Document:

FORM OF IRAQ LICENCE AGREEMENT

 

LICENCE AGREEMENT

 

THIS AGREEMENT (the “Agreement”)
made effective as of the 27 day of July, 2012

 

BETWEEN:

 

PETROSONIC ENERGY, INC.,
a body corporate carrying on business in Nevada, U.S.A.

 

(“Petrosonic”)

 

AND:

 

SONORO ENERGY LTD., a body
corporate carrying on business in the Province of Alberta, Canada

 

(“Sonoro”)

 

WHEREAS:

 

		(a)	All capitalized terms used in these Recitals are defined in Section 1 below;

 

		(b)	Petrosonic owns Proprietary Information and certain Patents related to the upgrading of heavy oils
by sonicated de-asphalting and oxidation; and

 

		(c)	Sonoro is a company carrying on business in Iraq;

 

		(d)	Sonoro wishes to obtain a licence to use the Licenced Property in the Territory.

 

NOW THEREFORE, in consideration
of the foregoing and the representations, warranties, covenants, conditions and promises contained herein and for other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

		1.	DEFINITIONS

 

		1.1	The following terms, when employed in this Agreement with capitalized initial letters, shall be
defined as follows:

 

		(a)	“Affiliate” means any person, partnership, joint venture, corporation or other
form of enterprise which directly or indirectly controls, is controlled by, or is under common control with, Sonoro. For purposes
of the preceding sentence, “control” means possession, directly or indirectly, of the power to direct or cause direction
of management and policies through ownership of voting securities, contract, voting trust or otherwise;

 

    	 

    	 

    

 

		(b)	“Confidential Information” means all information, data, knowledge and know-how
(in whatever form and however communicated or maintained, whether orally, electronically or documentary, computer storage or otherwise)
that is not generally known or available to third parties, and which derives independent economic value, actual or potential, from
not being generally known or available, relating, directly or indirectly, to Petrosonic or its Proprietary Information (including,
without limitation, any documents or notes relating thereto) that is delivered or disclosed by Petrosonic or by any of its officers,
directors, employees, partners, agents or affiliates to Sonoro in writing, electronically, verbally or through visual means or
which Sonoro obtains naturally, through observation or through analyses, interpretations, compilations, studies or evaluations
of such information, data, knowledge or know-how, but does not include such information, data, knowledge or know-how, as shown
by written records: (1) that is in Petrosonic’s possession prior to disclosure thereof by Petrosonic; (2) is in the public
domain prior to the disclosure thereof by Petrosonic or lawfully enters the public domain through no violation of this Agreement
after disclosure thereof by Petrosonic to Sonoro; (3) becomes available to Sonoro on a non-confidential basis from a source other
than Petrosonic who is not, to Sonoro’s knowledge, after enquiry, under any obligation of confidentiality to Petrosonic;
or (4) is independently developed by Sonoro without reference to or use of any of Petrosonic’s Confidential Information;

 

		(c)	“Facility” means a heavy oil processing facility located in Fier Albania, with
a capacity of 1,000 barrels of oil per day, or such greater capacity as Petrosonic and Sonoro may agree to in writing;

 

		(d)	“Improvements” means improvements, variations, updates, modifications or enhancements
made by Petrosonic or Sonoro after the date of this Agreement relating to the Licenced Property;

 

		(e)	“Licence” means the licence of the Licenced Property from Petrosonic to Sonoro,
as set out Section 2;

 

		(f)	“Licenced Property” means the Proprietary Information and the Patents;

 

		(g)	“Net Income” has the meaning given to it in the Shareholders’ Agreement

 

		(h)	“Patents” means

 

		(i)	International Patent Application No. PCT/CA2009/000289 published September 17, 2009;

 

		(ii)	Eurasian Patent Application No. 201071060, filed December 15, 2010;

 

		(iii)	European Patent Application No. 2260089, filed December 15, 2010;

 

		(iv)	United States Patent Application No. 61/035,690, filed March 11, 2008;

 

		(v)	Indian Patent Application No. 2156/MUMNP/2010;

 

    	- 2 -

    	 

    

 

		(vi)	Canadian Trade-Mark No. TMA670945, registered August 23, 2006,

 

together
with any and all related or subsequent filings thereof or based thereon in any patent office, intellectual property office or similar
office or authority in the world, any and all continuations, continuations in part, divisions, reissues, substitutes, and extensions
thereof or thereto, and any and all rights world-wide to file further patents, continuations in part, divisions, continuations,
reissues, substitutes, and extensions related thereto, and including any Improvements thereto provided such Improvements are owned
by Petrosonic;

 

		(i)	“Proprietary Information” means proprietary and non-public business information
including inventions (whether or not patentable), discoveries, trade secrets, know-how, methods, processes, designs, technology,
technical data, specifications and experience of Petrosonic relating to the upgrading of heavy oils by sonicated de-asphalting
and oxidation;

 

		(j)	“Purpose” means the upgrading of heavy oils at the Facility;

 

		(k)	“Term” has the meaning given to it in Section 7.1;

 

		(l)	“Territory” means the Republic of Iraq;

 

		2.	GRANT OF LICENCE

 

		2.1	Petrosonic hereby grants to Sonoro, and Sonoro hereby accepts, a non-exclusive, royalty-free and
fully paid-up licence (the “Licence”) to use the Licenced Property during the Term solely for the Purpose and
solely in the Territory, subject to the terms and conditions set out in this Agreement.

 

		2.2	The Licence shall be non-divisible, non-transferable and non-assignable.

 

		3.	CONFIDENTIALITY

 

		3.1	Sonoro agrees to keep and use the Confidential Information in confidence, and will not, without
the prior written consent of Petrosonic, disclose the Confidential Information to any person or entity, except to Sonoro’s
directors, officers, employees, contractors and professional advisors who require the Confidential Information to assist Sonoro
in performing its obligations under this Agreement and who have agreed to be bound by the confidentiality provisions of this Agreement.
Sonoro will be responsible and liable for any use or disclosure of the Confidential Information by such parties in violation of
this Agreement.

 

		3.2	Nothing contained herein shall be deemed to prevent disclosure of any of the Confidential Information
if such disclosure is legally required to be made in a judicial, administrative, or governmental proceeding pursuant to a valid
subpoena or other applicable order; provided, however, Sonoro will give Petrosonic at least ten days’ prior written notice
(unless less time is permitted by the applicable proceeding) before disclosing any of the Confidential Information in any such
proceeding and, in making such disclosure, Sonoro shall disclose only that portion thereof required to be disclosed and shall take
all reasonable efforts to preserve the confidentiality thereof, including supporting Petrosonic in obtaining protective orders.

 

    	- 3 -

    	 

    

 

		3.3	Sonoro will not use Confidential Information provided under this Agreement to file patents at any
time during the Term of this Agreement or following its termination.

 

		3.4	Notwithstanding the termination of this Agreement for any reason, this Section 3 will survive and
continue to bind Sonoro and its successors and assigns for a period of five (5) years from the date of such termination.

 

		4.	PROPERTY RIGHTS AND IMPROVEMENTS

 

		4.1	Sonoro acknowledges and agrees that Petrosonic owns all right, title and interest in and to the
Licenced Property and all Improvements to the Licenced Property made by Petrosonic alone, or jointly with Sonoro, or by Sonoro
alone, and all such Improvements, regardless of when made, shall be immediately deemed to be fully included in the Licence. Each
party agrees to give timely notice to the other party of the details of all Improvements made by such party during the Term of
this Agreement.

 

		4.2	Sonoro will, at the request of Petrosonic, sign all documents as may be required to ensure that
ownership of the Licenced Property and any Improvements remains with Petrosonic.

 

		4.3	If there is an alleged infringement of the Licenced Property or any Improvements or any right with
respect to the Licenced Property or any Improvements, Sonoro may, on receiving the prior written consent of Petrosonic, prosecute
litigation designed to enjoin infringers of the Licenced Property or any Improvements. Provided that it has first granted its prior
written consent, Sonoro agrees to reasonably co-operate to the extent of signing all necessary documents and to vest in Sonoro
the right to institute the litigation, provided that all the direct and indirect costs and expenses of bringing and conducting
the litigation or settlement are paid by Sonoro and in this case all recoveries are for the benefit of Petrosonic.

 

		4.4	If any complaint alleging infringement of any patent or other proprietary rights is made against
Sonoro or a sub-licencee of Sonoro regarding the use, in accordance with the terms and conditions of this Agreement of the Licenced
Property or any Improvements in accordance with the terms of this Agreement, the following procedure will be adopted:

 

		(a)	Sonoro will promptly notify Petrosonic on receipt of the complaint and will keep Petrosonic fully
informed of the actions and positions taken by the complainant and taken or proposed to be taken by Sonoro on behalf of itself
or a permitted sub-licencee;

 

		(b)	all costs and expenses incurred by Sonoro or any permitted sub-licencee of Sonoro in investigating,
resisting, litigating and settling the complaint, including the payment of any award of damages and/or costs to any third party,
will be paid by Sonoro;

 

    	- 4 -

    	 

    

 

		(c)	no decision or action concerning or governing any final disposition of the complaint will be taken
without full consultation with, and approval by, Petrosonic acting reasonably; and

 

		(d)	Petrosonic may elect to participate as a party in any litigation involving the complaint to the
extent that the court may permit, and any additional expenses generated by such participation will be paid by Petrosonic (subject
to the possibility of recovery of some or all of the additional expenses from the complainant).

 

		4.5	Sonoro will not attempt to reverse engineer, de-encrypt, or otherwise derive the design, internal
logic, structure or inner workings (including algorithms and source code) of any products, models, prototypes, software or other
items constituting Confidential Information, including the Licensed Property.

 

		5.	LIMITATION OF WARRANTY

 

		5.1	Petrosonic makes no warranty, express or implied, regarding the Licenced Property or any Improvements,
except as explicitly provided herein.

 

		6.	REPRESENTATIONS, WARRANTIES AND COVENANTS

 

		6.1	Petrosonic represents and warrants that Petrosonic owns or has sufficient rights to the Licenced
Property to grant the Licence to Sonoro under this Agreement.

 

		6.2	Petrosonic represents and warrants that there are no prior agreements, obligations or duties of
any nature or kind affecting Petrosonic’s rights and abilities to grant the Licence to Sonoro.

 

		6.3	To the best of Petrosonic’s knowledge, Petrosonic is not aware of any intellectual property
rights of any third parties restricting or derogating from the enjoyment, use, practice or exploitation by Petrosonic of the Licenced
Property.

 

		6.4	Sonoro represents and warrants that it is a duly organized and validly existing under the laws
of the Province of British Columbia and has the power and authority to carry on its business as now conducted and as contemplated
under this Agreement.

 

		6.5	Sonoro will comply with all laws and regulations with respect to all activities conducted as contemplated
by this Agreement.

 

		6.6	Sonoro represents and warrants to Petrosonic that it has the infrastructure, expertise and resources
to:

 

		(a)	conduct commercial operations using the Licenced Property for the Purpose; and

 

		(b)	handle Licenced Property with care and without danger to Sonoro, its employees, agents, or the
public.

 

    	- 5 -

    	 

    

 

		7.	TERM AND TERMINATION

 

		7.1	The term (the “Term”) of this Agreement starts on the date of this Agreement
and continues for the term Sonoro, operates using the intellectual property in the Territory.

 

		7.2	Notwithstanding the provisions of subsection 8.1 above and without prejudice to any other right
and remedy that one party may have against the other party for breach or non-performance of this Agreement, this Agreement may
be terminated:

 

		(a)	by either party upon thirty (30) days written notice if the other party shall materially violate
any of the provisions or conditions of this Agreement and shall fail to discontinue or remedy such violation within the said period
of thirty (30) days; or

 

		(b)	by either party immediately if the other party shall become insolvent or unable to pay its debts
as they mature, shall institute a bankruptcy or insolvency proceeding or have such a proceeding instituted against it which is
not dismissed within thirty (30) days, shall make an assignment for the benefit of creditors, or shall commence dissolution or
liquidation proceedings.

 

		7.3	Expiration or termination for any reason of this Agreement shall not in any case operate to relieve
either of the parties from its responsibility to fulfill any obligations under the provisions of this Agreement which shall have
accrued to such party prior to the time of such expiration or termination including the obligation to pay fees and royalties.

 

		8.	ASSIGNMENT

 

		8.1	Sonoro may assign, transfer or otherwise dispose of any or all rights granted under this Agreement
without the prior written consent of Petrosonic.

 

		9.	FORCE MAJEURE

 

		9.1	The obligations of a party shall be suspended during the time and to the extent that the party
is prevented from or delayed in complying with that obligation by a force majeure.

 

		9.2	For the purpose of this Section, force majeure means a circumstance beyond the reasonable control
of a party which occurs without the fault or negligence of the party affected, and includes, without limitation, inevitable accident,
storm, flood, fire, earthquake, explosion, peril of navigation, hostility, act of terrorism, war (declared or undeclared), insurrection,
industrial strikes, lockouts or other industrial action, executive or administrative order or act of either general or particular
application of any government, whether de jure or de facto, or any official purporting to act under the authority of that government,
prohibition or restriction by domestic or foreign laws, regulations or policies, quarantine or customs restrictions, breakdown
or damage to or confiscation of property.

 

    	- 6 -

    	 

    

 

		10.	NOTICE

 

		10.1	Any notice or other communication provided for in this agreement (a “Notice”)
shall be in writing and shall be delivered personally, sent by courier or transmitted by facsimile to the party at the address
or facsimile number provided below, or such other address or facsimile number as a party may specify by notice in writing to the
other party, from time to time. Any Notice personally delivered to a party shall be deemed to have been given and received on the
day it is so delivered, provided that if such day is not a day where businesses are ordinarily open in Vancouver, British Columbia
or in Toronto, Ontario (a “Business Day”) then the Notice shall be deemed to have been given and received on
the next Business Day. Any Notice sent by courier or transmitted by facsimile shall be deemed to have been given and received on
the next Business Day following the date of its sending or transmission.

 

If to Petrosonic:

Petrosonic Energy, Inc.

57 Valley Woods Way NW

Calgary, AB, T3B 6A5

Attention:Art
Agolli

Fax No.:(403) 441 6919

 

with a copy to:

 

Merani Reimer LLP

Barristers & Solicitors

Suite 204, 205-9th Avenue S.E.

Calgary, Alberta, T2G 0R3

 

	Attention:	Ashif S. Merani
	Fax No:	(403) 398-0220
	Tel:	(403) 261-7006
	Email:	ashif@meranireimer.com

 

If to Sonoro:

 

Sonoro Energy Ltd.

Suite 1000, 600 – 6th Avenue S.W.

Calgary, Alberta T2P 0S5

 

	Attention:	David A. Little,
	 	CFO
	Fax No.:	1 (888) 774-3858
	Tel:	(403) 262-3252
	Email:	dlittle@sonoroenergy.com

 

    	- 7 -

    	 

    

 

with a copy to:

 

Goodmans

Suite 1900, 355 Burrard Street

Vancouver, BC V6C 2G8

 

Attention:       Mr. David Redford

Fax No.:      (604) 682-7131

 

		11.	GOVERNING LAW

 

		11.1	This Agreement shall be construed, governed by and interpreted in accordance with the laws of the
Province of Alberta and the laws of Canada applicable therein. The parties irrevocably and unconditionally submit to the jurisdiction
of the courts of the Province of Alberta.

 

		12.	GENERAL

 

		12.1	This Agreement constitutes the entire agreement between the parties hereto relative to the subject
matter hereof and supersede all previous agreements, negotiations, commitments and writings relative to the subject matter hereof
and, may not be changed or modified in any manner unless in writing signed by the authorized officer or representative on behalf
of each of the parties hereto on or after the date of execution of this Agreement.

 

		12.2	Time will be of the essence of this Agreement.

 

		12.3	Subject to the limitations expressed in this Agreement, this Agreement operates for the benefit
of and is binding on the parties and their respective successors and assigns.

 

		12.4	No condoning or excusing by a party of any default or breach by the other party of any terms of
this Agreement operates as a waiver of that party’s rights under this Agreement.

 

		12.5	Each party to this Agreement represents and warrants to each other party that such party has read
and fully understands the terms and provisions hereof, has had an opportunity to review this Agreement with legal counsel, and
has executed this Agreement based upon such party's own judgment and advice of independent legal counsel (if sought).

 

		12.6	Any of the provisions of this Agreement that are indefinite, invalid, illegal or otherwise voidable
or unenforceable may be severed and the balance of this Agreement will continue in full force and effect.

 

		12.7	The headings or Sections of this Agreement are for convenience of reference only, and shall not
in any way affect the meaning or interpretation of any of the provisions of this Agreement.

 

		12.8	This Agreement may be executed in counterparts and by facsimile, each of which when so executed
will be deemed to be an original and such counterparts shall together constitute one and the same instrument.

 

    	- 8 -

    	 

    

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the day and year first written above.

 

	Vendor:	 	SONORO ENERGY LTD.
	 	 	 
	 	 	Per:	/s/ David Little
	 	 	 	Name: David Little
	 	 	 	Title: Chief Financial Officer
	 	 	 	Authorized Signatory
	 	 	 
	Purchaser:	 	PETROSONIC ENERGY, INC.
	 	 	 
