Originating Lender shall remain a
              --------   -------
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant  receiving  the  participating  interest  in  the  Obligations,  the
Commitments,  and  the  other  rights  and  interests  of the Originating Lender
hereunder  shall  not  constitute  a  "Lender" hereunder or under the other Loan
Documents  and  the  Originating Lender's obligations under this Agreement shall
remain  unchanged,  (ii)  the Originating Lender shall remain solely responsible
for  the performance of such obligations, (iii) Borrower, Agent, and the Lenders
shall  continue  to  deal  solely  and  directly  with the Originating Lender in
connection  with  the  Originating  Lender's  rights  and obligations under this
Agreement  and  the other Loan Documents, (iv) no Lender shall transfer or grant
any  participating interest under which the Participant has the right to approve
any  amendment  to,  or any consent or waiver with respect to, this Agreement or
any  other  Loan Document, except to the extent such amendment to, or consent or
waiver  with  respect  to this Agreement or of any other Loan Document would (A)
extend  the  final  maturity  date  of  the  Obligations hereunder in which such
Participant  is  participating,  (B)  reduce the interest rate applicable to the
Obligations  hereunder  in  which such Participant is participating, (C) release
all  or a material portion of the Collateral or guaranties (except to the extent
expressly  provided  herein  or  in  any  of  the Loan Documents) supporting the
Obligations  hereunder  in which such Participant is participating, (D) postpone
the  payment  of,  or reduce the amount of, the interest or fees payable to such
Participant  through  such  Lender,  or  (E)  change  the amount or due dates of
scheduled  principal  repayments or prepayments or premiums; and (v) all amounts
payable by Borrower hereunder shall be determined as if such Lender had not sold
such participation; except that, if amounts outstanding under this Agreement are
due and unpaid, or shall have been declared or shall have become due and payable

                                     -82-
<PAGE>

upon  the occurrence of an Event of Default, each Participant shall be deemed to
have  the  right  of set-off in respect of its participating interest in amounts
owing  under  this  Agreement  to  the  same  extent  as  if  the  amount of its
participating  interest  were  owing  directly  to  it  as  a  Lender under this
Agreement.  The  rights  of any Participant only shall be derivative through the
Originating  Lender  with  whom such Participant participates and no Participant
shall  have  any  rights under this Agreement or the other Loan Documents or any
direct  rights  as  to  the other Lenders, Agent, Borrower, the Collections, the
Collateral,  or  otherwise  in respect of the Obligations.  No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among  themselves.

(f)     In  connection  with  any  such  assignment or participation or proposed
assignment or participation, a Lender may disclose all documents and information
which  it now or hereafter may have relating to Borrower or Borrower's business.

(g)     Any other provision in this Agreement notwithstanding, any Lender may at
any  time  create  a  security interest in, or pledge, all or any portion of its
rights under and interest in this Agreement in favor of any Federal Reserve Bank
in  accordance  with  Regulation  A of the Federal Reserve Bank or U.S. Treasury
Regulation 31 CFR  203.14, and such Federal Reserve Bank may enforce such pledge
or  security  interest  in  any  manner  permitted  under  applicable  law.

(h)     Prior to the occurrence of an Event of Default, Foothill in its capacity
as  Lender,  shall  at  all  times  maintain at least 66 2/3% of the outstanding
Obligations.

14.2    SUCCESSORS.  This  Agreement  shall bind and inure to the benefit of the
        ----------
respective  successors  and  assigns  of each of the parties; provided, however,
that  Borrower  may  not assign this Agreement or any rights or duties hereunder
without  the  Lenders' prior written consent and any prohibited assignment shall
be  absolutely  void  ab  initio.  No consent to assignment by the Lenders shall
release  Borrower  from its Obligations.  A Lender may assign this Agreement and
the  other  Loan  Documents  and  its rights and duties hereunder and thereunder
pursuant  to  SECTION  14.1 hereof and, except as expressly required pursuant to
              -------------
SECTION  14.1  hereof,  no  consent  or  approval  by  Borrower  is  required in
-------------
connection  with  any  such  assignment.

15.     AMENDMENTS;  WAIVERS.

15.1    AMENDMENTS AND WAIVERS.  No amendment or waiver of any provision of this
        ----------------------
     Agreement  or  any  other Loan Document, and no consent with respect to any
departure  by Borrower therefrom, shall be effective unless the same shall be in
writing  and  signed by the Required Lenders (or by Agent at the written request
of  the Required Lenders) and Borrower and then any such waiver or consent shall
be  effective  only  in  the  specific instance and for the specific purpose for
which  given;  provided,  however,  that  no  such waiver, amendment, or consent
shall,  unless  in writing and signed by all of the Lenders affected thereby and
Borrower  and  acknowledged  by  Agent,  do  any  of  the  following:

(a)     increase  or  extend  any  Commitment  of  any  Lender,

(b)     postpone  or  delay  any  date fixed by this Agreement or any other Loan
Document  for  any  payment  of  principal, interest, fees, or other amounts due
hereunder  or  under  any  other  Loan  Document,

(c)     reduce  the  principal of, or the rate of interest on, any loan or other
extension  of  credit  hereunder,  or  reduce  any fees or other amounts payable
hereunder  or  under  any  other  Loan  Document,

                                     -83-
<PAGE>

(d)     change  the  percentage  of the Commitments that is required to take any
action  hereunder,

(e)     amend  this  Section  or  any  provision  of the Agreement providing for
consent  or  other  action  by  all  Lenders,

(f)     release  Collateral  other  than  as  permitted  by  SECTION  16.12,
                                                             --------------

(g)     change  the  definition  of  "Required  Lenders",

(h)     contractually  subordinate  any  of  the  Agent's  Liens,

(i)     release  Borrower  from  any  obligation  for  the  payment  of  money,

(j)    change  the  definition  of  Borrowing Base or change SECTION 2.1(b), or
                                                              --------------

(k)     amend  any  of  the  provisions  of  SECTION  16.
                                             -----------

and,  provided  further,  however,  that  no amendment, waiver or consent shall,
      -----------------   -------
unless  in  writing and signed by Agent, Issuing Lender, or Swing Lender, affect
the  rights  or duties of Agent, Issuing Lender, or Swing Lender, as applicable,
under this Agreement or any other Loan Document.  The foregoing notwithstanding,
any  amendment,  modification,  waiver,  consent, termination, or release of, or
with respect to, any provision of this Agreement or any other Loan Document that
relates  only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrower, shall not require consent
by  or  the  agreement  of  Borrower.

15.2    REPLACEMENT  OF HOLDOUT LENDER.  If any action to be taken by the Lender
        ------------------------------
Group  or  Agent  hereunder  requires  the  unanimous consent, authorization, or
agreement  of  all  Lenders,  and  a Lender ("HOLDOUT LENDER") fails to give its
consent,  authorization, or agreement, then Agent, upon at least 5 Business Days
prior  irrevocable  notice  to  the  Holdout Lender, may permanently replace the
Holdout  Lender  with  one  or  more  substitute  Lenders  (each, a "REPLACEMENT
LENDER"),  and  the  Holdout  Lender  shall  not  have the right to refuse to be
replaced  hereunder.  Such notice to replace the Holdout Lender shall specify an
effective  date  for  such  replacement,  which  date shall not be later than 15
Business  Days  after  the  date  such  notice  is  given.
     Prior  to  the  effective  date of such replacement, the Holdout Lender and
each  Replacement  Lender shall execute and deliver an Assignment and Acceptance
Agreement,  subject  only  to  the  Holdout Lender being repaid its share of the
outstanding  Obligations  (including  an assumption of its Pro Rata Share of the
Risk  Participation  Liability)  without  any  premium  or  penalty  of any kind
whatsoever.  If  the  Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance Agreement prior to the effective date of such
replacement,  the  Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance Agreement.  The replacement of any Holdout Lender
shall  be made in accordance with the terms of SECTION 14.1.  Until such time as
                                               ------------
the  Replacement  Lenders  shall  have  acquired  all  of  the  Obligations, the
Commitments,  and  the  other  rights  and  obligations  of  the  Holdout Lender
hereunder  and  under  the other Loan Documents, the Holdout Lender shall remain
obligated  to  make  the  Holdout  Lender's  Pro  Rata  Share of Advances and to
purchase a participation in each Letter of Credit, in an amount equal to its Pro
Rata  Share  of  the  Risk  Participation  Liability  of  such Letter of Credit.

                                     -84-
<PAGE>

15.3    NO  WAIVERS;  CUMULATIVE REMEDIES.  No failure by Agent or any Lender to
        ---------------------------------
exercise  any  right,  remedy, or option under this Agreement or, any other Loan
Document,  or  delay by Agent or any Lender in exercising the same, will operate
as  a waiver thereof.  No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated.  No waiver by
     Agent  or  any  Lender on any occasion shall affect or diminish Agent's and
each Lender's rights thereafter to require strict performance by Borrower of any
provision  of  this  Agreement.  Agent's  and  each  Lender's  rights under this
Agreement  and  the other Loan Documents will be cumulative and not exclusive of
any  other  right  or  remedy  that  Agent  or  any  Lender  may  have.

