Dated as of June 19, 2000

                                 GREKA AM, INC.,

                                as the Borrower,

                            GREKA ENERGY CORPORATION,

                                as the Guarantor

                                       and

                       CANADIAN IMPERIAL BANK OF COMMERCE,

                                    as Agent

                                       and

                            CIBC WORLD MARKETS CORP.,

                                   as Arranger

================================================================================

                         CREDIT AND GUARANTEE AGREEMENT

================================================================================

<PAGE>


                                    CONTENTS

SECTION                                                                    Page

1.       DEFINITIONS AND ACCOUNTING TERMS.....................................1
      Defined Terms...........................................................1
      Use of Defined Terms...................................................20
      Cross-References.......................................................20
      Accounting, and Financial Determinations...............................20
2.       THE COMMITMENTS, BORROWING PROCEDURES, NOTES AND BORROWING BASE.....21
      The Commitments........................................................21
      Reduction of Maximum Available Amount..................................21
      Borrowing Procedures for Loans.........................................22
      Continuation and Conversion Elections..................................22
      Funding................................................................23
      Notes..................................................................23
      Determination of the Borrowing Base....................................24
3.       REPAYMENTS, PREPAYMENTS, INTEREST AND FEES..........................24
      Repayments and Prepayments.............................................24
      Interest Provisions....................................................25
      Fees...................................................................26
4.       CERTAIN LIBO RATE AND OTHER PROVISIONS..............................26
      Fixed Rate Lending Unlawful............................................26
      Deposits Unavailable...................................................27
      Increased LIBO Rate Loan Costs, Etc....................................27
      Funding Losses.........................................................28
      Increased Capital Costs................................................29
      Taxes..................................................................30
      Payments, Computations, Etc............................................32
      Sharing of Payments....................................................33
      Set off................................................................33
      Use of Proceeds........................................................34
      Maximum Interest.......................................................34
<PAGE>

5.       THE GUARANTEE.......................................................35
      The Guarantee..........................................................35
      Guarantees Unconditional...............................................35
      Reinstatement in Certain Circumstances.................................36
      Waiver of Notice.......................................................37
      Subrogation............................................................37
      Stay of Acceleration...................................................37
6.       CONDITIONS TO BORROWING.............................................38
      Initial Borrowing......................................................38
      All Borrowings.........................................................42
7.       REPRESENTATIONS AND WARRANTIES......................................43
      Organization, Etc......................................................44
      Due Authorization, Non-Contravention, Etc..............................44
      Government Approval, Regulation, Etc...................................44
      Validity, Etc..........................................................45
      Financial Information..................................................45
      No Material Adverse Change.............................................46
      Litigation, Labor Controversies, Etc...................................46
      Subsidiaries...........................................................46
      Ownership of Properties; Reserve Report................................46
      Taxes..................................................................46
      Pension and Welfare Plans..............................................47
      Environmental Warranties...............................................47
      Regulations U and X....................................................48
      Accuracy of Information................................................49
      No Defaults under Other Agreements.....................................49
      Solvency...............................................................49
      Compliance with Laws, Etc..............................................50
      Creation and Perfection of Security Interests..........................50
8.       COVENANTS...........................................................50
      Affirmative Covenants..................................................50
      Negative Covenants.....................................................56
9.       EVENTS OF DEFAULT...................................................63
      Listing of Events of Default...........................................63
      Action if Bankruptcy...................................................66
      Action if Other Event of Default.......................................66
<PAGE>

10.      THE AGENT...........................................................66
      Actions................................................................66
      Funding Reliance, Etc..................................................67
      Exculpation............................................................68
      Successor..............................................................68
      Extensions of Credit by the Agent and the Arranger.....................69
      Credit Decisions.......................................................69
      Copies, Etc............................................................69
11.      MISCELLANEOUS PROVISIONS............................................70
      Waivers, Amendments, Etc...............................................70
      Notices................................................................70
      Payment of Costs and Expenses..........................................71
      Indemnification........................................................72
      Survival.................................................................
      Severability...........................................................73
      Heading................................................................73
      Execution in Counterparts, Effectiveness, Etc..........................73
      Governing Law; Entire Agreement........................................74
      Successors and Assigns.................................................74
      Sale and Transfer of Loans and Note, Participations in Loans and Note..74
      Other Transactions.....................................................76
      Treatment of Certain Information; Confidentiality......................77
      Forum Selection and Consent to Jurisdiction............................77
      Waiver of Jury Trial...................................................78
      No Oral Agreements.....................................................79



Exhibits

Exhibit A.........Form of Note

Exhibit B.........Form of Borrowing Request

Exhibit C.........Form of Continuation/Conversion Notice

Exhibit D.........Form of Security Agreement

Exhibit E.........Form of Pledge Agreement

Exhibit F.........Form of Bank Assignment Agreement
<PAGE>

Exhibit G.........Form of Inter-Company Note

Exhibit H-1.......Form of Opinion of Counsel to the Borrower and the Guarantor

Exhibit H-2.......Form of Opinion of General Counsel to the Borrower and the
                  Guarantor

Exhibit H-3.......Form of Opinion of Counsel to the Agent

Exhibit H-4.......Form of Opinion of Counsel to the Guarantor

Exhibit H-5.......Form of Opinion of Dutch Counsel to GREKA Energy

Exhibit I.........Form of Mortgage

Exhibit J.........Form of Assignment of Account Agreement

Exhibit K.........Form of Pledge of Shares

Schedule 1 .......Mortgaged Properties

Schedule 2........Disclosure Schedule


<PAGE>


THIS CREDIT AND GUARANTEE AGREEMENT,  dated as of June 19, 2000, among GREKA AM,
INC.,  a Colorado  corporation  (the  Borrower),  GREKA  Energy  Corporation,  a
Colorado  corporation  (the  Guarantor,  or GREKA ENERGY),  CIBC, INC. as lender
(together with any commercial bank or other financial institution that becomes a
Lender  pursuant to Section  11.11,  the  Lenders),  CANADIAN  IMPERIAL  BANK OF
COMMERCE  (CIBC),  as  administrative  agent (the Agent) and CIBC WORLD  MARKETS
CORP. as arranger (the Arranger).

WHEREAS,  the Borrower has requested the Lenders to make revolving  loans to the
Borrower in an amount not to exceed  $47,500,000 for the purpose of consummating
the Acquisition (as defined below),  refinancing of the Borrower's  indebtedness
to Bank One,  Texas,  N.A. for working  capital  purposes and for other  general
corporate purposes;

WHEREAS,  the Guarantor has agreed to guarantee the  obligations of the Borrower
hereunder  and under the other Loan  Documents to which the Borrower is a party;
and

WHEREAS,  the Lenders are willing to make the loans to the Borrower on the terms
and conditions contained herein;

NOW THEREFORE, the parties hereto agree as follows:

DEFINITIONS AND ACCOUNTING TERMS

Defined Terms

1.1 The following terms (whether or not underscored or highlighted in bold) when
used in this Agreement, including its preamble and recitals, shall, except where
the context otherwise requires, have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):

Acquisition  means the  acquisition  by GREKA  Colombia  of certain  Oil and Gas
Properties  located  in  Colombia  from  Omimex  Resources,   Inc.,  a  Delaware
corporation, pursuant to the terms of the Acquisition Documents.

Acquisition  Documents  means the Purchase and Sale Agreement  dated as of March
17,  1999,  by and  among  Sabacol,  Inc.,  Omimex  Resources,  Inc.,  Omimex de
Colombia,  Ltd.  and  Omimex  International  Corporation  as the  same  has been
amended, supplemented or otherwise modified prior to the date hereof.


                                     Page 1
<PAGE>

Affiliate  means,  when used  with  respect  to any  Person,  any  other  Person
(including any member of the immediate  family of any such natural  person) who,
directly or indirectly,  beneficially owns or controls ten percent (10%) or more
of the total voting power of shares of capital  stock of such Person  having the
right  to vote  for  directors  under  ordinary  circumstances,  and any  Person
controlling, controlled by or under common control with any such Person. As used
in this definition,  "control" means the possession,  directly or indirectly, of
the power to direct or cause the direction of the  management  and policies of a
Person,  whether  through the  ownership  of voting  securities,  by contract or
otherwise.

Agent is defined in the preamble  and  includes  each other Person as shall have
subsequently been appointed as the successor Agent pursuant to Section 10.4.

Agreement means, on any date, this Credit and Guarantee  Agreement as originally
in  effect  and as  thereafter  from  time to  time  amended,  supplemented  and
restated, or otherwise modified and in effect on such date.

Alternate Base Rate means,  on any date and with respect to all Base Rate Loans,
a fluctuating  rate of interest per annum equal to the higher of (a) the rate of
interest  most recently  determined  by CIBC at its Domestic  Office as its base
rate for Dollar loans and (b) the Federal Funds Rate most recently determined by
the Agent plus 1%. The Alternate Base Rate is not necessarily intended to be the
lowest rate of interest  determined  by CIBC in  connection  with  extensions of
credit.  Changes in the rate of interest on that portion of any Loans maintained
as Base Rate  Loans  will take  effect  simultaneously  with each  change in the
Alternate Base Rate. The Agent will give notice promptly to the Borrower and the
Lenders of changes in the  Alternate  Base Rate;  provided  that failure to give
such notice shall not give rise to any liability.

Applicable  Margin means,  on any date,  with respect to any Base Rate Loan then
outstanding,  1.25%;  and with  respect to any LIBO Rate Loan then  outstanding,
3.25%.

Arranger is defined in the preamble.

Asset means, as to any Person, all property of any kind, name or nature, real or
personal,  tangible  or  intangible,  legal or  equitable,  whether now owned or
hereafter acquired,  including,  without limitation,  the Hydrocarbon Interests,
money, stock, contract rights,  franchises,  value as a going concern, causes of
action, undivided fractional ownership interests, intellectual property, rights,
and  anything  of  any  value  which  can  be  made  available  for,  or  may be
appropriated to, the payment of debts.

                                     Page 2
<PAGE>

Assignee Banks is defined in Section 11.11.1.

Assignment of Account  Agreement means the Assignment of Account Agreement dated
as of June 19, 2000 between the Guarantor and the Agent,  in  substantially  the
form of Exhibit J hereto, as amended from time to time.

Authorization means any consent, registration,  filing, agreement, notarization,
certificate,  license,  approval,  permit,  authority,  grant, right,  easement,
decree,  waiver,  privilege  or exemption  from,  by or with any  government  or
Governmental  Authority,  whether given or withheld by express  action or deemed
given or withheld by failure to act within any  specified  time period,  and all
corporate, creditors and stockholders' approvals or consents.

Authorized  Officer means relative to the Borrower,  those of its officers whose
signatures and incumbency shall have been certified to the Agent and the Lenders
pursuant to Section 6.1.1.

Bank Assignment Agreement means a Bank Assignment Agreement substantially in the
form of Exhibit F hereto.

Base Rate Loan means a Loan bearing interest at a fluctuating rate determined by
reference to the Alternate Base Rate.

Borrower is defined in the preamble.

Borrowing  means each extension of credit made by the Lenders by way of Loans of
the same type,  having the same Interest  Period made by the same Lenders on the
same Business Day pursuant to the same Borrowing Request.

Borrowing Base means the Borrowing Base from time to time  established  pursuant
to Section 2.7.

Borrowing  Base  Deficiency  means the excess of (x) the  outstanding  aggregate
principal amount of all Loans over (y) the Borrowing Base then in effect.

Borrowing Base Deficiency  Determination means any date on which the outstanding
aggregate  principal  amount of all Loans  exceeds  the  Borrowing  Base then in
effect.

Borrowing Base  Deficiency  Payment Date means the 10th day occurring  after the
receipt by the  Borrower of funds from (i) the sale of assets of the Borrower or
any Subsidiaries,  (ii) the sale of assets by GREKA Colombia,  (iii) the sale by
GREKA of all or a portion of its  ownership  interest in GREKA  Colombia or (iv)
any Casualty  Event with respect to the  Borrower or any  Subsidiaries  or GREKA
Colombia.

                                     Page 3
<PAGE>

Borrowing  Request  means a loan  request and  certificate  duly  executed by an
Authorized Officer of a Borrower, substantially in the form of Exhibit B hereto.

Business Day means (a) any day which is neither a Saturday or Sunday nor a legal
holiday on which  Lenders are  authorized  or required to be closed in New York,
New York and (b)  relative to the making,  continuing,  prepaying or repaying of
any LIBO Rate Loans,  any day on which dealings in Dollars are carried on in the
London interbank market.

Capital  Expenditures means, for any period, the sum of (a) the aggregate amount
of all  expenditures of the Borrower and its  Subsidiaries  for fixed or capital
assets  made  during  such  period  which,  in  accordance  with GAAP,  would be
classified  as  capital  expenditures  and  (b)  the  aggregate  amount  of  all
Capitalized Lease Liabilities incurred during such period.

Capital  Stock means any and all  shares,  interests,  participations,  or other
equivalents (however designated) of capital stock of a corporation,  any and all
equivalent  ownership  interests in a Person (other than a corporation)  and any
and all warrants or options to purchase any of the foregoing.

Capitalized Lease Liabilities means all monetary obligations of any Person under
any leasing or similar  arrangement  which,  in accordance  with GAAP,  would be
classified as capitalized  leases,  and, for purposes of this Agreement and each
other Loan Document,  the amount of such  obligations  shall be the  capitalized
amount  thereof,  determined in accordance  with GAAP,  and the stated  maturity
thereof  shall be the date of the last  payment of rent or any other  amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.

Cash Collateral Account is defined in the Pledge Agreement.

Cash Equivalent Investment means, at any time:

(a)      any evidence of  Indebtedness,  maturing not more than six months after
         such time, issued or guaranteed by the United States Government;

(b)      commercial  paper,  maturing  not more than six months from the date of
         issue, which is issued by (i) a corporation (other than an Affiliate of
         the  Borrower)  organized  under  the laws of any  state of the  United
         States  or of the  District  of  Columbia  and  rated  one of the three
         highest rating categories by S&P or Moody's, or (ii) any Lender (or its
         holding company);

                                     Page 4
<PAGE>

(c)      any  certificate  of deposit or bankers  acceptance,  maturing not more
         than six  months  after  such  time,  which is issued  by either  (i) a
         commercial banking  institution that is a member of the Federal Reserve
         System and has a combined capital and surplus and undivided  profits of
         not less than $250,000,000, or (ii) any Lender;

(d)      any  repurchase   agreement  entered  into  with  any  bank  (or  other
         commercial  banking  institution  of the stature  referred to in clause
         (c)(i) which (i) is in any  obligation of the type  described in any of
         clauses (a)  through  (c) and (ii) has a market  value at the time such
         repurchase  agreement  is  entered  into of not less  than  100% of the
         repurchase  obligation  of  such  bank  (or  other  commercial  banking
         institution) thereunder;

(e)      investments in certificates of deposit  maturing within six months from
         the  date  of  issuance  thereof  issued  by a bank  or  trust  company
         organized  under the laws of the United  States or any state thereof or
         the laws of Canada,  having  capital,  surplus  and  undivided  profits
         aggregating at least  $250,000,000 and whose long-term  certificates of
         deposit are, at the time of acquisition thereof by the Borrower,  rated
         A-1 by S&P or P-1 by Moody's;

(f)      deposit  accounts (i) in a bank or trust  company  organized  under the
         laws of the  United  States  or any state  thereof  or  Canada,  having
         capital,   surplus  and   undivided   profits   aggregating   at  least
         $250,000,000 and whose commercial paper (or that of the holding company
         with which such bank or trust  company is  affiliated)  is rated A-1 by
         S&P or P-1 by Moody's:

(g)      marketable direct obligations  issued or unconditionally  guaranteed by
         the  United  States or  Canadian  government  or  issued by any  agency
         thereof and backed by the full faith and credit of the United States or
         Canada,  as the case may be, in each case  maturing  no later  than six
         months from the date of acquisition; or

(h)      money  market,  mutual or  similar  funds  that  invest in  obligations
         referred  to in  clauses  (a),  (b),  (c),  (e),  (f),  or (g) of  this
         definition,  and in each case  such  funds  having  assets in excess of
         $250,000,000.

Casualty Event means, with respect to any property of any Person, any loss of or
damage to, or any  condemnation or other taking of, such property for which such
Person or any of its Subsidiaries  receives  insurance proceeds or proceeds of a
condemnation award or other compensation.

                                     Page 5
<PAGE>

CERCLA  means  the  Comprehensive   Environmental  Response,   Compensation  and
Liability Act of 1980, as amended.

CERCLIS means the Comprehensive  Environmental  Response Compensation  Liability
Information System List.

Change of Control  means (i) any  individual  or group shall own,  collectively,
directly or indirectly more than 20% (on a fully diluted basis) of the aggregate
voting shares of capital stock of all classes of the Guarantor or shall have the
ability to appoint or remove,  directly or indirectly  (including through voting
rights  obtained  from other  shareholders),  the majority of the members of the
board of  directors  of the  Guarantor,  except  that Capco  Resources  Ltd.,  a
Canadian company, may hold up to, but not more than, 35% of the aggregate voting
shares of capital stock of the Guarantor,  or (ii) the Guarantor  shall cease to
own 100% of the issued and  outstanding  Capital Stock of GREKA Colombia and the
Borrower.

CIBC is defined in the preamble.

Closing Date means the date of the initial  Borrowing in accordance with Article
VI.

Code means the Internal Revenue Code of 1986, as amended,  reformed or otherwise
modified from time to time.

Colombia means the Republic of Colombia.

Collateral  Property means any "Mortgaged  Property",  "Collateral"  or "Pledged
Collateral" as defined in any Security Document.

Commitment means, relative to any Lender, such Lender's obligation to make Loans
pursuant to Section 2.1.1.

Commitment  Amount means,  on any date, the lesser of (a) the Maximum  Available
Amount then in effect and (b) the Borrowing Base then in effect.

Commitment Termination Date means the earliest of (a) the Maturity Date; (b) the
date on which the  Commitment  Amount is  terminated  in full or reduced to zero
pursuant to Section  2.2; and (c) the date on which any  Commitment  Termination
Event occurs.  Upon the occurrence of any event  described in clause (b) or (c),
the Commitments shall terminate automatically and without further action.

                                     Page 6
<PAGE>

Commitment  Termination  Event means (a) the occurrence of any Default described
in  clauses  (a)  through  (d) of  Section  9.1.9;  or (b)  the  occurrence  and
continuance of any other Event of Default and either (i) the  declaration of the
Loans to be due and payable  pursuant to Section  9.3, or (ii) in the absence of
such declaration,  the giving of notice by the Agent, acting at the direction of
the Majority Lenders,  to the Borrower that the Commitments have been terminated
as a result of such Event of Default.

Contingent  Liability  means any agreement,  undertaking or arrangement by which
any Person guarantees,  endorses or otherwise becomes or is contingently  liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for  payment,  to supply  funds  to, or  otherwise  to invest  in, a debtor,  or
otherwise  to assure a  creditor  against  loss) the  indebtedness  or  monetary
obligation of any other Person (other than by endorsements of instruments in the
course  of  collection),  or  guarantees  the  payment  of  dividends  or  other
distributions  upon the shares of any other  Person.  The amount of any Person's
obligation  under any Contingent  Liability shall (subject to any limitation set
forth  therein)  be deemed to be the  outstanding  principal  amount (or maximum
principal  amount,  if larger)  of the debt or  monetary  obligation  guaranteed
thereby.

Continuation/Conversion  Notice means a notice of continuation or conversion and
certificate   duly   executed  by  an   Authorized   Officer  of  the  Borrower,
substantially in the form of Exhibit C hereto.

Controlled Group means all members of a controlled group of corporations and all
members  of  a  controlled  group  of  trades  or  businesses  (whether  or  not
incorporated)  under common  control  which,  together  with the  Borrower,  are
treated  as a single  employer  under  Section  414(b)  or 414(c) of the Code or
Section 4001 of ERISA.

Default means any Event of Default or any condition,  occurrence or event which,
after notice or lapse of time or both, would constitute an Event of Default.

Default Rate is defined in Section 3.2.2.

Disclosure Schedule means the Disclosure Schedule attached hereto as Schedule 2,
as it may be amended,  supplemented  or otherwise  modified from time to time by
the Borrower with the written consent of the Majority Lenders.

                                     Page 7
<PAGE>

Dollar and the sign $ mean lawful money of the United States.

Domestic  Office  means,  relative  to any  Lender,  the  office of such  Lender
designated  as such  below  its  signature  hereto  or  designated  in the  Bank
Assignment  Agreement  for such Lender or such other  office of a Lender (or any
successor  or  assign  of  such  Lender)  within  the  United  States  as may be
designated from time to time by notice from such Lender,  as the case may be, to
each other Person party hereto.

EBITDA means, at any date of  determination  and for any period of determination
thereof,  the sum,  without  duplication,  of the amounts for such period of net
income  plus  Total  Interest   Expense,   plus   depreciation,   depletion  and
amortization  expense; plus U.S. federal and U.S. state income taxes, plus other
non-cash charges and expenses  deducted from revenues in determining net income,
all as  determined  on a combined  basis for the  Borrower  and GREKA  Colombia;
provided that there shall be excluded the income of any other Person (other than
the Borrower) in which the Borrower has an ownership or similar interest, except
to the  extent  of the  amount of cash  dividends  or other  cash  distributions
actually paid to the Borrower during such period.

Effective  Date means the date this  Agreement  becomes  effective  pursuant  to
Section 11.8.

Environmental Laws means federal, state or local laws, rules or regulations, and
any judicial,  arbitral or administrative  interpretations  thereof,  including,
without limitation,  any applicable judicial,  arbitral or administrative order,
judgment,  permit,  approval,  decision or  determination  pertaining to health,
safety or the environment in effect at the time in question,  including, without
limitation,  CERCLA,  the Federal Water Pollution  Control Act, as amended,  the
Occupational  Safety and Health Act, as amended,  the Resource  Conservation and
Recovery Act, as amended  (RCRA),  the Safe Drinking Water Act, as amended,  the
Toxic  Substances  Control  Act,  as  amended,   the  Superfund   Amendment  and
Reauthorization Act of 1986, as amended, the Hazardous Materials  Transportation
Act,  as  amended,  comparable  state and local  laws,  and other  environmental
conservation and protection laws. The terms "hazardous substance," "release" and
"threatened  release" shall have the meanings  specified in the CERCLA,  and the
terms  "solid  waste" and  "disposal"  (or  "disposed")  shall have the meanings
specified  in RCRA and the term "oil"  shall have the meaning  specified  in Oil
Pollution Act, as amended (OPA); provided,  that (i) in the event either CERCLA,
RCRA or OPA is amended so as to broaden the meaning of any term defined thereby,
such  broader  meaning  shall apply  subsequent  to the  effective  date of such
amendment  with  respect to all  provisions  of this  Agreement  and (ii) to the
extent the laws of the state or states in which any  property of the Borrower is
located establish a meaning for "hazardous  substance,"  "release,"  "threatened
release,"  "solid  waste,"  "disposal"  or "oil"  which  is  broader  than  that
specified in CERCLA, RCRA or OPA, such broader meaning shall apply subsequent to
the effective date of the establishment of such meaning.

                                     Page 8
<PAGE>

ERISA means the Employee Retirement Income Security Act of 1974, as amended, and
any  successor  statute  of  similar  import,   together  with  the  regulations
thereunder,  in each case as in effect from time to time. References to sections
of ERISA also refer to any successor sections.

Event of Default is defined in Section 9.1.

Existing  Indebtedness  means Indebtedness of the Borrower in a principal amount
of not more than  $2,980,000  and  accrued  interest  thereon  under the  credit
agreement dated September 23, 1996 between the Borrower,  Bank One, Texas, N.A.,
as agent, and the lenders named therein.

