Document:

Exhibit 10.2

 

EXCHANGE AGREEMENT

 

This Exchange Agreement
(this “Agreement”) is made and entered into on October 22, 2015, by and between Emerald Oil, Inc., a Delaware corporation
(the “Company”), ZP Master Utility Fund, Ltd. (“ZP Master”) and P Zimmer Ltd. (P Zimmer Ltd., collectively
with ZP Master, the “Holder”) of 2.00% Convertible Senior Notes due 2019 (the “Convertible Notes”) issued
by the Company.

 

RECITALS

 

WHEREAS, the Holder currently
holds $16,500,000 principal amount of the Convertible Notes;

 

WHEREAS, the Holder desires
to exchange $3,000,000 of its Convertible Notes, at the rate of $500.00 per $1,000.00 of principal amount to be exchanged (the
“Exchange Notes”), for shares of the Company’s common stock, par value $0.001 per share (“Common Stock”),
on the terms and conditions set forth in this Agreement (the “Exchange”);

 

WHEREAS, the Company desires
to issue to the Holder that number of shares of the Company’s Common Stock determined as set forth in Section 1.1(b) below
in exchange for the Convertible Notes in the Exchange;

 

NOW, THEREFORE, in consideration
of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE
I

Exchange

 

Section 1.1          Exchange
and Sale of Convertible Notes for Common Stock.

 

(a)         Upon
the terms and subject to the conditions of this Agreement, on the Closing Date (as defined herein), the Company shall issue, subject
to Section 1.1(d) and Section 1.2 hereof, to the Holder, and the Holder agrees to accept from the Company, the number of shares
of Common Stock determined in accordance with the terms of subsection (b) hereof in exchange for the Exchange Notes.

 

(b)         On
the Closing Date, the Holder will receive a final number of shares of Common Stock determined as set forth below plus a cash payment
representing any unpaid interest on the Exchange Notes being exchanged that has accrued through the Closing Date. The number of
shares of Common Stock issued to the Holder in exchange for the Exchange Notes pursuant to the terms of this Agreement is referred
to herein as the “Exchange Shares.” The Exchange Shares shall equal the principal amount of Exchange Notes to be exchanged
at a conversion price of $500.00 per $1,000 of Exchange Notes, divided by the “Share Price” (as defined below), rounded
down to the nearest whole share. 

 

(c)         Definitions.
For purposes of this Exchange Agreement:

 

     

     

    

 

(i) “Share Price” means the 85%
of the arithmetic average of the daily VWAPs over the Averaging Period.

 

(ii) “VWAP” means for each of the
fifteen (15) consecutive Trading Days during the Averaging Period, the per share volume-weighted average price of the Common Stock
as displayed under the heading “Bloomberg VWAP” on Bloomberg page “EOX equity AQR” (or its equivalent successor
if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading
of the primary trading session on such Trading Day (or if such volume-weighted average price is unavailable, the market value of
one share of the Common Stock on such Trading Day determined, using a volume weighted average method, by a nationally recognized
independent investment banking firm retained for this purpose by the Company and Holder). The volume weighted average price used
for purposes of the VWAP will be determined without regard to after hours trading or any other trading outside of the regular trading
session hours.

 

(iii) “Averaging Period” means
the fifteen (15) consecutive Trading Day period beginning on October 23, 2015 and ending after the scheduled close of trading on
November 12, 2015 (assuming that no Market Disruption Event occurs between October 23, 2015 and November 12, 2015).

 

(iv) “Trading Day” means a day
on which (i) there is no Market Disruption Event (as defined below), and (ii) trading in the Company’s securities generally
occurs on the New York Stock Exchange.

 

(v) “Market Disruption Event” means
the occurrence or existence on any Scheduled Trading Day (as defined below) for the Common Stock of any suspension or limitation
imposed on trading of the Common Stock (by reason of movements in price exceeding limits permitted by the relevant stock exchange
or otherwise) in the Common Stock, and such suspension or limitation occurs or exists throughout the 30 minutes prior to the closing
time of the relevant exchange on such day.

 

(vi) “Scheduled Trading Day” means a day that is regularly
scheduled Trading Day of the New York Stock Exchange.

 

(d)         The Company and the Holder
agree that the amount of the Exchange Notes being exchanged pursuant to this Agreement shall automatically be reduced (in multiples
of $1,000) so that the Company shall not issue Common Stock in Exchange for the Exchange Notes, to the extent that after giving
effect to such Exchange, the Holder (together with the Holder’s affiliates or any other person deemed to be a member of a
Section 13(d)(3) group with the Holder with respect to Common Stock of the Company) would beneficially own in excess of 9.9% of
the Common Stock outstanding immediately after giving effect to such Exchange. The Holder acknowledges that as a result of this
restriction, the number of shares that may be issued upon the Exchange may change depending upon changes in the outstanding shares
of Common Stock.  Immediately prior to the settlement of the Exchange, the Holder shall certify the number of shares of Common
Stock that it beneficially owns (including through other derivative securities) and the shares of Common Stock beneficially owned
by the Holder’s affiliates and any other person with whom it may have formed a Section 13(d)(3) “group.” 
Any portion of the Convertible Notes not exchanged due to the above limitations will remain outstanding.

 

    		2	 

     

    

 

(e)         Upon
execution of the Agreement, the Company will promptly make a public announcement regarding the Exchange. Following such announcement,
the Confidentiality Agreement between the Company and Zimmer Partners, L.P., dated October 7, 2015, shall be terminated and of
no further effect.

 

Section 1.2          Cancellation
of Convertible Notes.  Pursuant to the Indenture dated as of March 24, 2014 between the Company and U.S. Bank National
Association, as Trustee, governing the Convertible Notes (the “Indenture”), the Holder hereby agrees that the aggregate
principal amount and all accrued unpaid interest on the Exchange Notes shall be cancelled on the completion of the Exchange. The
Holder acknowledges that the cancellation of the Exchange Notes shall have the effects specified in the Indenture.

 

Section 1.3          Section
3(a)(9) Exchange.  In consideration of and for the Exchange, the Company agrees to issue to the Holder the Exchange
Shares. The issuance of the Exchange Shares to the Holder will be made without registration of such Exchange Shares under the Securities
Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”), in reliance upon
the exemption therefrom provided by Section 3(a)(9) of the Securities Act. The Holder acknowledges that the Company is relying
upon the truth and accuracy of, and the Holder’s compliance with, its representations, warranties, agreements, acknowledgments
and understandings set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder
for the Exchange.

 

Section 1.4          Closing
Mechanics.  The closing of the transactions contemplated by this Agreement shall occur on 9:00 a.m., Mountain Standard
Time, on November 13, 2015 or at such other time on the same date or such other date as the parties may agree in writing (such
time and date, the “Closing Date”). Prior to the Closing Date, Holder shall instruct its broker or other participant
in the Fast Automated Securities Transfer Program of The Depository Trust Company (“DTC”) to transfer and deliver the
Exchange Notes to the Trustee for purposes of cancellation. On the Closing Date, the Company will deliver the shares of Common
Stock to be issued in the Exchange to the transfer agent of the Company to be transmitted to the Holder by crediting the account
of Holder’s prime broker with DTC through DTC’s Deposit/Withdrawal at Custodian (“DWAC”) program.