	 	 	Per:	/s/ Art Agolli
	 	 	 	Name: Art Agolli
	 	 	 	Title: President
	 	 	 	Authorized Signatory

 

    	- 9 -$150,000,000

 

AMENDED
AND RESTATED CREDIT AGREEMENT

 

Between

 

VOYAGER OIL & GAS, INC.,

a Montana corporation,

 

as Borrower,

 

and

 

MACQUARIE BANK LIMITED,

a bank incorporated under the laws of Australia,

in its individual capacity and as Administrative Agent,

 

And

 

the Lenders Party Hereto

 

 

 

Dated
as of July 26, 2012

 

    	 

    	 

    

 

table
of contents

 

	 	 	Page
	 	 	 
	Article I THE LOAN FACILITY	1
	 	 	 
	Section 1.1	Maximum Note Amount	1
	Section 1.2	The Revolving Loan	2
	Section 1.3	The Term Loan	5
	Section 1.4	The Bridge Loan	6
	Section 1.5	Development Plan	6
	Section 1.6	Advance Procedure	7
	Section 1.7	Promissory Note	8
	Section 1.8	Interest	8
	Section 1.9	Repayment of the Loan	9
	Section 1.10	Time and Place of Payments	10
	Section 1.11	Optional Prepayment of the Loan	10
	Section 1.12	Mandatory Prepayment of the Loan	10
	Section 1.13	Application of Insurance Proceeds	11
	Section 1.14	Fees	12
	Section 1.15	Taxes	12
	 	 	 
	Article II SECURITY; ETC.	15
	 	 	 
	Section 2.1	Grant of Liens and Security Interests	15
	Section 2.2	Notice of Assignment of Proceeds	15
	Section 2.3	Further Assurances	16
	Section 2.4	Release of Liens; Financing Statements; Release	16
	Section 2.5	Subordination Agreements	16
	Section 2.6	Pledged Interests	16
	Section 2.7	All Obligations are Pari Passu	17
	Section 2.8	Swap Obligations Beyond Maturity	17
	Section 2.9	Control of Deposit Account	17
	 	 	 
	Article III REPRESENTATIONS AND WARRANTIES	17
	 	 	 
	Section 3.1	Formation and Existence	17
	Section 3.2	Name; Executive Offices	17
	Section 3.3	Ownership; Subsidiaries	17
	Section 3.4	Authorization; Non-Contravention	18
	Section 3.5	Solvency	18
	Section 3.6	Omissions and Misstatements	18
	Section 3.7	Joint Venture	19
	Section 3.8	Commissions; Expenses	19
	Section 3.9	Tax Returns; Taxes	19
	Section 3.10	Litigation; Governmental Proceedings	19
	Section 3.11	Ownership of Collateral; Interests	19
	Section 3.12	Debt	20
	Section 3.13	Intellectual Property	20
	Section 3.14	No Other Leases	20

 

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	Section 3.15	Investments	20
	Section 3.16	No Unusual Restrictions	20
	Section 3.17	No Take or Pay Agreements	21
	Section 3.18	Gas Imbalances	21
	Section 3.19	Environmental Matters	21
	Section 3.20	Permits and Licenses	22
	Section 3.21	Operation of the Properties	22
	Section 3.22	USA PATRIOT Act Representation	23
	Section 3.23	Contingent Liabilities	23
	Section 3.24	Equipment	23
	Section 3.25	Unpaid Bills	23
	Section 3.26	Taxpayer Identification	23
	Section 3.27	Investment Company	23
	Section 3.28	No Margin Trading	24
	Section 3.29	No Pending Sale or Financing	24
	Section 3.30	No Calls on Production	24
	Section 3.31	Basic Documents	24
	Section 3.32	Farmout Agreements and Subject Contracts, Etc	24
	Section 3.33	Operating Agreements	25
	Section 3.34	No Unusual Agreements	25
	Section 3.35	Suspense of Proceeds	25
	Section 3.36	Employee Plans	25
	Section 3.37	Insurance	26
	Section 3.38	No Material Adverse Effect	26
	Section 3.39	Restriction on Liens	26
	Section 3.40	Hedging Agreements	26
	Section 3.41	Marketing of Production	26
	Section 3.42	Deposit Accounts	26
	Section 3.43	Labor Matters	26
	Section 3.44	Eligible Contract Participant	27
	Section 3.45	No Default	27
	Section 3.46	Choice of Law	27
	Section 3.47	Financial Statements	27
	Section 3.48	Priority	27
	Section 3.49	Affiliate Interests in Properties	27
	 	 	 
	Article IV FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO ADMINISTRATIVE AGENT	27
	 	 	 
	Section 4.1	Monthly Reporting Package	27
	Section 4.2	Financial Reporting	28
	Section 4.3	Compliance Certificate	28
	Section 4.4	Notices of Default and Other Significant Events	28
	Section 4.5	Reserve Reports	29
	Section 4.6	Additional Information	31
	Section 4.7	Monthly Field Activity Reports	31
	Section 4.8	Test Results; Core Analyses; Surveys and Logs	31
	Section 4.9	Reports Made to a Governmental Authority	31

 

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	Section 4.10	Charter Documents	31
	Section 4.11	Certificate of Authorized Officer—Hedging Agreements	31
	Section 4.12	Certificate of Insurer—Insurance Coverage	32
	Section 4.13	Anticipated Cost Overruns	32
	Section 4.14	Updated Development Plan	32
	 	 	 
	Article V AFFIRMATIVE COVENANTS	32
	 	 	 
	Section 5.1	Preservation of Existence	32
	Section 5.2	Compliance with Law	32
	Section 5.3	Environmental Matters	33
	Section 5.4	Records	34
	Section 5.5	Litigation	34
	Section 5.6	Damage to Collateral	34
	Section 5.7	Solvency	35
	Section 5.8	Insurance	35
	Section 5.9	Delivery of Invoices, Receipts, Etc	36
	Section 5.10	Access to Books and Records; Inspections; Consultants	36
	Section 5.11	Creditors	37
	Section 5.12	Operators	37
	Section 5.13	Purchasers of Hydrocarbons	38
	Section 5.14	Use of Proceeds	38
	Section 5.15	Bonds	38
	Section 5.16	Hydrocarbon Price Risk Management Program	38
	Section 5.17	Evidence of Title	39
	Section 5.18	Continuing Enterprise	39
	Section 5.19	Access to Technical Data	39
	Section 5.20	Financial Ratios	39
	Section 5.21	Maintenance of Liens	41
	Section 5.22	Payment of Taxes, Etc	41
	Section 5.23	Equipment	41
	Section 5.24	Maintenance of Leases	41
	Section 5.25	Operator	42
	 	 	 
	Article VI NEGATIVE COVENANTS	42
	 	 	 
	Section 6.1	Debt	42
	Section 6.2	Accounts	43
	Section 6.3	Guaranties	43
	Section 6.4	Ownership and Business Operations	43
	Section 6.5	Liens and Encumbrances	45
	Section 6.6	Affiliate Transactions	45
	Section 6.7	Investments	45
	Section 6.8	Subsidiaries; Structure	46
	Section 6.9	Joint Ventures	46
	Section 6.10	Dividends and Distributions	46
	Section 6.11	Modifications to Documents	46
	Section 6.12	Other	46
	Section 6.13	Use of Loan Proceeds	47

 

    	iii

    	 

    

 

	Section 6.14	Limitation on Leases	47
	Section 6.15	Nature of Business	47
	Section 6.16	Deposit Accounts	47
	Section 6.17	No Severance Agreements	47
	Section 6.18	Commodity Deliveries	47
	Section 6.19	G&A Expenses	48
	Section 6.20	Hartz Loan Documents	48
	Section 6.21	Consent to AFEs	48
	 	 	 
	Article VII FURTHER RIGHTS OF LENDERS	48
	 	 	 
	Section 7.1	Further Assurances; Delivery of Additional Documents	48
	Section 7.2	Payments by Lenders	49
	Section 7.3	Possession and Preservation of Collateral	49
	Section 7.4	Indemnification	49
	 	 	 
	Article VIII CLOSING; CONDITIONS PRECEDENT	51
	 	 	 
	Section 8.1	Closing	51
	Section 8.2	Conditions to Closing	51
	Section 8.3	Conditions to the Making of Each Advance	53
	 	 	 
	Article IX EVENTS OF DEFAULT	55
	 	 	 
	Section 9.1	Events of Default	55
	 	 	 
	Article X REMEDIES OF LENDERS	57
	 	 	 
	Section 10.1	Remedies Generally	57
	Section 10.2	No Marshalling; Use of Collateral Pending Foreclosure; Etc	58
	Section 10.3	Set-Off Rights	58
	Section 10.4	Rights Under Operating Agreements	58
	Section 10.5	Netting of Claims	59
	Section 10.6	All Rights and Remedies are Cumulative	59
	 	 	 
	Article XI ADMINISTRATIVE AGENT	59
	 	 	 
	Section 11.1	Appointment and Authorization of Administrative Agent	59
	Section 11.2	Delegation of Duties	59
	Section 11.3	Liability of Administrative Agent	60
	Section 11.4	Reliance by Administrative Agent	60
	Section 11.5	Notice of Default	60
	Section 11.6	Credit Decision; Disclosure of Information by Administrative Agent	61
	Section 11.7	Indemnification of Administrative Agent	61
	Section 11.8	Administrative Agent in its Individual Capacity	62
	Section 11.9	Successor Administrative Agent	62
	Section 11.10	Administrative Agent May File Proofs of Claim	62
	Section 11.11	Collateral Matters	63
	Section 11.12	Advance Procedure	64
	Section 11.13	Payments	65
	Section 11.14	Application of Payments	65
	Section 11.15	Liens	66

 

    	iv

    	 

    

 

	Section 11.16	Payment Priority	66
	Section 11.17	Sharing of Payments by Lenders	66
	Section 11.18	Relationship of Lenders	66
	Section 11.19	Actions by Administrative Agent	66
	Section 11.20	Replacement of Lenders	67
	 	 	 
	Article XII MISCELLANEOUS	68
	 	 	 
	Section 12.1	Assignment	68
	Section 12.2	Notices	69
	Section 12.3	Waivers; Amendments; Schedules	70
	Section 12.4	Confidentiality; Permitted Disclosures	71
	Section 12.5	Form of Documents	72
	Section 12.6	Third-Party Beneficiaries	73
	Section 12.7	Governing Law; Venue	73
	Section 12.8	Waiver of Jury Trial, Punitive Damages, Etc	73
	Section 12.9	Fees, Costs and Expenses	74
	Section 12.10	Compliance with Usury Laws	74
	Section 12.11	Limited Power of Attorney	75
	Section 12.12	Severability	75
	Section 12.13	Defined Terms; Interpretation, Etc	75
	Section 12.14	This Agreement Controls if Terms Conflict	76
	Section 12.15	Counterpart Execution	76
	Section 12.16	Acknowledgment of Exculpatory Provisions	76
	Section 12.17	Final Agreement	77

 

    	v

    	 

    

 

EXHIBITS,
APPENDICES AND SCHEDULES

 

Exhibits:

 

	Exhibit A	Description of Properties; Interests
	Exhibit B	Form of Promissory Note
	Exhibit C	Form of Advance Request
	Exhibit D	Existing and Approved Purchasers
	Exhibit E	Form of Security Agreement
	Exhibit F	Form of Subordination Agreement
	Exhibit G	Form of Notice of Assignment of Proceeds
	Exhibit H	Form of Mortgage
	
        Exhibit I

        Exhibit J
	
        Form of Compliance Certificate

        Form of Pledge Agreement

	Exhibit K	Form of Notice of Assignment of Proceeds from Sale of Equity
	 	 

Appendices:

 

	Appendix A	Definitions
	Appendix B	Lenders

 

Schedules:

 

	Schedule 1.5	Development Plan
	Schedule 1.6(c)	Authorized Signatories on Advance Requests
	Schedule 3.3	Subsidiaries
	Schedule 3.4(d)	Consents
	Schedule 3.7	Joint Ventures
	Schedule 3.10	Litigation
	Schedule 3.19	Environmental Matters
	Schedule 3.23	Contingent Liabilities
	Schedule 3.25	Unpaid Bills/Vendor List
	Schedule 3.32	Farmout Agreements and Subject Contracts
	Schedule 3.33	Operators/Operating Agreements
	Schedule 3.35	Suspense of Proceeds
	Schedule 3.36	Employee Plans
	Schedule 3.39	Restrictions on Liens
	Schedule 3.40	Hedging Agreements
	Schedule 3.41	Marketing Contracts
	Schedule 3.42	Deposit Accounts
	Schedule 3.49	Affiliate Interests in Properties
	Schedule 5.15	Bonds and Qualifications
	Schedule 6.1(b)	Existing Debt
	Schedule 6.4(o)	Subsidiary Existing Debt
	Schedule 6.5	Liens and Encumbrances
	Schedule 6.7	Permitted Investments

 

    	vi

    	 

    

 

AMENDED
AND RESTATED CREDIT AGREEMENT

 

This $150,000,000 Amended
and Restated Credit Agreement is dated July 26, 2012 between VOYAGER OIL & GAS, INC., a Montana corporation, (“Borrower”)
and MACQUARIE BANK LIMITED, a bank incorporated under the laws of Australia, (in its individual capacity, “MBL”)
as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, “Administrative
Agent”) and the other Lenders party to this Agreement.

 

Background

 

A.           Borrower,
Administrative Agent and each Lender party hereto entered into the $150,000,000 Credit Agreement dated February 10, 2012 (as amended,
supplemented or modified from time to time, the “Original Credit Agreement”).

 

B.           Borrowers,
MBL, Administrative Agent and Lenders agree to amend and restate the terms of the Original Credit Agreement as set forth in this
Agreement.

 

C.           Borrower
has requested that Lenders make available to Borrower a revolving and a term loan facility, and Lenders are willing to make that
revolving and term loan facility available to Borrower pursuant to the terms and conditions of this Agreement and the other Loan
Documents.

 

D.           To
secure all of Borrower’s obligations to Lenders under the Loan Documents, Borrower will grant to Administrative Agent, for
the ratable benefit of each of the Lenders and Swap Counterparty as swap provider under the Swap Agreement, a first-priority mortgage
lien and security interest in all of the real and personal property of Borrower.

 

Agreements

 

For good and valuable
consideration, the receipt and sufficiency of which are acknowledged by each of the parties, Borrower, Administrative Agent and
Lenders agree as follows:

 

Article
I

THE LOAN FACILITY

 

Section
1.1           Maximum Note Amount.

 

(a)          Maximum
Note Amount. Each Lender severally agrees to make available to Borrower, at any time prior to the Availability
Termination Date, such Lender’s Percentage Share of (i) a senior secured revolving loan (the “Revolving
Loan”) not to exceed $80,000,000 (the “Revolving Loan Note Amount”), (ii) a senior
secured term loan (the “Term Loan”) not to exceed $50,000,000 (the “Term Loan Note
Amount”), and (iii) a senior secured bridge term loan (the “Bridge Loan”) not to exceed
$20,000,000 (the “Bridge Loan Note Amount”) subject to the terms and conditions of this Agreement. Lenders
do not intend to advance Borrower any amount in excess of the Note Amount. If, however, the obligations of Borrower under the
Loan at any time exceed the Note Amount, all amounts owing by Borrower to Lenders under this Agreement will nevertheless
constitute Obligations and will be entitled to the benefit of Administrative Agent’s Liens on the Collateral.

 

    	 

    	 

    

 

(b)          All
Amounts Due at Maturity. All monetary Obligations (other than Obligations under the Swap Agreement that are intended to continue
past the Maturity Date) will be fully due and payable on the Maturity Date.

 

Section
1.2           The Revolving Loan.

 

(a)          Availability
and Purpose of Revolving Loan Advances. Borrower must use Advances under the Revolving Loan exclusively to:

 

(i)          pay
Related Costs;

 

(ii)         pay
the principal amount of certain Debt existing on the Closing Date and set forth on Schedule 1.2(a);

 

(iii)        pay
other expenses Approved by Administrative Agent in its reasonable discretion;

 

(iv)        repay
the Term Loan or Bridge Loan; and

 

(v)         any
increases in the Borrowing Base made after Closing may also be used for Borrower’s general corporate purposes.

 

(b)          Borrowing
Base.

 

(i)          The
initial Borrowing Base available under the Revolving Loan is $15,000,000. Thereafter, Administrative Agent will re-determine the
Borrowing Base pursuant to this Section 1.2(b).

 

(ii)         Commencing
with the Reserve Report due on August 15, 2012, and subject to Section 1.2(e) below, the Administrative Agent will re-determine
the Borrowing Base pursuant to this Section 1.2(b) not less than every six months based upon the most recent Reserve Report.
However, if Borrower changes its fiscal year, then the next re-determination date shall be no later than 75 days following Borrower’s
new fiscal year end date. On or before each, February 15 and August 15 until the Maturity Date, Borrower shall furnish to Administrative
Agent a Reserve Report (with “effective dates” of December 31, and June 30, respectively), which shall set forth, as
of the applicable effective date, the Proved Reserves attributable to the Properties. Each Reserve Report delivered each calendar
year shall be a complete report prepared by Engineers. Each Reserve Report shall relate to the Proved Reserves attributable to
the Properties in accordance with Section 4.5. For the avoidance of doubt, commencing with the delivery of the Reserve Report
due on August 15, 2012, within 30 days following receipt of each such Reserve Report, Administrative Agent shall, in its sole discretion,
make a determination of the Borrowing Base which shall become effective upon written notification from Administrative Agent to
Borrower until the effective date of the next redetermination as set forth in this Section 1.2(b).

 

    	2

    	 

    

 

(iii)        Administrative
Agent is not required to consider any Proved Reserves attributable to the Properties for inclusion in the Borrowing Base if, in
Administrative Agent’s reasonable opinion, Administrative Agent does not have a first priority security interest or mortgage
Lien on such Properties. In no event will the Borrowing Base exceed the Revolving Loan Note Amount.

 

(iv)        Subject
to Section 1.2(e) below, Administrative Agent shall determine the Borrowing Base in accordance with its customary lending
practices based on the maximum Revolving Loan amount that may be supported by the Properties and Borrower acknowledges, for purposes
of this Agreement, such determination by Administrative Agent as being the maximum Revolving Loan amount that may be supported
by the Properties as of such date of determination. In making any redetermination of the Borrowing Base, Administrative Agent shall
apply consistently the parameters and other credit factors then generally being utilized by Administrative Agent for Borrowing
Base redeterminations for Administrative Agent’s similarly situated borrowers. Borrower and Administrative Agent acknowledge
that (a) due to the uncertainties of the Hydrocarbon extraction process, the Properties are not subject to evaluation with a high
degree of accuracy and are subject to potential rapid deterioration in value, and (b) for this reason and the difficulties and
expenses involved in liquidating and collecting against the Properties, Administrative Agent’s determination of the maximum
Revolving Loan amount that may be supported by the Properties contains an equity cushion, which equity cushion is acknowledged
by Borrower as essential for the adequate protection of Lenders.

 

(c)          Unscheduled
Re-determinations. In addition to the redetermination of the Borrowing Base described in Section 1.2(b)(ii),

 

(i)          Borrower
may initiate a redetermination of the Borrowing Base at any other time by specifying in writing to Administrative Agent the date
by which Borrower will furnish to Administrative Agent an updated Reserve Report in accordance with Section 4.5 and the
date by which such redetermination is requested to occur (but not less than 30 days after Administrative Agent receives the updated
Reserve Report);

 

(ii)         Administrative
Agent may initiate such a redetermination in its sole discretion;

 

but, Borrower
and Administrative Agent may each initiate only two such unscheduled redetermination each between scheduled redetermination dates.
Borrower shall pay a $15,000 engineering fee to Administrative Agent for each unscheduled redetermination requested by Borrower.

 

    	3

    	 

    

 

(d)          Reduction
of Commitment.

 

(i)          Upon
at least five Business Days prior written notice to Administrative Agent, Borrower may at any time permanently reduce the Revolving
Loan Note Amount, but:

 

(A)         each
reduction must be in an amount equal to an integral multiple of One Hundred Thousand Dollars ($100,000);

 

(B)         if,
after giving effect to the reduction, the Obligations outstanding under the Revolving Loan would exceed the Revolving Loan Note
Amount, Borrower must, as a condition to the effectiveness of the reduction, prepay the Obligations outstanding under the Revolving
Loan by an amount equal to that excess;

 

(C)         as
a condition to the effectiveness of the reduction, Borrower must pay to Administrative Agent, for the ratable benefit of Lenders,
any fee accrued to the date of such reduction and unpaid under Section 1.14(a); and

 

(D)         once
it has become effective, no reduction in the Revolving Loan Note Amount can be withdrawn or restored.

 

(ii)         In
the event of a Defaulting Lender, and as long as no Event of Default exists, Borrower, at its election may terminate such Defaulting
Lender’s Percentage Share of the Borrowing Base hereunder; provided that (A) such termination must be of the Defaulting Lender’s
entire Percentage Share of the Borrowing Base, (B) Borrower shall pay all amounts owed by Borrower to such Defaulting Lender under
this Agreement and under the other Loan Documents (including principal of and interest on the Advances owed to such Defaulting
Lender and accrued Commitment Fees but specifically excluding any Breakage Costs as result of such payment of Advances), and (C)
unless otherwise consented to by Administrative Agent, a Defaulting Lender’s Percentage Share of the Borrowing Base may be
terminated by Borrower under this Section 1.2(d)(ii) if and only if at such time, Borrower has elected, or is then electing,
to terminate the Percentage Share of the Borrowing Base of all then existing Defaulting Lenders. Upon written notice to the Defaulting
Lender and Administrative Agent of Borrower’s election to terminate a Defaulting Lender’s Percentage Share of the Borrowing
Base pursuant to this Section 1.2(d)(ii) and the payment of amounts required to be made by Borrower under clause (B) above,
(x) such Defaulting Lender shall cease to be a “Lender” hereunder for all purposes except that such Lender’s
rights under Sections 1.15 and 7.4 shall continue with respect to events and occurrences occurring before or concurrently
with its ceasing to be a “Lender” hereunder, (y) such Defaulting Lender’s Percentage Share of the Borrowing Base
shall be deemed terminated, and (z) such Defaulting Lender shall be relieved of its obligations hereunder other than its obligations
under Section 7.4 with respect to events and occurrences occurring before or concurrently with its ceasing to be a “Lender”
hereunder; provided that, any such termination will not be deemed to be a waiver or release of any claim by Borrower, Administrative
Agent or any Lender may have against such Defaulting Lender. Notwithstanding anything herein to the contrary, an election by Borrower
to terminate a Defaulting Lender’s Percentage Share of the Borrowing Base pursuant to this Section 1.2(d)(ii) shall
permanently decrease the Borrowing Base unless and until an increase is made pursuant to this Section 1.2(b).