Federal Funds Rate means, for any period, a fluctuating  interest rate per annum
equal for each day during such period to (a) the  weighted  average of the rates
on overnight  federal  funds  transactions  with members of the Federal  Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next  preceding  Business Day) by the Federal
Reserve Bank of New York;  or (b) if such rate is not so  published  for any day
which is a Business  Day,  the  average of the  quotations  for such day on such
transactions  received by CIBC from three  federal  funds  brokers of recognized
national standing selected by it.

Fee Letter means the fee letter dated June 19, 2000  between the  Borrower,  the
Guarantor, the Agent and the Arranger, as the same may be amended, supplemented,
restated or otherwise modified from time to time.

Fiscal Quarter means any calendar quarter of a Fiscal Year.

Fiscal Year means any period of twelve  consecutive  calendar  months  ending on
December  31;  references  to a Fiscal Year with a number  corresponding  to any
calendar year (e.g.,  the "1999 Fiscal Year") refer to the Fiscal Year ending on
the December 31 occurring during such calendar year.

F.R.S.  Board means the Board of Governors of the Federal  Reserve System or any
successor thereto.

                                     Page 9
<PAGE>

GAAP is defined in Section 1.4.

Governmental  Authority  means the  government of the United States or any other
nation or country or any political subdivision thereof,  whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative,  judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government.

GREKA Colombia means GREKA Energy Colombia B.V., a Netherlands company.

GREKA Colombia Reduction Date is defined in Section 1.5.

GREKA Integrated means GREKA Integrated, Inc., a Colorado corporation.

Guarantor is defined in the preamble.

Hazardous Material means any pollutant or contaminant or hazardous, dangerous or
toxic  chemical,  material or  substance  within the  meaning of any  applicable
national,  regional,  state or local law,  regulation,  ordinance or requirement
(including  consent decrees and  administrative  orders) relating to or imposing
liability or standards of conduct  concerning any hazardous,  toxic or dangerous
waste, substance or material, all as amended or hereafter amended.

Hedging  Obligations  means, with respect to any Person,  (a) all liabilities of
such Person under  interest rate swap  agreements,  interest rate cap agreements
and interest rate collar  agreements,  and all other  agreements or arrangements
designed  to protect  such Person  against  fluctuations  in  interest  rates or
currency  exchange rates and (b) all  liabilities of such Person under commodity
hedges,  commodity swaps, exchanges,  forward, future, collar or cap agreements,
fixed price  agreements,  and all other  agreements or arrangements  designed to
protect such Person against the fluctuations in commodity prices.

herein, hereof, hereto,  hereunder and similar terms contained 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  Section,  paragraph or
provision of this Agreement or such other Loan Document.

Highest Lawful Rate is defined in Section 4.11.

Hydrocarbons  means oil, gas, casing head gas,  condensate,  distillate,  liquid
hydrocarbons, gaseous hydrocarbons, all products refined, separated, settled and
dehydrated  therefrom and all products  refined  therefrom,  including,  without
limitation,  kerosene, liquefied petroleum gas, refined lubricating oils, diesel
fuel, drip gasoline, natural gasoline, helium, sulfur and all other minerals.

                                    Page 10
<PAGE>

Hydrocarbon Interests means all rights, titles,  interests and estates now owned
or  hereafter  acquired by the Borrower in any and all oil, gas and other liquid
or gaseous hydrocarbon  properties and interests,  including without limitation,
mineral  fee or  lease  interests,  production  sharing  agreements,  concession
agreements, association agreements, license agreements, service agreements, risk
service  agreements or similar  Hydrocarbon  interests granted by an appropriate
Governmental Authority,  farmout,  overriding royalty and royalty interests, net
profit  interests,  oil  payments,  production  payment  interests  and  similar
interests  in  Hydrocarbons,  including  any  reserved or residual  interests of
whatever nature.

Impermissible  Qualification means,  relative to the opinion or certification of
any independent public accountant as to any financial statement of the Borrower,
any  qualification or exception to such opinion or certification (a) which is of
a "going concern" or similar  nature;  (b) which relates to the limited scope of
examination  of  matters  relevant  to such  financial  statement;  or (c) which
relates  to the  treatment  or  classification  of any  item in  such  financial
statement and which, as a condition to its removal,  would require an adjustment
to such item the effect of which would be to cause the Borrower to be in default
of any of its obligations under Section 8.2.4.

including  means  including  without  limiting the generality of any description
preceding  such term,  and, for purposes of this  Agreement  and each other Loan
Document, the parties hereto agree that the rule of ejusdem generis shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters  specifically
mentioned.

Indebtedness of any Person means,  without  duplication:  (a) all obligations of
such Person for borrowed money and all  obligations of such Person  evidenced by
bonds,  debentures,  notes or other similar  instruments;  (b) all  obligations,
contingent or  otherwise,  relative to the face amount of all letters of credit,
whether or not drawn,  and banker's  acceptances  issued for the account of such
Person;  (c) all  obligations  of such Person as lessee  under leases which have
been or should  be, in  accordance  with GAAP,  recorded  as  Capitalized  Lease
Liabilities;  (d) liabilities of such Person under all Hedging Obligations;  (e)
whether  or  not so  included  as  liabilities  in  accordance  with  GAAP,  all
obligations  of such Person to pay the  deferred  purchase  price of property or
services  (except  trade  accounts  payable  arising in the  ordinary  course of
business),  and indebtedness  (excluding  prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such  indebtedness  shall have been  assumed by such Person or is limited in
recourse;  (f) all obligations of such Person in respect of production payments,
whether  monetary or  volumetric;  and (g) all  Contingent  Liabilities  of such
Person in respect of any of the foregoing.  For all purposes of this  Agreement,
the Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture in which such Person is a general partner or a joint venturer.

                                    Page 11
<PAGE>

Indemnified Liabilities is defined in Section 11.4.

Indemnified Parties is defined in Section 11.4.

Inter-Company  Note means a promissory note in substantially the form of Exhibit
G issued by the  Borrower or GREKA  Colombia,  to any  affiliate  of either such
Person,  which  promissory  note shall by its terms  provide  that,  without the
consent of the Majority  Lenders,  no payments of  principal,  interest or other
amounts  thereunder  shall be made until the payment and  performance in full of
the Obligations and the termination of the Commitments.

Interest Period means,  relative to any LIBO Rate Loans, the period beginning on
(and  including)  the date on which such LIBO Rate Loan is made or continued as,
or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4 and shall end
on (but exclude) the day which numerically  corresponds to such date one, two or
three months thereafter (or, if such month has no numerically corresponding day,
on the last  Business  Day of such  month),  in either case as the  Borrower may
select in its relevant notice pursuant to Section 2.3 or 2.4; provided, however,
that (a) the Borrower shall not be permitted to select Interest Periods to be in
effect at any one time which have  expiration  dates occurring on more than four
different  dates; (b) if such Interest Period would otherwise end on a day which
is not a Business  Day,  such  Interest  Period shall end on the next  following
Business Day (unless,  if such Interest Period applies to LIBO Rate Loans,  such
next following  Business Day is the first Business Day of a calendar  month,  in
which case such  Interest  Period shall end on the  Business Day next  preceding
such  numerically  corresponding  day); and (c) no Interest Period may end later
than  the  date  set  forth  in  clause  (a) of the  definition  of  "Commitment
Termination Date".

Investment means,  relative to any Person,  (a) any loan or advance made by such
Person to any other Person (excluding commission, travel and similar advances to
officers  and  employees  made in the  ordinary  course  of  business);  (b) any
Contingent  Liability of such Person;  and (c) any ownership or similar interest
held by such Person in any other Person.  The amount of any Investment  shall be
the original  principal or capital  amount thereof less all returns of principal
or equity thereon (and without  adjustment by reason of the financial  condition
of such other Person) and shall, if made by the transfer or exchange of property
other than cash, be deemed to have been made in an original principal or capital
amount equal to the fair market value of such property.

                                    Page 12
<PAGE>

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

Law or law means any  present  or  future  federal,  state or local law or other
constitution,  charter,  act, statute, law, ordinance,  code, rule,  regulation,
order,  judgment of a court or standards  contained in any applicable  permit or
approval,  or any other  legislative,  judicial or administrative  action of any
Governmental Authority.

Lenders is defined in the preamble.

LIBO Rate means,  relative to any Interest Period for LIBO Rate Loans,  the rate
of interest equal to the offered quotation appearing on Telerate Page 3750 or if
such  Telerate  Page  shall not be  available,  on the LIBO page on the  Reuters
Screen (or on any page that can reasonably be considered a replacement  page) at
approximately  11:00 a.m. New York time (or as soon  thereafter as  practicable)
two  Business  Days prior to the  beginning of such  Interest  Period for Dollar
deposits having a term comparable to such Interest  Period.  If no such Telerate
Page 3750 or Reuters Screen LIBO page (or replacement  page) is available,  then
the "LIBO Rate" shall mean, relative to any Interest Period for LIBO Rate Loans,
the rate of interest  equal to (rounded  upwards,  if necessary,  to the nearest
1/100  of 1%) the rate  per  annum,  at which  Dollar  deposits  in  immediately
available  funds are  offered to CIBC's  LIBOR  Office in the  London  interbank
market  as at or about  11:00  a.m.  New York  time  (or as soon  thereafter  as
practicable)  two Business Days prior to the  beginning of such Interest  Period
for  delivery  on the  first  day of  such  Interest  Period,  and in an  amount
approximately  equal to the  amount  of  CIBC's  LIBO Rate Loan and for a period
approximately equal to such Interest Period.

                                    Page 13
<PAGE>

LIBO Rate Loan means a Loan  bearing  interest,  at all times during an Interest
Period  applicable  to such Loan,  at a fixed  rate of  interest  determined  by
reference to the LIBO Rate  (Reserve  Adjusted).

LIBO Rate (Reserve Adjusted) means,  relative to any Loan to be made,  continued
or maintained as, or converted into, a LIBO Rate Loan for any Interest Period, a
rate per annum  (rounded  upwards,  if  necessary,  to the nearest  1/100 of 1%)
determined pursuant to the following formula:

            LIBO Rate               =                   LIBO Rate
                                            -------------------------------
         (Reserve Adjusted)                 1.00 - LIBOR Reserve Percentage

The LIBO Rate  (Reserve  Adjusted)  for any Interest  Period for LIBO Rate Loans
will be determined by the Agent on the basis of the LIBOR Reserve  Percentage in
effect on, and the applicable  rates furnished to and received by the Agent from
CIBC, two Business Days before the first day of such Interest Period.

LIBOR Office means, relative to any Lender, the office of such Lender designated
as such  below  its  signature  hereto  or  designated  in the  Bank  Assignment
Agreement  for such Lender or such other office of a Lender as  designated  from
time to time by notice from such Lender to the Borrower  and the Agent,  whether
or not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.

LIBOR Reserve  Percentage  means,  relative to any Interest Period for LIBO Rate
Loans,  the average  maximum rate (expressed as a decimal) at which reserves are
required to be maintained  during such Interest Period under Regulation D of the
F.R.S.  Board by member  Lenders of the Federal  Reserve System in New York City
with  deposits  exceeding   $1,000,000,000   (including  all  basic,  emergency,
supplemental,   marginal  and  other   reserves  and  taking  into  account  any
transitional  adjustments or other scheduled changes in reserve requirements) as
"Eurocurrency  Liabilities",  as such term is  defined  in  Regulation  D of the
F.R.S.  Board.  Without limiting the effect of the foregoing,  the LIBOR Reserve
Percentage  shall reflect any other  reserves  required to be maintained by such
member  Lenders by reason of any  Regulatory  Change against (i) any category of
liabilities  which  includes  deposits  by  reference  to which the  LIBOR  Rate
(Reserve  Adjusted) is to be  determined,  or (ii) any category of extensions of
credit or other assets which include LIBO Rate Loans.

                                    Page 14
<PAGE>

Lien means, with respect to any Person, any security interest, mortgage, pledge,
hypothecation,  assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise),  charge  against or interest in property to secure payment of a debt
or performance of an obligation or other priority or preferential arrangement of
any kind or nature  whatsoever  but  excluding  set-off or netting  arrangements
pursuant to any Hedging Agreement.

Loan is defined in Section 2.1.1.

Loan Document means this  Agreement,  the Notes,  each Security  Document,  each
Borrowing  Request,  together  in each case  with all  exhibits,  schedules  and
attachments  thereto,  the Fee Letter  and all other  agreements,  documents  or
instruments  from time to time  executed  or  delivered  in  connection  with or
pursuant to any of the foregoing.

Majority  Lenders means, at anytime,  Lenders in the aggregate  holding at least
66-2/3%  of the  then  aggregate  unpaid  principal  amount  of the  outstanding
Borrowings, or, if no such principal amount is then outstanding,  Lenders having
at least 66-2/3% of the Commitments.

Material  Adverse  Effect means a material  adverse  effect on (i) the business,
operations,  affairs,  property,  financial  condition,  prospects,  assets,  or
results of  operations  of the Borrower or the  Guarantor or (ii) the ability of
the Borrower or the Guarantor to perform its  obligations  under any of the Loan
Documents or (iii) the validity or enforceability of this Agreement or the other
Loan Documents.

Materiality  Threshold means,  with respect to the Guarantor,  $1,000,000,  and,
with respect to the Borrower, $250,000.

Maturity Date means December 1, 2000.

Maximum Available Amount means  $14,200,000,  as such amount may be reduced from
time to time  pursuant to Section  2.2 or  terminated  pursuant to Section  9.3;
provided that prior to the fulfillment of the conditions  precedent specified in
Section 6.3, the Maximum Available Amount shall be $6,700,000.

Monthly  Payment  Date means the first day of each  calendar  month,  commencing
August 1, 2000  provided  that if any such day is not a Business  Day,  the next
succeeding Business Day.

Moody's means Moody's Investors Service, Inc.

                                    Page 15
<PAGE>

Mortgage  means  the  Mortgage,  Deed of Trust,  Assignment  of  Production  and
Security Agreement in substantially the form of Exhibit I, between the Borrower,
CIBC and Ian G.P. Schottlaender, as trustee, as amended from time to time.

Mortgaged Properties means the properties listed on Schedule 1 hereto.

Note means a promissory note of the Borrower payable to any Lender,  in the form
of  Exhibit  A hereto  (as such  promissory  note may be  amended,  endorsed  or
otherwise modified from time to time),  evidencing the aggregate Indebtedness of
the Borrower to such Lender resulting from outstanding Loans, and also means all
other  promissory  notes accepted from time to time in substitution  therefor or
renewal thereof.

Obligations means all obligations,  Indebtedness and liabilities of the Borrower
to the Agent or the  Lenders,  now  existing or  hereafter  arising  under or in
connection with this Agreement, the Notes, and each other Loan Document, whether
direct,   indirect,   related,   unrelated,   fixed,   contingent,   liquidated,
unliquidated,  joint, several, or joint and several,  including the obligations,
Indebtedness and liabilities of the Borrower,  and all interest accruing thereon
(including any interest that accrues after the commencement of any proceeding by
or against the Borrower or any other Person  under any  bankruptcy,  insolvency,
liquidation,  moratorium,  receivership,  reorganization  or other debtor relief
law) and all attorneys'  fees and other  expenses  incurred in the collection or
enforcement thereof.

Obligors means, collectively, the Borrower and the Guarantor.

Oil and Gas  Business  means  (a) the  acquisition,  exploration,  exploitation,
development, operation and disposition of interests in Hydrocarbon Interests and
Hydrocarbons; (b) gathering,  marketing, treating, processing,  storage, selling
and transporting of any production from such interests or Hydrocarbon Interests,
including,  without  limitation,  the  marketing of  Hydrocarbons  obtained from
unrelated Persons;  (c) any business relating to or arising from exploration for
or development,  production,  treatment,  processing, storage, transportation or
marketing of oil, gas and other  minerals and products  produced in  association
therewith;  and (d) any activity  that is ancillary or necessary or desirable to
facilitate  the  activities  described  in  clauses  (a)  through  (c)  of  this
definition,  except  that for  purposes  of this  Agreement  and the other  Loan
Documents,  the crude oil  refining  and contract  drilling  businesses  are not
considered to be the Oil and Gas Businesses.

                                    Page 16
<PAGE>

Oil and Gas Properties means Hydrocarbon Interests;  the Assets 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) which may affect all or any
portion of the Hydrocarbon  Interests;  all operating 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  Interest;  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  income  from or  attributable  to the
Hydrocarbon Interests; all tenements, hereditaments, appurtenances and Assets in
any manner  appertaining,  belonging,  affixed or incidental to the  Hydrocarbon
Interests,  Assets, rights, titles,  interests and estates described or referred
to  above,  including  any and  all  Assets,  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 Asset  (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,  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.

Organic  Document  means,  for  any  Person,  its  certificate  or  articles  of
incorporation,  its by-laws,  certificate  of  formation,  regulations,  limited
liability  company  agreement,   partnership  agreement,  or  similar  governing
document,  and all  shareholder  membership or  partnership  agreements,  voting
trusts and similar arrangements.

Participant is defined in Section 11.11.

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

Pension Plan means a "pension  plan", as such term is defined in section 3(2) of
ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as
defined  in  section  4001(a)(3)  of ERISA),  and to which the  Borrower  or any
corporation,  trade or business that is, along with such Borrower, a member of a
Controlled  Group,  may have  liability,  including  any  liability by reason of
having been a substantial  employer  within the meaning of section 4063 of ERISA
at any time during the preceding five years,  or by reason of being deemed to be
a contributing sponsor under section 4069 of ERISA.

                                    Page 17
<PAGE>

Percentage means,  relative to any Lender, the percentage set forth opposite its
signature hereto or set forth in the Bank Assignment  Agreement for such Lender,
as such percentage may be adjusted from time to time pursuant to Bank Assignment
Agreement(s)  executed by such  Lender and its  Assignee  Bank(s) and  delivered
pursuant to Section 11.11.

Person  means  any  natural  person,  corporation,  limited  liability  company,
partnership,  firm, association,  trust, government,  governmental agency or any
other entity, whether acting in an individual, fiduciary or other capacity.

Plan means any Pension Plan or Welfare Plan.

Pledge Agreement means the Pledge and Security  Agreement,  in substantially the
form of Exhibit E, between the Guarantor and the Agent,  as amended from time to
time.

Pledge of Shares means the Pledge of Shares among the Guarantor,  GREKA Colombia
and the Agent, in  substantially  the form of Exhibit K hereto,  as amended from
time to time.

Proved  Reserves  means  collectively,  "proved oil and gas  reserves",  "proved
developed producing oil and gas reserves",  "proved developed  non-producing oil
and gas reserves"  (consisting of proved developed  shut-in oil and gas reserves
and proved developed behind pipe oil and gas reserves),  and "proved undeveloped
oil and gas  reserves",  as such terms are  defined by the U.S.  Securities  and
Exchange Commission in its standards and guidelines.

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

Release means "release" as such terms are defined in CERCLA.

                                    Page 18
<PAGE>

Required  Deficiency  Payment means for each Borrowing Base  Deficiency  Payment
Date occurring  after a Borrowing  Base  Deficiency  Determination  (the Subject
Determination)  in  accordance  with the terms hereof,  an amount  sufficient to
reduce to zero the Borrowing Base Deficiency existing on the date of the Subject
Determination  in a single  lump sum  payment  on or before the  Borrowing  Base
Deficiency  Payment Date;  provided,  that if the amount of the  Borrowing  Base
Deficiency  increased  after  the  date of the  Subject  Determination  then the
Required  Deficiency  Payment shall be in an amount sufficient to reduce to zero
the Borrowing Base Deficiency.

S&P means Standard & Poor's Ratings Group.

Security  Agreement means the Security  Agreement in  substantially  the form of
Exhibit D, between the Borrower and the Agent, as amended from time to time.

Security  Documents  means,  individually,  (i) the Security  Agreement  and all
amendments,  supplements,  restatements or other modifications made from time to
time  thereto;  (ii)  the  Pledge  Agreement  and all  amendments,  supplements,
restatements or other  modifications made from time to time; (iii) the Pledge of
Shares and all amendments, supplements, restatements or other modifications made
from time to time;  (iv)  Assignment of Accounts  Agreement and all  amendments,
supplements, restatements or other modifications made from time to time; (v) any
Mortgage and all amendments,  supplements,  restatements or other  modifications
made from time to time thereto; (vi) any additional similar document required by
the  Agent  pursuant  to  Section  8.1.7;  and  (vii)  collectively,  all of the
foregoing.

Solvent means,  with respect to any Person at any time, a condition under which:
(a) the  fair  saleable  value  of  such  Person's  assets  is,  on the  date of
determination,  greater  than the  total  amount  of such  Person's  liabilities
(including  contingent  and  unliquidated  liabilities)  at such time;  (b) such
Person is able to pay all of its liabilities as such liabilities mature; and (c)
such Person does not have  unreasonably  small capital with which to conduct its
business.  For  purposes  of  this  definition  (i)  the  amount  of a  Person's
contingent or  unliquidated  liabilities at any time shall be that amount which,
in light of all the facts and circumstances then existing, represents the amount
which can reasonably be expected to become an actual or matured liability;  (ii)
the "fair saleable  value" of an asset shall be the amount which may be realized
within a reasonable time either through  collection or sale of such asset at its
regular market value;  and (iii) the "regular market value" of an asset shall be
the amount  which a capable and diligent  business  person could obtain for such
asset  from an  interested  buyer who is willing to  purchase  such asset  under
ordinary selling conditions.

                                    Page 19
<PAGE>

Stockholders' Equity means, as of the time of any determination thereof is to be
made,  the sum of the  Guarantor's  capital stock (which shall exclude  treasury
stock and any capital stock subject to mandatory redemption by the issuer at the
option of the holder  thereof) and  additional  paid-in  capital,  plus retained
earnings (minus accumulated  deficit),  all as shown on the consolidated balance
sheet of the Guarantor and the Guarantor's Subsidiaries and based on GAAP.

Subsidiary  means,  with respect to any Person,  (a) a corporation a majority of
whose voting stock is at the time, directly or indirectly, owned by such Person,
by one or more  Subsidiaries  of such  Person or by such  Person and one or more
subsidiaries  of such  Person;  (b) a  partnership  in which  such  Person  or a
Subsidiary of such Person is, at the date of determination, a general or limited
partner  of such  partnership,  but only if such  Person  or its  subsidiary  is
entitled  to receive  more than 50% of the assets of such  partnership  upon its
dissolution  and which is otherwise  directly or  indirectly  controlled by such
Person,  or (c) any other Person (other than a corporation  or  partnership)  in
which such Person, directly or indirectly, at the date of determination thereof,
has (i) at least a  majority  ownership  interest  or (ii) the power to elect or
direct the election of a majority of the  directors or other  governing  body of
such Person.  Unless the context otherwise clearly requires,  references in this
Agreement to a "Subsidiary" or the  "Subsidiaries"  refer to a Subsidiary or the
Subsidiaries of the Guarantor.

Taxes is defined in Section 4.6.

Total   Interest   Expense  means  with  respect  to  any  period  for  which  a
determination  thereof is to be made, the sum, without  duplication,  of (i) the
aggregate  amount of all interest  accrued  (whether or not paid) or capitalized
during such period, on all Indebtedness of the Borrower and GREKA Colombia, on a
combined basis,  plus (ii) the portion of any Capitalized  Lease  Liabilities of
such Persons  allocable to interest  expense in accordance  with GAAP plus (iii)
the interest  portion of any deferred  payment  obligation of such Persons minus
(iv) the non-cash accretion of the discount and amortization of the fees payable
hereunder to the Agent and the Lenders, all determined on a combined basis.

Transfer is defined in Section 8.2.9.

type means,  relative to any Loan, the portion thereof, if any, being maintained
as a Base Rate Loan or a LIBO Rate Loan.

                                    Page 20
<PAGE>

United States or U.S.  means the United States of America,  its fifty States and
the District of Columbia.

Welfare Plan means a "welfare  plan", as such term is defined in section 3(1) of
ERISA.