16.     AGENT;  THE  LENDER  GROUP.

16.1    APPOINTMENT  AND  AUTHORIZATION OF AGENT.  Each Lender hereby designates
        ----------------------------------------
and  appoints  Foothill as its representative under this Agreement and the other
Loan  Documents and each Lender hereby irrevocably authorizes Agent to take such
action  on its behalf under the provisions of this Agreement and each other Loan
Document  and  to  exercise such powers and perform such duties as are expressly
delegated  to  Agent  by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.  Agent agrees to
act  as  such  on the express conditions contained in this SECTION 16.  The
                                                           ----------
provisions  of  this  SECTION  16  are  solely for the benefit of Agent, and the
                      -----------
Lenders,  and  Borrower shall have no rights as a third party beneficiary of any
of  the  provisions  contained  herein.  Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall  not have any duties or responsibilities, except those expressly set forth
herein,  nor  shall  Agent  have or be deemed to have any fiduciary relationship
with  any Lender, and no implied covenants, functions, responsibilities, duties,
obligations  or  liabilities shall be read into this Agreement or any other Loan
Document  or  otherwise  exist  against Agent; it being expressly understood and
agreed  that  the use of the word "Agent" is for convenience only, that Foothill
is merely the representative of the Lenders, and only has the contractual duties
set  forth  herein.  Except  as  expressly otherwise provided in this Agreement,
Agent  shall  have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking  any  actions that Agent expressly is entitled to take or assert under or
pursuant  to  this Agreement and the other Loan Documents.  Without limiting the
generality  of  the  foregoing,  or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right  to  exercise  the  following  powers as long as this Agreement remains in
effect:  (a)  maintain,  in  accordance  with  its customary business practices,
ledgers  and  records  reflecting the status of the Obligations, the Collateral,
the  Collections, and related matters, (b) execute or file any and all financing
or  similar statements or notices, amendments, renewals, supplements, documents,
instruments,  proofs of claim, notices and other written agreements with respect
to  the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided  in  the Loan Documents, (d) exclusively receive, apply, and distribute
the  Collections  as  provided in the Loan Documents, (e) open and maintain such
bank  accounts  and  cash  management  accounts  as  Agent  deems  necessary and
appropriate  in  accordance  with  the Loan Documents for the foregoing purposes
with  respect  to the Collateral and the Collections, (f) perform, exercise, and
enforce  any  and all other rights and remedies of the Lender Group with respect
to  Borrower,  the  Obligations,  the  Collateral, the Collections, or otherwise
related  to any of same as provided in the Loan Documents, and (g) incur and pay
such  Lender  Group  Expenses as Agent may deem necessary or appropriate for the
performance  and  fulfillment  of  its functions and powers pursuant to the Loan
Documents.

16.2    DELEGATION  OF  DUTIES.  Agent  may execute any of its duties under this
        ----------------------
Agreement  or  any  other  Loan  Document  by  or  through  agents, employees or
attorneys-in-fact  and  shall  be  entitled  to advice of counsel concerning all
matters  pertaining  to  such  duties.  Agent  shall  not be responsible for the
negligence  or  misconduct  of  any agent or attorney-in-fact that it selects as
long  as such selection was made without gross negligence or willful misconduct.

                                     -85-
<PAGE>

16.3    LIABILITY  OF  AGENT.  None  of  the  Agent-Related Persons shall (i) be
        --------------------
liable  for  any  action taken or omitted to be taken by any of them under or in
connection  with  this  Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or  (ii)  be  responsible  in  any manner to any of the Lenders for any recital,
statement,  representation  or  warranty  made  by Borrower or any Subsidiary or
Affiliate  of  Borrower,  or  any officer or director thereof, contained in this
Agreement  or  in  any  other  Loan  Document,  or  in  any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under  or  in connection with, this Agreement or any other Loan Document, or the
validity,  effectiveness,  genuineness,  enforceability  or  sufficiency of this
Agreement  or  any  other  Loan  Document, or for any failure of Borrower or any
other  party  to  any  Loan  Document  to  perform  its obligations hereunder or
thereunder.  No Agent-Related Person shall be under any obligation to any Lender
to  ascertain  or  to  inquire as to the observance or performance of any of the
agreements  contained  in,  or  conditions  of, this Agreement or any other Loan
Document,  or  to  inspect  the  Books or properties of Borrower or the books or
records  or  properties  of  Borrower's  Subsidiaries  or  Affiliates.

16.4   RELIANCE  BY AGENT.  Agent shall be entitled to rely, and shall be fully
        ------------------
protected  in  relying,  upon  any  writing,  resolution,  notice,  consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement  or  other  document  or conversation believed by it to be genuine and
correct  and to have been signed, sent, or made by the proper Person or Persons,
and  upon  advice and statements of legal counsel (including counsel to Borrower
or counsel to any Lender), independent accountants and other experts selected by
Agent.  Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions  are received, Agent shall act, or refrain from acting, as it deems
advisable.  If  Agent  so  requests,  it  shall  first  be  indemnified  to  its
reasonable  satisfaction  by  Lenders  against any and all liability and expense
that  may  be  incurred by it by reason of taking or continuing to take any such
action.  Agent shall in all cases be fully protected in acting, or in refraining
from  acting, under this Agreement or any other Loan Document in accordance with
a  request  or  consent  of the Lenders and such request and any action taken or
failure  to  act  pursuant  thereto  shall  be  binding upon all of the Lenders.

16.5    NOTICE  OF  DEFAULT  OR  EVENT OF DEFAULT.  Agent shall not be deemed to
        -----------------------------------------
have  knowledge  or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses  required  to  be  paid to Agent for the account of the Lenders, except
with  respect  to  Events of Default of which Agent has actual knowledge, unless
Agent  shall have received written notice from a Lender or Borrower referring to
this  Agreement,  describing  such Default or Event of Default, and stating that
such notice is a "notice of default."  Agent promptly will notify the Lenders of
its  receipt  of  any  such notice or of any Event of Default of which Agent has
actual  knowledge.  If  any  Lender  obtains  actual  knowledge  of any Event of
Default,  such  Lender promptly shall notify the other Lenders and Agent of such
Event  of  Default.  Each  Lender  shall  be  solely  responsible for giving any
notices  to its Participants, if any.  Subject to SECTION 16.4, Agent shall take
                                                  ------------
such action with respect to such Default or Event of Default as may be requested
by  the  Required  Lenders in accordance with SECTION 9; provided, however, that
                                              ---------
unless  and  until Agent has received any such request, Agent may (but shall not
be  obligated  to)  take  such  action, or refrain from taking such action, with
respect  to  such  Default  or  Event  of  Default  as  it shall deem advisable.

16.6     CREDIT  DECISION.  Each  Lender  acknowledges  that  none  of  the
        ----------------
Agent-Related Persons has made any representation or warranty to it, and that no
act  by Agent hereinafter taken, including any review of the affairs of Borrower
and  its  Subsidiaries  or  Affiliates,  shall  be  deemed  to  constitute  any
representation  or  warranty  by  any  Agent-Related Person to any Lender.  Each
Lender  represents to Agent that it has, independently and without reliance upon
any  Agent-Related  Person and based on such documents and information as it has
deemed  appropriate,  made  its  own  appraisal  of  and  investigation into the

                                     -86-
<PAGE>

business,  prospects,  operations,  property,  financial and other condition and
creditworthiness  of Borrower and any other Person (other than the Lender Group)
party  to  a  Loan Document, and all applicable bank regulatory laws relating to
the  transactions  contemplated  hereby, and made its own decision to enter into
this  Agreement  and  to extend credit to Borrower.  Each Lender also represents
that  it  will, independently and without reliance upon any Agent-Related Person
and  based on such documents and information as it shall deem appropriate at the
time,  continue  to  make  its  own credit analysis, appraisals and decisions in
taking  or  not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business,  prospects,  operations,  property,  financial and other condition and
creditworthiness  of Borrower and any other Person (other than the Lender Group)
party  to  a  Loan  Document.  Except  for notices, reports, and other documents
expressly  herein  required to be furnished to the Lenders by Agent, Agent shall
not  have  any  duty  or responsibility to provide any Lender with any credit or
other  information  concerning  the  business,  prospects, operations, property,
financial  and  other  condition  or  creditworthiness of Borrower and any other
Person  party to a Loan Document that may come into the possession of any of the
Agent-Related  Persons.

16.7    COSTS  AND  EXPENSES;  INDEMNIFICATION.  Agent  may incur and pay Lender
        --------------------------------------
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the  performance  and  fulfillment  of  its  functions,  powers, and obligations
pursuant to the Loan Documents, including court costs, reasonable attorneys fees
and expenses, fees and expenses of financial accountants, advisors, consultants,
and  appraisers,  costs  of  collection  by  outside  collection  agencies  and
auctioneer  fees  and  costs  of  security  guards or insurance premiums paid to
maintain the Collateral, whether or not Borrower is obligated to reimburse Agent
or  Lenders  for  such  expenses  pursuant to the Credit Agreement or otherwise.
Agent  is  authorized  and directed to deduct and retain sufficient amounts from
Collections  received  by  Agent to reimburse Agent for such out-of-pocket costs
and  expenses prior to the distribution of any amounts to Lenders.  In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent,  each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof.  Whether
or  not  the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or  on  behalf of Borrower and without limiting the obligation of Borrower to do
so),  according  to  their  Pro  Rata  Shares,  from  and  against  any  and all
Indemnified  Liabilities;  provided, however, that no Lender shall be liable for
the  payment  to  any  Agent-Related  Person  of any portion of such Indemnified
Liabilities  resulting  solely  from  such  Person's gross negligence or willful
misconduct  nor shall any Lender be liable for the obligations of any Defaulting
Lender  in  failing  to  make an Advance or other extension of credit hereunder.
Without  limitation  of  the  foregoing,  each Lender shall reimburse Agent upon
demand  for  such  Lender's ratable share of any costs or out-of-pocket expenses
(including  attorneys, accountants, advisors, and consultants fees and expenses)
incurred  by  Agent  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, this Agreement, any other Loan Document, or
any  document contemplated by or referred to herein, to the extent that Agent is
not  reimbursed  for such expenses by or on behalf of Borrower.  The undertaking
in  this  Section shall survive the payment of all Obligations hereunder and the
resignation  or  replacement  of  Agent.