 

    	4

    	 

    

 

(e)          Borrowing
Base Increases are Discretionary. Notwithstanding anything in this Section 1.2 or elsewhere in this Agreement to the
contrary, the Borrowing Base will be increased to an amount in excess of the initial Borrowing Base set forth in Section 1.2(a)
above only in the sole and absolute discretion of Administrative Agent.

 

(f)          Revolving
Credit. Subject to the satisfaction of the conditions in Section 8.3, amounts repaid in respect of the Revolving Loan
may be re-borrowed up to the Borrowing Base on a revolving basis until the Availability Termination Date.

 

Section
1.3           The Term Loan.

 

(a)          Term
Loan Availability. $3,030,730 of the Term Loan has been Advanced and is no longer available. The remaining portion of the
Term Loan is uncommitted, however, Administrative Agent may, in its sole discretion and subject to an Approved revised Development
Plan and the satisfaction of the conditions in Section 8.3, commit additional funds under the Term Loan. The Administrative
Agent will notify Borrower in writing of any additional commitment amounts under the Term Loan. The Term Loan shall be used for
the purposes set forth in Section 1.3(b) below.

 

(b)          Purpose
of Term Loan Advances. Borrower must use Advances under the Term Loan exclusively to:

 

(i)          fund
development activities set forth in the Development Plan and included in an AFE or Reimbursement Request Approved by Administrative
Agent;

 

(ii)         fund,
with the Approval (not to be unreasonably withheld or delayed) of Administrative Agent, the acquisition of additional Properties;

 

(iii)        pay
Related Costs; and

 

(iv)        with
the Approval (not to be unreasonably withheld or delayed) of Administrative Agent, eliminate a Borrowing Base Deficiency in accordance
with Section 1.12(c)(iii).

 

(c)          No
Revolving Credit. Amounts repaid in respect of the Term Loan cannot be reborrowed.

 

    	5

    	 

    

 

Section
1.4           The Bridge Loan.

 

(a)          The
Bridge Loan Availability. At Closing and through the Availability Termination Date, $15,000,000 is available under the Bridge
Loan subject to the satisfaction of the conditions in Section 8.3. The remaining portion of the Bridge Loan is uncommitted and
available through the Availability Termination Date and the Administrative Agent will notify Borrower in writing of any additional
commitment amounts under the Bridge Loan. The Bridge Loan shall be used for the purposes set forth in Section 1.4(b) below.

 

(b)          Purpose
of Bridge Loan Advances. Borrower must use Advances under the Bridge Loan exclusively to pay Current Liabilities associated
with development activities on the Properties (or as otherwise Approved by Administrative Agent) and the payment of the Advance
Fee in connection with the Bridge Loan.

 

Section
1.5           Development Plan.

 

(a)          Borrower’s
revised and current Development Plan covering the development activities of Borrower is attached to this Agreement as Schedule
1.5. Borrower can propose modifications to the Development Plan from time to time,
and those modifications will become effective when Approved (not to be unreasonably withheld or delayed) by Administrative Agent.

 

(b)          Administrative
Agent’s Approval of a modification to the Development Plan proposed by Borrower shall be granted in Administrative Agent’s
reasonable discretion. 

 

(c)          In
support of each Development Plan, Borrower will prepare and submit to Administrative Agent for Approval(not to be unreasonably
withheld or delayed): (i) in the case of costs not yet expended, an AFE (including all Supporting Documentation) at least 15 days
before Borrower incurs any costs that it intends to fund out of an Advance or (ii) in the case of costs already expended and to
be reimbursed through an Advance, reasonable evidence of a request for payment by the applicable Operator and reasonable evidence
of payment by Borrower (collectively, “Reimbursement Request”)
at least 5 days before Borrower requests such an Advance. 

 

(d)          Notwithstanding
the Administrative Agent’s Approval of a Development Plan:

 

(i)          Borrower
must nevertheless satisfy the conditions described in this Article I and Section 8.3 prior to the making of each
Advance; and

 

(ii)         Lenders
will have no obligation to make an Advance to fund projects included on the Development Plan:

 

(A)         unless
the requested Advance relates to an AFE or Reimbursement Request Approved by Administrative Agent; or

 

(B)         if
the requested Advance (together with all amounts previously Advanced in respect of the applicable AFE or Reimbursement Request)
exceeds (1) the cost set forth in the Development Plan for that project, or (2) the Loan availability remaining under the Term
Loan.

 

    	6

    	 

    

 

Section
1.6           Advance Procedure.

 

(a)          Advance
Requests. Subject to the satisfaction of the conditions in Section 8.3, Borrower can request Advances through the Availability
Termination Date. To request an Advance, Borrower will deliver an Advance Request to Administrative Agent by 12:00 p.m. Houston,
Texas time, at least three Business Days prior to the date on which the Advance, if Approved, is to be made. Each Advance Request
will include invoices or other Supporting Documentation reasonably requested by Administrative Agent to support the amounts to
be paid out of the requested Advance. Unless Administrative Agent notifies Borrower in writing within that three Business Day
period that it objects or requires additional information with respect to the requested Advance (in which case, Administrative
Agent will describe the objection or requested information in reasonable detail), then Administrative Agent will process the Advance
Request on or before the end of the third Business Day of such three Business Day period. All Advances to Borrower under the Term
Loan and Revolving Loan will be made to Borrower’s Operating-Checking deposit account identified on Schedule 3.42.
All Advances to Borrower under the Bridge Loan will be made to Borrower’s Blocked Checking Account identified on Schedule
3.42

 

(b)          Minimum
Advance. The minimum amount of any Advance will be $100,000 unless a lesser amount remains available under the Term Loan or
the Revolving Loan, as applicable.

 

(c)          Authorized
Signatories. Schedule 1.6(c) identifies and contains a specimen signature of each Person authorized to request an Advance
on behalf of Borrower, which schedule may be updated by Borrower upon written notice to Administrative Agent delivered in accordance
with Section 12.2. Unless otherwise noted on Schedule 1.6(c), only a single signatory is required on an Advance
Request.

 

(d)          Unavailability
of USD. If any non-U.S. Lender notifies Administrative Agent that deposits in USD will not be readily available to such Lender
in the relevant interbank market to enable such Lender to fund a requested Advance, then (i) Administrative Agent will give prompt
notice of that fact to Borrower, and (ii) the Advance Request will be deemed to have been reduced by an amount equal to such Lender’s
Percentage Share of the requested Advance and such Lender will have no obligation to make its Percentage Share of the requested
Advance; but each other Lender shall remain obligated to fund its pro rata share of such Advance (calculated as if all Lenders
were participating in the funding of the Advance). At such time as the non-funding Lender determines that deposits in USD are
readily available in the interbank market to enable such Lender to fund the Advance, then the Lender will notify the Administrative
Agent and Administrative Agent will give prompt notice of that fact to Borrower, and (iii) such Lender shall then fund its Percentage
Share of such Advance so that each Lender will have Advances outstanding in an amount equal to its pro rata share of the aggregate
Advances outstanding.

 

    	7

    	 

    

 

Section
1.7           Promissory Note. Borrower’s obligation
to repay the Loan will be evidenced by Promissory Notes in favor of each Lender. The Advances made by each Lender shall be evidenced
by a single Promissory Note, dated, in the case of (i) any Lender party hereto as of the Closing Date, or (ii) any
Lender that becomes a party hereto pursuant to an assignment, as of the effective date of the assignment, payable to the order
of such Lender in a principal amount equal to its commitment as in effect on such date, and otherwise duly completed. In the event
that any Lender’s commitment increases or decreases for any reason, Borrower shall deliver on the effective date of such
increase or decrease (and upon the surrender of any then existing Promissory Note evidencing the same obligation), a new Promissory
Note payable to the order of such Lender in a principal amount equal to its commitment after giving effect to such increase or
decrease, and otherwise duly completed. Each Lender will record on its books the date, amount and interest rate of each Advance
made by such Lender, as well as a record of all principal payments made by Borrower in respect of such Promissory Note. If such
Promissory Note is transferred to another holder, the applicable Lender may prepare a schedule of that information and attach
it to such Promissory Note. However, neither an error in the recordation of that information on such Lender’s books nor
the failure to prepare and attach a schedule of that information to such Promissory Note when it is transferred to another holder
will affect such Lender’s or Borrower’s rights and obligations in respect of such Promissory Note or the validity
of any transfer of such Promissory Note to another holder.

 

Section
1.8           Interest.

 

(a)          Each
Advance under the Loan will bear interest at the applicable Contract Rate beginning on the date of such Advance and continuing
until such Advance is paid in full in accordance with this Agreement. If an Event of Default exists, all amounts outstanding under
the Loan will bear interest at a rate per annum (the “Default Rate”)
equal to the lesser of (i) the Highest Lawful Rate and (ii) the Contract Rate plus 2%. In addition, any amount owing by Borrower
or another Obligor under this Agreement or the other Loan Documents that is not paid when due, whether at stated maturity, upon
acceleration or otherwise, will bear interest (both before and after judgment) at the Default Rate.

 

(b)          All
interest will be computed on the actual number of days elapsed over a year composed of 360 days with respect to LIBOR Loans and
365/366 days with respect to Base Rate Loans. Interest is due and payable under this Agreement in arrears and in immediately available
funds (i) on the last Business Day of each month prior to the Facility Termination Date, (ii) on the last Business Day of any Interest
Period, and (ii) in full on the Facility Termination Date.

 

(c)          Borrower
must indicate the Contract Rate for each Advance by delivering a selection notice substantially in accordance with this Section
1.8(c) (the “Selection Notice”)
to the Administrative Agent at least three Business Days prior to the end of the current Interest Period. Any Advance under the
Term Loan or the Bridge Loan will be a LIBOR Loan. Borrower shall select the Contract Rate for any Advance under the Revolving
Loan. If Borrower elects the Prime Rate for an Advance under the Revolving Loan, then such Advance will be a “Base
Rate Loan,” and if Borrower elects the LIBOR Rate then such Advance will be
a “LIBOR Loan.” If Borrower fails to timely deliver a Selection
Notice, then such Advance under the Revolving Loan will bear interest at the Prime Rate and will be a Base Rate Loan.

 

    	8

    	 

    

 

(d)          There
can be no more than six LIBOR Loans outstanding at any one time.

 

(e)          Subject
to the provisions of this Section 1.8(e), Borrower can elect to continue
all or any part of any LIBOR Loan beyond the expiration of the then current Interest Period relating to that LIBOR Loan by giving
at least three Business Days’ notice (the “Continuation Notice”)
to Administrative Agent prior to the end of the Interest Period. The Continuation Notice must specify the amount of the LIBOR Loan
to be continued (in integer multiples of $100,000) and the length of the continuation Interest Period. If Borrower fails to timely
deliver a Continuation Notice, then the expiring LIBOR Loan will be converted to a Base Rate Loan.

 

(f)          Administrative
Agent’s determination of the LIBOR Rate as provided in this Agreement will, absent manifest error, be conclusive and binding
on all parties.

 

(g)          If,
on or before any date on which Administrative Agent is to determine the LIBOR Rate:

 

(i)          Administrative
Agent determines that adequate and fair means do not or will not exist for determining the LIBOR Rate applicable to an Interest
Period or, for any reason, Administrative Agent will not be able to determine the LIBOR Rate for the applicable Interest Period;
or

 

(ii)         Administrative
Agent determines that the LIBOR Rate determined in accordance with this Agreement does not accurately reflect any Lender’s
cost of funding, making or maintaining that Advance for the applicable Interest Period;

 

then Administrative Agent can
give notice of that circumstance to Borrower (a “Market Disruption Notice”), whereupon Lenders’ obligations
to make the requested Advance on the basis of the LIBOR Rate will be suspended until such time as Administrative Agent notifies
Borrower that the circumstances described in the Market Disruption Notice no longer exist. If Administrative Agent has issued a
Market Disruption Notice, all subsequent Advances will bear interest at the Prime Rate plus (x) the Applicable Margin then in effect
and (y) if an Event of Default exists, 2%, but in no event shall the interest rate ever exceed the Highest Lawful Rate.

 

Section
1.9           Repayment of the Loan.

 

(a)          Repayment
of the Loan. Except as provided in Sections 1.11 and 1.12, principal on the Loan shall be due and payable on
the Maturity Date. On the Maturity Date, Borrower will pay to Administrative Agent, for the ratable benefit of each Lender, all
of the monetary Obligations outstanding on that date (other than Obligations that may continue past the Maturity Date under the
terms of the Swap Agreement) and perform or otherwise satisfy all other Obligations (other than Obligations that may continue
past the Maturity Date under the terms of the Swap Agreement) then outstanding.

 

    	9

    	 

    

 

(b)          Application
of Funds. Except as provided in Section 1.12(b, all payments under the Loan will be applied (i) first to unpaid
fees, LIBOR Breakage Costs and Related Costs which Borrower is obligated to pay under the Loan Documents, (ii) second
to accrued interest on the Bridge Loan, (iii) third to accrued interest on the Term Loan, (iv) fourth
to accrued interest on the Revolving Loan, (v) fifth to principal on the Bridge Loan, (vi) sixth to principal
on the Term Loan, and (vii) seventh to principal on the Revolving Loan until the amount outstanding under the Revolving
Loan is reduced to zero.

 

Section
1.10         Time and Place of Payments.

 

(a)          Project
Account. All payments to be made by Borrower to Administrative Agent under this Agreement will be made to the following account
(the “Project Account”) by wire transfer in immediately available funds not later than 11:00 a.m., Houston,
Texas, time on the date due:

 

	Account:	The Bank of New York Mellon
	 	New York, New York 10004
	 	ABA # 021000018
	 	 
	Favour:	Macquarie Bank Limited
	 	Sydney
	 	A/C No.:  8900055375
	 	Chips UID:  236386
	 	Reference:  Voyager
    Oil & Gas, Inc.

 

or to any other account in the
same federal tax jurisdiction that Administrative Agent may designate in writing to Borrower from time to time.

 

(b)          Business
Days. If any payment to be made under this Agreement falls due on a day that is not a Business Day, the payment will be payable
on the next succeeding Business Day.

 

Section
1.11         Optional Prepayment of the Loan. Borrower can prepay the
Loan in whole or in part at any time without penalty or premium, except for Breakage Costs resulting from such prepayment.
All prepayments received by Administrative Agent under this Section 1.11 will be immediately applied as a prepayment of
the Loan pursuant to Section 1.9(b).

 

Section
1.12         Mandatory Prepayment of the Loan.

 

(a)          Borrower
will promptly pay to Administrative Agent, for the ratable benefit of each Lender, 100% of all net proceeds from the sale of any
Collateral to which Proved Reserves are attributed (excluding sales of Hydrocarbons in the ordinary course of business and sale
of Equipment authorized by the Security Agreement). The preceding sentence will not, however, be deemed to be a consent by Administrative
Agent to any sale. All prepayments received by Administrative Agent under this Section 1.12
will be immediately applied as a prepayment of the Loan pursuant to Section 1.9(b).

 

    	10

    	 

    

 

(b)          As
long as any Obligations are outstanding under the Bridge Loan, Borrower will promptly pay to Administrative Agent, for the ratable
benefit of each Lender, 100% of all net proceeds from the sale of any Equity Interests in Borrower. All prepayments received by
Administrative Agent under this Section 1.12(b) will be immediately applied
as a prepayment of the Bridge Loan as follows: (i) first to unpaid
fees, LIBOR Breakage Costs and Related Costs which Borrower is obligated to pay under the Loan Documents, (ii) second
to accrued interest on the Bridge Loan, (iii) third to principal
on the Bridge Loan until the amount outstanding under the Bridge Loan is reduced to zero. After prepayment of the Bridge Loan as
set forth above, Administrative Agent will remit to Borrower any and all remaining proceeds from the sale of the Equity Interest.

 

(c)          Within
ten Business Days after Borrower receives written notice from Administrative Agent that a Borrowing Base Deficiency exists, Borrower
must deliver to Administrative Agent a written response indicating which of the following actions Borrower will take to remedy
the Borrowing Base Deficiency (and the failure of Borrower to timely deliver such election notice or to timely perform the actions
chosen to remedy such Borrowing Base Deficiency will constitute an Event of Default):

 

(i)          within
30 days of receipt by Borrower of written notice of the Borrowing Base Deficiency, prepay the Loan in cash in an aggregate principal
amount sufficient to eliminate such Borrowing Base Deficiency;

 

(ii)         prepay
the Loan in four equal monthly installments in an aggregate principal amount sufficient to eliminate the Borrowing Base Deficiency,
with the first such installment due 30 days after the date such Borrowing Base Deficiency notice is received by Borrowers and the
remaining installments due on the same date in the three successive months;

 

(iii)        with
the Approval of Administrative Agent, prepay Advances from an Advance under the Term Loan in an aggregate principal amount sufficient
to eliminate such Borrowing Base Deficiency;

 

(iv)        grant
to Administrative Agent a first priority Lien in additional collateral which, in Administrative Agent’s reasonable determination,
has sufficient loan value to eliminate such Borrowing Base Deficiency, or

 

(v)         eliminate
the Borrowing Base Deficiency through a combination of the actions described in subclauses (i), (ii), (iii) and (iv) above.

 

Section
1.13         Application of Insurance Proceeds. Borrower will promptly
pay to Administrative Agent, for the ratable benefit of each Lender, 100% of all cash amounts received as insurance proceeds under
any property or casualty insurance related to the Collateral unless Administrative Agent Consents to Borrower’s expenditure
of those insurance proceeds to repair or replace the affected Collateral; but, if no Event of Default exists, Borrower may apply
the first $250,000 in insurance proceeds received during any calendar year to repair or replace the affected Collateral
without having to first obtain Administrative Agent’s Consent. All prepayments received by Administrative Agent under this
Section 1.13 will be immediately applied as a prepayment of the Loan pursuant to Section 1.9(b).

 

    	11

    	 

    

 

Section
1.14         Fees.

 

(a)          Commitment
Fees. Borrower agrees to pay to Administrative Agent, for the ratable benefit of each Lender, a commitment fee at a per annum
rate equal to one-half of one percent (.50%) of the daily unused Borrowing Base (the Borrowing Base then in effect less the aggregate
principal amount of the Revolving Loan then outstanding) from the date of this Agreement until the Commitment Termination Date,
but if any Lender is unable to fund an Advance pursuant to Section 1.6(d) then such Lender shall not be entitled to receive
a Commitment Fee unless and until such Lender is once again able to fund the Advance and the per annum rate of any Commitment
Fee applicable to such Lender shall be adjusted on a pro rata basis to exclude those days for which such Lender was unable to
fund the requested Advance. Further, no Commitment Fee shall accrue to a Defaulting Lender during the period such Lender remains
a Defaulting Lender. The commitment fees shall be due and payable quarterly in arrears on the last day of each March, June, September
and December commencing on March 31, 2012 and continuing thereafter through and including the Commitment Termination Date.

 

(b)          Advance
Fee. Contemporaneously with the making of any Advance, Borrower will pay to Administrative Agent, for the ratable benefit
of each Lender, a non-refundable fee (the “Advance Fee”) equal to

 

(i)          with
respect to Advances under the Revolving Loan, one percent (1.0%) of the amount of any incremental increase above the highest principal
amount previously outstanding under the Revolving Loan;

 

(ii)         with
respect to Advances under the Term Loan, one percent (1.0%) of the Advance; and

 

(iii)        with
respect to the Advance under the Bridge Loan, $1,000,000.

 

Borrower will
not, however, be required to pay Lender an Advance Fee on Advances (or portions of Advances) made to pay an Advance Fee or for
an Advance under the Revolving Loan used to repay the Term Loan or Bridge Loan.

 

(c)          All
fees will be computed on the actual number of days elapsed over a year composed of 360 days.

 

Section
1.15         Taxes.