 

Section 1.5          Conditions
to Closing.

 

(a)         The
obligation of the Holder hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Holder’s sole
benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i)         The
Company shall have caused its transfer agent to credit to Holder or its designee the Exchange Shares;

 

(ii)        The
Company shall have submitted an additional share listing application for the Exchange Shares with the NYSE MKT on or prior to the
Closing Date and shall cause the Exchange Shares to be approved by the NYSE MKT for listing on the Closing Date or as soon as practicable
thereafter; and

 

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(iii)       The
representations and warranties of the Company in this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date and the Company has complied in all material respects with
all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

 

(b)         The
obligation of the Company hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice
thereof:

 

(i)         The
Holder shall have delivered, or caused to be delivered, to the Company (x) the Exchange Notes being exchanged pursuant to this
Agreement in accordance with the written instructions of the Company and (y) all documentation related to the right, title and
interest in and to all of the Exchange Notes, and whatever documents of conveyance or transfer may be necessary or reasonably desirable
to transfer to and confirm in the Company all right, title and interest in and to (free and clear of any mortgage, lien, pledge,
charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto) the Exchange
Notes.

 

(ii)        The
representations and warranties of the Holder in this Agreement shall be true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date and that the Holder shall have complied in all material respects
with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

 

ARTICLE
II

Representations and Warranties of the Holder

 

The Holder hereby makes
the following representations and warranties, each of which is true and correct on the date hereof and the Closing Date and shall
survive the Closing Date and the transactions contemplated hereby to the extent set forth herein:

 

Section 2.1          Existence
and Power.

 

(a)         The
Holder is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has
the power, authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate
the transactions contemplated hereby.

 

    		4	 

     

    

 

(b)         The
execution of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby do not and
will not constitute or result in a breach, violation, conflict or default under any note, bond, mortgage, deed, indenture, lien,
instrument, contract, agreement, lease or license to which the Holder is a party, whether written or oral, express or implied,
or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative
or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Holder or on the part of any
other party thereto or cause the acceleration or termination of any obligation or right of the Holder, except for such breaches,
conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on the ability of the Holder to perform its obligations hereunder. As used in this Agreement, the term “Material
Adverse Effect” shall mean a material adverse effect on the business, condition (financial or otherwise), properties or results
of operations of the party, or an event, change or occurrence that would materially adversely affect the ability of the party to
perform its obligations under this Agreement which would limit the Holder’s power to transfer the Exchange Notes hereunder.

 

Section 2.2          Valid
and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Holder and
constitutes a legal, valid and binding obligation of the Holder, enforceable against the Holder in accordance with its terms, except
that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting
or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

Section 2.3          Title
to Exchange Notes.  The Holder has good and valid title to the Exchange Notes in the aggregate principal amount set
forth in the recitals to this Agreement, free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance,
title retention agreement, option, equity or other adverse claim thereto. The Holder has not, in whole or in part, (i) assigned,
transferred, hypothecated, pledged or otherwise disposed of the Exchange Notes or its rights in such Exchange Notes, or (ii) given
any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to such Exchange
Notes which would limit the Holder’s power to transfer the Exchange Notes hereunder.

 

Section 2.4          Investment
Decision.  The Holder is a “qualified institutional buyer” within the meaning of Rule 144A under the
Securities Act and was not organized for the purpose of acquiring the Exchange Shares. The Holder is knowledgeable, sophisticated
and experienced in business and financial matters and has previously invested in securities similar to the Exchange Shares. The
Holder is able to bear the economic risk of its investment in the Exchange Shares and is presently able to afford the complete
loss of such investment.

 

The Holder (or its authorized
representative) has had the opportunity to review the Company’s filings with the Securities and Exchange Commission (the
“Commission”), including, without limitation, the Company’s Annual Report on Form 10-K for the year ended December
31, 2014; the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015; the Company’s
current reports on Form 8-K filed on January 30, 2015, February 2, 2015, February 11, 2015, March 10, 2015, April 2, 2015, May
4, 2015, May 11, 2015, May 18, 2015, May 20, 2015, May 21, 2015, May 29, 2015, June 11, 2015, August 3, 2015, August 5, 2015, October
2, 2015 and October 13, 2015; and the Company’s Proxy Statement filed on April 24, 2015 (all of such filings with the Commission
referred to, collectively, as the “SEC Documents”). The Holder has had such opportunity to ask questions of the Company
and its representative and to obtain from representatives of the Company such information as is necessary to permit it to evaluate
the merits and risks of its investment in the Company. The Holder has independently, without reliance upon any representatives
of the Company and based on such information as the Holder deemed appropriate, made its own analysis and decision to enter into
this Agreement. The Holder has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able
to evaluate the risks involved in the Exchange pursuant hereto and to make an informed investment decision with respect to such
exchange.

 

    		5	 

     

    

 

The Holder acknowledges
that the Company is relying on the truth and accuracy of the foregoing representations and warranties in the offering of the Exchange
Shares to the Holder without having first registered the Exchange Shares under the Securities Act.

 

Section 2.5          Affiliate
Status.  The Holder is not, and has not been during the preceding three months, an “affiliate” of the
Company as such term is defined in Rule 144 under the Securities Act.

 

Section 2.6          Professional
Advice.  With respect to the tax, accounting and other economic considerations involved in the Exchange, the Holder
is not relying on the Company or any of its affiliates, and the Holder has carefully considered and has, to the extent the Holder
believes such discussion is necessary, discussed with the Holder’s professional legal, tax, accounting and financial advisors
the implications of the Exchange for the Holder’s particular tax, accounting and financial situation.

 

Section 2.7          No
Solicitation.  The Holder was not solicited by anyone on behalf of the Company to enter into this transaction.

 

ARTICLE
III

Representations, Warranties and Covenants of the Company

 

The Company hereby makes
the following representations, warranties, and covenants each of which is true and correct on the date hereof and shall survive
the date of the Closing and the transactions contemplated hereby to the extent set forth herein.

 

Section 3.1          Existence
and Power.

 

(a)         The
Company is duly incorporated, validly existing and in good standing under the laws of Delaware, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. The Company has the requisite power
and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated
hereby.

 

    		6	 

     

    

 

(b)         The
execution of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (i) does
not require the consent, approval, authorization, order, registration or qualification of, or filing with, any governmental authority
or court, or body or arbitrator having jurisdiction over the Company, other than the NYSE MKT and DTC; and (ii) does not and will
not constitute or result in a breach, violation or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract,
agreement, lease or license, whether written or oral, express or implied, or with the certificate of incorporation or bylaws of
the Company, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative
or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Company or on the part of any
other party thereto or cause the acceleration or termination of any obligation or right of the Company or any other party thereto,
except for such breaches, violations or defaults which would not reasonably be expected to, singly or in the aggregate, result
in a Material Adverse Effect (as defined above) on the ability of the Company to perform its obligations hereunder.

 

Section 3.2          Valid
and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Company and
constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms,
except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting
or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

Section 3.3          Valid
Issuance of the Exchange Shares.  The Exchange Shares, when issued and delivered in accordance with the terms and
for the consideration set forth in this Agreement, will be validly issued, fully paid and non-assessable and free of restrictions
on transfer other than restrictions on transfer under applicable federal and state securities laws and liens or encumbrances created
by or imposed by the Holder. Assuming the accuracy of the representations of the Holder in Article II of this Agreement, the Exchange
Shares will be issued in compliance in all material respects with all applicable federal and state securities laws. The Company
has a sufficient number of authorized and unissued shares of Common Stock to consummate the Exchange.