Working  Capital  means the excess of: (a) current  assets of the  Borrower  and
GREKA  Colombia,  on a combined basis,  excluding  amounts payable to either the
Borrower  or GREKA  Colombia  by the  Guarantor  or any other  Affiliate  of the
Borrower or GREKA  Colombia over (b)  consolidated  current  liabilities  of the
Borrower and GREKA Colombia,  on a combined basis,  excluding amounts payable in
respect of the Loans.

Use of Defined Terms

1.2 Unless otherwise defined or the context otherwise requires,  terms for which
meanings are provided in this  Agreement  shall have such  meanings when used in
the  Disclosure  Schedule  and in each Note,  Borrowing  Request,  Continuation/
Conversion Notice, other Loan Document, notice and other communication delivered
from time to time in connection with this Agreement or any other Loan Document.

Cross-References

1.3 Unless otherwise  specified,  references in this Agreement and in each other
Loan  Document  to any  Article or Section  are  references  to such  Article or
Section of this Agreement or such other Loan Document,  as the case may be, and,
unless otherwise specified,  references in any Article, Section or definition to
any clause are references to such clause of such Article, Section or definition.

Accounting, and Financial Determinations

1.4 Unless otherwise specified, all accounting terms used herein or in any other
Loan  Document  shall  be  interpreted,   all  accounting   determinations   and
computations  hereunder or thereunder  (including  under Section 8.2.4) shall be
made,  and all  financial  statements  required  to be  delivered  hereunder  or
thereunder  shall be prepared in accordance  with, those United States generally
accepted  accounting  principles  (GAAP)  applied  in  the  preparation  of  the
financial statements referred to in Section 7.5. In the event any change in GAAP
after the date hereof would  materially  affect the calculation of the financial
covenants  contained in Section  8.2.4,  the Guarantor and the Majority  Lenders
agrees to enter into good faith  negotiations  for an  agreement  to revise such
financial  covenants  or the  definitions  of terms  used  therein  to take into
account such changes in GAAP;  provided,  however,  that until the Guarantor and
the Lenders have entered into such an  agreement,  such  financial  calculations
shall continue to be made in accordance with GAAP as in effect immediately prior
to such change.

                                    Page 21
<PAGE>

GREKA Colombia Covenants, Representations and Warranties

1.5 All covenants,  representations  and warranties  contained herein that refer
specifically to GREKA Colombia shall be of no further force or effect as soon as
(x) the Lenders  shall have  received  $7,500,000  from the  Borrower as partial
repayment of the Loans and (y) the  Borrower  has reduced the Maximum  Available
Amount to not more than  $6,700,000  in  accordance  with Section 2.2 (the GREKA
Reduction Date).

THE COMMITMENTS, BORROWING PROCEDURES, NOTES AND BORROWING BASE

The Commitments

2.1 On the terms and  subject to the  conditions  of this  Agreement  (including
Article  VI),  each Lender  severally  agrees to make Loans as described in this
Section 2.1.

Loan Commitment

2.1.1 On the terms and subject to the  conditions of this  Agreement  (including
Article VI), each Lender hereby  severally  agrees to make loans to the Borrower
(relative to such Lender,  and of any type,  its Loans) from time to time on any
Business Day occurring prior to the Commitment  Termination  Date, equal to such
Lender's  Percentage of the aggregate  amount of the Borrowing  requested by the
Borrower  to be  made  on such  Business  Day.  The  commitment  of each  Lender
described in this Section 2.1.1 is herein referred to as its Commitment.  On the
terms and conditions hereof,  the Borrower may from time to time borrow,  prepay
and reborrow Loans.

Lenders Not Permitted or Required to Make Loans

2.1.2 No Lender shall be permitted or required to make any Loan and the Borrower
shall not be permitted to effectuate a reduction in the Maximum Available Amount
pursuant to Section 2.2 if, after giving effect thereto,

                                    Page 22
<PAGE>

(a)      the aggregate  outstanding principal amount of all Loans of all Lenders
         would exceed the Commitment Amount, or

(b)      the aggregate  outstanding principal amount of all Loans of such Lender
         would exceed such Lender's Percentage of the Commitment Amount.

Reduction of Maximum Available Amount

2.2 The Borrower may, from time to time on any Business Day occurring  after the
time of the  initial  extension  of credit  hereunder,  voluntarily  reduce  the
Maximum  Available  Amount;  provided,  however that all such  reductions  shall
require at least three (3) Business Days' prior notice to the Agent and shall be
permanent, and any partial reduction of the Maximum Available Amount shall be in
a minimum amount of $500,000 and in an integral multiple of $250,000.

Borrowing Procedures for Loans

2.3 By delivering a Borrowing  Request to the Agent on or before (i) 12:00 noon,
New York time in the case of Base Rate Loans one (1)  Business  Day prior to the
Business Day on which such Borrowing is to be made and (ii) 12:00 noon, New York
time in the case of a LIBO  Rate  Loan  three  (3)  Business  Days  prior to the
Business Day on which such  Borrowing is to be made,  the Borrower may from time
to time  irrevocably  request  that a  Borrowing  be made in the  amount  of (a)
$1,000,000  and integral  multiples of $50,000  thereafter,  in the case of LIBO
Rate Loans and (b) $250,000 and integral multiple of $50,000 thereafter,  in the
case of Base Rate Loans or in the unused amount of the Commitments. The Agent at
its  option  may  accept  telephonic  requests  for  Loans,  provided  that such
acceptance  shall not  constitute a waiver of the Agent's right to delivery of a
Borrowing  Request in connection with subsequent  Loans. Any telephonic  request
for a Loan by the  Borrower  shall be  promptly  confirmed  by  submission  of a
properly  completed  Borrowing Request to the Agent. On the terms and subject to
the conditions of this  Agreement,  each  Borrowing  comprised of Loans shall be
comprised of the type of Loans, and shall be made on the Business Day, specified
in such  Borrowing  Request.  On or before  11:00  a.m.  (New York time) on such
Business  Day each  Lender  shall  deposit  with the Agent  same day funds in an
amount  equal to such  Lender's  Percentage  of the  requested  Borrowing.  Such
deposit  will be made to an account  which the Agent shall  specify from time to
time by  notice to the  Lenders.  To the  extent  funds  are  received  from the
Lenders,  the Agent  shall make such funds  available  to the  Borrower  by wire
transfer to the  accounts  the Borrower  shall have  specified in its  Borrowing
Request.  No Lender's obligation to make any Loan shall be affected by any other
Lender's failure to make any Loan.

                                    Page 23
<PAGE>

Continuation and Conversion Elections

2.4 By  delivering  a  Continuation/Conversion  Notice to the Agent on or before
12:00 noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably  elect,  on not less than three (3) nor more than five (5)  Business
Days'  notice,  that all or any  portion of any Loans  (subject  to the  minimum
amounts for each type of Loan specified in Sections 2.2 and 2.3) to the Borrower
be, in the case of Base Rate  Loans,  converted  into LIBO Rate Loans or, in the
case of LIBO Rate Loans,  converted on the last day of the then current Interest
Period into a Base Rate Loan or continued as a LIBO Rate Loan (in the absence of
delivery of a Continuation/Conversion  Notice with respect to any LIBO Rate Loan
at least  three  (3)  Business  Days  before  the  last day of the then  current
Interest  Period with respect  thereto,  such LIBO Rate Loan shall, on such last
day,  automatically convert to a LIBO Rate Loan having an Interest Period of one
month  except as provided in clause  (ii) of the proviso to this  Section  2.4);
provided,  however,  that (i) each such conversion or continuation  shall be pro
rated among the  applicable  outstanding  Loans of all Lenders to the  Borrower;
(ii) no  portion  of the  outstanding  principal  amount  of any Loans may be so
continued  as, or be so  converted  into,  LIBO Rate Loans when any  Default has
occurred and is  continuing;  and (iii)  continuation  of a LIBO Rate Loan,  the
conversion of a Base Rate Loan into a LIBO Rate Loan or the conversion of a LIBO
Rate  Loan  into a Base  Rate  Loan  pursuant  to this  Section  2.4  shall  not
constitute  a  Borrowing  for  purposes  of Section  6.2.1 or Article VI of this
Agreement.

Funding

2.5 Each Lender may, if it so elects,  fulfill its obligation to make,  continue
or convert LIBO Rate Loans  hereunder by causing one of its foreign  branches or
Affiliates (or an international banking facility created by such Lender) to make
or maintain  such LIBO Rate Loan;  provided,  however,  that such LIBO Rate Loan
shall nonetheless be deemed to have been made and to be held by such Lender, and
the obligations of the Borrower to repay such LIBO Rate Loan shall  nevertheless
be to such  Lender  for  the  account  of  such  foreign  branch,  Affiliate  or
international  banking facility.  In addition,  the Borrower hereby consents and
agrees  that,  for  purposes  of any  determination  to be made for  purposes of
Sections 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each Lender
elected to fund all LIBO Rate Loans by purchasing  Dollar  deposits in its LIBOR
Office's interbank eurodollar market.

                                    Page 24
<PAGE>

Notes

2.6 Each  Lender's  Loans  under its  Commitment  shall be  evidenced  by a Note
payable to the order of such Lender in a maximum  principal amount equal to such
Lender's  Percentage of Forty-Seven  Million Five Hundred Thousand Dollars.  The
Borrower hereby irrevocably authorizes each Lender to make (or cause to be made)
appropriate  notations  on the grid  attached to such  Lender's  Note (or on any
continuation  of such grid or otherwise in its  records),  which  notations,  if
made, shall evidence, inter alia, the date of, the outstanding principal of, and
the interest rate and Interest Period applicable to the Loans evidenced thereby.
Such notations  shall be conclusive and binding on the Borrower  absent manifest
error;  provided,  however  that  the  failure  of any  Lender  to make any such
notations shall not limit or otherwise affect any Obligations.

Determination of the Borrowing Base

2.7 The Borrower,  the Agent and the Lenders agree that the Borrowing Base shall
be $14,200,000.  Without limiting Section 8.2.8 or 8.2.9, if the Borrower sells,
transfers or otherwise disposes of any property that has an aggregate sale price
in  excess of  $1,000,000,  the  Borrowing  Base  shall be  reduced  by  amounts
determined by the Majority Lenders. In addition, if any loss,  destruction of or
damage to, or any taking, casualty or condemnation of, any such property occurs,
the  Borrowing  Base shall be  reduced  by the  greater of (i) the amount of the
proceeds of insurance or other compensation  received by the Borrower in respect
of such loss,  destruction,  damage,  taking or condemnation and (ii) the amount
determined by the Required Lenders.

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

Repayments and Prepayments

3.1 The Borrower  shall repay in full the unpaid  principal  amount of each Loan
upon the Maturity Date. Prior thereto, the Borrower

(a)      may,  from  time  to  time  on  any  Business  Day,  make  a  voluntary
         prepayment, in whole or in part, of the outstanding principal amount of
         any Loans,  provided,  however,  that (i) any such prepayment  shall be
         made pro rata  among  Loans to the  Borrower  of the same type and,  if
         applicable,  having the same Interest Period,  of all Lenders;  (ii) if
         the  Borrower  makes such  prepayment  of any LIBO Rate Loan on any day
         other than the last day of the  Interest  Period for such Loan then the
         Borrower shall be responsible  for the increased cost to the Lenders as
         provided  more  fully  in  Section  4.4;   (iii)  all  such   voluntary
         prepayments  shall  require  at least  three  but no more than five (5)
         Business  Days' prior  written  notice to the Agent;  and (iv) all such
         voluntary  partial payments shall be in an aggregate  minimum amount of
         $250,000 and an integral multiple of $50,000;

                                    Page 25
<PAGE>

(b)      shall,  on each  date  when  any  reduction  in or  termination  of the
         Commitment Amount shall become effective (including pursuant to Section
         2.2, but excluding any such reduction or  termination  resulting from a
         Borrowing Base Deficiency), make a mandatory prepayment in an amount at
         least equal to the aggregate, outstanding principal amount of all Loans
         in excess of the Commitment Amount as reduced or terminated;

(c)      shall, on each Borrowing Base  Deficiency  Payment Date when the sum of
         the then aggregate  outstanding  principal  amount of all Loans exceeds
         the Borrowing  Base then in effect,  first make a mandatory  prepayment
         equal to at least the amount by which all Loans  exceed  the  Borrowing
         Base; and

(d)      shall,  immediately  upon any  acceleration of the Maturity Date of any
         Loans pursuant to Section 9.2 or Section 9.3, repay all Loans.

Each  prepayment  of any Loan made  pursuant  to this  Section  shall be without
premium or penalty,  except for any breakage costs and any other  reimbursements
as may be required by Section 4.4. No prepayment of principal of any Loans shall
cause a reduction in the Commitment Amount.

Interest Provisions

3.2 Interest on the  outstanding  principal  amount of Loans shall accrue and be
payable by the Borrower in accordance with this Section 3.2.

Rates

3.2.1   Pursuant   to  an   appropriately   delivered   Borrowing   Request   or
Continuation/Conversion  Notice,  the Borrower may elect that Loans comprising a
Borrowing accrue interest at a rate per annum:

(a)      on that portion maintained from time to time as a Base Rate Loan, equal
         to the sum of the Alternate  Base Rate from time to time in effect plus
         the Applicable Margin with respect to Base Rate Loans; and

                                    Page 26
<PAGE>

(b)      on that portion  maintained  as a LIBO Rate Loan,  during each Interest
         Period applicable  thereto,  equal to the sum of the LIBO Rate (Reserve
         Adjusted)  for such  Interest  Period plus the  Applicable  Margin with
         respect to LIBO Rate Loans.

All LIBO Rate Loans shall bear  interest from and including the first day of the
applicable  Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.

Post-Default Rates

3.2.2  After the  occurrence  of any Event of Default  or after the date  (after
giving effect to any grace  period) any principal  amount of any Loan is due and
payable (whether on the Maturity Date, upon acceleration or otherwise), or after
any other monetary Obligation of the Borrower shall have become due and payable,
the Borrower shall pay, but only to the extent permitted by law, interest (after
as well as before  judgment) at a rate per annum (the Default Rate) equal to the
sum of (x) the Alternate Base Rate or LIBO Rate (Reserve  Adjusted) (as the case
may be) plus (y)  3.00%  plus (z) the  Applicable  Margin  from  time to time in
effect for the applicable type of Loans.

Payment Dates

3.2.3 Interest accrued on each Loan shall be payable,  without  duplication,  by
the Borrower: (a) in the case of any Base Rate Loans, in arrears on each Monthly
Payment Date;  (b) on the Maturity Date; (c) with respect to any Base Rate Loans
converted  into LIBO Rate Loans on a day when interest  would not otherwise have
been payable pursuant to clause (a), on the date of such conversion;  (d) in the
case of a LIBO Rate Loan,  on the last day of each  Interest  Period but no less
frequently  than  monthly  and  (e) on  that  portion  of  any  Loans  which  is
accelerated  pursuant  to Section  9.2 or  Section  9.3,  immediately  upon such
acceleration.  Interest accrued on Loans or other monetary  Obligations  arising
under this  Agreement or any other Loan  Document  after the date such amount is
due and payable  (whether on the Maturity Date, upon  acceleration or otherwise)
shall be payable by the Borrower upon demand.

Fees

3.3 The Borrower  agrees to pay the fees set forth in this Section 3.3. All such
fees shall be non-refundable.

                                    Page 27
<PAGE>

Commitment Fee

3.3.1 The  Borrower  agrees to pay to the Agent for the account of each  Lender,
for the period commencing on the Effective Date and continuing through the final
Commitment Termination Date, a commitment fee at the rate of 1/2 of 1% per annum
on such Lender's  Percentage  of the sum of the average daily unused  portion of
the Borrowing  Base during the period  preceding  each Monthly  Payment Date and
occurring on or after the prior Monthly Payment Date. Such commitment fees shall
be payable by the Borrower in arrears on each Monthly  Payment Date,  commencing
with the first such day  following  the Effective  Date,  and on the  Commitment
Termination Date.

Participation Fees

3.3.2 The  Borrower  agrees to pay on the Closing  Date to the Agent for its own
account as provided in the Fee Letter,  all fees set forth  therein on the dates
and in the amounts set forth therein.

CERTAIN LIBO RATE AND OTHER PROVISIONS

Fixed Rate Lending Unlawful

4.1 If any Lender shall  determine that the  introduction of or any change in or
in the interpretation of any law after the Effective Date makes it unlawful,  or
any central bank or other  governmental  authority  asserts that it is unlawful,
for such Lender to make,  continue  or  maintain  any Loan as, or to convert any
Loan into, a LIBO Rate Loan, the  obligations of such Lender to make,  continue,
maintain or convert any such Loans shall, upon such determination,  forthwith be
suspended  until such  Lender  shall  notify  the Agent  that the  circumstances
causing such  suspension no longer exist,  and all such Lender's LIBO Rate Loans
shall automatically  convert into Base Rate Loans at the end of the then current
Interest  Periods  with  respect  thereto or sooner,  if required by such law or
assertion.

Deposits Unavailable

4.2 If the Agent shall have determined (which  determination  shall be generally
applicable to all borrowers from CIBC similar to the Borrower and having similar
provisions in agreements  with CIBC as Agent) that (a) Dollar  deposits,  as the
case may be, in the relevant amount and for the relevant Interest Period are not
available  to CIBC in its  relevant  market;  or (b) by reason of  circumstances
affecting CIBC's relevant  market,  adequate means do not exist for ascertaining
the interest rate  applicable  hereunder to LIBO Rate Loans,  then,  upon notice
from the Agent to the  Borrower  and the  Lenders,  (x) the  obligations  of all
Lenders  under  Section 2.3 and Section 2.4 to make or continue any Loans as, or
to convert any Loans into,  LIBO Rate Loans shall  forthwith be suspended  until
the Agent  shall  notify the  Borrower  and the Lenders  that the  circumstances
causing  such  suspension  no longer  exist;  and (y) all LIBO Rate Loans  shall
automatically  convert  into  Base  Rate  Loans at the end of the  then  current
Interest Periods with respect thereto.

                                    Page 28
<PAGE>

Increased LIBO Rate Loan Costs, Etc.

4.3 The Borrower agrees to reimburse each Lender for any increase in the cost to
such Lender of, or any  reduction  in the amount of any sum  receivable  by such
Lender in respect of, making, continuing or maintaining (or of its obligation to
make, continue or maintain) any Loans as, or of converting (or of its obligation
to convert) any Loans into,  LIBO Rate Loans.  Such Lender shall promptly notify
the Agent and the Borrower in writing of the  occurrence of any such event,  and
in any event, within 180 days, after it obtains knowledge thereof and determines
to request such  compensation  such notice to state, in reasonable  detail,  the
reasons therefor, the additional amount required fully to compensate such Lender
for such increased cost or reduced  amount,  the basis upon which such amount is
computed (and including  calculations  in reasonable  detail) and such Lender is
generally requesting  compensation from all borrowers from such Lender which are
similar to the Borrower and having  similar  provisions in agreements  with such
Lender. Such additional amount shall be payable by the Borrower directly to such
Lender  upon  forty-five  days of its  receipt of such  notice,  and such notice
shall, in the absence of manifest error, be presumed correct. The Borrower shall
not, and shall not cause its  Subsidiaries  to, be obligated to pay for any such
amounts if such Lender does not notify the Borrower that such additional amounts
are owing within 180 days of the date such Lender obtains knowledge thereof.

Anything in this  Section 4.3 or in Section  4.5 below  notwithstanding,  if any
Lender  elects to require  payment  by the  Borrower  of any  amount  under this
Section 4.3 or Section 4.5, the Borrower  may,  within 60 days after the date of
receiving  notice  thereof and so long as no Default  shall have occurred and be
continuing,  elect to terminate such Lender (for purposes of this paragraph, the
Terminated  Lender) as a party to this  Agreement;  provided that,  concurrently
with  such  termination  the  Borrower  shall  (i) if the  Agent and each of the
Lenders  other than the  Terminated  Lender shall  consent,  pay the  Terminated
Lender  all  principal,  interest  and  fees  and  other  amounts  owed  to such
Terminated  Lender through such date of termination or (ii) have arranged for an
assignee  acceptable  to the Agent become a  substitute  Lender for all purposes
under this Agreement in the manner provided in Section 11.11.1; provided further
that, prior to substitution for any Terminated  Lender,  the Borrower shall have
given  written  notice to the Agent of such  intention  and, if requested by the
Borrower, the Lenders (other than the Terminated Lenders) shall have the option,
but no obligation, for a period of sixty (60) days after receipt of such notice,
to increase their Commitments in order to replace the Terminated Lender.

                                    Page 29
<PAGE>

Funding Losses

4.4 In the event any Lender shall incur any loss or expense  (including any loss
or expense  incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to make, continue or maintain any portion of
the principal  amount of any Loan as, or to convert any portion of the principal
amount of any Loan into, a LIBO Rate Loan) as a result of (a) any  conversion or
repayment or prepayment of the principal amount of any LIBO Rate Loans on a date
other than the scheduled  last day of the Interest  Period  applicable  thereto,
whether  pursuant to Section 3.1 or  otherwise;  (b) any Loans not being made as
LIBO Rate Loans in accordance with the Borrowing  Request  therefor;  or (c) any
Loans not being  continued as, or converted  into, LIBO Rate Loans in accordance
with the Continuation/Conversion  Notice therefor, then, upon the written notice
of such Lender to the Borrower (with a copy to the Agent),  the Borrower  shall,
within forty-five days of its receipt thereof,  pay directly to such Lender such
amount as will  reimburse  such  Lender for such loss or expense.  Such  written
notice (which shall include  calculations  in reasonable  detail) shall,  in the
absence of manifest error, be conclusive.

Increased Capital Costs

4.5 If after the Effective  Date any change in, or the  introduction,  adoption,
effectiveness,  interpretation,  reinterpretation  or  phase-in  of,  any law or
regulation, directive, guideline, decision or request (whether or not having the
force of law) of any  court,  central  bank,  regulator  or  other  governmental
authority  affects or would affect the amount of capital required or expected to
be  maintained  by any Lender or any Person  controlling  such Lender,  and such
Lender determines (in its sole and absolute  discretion) that the rate of return
on its or such  controlling  Person's capital as a consequence of its Commitment
or the Loans made by such  Lender is reduced  to a level  materially  below that
which such Lender or such  controlling  Person  could have  achieved but for the
occurrence  of any such  circumstance,  then,  in any such case upon notice from
time to time by such Lender to the  Borrower but in no event later than 180 days
after such Lender makes such  determination,  the Borrower shall immediately pay
directly to such Lender additional  amounts sufficient to compensate such Lender
or such  controlling  Person for such  reduction  in rate of  return;  provided,
however,  that the  Borrower  shall not be required to make such payment if such
Lender does not provide notice of such determination  within 180 days thereof. A
certificate of any Lender claiming  compensation  under this Section and setting
forth the  additional  amount or  amounts  to be paid to it  hereunder  shall be
conclusive in the absence of manifest  error. In determining  such amount,  such
Lender may use any reasonable  averaging and attribution methods. A statement of
such Lender as to any such additional amount or amounts (including  calculations
thereof in reasonable detail) shall, in the absence of manifest error or written
objection by the Borrower within 10 days after its receipt of such statement, be
conclusive.  In  determining  such  amount,  such Lender may use any  reasonable
method of averaging and attribution that it shall deem applicable.

                                    Page 30
<PAGE>

Each  Lender will  promptly  notify the  Borrower  and the Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to  compensation  pursuant to this Section and will designate a different
lending office if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to such Lender.

Any  certificate  delivered by a Lender  pursuant to this Section 4.5 requesting
compensation  shall  certify  that such request for  compensation  is being made
pursuant to a policy adopted by such Lender to seek such compensation  generally
from  customers  similar  to the  Borrower  and  having  similar  provisions  in
agreements with such Lender.