 

(a)          Taxes
Not Deducted from Payments to Lender. All payments made by Borrower under this Agreement will be made free and clear of
and without deduction for Taxes (other than Excluded Taxes). If Borrower is required by law to deduct any Taxes (other than
Excluded Taxes) from any sum payable to any Lender, (i) the sum payable will be increased by an amount that would be required
to be paid so that, after making all required deductions (including deductions applicable to additional sums payable under
this Section 1.15(a)) such Lender will receive an amount equal to the sum it would have received had no deductions
been made, (ii) Borrower will deduct from the sum payable to such Lender an amount sufficient to pay such Taxes and pay the
balance to such Lender, and (iii) Borrower will promptly pay the full amount deducted to the relevant Taxing Authority or
other Governmental Authority in accordance with Law, provided, however, that Borrower shall not be required to
increase any such amounts payable to any Lender with respect to such Taxes: (i) that are attributable to such Lender’s
failure to comply with the requirements of Section 1.15(d), (ii) that are United States withholding Taxes imposed on
amounts payable to such Lender at the time such Lender becomes a party to this Agreement, except to the extent that such
Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from Borrower with
respect to such Taxes pursuant to this Section 1.15(a), or (iii) any amounts paid under FATCA.

 

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(b)          Other
Taxes. In addition, and to the fullest extent permitted by Law, Borrower agrees to pay any present or future stamp, documentary,
mortgage registration or similar Taxes or any other excise or property Taxes, charges or similar levies that arise from any payment
made or from the execution, delivery or registration of, or otherwise with respect to, any Loan Document (collectively, the “Other
Taxes”).

 

(c)          Indemnification.
To the fullest extent permitted by Law, except as specifically provided in Section 1.15(a), and unless there exists
a material breach of Administrative Agent’s or Lenders’ representations in this Agreement, Borrower will forever indemnify
Administrative Agent and Lenders from and against (i) all Taxes (other than Excluded Taxes) and Other Taxes imposed by any Taxing
Authority on amounts payable under this Section 1.15(c) and paid by Administrative Agent or Lenders on behalf of Borrower
and (ii) all liabilities (including penalties, interest and reasonable attorney’s fees, expenses and disbursements) arising
from or related to those Taxes (other than Excluded Taxes) and Other Taxes. Borrower will make any payments required under this
Section 1.15(c) within 30 days after Administrative Agent or Lenders delivers a written notice to Borrower that (x) identifies
the relevant Taxing Authority and the amount of the Tax (other than an Excluded Tax) or Other Tax imposed, (y) states with reasonable
specificity the basis for that Tax (other than an Excluded Tax) or Other Tax, and (z) certifies that Administrative Agent or Lenders
have paid the Tax (other than an Excluded Tax) or Other Tax imposed. The indemnification obligations of Borrower under this Section
1.15(c) will survive the repayment of the Obligations and the termination of this Agreement.

 

(d)          Certification
of Tax Status By Lender.

 

(i)          Each
Lender will promptly and prior to the time any payments are made: (A) execute and deliver to Borrower a duly completed copy of
United States Internal Revenue Service Form W-8BEN, W-8IMY or W-8ECI (as applicable), claiming complete exemption from, or a reduced
rate of, United States federal withholding Tax on all payments by Borrower under this Agreement and the other Loan Documents, and
(B) deliver to Borrower a United States Internal Revenue Service Form W-8 or W-9 (as applicable) and certify that such Lender is
entitled to an exemption from United States backup withholding Tax. Each Lender further agrees to deliver to Borrower (x) renewals
or additional copies of such forms (or any successor forms) on or before the date that such forms expire or become obsolete, (y)
after the occurrence of any event requiring a change in the most recent forms delivered by it, additional forms or amendments to
those forms as may be reasonably requested by Borrower, and (z) from time to time as reasonably requested by Borrower. All forms
or amendments described in the preceding sentence will include a certification by such Lender that it is entitled to receive payments
under this Agreement without deduction or withholding of any United States federal income Taxes, unless an event (including a change
in Law) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender
advises Borrower in writing that such Lender is not capable of receiving payments without any deduction or withholding of United
States federal income Tax. Notwithstanding any other provision of this paragraph, a non-U.S. Lender shall not be required to deliver
any form pursuant to this paragraph that such non-U.S. Lender is not legally able to deliver.

 

    	13

    	 

    

 

(ii)         If
a payment made to any Lender or Administrative Agent under any Loan Document would be subject to U.S. federal withholding Tax imposed
by FATCA if such Lender or Administrative Agent were to fail to comply with the applicable reporting requirements of FATCA (including
those contained in Section 1471(b) or 1472(b) of the Internal Revenue Code of 1986, as amended, as applicable), such Lender or
Administrative Agent shall deliver to Borrower, at the time or times prescribed by Law and at such time or times reasonably requested
by Borrower, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal
Revenue Code of 1986, as amended) and such additional documentation reasonably requested by Borrower as may be necessary for Borrower
to comply with its obligations under FATCA, to determine that such Lender or Administrative Agent has or has not complied with
its obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment. Solely for purposes
of this Section 1.15(d), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(e)          Certain
Recoveries. If a Lender becomes subject to Taxes because of its failure to deliver a form required under Section 1.15(d),
Borrower shall take such steps as such Lender may reasonably request to assist such Lender in recovering those Taxes.

 

(f)          Documentation
of Exemptions. If any Lender is entitled to an exemption from or reduction of withholding Tax with respect to payments under
any Loan Document pursuant to the Law of any relevant jurisdiction, such Lender will deliver to Borrower, at the time or times
prescribed by Law, properly completed and executed documentation required by Law so as to permit those payments to be made without
withholding or at a reduced rate of withholding.

 

(g)          Designation
of Substitute Lending Office. Each Lender will, at Borrower’s request following the occurrence of any event giving rise
to the operation of this Section 1.15, use commercially reasonable efforts (subject to overall policy considerations
of such Lender) to designate a substitute lending office, but provided that such designation is made on such terms that such Lender
and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of this Section 1.15. Nothing in this Section 1.15(g) will affect or postpone
any of the obligations of Borrower or the rights of such Lender provided in this section.

 

    	14

    	 

    

 

(h)          Effect
of Tax Refund. Each Lender will use its commercially reasonable efforts to obtain in a timely fashion any refund, deduction
or credit of any Taxes or Other Taxes paid or reimbursed by Borrower pursuant to this Section 1.15. If any Lender determines
in its sole discretion, exercised in good faith, that it has received a benefit in the nature of a refund, deduction or credit
(including a refund in the form of a deduction from, or credit against Taxes or Other Taxes that are otherwise payable by such
Lender) of any Taxes or Other Taxes with respect to which Borrower has made a payment under this Section 1.15, such Lender
will notify and reimburse Borrower (promptly after such Lender reasonably determines that such refund, deduction or credit has
become final) to the extent of the benefit of such refund, deduction or credit, including any interest paid by the relevant Taxing
Authority, net of all out-of-pocket expenses of such Lender; provided, that Borrower, upon the request of such Lender,
agrees to repay the amount paid over to Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental
Authority) to such Lender in the event such Lender is required to repay such refund to such Governmental Authority. Nothing in
this Section 1.15 will, however, require such Lender to make available its Tax returns (or any other information relating
to its Taxes which it deems to be confidential) or to attempt to obtain any refund, deduction or credit (including any interest
paid by the relevant Taxing Authority and received by such Lender), if such Lender determines that doing so could be inconsistent
with any reporting position otherwise taken by such Lender on its Tax returns.

 

Article
II

SECURITY; ETC.

 

Section
2.1          Grant of Liens and Security Interests. As security
for all of the Obligations owed to Administrative Agent, Lenders and any Swap Counterparty under this Agreement, the Swap Agreement
and the other Loan Documents, Borrower grants, assigns, transfers and conveys to Administrative Agent, for the ratable benefit
of each Lender and any Swap Counterparty, a first priority mortgage Lien on and first priority and perfected security interest
in the Collateral owned by Borrower subject only to the Permitted Encumbrances.

 

Section
2.2           Notice of Assignment of Proceeds.

 

(a)          Except
as provided in Section 2.2(b), so long as no Event of Default has occurred,
Borrower may collect for its own use and enjoyment all amounts and all monies owing to Borrower by any account debtor to Borrower
or all proceeds from the sale of Hydrocarbons from or allocable to Borrower’s Net Revenue Interest in the Properties. Following
an Event of Default, Borrower shall cooperate with Administrative Agent to deliver to each Operator, Purchaser and other Person
that is an account debtor to Borrower, written notice (substantially in the form of Exhibit G)
from Administrative Agent (as assignee) and Borrower that all amounts owing to Borrower by that Person—including all proceeds
from the sale of Hydrocarbons from or allocable to Borrower’s Net Revenue Interest in the Properties—have been assigned
to Administrative Agent and are to be paid into the Project Account. Borrower shall Cause all recipients of the notices to remit
all amounts owing to Borrower directly to the Project Account. Subject to any then existing contractual obligations that are not
cancelable without penalty and subject to Borrower’s legal right to direct to whom its Hydrocarbons are sold, Borrower shall
not sell Hydrocarbons to any Purchaser or through an Operator that refuses to timely acknowledge the notice of assignment of proceeds
and pay amounts directly into the Project Account as required by this Section 2.2.

 

    	15

    	 

    

 

(b)          In
accordance with the terms and conditions of Section 1.12(b), Borrower shall
cooperate with Administrative Agent to deliver to each Lead Book Runner, or any other first recipient of proceeds from the sale
of Borrower’s Equity Interests, written notice (substantially in the form of Exhibit K)
from Administrative Agent (as assignee) and Borrower that all amounts owing to Borrower by any Person purchasing Equity Interests
in Borrower have been assigned to Administrative Agent and are to be paid into the Project Account. Borrower shall Cause all recipients
of the notices to remit all amounts owing to Borrower directly to the Project Account. Subject to any then existing contractual
obligations that are not cancelable without penalty, Borrower shall not sell its Equity Interests to any Purchaser or through any
Person that refuses to timely acknowledge the notice of assignment of proceeds and pay amounts directly into the Project Account
as required by this Section 2.2.

 

Section
2.3           Further Assurances. Borrower shall, at the
request of Administrative Agent, execute and deliver to Administrative Agent, for the benefit of Lenders and any Swap Counterparty,
any additional documents necessary, in the reasonable opinion of Administrative Agent, to create, perfect and maintain Administrative
Agent’s Liens on the Collateral in a first-priority position subject only to the Permitted Encumbrances. Borrower irrevocably
authorizes Administrative Agent to prepare and file, at any time and in any filing office, all financings statements and amendments
to them necessary to the perfection or continuation of the security interests granted to Administrative Agent by Borrower.

 

Section
2.4           Release of Liens; Financing Statements; Release.
Following the Indefeasible repayment of all monetary Obligations in full and in cash and the complete performance of all other
Obligations (other than inchoate indemnity obligations and similar obligations that survive the termination of this Agreement),
(a) Administrative Agent will deliver to Borrower, at Borrower’s expense, releases of all Liens arising under the Security
Documents with an acknowledgment that the same have been terminated, and (b) Borrower shall deliver to Administrative Agent, Lenders
and any Swap Counterparty a general release of all liabilities and obligations of each of them under this Agreement and the other
Loan Documents.

 

Section
2.5           Subordination Agreements. Borrower shall Cause
all of its Affiliates and any other Person designated by Administrative Agent to execute a Subordination Agreement.

 

Section
2.6           Pledged Interests. Borrower will execute and
deliver a Pledge Agreement on or before the Closing Date so as to grant to Administrative Agent, as additional security for the
Obligations, a first-priority security interest in all of the issued and outstanding Equity Interests of its direct Subsidiary,
Emerald Oil (collectively, the “Pledged Interests”).

 

    	16

    	 

    

 

Section
2.7           All Obligations are Pari Passu. All
Obligations owed to Administrative Agent and Lenders under the Loan Documents shall be pari passu with all Obligations
owed to any Swap Counterparty under a Swap Agreement, and all Obligations shall be secured ratably, for the benefit of Administrative
Agent, each of the Lenders and any Swap Counterparty, by the Liens granted pursuant to the Security Documents.

 

Section
2.8           Swap Obligations Beyond Maturity. To the extent
Borrower enters into any transactions under the Swap Agreement that extend beyond the Maturity Date, the Obligations under the
Swap Agreement will continue to be secured by the Security Documents even if Borrower has fully repaid the Loan unless, after
the full payment and performance of all Obligations other than Obligations under the Swap Agreement, Borrower posts cash margin,
a letter of credit or other collateral approved in writing by the Swap Counterparty under a standard ISDA credit support annex.

 

Section
2.9           Control of Deposit Account. As long as any
Obligations are outstanding under the Bridge Loan, Borrower acknowledges that, pursuant to a Deposit Account Control Agreement,
Administrative Agent has exclusive control over the Borrower’s Blocked Checking deposit account identified on Schedule3.42
(the “Blocked Checking Account”). Within 5 Business Days of the full and Indefeasible payment of all monetary
Obligations owing under the Bridge Loan, and as long as there is no Event of Default, Administrative Agent shall deliver to the
Bank a Notice of Release of Exclusive Control (each as defined in the Deposit Account Control Agreement over the Blocked Checking
Account).

 

Article
III

REPRESENTATIONS AND WARRANTIES

 

To induce each Lender
to make the Loan, Borrower makes the following representations and warranties, each and all of which will survive the execution
and delivery of this Agreement and continue until all Obligations have been satisfied and no Lender has any further commitment
to make any Advance under this Agreement.

 

Section
3.1           Formation and Existence. Borrower is a corporation
duly organized, validly existing and in good standing under the laws of the State of Montana. Borrower is qualified to do business
in every other jurisdiction where the nature of its business or the ownership of its property requires it to be so qualified and
where failure to so qualify could reasonably be expected to have a Material Adverse Effect.

 

Section
3.2           Name; Executive Offices. The name of Borrower,
as listed in its Charter Documents on file in the public records of its jurisdiction of organization, is Voyager Oil & Gas,
Inc. Borrower’s principal place of business and chief executive offices are located at the address specified in Section
12.2 (or as set forth in a notice delivered pursuant to Section 12.2).

 

Section
3.3           Ownership; Subsidiaries. There are no agreements
in force which provide for the issue or allotment of, or grant any Person the right to call for the issue or allotment of, any
Equity Interest in Borrower (including any option or right of pre-emption or conversion). All of the outstanding Equity Interests
of Emerald Oil are covered by Pledge Agreements in favor of Administrative Agent. Except as set forth on Schedule 3.3,
Borrower has no Subsidiaries

 

    	17

    	 

    

 

Section
3.4           Authorization; Non-Contravention. Borrower’s
execution, delivery and performance under the Loan Documents and the creation of all Liens provided for in the Security Agreements:

 

(a)          are
within the corporate power and authority of Borrower;

 

(b)          have
been duly authorized by all necessary corporate action of Borrower;

 

(c)          are
not in contravention of (i) any agreement to which Borrower is a party or by which it or its property is bound, (ii) the Charter
Documents of Borrower, or (iii) any provision of law applicable to Borrower or its properties, and in the case of each of clauses
(i) and (iii), where its contravention could reasonably be expected to have a Material Adverse Effect;

 

(d)          do
not require the consent or approval of any Governmental Authority or any other Person except for (i) those previously delivered
to Administrative Agent, (ii) those third party approvals or consents which, if not made or obtained, could not reasonably be expected
to have a Material Adverse Effect or (iii) those that are both (A) identified on Schedule 3.4(d),
and (B) routinely granted by the relevant Governmental Authority and expected to be obtained in the ordinary course (the consents
and approvals described in the preceding clause (ii) being the “Post-Closing Governmental Consents”);
and

 

(e)          are
legal, valid and binding obligations of Borrower, enforceable against it in accordance with their respective terms, except as enforceability
may be limited by applicable Debtor Relief Laws and by general equitable principles.

 

Section
3.5           Solvency. Borrower is Solvent and will continue
to be Solvent after giving effect to the transactions contemplated by this Agreement.

 

Section
3.6           Omissions and Misstatements. Borrower has disclosed
to Administrative Agent all agreements, and all other matters known to Borrower, that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. All financial and other information furnished in writing by or on behalf
of Borrower to Administrative Agent in connection with the negotiation or performance of this Agreement or any other Loan Document,
when taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading; but, with respect to financial
projections, Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable
at the time. To Borrower’s knowledge, after due inquiry, there is no fact peculiar to Borrower which could reasonably be
expected to have a Material Adverse Effect or in the future is reasonably likely to have a Material Adverse Effect and which has
not been set forth in this Agreement or the Loan Documents or disclosed in writing to Administrative Agent by Borrower on or before
the date of this Agreement. To Borrower’s knowledge, after due inquiry, there are no statements or conclusions in any Reserve
Report which are based upon or include misleading information or fail to take into account material information regarding the
matters reported therein.

 

    	18

    	 

    

 

Section
3.7           Joint Venture. Except as set forth on Schedule
3.7, Borrower is not engaged in any joint venture or partnership with any other Person.

 

Section
3.8           Commissions; Expenses. No broker’s or
finder’s fees or commissions have been paid or will be payable by Borrower or any of its Affiliates to any Person in connection
with the transactions contemplated by this Agreement.

 

Section
3.9           Tax Returns; Taxes. Borrower has timely filed
(after giving effect to any applicable extensions) all material Tax returns (foreign, federal, state and local) required to be
filed and has paid all Taxes due (including interest and penalties) except for (a) amounts contested in good faith by Borrower
through appropriate proceedings timely filed and against which Borrower maintains adequate reserves in accordance with GAAP and
(b) to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect. No assessments
have been made by any Governmental Authority against Borrower or any of the Collateral that have not been paid (except for assessments
protested in good faith by Borrower through appropriate proceedings timely filed and against which Borrower maintains adequate
reserves in accordance with GAAP) nor has any penalty or deficiency been assessed by any Governmental Authority. No Governmental
Authority has notified Borrower that any material Tax return is under examination, nor is the result of any prior examination
being contested by Borrower. Except with respect to taxes being contested in good faith by Borrower through appropriate proceedings
timely filed and against which Borrower maintains adequate reserves in accordance with GAAP, no material Tax Liens have been filed
against Borrower or any of the Collateral.

 

Section
3.10         Litigation; Governmental Proceedings. Except as set forth
on Schedule 3.10, no claim, action, suit or other proceeding (collectively, an “Action”) by any
Governmental Authority or any other Person is pending or, to Borrower’s knowledge, threatened against Borrower or that relates
to any of the Collateral. With respect to the Actions set forth on Schedule 3.10, Borrower has not accepted liability
in connection with any Action except in the specific instances described on Schedule 3.10, none of which could reasonably
be expected to have a Material Adverse Effect.

 

Section
3.11         Ownership of Collateral; Interests.

 

(a)          All
Collateral is owned of record by Borrower, free and clear of any Lien other than the Permitted Encumbrances. Except for the Permitted
Encumbrances, Borrower has Defensible Title to each of the Properties. Except for Permitted Encumbrances or as Approved by Administrative
Agent, Borrower’s interest in the Properties is not subject to any mineral reservations or top leases of record. Borrower
has the exclusive right to sell and grant Liens over the Collateral. There are no unrecorded documents or agreements that could
limit or impair (i) Borrower’s ability to grant the Liens contemplated by the Security Documents or (ii) Administrative Agent’s
ability to enforce those Liens pursuant to the Security Documents. Subject to the Permitted Encumbrances, Borrower has all beneficial
right, title and interest in and to the Net Revenue Interest in all production from or allocable to Borrower’s interest in
the Properties (including each Lease).

 

    	19

    	 

    

 

(b)          All
Basic Documents to which Borrower is a party and, to Borrower’s knowledge, all Leases and material agreements comprising
the Properties and referenced in the title opinions and/or reports or other title materials delivered to Administrative Agent are
valid, existing and in full force and effect. No material default by Borrower or, to the knowledge of Borrower, any other party
to any Basic Document (or event or circumstance which with the giving of notice or the passage of time or both would give rise
to a material default) exists under any such Basic Document.