 

ARTICLE
IV

Miscellaneous Provisions

 

Section 4.1          Survival
of Representations and Warranties.  The agreements of the Company, as set forth herein, and the respective representations
and warranties of Holder and the Company as set forth herein in Articles 2 and 3, respectively, shall survive the Closing Date.

 

Section 4.2          Notice.  Any
notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) with return receipt requested or sent by reputable overnight courier service (charges prepaid):

 

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(a)         if
to the Holder, at its address as follows:

 

Zimmer Partners, LP

888 Seventh Avenue, 23rd
Floor

New York, NY 10106

Attention:  General Counsel

 

(b)         if
to the Company, at its address, as follows:

 

Emerald Oil, Inc.

200 Columbine, Suite 500

Denver, Colorado 80206

Attention: General Counsel

 

Each party hereto by notice
to the other party may designate additional or different addresses for subsequent notices or communications. All notices and communications
will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being
deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if transmitted by facsimile; and the next business
day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

 

Section 4.3          Entire
Agreement.  This Agreement and the other documents and agreements executed in connection with the Exchange embody
the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior
and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject
matter, including, without limitation, any term sheets, emails or draft documents.

 

Section 4.4          Assignment;
Binding Agreement.  This Agreement and the various rights and obligations arising hereunder shall inure to the benefit
of and be binding upon the parties hereto and their successors and assigns.

 

Section 4.5          Counterparts.  This
Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but
all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered
by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

 

Section 4.6          Remedies
Cumulative.  Except as otherwise provided herein, all rights and remedies of the parties under this Agreement are
cumulative and without prejudice to any other rights or remedies available at law.

 

Section 4.7          Governing
Law.  This Agreement shall in all respects be construed in accordance with and governed by the substantive laws of
the State of Delaware, without reference to its conflicts of law rules.  Any right to trial by jury with respect to any
action or proceeding arising in connection with this Agreement is hereby waived by the parties hereto.  The Company and
the Holder agree that any suit or proceeding arising in respect of this Agreement will be tried exclusively in the U.S. District
Court for the District of Delaware, and the Company and the Holder agree to submit to the jurisdiction of, and to venue in, such
court.

 

Section 4.8          No
Third Party Beneficiaries or Other Rights.  Nothing herein shall grant to or create in any person not a party hereto,
or any such person’s dependents or heirs, any right to any benefits hereunder, and no such party shall be entitled to sue
any party to this Agreement with respect thereto.

 

    		8	 

     

    

 

Section 4.9          Waiver;
Consent.  This Agreement may not be changed, amended, terminated, augmented, rescinded or discharged (other than
in accordance with its terms), in whole or in part, except by a writing executed by the parties hereto. No waiver of any of the
provisions or conditions of this Agreement or any of the rights of a party hereto shall be effective or binding unless such waiver
shall be in writing and signed by the party claimed to have given or consented thereto. Except to the extent otherwise agreed in
writing, no waiver of any term, condition or other provision of this Agreement, or any breach thereof shall be deemed to be a waiver
of any other term, condition or provision or any breach thereof, or any subsequent breach of the same term, condition or provision,
nor shall any forbearance to seek a remedy for any noncompliance or breach be deemed to be a waiver of a party’s rights and
remedies with respect to such noncompliance or breach.

 

Section 4.10        Word
Meanings.  The words such as “herein,” “hereinafter,” “hereof” and “hereunder”
refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine
and neuter, and vice versa, unless the context otherwise requires.

 

Section 4.11        No
Broker.  Neither party has engaged any third party as broker or finder or incurred or become obligated to pay any
broker’s commission or finder’s fee in connection with the transactions contemplated by this Agreement other than such
fees and expenses for which that particular party shall be solely responsible.

 

Section 4.12        Further
Assurances.  The Holder and the Company each hereby agree to execute and deliver, or cause to be executed and delivered,
such other documents, instruments and agreements, and take such other actions, as either party may reasonably request in connection
with the transactions contemplated by this Agreement.

 

Section 4.13        Costs
and Expenses.  The Holder and the Company shall each pay their own respective costs and expenses incurred in connection
with the negotiation, preparation, execution and performance of this Agreement, including, but not limited to, attorneys’
fees.

 

Section 4.14        Headings.  The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 4.15        Severability.
If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.

 

[the remainder of this
page is intentionally left blank]

 

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

 

	 	HOLDER:
	 	 
	 	By:	/s Stuart J. Zimmer
	 	Name: Stuart J. Zimmer
	 	Title: Authorized Signatory, Investment Manager to ZP Master Utility Fund, Ltd. and P Zimmer Ltd.
	 	 	 
	 	EMERALD OIL, INC.
	 	 
	 	By:	/s/ McAndrew A. Rudisill
	 	Name: McAndrew A. Rudisill
	 	Title: Chief Executive Officer and President

 

Signature Page to Exchange Agreement

    		10Exhibit 10.3

 

LIMITED FORBEARANCE AGREEMENT

 

This LIMITED FORBEARANCE
AGREEMENT (this “Agreement”), dated as of November 5, 2015 (the “Effective Date”),
is by and among Emerald Oil, Inc., a Delaware corporation (“Borrower”), the subsidiaries of Borrower
party hereto (each a “Guarantor,” and together with Borrower, “Obligors”),
the Lenders (as defined below) party hereto, and Wells Fargo Bank, N.A., as administrative agent (in such capacity, “Administrative
Agent”) for Lenders.

 

RECITALS:

 

A.           The
Loan Documents. Obligors are indebted to Lenders and granted collateral security as evidenced by certain instruments, agreements
and documents including, without limitation, the Amended and Restated Credit Agreement dated as of May 1, 2014 among Borrower,
Administrative Agent, and the financial institutions party thereto from time to time, as lenders ( “Lenders”),
as amended by that certain First Amendment to Credit Agreement dated September 2, 2014 and that certain Limited Waiver and Second
Amendment to Credit Agreement dated April 30, 2015 (collectively, and as further amended, modified or supplemented, the “Credit
Agreement”), and the other Loan Documents (as defined in the Credit Agreement); such indebtedness being secured by
perfected, first priority security interests in and liens on substantially all property of Obligors (the “Collateral”)
as provided in the Security Instruments (as defined in the Credit Agreement).

 

B.           Guaranties.
All of the Secured Obligations (as defined in the Credit Agreement) have been unconditionally guaranteed by Guarantors pursuant
to certain agreements and documents including, without limitation, the Guaranty and Collateral Agreement dated November 20, 2012,
by Borrower and Guarantors in favor of the Administrative Agent, as amended by that certain First Amendment to Guaranty and Collateral
Agreement dated May 1, 2014 and as supplemented by that certain Assumption Agreement and Supplement dated November 24,
2014 and as supplemented by that certain Assumption Agreement dated July 28, 2015 (collectively, and as amended,
modified or supplemented, the “Guaranties”).

 

C.           Existing
Defaults. Obligors acknowledge that Events of Default under the Loan Documents have occurred and are continuing, and prospective
Events of Default are anticipated to occur, each as more specifically described in Exhibit A attached hereto (the “Specified
Defaults”).