Taxes

4.6(a)   All payments by any Obligor of principal of, and interest on, the Loans
         and all other  amounts  payable  hereunder  and  under  any other  Loan
         Document shall be made free and clear of and without  deduction for any
         present or future excise,  stamp or other similar taxes,  fees, duties,
         withholdings or other charges of any nature  whatsoever  imposed by any
         taxing authority, but excluding franchise taxes and taxes imposed on or
         measured by any Lender's  income or gross receipts  (such  non-excluded
         items  being  called  Taxes).  In the  event  that any  withholding  or
         deduction  from any  payment  to be made by any  Obligor  hereunder  is
         required in respect of any Taxes pursuant to any  applicable  law, rule
         or  regulation  (except  for any  withholding  required in respect of a
         Lender or any  Agent by the laws of any  jurisdiction  (other  than the
         United States) where such Lender or Agent is doing business),  then the
         Borrower or the Guarantor (as the case may be) will (i) pay directly to
         the relevant  authority  the full amount  required to be so withheld or
         deducted;  (ii)  promptly  forward to the Agent an official  receipt or
         other  documentation  satisfactory to the Agent evidencing such payment
         to such  authority;  and (iii) pay to the Agent for the  account of the
         Agent and the Lenders such additional amount or amounts as is necessary
         to ensure  that the net amount  actually  received by the Agent or each
         Lender will equal the full amount such Lender  would have  received had
         no such withholding or deduction been required.  Moreover, if any Taxes
         are directly  asserted  against the Agent or any Lender with respect to
         any payment received by the Agent or such Lender  hereunder,  the Agent
         or such Lender may pay such Taxes and the Borrower or the Guarantor (as
         the case may be) will promptly pay such additional  amounts  (including
         any  penalties,  interest or expenses  (other than any such  penalties,
         interest or expense as a result of acts or omissions constituting gross
         negligence  on the part of such  Person)) as is necessary in order that
         the net amount  received by such Person after the payment of such Taxes
         (including any Taxes on such additional  amount) shall equal the amount
         such Person would have received had such Taxes not been asserted.

                                    Page 31
<PAGE>

         If a Lender  becomes aware that any such  withholding or deduction from
         any payment to be made by any Obligor hereunder or under any other Loan
         Document is required,  then such Lender shall promptly notify the Agent
         and the applicable Obligor thereof stating the reasons therefor and the
         additional  amount required to be paid under this Section.  Each Lender
         shall execute and deliver to the Agent and the applicable  Obligor such
         forms as it may be required to execute and deliver  pursuant to Section
         4.6(b).  To the extent that any such  withholding or deduction  results
         from the  failure  or delay of a Lender to provide a form  required  by
         Section 4.7(b) (unless such failure or delay is due to some prohibition
         under applicable requirement of Law), the applicable Obligor shall have
         no  obligation  to pay the  additional  amount  required  by clause (b)
         below.  Anything  in this  Section 4.6  notwithstanding,  if any Lender
         elects to require  payment by any Obligor of any material  amount under
         this  Section,  the  Borrower  may,  within  60 days  after the date of
         receiving  notice thereof and so long as no Default shall have occurred
         and be continuing, elect to terminate such Lender (for purposes of this
         paragraph,  the  Terminated  Lender)  as a  party  to  this  Agreement;
         provided that,  concurrently  with such  termination the Borrower shall
         (i) if the  Agent and each of the  Lenders  other  than the  Terminated
         Lender shall consent, pay the Terminated Lender all principal, interest
         and fees and other amounts owed to such Terminated  Lender through such
         date of termination or (ii) have arranged for an assignee acceptable to
         the Agent to become a  substitute  Lender for all  purposes  under this
         Agreement in the manner provided in Section  11.11.1;  provided further
         that,  prior to substitution  for any Terminated  Lender,  the Borrower
         shall have given written  notice to the Agent of such intention and, if
         requested  by the  Borrower,  the Lenders  (other  than the  Terminated
         Lenders)  shall have the  option,  but no  obligation,  for a period of
         sixty  (60) days  after  receipt  of such  notice,  to  increase  their
         Commitments in order to replace the Terminated Lender.

                                    Page 32
<PAGE>

         If any  Obligor  fails to pay any  Taxes  when  due to the  appropriate
         taxing authority or fails to remit to the Agent, for the account of the
         respective Lenders, the required receipts or other required documentary
         evidence,  the Borrower and the Guarantor  shall  indemnify the Lenders
         for any  incremental  Taxes,  interest  or  penalties  that may  become
         payable by any Lender as a result of any such failure.  For purposes of
         this Section 4.6 a distribution hereunder by the Agent or any Lender to
         or for the account of the Agent or any Lender shall be deemed a payment
         by the Borrower.

(b)      Each Lender which is organized under the laws of a jurisdiction outside
         the United States shall,  (i) on the day of the initial  borrowing from
         each such Lender  hereunder  and (ii) from time to time  thereafter  if
         requested  by the  Borrower  or the  Agent,  provide  the Agent and the
         Borrower with the forms  prescribed by the Internal  Revenue Service of
         the United States certifying as to such Lender's status for purposes of
         determining exemption from United States withholding taxes with respect
         to all payments to be made to such Lender hereunder and under the other
         Loan  Documents or other  documents  satisfactory  to such Lender,  the
         Borrower and the Agent and  indicating  that all payments to be made to
         such  Lender  hereunder  and  under the other  Loan  Documents  are not
         subject to United States  withholding  tax. Unless the Borrower and the
         Agent shall have received such forms or such documents  indicating that
         payments to such Lender  hereunder  and under the other Loan  Documents
         are not subject to United States  withholding tax, the Borrower and the
         Agent shall be entitled to withhold  United  States  withholding  taxes
         from such payments at the applicable statutory rate.

                                    Page 33
<PAGE>

(c)      For any period with respect to which a Lender has failed to provide the
         Borrower or the Agent with the appropriate  form referred to in Section
         4.6(b)  (unless  such  failure  is due to a change  in  treaty,  law or
         regulation  occurring  after the date of which such form originally was
         required  to be  provided),  such  Lender  shall  not  be  entitled  to
         indemnification  under Section  4.6(a) with respect to Taxes imposed by
         the United States,  provided that, if a Lender that is otherwise exempt
         from or subject to a reduced rate of withholding  tax,  becomes subject
         to Taxes because of its failure to deliver a form  required  hereunder,
         the Borrower shall take such steps,  at the expense of such Lender,  as
         such  Lender  shall  reasonably  request to assist such Bank to recover
         such Taxes.

(d)      If the  Borrower is required  to pay  additional  amounts to or for the
         account of any Lender  pursuant to this Section as a result of a change
         in law or treaty  occurring  after such Lender  first became a party to
         this  Agreement,  then such Lender  will,  at the  Borrower's  request,
         change the  jurisdication  of its lending office if, in the judgment of
         such  Lender,  such  change  (i)  will  eliminate  or  reduce  any such
         additional  payment  which  may  thereafter  accrue  and  (ii)  is  not
         otherwise disadvantageous to such Lender.

Payments, Computations, Etc.

4.7  Unless  otherwise  expressly  provided,   all  payments  pursuant  to  this
Agreement,  the Notes or any other Loan Document  shall be made to the Agent for
the pro rata account of the Lenders  entitled to receive such payment.  All such
payments  required  to be made to the  Agent  shall  be made,  without  set off,
deduction or counterclaim, not later than 12:00 noon, New York time, on the date
due, in same day or immediately  available  funds,  to such account as the Agent
shall specify from time to time by notice to the Borrower.  Funds received after
that  time  shall be  deemed  to have  been  received  by the  Agent on the next
succeeding  Business  Day. The Agent shall  promptly  remit in same day funds to
each Lender its share,  if any, of such  payments  received by the Agent for the
account of such Lender.  All interest and fees shall be computed on the basis of
the actual number of days  (including  the first day but excluding the last day)
occurring  during the period for which such  interest  or fee is payable  over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan, 365
days or, if  appropriate,  366  days).  Whenever  any  payment  to be made shall
otherwise  be due on a day  which is not a  Business  Day,  such  payment  shall
(except  as  otherwise  required  by clause  (c) of the  definition  of the term
Interest  Period with respect to LIBO Rate Loans) be made on the next succeeding
Business Day and such extension of time shall be included in computing  interest
and fees, if any, in connection with such payment.

                                    Page 34
<PAGE>

Sharing of Payments

4.8(a)   If any Lender  shall  obtain any  payment  or other  recovery  (whether
         voluntary,  involuntary,  by  application  of set off or  otherwise) on
         account of any Loan (other than  pursuant to the terms of Sections 4.3,
         4.4,  4.5 and 4.6) in excess of its pro rata share of payments  then or
         therewith obtained by all Lenders,  such Lender shall purchase from the
         other  Lenders  such  participations  in Loans made by them as shall be
         necessary to cause such  purchasing  Lender to share the excess payment
         or other recovery ratably with each of them; provided, however, that if
         all  or  any  portion  of the  excess  payment  or  other  recovery  is
         thereafter recovered from such purchasing Lender, the purchase shall be
         rescinded  and  each  Lender  which  has  sold a  participation  to the
         purchasing  Lender  shall repay to the  purchasing  Lender the purchase
         price to the ratable  extent of such  recovery  together with an amount
         equal  to  such  selling  Lender's  ratable  share  (according  to  the
         proportion  of  (a)  the  amount  of  such  selling  Lender's  required
         repayment to the purchasing Lender to (b) the total amount so recovered
         from the  purchasing  Lender) of any  interest or other  amount paid or
         payable by the  purchasing  Lender in  respect  of the total  amount so
         recovered.  The  Borrower  agrees  that  any  Lender  so  purchasing  a
         participation  from another Lender pursuant to this Section may, to the
         fullest  extent  permitted  by law,  exercise all its rights of payment
         (including  pursuant to Section 4.9) with respect to such participation
         as fully as if such Lender were the direct creditor of such Borrower in
         the amount of such participation.  If under any applicable  bankruptcy,
         insolvency or other similar law, any Lender receives a secured claim in
         lieu of a set off to which this Section applies,  such Lender shall, to
         the extent practicable,  exercise its rights in respect of such secured
         claim in a manner  consistent  with the rights of the Lenders  entitled
         under this  Section to share in the  benefits  of any  recovery on such
         secured claim.

Set off

4.9 Each Lender shall,  upon the occurrence of any Default  described in clauses
(a) through (d) of Section  9.1.9 with respect to the Borrower or the  Guarantor
or, with the consent of the Majority  Lenders,  upon the occurrence of any other
Event of  Default,  have the  right to  appropriate  and apply in set off to the
payment of the Obligations  owing to it, and (as security for such  Obligations)
any and all balances,  credits, deposits,  accounts or moneys of the Borrower or
the Guarantor then or thereafter maintained with such Lender; provided, however,
that any such  appropriation  and application shall be subject to the provisions
of Section  4.8.  Each  Lender  agrees  promptly  to notify the  Borrower or the
Guarantor,  as applicable,  and the Agent after any such set off and application
made by such  Lender;  provided,  however,  that the failure to give such notice
shall not affect the  validity  of such set off and  application.  The rights of
each Lender  under this  Section are in  addition to other  rights and  remedies
(including other rights of set off under applicable law or otherwise) which such
Lender may have.

                                    Page 35
<PAGE>

Use of Proceeds

4.10 The  Borrower  shall apply the proceeds of each  Borrowing  (a) to repay in
full  the  Existing  Indebtedness;  (b) to  make  an  intercompany  loan  to the
Guarantor  for  the  purpose  of  consummating  the  Acquisition;   (c)  to  pay
transaction  expenses  in  connection  with the  forgoing;  and (d) for  general
corporate  purposes;  provided  that,  no  proceeds  of any Loan will be used to
acquire any equity  security of a class which is registered  pursuant to Section
12 of the Securities  Exchange Act of 1934 or any "margin stock",  as defined in
F.R.S. Board Regulation U and no such proceeds shall be used in violation of any
applicable law or regulation.

Maximum Interest

4.11 It is the intention of the parties hereto to conform strictly to applicable
usury laws and, anything herein to the contrary notwithstanding, the obligations
of the  Borrower to each  Lender  under this  Agreement  shall be subject to the
limitation  that  payments of interest  shall not be required to the extent that
receipt thereof would be contrary to provisions of law applicable to such Lender
limiting  rates of interest  which may be charged or  collected  by such Lender.
Accordingly,  if the  transactions  contemplated  hereby would be usurious under
applicable  law  (including  the Federal and state laws of the United  States of
America, or of any other jurisdiction whose laws may be mandatorily  applicable)
with respect to a Lender then,  in that event,  notwithstanding  anything to the
contrary in this Agreement,  it is agreed as follows: (a) the provisions of this
Section 4.11 shall govern and control;  (b) the  aggregate of all  consideration
which constitutes  interest under applicable law that is contracted for, charged
or received under this Agreement, or under any of the other aforesaid agreements
or otherwise  in  connection  with this  Agreement by such Lender shall under no
circumstances  exceed the maximum  amount of interest  allowed by applicable law
(such maximum  lawful  interest rate, if any, with respect to such Lender herein
called the  Highest  Lawful  Rate),  and any  excess  shall be  credited  to the
Borrower by such Lender (or, if such consideration shall have been paid in full,
such excess promptly refunded to the Borrower);  (c) all sums paid, or agreed to
be  paid,  to  such  Lender  for  the  use,  forbearance  and  detention  of the
indebtedness  of the  Borrower to such  Lender  hereunder  shall,  to the extent
permitted  by  applicable  law, be  amortized,  prorated,  allocated  and spread
throughout the full term of such indebtedness  until payment in full so that the
actual rate of interest is uniform throughout the full term thereof;  and (d) if
at any time the  interest  provided  pursuant to Section 3.2  together  with any
other  fees  payable  pursuant  to this  Agreement  and  deemed  interest  under
applicable  law,  exceeds  that amount  which would have  accrued at the Highest
Lawful  Rate,  the amount of interest and any such fees to accrue to such Lender
pursuant to this  Agreement  shall be limited,  notwithstanding  anything to the
contrary  in this  Agreement  to that  amount  which  would have  accrued at the
Highest  Lawful Rate, but any subsequent  reductions,  as applicable,  shall not
reduce the interest to accrue to such Lender  pursuant to this  Agreement  below
the Highest Lawful Rate until the total amount of interest  accrued  pursuant to
this Agreement and such fees deemed to be interest equals the amount of interest
which would have accrued to such Lender if a varying rate per annum equal to the
interest provided pursuant to Section 3.2 had at all times been in effect,  plus
the amount of fees which  would  have been  received  but for the effect of this
Section 4.11.

                                    Page 36
<PAGE>

THE GUARANTEE

The Guarantee

5.1 The Guarantor hereby unconditionally,  irrevocably guarantees to the Lenders
and the  Agent,  and to each of  them,  the  due  and  punctual  payment  of all
Obligations  as and when the same  shall  become  due and  payable,  whether  at
maturity,  by declaration or otherwise,  according to the terms thereof. In case
of failure by the  Borrower  punctually  to pay any  Obligation,  the  Guarantor
hereby unconditionally agrees to cause such payment to be made punctually as and
when  the  same  shall  become  due  and  payable,  whether  at  maturity  or by
declaration or otherwise, and as if such payment were made by the Borrower.

Guarantees Unconditional

5.2 The obligations of the Guarantor under this Article V shall be unconditional
and absolute  irrespective of the value,  genuineness,  validity,  regularity or
enforceability  of the  obligations  of the Borrower under this  Agreement,  the
Notes or any other agreement or instrument referred to herein or therein, or any
substitution,  release or exchange of any other  guarantee of or other  security
for any of the  obligations  of the  Guarantor  hereunder,  and,  to the fullest
extent  permitted by  applicable  law,  irrespective  of any other  circumstance
whatsoever  that might  otherwise  constitute a legal or equitable  discharge or
defense of a surety or guarantor (other than payment in full of such obligations
of  the  Guarantor  hereunder)  and,  without  limiting  the  generality  of the
foregoing, shall not be released, discharged or otherwise affected by:

                                    Page 37
<PAGE>

(a)      any extension,  renewal, settlement,  compromise,  waiver or release in
         respect of any obligation of any other Obligor under any Loan Document,
         by operation of law or otherwise;

(b)      any modification or amendment of or supplement to any Loan Document;

(c)      any  modification,   amendment,  waiver,  release,   non-perfection  or
         invalidity of any direct or indirect  security,  or of any guarantee or
         other  liability of any third party,  for any obligation of any Obligor
         under any Loan Document;

(d)      any change in the  corporate  existence,  structure or ownership of the
         Borrower  or  its   Subsidiaries,   or  any   insolvency,   bankruptcy,
         reorganization  or other similar  proceeding  affecting the Borrower or
         its Subsidiaries or their assets or any resulting  release or discharge
         of any obligation of any other Obligor contained in any Loan Document;

(e)      the existence of any claim, set-off or other rights which the Guarantor
         may have at any time against the  Borrower,  the Agent or any Lender or
         any other Person,  whether or not arising in  connection  with any Loan
         Document;  provided that nothing  herein shall prevent the assertion of
         any such claim by separate suit or compulsory counterclaim;

(f)      any invalidity or  unenforceability  relating  to or against any  other
         Obligor  for any  reason  of any  Loan  Document  or any  provision  of
         applicable law or regulation  purporting to prohibit the payment by any
         other Obligor of any Obligation; or

(g)      any other act or omission to act or delay of any kind by any Obligor or
         any other Person or any other  circumstance  whatsoever that might, but
         for the provisions of this  paragraph,  constitute a legal or equitable
         discharge of or defense to the  obligations of the Guarantor under this
         Article V.

                                    Page 38
<PAGE>

Reinstatement in Certain Circumstances

5.3 The Guarantor's  obligations under this Article V shall remain in full force
and  effect  until the  Commitments  are  terminated  and all  principal  of and
interest on the Notes and all other  amounts  payable by the Borrower  hereunder
and under the other Loan Documents  shall have been paid in full. If at any time
any payment of the  principal  of or  interest  on any Note or any other  amount
payable  by the  Borrower  under  any  Loan  Document  is  rescinded  or must be
otherwise restored or returned upon the insolvency, bankruptcy or reorganization
of the Borrower or otherwise,  the Guarantor's  obligations under this Article V
with respect to such  payment  shall be  reinstated  at such time as though such
payment had become due but had not been made at such time.

Waiver of Notice

5.4 Each Guarantor  irrevocably waives acceptance hereof,  presentment,  demand,
protest and any notice not provided for herein,  as well as any requirement that
at any time any action be taken by any Person  against any other  Obligor or any
other Person.

Subrogation

5.5 The Guarantor  hereby waives until the payment and  satisfaction  in full of
all of the Obligations and the expiration or termination of the Commitments, all
rights of subrogation or contribution,  whether arising by contract or operation
of law  (including  without  limitation any such right arising under the Federal
Bankruptcy Code) or otherwise by reason of any payment by the Guarantor pursuant
to the  provisions  of this Article V and further  agrees that until the payment
and satisfaction in full of the Obligations and the expiration or termination of
the Commitments, the Guarantor shall not exercise any right or remedy arising by
reason of any  performance  by the Guarantor of its guarantee in this Article V,
whether by  subrogation  or otherwise,  against the Borrower or any security for
any of the Obligations.

Stay of Acceleration

5.6 If  acceleration  of the time  for  payment  of any  amount  payable  by the
Borrower  under this  Agreement  is stayed upon the  insolvency,  bankruptcy  or
reorganization   of  the  Borrower,   all  such  amounts  otherwise  subject  to
acceleration  under the terms of this Agreement shall  nonetheless be payable by
the Guarantor  hereunder forthwith on demand by the Agent made at the request of
the Majority Lenders.

                                    Page 39
<PAGE>

Deposits in Cash Account

5.7 The Guarantor shall deposit $600,000 into the Cash Collateral Account on the
first day of each calendar month, commencing August 1, 2000. All amounts held in
the Cash Collateral Account shall provide collateral security to the Lenders and
the Agent, as more fully provided in the Pledge Agreement.

CONDITIONS TO BORROWING

Initial Borrowing

6.1 The  obligations  of the  Lenders  to fund the  initial  Borrowing  shall be
subject  to the  prior  or  concurrent  satisfaction  of each of the  conditions
precedent set forth in this Section 6.1.

Resolutions, Etc.

6.1.1 The Agent shall have received from each of the Borrower and the Guarantor,
a  certificate,  dated the date of the initial  Borrowing,  of its  Secretary or
Assistant  Secretary  as to (a)  resolutions  of its Board of Directors or other
governing body then in full force and effect authorizing the execution, delivery
and performance of this Agreement and each other Loan Document to be executed by
it and (b) the incumbency  and  signatures of those  officers  authorized to act
with respect to this Agreement and each other Loan Document executed by it, upon
which certificate the Agent and each Lender may conclusively rely until it shall
have  received a further  certificate  of the  Secretary  of the Borrower or the
Guarantor (as the case may be) canceling or amending such prior certificate.

Satisfactory Review and Legal Form

6.1.2 All legal matters in connection  with this Agreement and the  consummation
of the  transaction  contemplated  hereby  and by the  Loan  Documents  shall be
approved by the Agent and its legal counsel, and there shall have been furnished
to the Agent by the Borrower and the Guarantor,  at the Obligors' expense,  such
agreements,   opinions  of  counsel,   title  opinions  and  other  records  and
information,  in form and substance,  scope and methodology  satisfactory to the
Agent or counsel to the Agent in the sole  discretion of the Agent or counsel to
the Agent,  as the Agent or counsel to the Agent may  reasonably  have requested
for that purpose,  including,  without limitation, (a) information pertaining to
the makeup, background (including references), experience and prior associations
of the  senior  management  and  board  of  directors  of the  Borrower  and the
Guarantor and any shareholders holding a beneficial interest in more than 10% of
the voting  securities  of the  Guarantor,  (b)  information  pertaining  to the
organization  and  structure,  ownership  of material  assets and title  matters
pertaining to the Guarantor and the Borrower and (c) information relating to the
use of Hazardous Material at, on or in connection with the Mortgaged  Properties
or any other real property of the Borrower or GREKA Colombia and compliance with
all  applicable  Environmental  Laws  and  environmental   assessments  of  such
Mortgaged Properties.

                                    Page 40
<PAGE>

Financial Statements

6.1.3 The Agent and the  Lenders  shall have  received a  certified  copy of the
audited  consolidated balance sheet of the Guarantor as at December 31, 1999 and
the related consolidated  statements of income,  retained earnings and cash flow
of the Guarantor and its consolidated  Subsidiaries for the fiscal year ended on
said  date,  with  the  opinion  thereon  of an  independent,  certified  public
accountant of nationally  recognized standing,  which financial statements shall
be in form and substance satisfactory to the Agent and the Lenders.

Delivery of Notes

6.1.4 The Agent shall have  received,  for the account of each Lender,  its Note
duly executed and delivered by the Borrower.

Security Agreement

6.1.5 The Agent  shall  have  received  executed  counterparts  of the  Security
Agreement, dated as of the date hereof, duly executed by the Borrower,  together
with executed copies of proper Uniform  Commercial  Code Form UCC-1  statements,
necessary  or in the opinion of the Agent,  desirable to create in the Agent for
the  benefit  of the Agent  and the  Lenders  all Liens and other  rights of any
Person as a valid,  perfected  first  priority Lien in the  Collateral  Property
described in the Security Agreement.

Pledge Agreement

6.1.6 The Agent shall have  received  (i)  executed  counterparts  of the Pledge
Agreement, dated as of the date hereof, duly executed by the Guarantor, together
with executed copies of proper Uniform  Commercial  Code Form UCC-1  statements,
necessary  or in the opinion of the Agent,  desirable to create in the Agent for
the  benefit  of the Agent  and the  Lenders  all Liens and other  rights of any
Person as a valid,  perfected  first  priority Lien in the  Collateral  Property
described in the Pledge  Agreement;  (ii) the shares of the Borrower required to
be  delivered  to the  Agent  on  the  Effective  Date  pursuant  to the  Pledge
Agreement;  and (iii) stock powers  executed in blank with respect to the shares
specified in clause (ii).