16.8    AGENT  IN  INDIVIDUAL  CAPACITY.  Foothill  and  its Affiliates may make
        -------------------------------
loans  to,  issue  letters  of  credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial  advisory,  underwriting,  or  other  business  with  Borrower and its
Subsidiaries  and  Affiliates and any other Person (other than the Lender Group)
party to any Loan Documents as though Foothill were not Agent hereunder, and, in
each  case,  without  notice  to  or  consent of the other members of the Lender
Group.  The other members of the Lender Group acknowledge that, pursuant to such
activities,  Foothill  or  its  Affiliates  may  receive  information  regarding
Borrower  or  its  Affiliates and any other Person (other than the Lender Group)

                                     -87-
<PAGE>

party  to  any  Loan Documents that is subject to confidentiality obligations in
favor  of Borrower or such other Person and that prohibit the disclosure of such
information  to  the  Lenders,  and  the  Lenders  acknowledge  that,  in  such
circumstances  (and  in  the  absence  of  a  waiver  of  such  confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent  shall  not  be  under any obligation to provide such information to them.
The  terms  "LENDER"  and "LENDERS" include Foothill in its individual capacity.

16.9    SUCCESSOR  AGENT.  Agent  may resign as Agent upon 45 days notice to the
        ----------------
Lenders.  If  Agent  resigns  under  this  Agreement, the Required Lenders shall
appoint  a  successor Agent for the Lenders.  If no successor Agent is appointed
prior  to  the  effective  date  of the resignation of Agent, Agent may appoint,
after  consulting  with the Lenders, a successor Agent.  If Agent has materially
breached  or  failed  to  perform any material provision of this Agreement or of
applicable  law, the Required Lenders may agree in writing to remove and replace
Agent  with  a  successor Agent from among the Lenders.  In any such event, upon
the  acceptance  of its appointment as successor Agent hereunder, such successor
Agent  shall succeed to all the rights, powers, and duties of the retiring Agent
and  the  term  "Agent" shall mean such successor Agent and the retiring Agent's
appointment,  powers,  and  duties  as  Agent  shall  be  terminated.  After any
retiring  Agent's resignation hereunder as Agent, the provisions of this SECTION
                                                                         -------
16  shall inure to its benefit as to any actions taken or omitted to be taken by
--
it  while it was Agent under this Agreement.  If no successor Agent has accepted
appointment  as  Agent by the date which is 45 days following a retiring Agent's
notice  of  resignation,  the  retiring  Agent's  resignation shall nevertheless
thereupon  become  effective  and the Lenders shall perform all of the duties of
Agent  hereunder  until  such  time,  if any, as the Lenders appoint a successor
Agent  as  provided  for  above.

16.10     LENDER  IN  INDIVIDUAL  CAPACITY.  Any  Lender  and  its  respective
         --------------------------------
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits  from,  acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and  its Subsidiaries and Affiliates and any other Person (other than the Lender
Group)  party  to  any  Loan  Documents  as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group.
The  other  members  of  the  Lender  Group  acknowledge  that, pursuant to such
activities,  such  Lender  and its respective Affiliates may receive information
regarding Borrower or its Affiliates and any other Person (other than the Lender
Group)  party  to  any  Loan  Documents  that  is  subject  to  confidentiality
obligations  in  favor  of  Borrower  or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in  such  circumstances  (and in the absence of a waiver of such confidentiality
obligations,  which  waiver  such Lender will use its reasonable best efforts to
obtain),  such  Lender  shall  not  be  under  any  obligation  to  provide such
information  to them.  With respect to the Swing Loans and Agent Advances, Swing
Lender  shall  have the same rights and powers under this Agreement as any other
Lender  and  may  exercise  the  same as though it were not the sub-agent of the
Agent.

16.11     WITHHOLDING  TAXES.
          ------------------

(a)     If  any  Lender  is a "foreign corporation, partnership or trust" within
the meaning of the IRC and such Lender claims exemption from, or a reduction of,
     U.S.  withholding  tax  under Sections 1441 or 1442 of the IRC, such Lender
agrees  with  and  in  favor  of  Agent  and  Borrower,  to deliver to Agent and
Borrower:

          (i)  if  such Lender claims an exemption from withholding tax pursuant
          to  its  portfolio  interest exception, (a) a statement of the Lender,
          signed  under  penalty  of  perjury,  that  it  is not a (I) "bank" as
          described  in  Section  881(c)(3)(A)  of the IRC, (II) 10% shareholder
          (within  the  meaning  of  Section  881(c)(3)(B) of the IRC), or (III)
          controlled  foreign  corporation  described in Section 881(c)(3)(C) of
          the  IRC,  and  (B)  a  properly completed IRS Form W-8BEN, before the
          first  payment  of  any interest under this Agreement and at any other
          time  reasonably  requested  by  Agent  or  Borrower;

                                     -88-
<PAGE>

          (ii)  if  such  Lender  claims  an  exemption from, or a reduction of,
          withholding  tax  under a United States tax treaty, properly completed
          IRS  Form  W-8BEN  before the first payment of any interest under this
          Agreement  and  at  any  other  time  reasonably requested by Agent or
          Borrower;

          (iii) if such Lender claims that interest paid under this Agreement is
          exempt  from  United  States withholding tax because it is effectively
          connected  with  a United States trade or business of such Lender, two
          properly  completed  and executed copies of IRS Form W-8ECI before the
          first  payment  of any interest is due under this Agreement and at any
          other  time  reasonably  requested  by  Agent  or  Borrower;

          (iv)  such  other  form  or  forms as may be required under the IRC or
          other  laws  of the United States as a condition to exemption from, or
          reduction  of,  United  States  withholding  tax.

Such  Lender  agrees  promptly  to  notify  Agent  and Borrower of any change in
circumstances  which  would  modify  or  render invalid any claimed exemption or
reduction.

(b)     If  any  Lender  claims exemption from, or reduction of, withholding tax
under  a  United  States tax treaty by providing IRS Form W-8BEN and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or part of
     the  Obligations  of  Borrower to such Lender, such Lender agrees to notify
Agent  of the percentage amount in which it is no longer the beneficial owner of
Obligations  of  Borrower  to  such  Lender.  To  the  extent of such percentage
amount,  Agent  will  treat  such  Lender's  IRS Form W-8BEN as no longer valid.

(c)     If  any  Lender is entitled to a reduction in the applicable withholding
tax,  Agent  may  withhold  from  any  interest payment to such Lender an amount
equivalent  to  the  applicable  withholding  tax after taking into account such
reduction.  If  the  forms  or other documentation required by subsection (a) of
this  Section  are  not  delivered  to  Agent,  then Agent may withhold from any
interest  payment to such Lender not providing such forms or other documentation
an  amount  equivalent  to  the  applicable  withholding  tax.

(d)     If  the  IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that Agent did not properly withhold tax from
amounts  paid  to or for the account of any Lender (because the appropriate form
was  not  delivered, was not properly executed, or because such Lender failed to
notify  Agent of a change in circumstances which rendered the exemption from, or
reduction  of, withholding tax ineffective, or for any other reason) such Lender
shall  indemnify  and  hold  Agent  harmless  for  all amounts paid, directly or
indirectly,  by Agent as tax or otherwise, including penalties and interest, and
including  any taxes imposed by any jurisdiction on the amounts payable to Agent
under  this  Section,  together with all costs and expenses (including attorneys
fees  and  expenses).  The obligation of the Lenders under this subsection shall
survive  the  payment  of  all Obligations and the resignation or replacement of
Agent.

(e)     All  payments made by Borrower hereunder or under any note or other Loan
Document  will be made without setoff, counterclaim, or other defense, except as
required  by  applicable  law other than for Taxes (as defined below).  All such
payments  will  be  made free and clear of, and without deduction or withholding
for,  any present or future taxes, levies, imposts, duties, fees, assessments or

                                     -89-
<PAGE>

other  charges  of  whatever nature now or hereafter imposed by any jurisdiction
(other  than  the  United  States)  or  by  any  political subdivision or taxing
authority  thereof  or therein (other than of the United States) with respect to
such  payments  (but  excluding,  any  tax imposed by any jurisdiction or by any
political  subdivision or taxing authority thereof or therein (i) measured by or
based  on  the net income or net profits of a Lender, or (ii) to the extent that
such  tax  results from a change in the circumstances of the Lender, including a
change  in  the residence, place of organization, or principal place of business
of  the  Lender,  or  a  change  in  the  branch or lending office of the Lender
participating  in the transactions set forth herein) and all interest, penalties
or  similar  liabilities  with  respect  thereto  (all  such non-excluded taxes,
levies,  imposts,  duties,  fees, assessments or other charges being referred to
collectively  as  "TAXES").  If  any  Taxes  are  so levied or imposed, Borrower
agrees  to pay the full amount of such Taxes, and such additional amounts as may
be  necessary  so  that every payment of all amounts due under this Agreement or
under  any  note,  including  any  amount paid pursuant to this SECTION 16.11(e)
                                                                ----------------
after  withholding or deduction for or on account of any Taxes, will not be less
than  the amount provided for herein; provided, however, that Borrower shall not
                                      --------  -------
be required to increase any such amounts payable to Agent or any Lender (i) that
is  not  organized  under the laws of the United States, if such Person fails to
comply  with  the  other  requirements  of  this  SECTION  16.11, or (ii) if the
                                                  --------------
increase  in  such  amount  payable  results  from  Agent's or such Lender's own
willful  misconduct  or  gross  negligence.  Borrower  will  furnish to Agent as
promptly  as possible after the date the payment of any Taxes is due pursuant to
applicable  law  certified  copies  of  tax  receipts evidencing such payment by
Borrower.