 

D.           Forbearance
Request by Borrower and Guarantors. Obligors have requested that Administrative Agent and Lenders forbear until December
18, 2015 from exercising their rights and remedies arising as a result of the occurrence of the Specified Defaults in order to
allow Obligors sufficient time to improve their liquidity and business operations. Administrative Agent and the Lenders party hereto
are willing to grant such forbearance subject to the terms and conditions of this Agreement.

 

NOW, THEREFORE, in
consideration of the premises and the mutual covenants, representations, warranties and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

    	 	1	 

     

    

 

AGREEMENTS:

 

1.          Definitions.
Capitalized terms used and not otherwise defined herein shall have the same meanings as set forth in the Credit Agreement. In addition,
the following terms, for the purposes of this Agreement, shall have the following meanings:

 

(a)          “Forbearance
Period” means the period commencing on the Effective Date and continuing through and including the Termination Date,
unless earlier terminated pursuant to the terms and provisions of this Agreement.

 

(b)          “Material
Contracts” means any contract involving payments to or from any Obligor in an aggregate amount in excess of $5,000,000.00
including, without limitation, those listed on Exhibit B attached hereto.

 

(c)          “Net
Cash Proceeds” means, with respect to any incurrence of Debt or sale or disposition of (including Casualty Events
affecting) Oil and Gas Properties, the cash proceeds of such incurrence, sale or disposition net of reasonable legal fees, accountants’
fees, underwriters’ or placement agents’ fees, listing fees, discounts or commissions and brokerage, consultant and
other customary fees and charges actually incurred in connection with such incurrence, sale or disposition and net of taxes paid
or payable as a result of such incurrence, sale or disposition (after taking into account any available tax credit or deduction
and any tax sharing arrangements).

 

(d)          “Termination
Date” means 5:00 p.m. (Dallas, Texas Time) on December 18, 2015.

 

(e)          “Termination
Event” means the occurrence of any of the following: (i) any representation or warranty made or deemed made by any
Obligor in this Agreement shall be false, misleading or erroneous in any material respect when made or deemed to have been made,
(ii) any Obligor shall fail to perform, observe or comply timely with any covenant, agreement or term contained in this Agreement,
(iii) any Default or Event of Default, other than the Specified Defaults, shall occur or shall have occurred under this Agreement
or any of the Loan Documents, (iv) any Obligor shall commence a voluntary proceeding seeking liquidation, reorganization, or other
relief with respect to itself or its debts under any bankruptcy, insolvency, or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it or shall make a general assignment for the benefit of creditors or shall generally
fail to pay its debts as they become due or shall take any action to authorize any of the foregoing, (v) an involuntary proceeding
shall be commenced against any Obligor seeking liquidation, reorganization, or other relief with respect to it or its debts under
any bankruptcy, insolvency, or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official for it or a substantial part of its property, in each case that remains undismissed
or unstayed for five (5) consecutive calendar days, (vi) any event or condition shall occur after the Effective Date which shall
have a Material Adverse Effect, as determined by Administrative Agent, (vii) any default or event of default shall occur after
the Effective Date in connection with any Material Contract, or (viii) the exercise by any creditor or holder of Material Indebtedness
of any Obligor (excluding the Credit Parties under the Loan Documents) of any right or remedy available to them in connection with
any default under the documents governing such Material Indebtedness, including, but not limited to any foreclosure or enforcement
action against any Collateral.

 

    	 	2	 

     

    

 

2.          Forbearance.

 

(a)          Forbearance.
Subject to the terms of this Agreement and only so long as no Termination Event shall have occurred, Administrative Agent and Lenders
hereby agree to forbear until the Termination Date from exercising their rights and remedies under the Loan Documents arising from
Specified Defaults. Notwithstanding the foregoing, the forbearance granted by the Administrative Agent and Lenders pursuant hereto
shall not constitute and shall not be deemed to constitute a waiver of any of the Specified Defaults or of any other Default or
Event of Default under the Loan Documents. On and after the Termination Date, or such earlier date on which a Termination Event
occurs, Administrative Agent’s and Lenders’ agreement hereunder to forbear shall terminate automatically without further
act or action by Administrative Agent or Lenders, and Administrative Agent and Lenders shall be entitled to exercise any and all
rights and remedies available to it or them under the Loan Documents and this Agreement, at law, in equity, or otherwise.

 

(b)          Principal
and Interest Payments; Borrowings. Commencing on the Effective Date, Borrower shall pay to Administrative Agent, for the
benefit of the Lenders on a pro rata basis accrued interest on the outstanding principal balance of the Loans on the last Business
Day of each calendar month. Commencing on the Effective Date, interest shall accrue and be payable on the outstanding principal
balance of the Loans at a rate per annum equal to one and three quarters percent (1.75%) plus the Alternate Base Rate, but in no
event to exceed the Highest Lawful Rate. During the Forbearance Period, no outstanding Loans may be continued as, or converted
into, Eurodollar Loans, no Lender has any obligation to make additional Loans, and Issuing Bank has no obligation to issue any
Letter of Credit.

 

(c)          Other
Payments. Borrower shall pay Administrative Agent, for the benefit of those Lenders that deliver fully executed signature
pages to this Agreement to the Administrative Agent on or before 5:00 p.m. on November 5, 2015, a fully earned forbearance fee
equal to one half of one percent (0.5%) of the outstanding principal balance of the Loans owing to each such Lender as of the Effective
Date, of which fifteen hundredths of one percent (0.15%) of such outstanding principal balance (the “Initial Forbearance
Fee Payment”), shall be paid on the Effective Date, and the remaining balance of which shall be paid at the expiration
or termination of the Forbearance Period (provided that the remaining balance shall be waived in the event Borrower has repaid
all outstanding Loans in full on or before the expiration or termination of the Forbearance Period). Borrower also agrees to reimburse
Administrative Agent and the Lenders upon demand for all out-of-pocket expenses (including reasonable attorneys’ fees, settlement
costs and fees and expenses of FTI Consulting, Inc., (“FTI”) as the financial advisor engaged by Administrative
Agent’s counsel) incurred in connection with the negotiation of this Agreement, any further restructuring or “workout”
with Obligors, whether or not consummated, of any Secured Obligations, and any enforcement of any Secured Obligations. Borrower
acknowledges and agrees that all such expenses are being incurred in connection with a restructuring or workout, as these terms
are used in Section 12.03(a) of the Credit Agreement.

 

    	 	3	 

     

    

 

3.          Representations
and Warranties. To induce Administrative Agent and Lenders to enter into this Agreement, Obligors hereby jointly and severally
represent and warrant to Credit Parties as follows:

 

(a)          Duly
Organized. Obligors are duly organized, validly existing and in good standing under the laws of the jurisdiction in which
they were organized and formed, and Obligors have the power and authority to perform their respective obligations under this Agreement
and the Loan Documents.

 

(b)          Authority.
The execution, delivery and performance of this Agreement (i) have been duly authorized by all requisite action on the part of
Obligors and (ii) do not and will not violate the organizational documents of Obligors, any other material agreement to which any
Obligor is a party, or any law, rule or regulation, or any order of any court, governmental authority or arbitrator, by which any
Obligor or any of its respective properties is bound.