                                    Page 41
<PAGE>

Mortgage

6.1.7 The Agent shall have  received  counterparts  of a Mortgage  covering each
Mortgaged  Property,  each dated as of the date  hereof,  duly  executed  by the
Borrower, together with evidence of the completion (or satisfactory arrangements
for the  completion) of all recordings and filings of the  Mortgage(s) as be may
be necessary  or, in the  reasonable  opinion of the Agent,  desirable to create
effectively  a valid,  perfected,  first  priority  Lien against the  properties
purported to be covered thereby; and (b) such surveys,  abstracts and appraisals
as may be required in  connection  with the Mortgage or as the Majority  Lenders
may reasonably request, all in form and substance  satisfactory to the Agent and
the Lenders.

Title Opinions

6.1.8 The Agent shall have received title opinions with respect to the Mortgaged
Properties in a form and substance satisfactory and from counsel satisfactory to
the Agent.

Payment of Outstanding Indebtedness

6.1.9 All  Existing  Indebtedness  shall  have  been paid in full and  cancelled
(including,  to the extent necessary,  from proceeds of the initial  Borrowing);
and all Liens securing payment of any such Indebtedness have been terminated and
the Agent shall have received all Uniform Commercial Code form UCC-3 termination
statements or other  instruments as may be suitable or appropriate in connection
therewith.

Searches and Releases

6.1.10 The Agent  shall have  received  the  following  from the  Borrower:  (a)
executed  copies of  proper  Uniform  Commercial  Code  form  UCC-3  termination
statements and other relevant  assignments and documents,  if any,  necessary to
terminate  all Liens  and  other  rights  of any  Person  (i) in any  Collateral
Property  described in the Security  Documents  previously granted by any Person
and (ii)  securing any of the Existing  Indebtedness,  together  with such other
Uniform  Commercial  Code Form UCC-3  termination  statements or releases as the
Agent may reasonably request; and (b) copies of Uniform Commercial Code, tax and
judgment  lien  searches  with respect to the Borrower and the Guarantor in each
jurisdiction deemed appropriate by the Agent.

                                    Page 42
<PAGE>

Opinions of Counsel

6.1.11 The Agent and the Lenders shall have received opinions, dated the date of
the initial  extension of credit or such other date  acceptable to the Agent and
addressed to the Agent and all Lenders, from

(a)      Ballard Spahr Andrews & Ingersoll, LLP, special counsel to the Borrower
         and the Guarantor, in substantially the form of Exhibit H-1;

(b)      Susan Whalen,  General  Counsel of the  Guarantor and the Borrower,  in
         substantially the form of Exhibit H-2;

(c)      Downey Brand Seymor & Rohwer,  Breazeale  Sachse & Wilson LLP, Maddox &
         Holloman,  P.C.  and  Andrews & Kurth,  special  local  counsel  to the
         Borrower in the states of California,  Louisiana, New Mexico and Texas,
         respectively; and

(d)      Freshfields   LLP,   special  New  York   counsel  to  the  Agent,   in
         substantially the form of Exhibit H-3.

Consummation of the Acquisition

6.1.12 The Acquisition  shall occur subsequent to the initial  Borrowing and the
Agent and the Lenders shall have received copies of all  Acquisition  Documents,
which shall be in form and scope  satisfactory  to the Agent and the Lenders and
which  agreements  shall not be amended  subsequent to June 15, 2000 and none of
the conditions to the  Acquisition  shall be waived  without,  in each case, the
prior consent of the Agent and the Majority  Lenders,  provided that the closing
date for the Acquisition may be modified without the consent of the Agent or the
Majority Lenders.

No Material Adverse Change

6.1.13  Since  December  31,  1999,  there shall not have  occurred any material
adverse change in the financial  condition,  operations,  properties,  assets or
prospects of either (x) GREKA and its Subsidiaries or (y) the Borrower.

Insurance

6.1.14 The Agent and the Lenders shall have received  certificates  of insurance
evidencing  the  existence of all  insurance  required to be  maintained  by the
Borrower and the Guarantor pursuant to Section 8.1.4, such certificates to be in
such form and contain such information as reasonably requested by the Agent.

                                    Page 43
<PAGE>

Reserve Report

6.1.15 The Agent shall have received a reserve  report  prepared by  Netherland,
Sewell & Associates,  Inc. covering the Borrower's Hydrocarbon Interests and the
Hydrocarbon  Interests  to  be  acquired  by  GREKA  Colombia  pursuant  to  the
Acquisition.

Payment of Fees

6.1.16 The Agent shall have received  evidence of the payment by the Borrower of
all fees, expenses and other amounts previously agreed to by the Borrower or the
Guarantor or payable hereunder on or before the date of the initial Borrowing.

Assignment of Account Agreement

6.1.17 The Agent shall have received executed  counterparts of the Assignment of
Account Agreement, dated as of the date hereof, duly executed by the Guarantor.

All Borrowings

6.2 The  obligation  of each  Lender  to fund  any Loan on the  occasion  of any
Borrowing (including the initial Borrowing) shall be subject to the satisfaction
of each of the conditions precedent set forth in this Section 6.2.

Compliance with Warranties, No Default, Etc.

6.2.1 Both before and after giving effect to any Borrowing  (but, if any Default
of the nature  referred to in Section  9.1.5 shall have occurred with respect to
any other  Indebtedness,  without giving effect to the application,  directly or
indirectly,  of the proceeds thereof) the following statements shall be true and
correct:

(a)      the  representations  and warranties set forth in Article VI and in the
         other Security Documents shall be true and correct with the same effect
         as if then made (unless  stated to relate solely to an earlier date, in
         which  case  such  representations  and  warranties  shall  be true and
         correct as of such earlier date);

(b)      no  labor   controversy,   litigation,   arbitration  or   governmental
         investigation  or  proceeding  shall be pending or, to the knowledge of
         the Borrower or the Guarantor,  threatened  against the Borrower or the
         Guarantor  or  any  of  their  respective   Subsidiaries   which  would
         reasonably be expected to have a Material Adverse Effect; and

                                    Page 44
<PAGE>

(c)      no Default shall have then occurred and be continuing,  and neither the
         Borrower  nor  the  Guarantor  are  not  in  violation  of  any  law or
         governmental  regulation  or court  order  or  decree  except  for such
         violations  as would not  reasonably  be  expected  to have a  Material
         Adverse Effect.

Borrowing Request

6.2.2 The Agent shall have received a Borrowing Request for such Borrowing. Each
of the delivery of a Borrowing Request and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that, on the date of such Borrowing (both immediately  before and after
giving effect to such Borrowing and the  application  of the proceeds  thereof),
the  statements  made in Section 6.2.1 are true and correct.  By delivering  the
initial Borrowing Request,  the Borrower shall be deemed to have represented and
warranted  that  on and as of the  date  of the  initial  Borrowing  each of the
conditions set forth in Article VI has been satisfied.

Satisfactory Legal Form

6.2.3 All documents executed or submitted pursuant hereto by or on behalf of the
Borrower  shall be  satisfactory  in form and  substance  to the  Agent  and its
counsel;  the  Agent  and its  counsel  shall  have  received  all  information,
approvals,  opinions,  documents or  instruments as the Agent or its counsel may
reasonably request.

Conditions to Subsequent Borrowings

6.3 The  obligation  of each  Lender  to fund  Loans in an  amount  in excess of
$6,700,000 in the aggregate for all Lenders shall be subject to the satisfaction
of each of the conditions precedent set forth in this Section 6.3.

6.3.1 The Agent and the Lenders shall have received the opinion, dated as of the
date of the  Acquisition  (or such other date as is acceptable to the Agent) and
addressed to the Agent and all Lenders, from Gomez Pinzon & Associados,  special
Colombian counsel to GREKA Colombia, in substantially the form of Exhibit H-4.

6.3.2 The Agent and the Lenders shall have received the opinion, dated as of the
date of the  Acquisition  (or such other date as is acceptable to the Agent) and
addressed to the Agent and all Lenders,  from Dutch  counsel to GREKA  Colombia,
reasonably acceptable to the Agent, in substantially the form of Exhibit H-5.

6.3.3 The Agent shall have received (i) executed  counterparts  of the Pledge of
Shares,  duly executed by the Guarantor and GREKA  Colombia;  (ii) the shares of
GREKA  Colombia  required to be delivered to the Agent pursuant to the Pledge of
Shares;  and (iii) stock  powers  executed  in blank with  respect to the shares
specified in clause (ii).

                                    Page 45
<PAGE>

6.3.4 All approvals,  authorizations and consents from Governmental  Authorities
and third parties  necessary for the consummation of the Acquisition  shall have
been obtained.

REPRESENTATIONS AND WARRANTIES

In order to induce the Lenders and the Agent to enter into this Agreement and to
make Borrowings hereunder, each of the Borrower and the Guarantor represents and
warrants unto the Agent and each Lender as set forth in this Article VII.

Organization, Etc.

7.1 Each of the Borrower and the  Guarantor is a corporation  validly  organized
and existing and in good standing under the laws of the State of Colorado.  Each
of the  Borrower  and the  Guarantor  is qualified to do business and is in good
standing  as a foreign  entity  in each  jurisdiction  where  the  nature of its
business  requires such  qualification,  except where the failure to so qualify,
would not reasonably be expected to have a Material Adverse Effect.  Each of the
Borrower and the  Guarantor has full power and authority and holds all requisite
governmental licenses, permits and other approvals (i) to enter into and perform
its Obligations under this Agreement,  the Notes and each other Loan Document to
which it is a party and (ii) except where failure to do so would not  reasonably
be expected to have a Material  Adverse Effect,  to own and hold under lease its
property and to conduct its business substantially as currently conducted by it.
Following the Acquisition, GREKA Colombia will have full power and authority and
will  hold  all  requisite  governmental  licenses,  permits  and  approvals  to
consummate the  Acquisition  and perform its  obligations  under the Acquisition
Documents.

Due Authorization, Non-Contravention, Etc.

7.2 The  execution,  delivery  and  performance  by each of the Borrower and the
Guarantor  of this  Agreement  and each other Loan  Document  executed  or to be
executed by it, are within the Borrower's and the Guarantor's  powers, have been
duly  authorized  by all  necessary  action,  and do not (a) violate any Organic
Documents of the Borrower or the  Guarantor;  (b) violate any other  contractual
restriction,  law or governmental regulation or court decree or order binding on
or  affecting  the  Borrower  or the  Guarantor;  (c) result in, or require  the
creation or  imposition  of, any Lien on any  properties  of the Borrower or the
Guarantor except for Liens granted under the Loan Documents;  or (d) require the
consent of any person which has not been obtained.

                                    Page 46
<PAGE>

The execution,  delivery and  performance  by GREKA Colombia of the  Acquisition
Documents  executed or to be executed by it, are within GREKA Colombia's powers,
have been duly authorized by all necessary action,  and do not (a) violate GREKA
Colombia's Organic Documents;  (b) violate any contractual  restriction,  law or
governmental  regulation or court decree or order binding on or affecting  GREKA
Colombia;  or (c) result in, or require the creation or imposition  of, any Lien
on any of GREKA Colombia's properties.

Government Approval, Regulation, Etc.

7.3 No  authorization or approval or other action by, and no notice to or filing
with, any Governmental  Authority or regulatory body or other Person is required
for the due execution,  delivery or performance by the Borrower or the Guarantor
of this Agreement,  the Notes or any other Loan Document to which it is a party.
Neither the Borrower nor the  Guarantor is an  "investment  company"  within the
meaning of and subject to regulation  under the Investment  Company Act of 1940,
as amended,  or 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",  within the meaning of and subject to regulation  under
the Public Utility Holding Company Act of 1935, as amended.

Validity, Etc.

7.4 This  Agreement,  the Notes and each other  Loan  Document  executed  by the
Borrower will, on the due execution and delivery thereof, constitute, the legal,
valid and binding  obligations of the Borrower  enforceable  in accordance  with
their respective terms.  Without limiting the foregoing,  each Security Document
executed by the Borrower  constitutes the legal, valid and binding obligation of
the Borrower  enforceable  in accordance  with its respective  terms,  and, upon
recording thereof,  shall create a valid and perfected,  first priority security
interest in the Assets of the Borrower as provided  therein.  This Agreement and
each other Loan  Document  to which the  Guarantor  is a party  constitutes  the
legal, valid and binding  obligations of the Guarantor  enforceable  against the
Guarantor  in  accordance  with their  respective  terms.  Without  limiting the
forgoing,  the  Pledge  Agreement  constitutes  the  legal,  valid  and  binding
obligation  of the  Guarantor,  enforceable  against the Guarantor in accordance
with its respective  terms,  and creates a valid and  perfected,  first priority
security interests in the Assets of the Guarantor as provided therein.

                                    Page 47
<PAGE>

Financial Information

7.5(a)   The financial statements of the Guarantor referred to in Section 6.1.3,
         copies of which have been furnished to the Agent and each Lender,  have
         been  prepared  in  accordance   with  GAAP  and  present   fairly  the
         consolidated  financial condition of the Guarantor and its consolidated
         Subsidiaries,  as at the date thereof and the results of its operations
         for the period then ended; and

(b)      the financial  statements of the Borrower referred to in Section 6.1.3,
         copies of which have been furnished to the Agent and each Lender,  have
         been prepared in accordance with GAAP consistently applied, and present
         fairly the consolidated  financial condition of the Borrower, as at the
         dates  thereof  and the results of its  operations  for the period then
         ended.

No Material Adverse Change

7.6 From the date of the  financial  statements  described in Section 7.5 to the
Effective  Date,  there has been no event,  occurrence  or condition  that could
reasonably be expected to have a Material Adverse Effect.

Litigation, Labor Controversies, Etc.

7.7 There is no pending or, to the Knowledge of the Borrower and the  Guarantor,
threatened litigation,  action,  proceeding,  or labor controversy affecting the
Borrower  or the  Guarantor  (including  its  Subsidiaries),  or  any  of  their
respective properties, businesses, assets or revenues, which could reasonably be
expected  to have a  Material  Adverse  Effect or which  purports  to affect the
legality,  validity or enforceability of this Agreement,  the Notes or any other
Loan Document, except such as described on the Disclosure Schedule.

Subsidiaries

7.8 As of date hereof,  the Borrower has no Subsidiaries other than MV Ventures,
GP, a Texas general partnership.

Ownership of Properties; Reserve Report

7.9 Each of the Borrower and the Guarantor owns good and defensible title to, or
valid  leasehold  interests  in,  all of its  properties  and  assets,  real and
personal,  tangible and intangible, of any nature whatsoever (including patents,
trademarks,  trade names,  service marks and copyrights),  free and clear of all
Liens, charges or claims (including infringement claims with respect to patents,
trademarks,  copyrights and the like) and free and clear of all  limitations and
restrictions on, and consent requirements for,  disposition or transfer,  except
for  imperfections and burdens that do not in the aggregate  materially  detract
from the value  thereof.  The  Hydrocarbon  Interests  disclosed  in the reserve
report  delivered to the Agent pursuant to Section 6.1.15  constitute all of the
Hydrocarbon Interests owned by the Borrower as of the date of this Agreement. To
the  Knowledge of the Borrower and the  Guarantor,  the  estimated  reserves set
forth in the reserve  report  delivered  pursuant to Section 6.1.15 are accurate
and the Borrower and the Guarantor have delivered to the reservoir engineer that
prepared such reserve report all the information  reasonably  required to enable
such Person to prepare such reserve report.

                                    Page 48
<PAGE>

Taxes

7.10 Each of the  Borrower  and the  Guarantor  has filed  all tax  returns  and
reports  required  by law to have  been  filed by it and has paid all  taxes and
governmental charges thereby shown to be owing, except any such taxes or charges
which are being  diligently  contested in good faith by appropriate  proceedings
and for which  adequate  reserves  in  accordance  with GAAP shall have been set
aside on its books.

Pension and Welfare Plans

7.11  During  the  twelve-consecutive-month  period  prior  to the  date  of the
execution and delivery of this  Agreement and prior to the date of any Borrowing
hereunder,  no steps have been taken to terminate any Pension Plan in a distress
termination  under Section 4041 (c) of ERISA,  and no  contribution  failure has
occurred  with  respect to any Pension  Plan  sufficient  to give rise to a Lien
under section 302(f) of ERISA.  No condition  exists or event or transaction has
occurred  with respect to any Pension Plan which might result in the  incurrence
by the Borrower or any member of the Controlled Group of any liability,  fine or
penalty.  Except as  disclosed  in Item  7.11  (Employee  Benefit  Plans) of the
Disclosure Schedule, neither the Borrower nor any member of the Controlled Group
has any contingent liability with respect to any post-retirement benefit under a
Welfare Plan, other than liability for continuation coverage described in Part 6
of Title I of ERISA.

Environmental Warranties

7.12 Except as set forth in Item 7.12 (Environmental  Matters) of the Disclosure
Schedule:

                                    Page 49
<PAGE>

(a)      To the  Knowledge of the Borrower and the  Guarantor,  except where the
         failure to obtain or comply could not  reasonably be expected to have a
         Material Adverse Effect, each of the Borrower and the Guarantor and all
         of their  respective  Assets and  operations  are in  compliance in all
         material respects with all Environmental Laws. Neither the Borrower nor
         the  Guarantor  is aware of, and  neither has  received  notice of, any
         past, present, or future conditions, events, activities,  practices, or
         incidents  which  may  interfere  with or  prevent  the  compliance  or
         continued  compliance  of the  Borrower  and  the  Guarantor  with  all
         Environmental Laws;

(b)      To the  Knowledge of the Borrower and the  Guarantor,  except where the
         failure to obtain or comply could not  reasonably be expected to have a
         Material  Adverse  Effect,  each of the Borrower and the  Guarantor has
         obtained all permits,  licenses,  and authorizations  that are required
         under  applicable  Environmental  Laws, and has received no notice that
         all such permits are not in good standing,  or that the Borrower or the
         Guarantor is not in compliance  with all of the terms and conditions of
         such permits;

(c)      To the  Knowledge of the Borrower and the  Guarantor,  except where the
         failure to obtain or comply could not  reasonably be expected to have a
         Material  Adverse  Effect,  no Hazardous  Materials exist on, about, or
         within or have been used, generated,  stored, transported,  disposed of
         on, or Released from any of the Assets of the Borrower or the Guarantor
         except in amounts that would not violate  applicable law. The use which
         each Borrower  makes and intends to make of its  properties  and Assets
         will  not  result  in the  use,  generation,  storage,  transportation,
         accumulation, disposal, or Release of any Hazardous Material on, in, or
         from any of their properties or assets except in amounts that would not
         violate applicable law;

(d)      To the Knowledge of the Borrower and the Guarantor, neither Obligor nor
         any of its  currently  or  previously  owned or  leased  properties  or
         operations is subject to any  outstanding  or threatened  order from or
         agreement with any Governmental Authority or other Person or subject to
         any  judicial or docketed  administrative  proceeding  with  respect to
         failure to comply with Environmental Laws;

(e)      To the  Knowledge of the Borrower and the  Guarantor,  except where the
         failure to obtain or comply could not  reasonably be expected to have a
         Material  Adverse  Effect,  there are no  conditions  or  circumstances
         associated with the currently or previously owned or leased  properties
         or operations of the Borrower or the Guarantor that could reasonably be
         expected to give rise to any Environmental Liabilities;

                                    Page 50
<PAGE>

(f)      Neither  Obligor  has  a  treatment,   storage,  or  disposal  facility
         requiring a permit under the Resource Conservation and Recovery Act, 42
         U.S.C.ss.  6901  et  seq.,  regulations  thereunder  or any  comparable
         provision  of state  law.  To the  Knowledge  of the  Borrower  and the
         Guarantor,  each of the  Borrower and the  Guarantor is in  substantial
         compliance with all applicable financial responsibility requirements of
         all Environmental Laws;

(g)      Neither  Obligor  has  filed,  or to the best of the  Knowledge  of the
         Borrower and the Guarantor,  failed to file, any notice  required under
         applicable Environmental Law reporting a Release; and

(h)      Neither  Obligor  has  received  notice that a Lien  arising  under any
         Environmental  Law has  attached to any  property or revenues of either
         Obligor.

Regulations U and X

7.13  Neither  the  Borrower  nor the  Guarantor  is engaged in the  business of
extending  credit for the purpose of purchasing or carrying margin stock, and no
proceeds  of any Loans will be used for a purpose  which  violates,  or would be
inconsistent  with, F.R.S. Board Regulation U or X. Terms for which meanings are
provided  in  F.R.S.  Board  Regulation  U or X or any  regulations  substituted
therefor,  as from time to time in effect,  are used in this  Section  with such
meanings.

Accuracy of Information

7.14 To the Knowledge of the Borrower and the Guarantor, all factual information
heretofore or contemporaneously furnished by or on behalf of the Borrower or the
Guarantor in writing to the Agent, the Arranger or any Lender for purposes of or
in connection with this Agreement or any transaction contemplated hereby is, and
all other such factual  information  hereafter  furnished by or on behalf of the
Borrower or the Guarantor to the Agent, the Arranger or any Lender will be, true
and accurate in every material  respect on the date as of which such information
is dated or  certified  and as of the date of  execution  and  delivery  of this
Agreement by the Agent and such Lender,  and such  information  is not, or shall
not be, as the case may be,  incomplete  by omitting to state any material  fact
necessary to make such information not misleading in any material respect. There
is no fact known to the Borrower or the Guarantor  which has a Material  Adverse
Effect,  or which could reasonably be expected to have a Material Adverse Effect
other than such  information  that has been  disclosed in writing to the Lenders
prior to the date hereof.

                                    Page 51
<PAGE>

The  Disclosure  Schedule  contains,  as of the  date  of  this  Agreement,  the
outstanding  principal  amount of all  Indebtedness of the Borrower,  any of its
Subsidiaries or GREKA Colombia in excess of $250,000, and specifies for all such
Indebtedness (w) the holder of such Indebtedness, (x) the interest rate/or basis
for determining  such interest rate in the case of floating rate  Indebtedness),
(y) any Liens granted to secure such Indebtedness and (z) the scheduled maturity
of all payments with respect to such Indebtedness.

No Defaults under Other Agreements

7.15 Except as disclosed in Item 7.15 of the  Disclosure  Schedule,  neither the
Borrower nor the Guarantor is in default in the payment when due (subject to any
applicable  grace  period),   whether  by  acceleration  or  otherwise,  of  any
Indebtedness in excess of the applicable Materiality Threshold,  and no defaults
have occurred in the  performance  or observance of any  obligation or condition
with  respect  to any such  Indebtedness  if the  effect of such  default  is to
accelerate the maturity of any Indebtedness.

Solvency

7.16 Each of the Borrower and the Guarantor is Solvent.

Compliance with Laws, Etc.

7.17 Each of the Borrower,  the  Guarantor and GREKA  Colombia has complied with
all applicable  statutes,  rules,  regulations,  orders and  restrictions of any
government or any  instrumentality or agency thereof,  having  jurisdiction over
the conduct of their respective  businesses or the ownership of their respective
Hydrocarbon Interests except where the failure to so comply would not reasonably
be expected to have a Material Adverse Effect.

Creation and Perfection of Security Interests

7.18 All Liens and other security interests  described in the Security Documents
have been created and perfected as required pursuant to each Security  Document,
and copies of Uniform  Commercial  Code financing  statements and other relevant
documentation have been provided to the Agent.

                                    Page 52
<PAGE>

COVENANTS

Affirmative Covenants

8.1 The  Borrower and the  Guarantor  agree with the Agent and each Lender that,
until all Commitments  have  terminated and all  Obligations  have been paid and
performed in full, the Borrower and the Guarantor  will perform the  obligations
set forth in this Section 8.1.

Financial Information, Reports, Notices, Etc.