 

(c)          To
Borrower’s knowledge, all of the assets of Borrower that are reasonably necessary for the conduct of its current business
are in good working condition (ordinary wear and tear excepted) and are regularly maintained in accordance with customary industry
standards.

 

(d)          Except
for the Properties identified on Exhibit A and the properties owned by the
Emerald US Entities, (i) Borrower does not own any other direct or indirect interest of any kind in Hydrocarbons, including any
Equity Interests, Equity Equivalents, or calls or options to purchase, and (ii) Borrower does not have any right to acquire any
interest of the type described in the preceding clause (i).

 

(e)          Borrower’s
Working Interest is not more than, and its Net Revenue Interest is not less than, the percentages set forth on Exhibit
A for each of the Properties.

 

Section
3.12         Debt. On the Closing Date, Borrower will not have any
Debt outstanding other than as permitted under Section 6.1.

 

Section
3.13         Intellectual Property. Borrower possesses all trademarks,
trade names, trade styles, copyrights, patents and other intellectual property necessary to conduct its current business without
any infringement or conflict with the rights of any other Person, except as otherwise could not reasonably be expected to result
in a Material Adverse Effect.

 

Section
3.14         No Other Leases. Borrower is neither the lessor nor lessee
under any material leases (including real property leases, equipment leases, capital leases, etc.) other than the Leases included
in the Properties and leases entered into in the ordinary course of business which are not considered Leases as defined herein.

 

Section
3.15         Investments. Other than deposits made from time to time
in connection with the purchase of Properties consistent with the terms and conditions of this Agreement, Borrower has not made
or committed to make any Investment in excess of $100,000.

 

Section
3.16         No Unusual Restrictions. Borrower is not a party to, bound
by or subject to any indenture, agreement, contract, instrument, lease, Charter Document, injunction, order, restriction or decree,
which could reasonably be expected to have a Material Adverse Effect.

 

    	20

    	 

    

 

Section
3.17         No Take or Pay Agreements. Borrower is not a party to
or bound by, and neither Borrower nor, to Borrower’s knowledge, any of the Properties are subject to, any “take or
pay” contract or settlement or any other agreement or arrangement that (a) allows any Natural Gas purchasers to take Natural
Gas previously paid for out of future Natural Gas production, or (b) provides for a cash refund or rebate to any Natural Gas purchaser
if reimbursement of take or pay monies is not made through Natural Gas production.

 

Section
3.18         Gas Imbalances. To Borrower’s knowledge, Borrower
has not produced Hydrocarbons from the Properties in excess of the percentage to which its ownership interest in the applicable
Property would entitle it, pursuant to balancing rights of third parties or pursuant to balancing duties under Laws.

 

Section
3.19         Environmental Matters. Except as disclosed on Schedule
3.19 and as could not reasonably be expected to have a Material Adverse Effect:

 

(a)          To
Borrower’s knowledge, no Property, no operations currently conducted on any Property, and, to Borrower’s knowledge,
no operations conducted on any Property by any other prior owner or operator of any Property are (i) in violation of any Environmental
Law or any order or requirement of any Governmental Authority in respect of any Environmental Law, (ii) the subject of any existing,
pending or threatened action, suit, investigation, inquiry or proceeding by or before any Governmental Authority, or (iii) currently
subject to any unsatisfied remedial obligations under any Environmental Law;

 

(b)          Borrower
has duly filed and maintained all Permits and notices, if any, required by any Environmental Law to be maintained or filed in connection
with the operation or use of any Property by Borrower or, if Borrower is not the Operator, to Borrower’s knowledge the Operator
has duly filed and maintained all such Permits and notices, and Borrower and, to Borrower’s knowledge, Operator are in compliance
with the terms and conditions of those Permits and notices; 

 

(c)          To
Borrower’s knowledge, (i) all Hazardous Materials, solid waste, and Hydrocarbon exploration and production wastes, if any,
previously generated at any Property have been transported or treated or disposed of in accordance with Environmental Laws, (ii)
all transport carriers and treatment and disposal facilities have been and are operating in compliance with Environmental Laws,
and (iii) no such transport carriers or treatment or disposal facilities are the subject of any existing, pending or threatened
action, investigation or inquiry by any Governmental Authority in connection with any Environmental Laws; and

 

(d)          Neither
Borrower nor any of its Affiliates nor, to Borrower’s knowledge, Operator has any unsatisfied or known contingent liabilities
in connection with any Release or threatened Release of any Hazardous Materials, solid waste, and Hydrocarbon exploration and production
wastes on or from any Property, except as in compliance with Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment.

 

    	21

    	 

    

 

Section
3.20         Permits and Licenses.

 

(a)          Borrower,
if Borrower is the Operator, or to Borrower’s knowledge, Operator, if Borrower is not the Operator, as applicable, (i) maintains
all Permits necessary to conduct Hydrocarbon exploration and production operations on the Properties, and (ii) maintains all other
Permits necessary to conduct its business, except, in either case, where the failure to maintain a Permit could not reasonably
be expected to have Material Adverse Effect.

 

(b)          Borrower,
if Borrower is the Operator, or to Borrower’s knowledge, Operator, if Borrower is not the Operator, as applicable, is not
liable for any material pending fees, assessments or penalties relating to any Permit other than those payable in the ordinary
course of business and not yet delinquent.

 

(c)          The
continuation, validity and effectiveness of each Permit maintained by Borrower (or, if Borrower is not the Operator, to Borrower’s
knowledge the Permits maintained by Operator) are not and will in no way be materially adversely affected by the transactions contemplated
by this Agreement or the Security Documents.

 

(d)          Neither
Borrower nor, to Borrower’s knowledge, Operator, is in breach of or in default under the terms of any Permit, nor has Borrower
or, to Borrower’s knowledge, Operator, engaged in any activity which could result in the revocation or suspension of any
Permit and reasonably be expected to result in a Material Adverse Effect. No action or proceeding is pending or, to Borrower’s
knowledge, threatened by the issuer of any Permit that could result in the revocation or suspension of any Permit and reasonably
be expected to result in a Material Adverse Effect. No suspension of production on the Properties is in effect and reasonably be
expected to result in a Material Adverse Effect.

 

Section
3.21         Operation of the Properties.

 

(a)          Except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect, the Properties (together with any
other properties unitized with any of the Properties) have, since the acquisition of the Properties, been maintained, operated
and developed (i) in conformity with all Laws, (ii) in conformity with the terms and conditions of all Basic Documents, and (iii)
in a manner consistent with the conduct of a Prudent Operator, but with respect to any Properties for which Borrower is not the
Operator, then the foregoing representation shall be based upon Borrower’s knowledge;

 

(b)          To
Borrower’s knowledge and except where its occurrence could not reasonably be expected to have a Material Adverse Effect:
(i) no Property is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible
tolerance) because of any overproduction (whether or not that overproduction was permissible at the time), (ii) none of the vertical
Wells comprising the Properties (or properties unitized with any of the Properties) deviates from the vertical more than the maximum
permitted by Laws, (iii) each of the Wells comprising the Properties (or properties unitized with any of the Properties) are bottomed
under and are producing from, and the well bores are situated wholly within, the Properties or unitized properties, as applicable.

 

    	22

    	 

    

 

(c)          Neither
Borrower nor, to Borrower’s knowledge, Operator or any other Person is in breach of or in default under the terms of any
Basic Document to which any of them are bound or to which any of the Properties are subject, except to the extent such breach or
default could not reasonably be expected to have a Material Adverse Effect.

 

Section
3.22         USA PATRIOT Act Representation. Neither Borrower nor any
Obligor is a country, individual or entity named on the Specifically Designated National and Blocked Persons list issued by the
Office of Foreign Asset Control of the Department of the Treasury of the United States of America.

 

Section
3.23         Contingent Liabilities. Except for (a) obligations arising
under bonds required by Law and identified on Schedule 3.23, (b) indemnity, cleanup and other obligations of a customary
nature assumed or incurred (excluding Debt for borrowed money) in favor of any Person from whom Borrower acquired any of the Collateral,
and (c) Debt permitted by Section 6.1, Borrower has not assumed, guaranteed, endorsed or otherwise become directly,
indirectly or contingently liable for any liability of any other Person, except for the endorsement of checks and other negotiable
instruments for collection in the ordinary course of business.

 

Section
3.24         Equipment. Except for the Permitted Encumbrances, there
is no restriction or other limitation on Administrative Agent’s ability to obtain or exercise its Lien over the Equipment,
including the right to foreclose on and sell the Equipment or to exercise, subject to Debtor Relief Laws, all other rights and
remedies of a secured party under the Laws of each jurisdiction applicable to the Equipment.

 

Section
3.25         Unpaid Bills.

 

(a)          Schedule
3.25 identifies all vendors that have provided goods or services to Borrower in connection
with the development of the Properties during the six calendar months preceding this Agreement.

 

(b)          Borrower
does not have any past due bills for improvements to the Collateral that could give rise to mechanics’ or materialmen’s
Liens or other similar Liens arising by operation of law that could rank in priority ahead of any of the Liens arising under the
Security Documents, except for bills being diligently contested in good faith by Borrower and against which Borrower maintains
adequate reserves in accordance with GAAP.

 

Section
3.26         Taxpayer Identification. Borrower’s federal taxpayer
identification number is 77-0639000.

 

Section
3.27         Investment Company. Borrower is not an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

    	23

    	 

    

 

Section
3.28         No Margin Trading. Borrower is not engaged principally,
or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate,
of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board of Governors of the Federal Reserve
System (the “Board”)). No part of the proceeds of any Advance will be used for any purpose that violates Regulations
T, U or X of the Board.

 

Section
3.29         No Pending Sale or Financing. No agreement, whether written
or oral, exists between Borrower and any other Person regarding the purchase, sale or financing of any of the Collateral.

 

Section
3.30         No Calls on Production. No agreement, whether written
or oral, exists pursuant to which any Person has a call upon, option to purchase or similar right with respect to Borrower’s
rights to future production from or allocable to the Properties other than pursuant to Approved Marketing Contracts.

 

Section
3.31         Basic Documents.

 

(a)          Each
of the Basic Documents is in full force and effect in accordance with its terms and constitutes the valid and binding obligations
of Borrower, and to Borrower’s knowledge, of each of the parties to them, except as limited by Debtor Relief Laws and by
general equitable principles.

 

(b)          Neither
Borrower nor, to Borrower’s knowledge, any other party to any Basic Document is in breach of or in default under the terms
and conditions of the applicable Basic Document(s) where that breach or default could reasonably be expected to have a Material
Adverse Effect.

 

(c)          To
Borrower’s knowledge, no party to any Basic Document has given or threatened to give notice of any action to terminate, cancel,
rescind or procure a judicial reformation of any Basic Document where an action of that type could reasonably be expected to have
a Material Adverse Effect.

 

(d)          Neither
the execution and delivery of the Loan Documents by Borrower, nor the performance of any of its obligations under the Loan Documents—including
Borrower granting Liens to Administrative Agent in accordance with the Security Documents—will result in a breach of or a
default by Borrower under any Basic Document.

 

Section
3.32         Farmout Agreements and Subject Contracts, Etc. With respect
to the Properties and the Basic Documents creating the interests that comprise Properties, and except as set forth on Schedule
3.32, Borrower has not created and, to Borrower’s knowledge, there exist no:

 

(a)          farmout
agreements under which (i) Borrower has any remaining obligations or (ii) any other Person has any remaining rights to acquire
an interest of any kind in the Properties;

 

(b)          outstanding
obligations to drill Wells or engage in other development operations, except for (i) obligations under a Lease to drill an offset
Well and (ii) obligations under an Operating Agreement to participate in development activities to which Borrower has consented
and that are, in either case, included in the Development Plan;

 

    	24

    	 

    

 

(c)          no
limitations as to the depths covered or substances to which such interests relate other than as specified in the Leases and other
Basic Documents; and

 

(d)          royalty
provisions requiring the payment of royalties on any basis other than as specified in the Leases and other Basic Documents.

 

Section
3.33         Operating Agreements. With respect to the Operating Agreements
relating to Borrower’s Working Interest and Net Revenue Interest in the Properties:

 

(a)          Schedule
3.33 identifies all Operating Agreements to which the Properties are subject;

 

(b)          Schedule
3.33 identifies all outstanding calls for payment by Borrower, all of which are, unless
otherwise noted on Schedule 3.33, being paid within the term required; 

 

(c)          neither
Borrower nor, to Borrower’s knowledge, any of its predecessors in title has consented to any operation that is not included
in the Development Plan; and

 

(d)          there
are no operations with respect to which Borrower or, to Borrower’s knowledge, any predecessor in title has become a non-consenting
party nor are there any non-consent penalties binding or, to Borrower’s knowledge, that will become binding upon Borrower
that are not reflected in the Net Revenue Interest or Working Interest as set forth on Exhibit A.

 

Section
3.34         No Unusual Agreements. To Borrower’s knowledge,
all agreements applicable to Borrower’s Working Interest and Net Revenue Interest in the Properties are of the type generally
found in the oil and gas industry and the gathering and transmission industry, as applicable, and do not (individually or in the
aggregate) contain any unusual provisions which could reasonably be expected to have a Material Adverse Effect.

 

Section
3.35         Suspense of Proceeds. No proceeds from the sale of Hydrocarbons
attributable to Borrower’s interests in the Properties are being held in suspense for any reason except which could not
reasonably be expected to have a Material Adverse Effect.

 

Section
3.36        Employee Plans. Except as set forth on Schedule 3.36,
or as may be adopted from time to time upon approval of Administrative Agent, Borrower has no Employee Plans.

 

    	25

    	 

    

 

Section
3.37         Insurance. The insurance policies that Borrower is required
to maintain under Section 5.8 provide insurance coverage, in both type and amount, that is (a) sufficient to allow Borrower
to comply with all Laws and to satisfy the requirements of the Basic Documents and any other material agreement by which Borrower
is bound or which the Properties are subject, and (b) with respect to the Properties for which Borrower is the Operator, are consistent
with the insurance coverage, in both type and amount, that would be maintained by a Prudent Operator. With respect to those Properties
for which Borrower is not the Operator, to Borrower’s knowledge, the Operator maintains insurance coverage of a type and
in an amount that would be maintained by a Prudent Operator and is consistent with the requirements of the relevant Operating
Agreement. Administrative Agent, for the ratable benefit of Lenders and Swap Counterparties, has been named as an additional insured
under all liability insurance policies maintained by Borrower and has been named as a loss payee under all property casualty insurance
maintained with respect to the Collateral.

 

Section
3.38         No Material Adverse Effect. Since the date of the most
recent audited financial statements delivered to Administrative Agent, no Material Adverse Effect has occurred.

 

Section
3.39          Restriction on Liens. Except for (a) the
Post-Closing Governmental Consents, and (b) restrictions, if any, arising under the Basic Documents and identified on Schedule
3.39, no restriction or limitation exists with respect to Borrower’s ability to grant to Administrative Agent the
Liens arising under the Security Documents.

 

Section
3.40         Hedging Agreements. Schedule 3.40 identifies all
Hedging Agreements that are not Swap Agreements and includes the name of the counterparty to and the material terms of all transactions
under those Hedging Agreements (including the type, term, effective date, termination date and notional amounts or volumes), and
all credit support agreements relating to those Hedging Agreements (including any margin required or supplied and the name of
any Person providing credit support).

 

Section
3.41          Marketing of Production. Borrower does not sell or
otherwise dispose of any material portion of the Hydrocarbon production allocable to the Properties except pursuant to
Hydrocarbon marketing and sale contracts that are (a) identified on Schedule 3.41 and in effect on the date of this
Agreement, (b) Approved by Administrative Agent in its reasonable discretion, (c) between Borrower and any Person that is not
an Affiliate (whether or not in writing) that are cancelable, without penalty, on 30 days’ notice or less, or (d)
marketing arrangements over which Borrower exercises no direct control and to which it is subject pursuant to an Operating
Agreement (each an “Approved Marketing Contract”). Borrower is receiving a price for all Hydrocarbon
production sold that is computed substantially in accordance with the terms of the relevant contract, and, to
Borrower’s knowledge, deliveries are not being curtailed substantially below the subject Property’s delivery
capacity.

 

Section
3.42         Deposit Accounts. Except as set forth on Schedule 3.42,
Borrower does not maintain any deposit accounts (as defined in the UCC).

 

Section
3.43         Labor Matters. Neither Borrower nor any of its Subsidiaries
are in violation of any Law relating to labor matters, and all payments due from Borrower or any Subsidiary of Borrower for employee
health and welfare insurance have been paid or accrued as a liability on its books, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

    	26

    	 

    

 

Section
3.44         Eligible Contract Participant. Borrower is an “eligible
participant” as defined in the Commodities Futures Modernization Act of 2000 17 C.F.R. § 35.1(b)(2)(2006), as amended,
and the rules and regulations promulgated under that act.

 

Section
3.45         No Default. No Default exists or is reasonably likely
to result from Borrower’s entry into or performance under any Loan Document or the making of any Advance under this Agreement.
No event or circumstance exists which, with the expiry of a grace period, the giving of notice or the making of any determination
by any other Person would constitute a default under any other agreement, whether written or oral, by which Borrower is bound
or to which any of the Collateral is subject, except where such default could not reasonably be expected to have a Material Adverse
Effect.

 

Section
3.46         Choice of Law. The Borrower knows of no reason why the
parties’ choice of governing law in the Loan Documents to which Borrower is a party would not be recognized and enforced
by the courts as a valid choice of law; nor does Borrower know of any reason why a judgment obtained in relation to a Loan Document
to which Borrower is a party in the jurisdiction of the governing law of that Loan Document would not be recognized and enforced
in Borrower’s jurisdiction of formation.

 

Section
3.47        Financial Statements. The most recent financial statements
of Borrower delivered to Administrative Agent (a) have been prepared in accordance with GAAP, and (b) give a true and fair view
(if audited) or fairly present (if unaudited) of its consolidated financial condition as at the end of, and consolidated results
of operations for, the period to which they relate.

 

Section
3.48         Priority. Subject to Permitted Encumbrances, the Security
Documents have or will have first ranking priority and none is subject to any prior ranking or pari passu ranking Lien.

 

Section
3.49         Affiliate Interests in Properties. Except as set forth
on Schedule 3.49, no Affiliate of Borrower holds, either directly or indirectly, an ownership or economic interest in the
Properties, other than through their ownership of Equity Interests in Borrower.

 

Article
IV

FINANCIAL STATEMENTS AND INFORMATION;

CERTAIN NOTICES TO ADMINISTRATIVE AGENT

 

For as long as this
Agreement remains in effect, Borrower shall deliver the following to Administrative Agent:

 

Section
4.1           Monthly Reporting Package. Within 15 days after
the end of each calendar month (such month being the “Reported Month”), an operations report summarizing the
Reported Month’s workover and drilling activity and for each Lease or Well (i) gross and net Crude Oil and Natural Gas products
production and sales, (ii) lease operating expenses, (iii) production Taxes, and (iv) any other relevant operations data Administrative
Agent may request (the “Monthly Reporting Package”). But, if there are no Obligations outstanding under the
Term Loan, Borrower shall not be required to provide the Monthly Reporting Package.

 

    	27

    	 

    

 

Section
4.2           Financial Reporting.

 

(a)          Quarterly
Financial Reports. Within 45 days after the end of calendar quarter (other than the calendar quarter ending December 31)(such
quarter being the “Reported Quarter”) beginning with the Reported Quarter ending March 31, 2012, a balance
sheet, income statement and statement of cash flows of Borrower and its consolidated Subsidiaries (including any notes), prepared
by Borrower for (i) the Reported Quarter and (ii) cumulatively, all Reported Quarters since the end of the
prior fiscal year.