 

(c)          No
Defenses. The outstanding principal balance of the Loans is $139,604,977.84 as of the Effective Date. None of Obligors
has any defenses to payment, counterclaims, or rights of setoff with respect to the Loans or any other Secured Obligations existing
as of the Effective Date.

 

(d)          No
Other Defaults. Except for the Specified Defaults, no Default or Event of Default under the Loan Documents has occurred
and is continuing.

 

(e)          Deposit
Accounts. Upon and after the Effective Date, all of Obligors’ deposit accounts are maintained with Wells Fargo Bank,
N.A. and are covered by a deposit account control agreement in form and substance acceptable to Administrative Agent.

 

(f)          Taxes.
All payments due to all taxing authorities with respect to the Collateral are current as of the Effective Date.

 

4.          Covenants.
Notwithstanding any provisions to the contrary contained in the Loan Documents, Obligors hereby covenant and agree that, during
the Forbearance Period, each of them will perform, observe and comply with each of the following covenants:

 

(a)          Compliance
with Related Documents and this Agreement. Obligors will perform, observe and comply with each covenant, agreement and
term contained in this Agreement and each of the Loan Documents, including, without limitation, the fees and payments required
thereunder, except for the Specified Defaults.

 

    	 	4	 

     

    

 

(b)          Prepayment
of Loans. Borrower shall make a mandatory prepayment of the Loans in an amount equal to 100% of the Net Cash Proceeds received
by any Obligor in each of the following circumstances:

 

(1)         If
any Obligor sells, assigns, farms out, conveys or otherwise transfers any Oil and Gas Properties (or any Equity Interests in any
Obligor owning such Oil and Gas Properties) other than the Title Defect Properties (as defined in that certain Letter Agreement
dated October 1, 2015 among the Administrative Agent, the Majority Lenders, the Borrower and the Guarantors) or terminates, unwinds,
cancels or otherwise disposes of any Swap Agreement, and the Net Cash Proceeds of all such transfers (other than fifty percent
(50%) of proceeds from the transfer of Title Defect Properties) and all such terminations of Swap Agreements made since the commencement
of the Forbearance Period exceed $500,000.00;

 

(2)         If
any Obligor issues any Debt for borrowed money since the commencement of the Forbearance Period; or

 

(3)         If
any Obligor receives a tax refund, insurance proceeds or other recoveries for a Casualty Event (collectively, “Recoveries”),
and the aggregate amount of the Recoveries since the commencement of the Forbearance Period exceeds $500,000.00.

 

(c)          Deposit
of Funds. Obligors shall cause all of their collections, including but not limited to joint interest billing receivables
and hedge settlements, to be deposited in deposit accounts that are covered by a deposit account control agreement in favor of
Administrative Agent, and shall not open or maintain any deposit account other than deposit accounts that are maintained with Wells
Fargo Bank, N.A.

 

(d)          Financial
Statements. Borrower shall deliver to Administrative Agent and Lenders, no later than twenty (20) days after the end of
each calendar month, a copy of the unaudited consolidated balance sheet for Borrower and its Consolidated Subsidiaries and related
statements of operations, stockholders’ equity, as applicable, and cash flows as of the end of and for such calendar month
and the then elapsed portion of the fiscal year. Such financial statements shall be certified by one of Borrower’s Financial
Officers as presenting fairly, in all material respects, the financial condition and results of operations of Borrower and its
Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes.

 

    	 	5	 

     

    

 

(e)          Cash
Flow Forecasts. Borrower shall deliver to Administrative Agent and Lenders, by no later than 12 noon Central Time on Thursday
of each week beginning on the first Thursday after the Effective Date, an updated weekly 13-week cash flow forecast setting forth
all sources and uses of cash and beginning and ending cash balances (the “Budget”), an initial copy of
which shall be delivered on or prior to the Effective Date. For each monthly period set forth in the Budget, the actual production
volume of crude oil shall not in any event be less than the amount forecasted for such period by more than ten percent (10%) of
the amount forecasted. For each weekly period set forth in the Budget, the actual expenditures by Obligors for Total Operating
Disbursements (as designated in the Budget) shall not in any event exceed the aggregate amount budgeted for such period by more
than fifteen percent (15%) of the budgeted amount, and the actual expenditures of Obligors shall not, for each line item in the
Budget labeled Accounts Payable – Critical, Accounts Payable – DMS, Salaries & Benefits, Rent & Utilities and
Other exceed the amount budgeted for such line item in the Budget for such period by more than twenty percent (20%) of the budgeted
amount. With respect to only the line item labeled Accounts Payable – Critical, Borrower may carry over unspent budgeted
amounts in any weekly period to future weekly periods so that Borrower has available to it the cumulative-to-date total budgeted
amounts at any time, without causing such future weekly periods to exceed the allowable variance. Any such carryover spend will
also be deducted in determining the Borrower’s compliance with expenditures for Total Operating Disbursements. Obligors shall
operate strictly in accordance with the Budget and shall pay only those actual, ordinary and necessary operating expenses of Obligors’
business in compliance with the Budget (subject to the variances identified above).

 

(f)          Reconciliation
Reports. Borrower shall deliver to Administrative Agent and Lenders concurrently with each Budget (i) a variance report
reconciling the prior week’s cash flow forecast to the actual sources and uses of cash for the prior week, along with a line-by-line
reconciliation and explanation of material variances, and (ii) a listing of each Obligor’s accounts receivable, including
invoices aged by invoice date and due date (with an explanation of the terms offered), together with a summary specifying the name,
address, and balance due for each account debtor, and a schedule and aging of each Obligor’s accounts payable.

 

(g)          Mortgaged
Properties. Obligors shall cooperate with Administrative Agent and Lenders to cause the Mortgaged Properties and
the title information relating thereto delivered to Administrative Agent to exceed in each case 95% of the total value of the Oil
and Gas Properties evaluated by the most recent Reserve Report and shall deliver to Administrative Agent all information and take
all actions reasonably requested by Administrative Agent to assure compliance therewith.

 

(h)          Minimum
Cash. Obligors will cause their Cash Equivalents not to be less than $1,000,000.00 at the end of each week, as reported
to Administrative Agent and Lenders in accordance with Section 4(e) of this Agreement, during the Forbearance Period.

 

(i)          Maximum
Capital Expenditures. Obligors will cause their capital expenditures not to exceed $300,000.00 during the Forbearance Period.

 

    	 	6	 

     

    

 

(j)          Notices.
Borrower will give Administrative Agent prompt written notice of the following:

 

(1) Any notice
of a default or required redemption relating to any Material Indebtedness of any Obligor;

 

(2) The occurrence
of any default or event of default, or the pursuit of any remedies against any Obligor, in connection with any of the Material
Contracts;

 

(3) Any actual
or threatened suspension of services by the providers of Borrower’s midstream and gathering services or any other adverse
development in Borrower’s relationship with such providers;

 

(4) The filing
or commencement of, or the threat in writing of, any action, suit (whether in state or federal court), proceeding, receivership,
involuntary petition in bankruptcy, investigation or arbitration by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of the Borrower, threatened against or affecting any of the Obligors not previously disclosed in writing
to Lenders or any material adverse development in any action, suit, proceeding, investigation or arbitration (whether or not previously
disclosed to Lenders); and

 

(5) Any notice
of the filing or recordation of a mechanic’s, materialmen’s or other like Lien received by any of the Obligors with
respect to any of their Oil and Gas Properties.