16.12     COLLATERAL  MATTERS.
         -------------------

(a)     The Lenders hereby irrevocably authorize Agent, at its option and in its
     sole  discretion,  to  release  any  Lien  on  any  Collateral (i) upon the
termination  of the Commitments and payment and satisfaction in full by Borrower
of  all  Obligations,  (ii) constituting property being sold or disposed of if a
release  is  required  or  desirable  in  connection  therewith  and if Borrower
certifies  to  Agent that the sale or disposition is permitted under SECTION 7.4
                                                                     -----------
of  this  Agreement or the other Loan Documents (and Agent may rely conclusively
on  any  such certificate, without further inquiry), (iii) constituting property
in  which  Borrower  does not own any interest at the time the security interest
was  granted  or at any time thereafter, or (iv) constituting property leased to
Borrower  under  a  lease  that  has  expired  or is terminated in a transaction
permitted  under  this  Agreement.  Except  as  provided  above,  Agent will not
execute  and  deliver  a release of any Lien on any Collateral without the prior
written  authorization  of  (y) if the release is of all or substantially all of
the  Collateral,  all  of  the  Lenders, or (z) otherwise, the Required Lenders.
Upon  request  by  Agent  or  Borrower  at any time, the Lenders will confirm in
writing Agent's authority to release any such Liens on particular types or items
of  Collateral pursuant to this SECTION 16.12; provided, however, that (1) Agent
                                -------------  --------  -------
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse,  representation,  or  warranty,  and (2) such release shall not in any
manner  discharge,  affect,  or  impair the Obligations or any Liens (other than
those  expressly being released) upon (or obligations of Borrower in respect of)
all  interests retained by Borrower, including, the proceeds of any sale, all of
which  shall  continue  to  constitute  part  of  the  Collateral.

(b)     Agent  shall  have  no  obligation  whatsoever  to any of the Lenders to
assure  that  the  Collateral  exists  or  is  owned  by  Borrower or any of its
Subsidiaries  or  is cared for, protected, or insured or has been encumbered, or
that  the  Agent's Liens have been properly or sufficiently or lawfully created,
perfected, protected, or enforced or are entitled to any particular priority, or
to  exercise  at  all  or  in  any  particular manner or under any duty of care,
disclosure  or  fidelity,  or  to  continue  exercising,  any  of  the  rights,

                                     -90-
<PAGE>

authorities and powers granted or available to Agent pursuant to any of the Loan
Documents,  it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained  herein,  Agent  may act in any manner it may deem appropriate, in its
sole  discretion given Agent's own interest in the Collateral in its capacity as
one  of  the  Lenders  and  that  Agent  shall  have  no other duty or liability
whatsoever  to  any  Lender  as  to  any  of  the foregoing, except as otherwise
provided  herein.

16.13     RESTRICTIONS  ON  ACTIONS  BY  LENDERS;  SHARING  OF  PAYMENTS.
         --------------------------------------------------------------

(a)     Each  of  the  Lenders  agrees  that  it  shall not, without the express
consent of Agent, and that it shall, to the extent it is lawfully entitled to do
so, upon the request of Agent, set off against the Obligations, any amounts
owing  by such Lender to any Borrower or any deposit accounts of Borrower now or
hereafter  maintained with such Lender.  Each of the Lenders further agrees that
it  shall not, unless specifically requested to do so by Agent, take or cause to
be  taken  any  action,  including,  the  commencement of any legal or equitable
proceedings,  to  foreclose  any  Lien  on,  or  otherwise  enforce any security
interest in, any of the Collateral the purpose of which is, or could be, to give
such Lender any preference or priority against the other Lenders with respect to
the  Collateral.

(b)     If,  at  any  time  or  times  any  Lender shall receive (i) by payment,
foreclosure,  setoff,  or  otherwise, any proceeds of Collateral or any payments
with respect to the Obligations arising under, or relating to, this Agreement or
the  other  Loan Documents, except for any such proceeds or payments received by
such Lender from Agent pursuant to the terms of this Agreement, or (ii) payments
from  Agent in excess of such Lender's ratable portion of all such distributions
by  Agent,  such Lender promptly shall (1) turn the same over to Agent, in kind,
and with such endorsements as may be required to negotiate the same to Agent, or
in  immediately  available  funds,  as applicable, for the account of all of the
Lenders and for application to the Obligations in accordance with the applicable
provisions  of this Agreement, or (2) purchase, without recourse or warranty, an
undivided  interest  and  participation  in  the  Obligations  owed to the other
Lenders  so  that such excess payment received shall be applied ratably as among
the Lenders in accordance with their Pro Rata Shares; provided, however, that if
all  or  part  of  such  excess  payment  received  by  the  purchasing party is
thereafter  recovered  from  it,  those  purchases  of  participations  shall be
rescinded  in whole or in part, as applicable, and the applicable portion of the
purchase  price  paid  therefor  shall be returned to such purchasing party, but
without  interest except to the extent that such purchasing party is required to
pay  interest  in  connection  with  the  recovery  of  the  excess  payment.

16.14    AGENCY  FOR PERFECTION.  Agent hereby appoints each other Lender as its
         ----------------------
agent  (and  each  Lender  hereby  accepts  such appointment) for the purpose of
perfecting  the  Agent's  Liens in assets which, in accordance with Article 9 of
the  Code  can  be  perfected  only  by  possession.  Should  any  Lender obtain
possession  of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
     in  accordance  with  Agent's  instructions.

16.15    PAYMENTS  BY AGENT TO THE LENDERS.  All payments to be made by Agent to
         ---------------------------------
the  Lenders  shall  be  made  by  bank  wire  transfer  or internal transfer of
immediately  available funds pursuant to such wire transfer instructions as each
party  may  designate  for itself by written notice to Agent.  Concurrently with
each  such  payment,  Agent  shall identify whether such payment (or any portion
thereof)  represents  principal,  premium,  or  interest  of  the  Obligations.

                                     -91-
<PAGE>

16.16    CONCERNING  THE  COLLATERAL AND RELATED LOAN DOCUMENTS.  Each member of
         ------------------------------------------------------
the  Lender  Group authorizes and directs Agent to enter into this Agreement and
the  other  Loan  Documents  relating  to the Collateral, for the benefit of the
Lender  Group.  Each  member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating  to  the  Collateral  and the exercise by Agent of its powers set forth
therein  or  herein,  together  with  such  other  powers  that  are  reasonably
incidental  thereto,  shall  be  binding  upon  all  of  the  Lenders.

16.17    FIELD  AUDITS  AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS BY
         -----------------------------------------------------------------------
LENDERS;  OTHER REPORTS AND INFORMATION.  By becoming a party to this Agreement,
 --------------------------------------
each  Lender:

(a)     is  deemed  to  have  requested that Agent furnish such Lender, promptly
after  it  becomes  available,  a copy of each field audit or examination report
(each a "REPORT" and collectively, "REPORTS") prepared by Agent, and Agent shall
so  furnish  each  Lender  with  such  Reports,

(b)     expressly  agrees  and  acknowledges  that  Agent  does not (i) make any
representation  or warranty as to the accuracy of any Report, and (ii) shall not
be  liable  for  any  information  contained  in  any  Report,

(c)     expressly agrees and acknowledges that the Reports are not comprehensive
audits  or  examinations,  that  Agent  or  other  party performing any audit or
examination  will  inspect only specific information regarding Borrower and will
rely  significantly  upon the Books, as well as on representations of Borrower's
personnel,

(d)     agrees  to  keep  all Reports and other material, non-public information
regarding  Borrower  and  its  Subsidiaries  and  their  operations, assets, and
existing  and  contemplated  business  plans  in a confidential manner; it being
understood  and  agreed  by  Borrower  that  in  any  event such Lender may make
disclosures  (a) to counsel for and other advisors, accountants, and auditors to
such  Lender,  (b)  reasonably  required  by  any  bona fide potential or actual
Assignee or Participant in connection with any contemplated or actual assignment
or  transfer  by such Lender of an interest herein or any participation interest
in  such Lender's rights hereunder, (c) of information that has become public by
disclosures  made  by Persons other than such Lender, its Affiliates, assignees,
transferees,  or  Participants,  or  (d)  as required or requested by any court,
governmental  or  administrative agency, pursuant to any subpoena or other legal
process,  or by any law, statute, regulation, or court order; provided, however,
                                                              --------  -------
that,  unless prohibited by applicable law, statute, regulation, or court order,
such  Lender  shall notify Borrower of any request by any court, governmental or
administrative  agency,  or  pursuant to any subpoena or other legal process for
disclosure of any such non-public material information concurrent with, or where
practicable,  prior  to  the  disclosure  thereof,  and

(e)     without  limiting  the generality of any other indemnification provision
contained  in  this  Agreement,  agrees:  (i)  to  hold Agent and any such other
Lender  preparing  a Report harmless from any action the indemnifying Lender may
take  or conclusion the indemnifying Lender may reach or draw from any Report in
connection  with  any loans or other credit accommodations that the indemnifying
Lender  has  made  or  may  make  to  Borrower,  or  the  indemnifying  Lender's
participation  in,  or the indemnifying Lender's purchase of, a loan or loans of
Borrower; and (ii) to pay and protect, and indemnify, defend and hold Agent, and
any  such other Lender preparing a Report harmless from and against, the claims,
actions,  proceedings,  damages,  costs, expenses, and other amounts (including,
attorneys  fees and costs) incurred by Agent and any such other Lender preparing
a  Report as the direct or indirect result of any third parties who might obtain
all  or  part  of  any  Report  through  the  indemnifying  Lender.