 

(b)          Annual
Financial Statements. Within 120 days after the end of each fiscal year beginning with the fiscal year ending December 31,
2011, a copy of the annual consolidated financial statements (including all notes) of Borrower and its consolidated Subsidiaries,
consisting of a balance sheet, income statement and statement of cash flows, all audited by independent certified public accountants
retained by Borrower.

 

Section
4.3           Compliance Certificate. With the delivery of
each set of financial statements under Section 4.2, a certificate executed by the Chief Executive Officer, the President,
the Chief Financial Officer, the treasurer or any vice president of Borrower (an “Authorized Officer”) and
in the form of Exhibit I (a) certifying whether, to the Authorized Officer’s knowledge, a Default has occurred and,
if so, describing in reasonable detail the circumstances of the Default and any actions taken or proposed to be taken to cure
the Default, (b) setting forth in reasonable detail calculations demonstrating Borrower’s compliance with Section 5.20,
(c) stating whether any material change in GAAP or its application to Borrower has occurred since the date of the last audited
financial statements received by Administrative Agent and, if so, specifying the effect of that change on the financial statements
accompanying the certificate, and (d) in connection with financial statements delivered under Section 4.2(a), certifying
that the financial statements present fairly in all material respects, subject only to normal year-end adjustments, the financial
position and results of operations of Borrower in accordance with GAAP and absent any footnotes (other than those required to
explain financial data).

 

Section
4.4           Notices of Default and Other Significant Events.
Written notice to Administrative Agent promptly (but, in any event, within five Business Days) after Borrower becomes aware that
a Default has occurred or that any event has occurred or that any circumstance exists that could reasonably be expected have a
Material Adverse Effect, including:

 

(a)          any
material dispute arises between Borrower and any Governmental Authority;

 

(b)          the
making of a demand or the commencement of any proceeding against Borrower or related to the Properties with an amount in controversy
in excess of $100,000;

 

(c)          a
proposal by any Governmental Authority to acquire any of the Collateral by condemnation or eminent domain that could reasonably
be expected to have a Material Adverse Effect;

 

    	28

    	 

    

 

(d)          any
change in (i) Borrower’s company name (including the creation or change of any trade name); (ii) the location of Borrower’s
principal office; (iii) Borrower’s company structure or the jurisdiction in which Borrower is organized; (iv) Borrower’s
organizational identification number; or (v) Borrower’s federal taxpayer identification number;

 

(e)          the
revocation, suspension, forfeiture, expiration or material modification of any Permit that could reasonably be expected to have
a Material Adverse Effect;

 

(f)          any
material loss of or damage to any Collateral, or any material change in Borrower’s business or operations;

 

(g)          the
failure or refusal to make any payment when due in respect of any Debt that could reasonably be expected to have a Material Adverse
Effect; and

 

(h)          the
occurrence of any event of circumstance that could, if it continues, constitute a default by any Person under any of the Basic
Documents.

 

Each notice will describe, in reasonable
detail, the nature of the Default, event or circumstance, it’s anticipated effect on Borrower and the Collateral, and what
responsive action(s) Borrower proposes to take.

 

Section
4.5           Reserve Reports.

 

(a)          Timing
of Reports. Borrower shall, at its sole expense, Cause an engineering reserve report relating to the Properties (the “Reserve
Report”) to be prepared and delivered to Administrative Agent semi-annually beginning on the First Reserve Report Date.
Each Reserve Report will evaluate the projected recoverable reserves attributable to Borrower’s Working Interests and Net
Revenue Interests in the Properties. The effective dates of the Reserve Reports will be June 30 and December 31 of each year,
and Borrower shall deliver each Reserve Report to Administrative Agent as set forth in Section 1.2(b). All Reserve Reports
shall be prepared by the Engineers.

 

(b)          Preparation
of Reports. The Reserve Report will separately report on PDP Reserves, PDNP Reserves and PUD Reserves, and will be prepared
in accordance with the following requirements and assumptions:

 

(i)          reserves
shall be adjusted for cumulative production and revisions to reserve volume estimates since the effective date of the prior Reserve
Report;

 

(ii)         Hydrocarbon
pricing assumptions—

 

(A)         for
all Natural Gas to be sold by Borrower other than Natural Gas described in Section 4.5(b)(ii)(B), the purchase price for
each calendar year will be the average of the monthly prices provided to Borrower by Administrative Agent for that year for Natural
Gas as reflected in NYMEX as of the settlement of the last trading day for the contract month ending immediately prior to the effective
date of the Reserve Report, using price escalators or de-escalators existing in the market as reasonably determined by Administrative
Agent and notified to Borrower at the time the Reserve Report is being prepared, for the remaining life of the Properties;

 

    	29

    	 

    

 

(B)         for
all Natural Gas to be sold by Borrower on a fixed price basis pursuant to any Approved Marketing Contract or with respect to which
the price has been hedged pursuant to any NYMEX contract or a Hedging Agreement, the purchase price will be the fixed price for
the volumes indicated in the contract, agreement or arrangement;

 

(C)         for
Crude Oil to be sold by Borrower other than Crude Oil described in Section 4.5(b)(ii)(D), the purchase price for each calendar
year will be the average of the monthly prices provided to Borrower by Administrative Agent for that year for Crude Oil as reflected
in the NYMEX as of the settlement on the last trading day for the contract month ending immediately prior to the effective date
of the Reserve Report, using price escalators or de-escalators existing in the market as reasonably determined by Administrative
Agent and notified to Borrower at the time the Reserve Report is being prepared, for the remaining life of the Properties;

 

(D)         for
Crude Oil to be sold by Borrower on a fixed price basis pursuant to any Approved Marketing Contract or with respect to which the
price has been hedged pursuant to any NYMEX contract or a Hedging Agreement, the purchase price will be the fixed price for the
volumes indicated in the contract, agreement or arrangement; and

 

(E)         all
Hydrocarbon pricing assumptions will be further adjusted by appropriate quality, transportation and location differentials Approved
by Administrative Agent in its reasonable discretion.

 

(iii)        projected
operating expenses and capital expenditures will be adjusted to reflect (A) actual expense levels incurred since the effective
date of the prior Reserve Report and (B) reasonable projections as to anticipated increases or decreases in operating expenses
and capital expenditure levels;

 

(iv)        the
Reserve Report will utilize any other assumptions that Administrative Agent may reasonably request from time to time; and

 

(v)         each
Reserve Report will, if necessary, be accompanied by a proposed revision to the Development Plan that includes all development
projects included in the Reserve Report.

 

    	30

    	 

    

 

Section
4.6           Additional Information. Borrower shall deliver
to Administrative Agent (a) true, complete and contemporaneous copies of any financial statement, report or notice prepared for
or furnished to any Person pursuant to the terms of any preferred stock designation, indenture, loan or credit or other similar
agreement that Borrower is not otherwise required to deliver to Administrative Agent pursuant to this Agreement, (b) true, complete
and contemporaneous copies of all periodic and other reports, proxy statements and other materials distributed by Borrower to
its member(s) generally, and (c) additional information as Administrative Agent may reasonably request concerning Borrower, its
financial condition or the ownership or operation of any of the Collateral.

 

Section
4.7           Monthly Field Activity Reports. Borrower shall
compile a comprehensive listing of operations occurring on the Properties during the relevant Reported Quarter including: (a)
a reconciliation of actual capital costs incurred to corresponding AFEs, and (b) an updated Well status list showing zones completed
and fracked in each active Well. Borrower shall also compile and maintain a record, for each Reported Quarter, of the monthly
Natural Gas production and sales and Crude Oil Production Volumes for all Well completions included in the Properties during the
relevant Reported Quarter. Borrower shall report such monthly sales and production data within 21 days following the end of each
Reported Quarter in a form acceptable to Lender and deliver reports by e-mail to recipients designated by Lender. In the case
of Natural Gas, the sales volumes will be based on the integration of the charts recorded by the lease “check” meter
located downstream of the processing equipment and immediately upstream of the sales delivery point. Where production from multiple
completions is combined upstream of measurement equipment, Borrower will estimate sales volumes for the individual completions
using an appropriate allocation methodology.

 

Section
4.8           Test Results; Core Analyses; Surveys and Logs.
Borrower shall deliver to Administrative Agent, to the extent that they are available from the Operator, true and complete copies
of (a) all test results, fluid analyses, pressure surveys and core analyses related to the Properties as reasonably requested
by Administrative Agent, (b) each electrical survey, radioactivity log, temperature survey, deviation or directional survey, caliper
log and other log or survey obtained during the drilling of any Well upon Administrative Agent’s reasonable request, and
(c) a composite of all electrical-type logs, to the extent reasonable and customary, promptly following the completion of each
Well.

 

Section
4.9           Reports Made to a Governmental Authority. Concurrently
with the delivery of any such report or application to the applicable Governmental Authority, Borrower shall deliver to Administrative
Agent a true and complete copy of each material report made and application submitted to a Governmental Authority having jurisdiction
over any of the Leases or Wells.

 

Section
4.10         Charter Documents. Borrower shall deliver to Administrative
Agent true and complete copies of all amendments to any of its Charter Documents; but this Section 4.10 does not constitute
Administrative Agent’s Consent to any such amendment.

 

Section
4.11         Certificate of Authorized Officer—Hedging Agreements.
Concurrently with the delivery of each Reserve Report, a certificate of an Authorized Officer setting forth, as of the effective
date of the Reserve Report, a true and complete list of all Hedging Agreements (other than the Swap Agreements), their material
terms (including the counterparty, type, term, effective date, termination date and notional amounts or volumes), credit support
agreements not previously disclosed to Administrative Agent in writing, and any margin required or supplied under any credit support
agreement.

 

    	31

    	 

    

 

Section
4.12         Certificate of Insurer—Insurance Coverage. Concurrently
with Borrower’s delivery of any financial statements under Section 4.2(a) (and to the extent not previously delivered
to Administrative Agent) (a) a certificate of insurance coverage from each insurer (or from Borrower’s insurance broker)
with respect to the insurance required by Administrative Agent, and (b) true and complete copies of the applicable insurance policies.

 

Section
4.13         Anticipated Cost Overruns. Whenever Borrower anticipates
that the actual cost of any project that is the subject of an Approved AFE or Reimbursement Request will likely exceed the AFE
or Reimbursement Request amount Approved by Administrative Agent, Borrower will promptly notify Administrative Agent in writing
and (a) describe in reasonable detail the cause(s) of the anticipated cost overrun as explained by the Operator and (b) identify
to Administrative Agent the source of funds that Borrower proposes to use to pay those excess costs. So long as the cost overruns
are the result of normal and customary issues experienced in the oil and gas industry as determined by Administrative Agent in
its sole discretion, Borrower may use Advances to fund such additional costs.

 

Section
4.14         Updated Development Plan. Contemporaneous with the delivery
of each Reserve Report bearing an effective date as of December 31st of any year, Borrower will prepare and deliver to Administrative
Agent a revised, proposed Development Plan covering at least the next 6 months and setting forth all capital expenditure development
projects proposed for that period, the anticipated timing of those projects, the net cost of each of those projects to Borrower
and any other information that Administrative Agent may reasonably request. But, if there are no Obligations outstanding under
the Term Loan, Borrower will not be required to provide a Development Plan. Each proposed modification to the Development Plan
will be subject to the Approval of Administrative Agent, which Approval shall not be unreasonably withheld or delayed. Until Administrative
Agent has Approved a revised Development Plan or until there are no Obligations outstanding under the Term Loan, the most recent
Approved Development Plan (and all AFEs or Reimbursement Requests Approved in connection with that most recently Approved Development
Plan) will remain in effect.

 

Article
V

AFFIRMATIVE COVENANTS

 

For as long as this
Agreement remains in effect, Borrower shall, unless Administrative Agent otherwise Consents:

 

Section
5.1           Preservation of Existence. Maintain its existence
and current form of organization under the laws of the State of Montana and all related rights, privileges and franchises.

 

Section
5.2           Compliance with Law.

 

(a)          Comply
(and Cause it Affiliates to comply) with all Laws regarding the collection, payment and deposit of employees’ income, unemployment
and Social Security Taxes except to the extent that its noncompliance could not reasonably be expected to have a Material Adverse
Effect.

 

    	32

    	 

    

 

(b)          Where
Borrower is the Operator, make (and, where Borrower is not the Operator, Cause the Operators to make) properly and timely, all
royalty or overriding royalty payments and payments to all other interest owners in the Properties.

 

(c)          Where
Borrower is the Operator, comply (and, where Borrower is not the Operator, Cause the Operators to comply) with all Laws affecting
the ownership and operation of any of the Properties, including, all EHS Regulations except to the extent that its noncompliance
could not reasonably be expected to have a Material Adverse Effect.

 

(d)          Where
Borrower is the Operator, operate (and, where Borrower is not the Operator, Cause the Operators to operate) all Properties except
where the failure to do so could not reasonably be expected to have a Material Adverse Effect (whether or not such Property constitutes
a “facility” under CERCLA) so that no cleanup or other obligation is imposed under CERCLA or any other Law (including
Hazardous Substance Laws) intended to protect the environment or relating to the generation, transportation or disposal of hazardous
waste which could allow any Person to assert a Lien to secure that obligation that is senior in priority to Administrative Agent’s
Liens on the Collateral, but excluding Liens being protested in good faith by Borrower through appropriate proceedings timely filed
and against which Borrower maintains adequate reserves in accordance with GAAP.

 

(e)          Where
Borrower is the Operator, comply (and, where Borrower is not the Operator, Cause the Operators and all agent and invitees to comply),
in all material respects, with all EHS Regulations and other Laws with respect to Hazardous Materials, and keep all of the Properties
free and clear of any Liens imposed by those Laws. If Borrower receives any notice from any Person relating to an alleged Release
of Hazardous Materials on or from the Properties, Borrower shall immediately (and, in any event, prior to the expiration of any
period specified in the notice during which Borrower is to respond) deliver a true and complete a copy of the notice to Administrative
Agent along with a description, in reasonable detail, of the proposed response to the notice by Borrower or Operator, as applicable.

 

Section
5.3           Environmental Matters.

 

(a)          Where
Borrower is the Operator, comply (and, where Borrower is not the Operator, Cause the Operators to comply) with all Environmental
Laws except where the failure to comply could not reasonably be expected to have a Material Adverse Effect, including with respect
to (i) disposing of or releasing Hazardous Materials, solid wastes or Hydrocarbons on, under, about or from the Properties, (ii)
timely obtaining all Permits and filing all notices required to be obtained or filed in connection with the ownership and operation
of the Properties, (iii) promptly commencing and diligently prosecuting to completion any assessment, investigation, monitoring,
containment, cleanup, restoration or other remedial obligation (collectively, the “Remedial Work”)
required in connection with any actual or suspected past, present or future disposal or other Release of any Hazardous Materials,
solid wastes or Hydrocarbons on, under, about or from the Properties, and (iv) implementing and maintaining procedures as necessary
to continuously determine and ensure Borrower’s compliance with all Environmental Laws.

 

    	33

    	 

    

 

(b)          Notify
Administrative Agent in writing within seven Business Days after receiving written notice of (i) the commencement of any action,
investigation or inquiry by any Governmental Authority, or (ii) any threatened demand or action by any landowner or other Person
against Borrower or affecting the Properties in connection with an alleged violation of any Environmental Law (but excluding routine
testing and routine corrective action) in which the amount in controversy exceeds $100,000 and is not fully covered by insurance,
subject to normal deductibles.

 

(c)          Borrower
(if it is the Operator) will provide (and, where Borrower is not the Operator, will Cause the Operator to provide) environmental
audits and tests in accordance with American Society of Testing Materials standards as reasonably requested by Administrative Agent.
Borrower (if it is the Operator) will provide (and where Borrower is not the Operator, will Cause the Operator to provide) any
requested audit or test not more than once each year at its expense; the cost of any updated audits or tests reasonably requested
by Administrative Agent within the same year will be borne by Administrative Agent unless an Event of Default exists at the time
of Administrative Agent’s request, in which case the cost will be borne by Borrower.

 

Section
5.4           Records. Keep adequate records and books of
account in accordance with GAAP to reflect all transactions conducted with respect to its business and the Properties. Borrower
shall conduct its business and keep its books and records separate from those of its Affiliates.

 

Section
5.5           Litigation. Notify Administrative Agent in
writing within seven Business Days after (i) the commencement of any action, investigation or inquiry by any Governmental Authority,
or (ii) receiving written notice of any threatened demand or action by any other Person that seeks to:

 

(a)          prohibit
or impose any material restriction on Borrower’s business as it presently conducts it or the Properties; or

 

(b)          declare
any substance used, sold or distributed by Borrower to be a Hazardous Material in violation of any Hazardous Substance Law.

 

Section
5.6           Damage to Collateral. Notify Administrative
Agent in writing promptly upon Borrower becoming aware of:

 

(a)          damage
to any of the Collateral causing a loss in excess of $250,000 that is not fully covered by insurance, subject to normal
deductibles; and

 

(b)          the
occurrence or existence of any condition or event that could reasonably be expected to cause a loss or depreciation of any Collateral
in excess of $250,000, excluding changes in the economy generally, e.g., fluctuations in the market price of Hydrocarbons.

 

    	34

    	 

    

 

Section
5.7           Solvency. Conduct its business in a manner
as is necessary to remain Solvent.

 

Section
5.8           Insurance.

 

(a)          Continuously
keep all Personal Property insured for replacement value of like kind and quality (i) with insurance companies licensed to do business
in the jurisdiction(s) in which the property is located and having a Best’s rating of A or better, and (ii) against
loss or damage by theft, burglary, pilferage, fire and other risks customarily insured against by other prudent owners and operators
similarly situated.

 

(b)          Continuously
maintain (or Cause Operator(s) to maintain), with insurance companies licensed to do business in the applicable jurisdiction(s)
and having a Best’s rating of A or better, liability insurance coverage against risks incident to the ownership and
operation of the Properties of a type and in an amount as is customarily maintained by other prudent owners and operators similarly
situated.

 

(c)          Cause
all insurance policies to contain endorsements in form satisfactory to Administrative Agent showing Administrative Agent as loss
payee or additional insured, as applicable, and containing waivers of subrogation by the respective insurers and non-contributory
standard mortgagee clauses or their equivalent or a satisfactory mortgagee loss payable endorsement in favor of Administrative
Agent. Borrower shall notify Administrative Agent in writing promptly after becoming aware of the occurrence or existence of any
event or circumstance that could be the subject of a claim in excess of $250,000 under any insurance coverage maintained by or
for the benefit of Borrower. Borrower shall Cause all casualty insurance proceeds to be deposited directly into the Project Account
by the insurer and, Borrower authorizes and directs Administrative Agent to (i) retain and, subject to Section 1.12,
apply all insurance proceeds as a prepayment of the Obligations or, (ii) if no Event of Default then exists, disburse any or all
of those insurance proceeds to Borrower (subject to such terms and conditions as Administrative Agent may reasonably deem appropriate)
to pay the cost of repairing, replacing or restoring the Collateral or purchasing replacement Collateral.

 

(d)          Deliver
to Administrative Agent all certificates of insurance and, if requested by Administrative Agent, true and complete copies of all
insurance policies and endorsements, that Borrower is required to maintain under this Agreement. Borrower shall Cause all certificates
to show that (i) the relevant insurance is in full force and effect, and (ii) the insurer has agreed to give Administrative Agent
at least 15 days prior written notice of the cancellation or non-renewal any of the insurance coverages identified on the certificate.

 

(e)          Deliver
to Administrative Agent, at least 15 days prior to the expiration date of each policy maintained under this Section 5.8,
an acceptable certificate of insurance with respect to the renewal or replacement policy.

 

    	35

    	 

    

 

(f)          Notwithstanding
the specific requirements of this Section 5.8, employ (or Cause Operator(s)
to employ) industry standard practices at all times with respect to its insurance coverages to include, but not limited to, drilling,
workovers, flowline repairs, rig work and facilities work, and Borrower shall exercise commercially reasonable efforts to ensure
that all Operators also carry such insurance coverages. If Administrative Agent notifies Borrower that its insurance program is,
in the reasonable opinion of Administrative Agent, not in material compliance with this Section 5.8,
then Borrower shall promptly act to bring its insurance program into compliance to the extent such insurance is available on commercially
reasonable terms.