 

(k)          Information.
Obligors shall cooperate with FTI in performing its work as financial advisor to Administrative Agent and its counsel. In addition
to any notices required to be given under the Loan Documents, Obligors and their Advisors will provide Administrative Agent, Lenders
and FTI with such other information as may be requested by Administrative Agent or FTI from time to time, within five (5) Business
Days of such request, including, without limitation, copies of any bank or other financial institution statements; financial statements;
accounts receivable and accounts payable agings; transactional documentation; litigation pleadings, depositions, related documents
and transcripts; letters of intent or offers to purchase, lease or license any portion, all or substantially all of the assets
or ownership interests of any of Obligors; and letters of intent or commitments for any capital investment, loan or other financing
in or to any of Obligors, except, in each case, to the extent expressly designated as confidential and not to be disclosed to Obligors’
secured lenders. Borrower hereby acknowledges Administrative Agent’s right under the Credit Agreement to engage FTI in its
sole discretion under these circumstances and agrees to reimburse Administrative Agent for the fees and expenses of FTI as provided
in Section 2(c).

 

    	 	7	 

     

    

 

(l)          Access.
Administrative Agent, FTI, Lenders, and their agents shall have access during normal business hours to Obligors’ business
premises and to the Collateral to review, appraise and evaluate the physical condition of the Collateral and to inspect the books,
records and reports of Obligors concerning the operation of Obligors’ businesses, financial condition, the transfers and
expenditures of funds generated therefrom, the accrual of expenses relating thereto, and any and all other records relating to
the operations of Obligors. Obligors and their Advisors will fully cooperate with Administrative Agent, Lenders and FTI regarding
such reviews, evaluations, and inspections, and Obligors shall make their employees, consultants and professionals reasonably available
to Administrative Agent, Lenders, FTI, and Administrative Agent’s other professionals and consultants in conducting such
reviews, evaluations, and inspections.

 

(m)          No
Control. No act committed or action taken by the Credit Parties under this Agreement or the Loan Documents will be used,
construed, or deemed to hold the Credit Parties to be in control of any Obligor, or the governance, management or operations of
any Obligor for any purpose, without limitation, or to be participating in the management of any Obligor or acting as a “responsible
person” or “owner or operator” or a person in “control” with respect to the governance, management
or operation of any Obligor or their respective businesses (as such terms, or any similar terms, are used in the U.S. Bankruptcy
Code, the Code, or CERCLA, each as may be amended from time to time, or any other federal or state statute, at law, in equity,
or otherwise) by virtue of the interests, rights, and remedies granted to or conferred upon the Credit Parties under this Agreement
or the Loan Documents.

 

(n)          Obligors’
Advisors. Obligors shall maintain their engagement of Opportune LLP and Intrepid Financial Partners, or in the event either
such engagement shall terminate, such replacement advisors of comparable standing and reputation to which Administrative Agent
may consent in writing, such consent not to be unreasonably withheld (collectively, the “Advisors”) at
all times during the Forbearance Period. Obligors authorize Administrative Agent, FTI, and their agents and professionals to communicate
with Obligors’ Advisors without notice to, or the presence of, Obligors.

 

The failure of Obligors
to timely comply with the terms of this Section 4 shall constitute (i) a Default and an Event of Default under and for all
purposes of the Credit Agreement, and (ii) a Termination Event hereunder.

 

5.          Conditions
Precedent. As a condition to the commencement of the Forbearance Period on the Effective Date, each of the following conditions
shall have been fulfilled by Obligors:

 

(a)          This
Agreement. The Obligors, the Administrative Agent and the Majority Lenders have each executed and delivered this Agreement.

 

(b)          Payments.
Borrower shall have paid in cash (i) all accrued and unpaid interest on the outstanding principal balance of the Loans, (ii) the
Initial Forbearance Fee Payment, (iii) $100,000 to serve as FTI’s retainer, and (iv) all invoiced and unpaid fees and expenses
reasonably incurred by and owing to Administrative Agent’s counsel, Vinson & Elkins L.L.P.;

 

    	 	8	 

     

    

 

(c)          Budget.
Borrower shall have delivered the initial Budget, together with an aging of each Obligor’s receivables and payables in accordance
with Section 4(f) of this Agreement;

 

(d)          Deposit
Accounts. Obligors and Wells Fargo Bank, N.A., as depositary, shall have entered into one or more deposit account control
agreements with Administrative Agent covering the accounts maintained by the Obligors with Wells Fargo Bank, N.A.;

 

(e)          Zavanna
Settlement. Borrower shall have obtained the consent of Majority Lenders to the Confidential Settlement Agreement dated
October 16, 2015 among Borrower, Emerald WB LLC and Zavanna, LLC, and the release of Administrative Agent’s Lien in the Mortgaged
Properties contemplated thereby; and

 

(f)          Evidence
of Authority. Obligors shall have delivered to Administrative Agent certificates of duly authorized officers of Obligors,
and such other documents, instruments and agreements as Administrative Agent shall require, to evidence the due authorization,
execution and delivery of this Agreement, each of which shall be in form and substance satisfactory to Administrative Agent.

 

The failure of Obligors
to timely comply with the terms of this Section 5 shall constitute (i) a Default and an Event of Default under and for all
purposes of the Credit Agreement, and (ii) a Termination Event hereunder.

 

6.          Ratification
of Related Documents and Collateral. Obligors hereby acknowledge that each of them has received from Administrative Agent
proper notice of Default with respect to the Specified Defaults. Each of the Obligors hereby waives (a) any further notice of Default,
notice of intent to accelerate, or demand for payment and (b) any further opportunity to cure any of the Specified Defaults. Except
as modified by this Agreement, each Obligor hereby acknowledges, ratifies, reaffirms, and agrees that each of the Loan Documents,
and the first priority, perfected liens and security interests created thereby in favor of Administrative Agent in the Collateral,
are and will remain in full force and effect and binding on Obligors, and are enforceable in accordance with their respective terms
and applicable law. Each of the Obligors acknowledges, ratifies, and reaffirms all of the terms and provisions of the Loan Documents,
except as modified herein, which are incorporated by reference as of the Effective Date as if set forth herein including, without
limitation, all promises, agreements, warranties, representations, covenants, releases, indemnifications, and waivers of jury trials
contained therein. Obligors hereby acknowledge, ratify, and confirm the Credit Agreement, the Notes, the Security Instruments,
the Guaranties, the other Loan Documents, and all of their respective debts and obligations to Credit Parties thereunder. Obligors
acknowledge and agree that in the event Administrative Agent seeks to take possession of any or all of the Collateral securing
any of the Secured Obligations by court process, Obligors each irrevocably waive, to the fullest extent permitted by law, any bonds
and any surety or security relating thereto required by any statute, court rule or otherwise as an incident to such possession.

 

    	 	9	 

     

    

 

7.          Remedies
Upon Termination Event. Upon the occurrence of a Termination Event, (a) the Forbearance Period will terminate without further
act or action by any Credit Party, (b) Administrative Agent will be entitled immediately to accelerate the Secured Obligations,
institute foreclosure proceedings against the Collateral and to exercise any and all of Credit Parties’ rights and remedies
available to Credit Parties under the Loan Documents and this Agreement, at law, in equity, or otherwise, without further opportunity
to cure, demand, presentment, notice of dishonor, notice of Default, notice of intent to accelerate, notice of intent to foreclose,
notice of protest or other formalities of any kind, all of which are hereby expressly waived by Obligors.