                                     -92-
<PAGE>

In  addition  to the foregoing:  (x) any Lender may from time to time request of
Agent  in  writing  that  Agent  provide  to such Lender a copy of any report or
document  provided  by  Borrower  to  Agent  that has not been contemporaneously
provided  by  Borrower  to such Lender, and, upon receipt of such request, Agent
shall  provide  a  copy  of same to such Lender, (y) to the extent that Agent is
entitled,  under  any  provision  of  the  Loan Documents, to request additional
reports  or  information  from  Borrower,  any  Lender  may,  from time to time,
reasonably  request  Agent  to exercise such right as specified in such Lender's
notice  to  Agent,  whereupon  Agent  promptly  shall  request  of  Borrower the
additional reports or information reasonably specified by such Lender, and, upon
receipt  thereof  from  Borrower, Agent promptly shall provide a copy of same to
such  Lender,  and  (z)  any  time  that  Agent  renders to Borrower a statement
regarding  the  Loan  Account, Agent shall send a copy of such statement to each
Lender.

16.18    SEVERAL OBLIGATIONS; NO LIABILITY.  Notwithstanding that certain of the
         ---------------------------------
     Loan  Documents  now or hereafter may have been or will be executed only by
or  in  favor  of  Agent  in its capacity as such, and not by or in favor of the
Lenders,  any  and  all  obligations  on  the part of Agent (if any) to make any
credit  available  hereunder  shall  constitute  the  several  (and  not  joint)
obligations  of  the  respective  Lenders on a ratable basis, according to their
respective  Commitments,  to  make  an  amount  of such credit not to exceed, in
principal  amount,  at  any one time outstanding, the amount of their respective
Commitments.  Nothing contained herein shall confer upon any Lender any interest
in,  or subject any Lender to any liability for, or in respect of, the business,
assets,  profits, losses, or liabilities of any other Lender.  Each Lender shall
be  solely responsible for notifying its Participants of any matters relating to
the  Loan Documents to the extent any such notice may be required, and no Lender
shall  have  any  obligation, duty, or liability to any Participant of any other
Lender.  Except as provided in SECTION 16.7, no member of the Lender Group shall
                               ------------
have  any  liability  for  the acts of any other member of the Lender Group.  No
Lender  shall  be responsible to Borrower or any other Person for any failure by
any  other Lender to fulfill its obligations to make credit available hereunder,
nor to advance for it or on its behalf in connection with its Commitment, nor to
take  any  other  action  on  its  behalf  hereunder  or  in connection with the
financing  contemplated  herein.

16.19    BANK  PRODUCT  PROVIDERS.  Each Bank Product Provider shall be deemed a
         ------------------------
party hereto for purposes of any reference in a Loan Document to the parties for
whom  Agent  is  acting;  it  being  understood  and  agreed that the rights and
benefits  of  such  Bank  Product  Provider  under  the  Loan  Documents consist
exclusively  of  such  Bank  Product  Provider's  right to share in payments and
collections  out of the Collateral as more fully set forth herein. In connection
with  any such distribution of payments and collections, Agent shall be entitled
to  assume  no  amounts  are  due  to any Bank Product Provider unless such Bank
Product  Provider  has  notified  Agent  in  writing  of  the amount of any such
liability  owed  to  it  prior  to  such  distribution.

16.20    LEGAL  REPRESENTATION  OF  AGENT.  In  connection with the negotiation,
         --------------------------------
drafting,  and  execution  of this Agreement and the other Loan Documents, or in
connection  with  future  legal  representation relating to loan administration,
amendments,  modifications,  waivers,  or  enforcement of remedies, Munsch Hardt
Kopf & Harr, P.C. ("MUNSCH HARDT") only has represented and only shall represent
Foothill  in  its  capacity  as Agent and as a Lender.  Each other Lender hereby
acknowledges that Munsch Hardt does not represent it in connection with any such
matters.

17.     GENERAL  PROVISIONS.

17.1    EFFECTIVENESS.  This  Agreement  shall  be  binding and deemed effective
        -------------
when  executed  by  Borrower, Agent, and each Lender whose signature is provided
for  on  the  signature  pages  hereof.

                                     -93-
<PAGE>

17.2    SECTION  HEADINGS.  Headings  and numbers have been set forth herein for
        -----------------
convenience  only.  Unless  the contrary is compelled by the context, everything
contained  in  each  Section  applies  equally  to  this  entire  Agreement.

17.3    INTERPRETATION.  Neither this Agreement nor any uncertainty or ambiguity
        --------------
herein  shall  be  construed  or  resolved against the Lender Group or Borrower,
whether  under  any  rule  of  construction or otherwise.  On the contrary, this
Agreement  has  been  reviewed  by  all  parties  and  shall  be  construed  and
interpreted  according  to  the  ordinary  meaning  of  the  words used so as to
accomplish  fairly  the  purposes  and  intentions  of  all  parties  hereto.

17.4    SEVERABILITY  OF  PROVISIONS.  Each provision of this Agreement shall be
        ----------------------------
severable  from  every  other  provision  of  this  Agreement for the purpose of
determining  the  legal  enforceability  of  any  specific  provision.

17.5    AMENDMENTS  IN WRITING.  This Agreement only can be amended by a writing
        ----------------------
in  accordance  with  SECTION  15.1.
                      -------------

17.6    COUNTERPARTS;  TELEFACSIMILE  EXECUTION.  This Agreement may be executed
        ---------------------------------------
in any number of counterparts and by different parties on separate counterparts,
each  of  which, when executed and delivered, shall be deemed to be an original,
and  all  of  which,  when taken together, shall constitute but one and the same
Agreement.  Delivery  of  an  executed  counterpart  of  this  Agreement  by
telefacsimile  shall be equally as effective as delivery of an original executed
counterpart  of this Agreement.  Any party delivering an executed counterpart of
this  Agreement  by  telefacsimile  also  shall  deliver  an  original  executed
counterpart  of  this  Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this  Agreement.  The  foregoing shall apply to each other Loan Document mutatis
mutandis.

17.7    REVIVAL  AND REINSTATEMENT OF OBLIGATIONS.  If the incurrence or payment
        -----------------------------------------
of  the  Obligations  by  Borrower  or  the  transfer to the Lender Group of any
property  should  for any reason subsequently be declared to be void or voidable
under  any  state  or  federal  law  relating  to  creditors'  rights, including
provisions  of  the  Bankruptcy  Code  relating  to  fraudulent  conveyances,
preferences,  or other voidable or recoverable payments of money or transfers of
property  (collectively,  a  "VOIDABLE  TRANSFER"),  and  if the Lender Group is
required  to  repay or restore, in whole or in part, any such Voidable Transfer,
or  elects  to  do so upon the reasonable advice of its counsel, then, as to any
such  Voidable Transfer, or the amount thereof that the Lender Group is required
or  elects  to  repay  or restore, and as to all reasonable costs, expenses, and
attorneys  fees  of  the Lender Group related thereto, the liability of Borrower
automatically  shall  be  revived,  reinstated,  and restored and shall exist as
though  such  Voidable  Transfer  had  never  been  made.

17.8    CONFIDENTIALITY.  Agent  and  Lenders each individually (and not jointly
        ---------------
or  jointly and severally) agree that material, non-public information regarding
Borrower  and  its  Subsidiaries,  their  operations,  assets,  and existing and
contemplated  business  plans  shall  be  treated  by Agent and the Lenders in a
confidential  manner,  and  shall  not  be disclosed by Agent and the Lenders to
Persons who are not parties to this Agreement, except:  (a) to attorneys for and
other  advisors,  accountants,  auditors,  and  consultants to any member of the
Lender  Group,  (b)  to  Subsidiaries and Affiliates of any member of the Lender
Group  (including the Bank Product Providers), provided that any such Subsidiary
or  Affiliate shall have agreed to receive such information hereunder subject to
the  terms of this SECTION 17.8, (c) as may be required by statute, decision, or
                   ------------
judicial  or  administrative order, rule, or regulation, (d) as may be agreed to
in  advance  by  Borrower or its Subsidiaries or as requested or required by any
Governmental  Authority  pursuant to any subpoena or other legal process, (e) as
to  any  such  information  that is or becomes generally available to the public
(other  than  as a result of prohibited disclosure by Agent or the Lenders), (f)

                                     -94-
<PAGE>

in  connection  with  any  assignment, prospective assignment, sale, prospective
sale,  participation  or  prospective  participations,  or pledge or prospective
pledge  of  any  Lender's  interest under this Agreement, provided that any such
assignee,  prospective  assignee, purchaser, prospective purchaser, participant,
prospective  participant,  pledgee,  or prospective pledgee shall have agreed in
writing  to  receive  such  information  hereunder  subject to the terms of this
Section, and (g) in connection with any litigation or other adversary proceeding
involving  parties hereto which such litigation or adversary proceeding involves
claims  related  to the rights or duties of such parties under this Agreement or
the other Loan Documents.  The provisions of this SECTION 17.8 shall survive for
                                                  ------------
2  years  after  the  payment  in  full  of  the  Obligations.