 

Section
5.9           Delivery of Invoices, Receipts, Etc. Deliver
to Administrative Agent promptly upon request (a) true and complete copies of all contracts, statements, invoices, notices, receipts
and vouchers under which Borrower has incurred or will incur costs in excess of $250,000, and (b) such other supporting documentation
as Administrative Agent may reasonably request.

 

Section
5.10         Access to Books and Records; Inspections; Consultants.

 

(a)          Provide
Administrative Agent with all reasonable access to appropriate officers, employees and agents of Borrower to discuss the business
and accounts of Borrower during normal business hours and upon reasonable prior notice from Administrative Agent.

 

(b)          Provide
Administrative Agent with all reasonable access (at Administrative Agent’s risk and subject to Borrower’s reasonable
safety policies) to the books and records maintained by Borrower in connection with the conduct of its business. So as to not unreasonably
disrupt the business of Borrower, Borrower shall arrange access during its normal business hours on at least two Business Days’
notice from Administrative Agent.

 

(c)          Provide
Administrative Agent with all reasonable access (at Administrative Agent’s risk and subject to Borrower’s reasonable
safety policies) to the Properties and all other facilities owned, operated, used or maintained by Borrower in connection with
the conduct of its business to, among other things, witness all drilling, workover and other field activities. To provide Administrative
Agent with a reasonable opportunity to exercise its rights under this Section 5.10(c),
Borrower shall give Administrative Agent as much notice as practical of all field activities. The access granted to Administrative
Agent under this Section 5.10(c) will not unreasonably disrupt the operation
of the Properties or the conduct of field activities.

 

(d)          Provide
Administrative Agent’s consulting engineers, geologists, accountants and other professionals with all reasonable access (at
such consultant’s risk and subject to Borrower’s reasonable safety policies) to the Properties and all other facilities,
books and records owned, operated, used or maintained by Borrower in connection with the conduct of its business. So as to not
unreasonably disrupt the business of Borrower, Borrower shall arrange access during its normal business hours on at least two Business
Days’ notice from Administrative Agent. Administrative Agent may from time to time, upon prior written notice to Borrower
(except if an Event of Default exists, in which case Administrative Agent is not require to provide such notice), select and retain
such consultants as Administrative Agent reasonably determines are necessary to advise it with respect to technical and financial
matters related to each of Borrower’s business and its ownership and operation of the Properties. Borrower shall promptly
pay all reasonable fees and out-of-pocket expenses related to Administrative Agent’s consultants retained under this Section
5.10(c) upon receipt of an invoice from Administrative Agent. 

 

    	36

    	 

    

 

Section
5.11         Creditors. Provide Administrative Agent upon request a
true and complete schedule of Borrower’s material creditors, including the amount due to each and the date each payment
is due. Borrower shall notify Administrative Agent immediately if Borrower fails to make any payment (except for payments contested
in good faith by Borrower and against which Borrower maintains adequate reserves in accordance with GAAP) to any Person in accordance
with required terms where such non-payment could result in the imposition of a Lien on any of the Collateral or could reasonably
be expected to have a Material Adverse Effect. If Administrative Agent receives notice that Borrower has failed to make any required
payment when due, Administrative Agent may, but will have no obligation to, make payment directly to the creditor if necessary,
in the opinion of Administrative Agent, to protect Administrative Agent’s interest in the Collateral. If Administrative
Agent makes payments to any creditor under this Section 5.11, Borrower shall reimburse Administrative Agent upon demand
and, if not promptly reimbursed, those amounts will become part of the Obligations and will be secured by Administrative Agent’s
Liens on the Collateral.

 

Section
5.12         Operators. To the extent Borrower has the legal right
to do so (or the legal right to Cause or require any other Person to do so), and if Borrower has knowledge that a material breach
by the Operator occurred under any Operating Agreement that is not timely cured:

 

(a)          At
the request of Administrative Agent, vote to remove the Operator or commence any proceedings necessary under the applicable Operating
Agreement to remove the Operator;

 

(b)          Promptly
demand and diligently pursue indemnification or damages, as applicable, from the Operator for any loss or liability incurred by
Borrower;

 

(c)          Pay
the owners of Royalty Interests directly;

 

(d)          Cause
the Operator to deliver to any successor Operator all books and records related to the outgoing Operator’s operation of the
Properties, including all royalty payment records, joint interest billings, severance tax records, division orders, farm-in and
farmout agreements and title opinions;

 

(e)          Use
all commercially reasonable efforts to ensure that the value of the Properties is not diminished by virtue of the Operator’s
resignation or removal; and

 

(f)          Use
all commercially reasonable efforts to ensure an orderly transition of operations to the successor Operator.

 

    	37

    	 

    

 

Section
5.13         Purchasers of Hydrocarbons.

 

(a)          If
Administrative Agent notifies Borrower that any Purchaser of Hydrocarbons is, in Administrative Agent’s reasonable judgment,
not creditworthy, Borrower shall, to the extent that Borrower is the Operator, or to the extent Borrower is not the Operator Cause
any Operator to, require the Purchaser to secure, to the satisfaction of Administrative Agent, the Purchaser’s obligations
in respect of its purchase of Hydrocarbons attributable to the Properties. If the Purchaser refuses to secure its obligations,
then Borrower shall, subject to any existing marketing arrangement with that Purchaser that is binding on Borrower and that is
not terminable without penalty, (i) immediately cease selling Hydrocarbons to that Purchaser, or (ii) exercise its right to take
the Hydrocarbons in kind and sell those Hydrocarbons to Purchasers Approved by Administrative Agent unless Borrower owns less than
a 10% Working Interest in the subject Property and the Operator has acknowledged a notice of assignment of proceeds, then Borrower
need not take the actions set forth in this Section 5.13(a).

 

(b)          Borrower
shall give Administrative Agent at least 30 days prior written notice if Borrower proposes to sell, or, if Borrower is not the
Operator, within 5 Business Days of receiving notice that the Operator proposes to sell or has sold, any Hydrocarbons to any additional
or replacement Purchaser. The notice must (i) contain the proposed Purchaser’s complete name, address, telephone number,
facsimile number and contact person, and (ii) identify the Properties to which the purchases relate.

 

Section
5.14         Use of Proceeds. Use the proceeds of each Advance exclusively
for the purpose for which it is made and consistent with Sections 1.2(a) and 1.3(b) the AFEs and other Supporting
Documentation or Reimbursement Requests provided to Administrative Agent as part of the Advance Request.

 

Section
5.15         Bonds. Continuously maintain bonds required by any Governmental
Authority in connection with the ownership and operation of the Properties, and deliver to Administrative Agent true and complete
copies of all bonds in place (including renewals). Schedule 5.15 identifies (a) each bond that Borrower is required by
any Governmental Authority to maintain in connection with the ownership and operation of the Properties, and (b) all payment obligations
of Borrower to any Person who has issued a bond on behalf of Borrower.

 

Section
5.16         Hydrocarbon Price Risk Management Program. At the request
of Administrative Agent, dedicate, under the one or more Hedging Agreements, a percentage of the volume of PDP Reserves plus estimated
WIP volumes (not to exceed 85% of those volumes) projected to be produced prior to the earlier of (a) three years after the Closing
Date or (b) the Maturity Date to a Hydrocarbon price risk management program Approved by Administrative Agent in its reasonable
discretion. Any gain or loss for volume adjustments will be for Borrower’s account. Administrative Agent may review Borrower’s
Hydrocarbon price risk management program from time to time to determine if it is in compliance with this Section 5.16.
If Administrative Agent notifies Borrower that its Hydrocarbon price risk management program is, in the reasonable opinion of
Administrative Agent, not in compliance with this Section 5.16, then Borrower shall promptly act to bring its program into
compliance on commercially reasonable terms. Each Reserve Report delivered by Borrower pursuant to Section 4.5 will be
deemed to supplement Schedule 3.40 when delivered to Administrative Agent.

 

    	38

    	 

    

 

Section
5.17         Evidence of Title. 

 

(a)          Within
thirty (30) days after Closing, Borrower will deliver to Administrative Agent updated title opinions and title information reasonably
satisfactory to Administrative Agent covering the Properties in accordance with Section 5.17(b)
below. Notwithstanding the previous sentence, however, no Advance will be made by Lenders with respect to any Well or proposed
Well that is not the subject of an updated title opinion reasonably satisfactory to Administrative Agent.

 

(b)          The
opinions to be delivered under this Section 5.17 will show Defensible Title
in the Properties vested in the Borrower subject only to (i) the Permitted Encumbrances and (ii) the Mortgages in favor of Administrative
Agent as first and prior mortgage Liens subject only to the Permitted Encumbrances and will otherwise be reasonable satisfactory
to Administrative Agent and its counsel.

 

(c)          Deliver
to Administrative Agent, within 30 days after Administrative Agent’s request, updated run sheets or other documentation reasonably
acceptable to Administrative Agent reflecting (i) the recordation of Administrative Agent’s Lien related to the Mortgage
over all Properties for which Borrower has not previously delivered a title opinion, and (ii) the absence of any Lien that is not
a Permitted Encumbrance.

 

Section
5.18         Continuing Enterprise. Conduct its business at all times
in a manner necessary to (a) perform all of its obligations under the Basic Documents and its Obligations under the Loan Documents,
and (b) preserve its rights in and to the Properties and under the Basic Documents unless a Prudent Operator would not do so,
except, in each case, as could not reasonably be expected to have a Material Adverse Effect.

 

Section
5.19         Access to Technical Data. Provide Administrative Agent
and its consultants with access to all engineering, geological, geophysical and (to the maximum extent allowed under Borrower’s
seismic licenses) seismic data, studies and evaluations made or possessed by Borrower or to which it has access. So as to not
unreasonably disrupt the business of Borrower, Borrower shall arrange access during its normal business hours on at least two
Business Days’ notice from Administrative Agent. If the seismic information to be provided to Administrative Agent is subject
to a confidentiality agreement between Borrower and any other Person who is not an Affiliate, Borrower may require Administrative
Agent to execute a substantially similar confidentiality agreement before receiving the confidential information.

 

Section
5.20         Financial Ratios.

 

(a)          Current
Ratio. Borrower shall maintain a Current Ratio of at least 1.00 to 1.00.

 

(b)          Debt
Coverage Ratio. Borrower shall maintain a Debt Coverage Ratio of no more than 3.50 to 1.00.

 

(c)          Interest
Coverage Ratio. Borrower shall maintain an Interest Coverage Ratio of at least 2.50 to 1.00.

 

    	39

    	 

    

 

(d)          Borrower’s
Right to Cure Certain Breaches with New Equity. Borrower may cure (and shall be deemed to have cured) an Event of Default
arising out of a breach of any financial covenant set forth in Section 5.20 (the “Specified Financial Covenant”)
if it receives the cash proceeds of an investment of additional equity or other common equity contributions made in immediately
available funds (“Curative Equity”) within the applicable cure period under Section 9.1. Any Curative
Equity shall be deemed to be additional EBITDA or, in the case of the Current Ratio, additional Current Assets, for the fiscal
quarter in which the Specified Financial Covenant is breached. Borrower shall promptly (but in any event no later than 14 days
after the receipt thereof) notify Administrative Agent of its receipt of any proceeds of Curative Equity and such notification
shall constitute a designation by Borrower that such proceeds constitute Curative Equity. In the compliance certificate delivered
pursuant to Section 4.3 in respect of the fiscal quarter end on which Curative Equity is used to cure any breach of the
Specified Financial Covenant, Borrower shall (i) include evidence reasonably satisfactory to Administrative Agent of its receipt
of Curative Equity and (ii) set forth a calculation of the financial results and balance sheet of Borrower as at such fiscal quarter
end (including for such purposes the proceeds of such Curative Equity (broken out separately) as deemed EBITDA or as additional
Current Assets, as applicable, as if received on such date), which shall confirm, with respect to any fiscal quarter end on which
Curative Equity is used to cure any breach of the Specified Financial Covenant, that on a pro forma basis after taking into account
the receipt of the Curative Equity, Borrower would have been in compliance with the Specified Financial Covenant as of such date.
Upon delivery of a compliance certificate pursuant to Section 4.3 conforming to the requirements of this Section 5.20(d)
and accurately reflecting Borrower’s compliance with the applicable financial covenant as of the applicable measuring
date, any Event of Default that is continuing from a breach of any of the Specified Financial Covenant shall be deemed cured with
no further action required by Administrative Agent or any Lender. In the event Borrower does not cure the Specified Financial
Covenant violation as provided in this Section 5.20(d), the existing Event(s) of Default shall continue unless waived in
writing by Administrative Agent or the requisite Lenders in accordance with this Agreement. To the extent that Curative Equity
is received and included in the calculation of the Specified Financial Covenant as deemed EBITDA or additional Current Assets,
as applicable, for any fiscal quarter pursuant to this Section 5.20(d), such Curative Equity shall be deemed to be EBITDA
or additional Current Assets, as applicable, for purposes of determining compliance with the Specified Financial Covenant for
subsequent periods that include such fiscal quarter.

 

(e)          Calculating
Financial Ratios.

 

(i)          Administrative
Agent will reasonably determine Borrower’s compliance with the required Current Ratio and Debt Coverage Ratio, as applicable,
as of the end of each Reported Quarter using the financial statements delivered to Administrative Agent by Borrower under Section
4.2(a) and Section 4.2(b) for that same Reported Quarter.

 

    	40

    	 

    

 

(ii)         Administrative
Agent’s reasonable determination as to Borrower’s compliance with this Section 5.20 will be conclusive absent
manifest error. Except through the timely investment of new equity into Borrower as contemplated by Section 5.20(d) to cure
a breach of the required financial covenant, a breach of this Section 5.20 is not otherwise capable of being cured and,
as such, no cure period under Section 9.1 will apply.

 

Section
5.21         Maintenance of Liens. Cause all Collateral to be subject
at all times to a first-priority perfected Lien (subject only to Permitted Encumbrances) in favor of Administrative Agent. If
Borrower acquires additional Property after the Closing Date, Borrower shall promptly notify Administrative Agent of the acquisition
and execute and deliver amendments to the Security Documents as reasonably requested by Administrative Agent to grant to Administrative
Agent a first-priority perfected Lien (subject only to the Permitted Encumbrances) over that additional Property.

 

Section
5.22         Payment of Taxes, Etc. Pay when due all material Taxes,
assessments and governmental charges levied, assessed, imposed or payable in connection with any of the Collateral except for
Taxes, assessments, charges or encumbrances being protested in good faith by Borrower through appropriate proceedings timely filed
and diligently prosecuted and against which Borrower maintains adequate reserves in accordance with GAAP.

 

Section
5.23         Equipment.

 

(a)          Maintenance
of Equipment. Continuously maintain (and to the effect it has the legal right to do so, Cause Operators to maintain) all Equipment
in good working condition (ordinary wear and tear excepted) and in accordance with customary industry standards, except as could
not reasonably be expected to have a Material Adverse Effect.

 

(b)          Location
of Equipment. Keep all Equipment at the location(s) within the States of Colorado, Montana, North Dakota and Wyoming where
it is used by Borrower in the conduct of its business.

 

(c)          Equipment
Records. Maintain (and Cause the Operator to maintain) accurate and complete records of the Equipment (including its description,
location, age, condition, cost and accumulated depreciation) used in connection with the conduct of Borrower’s business
or the operation of the Properties.

 

(d)          Sale
or Disposal of Equipment. When Borrower is permitted to dispose of any Equipment under the Security Documents, it shall do
so in good faith, in an arm’s length transaction with a non-Affiliate and obtain an amount of recovery consistent with the
conduct of a Prudent Operator and customary industry standards.

 

Section
5.24         Maintenance of Leases. Promptly perform, pay and discharge
(or Cause Operator to perform, pay and discharge) (a) all delay rentals, royalties, expenses, severance Taxes and other Taxes
and indebtedness accruing under the Leases or the other Basic Documents, and (b) all other obligations imposed by the Leases and
the other Basic Documents, in each instance, unless the failure to do so could not reasonably be expected to have a Material Adverse
Effect. Borrower shall also act as a Prudent Operator in preventing the expiration, forfeiture or abandonment of any of the Properties
except for Properties that are known to be incapable of producing in paying quantities.

 

    	41

    	 

    

 

Section
5.25         Operator. Notwithstanding anything in any other document
to the contrary, Borrower will resign, or, to the effect it has the legal right to do so, Cause the resignation or removal of
Borrower or any Affiliate under any applicable Operating Agreement as the Operator of any of the Properties upon the written request
of Administrative Agent if an Event of Default has occurred and is continuing under the Credit Agreement or any other Loan Document.
Subject to the terms of the applicable Operating Agreement, Administrative Agent will have the right to Approve (not to be unreasonably
withheld or delayed) any action taken by Borrower to appoint or replace the Operator of any of the Properties.

 

Article
VI

NEGATIVE COVENANTS

 

For as long as this
Agreement remains in effect, Borrower shall not, unless Administrative Agent otherwise Consents:

 

Section
6.1          Debt. Incur, assume or allow to exist any Debt,
except:

 

(a)          the
Obligations;

 

(b)          Debt
existing on the date hereof which is identified on Schedule 6.1(b);

 

(c)          Debt
under the Basic Documents; 

 

(d)          Capital
Leases that do not exceed $250,000 in the aggregate

 

(e)          Debt
secured by a Permitted Encumbrance;

 

(f)          Debt
under a Hedging Agreement permitted under this Agreement;

 

(g)          accounts
payable, accrued expenses, and obligations to pay the deferred purchase price of property or services that (i) are incurred in
the ordinary course of business, (ii) are not more than 90 days past due or otherwise delinquent, and (iii) do not exceed $250,000
in the aggregate (excluding amounts being diligently contested in good faith and by appropriate action by Borrower and against
which Borrower maintains adequate reserves in accordance with GAAP);

 

(h)          letters
of credit, worker’s compensation claims, surety bonds and performance bonds incurred in the ordinary course of business,
and, with respect to each such instrument or claim that exceeds $250,000, Approved by Administrative Agent in its reasonable discretion;

 

(i)          guaranties
permitted to exist pursuant to Section 6.3;

 

(j)          endorsements
of negotiable instruments for collection in the ordinary course of business; and

 

(k)          Debt
Approved by Administrative Agent in its reasonable discretion and fully subordinated to the Obligations pursuant to a Subordination
Agreement.

 

    	42

    	 

    

 

For
the avoidance of doubt, Borrower shall not incur, assume or allow to exist any Debt in favor of any Emerald US Entity.

 

Section
6.2           Accounts. Sell, discount or factor its accounts
or its negotiable instruments except for accounts settled or discounted in the ordinary course of business while no Default exists.

 

Section
6.3           Guaranties. Guaranty the payment of any other
Person’s Debt or the performance of any other Person’s obligation except for (a) Debt permitted by Section 6.1,
(b) indemnity obligations customarily assumed or incurred (but excluding Debt for borrowed money) in favor of the seller of Wells
or Leases that become part of the Collateral following their acquisition by Borrower; but this Section 6.3 will not prohibit
Borrower’s endorsement of negotiable instruments for deposit or collection in the ordinary course of business. For purposes
of this Section 6.3, “guaranty” means any agreement (contingent, conditional or otherwise) to (x) pay, perform,
purchase, repurchase or otherwise acquire any obligation or liability of any other Person, or (y) purchase, sell or lease (as
either lessee or lessor) any property or services, in either case primarily for the purpose of (I) paying or enabling another
Person to pay any Debt, (II) performing or enabling another Person to perform any other obligation. For the avoidance of doubt,
Borrower shall not guaranty or assume any Debt of any Emerald US Entity.

 

Section
6.4           Ownership and Business Operations.