 

8.          Acknowledgment
of Defaults. Obligors specifically acknowledge the existence and continuation of the Specified Defaults.

 

9.          WAIVER
AND RELEASE. EACH OF Obligors (IN ITS OWN RIGHT AND ON BEHALF OF ITS PREDECESSORS,
SUCCESSORS, LEGAL REPRESENTATIVES AND ASSIGNS) HEREBY EXPRESSLY AND UNCONDITIONALLY ACKNOWLEDGES AND AGREES THAT IT HAS NO SETOFFS,
COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, DEFENSES, CLAIMS, CAUSES OF ACTION, ACTIONS OR DAMAGES OF ANY CHARACTER OR NATURE, WHETHER
CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED, FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED
OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE, FORESEEN OR UNFORESEEN, DIRECT, OR INDIRECT, AGAINST any CREDIT Party, ANY
OF ITS AFFILIATES OR ANY OF ITS OFFICERS, DIRECTORS, AGENTS, EMPLOYEES, ATTORNEYS OR REPRESENTATIVES OR ANY OF THEIR RESPECTIVE
PREDECESSORS, SUCCESSORS OR ASSIGNS (COLLECTIVELY, THE “LENDER-RELATED PARTIES”) OR ANY GROUNDS OR CAUSE FOR
REDUCTION, MODIFICATION, SET ASIDE OR SUBORDINATION OF THE SECURED Obligations
OR ANY LIENS OR SECURITY INTERESTS OF the CREDIT Parties. IN PARTIAL CONSIDERATION FOR THE AGREEMENT OF Administrative Agent and
LENDERs TO ENTER INTO THIS AGREEMENT, EACH OF Obligors HEREBY KNOWINGLY AND UNCONDITIONALLY WAIVES AND FULLY AND FINALLY RELEASES
AND FOREVER DISCHARGES THE LENDER-RELATED PARTIES FROM, and covenants not to sue the Lender-related parties for, ANY AND ALL SETOFFS,
COUNTERCLAIMS, ADJUSTMENTS, RECOUPMENTS, CLAIMS, CAUSES OF ACTION, ACTIONS,
GROUNDS, CAUSES, DAMAGES, COSTS AND EXPENSES OF EVERY NATURE AND CHARACTER, WHETHER CONTINGENT, NONCONTINGENT, LIQUIDATED, UNLIQUIDATED,
FIXED, MATURED, UNMATURED, DISPUTED, UNDISPUTED, LEGAL, EQUITABLE, SECURED OR UNSECURED, KNOWN OR UNKNOWN, ACTUAL OR PUNITIVE,
FORESEEN OR UNFORESEEN, DIRECT OR INDIRECT, ARISING OUT OF OR FROM OR RELATED TO ANY OF THE LOAN DOCUMENTS, WHICH any Obligor NOW
OWNS AND HOLDS, OR HAS AT ANY TIME HERETOFORE OWNED OR HELD, SUCH WAIVER, RELEASE AND DISCHARGE BEING MADE WITH FULL KNOWLEDGE
AND UNDERSTANDING OF THE CIRCUMSTANCES AND EFFECTS OF SUCH WAIVER, RELEASE AND DISCHARGE AND AFTER HAVING CONSULTED LEGAL COUNSEL
OF ITS OWN CHOOSING WITH RESPECT THERETO. THIS SECTION IS IN ADDITION TO ANY OTHER RELEASE OF ANY OF THE LENDER-RELATED PARTIES
BY ANY OF Obligors AND SHALL NOT IN ANY WAY LIMIT ANY OTHER RELEASE, COVENANT NOT TO SUE, OR WAIVER BY ANY OF Obligors IN FAVOR
OF ANY OF THE LENDER-RELATED PARTIES.

 

    	 	10	 

     

    

 

10.         No
Obligation of Credit Parties. Obligors hereby acknowledge and understand that upon the expiration or termination of the
Forbearance Period, if all the Specified Defaults have not been cured or waived by written agreement in accordance with the Credit
Agreement, or if there shall at such time exist a Default or Event of Default, then Credit Parties shall have the right to proceed
to exercise any or all available rights and remedies, which may include foreclosure on the Collateral and/or institution of legal
proceedings. Credit Parties shall have no obligation whatsoever to extend the maturity of the Secured Obligations, waive any Events
of Default or Defaults, defer any payments, or further forbear from exercising its rights and remedies.

 

11.         No
Implied Waivers. No failure or delay on the part of Credit Parties in exercising, and no course of dealing with respect
to, any right, power or privilege under this Agreement, the Credit Agreement, the Notes, the Security Instruments, the Guaranties,
or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege
under this Agreement, the Credit Agreement, the Notes, the Guaranties, or any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

 

12.         INDEMNIFICATION.
IN ADDITION TO, AND WITHOUT LIMITATION OF, ANY AND ALL INDEMNITIES PROVIDED IN THE LOAN
DOCUMENTS, Obligors HEREBY, JOINTLY AND SEVERALLY, INDEMNIFY AND HOLD EACH OF THE LENDER-RELATED PARTIES HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, LIABILITies, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS, JUDGMENTS, COSTS, AND EXPENSES, INCLUDING, WITHOUT LIMITATION,
Reasonable ATTORNEYS’ FEES, ARISING OUT OF OR FROM OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THIS AGREEMENT. IF ANY ACTION,
SUIT, OR PROCEEDING IS BROUGHT AGAINST ANY OF THE LENDER-RELATED PARTIES, Obligors SHALL, AT Such Lender-Related Parties’
REQUEST, DEFEND THE SAME AT THEIR SOLE COST AND EXPENSE, SUCH COST AND EXPENSE TO BE A JOINT AND SEVERAL LIABILITY OF Obligors,
BY COUNSEL SELECTED BY such Lender-related Party. NOTWITHSTANDING ANY PROVISION OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, THIS
SECTION 12 SHALL REMAIN IN FULL FORCE AND EFFECT AND SHALL SURVIVE ANY DELIVERY AND PAYMENT ON THE SECURED Obligations,
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

13.         Survival
of Representations and Warranties. All representations and warranties made in this Agreement or any other Loan Document
will survive the execution and delivery of this Agreement, and no investigation by Credit Parties or any closing will affect the
representations and warranties or the right of Credit Parties to rely upon them.

 

    	 	11	 

     

    

 

14.         Review
and Construction of Documents. Each of the Obligors hereby acknowledges, represents, and warrants to Credit Parties that
(a) Obligors have had the opportunity to consult with legal counsel of their own choice and have been afforded an opportunity
to review this Agreement with their legal counsel, (b) Obligors have reviewed this Agreement and fully understand the effects
thereof and all terms and provisions contained herein, and (c) Obligors have executed this Agreement of their own free will
and volition. The recitals contained in this Agreement shall be construed to be part of the operative terms and provisions of this
Agreement.