17.9    INTEGRATION.  This  Agreement,  together  with the other Loan Documents,
        -----------
reflects  the  entire  understanding  of  the  parties  with  respect  to  the
transactions  contemplated  hereby and shall not be contradicted or qualified by
any  other  agreement,  oral  or  written,  before  the  date  hereof.
17.10    LICENSE  TO GATHERING SYSTEMS.  In the event that the Gathering Systems
         -----------------------------
are  foreclosed  upon  pursuant  to  the Mortgages, Agent, on behalf of Lenders,
hereby  grants  to  each  Pledging  Subsidiary  a non-royalty bearing license to
transport  Hydrocarbons  produced  from  Wells not included within the Mortgaged
Properties  under  any  then  existing agreement regarding transport and for the
life  of  such transportation agreement or in the absence of a written agreement
consistent  with  the past practices and customs of the parties in the industry.

17.11    AGENCY  OF  THE  BORROWER  FOR  EACH  PLEDGING SUBSIDIARY.  Each of the
         ---------------------------------------------------------
Pledging  Subsidiaries  irrevocably  appoints  the Borrower as its agent for all
purposes relevant to this Agreement, including the giving and receipt of notices
and  execution  and  delivery  of  all  documents, instruments, and certificates
contemplated  herein  (including,  without limitation, execution and delivery to
the Agent of Reserve Reports and all modifications hereto).  Any acknowledgment,
consent,  direction,  certification,  or  other  action which might otherwise be
valid  or effective only if given or taken by all or any of the Borrower and the
Pledging Subsidiaries or acting singly, shall be valid and effective if given or
taken  only  by  the  Borrower,  whether or not any of the Pledging Subsidiaries
joins therein, and the Agent and the Lenders shall have no duty or obligation to
make  further  inquiry  with respect to the authority of the Borrower under this
SECTION  17.11,  provided  that  nothing  in  this SECTION 17.11 shall limit the
--------------                                     -------------
effectiveness  of,  or  the right of the Agent and the Lenders to rely upon, any
notice,  document,  instrument, certificate, acknowledgment, consent, direction,
certification,  or other action delivered by any Pledging Subsidiary pursuant to
this  Agreement.

17.12    DEVELOPMENT  PROJECTS.  Nothing  contained  in the Loan Documents shall
         ---------------------
prohibit any Pledging Subsidiary from developing any Oil and Gas Properties that
do  not  constitute  Collateral.

17.13    RESERVE ARBITRATION.  In the event of any dispute as to the amount of a
         -------------------
reserve  established  by  Agent  under  SECTION  2.1(b) clauses (i) through (vi)
                                        ---------------
inclusive,  Agent  and Borrower shall use good faith efforts to resolve any such
dispute  through  full  and  meaningful  discussions,  which  shall  include one
face-to-face  meeting  and  a  written exchange of positions.  In the event this
written  exchange  indicates  that  the  dispute cannot be resolved, the dispute
shall  be  referred  to  arbitration  in  the  city  of  Atlanta, Georgia by one
arbitrator  (selected  by  the  American  Arbitration  Association  but  having
extensive  work  experience  in establishing such type of reserves under oil and
gas  secured  credit  facilities),  in  accordance with the provisions set forth
herein  and  the  Commercial  Arbitration  Rules  of  the  American  Arbitration
Association  then in effect.  The decision of the arbitrator shall establish the
amount  of  such  reserve.


[Signature  page  to  follow.]

                                     -95-
<PAGE>

     IN  WITNESS  WHEREOF,  the  parties hereto have caused this Agreement to be
executed  and  delivered  as  of  the  date  first  above  written.

                                       ENERGY  CORPORATION  OF  AMERICA,
                                       a  West  Virginia  corporation


                                       By:         /s/ Michael S. Fletcher
                                           ----------------------------------
                                       Name:    Michael S. Fletcher
                                       Title:   Chief Financial Officer


                                        WELLS  FARGO  FOOTHILL,  INC.,
                                        a  California  corporation,
                                        as  Agent  and  as  a  Lender


                                       By:         /s/ Jeffrey Stanek
                                           ----------------------------------
                                       Name:    Jeffrey Stanek
                                       Title:   Senior Vice President


     For  purposes  of  acknowledging  agreement  to  the terms, provisions, and
conditions  of  this  Agreement  (including,  without  limitation,  the terms of
SECTION  17.11,  Eastern  American  and  A&W  are  executing  this  Agreement.
--------------

                                       EASTERN AMERICA ENERGY CORPORATION
                                       a  West  Virginia  corporation


                                       By:         /s/ Donald C. Supcoe
                                           ----------------------------------
                                       Name:    Donald C. Supcoe
                                       Title:   President


                                       ALLEGHENY & WESTERN ENERGY CORPORATION
                                       a  West  Virginia  corporation


                                       By:         /s/ Donald C. Supcoe
                                           ----------------------------------
                                       Name:    Donald C. Supcoe
                                       Title:   Vice President

<PAGE>


                                   EXHIBIT A-1
                                   -----------

FORM  OF  ASSIGNMENT  AND  ACCEPTANCE  AGREEMENT

     This  ASSIGNMENT  AND  ACCEPTANCE  AGREEMENT  ("ASSIGNMENT  AGREEMENT")  is
                                                     ---------------------
entered  into  as of                between                     ("ASSIGNOR") and
                     --------------         -------------------   --------
("ASSIGNEE").  Reference  is made to the Agreement described in ITEM 2 of ANNEX
  --------                                                      ------    -----
I  annexed  hereto  (the "CREDIT AGREEMENT").  Capitalized terms used herein and
-                         ----------------
not  otherwise  defined  shall  have the meanings ascribed to them in the Credit
Agreement.

1.     In  accordance  with the terms and conditions of SECTION 14 of the Credit
                                                        ----------
Agreement,  the  Assignor  hereby  sells  and  assigns  to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the  Assignor's  rights  and obligations under the Loan Documents as of the date
hereof  with  respect  to  the Obligations owing to the Assignor, and Assignor's
portion  of the Total Commitments and the Revolver Commitments, all as specified
in  ITEM  4.B  and  ITEM  4.C  of ANNEX I.  After giving effect to such sale and
    ---------       ---------     -------
assignments,  the  Assignee's  portion  of  the  Total  Commitments and Revolver
Commitments will be as set forth in ITEM 4.B of ANNEX I.  After giving effect to
such  sale  and  assignment,  the  Assignor's  amount  and  portion of the Total
Commitments  and  Revolver Commitments will be as set forth in ITEM 4.D and ITEM
                                                               --------     ----
4.E  of  ANNEX  I.
---      --------

2.     The  Assignor  (a)  represents  and  warrants  that  it  is the legal and
beneficial  owner  of  the interest being assigned by it hereunder and that such
interest  is free and clear of any adverse claim; (b) 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, enforceability, genuineness, sufficiency
or  value  of  the  Loan Documents or any other instrument or document furnished
pursuant  thereto;  and  (c)  makes no representation or warranty and assumes no
responsibility  with  respect  to  the  financial  condition  of Borrower or the
performance  or  observance by Borrower of any of its obligations under the Loan
Documents  or  any  other  instrument  or  document  furnished pursuant thereto.

3.     The  Assignee  (a)  confirms  that  it  has received copies of the Credit
Agreement  and  the  other Loan Documents, together with copies of the financial
statements  referred  to  therein and such other documents and information as it
has  deemed  appropriate  to  make its own credit analysis and decision to enter
into  this  Assignment  Agreement;  (b)  agrees  that it will, independently and
without reliance, as it shall deem appropriate at the time, continue to make its
own  credit  decisions  in taking or not taking action under the Loan Documents;
(c)  confirms  that  it is eligible as an assignee under the terms of the Credit
Agreement; (d) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers under the Loan Documents as are delegated
to  Agent  by  the  terms  thereof,  together with such powers as are reasonably
incidental  thereto;  (e)  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  Lender[;  and (f) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the  Assignee's  status for purposes of determining exemption from United States
withholding  taxes with respect to all payments to be made to the Assignee under
the  Credit  Agreement or such other documents as are necessary to indicate that
all  such  payments are subject to such rates at a rate reduced by an applicable
tax  treaty.]

4.     Following  the execution of this Assignment Agreement by the Assignor and
Assignee, it will be delivered by the Assignor to the Agent for recording by the
Agent.  The  effective  date of this Assignment (the "SETTLEMENT DATE") shall be
the  later  of  (a)  the  date  of  the execution hereof by the Assignor and the
Assignee,  the  payment  by  Assignor  or Assignee to Agent for Agent's sole and
separate  account  a  processing fee in the amount of $5,000, and the receipt of
any required consent of the Agent, and (b) the date specified in ITEM 5 of ANNEX
                                                                 ------    -----
I.
--

EXHIBIT A-1 - PAGE 1

<PAGE>

5.     Upon  recording  by the Agent, as of the Settlement Date (a) the Assignee
shall  be  a  party  to  the Credit Agreement and, to the extent of the interest
assigned  pursuant to this Assignment Agreement, have the rights and obligations
of  a Lender thereunder and under the other Loan Documents, and (b) the Assignor
shall,  to  the  extent  of  the  interest  assigned pursuant to this Assignment
Agreement,  relinquish its rights and be released from its obligations under the
Credit  Agreement  and  the  other  Loan  Documents.