8.1.1 The Borrower and the Guarantor, as applicable, will furnish, or will cause
to be  furnished,  to the Agent  for  distribution  to each  Lender  copies  (in
sufficient  number to provide at least one copy to each Lender) of the following
financial statements, reports, notices and information:

(a)      as soon as available and in any event not later than the earlier of (x)
         the date of filing of the  Guarantor's  Form 10-Q (or  successor  form)
         with the Securities  and Exchange  Commission and (y) 60 days after the
         end of each Fiscal  Quarter  commencing  with the Fiscal Quarter ending
         June 30, 2000, consolidated balance sheets, statements of earnings, and
         statements  of  cash  flow  of  the  Guarantor  and  its   consolidated
         Subsidiaries, including without limitation, the Borrower, as of the end
         of such Fiscal Quarter and consolidating balance sheets,  statements of
         earnings and  statements of cash flows of the Guarantor  (including the
         Guarantor  and its  Subsidiaries  other  than the  Borrower  and  GREKA
         Colombia in one column) and of the Borrower and GREKA Colombia for such
         Fiscal Quarter and for the period commencing at the end of the previous
         Fiscal Year and ending with the end of such Fiscal  Quarter,  certified
         by an Authorized  Officer of the Guarantor or the Borrower (as the case
         may be),  which  financial  statements  shall  have  been  reviewed  by
         independent  certified  public  accountants  of  nationally  recognized
         standing selected by the Guarantor;

(b)      as soon as available and in any event not later than the earlier of (x)
         the date of filing of the  Guarantor's  Form 10-K (or  successor  form)
         with the Securities and Exchange  Commission and (y) 105 days after the
         end of each Fiscal Year of the Guarantor  and the  Borrower,  a copy of
         the  annual  audit  report  for such  Fiscal  Year  for the  Guarantor,
         including therein  consolidated and consolidating  financial statements
         of the  Guarantor  and the  Borrower  as of the end of such Fiscal Year
         prepared  in the manner  described  in clause  (a) above and  certified
         (without any  Impermissible  Qualification)  by  independent  certified
         public  accountants of nationally  recognized  standing selected by the
         Guarantor,  together with a certificate  from an Authorized  Officer of
         the  Guarantor  to the effect that such Obligor has not become aware of
         any Default or Event of Default that has occurred or is continuing, or,
         if such  Obligor has become  aware of such Default or Event of Default,
         describing such Default or Event of Default and the steps, if any being
         taken to cure it;

                                    Page 53
<PAGE>

(c)      as soon as  available  and in any event within 30 days after the end of
         each Fiscal Month of each Fiscal Year of the Borrower  commencing  with
         the month ending May 31, 2000, consolidated balance sheets,  statements
         of earnings,  and statements of cash flow of the Borrower as of the end
         of such Fiscal Month and  consolidating  balance sheets,  statements of
         earnings and  statements of cash flows of the Borrower  (including  its
         Subsidiaries)  for such Fiscal Month and for the period  commencing  at
         the end of the  previous  Fiscal  Year and ending  with the end of such
         Fiscal Month, certified by an Authorized Officer of the Borrower;

(d)      as soon as available and in any event not later than the earlier of (x)
         the date of filing of the  Guarantor's  Form 10-Q (or  successor  form)
         with the Securities  and Exchange  Commission and (y) 60 days after the
         end of each Fiscal  Quarter  commencing  with the Fiscal Quarter ending
         June 30, 2000, a certificate,  executed by an Authorized Officer of the
         Guarantor,   showing  (in  reasonable   detail  and  with   appropriate
         calculations  and  computations  in all  respects  satisfactory  to the
         Agent)  compliance  with the  financial  covenants set forth in Section
         8.2.4 and  stating  (i) the  amount of  Indebtedness  incurred  that is
         permitted  by Section  8.2.2(h)  and (ii) the  aggregate  amount of all
         secured Indebtedness  incurred that is permitted by Section 8.2.3(b) in
         each case rounded upwards to the nearest  integral  multiple of $50,000
         and as of the end of such Fiscal Quarter;

(e)      as soon as available,  and in any event within 30 days after the end of
         each Fiscal  Month  commencing  with the month  ending May 31,  2000, a
         statement  of an  Authorized  Officer of the  Guarantor  setting  forth
         details  of (i) the  aggregate  amount of Capital  Expenditures  by the
         Borrower, and GREKA Colombia during such Fiscal Month and (ii) net-back
         price reports by field and commodity  price  hedging  information  with
         respect to the Borrower;

(f)      as soon as  available  and in any event within 30 days after the end of
         each Fiscal  Month  commencing  with the month  ending May 31,  2000, a
         production  statement  which  identifies  the most  recent  information
         available relating to the gross volumes of Hydrocarbons produced in the
         aggregate from the Hydrocarbon Interests included in the Borrowing Base
         and  a  statement  of  revenues  and  expenses   attributable   to  the
         Hydrocarbon  Interests  included in the Borrowing  Base for such Fiscal
         Month  ended,  such  production  report and  statement  of revenues and
         expenses to be in a form and substance  reasonably  satisfactory to the
         Agent and the Lenders;

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<PAGE>

(g)      promptly upon the Borrower or the Guarantor  learning of the occurrence
         of  any  Default  or  Borrowing  Base  Deficiency,  a  statement  of an
         Authorized  Officer of the Borrower or the  Guarantor  (as the case may
         be) setting forth details of such Default or Borrowing Base  Deficiency
         and the action  which the  Borrower has taken and proposes to take with
         respect thereto;

(h)      promptly  upon  the  Borrower  or the  Guarantor  learning  of (x)  the
         occurrence  of any  material  adverse  development  with respect to any
         litigation,  action,  proceeding,  or labor  controversy  described  in
         Section  7.7  or  (y)  the  commencement  of  any  labor   controversy,
         litigation,  action or proceeding of the type  described in Section 7.7
         or (z) any material adverse development with respect to any litigation,
         action,  proceeding  or  controversy  affecting  the  Borrower  or  the
         Guarantor,  which in the Borrower's or the Guarantor's  opinion,  could
         reasonably be expected to have a Material Adverse Effect;

(i)      promptly  after the  sending or filing  thereof,  copies of all reports
         which any the Guarantor sends to its  stockholders  generally,  and all
         reports on Form 10-K, 10-Q, 8-K, all definitive proxy  statements,  and
         effective registration  statements (other than registration  statements
         on Form S-8 or  successor  forms for sales of  securities  under Plans)
         which the Guarantor  files with the Securities and Exchange  Commission
         or any national securities exchange;

(j)      immediately  upon becoming aware of the institution of any steps by the
         Borrower,  the Guarantor or any Affiliate of Guarantor to terminate any
         Pension  Plan,  or the failure to make a required  contribution  to any
         Pension Plan if such failure is sufficient to give rise to a Lien under
         section 302(f) of ERISA,  or the taking of any action with respect to a
         Pension Plan which could result in the requirement that the Borrower or
         the  Guarantor  furnish  a bond or other  security  to the PBGC or such
         Pension  Plan,  or the  occurrence  of any event  with  respect  to any
         Pension  Plan which could result in the  incurrence  by the Borrower or
         Guarantor of any liability,  fine or penalty,  or any material increase
         in the  contingent  liability  of the  Borrower or the  Guarantor  with
         respect to any post-retirement Welfare Plan benefit, notice thereof and
         copies of all documentation relating thereto;

                                    Page 55
<PAGE>

(k)      promptly upon the Borrower or the Guarantor  obtaining knowledge of the
         occurrence of any Default or Event of Default;

(l)      as long as the GREKA Colombia  Reduction Date has not occurred,  at the
         time of the delivery of the information  specified in clause (c) above,
         the Guarantor shall deliver to the Agent a report concerning the status
         of its efforts to sell GREKA  Colombia  including (x) the number of the
         persons that have expressed an interest in purchasing GREKA Colombia or
         any interest  therein;  and (y) a narrative  description of the overall
         status of Guarantor's efforts to sell GREKA Colombia; and

(m)      such  other   information   respecting  the  condition  or  operations,
         financial  or  otherwise,   of  the  Borrower,  the  Guarantor  or  its
         Subsidiaries  as any  Lender  through  the  Agent may from time to time
         reasonably request.

Compliance with Laws, Etc.

8.1.2 Each of the Borrower and the  Guarantor  will comply,  the Borrower  shall
cause its  Subsidiaries to comply,  and the Guarantor shall cause GREKA Colombia
to comply, in all material respects with all applicable laws, rules, regulations
and orders, such compliance to include (without limitation): (a) the maintenance
and  preservation  of its  corporate  existence and  qualification  as a foreign
entity and (b) the  payment,  before the same become  delinquent,  of all taxes,
assessments and governmental charges imposed upon it or upon its property except
to  the  extent  being  diligently   contested  in  good  faith  by  appropriate
proceedings  and for which adequate  reserves in accordance with GAAP shall have
been set aside on its books.

Maintenance of Properties

8.1.3 Each of the Borrower and the Guarantor will, and the Guarantor shall cause
GREKA  Colombia  to,  maintain,   preserve,  protect  and  keep  its  respective
properties in good repair,  working order and condition  (ordinary wear and tear
excepted),  and make necessary and proper repairs,  renewals and replacements so
that its business carried on in connection  therewith may be properly  conducted
at all times in accordance with standard industry practices. In particular, each
of the Borrower and the Guarantor will operate,  to the extent that the Borrower
or the Guarantor  operates such Oil and Gas  Properties,  or, to the extent that
the Borrower or the Guarantor does not operate such Oil and Gas Properties,  use
its best  efforts  to  cause  to be  operated  its Oil and Gas  Properties  as a
reasonable and prudent operator.

                                    Page 56
<PAGE>

Insurance

8.1.4 Each of the Borrower and the Guarantor will, and the Guarantor shall cause
GREKA Colombia to, maintain or cause to be maintained with responsible insurance
companies  insurance with respect to its  properties  and business  against such
casualties  and  contingencies  and of  such  types  and in such  amounts  as is
customary in the case of similar businesses in similar locales (including, where
appropriate,  political risk insurance,  business interruption  insurance,  well
control,  operator's  extra expense and  remediation  insurance) and will,  upon
request  of the  Agent,  furnish  to  each  Lender  at  reasonable  intervals  a
certificate of an Authorized  Officer of the Borrower or the  Guarantor,  as the
case may be, setting forth the nature and extent of all insurance  maintained by
the Borrower, the Guarantor or GREKA Colombia, as the case may be, in accordance
with this Section.

Books and Records

8.1.5 Each of the Borrower and the Guarantor  will, and the Guarantor will cause
GREKA  Colombia to, keep books and records which  accurately  reflect all of its
business affairs and transactions and permit the Agent and each Lender or any of
their respective  representatives,  at reasonable times and intervals,  to visit
all of its  offices,  to discuss its  financial  matters  with its  officers and
independent public accountant (and each of the Borrower and the Guarantor hereby
authorizes such independent  public accountant with prior notice to the Borrower
or the Guarantor (as the case may be) and an opportunity  to attend,  to discuss
the financial matters of the Borrower or the Guarantor (as the case may be) with
each Lender or its  representatives)  and to examine (and, at the expense of the
Borrower,  photocopy  extracts  from)  any of its  books or other  records.  The
Borrower shall pay any fees of such independent  public  accountant  incurred in
connection  with the Agent's or any Lender's  exercise of its rights pursuant to
this Section.

Environmental Covenant

8.1.6 Each of the Borrower and the Guarantor  will, the Borrower shall cause its
Subsidiaries  to, and the  Guarantor  shall  cause  GREKA  Colombia  to, use and
operate all of its  facilities and  properties in material  compliance  with all
Environmental  Laws,  keep  all  necessary  permits,  approvals,   certificates,
licenses and other  authorizations  relating to environmental  matters in effect
and remain in material compliance therewith,  and handle all Hazardous Materials
in material compliance with all applicable Environmental Laws.

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<PAGE>

Agreement to Deliver Security Documents

8.1.7 Each of the Borrower and the Guarantor agrees to deliver to further secure
the  Obligations   whenever  requested  by  the  Agent  in  good  faith,  Pledge
Agreements,  Mortgages,  mortgages,  deeds, deeds of trust, security agreements,
financing statements,  continuation statements,  extensions agreements and other
similar agreements or instruments (in addition to those required to be delivered
under Article VI) in form and substance  satisfactory to the Agent in good faith
for the purpose of granting,  confirming and perfecting first and prior liens or
security interests in any property which is at such time Collateral  Property or
which was  intended to be  Collateral  Property  pursuant  to any Loan  Document
previously executed and not then released by the Agent, provided,  however, that
the  Borrower  shall at all times  maintain in effect in favor of the Agent such
Mortgages as are  necessary to grant,  confirm and perfect first and prior liens
or  security  interests  in at least  90% of the  present  value  of the  Proved
Reserves (whether  developed or undeveloped);  and further,  provided,  however,
that in the event that the Hydrocarbon  Interests on which the Agent has a first
priority  perfected Lien shall  constitute less than 90% of the present value of
the Proved  Reserves  (whether  developed or  undeveloped),  the Borrower  shall
promptly  notify  the  Agent  and  execute  or cause to be  executed  additional
Mortgages  necessary to increase  such  percentage to at least 90%. The Borrower
also agrees to deliver whenever requested by the Agent in good faith,  favorable
opinions (in addition to those  required to be  delivered  under  Article VI and
pursuant to the foregoing  sentence) from legal counsel  acceptable to the Agent
in good  faith with  respect to any  Collateral  Property  confirming  that such
Collateral  Property is subject to Security Documents securing  Obligations that
constitute and create legal,  valid and duly perfected  Liens in such properties
and interests and the proceeds  thereof,  and covering such other matters as the
Agent may request in good faith.

Perfection and Protection of Security Interests and Liens

8.1.8 Each of the Borrower and the  Guarantor  will from time to time deliver or
cause to be  delivered  to the  Agent  any  financing  statements,  continuation
statements,  extension  agreements and other documents,  properly  completed and
executed (and acknowledged  when required) by the Borrower or the Guarantor,  as
the case  may be,  in form  and  substance  satisfactory  to the  Agent  and the
Lenders,  which the Agent requests for the purpose of perfecting,  confirming or
protecting any Liens or other rights in (i) any Collateral Property and (ii) the
pledge by the Guarantor of the stock of GREKA  Colombia and the Borrower (to the
extent provided in the Pledge of Shares and Pledge Agreement, respectively).

                                    Page 58
<PAGE>

Compliance with Other Contractual Obligations

8.1.9 (i) Each of the Borrower and the Guarantor  shall, and the Guarantor shall
cause GREKA Colombia to, perform and observe in all material respects all of the
covenants and agreements  contained in each contract or agreement to which it is
a party (including, but not limited to, any licenses, association agreements and
concession  agreements)  that are provided to be  performed  and observed on the
part of the Borrower or GREKA Colombia, as applicable, and which, in the case of
agreements  by the  Guarantor  for the  payment of money,  provide  for  payment
obligations  of the  Guarantor  individually,  or  together  with all other such
agreements, in excess of the Materiality Threshold. Each of the Borrower and the
Guarantor shall, and the Guarantor shall cause GREKA Columbia to, diligently and
in good faith enforce, using appropriate procedures and proceedings,  all of its
material  rights and  remedies  under  (including  taking all  diligent  actions
required  to  collect  amounts  owed  to  such  Borrower  by any  other  parties
thereunder) each such contract or agreement.

Negative Covenants

8.2 The  Borrower and the  Guarantor  agree with the Agent and each Lender that,
until all Commitments  have  terminated and all  Obligations  have been paid and
performed in full, the Borrower (and the Borrower  shall cause its  Subsidiaries
to perform) and the Guarantor will perform (and the Guarantor  shall cause GREKA
Colombia to perform) the obligations set forth in this Section 8.2.

Business Activities

8.2.1 The Borrower  will not, the Borrower will cause its  Subsidiaries  not to,
and the  Guarantor  will cause GREKA  Colombia  not to,  engage in any  business
activity, except the Oil and Gas Business.

Indebtedness

8.2.2 The Borrower  will not, the Borrower will cause its  Subsidiaries  not to,
and the Guarantor  will cause GREKA Colombia not to,  create,  incur,  assume or
suffer to exist or otherwise become or be liable in respect of any Indebtedness,
other than, without duplication, the following:

(a)      Indebtedness in respect of the Loans and other Obligations;

(b)      until the date of the initial Borrowing, the Existing Indebtedness;

                                    Page 59
<PAGE>

(c)      unsecured  accounts payable incurred in the ordinary course of business
         (including open accounts extended by suppliers on normal trade terms in
         connection  with  purchases  of  goods  and  services,   but  excluding
         Indebtedness  incurred  through the  borrowing  of money or  Contingent
         Liabilities); and

(d)      Inter-Company  Notes, which Notes, in the case of GREKA Colombia (prior
         to the GREKA Colombia Reduction Date) shall be pledged to the Agent.

Liens

8.2.3 The Borrower  will not, the Borrower will cause its  Subsidiaries  not to,
and the Guarantor  will cause GREKA Colombia not to,  create,  incur,  assume or
suffer to exist any Lien upon any of their  respective  properties,  revenues or
assets, whether now owned or hereafter acquired, except:

(a)      Liens securing  payment of the Obligations and any Hedging  Obligations
         owed to a  Lender  (including  the  Agent)  or any  Affiliate  thereof,
         granted pursuant to any Security Document;

(b)      Liens for taxes,  assessments or other  governmental  charges or levies
         not at the time delinquent or being diligently  contested in good faith
         by  appropriate   proceedings  and  for  which  adequate   reserves  in
         accordance with GAAP shall have been set aside on its books;

(c)      Liens of carriers, warehousemen,  mechanics, materialmen, landlords and
         other like Liens  incurred in the ordinary  course of business for sums
         not overdue or being diligently  contested in good faith by appropriate
         proceedings  and for which  adequate  reserves in accordance  with GAAP
         shall have been set aside on its books;

(d)      Liens  incurred in the ordinary  course of business in connection  with
         workmen's  compensation,  unemployment  insurance  or  other  forms  of
         governmental insurance or benefits;

(e)      easements,    rights-of-way,    servitudes,    permits,   reservations,
         exceptions,  covenants  and  other  restrictions  as to the use of real
         property and other similar encumbrances incurred in the ordinary course
         of business which, with respect to all of the foregoing,  do not secure
         the  payment of  Indebtedness  and  which,  in the  aggregate,  are not
         substantial in amount and which do not in any case  materially  detract
         from  the  value  of  the  Hydrocarbon   Interest  subject  thereto  or
         materially  interfere with the ordinary  conduct of the business of the
         Borrower;

                                    Page 60
<PAGE>

(f)      defects,  irregularities and deficiencies in the title to any rights of
         way or any Hydrocarbon  Interest of the Borrower which in the aggregate
         do  not  materially  impair  the  use  of  such  rights  of  way or any
         Hydrocarbon  Interest for the purposes for which such rights of way and
         any other Hydrocarbon  Interest are held by the Borrower,  and defects,
         irregularities and deficiencies in title to any Hydrocarbon Interest of
         the Borrower,  which defects,  irregularities or deficiencies have been
         cured by possession under applicable statutes of limitations;

(g)      royalties,  overriding  royalties and revenue interests,  provided that
         the value of the  Hydrocarbon  Interests  shown on the reserve  reports
         delivered pursuant to Section 6.1.15 is net of such Liens;

(h)      Liens  arising out of all  presently  existing and future  division and
         transfer orders, advance payment agreements,  processing contracts, gas
         processing plant  agreements,  operating  agreements,  gas balancing or
         deferred production agreements, pooling, unitization or communitization
         agreements,  pipeline, gathering or transportation agreements, platform
         agreements,  drilling contracts,  injection or repressuring agreements,
         cycling  agreements,  construction  agreements,  salt  water  or  other
         disposal agreements, leases or rental agreements,  farm-out and farm-in
         agreements,  exploration  and development  agreements,  and any and all
         other contracts or agreements covering,  arising out, used or useful in
         connection  with  or  pertaining  to  the   exploration,   development,
         operation,   production,   sale,  use,  purchase,   exchange,  storage,
         separation,    dehydration,    treatment,    compression,    gathering,
         transportation,   processing,   improvement,  marketing,  disposal,  or
         handling of any Hydrocarbon Interest of the Borrower or GREKA Colombia,
         provided that such  agreements are entered into in the ordinary  course
         of business and contain  terms  customary  for such  agreements  in the
         industry and provided further that no Liens described in this paragraph
         (h) shall be granted or created in  connection  with the  incurrence of
         Indebtedness;

(i)      Liens securing performance of bids, tenders, trade contracts, statutory
         obligations,  return of money  bonds and  other  obligations  of a like
         nature  incurred  in  the  ordinary  course  of  business  (all  of the
         foregoing  other than for  Indebtedness)  or to secure  obligations  on
         surety or appeal bonds, not to exceed $250,000 in the aggregate for all
         such obligations secured by such Liens at any one time outstanding; and

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<PAGE>

(j)      Liens  identified in item 8.2.3(g)  (Existing  Liens) of the Disclosure
         Schedule.

The Guarantor will not create, incur, assume or suffer to exist, and in the case
of clause (y) below shall cause GREKA Colombia not to create,  incur,  assume or
suffer to exist any Lien upon (x) the  Capital  Stock of the  Borrower  or GREKA
Colombia other than Liens  described in clause (a) above and (y) any property or
assets of GREKA Colombia  except as provided in clauses  (b)-(i) above,  in each
case prior to the GREKA Colombia Reduction Date.

Financial Condition

8.2.4    The Guarantor will not permit:

(i)      the ratio of EBITDA to Total  Interest  Expense  for the  Borrower  and
         GREKA  Colombia  (on a pro  forma  basis  excluding  any  intra-company
         amount)  for any  period of four  consecutive  Fiscal  Quarters  of the
         Borrower  ending on or after the Effective  Date to be less than 2.5 to
         1.0;

(ii)     the ratio of  Indebtedness  of the  Borrower  as at the last day of any
         period of four consecutive Fiscal Quarters of the Borrower ending on or
         after the Effective  Date to EBITDA for the Borrower and GREKA Colombia
         (on a pro forma basis  excluding any  intra-company  Indebtedness)  for
         such period to be greater than 3.0 to 1.0; or

(iii)    Working Capital to be less than $1.00.

Investments

8.2.5 The Borrower will not, the Borrower shall not permit its  Subsidiaries to,
and the Guarantor shall not permit GREKA Colombia to, make, incur, or assume any
Investment in any other Person (including the Guarantor) except:

(a)      Investments  existing  on the  Effective  Date and  identified  in Item
         8.2.5(a) (Ongoing Investments) of the Disclosure Schedule;

(b)      Investments permitted as Indebtedness pursuant to Section 8.2.2;

(c)      Investments in Cash Equivalent Investments;

(d)      extensions of trade credit in the ordinary course of business;

                                    Page 62
<PAGE>

(e)      the  endorsement  of  negotiable  instruments  for  collection  in  the
         ordinary course of business;

(f)      Investments  in additional  Hydrocarbon  Interests made in the ordinary
         course of business;

(g)      transactions expressly permitted under Section 8.2.8; and

(h)      in the case of the Borrower and GREKA Colombia, loans to the Guarantor,
         GREKA  Integrated or any Subsidiary of the Guarantor;  provided that no
         Default  exists  immediately  prior  or  after  giving  effect  to such
         Investment and such loan is made from cash  available for  distribution
         to the  shareholders  of the  Borrower in  accordance  with the Organic
         Documents  of the  Borrower in any period  after  giving  effect to the
         payment of all debt  service,  capital  expenditures  and operating and
         maintenance  expenses of the  Borrower  (including  Taxes)  during such
         period; and provided, further that any such loans shall be evidenced by
         promissory notes,  which notes shall be pledged to the Collateral Agent
         and which notes shall be on terms and  conditions no less  favorable to
         the  Borrower  than terms and  conditions  that could be obtained in an
         arms-length transaction with a party that is not an Affiliate.

Restricted Payments, Etc.