 

15.         ENTIRE
AGREEMENT; AMENDMENT. THIS AGREEMENT AND THE RELATED DOCUMENTS AS INCORPORATED
HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO REGARDING Administrative Agent’s and Lenders’
FORBEARANCE WITH RESPECT TO THEIR RIGHTS AND REMEDIES ARISING AS A RESULT OF THE SPECIFIED DEFAULTS AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND
MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement may be amended or waived
only by an instrument in writing signed by the parties hereto. The Loan Documents, as modified by this Agreement, continue to evidence
the agreement of the parties with respect to the subject matter thereof.

 

16.         Notices.
All notices, requests, demands and other communications under this Agreement will be given in accordance with the provisions of
the Credit Agreement, except that notices to Administrative Agent shall be given to the following:

 

Wells Fargo Bank, N.A.

MAC D1053-150

301 S. College Street

Charlotte, NC 28288

Attention: Michael J. Thomas

Fax: 704.383.7611

Email: mjthomas@wellsfargo.com

 

17.         Successors
and Assigns. This Agreement will be binding upon, and will inure to the benefit of, the parties hereto and their respective
successors and assigns, provided that none of Obligors may assign any rights or obligations under this Agreement without the prior
written consent of Administrative Agent.

 

18.         Tolling
of Statutes of Limitation. The parties hereto agree that all applicable statutes of limitations with respect to the Loan
Documents shall be tolled and not begin running until the Termination Date.

 

19.         Arms-Length/Good
Faith. This Agreement has been negotiated at arms-length and in good faith by the parties hereto.

 

    	 	12	 

     

    

 

20.         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York and applicable
laws of the United States of America.

 

21.         Interpretation.
Wherever the context hereof will so require, the singular shall include the plural, the masculine gender shall include the feminine
gender and the neuter and vice versa. The headings, captions and arrangements used in this Agreement are for convenience only and
shall not affect the interpretation of this Agreement.

 

22.         Severability.
In case any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal, or unenforceable provision had never been contained herein.

 

23.         Counterparts.
This Agreement may be executed and delivered in any number of counterparts, and by different parties hereto on separate counterparts,
each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall
constitute one and the same instrument; provided that no party shall be bound by this Agreement until each of the parties has executed
a counterpart hereof. Execution of this Agreement via facsimile or other electronic means shall be effective, and signatures received
via facsimile or other electronic means shall be binding upon the parties hereto and shall be effective as originals.

 

24.         Further
Assurances. Obligors each agree to execute, acknowledge, deliver, file and record such further certificates, instruments
and documents, and to do all other acts and things, as may be reasonably requested by Administrative Agent as necessary or advisable
to carry out the intents and purposes of this Agreement.

 

25.         Loan
Document. This Agreement is a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.

 

    	 	13	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement as of the Effective Date.

 

	 	BORROWER:
	 	 
	 	EMERALD OIL, INC., a Delaware corporation
	 	 	 
	 	By:	/s/ Ryan Smith
	 	Name:	Ryan Smith
	 	Title:	Chief Financial Officer
	 	 	 
	 	Guarantors:
	 	 
	 	EMERALD WB LLc, a Colorado limited liability company
	 	 	 
	 	By:	/s/ Ryan Smith
	 	Name:	Ryan Smith
	 	Title:	Chief Financial Officer
	 	 	 
	 	EMERALD dB LLc, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Ryan Smith
	 	Name:	Ryan Smith
	 	Title:	Chief Financial Officer
	 	 	 
	 	EMERALD NWB LLc, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Ryan Smith
	 	Name:	Ryan Smith
	 	Title:	Chief Financial Officer
	 	 	 
	 	EOX MARKETING, LLc, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Jeremy Weemhoff
	 	Name:	Jeremy Weemhoff
	 	Title:	President

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

	 	Administrative Agent and Lender:
	 	 
	 	WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association
	 	 	 
	 	By:	/s/ Michael J. Thomas
	 	Name:	Michael J. Thomas
	 	Title:	Senior Vice President

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

	 	Lender:
	 	 
	 	SUNTRUST BANK

 

	 	By:	/s/ Janet R. Naifeh
	 	Name:	Janet R. Naifeh
	 	Title:	Senior Vice President

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

	 	Lender:
	 	 
	 	THE BANK OF NOVA SCOTIA
	 	 	 
	 	By:	/s/ Steve Kerr
	 	Name:	Steve Kerr
	 	Title:	Managing Director

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

	 	Lender:
	 	 
	 	BARCLAYS BANK PLC
	 	 	 
	 	By:	                  
	 	Name:	 
	 	Title:	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

	 	Lender:
	 	 
	 	CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

[Signature
Page to Forbearance Agreement]

 

    	 	 	 

     

    

 

Exhibit
A

SPECIFIED DEFAULTS

 

Each of the existing
and prospective breaches of the Loan Documents set forth below are Specified Defaults:

 

1.          The
Event of Default occurring under Section 10.01(d) of the Credit Agreement as a result of a breach of Section 9.01(a) and (b) of
the Credit Agreement with respect to the quarters ended June 30, 2015 and September 30, 2015.

 

2.          The
Event of Default under Section 10.01(a) of the Credit Agreement as a result of the failure of the Borrower to repay the Borrowing
Base Deficiency pursuant to Section 3.04(c)(ii) of the Credit Agreement.

 

3.          Any
Event of Default that may occur under Section 10.01(g) of the Credit Agreement as a result of an event that would enable or permit
the holders of Material Indebtedness (e.g., Convertible Notes) to cause such indebtedness to become due.

 

    	 	 	 

     

    

 

Exhibit
B

MATERIAL CONTRACTS

 

1.          Amended
and Restated Gas Dedication and Gathering Agreement between Dakota Midstream, LLC, Emerald Oil, Inc. and Emerald WB LLC, dated
July 1, 2014.

 

2.          Amended
and Restated Crude Oil Dedication & Throughput Commitment Transportation Agreement between Dakota Midstream, LLC and Dakota
Energy Connection, LLC, and Emerald Oil, Inc. and Emerald WB LLC, dated July 1, 2014.

 

3.          Amended
and Restated Water Dedication and Gathering Agreement between Dakota Fluid Solutions LLC, F/K/A Mesa Oil Services, LLC and Emerald
Oil, Inc. and Emerald WB LLC, dated July 1, 2014.

 

4.          Industrial
Water Delivery Services Agreement by and between Mesa Water Services, LLC and Emerald Oil, Inc. dated February 4, 2014.

 

5.          Employment
Agreement by and between Emerald Oil, Inc. and McAndrew Rudisill dated January 1, 2014.

 

6.          Employment
Agreement by and between Emerald Oil, Inc. and James Russell (J.R.) Reger dated January 1, 2014, and as amended March 31, 2014.

 

7.          ISDA
2002 Master Agreement by and between The Bank of Nova Scotia and Emerald Oil, Inc. dated June 20, 2014.

 

8.          Indenture
by and between Emerald Oil, Inc. and U.S. Bank National Association (as Trustee) dated March 24, 2014 regarding the Company’s
2.00% Convertible Senior Notes Due 2019.

 

9.          Oilfield
Services contract by and between Emerald Oil, Inc. and Liberty Oilfield Services, LLC.

 

10.         Sixth
Amendment to Office Lease dated March 3, 2014 by and between Emerald Oil, Inc. and LBA Realty Fund II-Company IV, LLC.

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