6.     Upon  recording  by  the  Agent,  from and after the Settlement Date, the
Agent  shall  make  all  payments  under the Credit Agreement and the other Loan
Documents  in  respect  of  the  interest  assigned  hereby  (including, without
limitation,  all  payments  of  principal,  interest  and  commitment  fees  (if
applicable)  with  respect  thereto) to the Assignee.  Upon the Settlement Date,
the  Assignee shall pay to the Assignor the Assigned Share (as set forth in ITEM
                                                                            ----
4.B  of  ANNEX  I)  of  the  principal amount of any outstanding loans under the
---      --------
Credit  Agreement and the other Loan Documents.  The Assignor and Assignee shall
make  all appropriate adjustments in payments under the Credit Agreement and the
other  Loan  Documents for periods prior to the Settlement Date directly between
themselves  on  the  Settlement  Date.

7.     THIS  ASSIGNMENT  AGREEMENT  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED AND
ENFORCED  IN  ACCORDANCE  WITH,  THE  LAWS  OF  THE  STATE  OF                 .
                                                              -----------------


[Remainder  of  page  left  intentionally  blank.]


EXHIBIT A-1 - PAGE 2

<PAGE>

     IN  WITNESS  WHEREOF,  the  parties  hereto  have  caused  this  Assignment
Agreement  and  ANNEX  I  hereto  to  be  executed  by their respective officers
                --------
thereunto  duly  authorized,  as  of  the  first  date  above  written.

[NAME  OF  ASSIGNOR]

as  Assignor


By
  -------------------------

Title:
       --------------------



[NAME  OF  ASSIGNEE]

as  Assignee


By
  -------------------------

Title:
       --------------------



ACCEPTED  THIS        DAY
               ------
OF
  -----------------------
WELLS  FARGO  FOOTHILL,  INC.
AS  AGENT


By
  -------------------------

Title:
       --------------------


EXHIBIT A-1 - PAGE 3

<PAGE>

ANNEX  FOR  ASSIGNMENT  AND  ACCEPTANCE  AGREEMENT

ANNEX  I

1.     Borrower:
2.     Name  and  Date  of  Credit  Agreement:

Amended  and Restated Credit Agreement dated as of May __, 2004, among Borrower,
the  lenders signatory thereto as the Lenders, and Wells Fargo Foothill, Inc., a
California  corporation,  as  the  arranger  and  administrative  agent  for the
Lenders.

3.     Date  of  Assignment  Agreement:
                                                                       ---------

4.     Amounts:

       a.  Assignor's Total Commitment                                $
                                                                       ---------
           Assignor's Revolver Commitment                             $
                                                                       ---------
           Assignor's Term Loan Commitment                            $
                                                                       ---------
       b.  Assigned Share of Total Commitment                                  %
                                                                      ---------
           Assigned Share of Revolver Commitment                               %
                                                                      ---------
           Assigned Share of Term Loan Commitment                              %
                                                                      ---------
       c.  Assigned Amount of Total Commitment                        $
                                                                       ---------
           Assigned Amount of Revolver Commitment                     $
                                                                       ---------
           Assigned Amount of Term Loan Commitment                    $
                                                                       ---------
       d.  Resulting Amount of Assignor's Total Commitment after
           giving effect to the sale and Assignment to Assignee       $
                                                                       ---------
           Resulting Amount of Revolver Commitment                    $
                                                                       ---------
           Resulting Amount of Term Loan Commitment                   $
                                                                       ---------
       e.  Assignor's Resulting Share of Total Commitment after
           giving effect to the Assignment to Assignee                         %
                                                                      ---------
           Assignor's Resulting Share of Revolver
           Commitment                                                          %
                                                                      ---------
           Assignor's Resulting Share of Term Loan
           Commitment                                                          %
                                                                      ---------

EXHIBIT A-1 - PAGE 4

<PAGE>

5.     Settlement Date
                                                                      ---------
6.     Notice and Payment Instructions, etc.

       Assignee:                             Assignor:

7.     Agreed and Accepted:
       [ASSIGNOR]                            [ASSIGNEE]

       BY:                                   By:
       Title:                                Title:

Accepted:
WELLS FARGO FOOTHILL, INC., as Agent


By:
Title:


EXHIBIT A-1 - PAGE 5

<PAGE>

                                   EXHIBIT C-1
                                   -----------
                        (Form of Compliance Certificate)

                           [on Borrower's letterhead]

To:     Wells  Fargo  Foothill,  Inc.,  as  Agent
        under  the  below-referenced  Credit  Agreement
        400  Northpark  Town  Center
        1000  Abernathy  Road,  Suite  1450
        Atlanta,  Georgia   30328
        Attn.:  Business  Finance  Division  Manager

     Re:     Compliance  Certificate  dated

Ladies  and  Gentlemen:

     Reference  is  made  to  that certain Amended and Restated Credit Agreement
dated  as  of  May   , 2004 (the "CREDIT AGREEMENT") among Energy Corporation of
                  ---            ----------------
America,  a  West  Virginia  corporation (the "BORROWER"), the lender or lenders
                                               --------
signatory  thereto (the "LENDERS"), and Wells Fargo Foothill, Inc., a California
                         -------
corporation, as the arranger and administrative agent for the Lenders ("AGENT").
                                                                        -----
Capitalized  terms  used  in  this  Compliance Certificate have the meanings set
forth  in  the  Credit  Agreement  unless  specifically  defined  herein.

Pursuant  to SECTION 6.3 of the Credit Agreement, the undersigned officer of the
             -----------
Borrower  hereby  certifies  that:

1.     The  financial  information  of  the  Borrower  furnished  in  SCHEDULE 1
                                                                      ----------
attached  hereto, has been prepared in accordance with GAAP (except for year end
adjustments  and  the  lack  of  footnotes,  in the case of financial statements
delivered  under  SECTION 6.3(a) of the Credit Agreement) and fairly presents in
                  --------------
all  material  respects  the  financial  condition  of  the  Borrower.

2.     Such officer has reviewed the terms of the Credit Agreement and has made,
or caused to be made under his/her supervision, a review in reasonable detail of
the  transactions  and  condition  of  the Borrower during the accounting period
covered  by  the  financial  statements delivered pursuant to SECTION 6.3 of the
                                                              -----------
Credit  Agreement.

3.     Such review has not disclosed the existence on and as of the date hereof,
and  the  undersigned  does  not  have knowledge of the existence as of the date
hereof,  of  any  event  or  condition  that  constitutes  a Default or Event of
Default,  except  for  such  conditions  or events listed on SCHEDULE 2 attached
                                                             ----------
hereto,  specifying  the  nature and period of existence thereof and what action
the  Borrower  has  taken,  is taking, or proposes to take with respect thereto.

4.     The  representations  and  warranties  of  the  Borrower contained in the
Credit  Agreement  and  the  other  Loan  Documents  are true and correct in all
material  respects  on and as of the date of such certificate, as though made on
and  as  of  such  date  (except  to  the  extent  that such representations and

EXHIBIT C-1 - PAGE 1

<PAGE>


warranties  relate  solely to an earlier date).  Without limiting the generality
of  the foregoing, the Borrower is in compliance with the covenants contained in
SECTION  7.20  of  the  Credit  Agreement  as demonstrated on SCHEDULE 2 hereof.
-------------                                                 ----------
IN  WITNESS  WHEREOF, this Compliance Certificate is executed by the undersigned
this        day  of               ,  200    .
     ------        ---------------       ---

                                  ENERGY  CORPORATION  OF  AMERICA,
                                  a  West  Virginia  corporation,


                                  By:
                                        ---------------------------------
                                  Name:
                                        ---------------------------------
                                  Title:
                                        ---------------------------------


EXHIBIT C-1 - PAGE 2

<PAGE>

                                   SCHEDULE  1
                                   -----------


EXHIBIT C-1 - SCHEDULE 1

<PAGE>

                                   SCHEDULE  2
                                   -----------

1.     MINIMUM  EBITDAX.  Borrower's  EBITDAX  (on  a  consolidated basis), on a
       ----------------
rolling  four-quarter basis ending _________, ________ is $______________, which
amount  [IS/IS  NOT]  greater  than  or equal to the amount set forth in SECTION
                                                                         -------
7.21(A)  of  the  Credit  Agreement  for  the  corresponding  period.
    ---

2.     BOOK NET WORTH.  Borrower's Book Net Worth (on a consolidated basis), for
       --------------
the  quarter  ending _________, ________ is $______________, which amount [IS/IS
NOT]  greater  than  or  equal  to the amount required in SECTION 7.20(A) of the
                                                          ---------------
Credit  Agreement  for  the  corresponding  period.

3.     MAXIMUM CAPITAL EXPENDITURES.  If applicable under SECTION 7.20(B) of the
       ----------------------------                       ---------------
Credit Agreement, the aggregate amount of capital expenditures made or committed
to be made to date in the current fiscal year is $________________, which amount
[IS/IS NOT] in excess of 120% of Projections set forth in SECTION 7.20(B) of the
                                                          ---------------
Credit  Agreement  for  the  corresponding  period.