8.2.6 On and at all times after the  Effective  Date:  (a) the Borrower will not
declare,  pay or make  any  dividend  or  distribution  (in  cash,  property  or
obligations)  on any shares of any class of its capital  stock (now or hereafter
outstanding)  or on any  warrants,  options or other  rights with respect to any
shares of any class of its capital stock (now or hereafter  outstanding)  (other
than  dividends  or  distributions  payable in its common  stock or  warrants to
purchase its common stock or  split-ups or  reclassifications  of its stock into
additional  or other  shares of its  common  stock) or apply any of its or their
funds,  property or Assets to the  purchase,  redemption,  sinking fund or other
retirement  of any shares of any class of its  capital  stock (now or  hereafter
outstanding), or warrants, options or other rights with respect to any shares of
any class of capital stock (now or hereafter  outstanding) of the Borrower;  and
(b) the Borrower will not make any deposit for any of the foregoing purposes.

Commingling of Funds; Separateness

8.2.7 The Borrower  will not and will not permit its  Subsidiaries  to commingle
its funds with those of  Guarantor  or any  Affiliate  of Guarantor or any other
Person.

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<PAGE>

Consolidation, Merger, Etc.

8.2.8 None of the Borrower or the Guarantor  will,  the Borrower shall cause its
Subsidiaries  not to, and the  Guarantor  shall  cause  GREKA  Colombia  not to,
liquidate  or  dissolve,  consolidate  with,  or merge  into or with,  any other
Person,  or purchase or otherwise acquire all or substantially all of the assets
of any Person (or of any  division  thereof)  except,  so long as no Default has
occurred and is  continuing  or would occur after  giving  effect  thereto,  the
Guarantor may purchase all or substantially  all of the assets of any Person, or
acquire such Person by merger,  provided  that the  Borrower,  the  Guarantor or
GREKA  Colombia,  as the case may be,  is the  surviving  Person  following  the
consummation  of  such  acquisition  merger  and  further  provided,   that  the
consideration  for such purchase or  acquisition  or merger shall not constitute
Hydrocarbon Interests except as provided in 8.2.9(b) below and further provided,
that GREKA Colombia may consummate the Acquisition.

Asset Dispositions, Etc.

8.2.9(a) None of the Borrower or the Guarantor  will,  the Borrower  shall cause
         its  Subsidiaries  not to, and the Guarantor shall cause GREKA Colombia
         not to, sell, assign, transfer, lease, convey, mortgage,  contribute or
         otherwise  convey,  or grant  options,  warrants  or other  rights with
         respect to (each a Transfer  (except that the assignment or termination
         of any Hedge  Agreements  shall not be considered a Transfer)),  all or
         substantially  all of their respective  Assets to any Person in any one
         transaction or series of transactions, whether or not related.

(b)      The Borrower shall not, the Borrower shall cause its  Subsidiaries  not
         to, and the Guarantor  shall cause GREKA Colombia not to,  Transfer any
         Asset,  other than (i) sales of inventory and used or surplus equipment
         in the ordinary  course of business and assignments of interests in oil
         and gas  leases  in  connection  with  customary  farmout  arrangements
         entered  into in the ordinary  course of business;  (ii) in the case of
         GREKA Colombia,  the sale of the assets acquired in connection with the
         Acquisition;  provided  that the  proceeds  of such sale  after  giving
         effect to the payment of any  reasonable  transaction  expenses are, at
         the  election  of  the  Guarantor,   either  deposited  into  the  Cash
         Collateral  Account or applied in full to the repayment of the Loans in
         accordance  with Section 3.1; and (iii) sales of Hydrocarbon  Interests
         that do not  constitute  Proved  Reserves  provided  such  sales are to
         Persons that are not Affiliates of the Guarantor and such sales are for
         fair value and  pursuant to  arms-length  transactions.  The  Guarantor
         shall not  Transfer any of its Capital  Stock of GREKA  Colombia or the
         Borrower;  provided  that the  Guarantor  may sell its Capital Stock in
         GREKA  Colombia if $7,500,000 of the proceeds of such sale after giving
         effect to the payment of any  reasonable  transaction  expenses are, at
         the  election  of  the  Guarantor,   either  deposited  into  the  Cash
         Collateral  Account or applied in full to the repayment of the Loans in
         accordance with Section 3.1.

                                    Page 64
<PAGE>

Negative Pledges, Restrictive Agreements, Etc.

8.2.10 The Borrower will not and will not permit its  Subsidiaries to enter into
any  agreement  (excluding  this  Agreement,  any other  Loan  Document  and any
agreement  relating to Existing  Indebtedness)  prohibiting  (a) the creation or
assumption  of any Lien upon its  properties,  revenues  or assets,  whether now
owned or  hereafter  acquired;  or (b) the  ability of the  Borrower to amend or
otherwise  modify this Agreement or any other Loan Document;  or (c) the ability
of any Subsidiary of the Borrower to make any payments,  directly or indirectly,
to the Borrower by way of dividends,  advances, repayments of loans or advances,
reimbursements  of  management  and other  intercompany  charges,  expenses  and
accruals or other returns on investments,  or any other agreement or arrangement
which restricts the ability of any such Subsidiary to make any payment, directly
or indirectly, to any other the Borrower.

Transactions with Affiliates

8.2.11 The Borrower  will not and will not permit its  Subsidiaries  to, and the
Guarantor  will not and will not permit  GREKA  Colombia to, enter into or be or
become a party to any transaction or arrangement  with any Affiliate  (including
without limitation, the purchase from, sale or exchange of property with, or the
rendering of service by or for, any Affiliate), except in the ordinary course of
and  pursuant  to  the  reasonable   requirements   of  the   Borrower's,   such
Subsidiary's,  the  Guarantor's or GREKA  Colombia's  business and upon fair and
reasonable  terms  no less  favorable  to the  Borrower,  such  Subsidiary,  the
Guarantor  or GREKA  Colombia,  as the  case  may be,  than  would  obtain  in a
comparable  arm's-length  transaction  with a Person  other  than an  Affiliate;
provided,  however,  that the Borrower may make loans to the  Guarantor or GREKA
Integrated as provided in Section 8.2.5(h).

Maintenance of Corporate Separateness

8.2.12   (a) The  Borrower,  its  Subsidiaries  and the  Guarantor  will satisfy
         customary corporate  formalities,  including,  without limitation,  the
         holding of regular board of directors' and  shareholders'  meetings (or
         the taking of actions  pursuant  to  written  consents  in lieu of such
         meetings)  and  the  maintenance  of  separate  corporate  records  and
         accounts  (except as  otherwise  provided  with  respect  to  financial
         statements  required  to be combined  in  accordance  with GAAP or this
         Agreement).

                                    Page 65
<PAGE>

         (b) None of the Borrower nor the Guarantor, will, or will permit any of
         their  respective  Subsidiaries to, commingle any assets with any other
         Person.

EVENTS OF DEFAULT

Listing of Events of Default

9.1 Each of the following  events or  occurrences  described in this Section 9.1
shall constitute an "Event of Default".

Non-Payment of Obligations

9.1.1 The Borrower or the  Guarantor  shall default in the payment or prepayment
when due of any principal of any Loan including any Required Deficiency Payment,
or the Borrower or the  Guarantor  shall  default in the payment when due of any
interest,  fee, expense other obligation or of any other Obligation  required to
be paid by such Obligor  hereunder  and, in the case of fees and expenses,  such
default shall have continued unremedied for 15 days.

Breach of Representation or Warranty

9.1.2 Any  representation  or warranty of the Borrower or the Guarantor  made or
deemed to be made hereunder or in any other Loan Document  executed by it or any
other  writing or  certificate  furnished by or on behalf of the Borrower or the
Guarantor  to the Agent,  the  Arranger or any Lender for the  purposes of or in
connection  with this  Agreement or any such other Loan Document  (including any
certificates  delivered  pursuant  to Article VI) is or shall be false or in any
material respect incorrect or inaccurate when made or deemed made.

Non-Performance of Certain Covenants and Obligations

9.1.3 The Borrower or the Guarantor shall (i) default in the due performance and
observance of any of its obligations under Section 8.2.2,  8.2.5,  8.2.6, 8.2.8,
8.2.9 or 8.2.10;  (ii)  default in the due  performance  and  observance  of its
obligations  under  Sections  8.1.7,  8.1.8 or 8.2.7,  which  default shall have
continued unremedied for more than 15 days; (iii) default in the due performance
and  observance  of any of its  obligations  under  Section  8.2.3 by  creating,
incurring,  assuming or suffering to exist any Lien not  otherwise  permitted by
Section  8.2.3 which Lien secures  indebtedness  or any other  obligation  in an
outstanding  principal  amount  in  excess of the  Materiality  Threshold;  (iv)
default in the due performance  and observance of any of its  obligations  under
Section 8.2.4,  which default shall have  continued  unremedied for more than 45
days; or (v) permit a Borrowing  Base  Deficiency to remain  unremedied for more
than 10 days.

                                    Page 66
<PAGE>

Non-Performance of Other Covenants and Obligations

9.1.4 The Borrower or the  Guarantor  shall default in the due  performance  and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall  continue  unremedied  for a period of 30
days after notice thereof shall have been given to the Borrower or the Guarantor
by the Agent or any Lender.

Default on Other Indebtedness

9.1.5 A default  shall occur in the payment when due (subject to any  applicable
grace period),  whether by acceleration or otherwise, of any Indebtedness of the
Borrower or the Guarantor,  the amount of which,  either  individually or in the
aggregate,  equals or exceeds the Materiality Threshold (other than Indebtedness
described in Section  9.1.1),  or a default  shall occur in the  performance  or
observance of any obligation or condition with respect to such Indebtedness,  if
the  effect  of  such  default  is  to  accelerate  the  maturity  of  any  such
Indebtedness or such default shall continue unremedied for any applicable period
of time  sufficient to permit the holder or holders of such  Indebtedness or any
trustee or agent for such holders,  to cause such Indebtedness to become due and
payable prior to its expressed maturity.

Judgments

9.1.6 Any  judgment  or order for the payment of money in excess of, in the case
of the Borrower,  $500,000,  and in the case of the Guarantor,  $1,000,000 above
applicable insurance coverage (provided that the insurer has not denied coverage
or  liability  for the claim)  shall be  rendered  against  the  Borrower or the
Guarantor and either (a)  enforcement  proceedings  shall have been commenced by
any creditor upon such judgment or order; or (b) there shall be any period of 30
consecutive  days during which a stay of  enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect.

                                    Page 67
<PAGE>

Pension Plans

9.1.7 Any of the following  events shall occur with respect to any Pension Plan:
(a) the  institution of any steps by the Borrower,  any member of its Controlled
Group or any other  Person to  terminate a Pension  Plan if, as a result of such
termination,  the  Borrower  or any  such  member  could be  required  to make a
contribution  to such  Pension  Plan,  or  could  reasonably  expect  to incur a
liability or obligation  to such Pension  Plan, in excess of $500,000;  or (b) a
contribution  failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA.

Change of Control

9.1.8 Any Change in Control shall occur.

Bankruptcy, Insolvency, Etc.

9.1.9 The Borrower,  the Guarantor or GREKA  Colombia shall (a) be liquidated or
become  insolvent or generally fail to pay, or admit in writing its inability or
unwillingness  to pay,  debts as they become due; (b) apply for,  consent to, or
acquiesce in, the  appointment  of a trustee,  receiver,  sequestrator  or other
custodian for the Borrower,  the Guarantor or GREKA  Colombia or any property of
any thereof,  or make a general assignment for the benefit of creditors;  (c) in
the absence of such  application,  consent or acquiescence,  permit or suffer to
exist the  appointment of a trustee,  receiver,  sequestrator or other custodian
for the Borrower,  the Guarantor or GREKA Colombia or for a substantial  part of
the property of any thereof, and such trustee,  receiver,  sequestrator or other
custodian  shall not be discharged  within 60 days,  provided that the Borrower,
the Guarantor and GREKA Colombia hereby expressly  authorizes the Agent and each
Lender to appear in any court  conducting  any relevant  proceeding  during such
60-day  period to  preserve,  protect  and defend  their  rights  under the Loan
Documents;  (d) permit or suffer to exist the  commencement  of any  bankruptcy,
reorganization,  liquidation,  debt  arrangement,  "concordato" or other case or
proceeding under any bankruptcy or insolvency law, or any  dissolution,  winding
up or liquidation proceeding, in respect of the Borrower, the Guarantor or GREKA
Colombia, and, if any such case or proceeding is not commenced by such Borrower,
the Guarantor or GREKA Colombia,  such case or proceeding or winding up shall be
consented to or acquiesced in by the Borrower,  the Guarantor or GREKA Colombia,
or shall  result in the entry of an order for relief or shall remain for 60 days
undismissed,  or (e) take any action  authorizing,  or in furtherance of, any of
the foregoing.

                                    Page 68
<PAGE>

Impairment of Security, Etc.

9.1.10 Any Loan  Document,  or any Lien  granted  thereunder,  shall  (except in
accordance with its terms), terminate,  cease to be effective or cease to be the
legally valid, binding and enforceable  obligation of the Obligor party thereto;
the Borrower or any other party, shall,  directly or indirectly,  contest in any
manner such effectiveness,  validity,  binding nature or enforceability;  or any
Lien securing any Obligation  shall cease to be a perfected first priority Lien,
subject only to those exceptions expressly permitted by such Loan Document.

Expropriation

9.1.11 One or more Governmental  Authorities of Colombia shall publicly announce
its intention to or shall repudiate,  terminate, seize, appropriate,  assume the
management of, abrogate or reduce all or any material  portion of GREKA Colombia
concession  agreements or  association  agreements  with respect to  hydrocarbon
reserves with a value in excess of $1,000,000 (each a "Colombian  Agreement") or
take any other action or actions (including,  without limitation,  suspending or
terminating  all or any material  portion of the  production or  exportation  of
Hydrocarbons the subject of the Colombian Agreements,  subjecting GREKA Colombia
to  new  or  additional  Taxes  that  result  in an  aggregate  increase  in the
percentage  of  Taxes  paid or  payable  by  GREKA  Colombia  greater  than  25%
subsequent to the date hereof or imposing  currency  controls that prevent GREKA
Colombia from  transferring  U.S.  Dollars outside of Colombia in each such case
with respect to greater than 25% of its sales of Hydrocarbons);

Action if Bankruptcy

9.2.  If any Event of Default  described  in clauses  (a) through (d) of Section
9.1.9 shall occur with respect to the Borrower or the Guarantor, the Commitments
(if  not  theretofore   terminated)  shall   automatically   terminate  and  the
outstanding  principal amount of all outstanding Loans and all other Obligations
shall automatically be and become immediately due and payable, without notice or
demand.

Action if Other Event of Default

9.3 If any Event of  Default  (other  than any  Event of  Default  described  in
clauses  (a) through (d) of Section  9.1.9 with  respect to the  Borrower or the
Guarantor) shall occur for any reason, whether voluntary or involuntary,  and be
continuing,  the Agent,  upon the  direction of the Majority  Lenders,  shall by
notice to the Borrower  declare all or any portion of the outstanding  principal
amount of the Loans and other  Obligations to be due and payable without further
notice,  demand or  presentment,  and/or  the  Commitments  (if not  theretofore
terminated) to be terminated, whereupon the full unpaid amount of such Loans and
other Obligations which shall be so declared due and payable shall be and become
immediately  due and payable,  without  further  notice,  demand or presentment,
and/or, as the case may be, the Commitments shall terminate.

                                    Page 69
<PAGE>

THE AGENT

Actions

10.1 Each Lender  hereby  appoints  CIBC as its Agent under and for  purposes of
this Agreement,  the Notes and each other Loan Document.  Each Lender authorizes
the Agent to act on behalf of such Lender  under this  Agreement,  the Notes and
each other Loan Document and, in the absence of other written  instructions from
the Majority  Lenders  received  from time to time by the Agent (with respect to
which the Agent agrees that it will comply, except as otherwise provided in this
Section or as otherwise  advised by counsel),  to exercise such powers hereunder
and thereunder as are specifically  delegated to or required of the Agent by the
terms  hereof  and  thereof,  together  with such  powers  as may be  reasonably
incidental  thereto.  Each Lender  hereby  indemnifies  (which  indemnity  shall
survive any termination of this Agreement) the Agent, pro rata according to such
Lender's Percentage, whether or not related to any singular, joint or concurrent
negligence of the Agent, from and against any and all liabilities,  obligations,
losses,  damages,  claims,  costs or expenses  of any kind or nature  whatsoever
which may at any time be imposed on, incurred by, or asserted against, the Agent
in any way relating to or arising out of this Agreement, the Notes and any other
Loan Document,  including reasonable  attorneys' fees, and as to which the Agent
is not reimbursed by the Borrower;  provided,  however,  that no Lender shall be
liable for the payment of any portion of such liabilities,  obligations, losses,
damages,  claims, costs or expenses which are determined by a court of competent
jurisdiction  in a final  proceeding  to have  resulted  solely from the Agent's
gross negligence or willful misconduct.  The Agent shall not be required to take
any action  hereunder,  under the Notes or under any other Loan Document,  or to
prosecute  or defend  any suit in respect  of this  Agreement,  the Notes or any
other Loan Document, unless it is indemnified hereunder to its satisfaction.  If
any  indemnity  in favor of the  Agent  shall be or  become  inadequate,  in the
Agent's,  determination,  as the case may be, the Agent may call for  additional
indemnification  from the Lenders and cease to do the acts  indemnified  against
hereunder  until  such  additional  indemnity  is  given.   Notwithstanding  any
provision to the contrary contained  elsewhere in this Agreement or in any other
Loan Document,  the Agent shall not have any duties or responsibilities,  except
as expressly set forth herein, and the Agent shall not 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 the Agent.

                                    Page 70
<PAGE>

Funding Reliance, Etc.

10.2  Unless the Agent  shall have been  notified  by  telephone,  confirmed  in
writing,  by any  Lender  by 5:00  p.m.,  New York  time,  on the day prior to a
Borrowing  that such  Lender  will not make  available  the amount  which  would
constitute its Percentage of such Borrowing on the date specified therefor,  the
Agent may assume that such Lender has made such  amount  available  to the Agent
and, in reliance upon such assumption, make available to the relevant Borrower a
corresponding  amount. If and to the extent that such Lender shall not have made
such amount  available  to the Agent,  such Lender and such  Borrower  severally
agree to repay the Agent forthwith on demand such corresponding  amount together
with  interest  thereon,  for each day from the date the Agent made such  amount
available  to such  Borrower to the date such amount is repaid to the Agent,  at
the interest rate applicable at the time to Loans comprising such Borrowing.

Exculpation

10.3 The Agent and its  directors,  officers,  employees  or agents shall not be
liable to any  Lender  for any  action  taken or omitted to be taken by it under
this  Agreement  or any  other  Loan  Document,  or in  connection  herewith  or
therewith,  except  for its own  willful  misconduct  or gross  negligence,  nor
responsible  for any  recitals  or  warranties  herein or  therein,  nor for the
effectiveness,  enforceability,  validity or due execution of this  Agreement or
any other Loan  Document,  nor for the  creation,  perfection or priority of any
Liens  purported to be created by any of the Loan  Documents,  or the  validity,
genuineness,  enforceability,  existence, value or sufficiency of any collateral
security,  nor to make any inquiry respecting the performance by the Borrower of
its  obligations  hereunder or under any other Loan  Document.  Any such inquiry
which may be made by the Agent shall not obligate it to make any further inquiry
or to take any  action.  The Agent  shall be  entitled  to rely  upon  advice of
counsel  concerning  legal  matters and upon any notice,  consent,  certificate,
statement  or writing  which the Agent  believes  to be genuine and to have been
presented by a proper Person.

                                    Page 71
<PAGE>

Successor

10.4 Subject to the appointment of a successor as provided below,  the Agent may
resign at any time upon at least 30 days' prior  notice to the  Borrower and all
Lenders. If the Agent at any time shall resign, the Borrower with the consent of
the Majority  Lenders may appoint a successor Agent which shall thereupon become
the Agent hereunder. In the event the successor Agent is not, at the time of its
appointment, a Lender hereunder, the Borrower shall have the right to consent to
the  successor  Agent,  which  consent  shall not be  unreasonably  withheld  or
delayed.  If no successor Agent shall have been so appointed by the Borrower and
the Majority Lenders,  and shall have accepted such appointment,  within 30 days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may, on behalf of the Lenders,  appoint a successor Agent,  respectively,  which
shall be one of the Lenders or a commercial banking institution  organized under
the laws of the U.S.  (or any  State  thereof)  or a U.S.  branch or agency of a
commercial banking institution,  and having a combined capital and surplus of at
least $100,000,000. Upon the acceptance of any appointment as Agent hereunder by
a successor  Agent,  such successor  Agent shall be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor Agent
may reasonably  request,  and shall thereupon  succeed to and become vested with
all  rights,  powers,  privileges  and  duties of the  retiring  Agent,  and the
retiring Agent shall be discharged  from its duties and  obligations  under this
Agreement.  After the retiring Agent's  resignation  hereunder as the Agent, the
provisions  of (a) this  Article X shall  inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent  under this  Agreement
and (b) Section 11.3 and Section 11.4 shall continue to inure to its benefit.

Extensions of Credit by the Agent and the Arranger

10.5 Each of the Agent and the  Arranger  shall have the same  rights and powers
with  respect to (x) the Loans made by it or any of its  Affiliates  and (y) the
Notes held by it or any of its  Affiliates  and may  exercise  the same as if it
were not the Agent or the Arranger. Each of the Agent and the Arranger and their
respective  Affiliates may accept  deposits  from,  lend money to, and generally
engage in any kind of business with the Borrower or Affiliate of the Borrower as
if it were not an Agent or the Arranger hereunder, as the case may be.

Credit Decisions

10.6 Each  Lender  acknowledges  that it has,  independently  of the Agent,  the
Arranger  and each  other  Lender,  and  based on such  Lender's  review  of the
financial information of the Borrower, this Agreement,  the other Loan Documents
(the terms and provisions of which being  satisfactory  to such Lender) and such
other  documents,  information  and  investigations  as such  Lender  has deemed
appropriate,  made its own credit decision to extend its Commitment. Each Lender
also  acknowledges  that it will,  independently  of the Agent, the Arranger and
each  other  Lender,  and  based  on  such  other  documents,   information  and
investigations  as it shall deem  appropriate at any time,  continue to make its
own credit  decisions as to exercising or not  exercising  from time to time any
rights and  privileges  available  to it under this  Agreement or any other Loan
Document.

                                    Page 72
<PAGE>

Copies, Etc.

10.7 The Agent shall give prompt notice to each Lender of each notice or request
required or permitted  to be given to the Agent by the Borrower  pursuant to the
terms of this Agreement  (unless  concurrently  delivered to the Lenders by such
Borrower).  The Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications  received by the
Agent  from  the  Borrower  for  distribution  to the  Lenders  by the  Agent in
accordance with the terms of this Agreement.

MISCELLANEOUS PROVISIONS

Waivers, Amendments, Etc.

11.1 The  provisions of this  Agreement and of each other Loan Document may from
time to time be amended, modified or waived, if such amendment,  modification or
waiver is in writing and consented to by the Borrower and the Majority  Lenders;
provided,  however, that no such amendment,  modification or waiver which would:
(a) modify any requirement  hereunder that any particular action be taken by all
the Lenders or by the Majority Lenders shall be effective unless consented to by
each Lender;  (b) modify this Section 11.1 or Section 2.7, change the definition
of "Majority Lenders" or "Borrowing Base", increase the Commitment Amount or the
Percentage of any Lender,  reduce any fees described in Article III, release any
collateral  security  except  as  otherwise  specifically  provided  in any Loan
Document or extend the  Commitment  Termination  Date shall be made  without the
consent of each Lender and each  holder of a Note;  (c) extend the due date for,
or reduce the amount of, any  scheduled  repayment or prepayment of principal of
or interest on any Loan or any other  obligation (or reduce the principal amount
of or rate of  interest  on any Loan)  shall be made  without the consent of the
holder of that Note  evidencing  such Loan; (d) affect  adversely the interests,
rights or obligations  of the Agent qua the Agent shall be made without  consent
of the Agent,  or (e) modify Section 11.4 without the consent of the Agent,  the
Arranger  and each  Lender.  No failure  or delay on the part of any Agent,  any
Lender or the  holder of any Note in  exercising  any power or right  under this
Agreement or any other Loan  Document  shall  operate as a waiver  thereof,  nor
shall any single or partial  exercise  of any such power or right  preclude  any
other or further  exercise  thereof or the exercise of any other power or right.
No notice  to or demand on the  Borrower  in any case  shall  entitle  it to any
notice or demand in similar or other circumstances. No waiver or approval by any
Agent,  any Lender or the holder of any Note under this  Agreement  or any other
Loan  Document  shall,  except  as may be  otherwise  stated  in such  waiver or
approval,  be  applicable  to  subsequent  transactions.  No waiver or  approval
hereunder shall require any similar or dissimilar waiver or approval  thereafter
to be granted hereunder.

