TO A QUALIFYING IPO, ACQUISITIONS OF PROVED HYDROCARBON
INTERESTS AND RELATED ASSETS SHALL NOT EXCEED, IN THE AGGREGATE FOR THE COMPANY
AND THE GUARANTORS, $30,000,000 DURING THE FISCAL QUARTER ENDING DECEMBER 31,
2006 AND DURING EACH CALENDAR YEAR (COMMENCING JANUARY 1, 2007) THE LESSER OF
(X) THE DIFFERENCE BETWEEN (1) THE SUM OF (A) THE AGGREGATE NET CASH PROCEEDS
RECEIVED SUBSEQUENT TO THE DATE HEREOF OF PERMITTED DISPOSITIONS OF OIL AND GAS
PROPERTIES PLUS (B) THE DENBURY OPTION PAYMENTS, AND (2) THE AGGREGATE PURCHASE
PRICES PAID SUBSEQUENT TO THE DATE HEREOF FOR ACQUISITIONS PERMITTED BY THIS
SECTION 8.4(H) AND (Y) $15,000,000."
(H)
ARTICLE VIII OF THE CREDIT AGREEMENT IS HEREBY AMENDED BY ADDING
THE FOLLOWING NEW SECTION 8.25:
"8.25
LIMITATION ON AMENDMENTS TO DENBURY OPTION AGREEMENT.
THE COMPANY
SHALL NOT, DIRECTLY OR INDIRECTLY:
(A) (I) AMEND, SUPPLEMENT OR OTHERWISE MODIFY ANY MATERIAL TERM OR CONDITION
(PURSUANT TO A WAIVER GRANTED BY OR TO SUCH PERSON OR OTHERWISE) OF THE DENBURY
3
OPTION AGREEMENT OR (II) FAIL TO ENFORCE STRICTLY THE TERMS AND CONDITIONS OF
THE DENBURY OPTION AGREEMENT, OR THE INDEMNITIES AND RIGHTS FURNISHED TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES PURSUANT THERETO SUCH THAT AFTER GIVING
EFFECT TO ANY SUCH AMENDMENT, SUPPLEMENT OR MODIFICATION, OR ANY SUCH FAILURE TO
ENFORCE, THE DENBURY OPTION AGREEMENT OR SUCH INDEMNITIES OR RIGHTS SHALL BE
MATERIALLY LESS FAVORABLE TO THE INTERESTS OF THE COMPANY, THE LOAN PARTIES OR
THE LENDERS WITH RESPECT THERETO; OR
(B)
OTHERWISE AMEND, SUPPLEMENT OR OTHERWISE MODIFY OR FAIL TO ENFORCE
THE TERMS AND CONDITIONS OF THE DENBURY OPTION AGREEMENT EXCEPT TO THE EXTENT
THAT ANY SUCH AMENDMENT, SUPPLEMENT OR MODIFICATION OR FAILURE TO ENFORCE COULD
NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT."
(I)
SECTION 11.27(A) OF THE CREDIT AGREEMENT IS AMENDED BY ADDING AS
THE NEW LAST SENTENCE THEREOF THE FOLLOWING:
"WITH RESPECT TO ANY DISPOSITION OF THE HASTINGS ASSETS PERMITTED UNDER SECTION
8.2(J), THE ADMINISTRATIVE AGENT'S SECURITY INTEREST IN THE RELATED COLLATERAL
COMPRISED OF (I) THE RESERVED OVERRIDING ROYALTY INTEREST REFERRED TO IN SECTION
1.29(A) OF THE DENBURY OPTION AGREEMENT, (II) THE REVERSIONARY INTEREST (AS
DEFINED IN THE DENBURY OPTION AGREEMENT) AND, IF APPLICABLE, (III) THE
VOLUMETRIC PRODUCTION PAYMENT (AS DEFINED IN THE DENBURY OPTION AGREEMENT) SHALL
NOT BE RELEASED."
SECTION 3.
AMENDMENT AND RATIFICATION.
UPON THE EFFECTIVENESS
HEREOF AS PROVIDED IN SECTION 4 OF THIS AMENDMENT, THIS AMENDMENT SHALL BE
DEEMED TO BE AN AMENDMENT TO THE CREDIT AGREEMENT, AND THE CREDIT AGREEMENT, AS
MODIFIED HEREBY, IS HEREBY RATIFIED, APPROVED AND CONFIRMED TO BE IN FULL FORCE
AND EFFECT IN EACH AND EVERY RESPECT.
EXCEPT AS EXPRESSLY PROVIDED BY THE
AMENDMENTS SET FORTH IN SECTION 2 OF THIS AMENDMENT, THE EXECUTION, DELIVERY AND
EFFECTIVENESS OF THIS AMENDMENT SHALL NEITHER OPERATE AS A WAIVER OF ANY RIGHT,
POWER OR REMEDY OF ANY LENDER OR ANY AGENT, NOR CONSTITUTE A WAIVER OF ANY
PROVISION OF ANY OF THE LOAN DOCUMENTS.
ALL REFERENCES TO THE CREDIT AGREEMENT
IN ANY OTHER DOCUMENT, INSTRUMENT, AGREEMENT OR