EXHIBIT C-1 - SCHEDULE 2

<PAGE>



                                   EXHIBIT I-1
                                   -----------
                   (Form of Indenture Compliance Certificate)

                           [on Borrower's letterhead]

To:     Wells  Fargo  Foothill,  Inc.,  as  Agent
        under  the  below-referenced  Credit  Agreement
        400  Northpark  Town  Center
        1000  Abernathy  Road,  Suite  1450
        Atlanta,  Georgia  30328
        Attn.:  Business  Finance  Division  Manager
     Re:     Indenture  Compliance  Certificate  dated

Ladies  and  Gentlemen:

     Reference  is  made  to  that certain Amended and Restated Credit Agreement
dated  as  of  May __, 2004 (the "CREDIT AGREEMENT") among Energy Corporation of
                                  ----------------
America,  a  West  Virginia  corporation (the "BORROWER"), the lender or lenders
                                               --------
signatory  thereto (the "LENDERS"), and Wells Fargo Foothill, Inc., a California
                         -------
corporation, as the arranger and administrative agent for the Lenders ("AGENT").
                                                                        -----
Capitalized  terms  used  in  this  Compliance Certificate have the meanings set
forth  in  the  Credit  Agreement  unless  specifically  defined  herein.

Pursuant  to SECTION 3.1 of the Credit Agreement, the undersigned officer of the
             -----------
Borrower  hereby  certifies  that:

1.     Borrower  has  requested a Term Loan in the amount of $_________________.

2.     After giving effect to the requested Term Loan the outstanding balance of
the  Obligations  is  $__________________________.

3.     After  giving  effect  to the requested Term Loan, no Default or Event of
Default  under  the  Indenture  has  occurred  and  is  continuing.

4.     The  Fixed  Charge  Coverage  Ratio  (as  defined  in  the Indenture) for
Borrower's  most recently ended four full fiscal quarters is ____________, which
amount  [IS/IS  NOT]  greater  than  or  equal  to  2.5  to  1.0.

EXHIBIT I-1 - PAGE 1

<PAGE>


     IN  WITNESS  WHEREOF,  this Indenture Compliance Certificate is executed by
the  undersigned  this  _____  day  of  _______________,  200__.

                                 ENERGY  CORPORATION  OF  AMERICA,
                                 a  West  Virginia  corporation,


                                  By:
                                        ---------------------------------
                                  Name:
                                        ---------------------------------
                                  Title:
                                        ---------------------------------

EXHIBIT I-1 - PAGE 2

<PAGE>


                                   EXHIBIT L-1
                                   -----------


                              FORM OF LIBOR NOTICE


Wells  Fargo  Foothill,  Inc.,  as  Agent
under  the  below  referenced  Credit  Agreement
2450  Colorado  Avenue
Suite  3000  West
Santa  Monica,  California  90404
Attention:

Ladies  and  Gentlemen:

     Reference  is  made  to  that certain Amended and Restated Credit Agreement
dated  as  of  May __, 2004 (the "CREDIT AGREEMENT") among Energy Corporation of
                                  ----------------
America,  a  West  Virginia  corporation (the "BORROWER"), the lender or lenders
                                               --------
signatory  thereto (the "LENDERS"), and Wells Fargo Foothill, Inc., a California
                         -------
corporation, as the arranger and administrative agent for the Lenders ("AGENT").
                                                                        -----
Capitalized  terms used in this LIBOR Notice  have the meanings set forth in the
Credit  Agreement  unless  specifically  defined  herein.

     This  LIBOR  Notice represents Borrower's request to elect the LIBOR Option
with  respect  to  outstanding  Advances  in  the amount of $               (the
"LIBOR  Rate  Advance")[, and is a written confirmation of the telephonic notice
     ----------------
of  such  election  given  to  Agent].

     Such  LIBOR  Rate  Advance  will  have  an Interest Period of 1, 3, 6 or 12
month(s)  commencing  on               .

This  LIBOR  Notice  further  confirms  Borrower's  acceptance,  for purposes of
determining  the  rate  of  interest  based  on  the LIBOR Rate under the Credit
Agreement,  of  the  LIBOR  Rate as determined pursuant to the Credit Agreement.


EXHIBIT L-1 - PAGE 1

<PAGE>

Borrower  represents  and  warrants  that  (i)  as  of  the  date  hereof,  each
representation  or  warranty  contained in or pursuant to any Loan Document, any
agreement,  instrument,  certificate, document or other writing furnished at any
time under or in connection with any Loan Document, and as of the effective date
of  any  advance, continuation or conversion requested above is true and correct
in  all  material  respects (except to the extent any representation or warranty
expressly related to an earlier date), (ii) each of the covenants and agreements
contained in any Loan Document have been performed (to the extent required to be
performed  on  or before the date hereof or each such effective date), and (iii)
no  Default  or  Event  of  Default  has  occurred and is continuing on the date
hereof,  nor  will  any  thereof occur after giving effect to the request above.

                                    Dated:


                                  ENERGY  CORPORATION  OF  AMERICA,
                                  a  West  Virginia  corporation,


                                  By:
                                        ---------------------------------
                                  Name:
                                        ---------------------------------
                                  Title:
                                        ---------------------------------


                                  Acknowledged  by:
                                  WELLS  FARGO  FOOTHILL,  INC.
                                  as  Agent


                                  By:
                                        ---------------------------------
                                  Name:
                                        ---------------------------------
                                  Title:
                                        ---------------------------------


EXHIBIT L-1 - PAGE 2

<PAGE>

                                  SCHEDULE C-1
                                  ------------

                                   COMMITMENTS

<TABLE>
<CAPTION>

<S>                         <C>                   <C>                    <C>

LENDER . . . . . . . . . .  REVOLVER COMMITMENT   TERM LOAN COMMITMENT   TOTAL COMMITMENT
==========================  ====================  =====================  =================
Wells Fargo Foothill, Inc.  $        ___________  $         ___________  $      __________
==========================  ====================  =====================  =================




All Lenders. . . . . . . .  $       ____________  $          __________  $     ___________
==========================  ====================  =====================  =================
</TABLE>


EXHIBIT C-1 - PAGE 1

<PAGE>

                                  SCHEDULE D-1
                                  ------------

                               DESIGNATED ACCOUNT

Account number _____ of Borrower maintained with the Designated Account Bank, or
such  other  deposit account of Borrower (located within the United States) that
has  been  designated  as  such,  in  writing  by,  Borrower  to  Agent.

"Designated  Account  Bank"  means  Harris  Bank

EXHIBIT D-1 - Page Solo

<PAGE>

                                  SCHEDULE L-1
                                  ------------

                                 AGENT'S ACCOUNT

An  account  at a bank designated by Agent from time to time as the account into
which  Borrower  shall  make  all payments to Agent under this Agreement and the
other  Loan Documents; unless and until Agent notifies Borrower to the contrary.
Agent's  Account  shall  be  that certain deposit account bearing account number
323-266193  and maintained by Lender with JPMorgan Chase Bank, 4 New York Plaza,
15th  Floor,  New  York,  New  York  10004,  ABA  #021000021.


SCHEDULE L-1 - Page 1

<PAGE>

                                  SCHEDULE P-1
                                  ------------

                                  PARTNERSHIPS

Arcadia  Drilling  Fund,  a  limited  partnership
-------------------------------------------------
Arcadia  Drilling  Fund  No.  2,  a  limited  partnership
---------------------------------------------------------
Arcadia  Drilling  Fund  No.  3,  a  limited  partnership
---------------------------------------------------------
Arcadia  Drilling  Fund  No.  4,  a  general  partnership
---------------------------------------------------------
Arcadia  Drilling  Fund  No.  7,  a  general  partnership
---------------------------------------------------------
Bent  Branch  Project,  a  general  partnership
-----------------------------------------------
Bevins  Branch  Partners  Ltd.,  a  limited  partnership
--------------------------------------------------------
Number  II,  Bevins  Branch,  Ltd.,  a  limited  partnership
------------------------------------------------------------
Burning  Fork  Partners,  a  general  partnership
-------------------------------------------------
Drift  Branch  Project,  a  joint  venture
------------------------------------------
Eastern  Producing  Limited  Partnership,  a  limited  partnership
------------------------------------------------------------------
Feds  Creek  Gas  Project,  a  joint  venture
---------------------------------------------
JBC  Drilling  Company  Number  4,  a  limited  partnership
-----------------------------------------------------------
JBC  Drill  Co.  #5
-------------------
Long  Branch  Partners,  a  general  partnership
------------------------------------------------
Lowe  Farm  Project,  Ltd.,  a  limited  partnership
----------------------------------------------------
Marshall's  Branch  Partners,  Ltd.,  a  limited  partnership
-------------------------------------------------------------
Shelby  Creek  Partners,  Ltd.,  a  limited  partnership
--------------------------------------------------------
Swinge  Camp  General  Partners,  a  general  partnership
---------------------------------------------------------
Swinge  Camp  Partners,  Ltd.,  a  limited  partnership
-------------------------------------------------------
Sycamore  Creek  Partners,  a  general  partnership
---------------------------------------------------
VICC  Mineral  Project  No.  8,  an  unincorporated  joint  venture
-------------------------------------------------------------------
Willow  River  Fund
-------------------
Wisconsin  Fund  Partnership  No.  1
------------------------------------

SCHEDULE P-1 - Page 1

<PAGE>

                                 SCHEDULE 2.7(A)
                                 ---------------

                              CASH MANAGEMENT BANKS

Harris  Bank

[Wells  Fargo  Bank,  National  Association]


SCHEDULE 2.7(A)  - Page 1

<PAGE>



                                 SCHEDULE 5.1(A)
                                 ---------------

                            BORROWING BASE PROPERTIES

                                       and

                                 SCHEDULE 5.1(a)

                            BORROWING BASE PROPERTIES


SCHEDULE 5.1(A)  - Page 1

<PAGE>