                                    Page 73
<PAGE>

Notices

11.2 All notices and other  communications  provided to any party  hereto  under
this  Agreement or any other Loan  Document  shall be in writing or by facsimile
and  addressed,  delivered  or  transmitted  to such  party  at its  address  or
facsimile  number set forth below its signature  hereto or set forth in the Bank
Assignment  Agreement  or at such other  address or  facsimile  number as may be
designated by such party in a notice to the other parties. Any notice, if mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service,  shall be deemed given when received;  any notice,  if
transmitted by facsimile,  shall be deemed given when transmitted and a receipt,
demonstrating successful transmission, is received by the Sender.

Payment of Costs and Expenses

11.3 Each Borrower and/or the Guarantor,  as the case may be, agrees jointly and
severally to pay on demand all reasonable expenses of the Agent and the Arranger
(including the reasonable fees, disbursements,  out-of-pocket expenses and other
charges of Freshfields  LLP, counsel to the Arranger and the Agent, and of local
counsel, if any, who may be retained by said counsel) in connection with (a) the
negotiation, preparation, execution, delivery, administration and enforcement of
this  Agreement  and of  each  other  Loan  Document,  including  schedules  and
exhibits,  and  any  amendments,   waivers,   consents,   supplements  or  other
modifications  to this  Agreement or any other Loan Document as may from time to
time hereafter be required,  whether or not the transactions contemplated hereby
are consummated;  (b) the filing, recording,  refiling or rerecording of each of
the Security Documents and/or any Uniform  Commercial Code financing  statements

                                    Page 74
<PAGE>

relating  thereto  and all  amendments,  supplements  and  modifications  to any
thereof and any and all other  documents  or  instruments  of further  assurance
required to be filed or recorded or refiled or rerecorded by the terms hereof or
of the Security Documents; and (c) the preparation and review of the form of any
document or instrument  relevant to this  Agreement or any other Loan  Document.
Each Lender  agrees to reimburse  the Agent on demand for such Lender's pro rata
share (based upon its  respective  Percentage) of any such costs or expenses not
paid by the  Borrower,  but  excluding  (d) any costs and expenses in connection
with  assignment  of or sale of  participations  as provided in Section 11.10 or
Section 11.11 of this Agreement.  Each Borrower and the Guarantor further agrees
jointly  and  severally  to pay,  and to save the Agent,  the  Arranger  and the
Lenders  harmless from all liability  for, any stamp or other taxes which may be
payable in  connection  with the  execution or delivery of this  Agreement,  the
Borrowings hereunder,  or the issuance of the Notes or any other Loan Documents.
Each Borrower and the Guarantor  also agrees  jointly and severally to reimburse
the Agent and each Lender upon demand for all reasonable  out-of-pocket expenses
(including  reasonable attorneys' fees and legal expenses) incurred by the Agent
or such Lender in connection  with (x) the negotiation of any  restructuring  or
"work-out"  whether  or  not  consummated,   of  any  Obligations  and  (y)  the
enforcement  of  any  Obligations.  All  such  requests  for  payment  shall  be
accompanied by invoices containing  reasonable detail. The Agent and each Lender
agree to the extent feasible,  and to the extent a conflict of interest does not
exist in the reasonable opinion of the Agent and any Lender or their counsel, to
use the  same  single  counsel  (i.e.  one law  firm)  in  connection  with  any
investigation,  litigation or other  proceeding under this Section 11.3. For any
expenditures incurred by the Agent or the Lenders under this Section 11.3, other
than in connection  with the enforcement of the Agent's or Lenders' rights under
the Loan  Documents,  the Agent,  the  Arranger  and each Lender  agree that the
Guarantor  shall have the right to approve any individual  expenditure in excess
of $10,000 and legal fees  (excluding  disbursements)  of the  Arranger  and the
Agent in excess of $100,000.

The obligations of the Borrower and the Guarantor with respect to expenses under
this Section 11.3 shall apply irrespective of whether the Facility is closed.

Indemnification

11.4 In  consideration  of the execution and delivery of this  Agreement by each
Lender and the Agent and the extension of the  Commitments,  and the arrangement
of the facility represented by this Agreement by the Arranger,  the Borrower and
the Guarantor  each hereby  jointly and severally  indemnifies,  exonerates  and
holds the Agent,  the  Arranger  and each  Lender  and each of their  respective

                                    Page 75
<PAGE>

officers,  directors,  employees  and  agents  (collectively,   the  Indemnified
Parties)  free and  harmless  from and  against  and  shall  pay for any and all
actions,  causes of action, suits, losses,  costs,  liabilities and damages, and
expenses  incurred in connection with the financing  contemplated  hereby or the
use or proposed use of the proceeds  thereof  (irrespective  of whether any such
Indemnified Party is a party, to the action for which indemnification  hereunder
is   sought),   including   reasonable   attorneys'   fees   and   disbursements
(collectively, the Indemnified Liabilities), incurred by the Indemnified Parties
or any of them as a  result  of,  or  arising  out of,  or  relating  to (a) any
transaction  financed  or to be  financed  in  whole  or in  part,  directly  or
indirectly,  with the  proceeds  of any  Borrowing;  (b) the  entering  into and
performance  of  this  Agreement  and  any  other  Loan  Document  by any of the
Indemnified Parties; (c) any investigation,  litigation or proceeding related to
any  environmental  cleanup,  audit,  compliance or other matter relating to the
protection  of the  environment  or the Release by the Borrower of any Hazardous
Material;  (d) the  presence  on or  under,  or the  escape,  seepage,  leakage,
spillage, discharge,  emission,  discharging or releases from, any real property
owned or  operated by the  Borrower of any  Hazardous  Material  (including  any
losses,  liabilities,  damages,  injuries, costs, expenses or claims asserted or
arising under any Environmental Law); or (e) any misrepresentation or inaccuracy
or breach of  Section  8.1.2  regardless  of  whether  caused  by, or within the
control  of,  the  Borrower;  in  each  case  except  for any  such  Indemnified
Liabilities arising for the account of a particular  Indemnified Party by reason
of the relevant  Indemnified  Party's gross negligence or willful  misconduct or
such  Indemnified  Party's own  unexcused  breach of any  provision  of any Loan
Document  (as  determined  by  the  final  judgment  of  a  court  of  competent
jurisdiction),  provided that it is the intention of the parties hereto that the
indemnified  parties  shall  not be  indemnified  in the case of their own gross
negligence or willful misconduct,  regardless of whether such negligence is sole
or contributory,  active or passive,  muted,  joint or technical.  If and to the
extent that the foregoing  undertaking may be unenforceable for any reason,  the
Borrower and the Guarantor  each hereby agrees jointly and severally to make the
maximum  contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law. The Agent and each Lender
agree to the extent feasible,  and to the extent a conflict of interest does not
exist in the reasonable opinion of the Agent and any Lender or their counsel, to
use the  same  single  counsel  (i.e.  one law  firm)  in  connection  with  any
investigation, litigation or other proceeding under this Section 11.4.

The   obligations   of  the   Borrower  and  the   Guarantor   with  respect  to
indemnification  under this Section 11.4 shall apply irrespective of whether the
Facility is closed.

                                    Page 76
<PAGE>

Survival

11.5 The obligations of the Borrower under Sections 4.3, 4.4, 4.5, 4.6, 11.3 and
11.4,  and the  obligations of the Lenders under Section 10.1 shall in each case
survive  any  termination  of  this  Agreement,  the  payment  in  full  of  all
Obligations  and the termination of all  Commitments.  The  representations  and
warranties  made by the Borrower and the Guarantor in this Agreement and in each
other Loan Document  shall survive the execution and delivery of this  Agreement
and each such other Loan Document.

Severability

11.6 Any  provision  of this  Agreement  or any  other  Loan  Document  which is
prohibited or unenforceable in any jurisdiction  shall, as to such provision and
such  jurisdiction,  be  ineffective  to  the  extent  of  such  prohibition  or
unenforceability without invalidating the remaining provisions of this Agreement
or such Loan  Document  or  affecting  the  validity or  enforceability  of such
provision in any other jurisdiction.

Heading

11.7 The various  headings of this Agreement and of each other Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of this  Agreement  or such  other Loan  Document  or any  provisions  hereof or
thereof.

Execution in Counterparts, Effectiveness, Etc.

11.8  This   Agreement  may  be  executed  by  the  parties  hereto  in  several
counterparts, each of which shall be executed by the Borrower, the Guarantor and
the  Agent and be deemed to be an  original  and all of which  shall  constitute
together but one and the same agreement.  This Agreement shall become  effective
when counterparts  hereof executed on behalf of the Borrower,  the Guarantor and
each  Lender  (or notice  thereof  satisfactory  to the  Agent)  shall have been
received by the Agent and notice  thereof  shall have been given by the Agent to
the Borrower and each Lender.

Governing Law; Entire Agreement

11.9 THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED
TO BE A CONTRACT  MADE UNDER AND GOVERNED BY THE  INTERNAL  LAWS OF THE STATE OF
NEW YORK. This Agreement,  the Notes and the other Loan Documents constitute the
entire understanding among the parties hereto with respect to the subject matter
hereof  and  supersede  any prior  agreements,  written  or oral,  with  respect
thereto.

                                    Page 77
<PAGE>

Successors and Assigns

11.10 This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns;  provided,  however,
that:  (a) neither the  Borrower  nor the  Guarantor  may assign or transfer its
rights or obligations  hereunder  without the prior written consent of the Agent
and all Lenders;  provided,  however, that for purposes of this Section 11.10 if
the  survivor  of a merger is  obligated  in respect of all  obligations  of the
Borrower or the Guarantor hereunder and under all other Loan Documents, a merger
permitted  pursuant  to  Section  8.2.8  hereof  shall not be an  assignment  or
transfer of such Borrower's  rights or obligations  hereunder and (b) the rights
of sale, assignment and transfer of the Lenders are subject to Section 11.11.

Sale and Transfer of Loans and Note, Participations in Loans and Note

11.11  Each  Lender  may  assign,  or sell  participations  in,  its  Loans  and
Commitment to one or more other Persons in accordance with this Section 11.11.

Assignments

11.11.1 Any Lender,  (a) with the written  consent of the Borrower and the Agent
(which consents shall not be  unreasonably  delayed or withheld) may at any time
assign  and  delegate  to one or more  commercial  lenders  or  other  financial
institutions  and (b) with notice to the  Borrower and the Agent but without the
consent of the  Borrower  or the Agent,  may assign and  delegate  to any of its
Affiliates  or to any other  Lender  already  a Lender  hereunder  (each  Person
described  in either of the  foregoing  clauses as being the Person to whom such
assignment and  delegation is to be made,  being  hereinafter  referred to as an
Assignee Bank),  all or any fraction of such Lender's total Loans and Commitment
(which  assignment  and  delegation  shall be of a constant,  and not a varying,
percentage  of all the assigning  Lender's  Loans and  Commitment)  in a minimum
aggregate  amount of  $2,000,000  except that no  assignment  to another  Lender
already a Lender  hereunder need be in such minimum amount so long as after such
assignment the assignor shall hold no interest or a minimum $2,000,000 interest;
provided,  however,  that any such  Assignee  Bank will  comply  as a  condition
precedent  to the  effectiveness  of the  assignment  to it with the  provisions
contained in Section 4.6(b) and further,  provided,  however, that, the Borrower
and the Agent shall be entitled  to  continue to deal solely and  directly  with
such Lender in  connection  with the  interests so assigned and  delegated to an
Assignee  Bank  until (c)  written  notice of such  assignment  and  delegation,
together  with payment  instructions,  addresses  and related  information  with
respect to such  Assignee  Bank,  shall have been given to the  Borrower and the
Agent by such Lender and such Assignee  Bank;  (d) such Assignee Bank shall have
executed  and  delivered  to the  Borrower  and  the  Agent  a  Bank  Assignment
Agreement,  accepted  by the  Agent  (e)  if  necessary,  Forms  1001,  4224  or
applicable successor forms or other appropriate forms have been delivered by the
prospective  Assignee Bank to the Guarantor,  as provided in Section 4.6(b); and
(f) the processing fees described below shall have been paid.

                                    Page 78
<PAGE>

From and after the date that the Agent accepts such Bank  Assignment  Agreement,
(x) the Assignee Bank thereunder shall be deemed  automatically to have become a
party hereto and to the extent that rights and  obligations  hereunder have been
assigned and  delegated to such  Assignee  Bank in  connection  with such Lender
Assignment  Agreement,  shall  have  the  rights  and  obligations  of a  Lender
hereunder and under the other Loan Documents and (y) the assignor Lender, to the
extent that rights and obligations hereunder have been assigned and delegated by
it in connection with such Bank Assignment Agreement, shall be released from its
obligations  hereunder and under the other Loan  Documents.  Promptly  after its
receipt  of notice  that the Agent has  received  an  executed  Bank  Assignment
Agreement,  the Borrower shall consent to such  assignment,  if applicable,  and
execute and deliver to the Agent (for delivery to the relevant  Assignee Bank) a
new Note  evidencing  such Assignee Bank's assigned Loans and Commitment and, if
the assignor Lender has retained Loans and a Commitment hereunder, a replacement
Note in the  principal  amount  of the  Loans  and  Commitment  retained  by the
assignor  Lender  hereunder (such Note to be in exchange for, but not in payment
of, that Note then held by such assignor Lender).  Each such Note shall be dated
the date of the predecessor Note. The assignor Lender shall mark the predecessor
Note  "exchanged" and deliver it to the Borrower.  Accrued interest on that part
of the  predecessor  Note evidenced by the new Note, and accrued fees,  shall be
paid as provided in the Bank  Assignment  Agreement;  provided  that neither the
Borrower nor the Guarantor  shall be obligated for the expenses of assignment by
any Lender as provided in this Section 11.11.  Accrued  interest on that part of
the  predecessor  Note  evidenced by the  replacement  Note shall be paid to the
assignor Bank.  Accrued interest and accrued fees shall be paid at the same time
or times provided in the predecessor  Note and in this Agreement.  Such assignor
Bank or such  Assignee  Bank must also pay a  processing  fee to the Agent  upon
delivery  of any Bank  Assignment  Agreement  in the amount of $3,500,  it being
understood  that the Borrower  shall not be obligated to reimburse such assignor
Lender or Assignee Bank for such  processing  fee. Any attempted  assignment and
delegation  not made in accordance  with this Section  11.11.1 shall be null and
void. The foregoing  provisions shall not apply to, or restrict,  or require the
consent of or notice of any Person to  effectuate,  the pledge or  assignment by
any Lender of its rights under this  Agreement  and its Notes and the other Loan
Documents (i) if an Event of Default has occurred and is  continuing,  or (b) to
any Federal Reserve Bank.

                                    Page 79
<PAGE>

Participations

11.11.2  Any  Lender may at any time sell to one or more  commercial  Lenders or
other  Persons (each of such  commercial  Lenders and other Persons being herein
called  a  "Participant")  participating  interests  in any of  the  Loans,  its
Commitment, or other interests of such Lender hereunder; provided, however, that
(a) no  participation  contemplated  in this  Section  11.11 shall  relieve such
Lender from its Commitment or its other obligations hereunder or under any other
Loan  Document;  (b)  such  Lender  shall  remain  solely  responsible  for  the
performance of its Commitment and such other obligations;  (c) each Borrower and
the Agent  shall  continue  to deal  solely  and  directly  with such  Lender in
connection with such Lender's  rights and  obligations  under this Agreement and
each of the other Loan Documents; (d) no Participant, unless such Participant is
an Affiliate of such Lender, or is itself a Lender, shall be entitled to require
such  Lender to take or refrain  from taking any action  hereunder  or under any
other Loan Document, except that such Lender may agree with any Participant that
such Lender will not, without such  Participant's  consent,  take any actions of
the type  described in clause (b) or (c) of Section  11.1;  and (e) the Borrower
shall not be required to pay any amount  under  Section 4.6 that is greater than
the  amount  which it  would  have  been  required  to pay had no  participating
interest been sold.

Other Transactions

11.12  Nothing  contained  herein  shall  preclude the Agent the Arranger or any
other Lender from engaging in any transaction, in addition to those contemplated
by this  Agreement or any other Loan  Document,  with the Borrower or any of its
Affiliates in which such  Borrower or such  Affiliate is not  restricted  hereby
from engaging with any other Person.

Treatment of Certain Information; Confidentiality

11.14 Each Lender,  the Agent,  and the Arranger  agree (on behalf of itself and
each of its affiliates,  directors,  officers, employees and representatives) to
keep confidential any non-public  information supplied to it by the Borrower, or

                                    Page 80
<PAGE>

the Guarantor  pursuant to this Agreement  that the Borrower  identifies to such
Lender,  Agent, or Arranger (as the case may be) as confidential at the time the
Borrower or the Guarantor so supplies such information,  provided,  that nothing
herein  shall limit the  disclosure  of any such  information  (i) to the extent
required by statute,  rule,  regulation or judicial process; (ii) to counsel for
any of the  Lenders,  the  Agent or the  Arranger;  (iii) to  Lender  examiners,
auditors or  accountants;  (iv) to the Arranger,  the Agent or any other Lender;
(v) in  connection  with any summons or subpoena to which any one or more of the
Lenders, the Arranger or the Agent is a party; (vi) to a subsidiary or affiliate
of such Person, or (vii) to any assignee or participant (or prospective assignee
or participant) so long as such subsidiary,  affiliate,  assignee or participant
(or prospective assignee or participant), as the case may be, first executes and
delivers to the  Borrower,  an  agreement  containing  provisions  substantially
identical to those contained in this Section 11.14; and provided  further,  that
in no event shall any Lender, the Arranger or the Agent be obligated or required
to return any materials furnished to it by the Borrower,  unless in violation of
this Section 11.14,  each Lender agrees that it will use its reasonable  efforts
to advise the Borrower as soon as practicable,  of any disclosure of information
in connection with (v) above; and provided,  further that each Lender, the Agent
and the Arranger  agree to provide  notice to the Borrower and the  Guarantor at
the  respective  addresses  provided in this Agreement in the case of disclosure
(or requested or required disclosure) of any such non-public information.

Forum Selection and Consent to Jurisdiction

11.15 ANY LITIGATION  BASED HEREON,  OR ARISING OUT OF, UNDER,  OR IN CONNECTION
WITH,  THIS  AGREEMENT  OR ANY OTHER LOAN  DOCUMENT,  OR ANY COURSE OF  CONDUCT,
COURSE OF  DEALING,  STATEMENTS  (WHETHER  VERBAL OR  WRITTEN) OR ACTIONS OF THE
AGENT, THE ARRANGER, THE LENDERS, THE BORROWER OR THE GUARANTOR SHALL BE BROUGHT
AND  MAINTAINED  EXCLUSIVELY  IN THE  COURTS  OF THE STATE OF NEW YORK OR IN THE
UNITED STATES  DISTRICT COURT FOR THE SOUTHERN  DISTRICT OF NEW YORK;  PROVIDED,
HOWEVER,  THAT ANY SUIT  SEEKING  ENFORCEMENT  AGAINST ANY  COLLATERAL  OR OTHER
PROPERTY  MAY  BE  BROUGHT,  AT  THE  AGENT'S  OPTION,  IN  THE  COURTS  OF  ANY
JURISDICTION  WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWER
AND  THE  GUARANTOR  EACH  HEREBY  EXPRESSLY  AND  IRREVOCABLY  SUBMITS  TO  THE
JURISDICTION  OF THE  COURTS OF THE STATE OF NEW YORK AND OF THE  UNITED  STATES

                                    Page 81
<PAGE>

DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED  THEREBY IN  CONNECTION  WITH SUCH  LITIGATION.  THE  BORROWER  AND THE
GUARANTOR  EACH  FURTHER  IRREVOCABLY  CONSENTS  TO THE  SERVICE  OF  PROCESS BY
REGISTERED MAIL,  POSTAGE PREPAID,  OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK.  THE BORROWER AND THE  GUARANTOR  EACH HEREBY  EXPRESSLY  AND
IRREVOCABLY  WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH  LITIGATION
BROUGHT  IN ANY  SUCH  COURT  REFERRED  TO  ABOVE  AND ANY  CLAIM  THAT ANY SUCH
LITIGATION  HAS BEEN BROUGHT IN AN  INCONVENIENT  FORUM.  TO THE EXTENT THAT THE
BORROWER  OR THE  GUARANTOR  HAS OR  HEREAFTER  MAY ACQUIRE  ANY  IMMUNITY  FROM
JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS  (WHETHER THROUGH SERVICE OR
NOTICE,  ATTACHMENT  PRIOR  TO  JUDGMENT,  ATTACHMENT  IN  AID OF  EXECUTION  OR
OTHERWISE)  WITH  RESPECT  TO  ITSELF  OR ITS  PROPERTY,  THE  BORROWER  AND THE
GURARANTOR,  AS APPLICABLE HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF
ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

Waiver of Jury Trial

11.16 THE AGENT,  THE  ARRANGER,  THE LENDERS,  THE  BORROWER AND THE  GUARANTOR
HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY  WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT,  OR ANY
COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT, THE ARRANGER,  THE LENDERS, THE BORROWER OR THE GUARANTOR.
THE BORROWER AND THE GUARANTOR EACH ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT  CONSIDERATION  FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL  INDUCEMENT FOR THE AGENT AND THE LENDERS  ENTERING INTO THIS AGREEMENT
AND EACH SUCH OTHER LOAN DOCUMENT.

                                    Page 82
<PAGE>

No Oral Agreements

11.17 THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS  REPRESENT THE FINAL AGREEMENT
BETWEEN  THE  PARTIES  AND  MAY  NOT  BE   CONTRADICTED  BY  EVIDENCE  OF  PRIOR
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

















                                    Page 83
<PAGE>

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

GREKA AM, INC.,

 as Borrower

By____________________________
Name:
Title:

Address:  3000 Wilcrest Drive, Suite 220
          Houston, Texas 77042


Facsimile No.:  (713) 266-0511
Attention:

GREKA ENERGY CORPORATION,
as Guarantor

By____________________________
Name:
Title:

Address:  630 Fifth Avenue, Suite 1501
          New York, New York 10111


Facsimile No.:  (212) 218-4679
Attention:




<PAGE>


CANADIAN IMPERIAL BANK OF COMMERCE,
   as Agent

By____________________________
Name:
Title:

Address:  425 Lexington Avenue
          New York, New York  10017

Facsimile No.:
Attention:


CIBC WORLD MARKETS CORP., as Arranger


By____________________________
Name:
Title:

Address:  425 Lexington Avenue
          New York, New York  10017

Facsimile No.:
Attention:



<PAGE>


PERCENTAGE LENDERS

         100%                      CIBC, INC.

                                    By_____________________
                                    Name:
                                    Title:

                                    Domestic

                                    Office:  425 Lexington Avenue
                                             New York, New York  10017

                                    Facsimile No.:

                                    Attention:

                                    LIBOR Office:  425 Lexington Avenue
                                                   New York, New York 100 17

                                    Facsimile No.:

                                    Attention:







                                    Page 84