 

(a)          Merge
with or into any other Person, including, without limitation, any Emerald US Entity;

 

(b)          acquire
or agree to acquire any material portion of the assets of or the Equity Interests in another Person;

 

(c)          transfer
(or grant any Person an option to acquire) any of its assets (as that term is defined under GAAP) with a fair market value, individually
or in the aggregate, of more than $250,000 in any three month period except for (i) the sale of Hydrocarbons under Approved Marketing
Contracts and (ii) the sale of worn, surplus or obsolete Equipment in accordance with this Agreement and the Security Documents;

 

(d)          cancel
or compromise any material Debt owed to Borrower except for consideration and in the ordinary course of Borrower’s business;

 

(e)          prepay
any material Debt other than the Obligations, but, as long as no Event of Default exists Borrower may prepay any Debt other than
Debt for borrowed money;

 

(f)          extend
credit or agree to extend credit to any Person except in the ordinary course of Borrower’s business and in accordance with
the Basic Documents;

 

(g)          move
its executive offices, change its company name, change its corporate form to another type of entity, or move its jurisdiction of
organization to a jurisdiction other than that in which Borrower is organized on the date of this Agreement without 30 days prior
written notice to Administrative Agent;

 

    	43

    	 

    

 

(h)         change
its fiscal year;

 

(i)   
      cause or allow (to the extent Borrower has the ability to prevent such action
through the exercise of all commercially reasonable efforts) (i) the release or abandonment of (A) any Well capable of
commercial production, or (B) any of Borrower’s Working Interest or Net Revenue Interest in any of the Properties
capable of commercial production, or (C) any of the Properties where a Prudent Operator would not cause or allow the same to
occur; (ii) the Properties to be developed, maintained or operated in a manner less favorable than the actions of a
Prudent Operator; and (iii) waive or agree to make any material alterations to the material terms of any Basic
Documents to which Borrower is a party to the extent such waiver or alteration could reasonably be expected to have a
Material Adverse Effect, except as made on behalf of Borrower by an Operator who is not an Affiliate pursuant to the terms of
an Operating Agreement;

 

(j)  
        except in the ordinary course of business or as otherwise permitted under
this Agreement, enter into any new agreement relating to or affecting any of the Properties that could reasonably be expected
to have a Material Adverse Effect;

 

(k)          enter
into any new farmout agreement or a material amendment to any existing farmout agreement relating to the Properties;

 

(l)    
      allow the purchase and sale of production from or allocable to the Properties except
pursuant to Approved Marketing Contracts; 

 

(m)         cause
or allow (to the extent Borrower has the ability to prevent such action through the exercise of all commercially reasonable efforts)
the commencement of any operation that is not the subject of an AFE or Reimbursement Request Approved
by Administrative Agent excluding emergency operations, operations required under contractual obligations that exist on the date
of this Agreement, operations necessary to ensure compliance with any EHS Regulation or any other Law; 

 

(n)         cause
or allow (to the extent Borrower has the ability to prevent such action through the exercise of all commercially reasonable efforts),
subject to Section 5.12, the replacement of any Operator; or

 

(o)          Cause
or allow its Subsidiaries to incur any Debt except:

 

(i)          Debt
pursuant to the Hartz Loan Documents existing on the date hereof, which amount of Debt is $17,725,000;

 

(ii)         Debt
existing on the date hereof which is identified on Schedule 6.4(o);

 

(iii)        Debt
under the Emerald Basic Documents;

 

(iv)        Capital
Leases that do not exceed $250,000 in the aggregate

 

    	44

    	 

    

 

(v)         Debt
under a Hedging Agreement;

 

(vi)        accounts
payable, accrued expenses, and obligations to pay the deferred purchase price of property or services that (i) are incurred in
the ordinary course of business, (ii) are not more than 90 days past due or otherwise delinquent, and (iii) do not exceed $250,000
in the aggregate (excluding amounts being diligently contested in good faith and by appropriate action by such Subsidiary and against
which such Subsidiary maintains adequate reserves in accordance with GAAP);

 

(vii)       letters
of credit, worker’s compensation claims, surety bonds and performance bonds incurred in the ordinary course of business;

 

(viii)      endorsements
of negotiable instruments for collection in the ordinary course of business.

 

Section
6.5           Liens and Encumbrances. Except as set forth
on Schedule 6.5:

 

(a)          allow
any Lien to exist or consent to the filing of any financing statement on any Collateral except:

 

(i)          Liens
in favor of Administrative Agent;

 

(ii)         the
Permitted Encumbrances;

 

(iii)        Liens
being protested in good faith by Borrower through appropriate proceedings timely filed and diligently prosecuted and against which
Borrower maintains adequate reserves in accordance with GAAP; and

 

(iv)        Liens
securing Capital Leases permitted by Section 6.1(b) and identified on Schedule 6.1(b) or permitted by Section
6.1(d).

 

(b)          sever
from or reserve out of any Property a right or power to take any action which affects the exploration or development of the Hydrocarbons
related to that Property.

 

Section
6.6           Affiliate Transactions. Subject to compliance
with the other provisions of this Agreement, enter into a transaction with any Affiliate unless (a) the Affiliate has executed
a Subordination Agreement and (b) Borrower has provided reasonably satisfactory evidence to the Administrative Agent that the
terms of the proposed transaction are at least as favorable as those that Borrower could obtain in an arm’s length transaction
with a Person that is not an Affiliate.

 

Section
6.7           Investments. Make any Investment except Investments
in (a) Cash Equivalents, (b) obligations of the United States government or any of its agencies, (c) guaranties permitted under
Section 6.3, and (d) Investments in connection with the purchase of Properties Approved (not to be unreasonably withheld
or delayed) by Administrative Agent.

 

    	45

    	 

    

 

Section
6.8           Subsidiaries; Structure. Create any direct
or indirect Subsidiary (other than those set forth on Schedule 3.3 or make any other material change in the corporate or
capital structure of Borrower. Borrower shall not enter into any arrangement by which any Person other than Borrower has the authority
to exercise management over Borrower’s and its Subsidiaries’ business or the Properties.

 

Section
6.9           Joint Ventures. Enter into, agree to enter
into or commit any of the Collateral in connection with the organization of any partnership, joint venture or similar arrangement.

 

Section
6.10         Dividends and Distributions. Do any of the following or
take an action that has substantially the same effect:

 

(a)          declare
or pay any cash dividends or distributions;

 

(b)          declare
or make any non-cash distribution;

 

(c)          declare,
make or pay any cash or non-cash distribution to any Emerald US Entity; 

 

(d)          purchase
or redeem any of its Equity Interests or other securities; or

 

(e)          take
any other action that has substantially the same effect as any of the actions prohibited under items (a)–(c) above.

 

Section
6.11         Modifications to Documents. Waive or modify (or agree
to waive or modify) the terms of any Operating Agreement, any Hedging Agreement or any material Basic Document, if such waiver
or amendment could reasonably be expected to have a Material Adverse Effect.

 

Section
6.12         Other.

 

(a)          fail
to observe all of the provisions of Articles IV and V
after the Closing, to the extent not already subsumed in this Article VI;

 

(b)          declare
an “Early Termination Date” (as that term may be defined in
the Swap Agreement) or any similar action pursuant to any Hedging Agreement without the Consent of Administrative Agent; but Borrower
may declare an Early Termination Date or any similar action under and in accordance with the terms of any Hedging Agreement (i)
in respect of any “Event of Default” (as defined in such Hedging Agreement) by the counterparty to such Hedging Agreement
or (ii) in order to close out any transactions then outstanding under such Hedging Agreement and pay all amounts due in connection
with the close out of such transactions coincident with the full and final repayment or prepayment of all of the Obligations;

 

(c)          enter
into any Hedging Agreement not Approved by Administrative Agent, such approval not to be unreasonably withheld or delayed, but
Borrower agrees that it will not be unreasonable for Administrative Agent to withhold its Approval of any Hedging Agreement if
Borrower’s counterparty under the proposed Hedging Agreement, is not a Swap Counterparty and could have the right to require
Borrower to post any margin or other security to secure amounts owing under the Hedging Agreement; 

 

    	46

    	 

    

 

(d)          enter
into a unit operating agreement relating to the Properties outside the ordinary course of business; or

 

(e)          adopt
any Employee Plan without the Consent of Administrative Agent which shall not be unreasonably withheld or delayed.

 

Section
6.13         Use of Loan Proceeds. Permit the proceeds of any Advance
to be used for any purpose other than the purposes permitted by this Agreement and in a manner consistent with the supporting
documentation provided to Administrative Agent in connection with each Advance Request. Neither Borrower nor any Person acting
on behalf of Borrower has taken or will take any action which would reasonably be expected to cause any of the Loan Documents
to violate Regulations T, U or X or any other regulation of the Board or to violate Section 7 of the Securities Exchange Act of
1934 or any rule or regulation thereunder, in each case as now in effect or as the same may hereinafter be in effect.

 

Section
6.14         Limitation on Leases. Create, incur, assume or suffer
to exist any obligation for the payment of rent or hire of property of any kind whatsoever (real or personal but excluding Capital
Leases and Leases), under leases or lease agreements which would cause the aggregate amount of all payments made by Borrower pursuant
to all such leases or lease agreements, including any residual payments at the end of any lease, to exceed $250,000 in
any period of twelve consecutive calendar months during the life of such leases.

 

Section
6.15         Nature of Business. Allow any material change to be made
in the character of Borrower’s business as an independent Hydrocarbon exploration and production company. Borrower will
not acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any
oil and gas properties not located within the geographical boundaries of the United States.

 

Section
6.16         Deposit Accounts. Except for those identified on Schedule
3.42, maintain any additional deposit accounts (as defined in the UCC) unless simultaneously therewith, Borrower, Administrative
Agent and the related depositary bank enter into a Deposit Account Control Agreement with respect to such deposit account.

 

Section
6.17         No Severance Agreements. Without the Approval of Administrative
Agent, enter into or become bound by or cause or allow any of the Collateral to become subject to any agreement under which Borrower
could become obligated to pay any amounts or make the accommodations to any Person, in connection with that Person’s resignation,
termination or any similar occurrence.

 

Section
6.18         Commodity Deliveries. Enter into obligations to deliver
commodities, goods or services, including Hydrocarbons, in consideration of one or more advance payments, other than gas balancing
arrangements in the ordinary course of business.

 

    	47

    	 

    

 

Section
6.19         G&A Expenses. Allow the G&A Expenses to exceed
an aggregate of $500,000 per calendar quarter.

 

Section
6.20         Hartz Loan Documents. Without the prior Approval of Administrative
Agent, agree, or Cause its Subsidiaries to agree, to amend, modify, restate, extend or alter in any material way the Hartz Loan
Documents or to increase the Debt owed to Hartz above $17,725,000 (but, Borrower shall provide copies of any proposed immaterial
amendments, modification, restatements, alterations or extensions of the Hartz Loan Documents to Administrative Agent prior to
executing same).

 

Section
6.21         Consent to AFEs. Without the prior Approval of Administrative
Agent, agree or consent to any AFE presented to Borrower by an Operator and related to any Properties in which Borrower’s
Working Interest exceeds 1% or where the cost to Borrower pursuant to each such AFE is more than $100,000. Administrative Agent’s
Approval of such AFE shall in no way be construed as an Approval by Administrative Agent to any Advance Request related to such
AFE and Borrower must still comply with the terms and conditions of Article I.

 

Article
VII

FURTHER RIGHTS OF LENDERS

 

Section
7.1           Further Assurances; Delivery of Additional Documents.
Until all Obligations are Indefeasibly repaid in full (other than indemnity and reimbursement obligations that survive the termination
of this Agreement):

 

(a)          Borrower
shall, at Borrower’s expense, take all actions and execute all additional documents reasonably requested by Administrative
Agent and necessary to (i) effect the creation, perfection, maintenance or continuation of a first-priority Lien in favor of Administrative
Agent over all of the Collateral, or (ii) assist Administrative Agent’s exercise of its rights under this Agreement and the
other Loan Documents (collectively, “Implementation Documents”).

 

(b)          Borrower
appoints Administrative Agent and each of its designees as Borrower’s attorney in fact to whenever an Event of Default exists
(i) execute, on behalf of Borrower , any Implementation Documents requested by Administrative Agent, and (ii) endorse for deposit
into the Project Account any checks or other negotiable instruments payable to Borrower and that come into the possession of Administrative
Agent. This appointment is coupled with an interest and is irrevocable.

 

(c)          In
exercising the appointment described in Section 7.1(b), neither Administrative
Agent nor its designees will be liable to any Person for any act, omission, error in judgment or mistake of law that is not intentional,
willful, grossly negligent or in bad faith.

 

    	48

    	 

    

 

Section
7.2           Payments by Lenders. If Borrower fails to (a)
continuously maintain insurance as required by this Agreement or (b) pay any amount owed to any Person when due if Borrower’s
failure to pay could reasonably be expected to have a Material Adverse Effect, Administrative Agent or Lenders can, but will not
have any obligation to, (x) obtain insurance on behalf of Borrower as required by this Agreement if such coverage is available
on commercially reasonable terms or (y) pay the unpaid amount(s) on behalf of Borrower. Administrative Agent or any Lender will
give Borrower at least three Business Days’ notice prior to exercising its rights under the preceding sentence unless
an Event of Default exists, in which case no prior notice will be necessary. Borrower will reimburse Administrative Agent
or such Lender upon demand for all amounts (including reasonable attorney’s fees) paid by Administrative Agent or such Lender
to any Person under this Section 7.2. If Borrower fails to reimburse those amounts upon demand, the unreimbursed amounts
will become part of the Obligations.

 

Section
7.3           Possession and Preservation of Collateral.
If any Event of Default exists, Administrative Agent can, in addition to any of remedies available to Administrative Agent, (a)
exercise the rights of a secured creditor under the UCC to enter Borrower’s premises, (b) take possession of the Collateral
to preserve and prepare the Collateral for sale, and (c) take possession or place custodians in control of Borrower’s premises
without charge, rent or payment, remain on and use the premises to preserve and prepare the Collateral for sale.

 

Section
7.4           Indemnification.

 

(a)          Borrower
will, to the fullest extent permitted by Law, indemnify and hold harmless Administrative Agent, Lenders and their respective Related
Parties (collectively, the “Indemnified Parties”) from and against all claims, injuries, damages, judgments, liabilities,
out-of-pocket costs and expenses (including the reasonable fees and expenses of counsel), charges and encumbrances (collectively,
“Claims”) arising from or related to:

 

(i)          asserting,
enforcing or defending the rights of any Indemnified Party under this Agreement or any of the other Loan Documents;

 

(ii)         creating,
perfecting, maintaining, or enforcing any Lien;

 

(iii)        taking
possession of, protecting, preserving and preparing for sale any of the Collateral when an Event of Default exists;

 

(iv)        the
acquisition, ownership or operation of any of the Collateral by Borrower or any other Person;

 

(v)         Borrower’s
proposed acquisition of any real or personal property;

 

(vi)        the
failure of Borrower or any other Person to comply with any Law (including any Environmental Law) or with the terms and conditions
of any Loan Document;

 

(vii)       the
inaccuracy of any representation or warranty made by Borrower or any other Person (other than any Indemnified Party) in any Loan
Document;

 

    	49

    	 

    

 

(viii)      the
failure of Borrower or any Operator to comply with any EHS Regulation or other Environmental Law, including with respect to the
presence, generation, storage, Release, threatened Release, use, transportation, disposal or arranging for the disposal or treatment
of any Hydrocarbons, Hydrocarbon waste, solid waste or Hazardous Substance on, under or from any of the Properties;

 

(ix)         any
finder’s, brokerage, financing or similar fees arising in connection with the transactions contemplated by this Agreement;
and

 

(x)          any
actual, threatened or prospective litigation, investigation or other proceeding relating to any of the foregoing, whether based
on contract, tort or any other legal or equitable theory and regardless of whether an Indemnified Party is a named party to the
proceeding.

 

(b)          The
indemnity obligation owing by Borrower to the Indemnified Parties under this Section 7.4:

 

(i)   
       will be not be limited, modified or excused by (A) any sole or concurrent
negligence of any Indemnified Party, whether through act or omission, or (B) any strict liability imposed on any Indemnified
Party; but

 

(ii)   
      will not be available to an Indemnified Party to the extent that the Claim is
determined by the final and non-appealable judgment of a court of competent jurisdiction to have resulted from the gross
negligence, bad faith or willful misconduct of that Indemnified Party.

 

(c)          Borrower
shall pay any amounts owing to an Indemnified Party under this Section 7.4 within 10 Business Days after Indemnified Party makes
a written demand for payment. If Borrower fails to timely pay the amounts owning under this Section 7.4:

 

(i)          if
the unpaid amount is owed to an Indemnified Party other than Administrative Agent or any Lender, Administrative Agent or such Lender
may (but will not be obligated to) remit the unpaid amount to that Indemnified Party on behalf of Borrower, in which case Borrower
shall reimburse Administrative Agent or such Lender upon demand; and

 

(ii)         if
Administrative Agent or any Lender is the Indemnified Party to whom the unpaid amount is owed (or if Borrower has failed to reimburse
Administrative Agent or such Lender for amounts due under Section 7.4(c)(i)), then Administrative Agent can, at its election, (A)
debit and apply funds from the Project Account (and Borrower authorizes and directs Administrative Agent to do so) to pay the amount
then owing to Administrative Agent or such Lender under this Section 7.4, or (B) capitalize the amount then owing and add them
to the Obligations.

 

(d)          Notwithstanding
anything to the contrary, any indemnified Taxes shall be covered exclusively by Section 1.15(c).

 

    	50

    	 

    

 

Article
VIII

CLOSING; CONDITIONS PRECEDENT

 

Section
8.1           Closing. The “Closing” of
this Agreement will occur when all of the conditions set forth in Article II and in Section 8.2 are either satisfied
or waived in writing by Administrative Agent; and the “Closing Date” will be the date on which the Closing
occurs.

 

Section
8.2           Conditions to Closing. As conditions to Closing:

 

(a)          Borrower
will execute and deliver to Administrative Agent each of the Loan Documents to which Borrower is a party;

 

(b)          Borrower
will Cause each other party (other than Administrative Agent and Lenders) to execute and deliver to Administrative Agent each of
the Loan Documents to which it is a party;

 

(c)          Borrower
will execute and deliver to Administrative Agent the first Advance Request;

 

(d)          Administrative
Agent will be satisfied, in its sole and absolute discretion, with the results of its business, financial, legal, title, engineering
and environmental due diligence of Borrower and the Properties;

 

(e)          Borrower
will deliver to Administrative Agent true and complete copies of each Permit required to be obtained by Borrower in connection
with the acquisition, ownership and operation of the Properties;

 

(f)          Borrower
will deliver to Administrative Agent its pro forma financial statements prepared in accordance with GAAP, except for the omission
of the notes required by GAAP, and subject to the assumptions stated and normal “year-end adjustments” and certified
as of the Closing Date by Borrower’s Authorized Officer as fairly presenting in all material respects the financial position
of Borrower after giving effect to this Agreement (including the payment of all fees and expenses payable in connection with this
Agreement and the initial Advance to be requested by Borrower under the Loan, if such an Advance is to be requested at Closing);
in addition, Borrower will have no contingent liabilities, liabilities for Taxes, unusual forward or long term commitments or unrealized
or unanticipated losses from any unfavorable commitments that are not disclosed in the financial statements;

 

(g)          Borrower
will deliver to Administrative Agent legal opinions satisfactory to Administrative Agent and its counsel;

 

(h)          Borrower
will deliver to Administrative Agent evidence of title reasonably satisfactory to Administrative Agent confirming that Borrower
holds Defensible Title to the Properties pursuant to Section 5.17;

 

(i)          Borrower
will deliver to Administrative Agent:

 

    	51

    	 

    

 

(i)          a
true and complete copy of resolutions satisfactory to Administrative Agent (A) authorizing Borrower’s execution and delivery
of the Loan Documents, the payment and performance of the Obligations, and the granting of the Liens contemplated by the Security
Documents, and (B) accompanied by the certification of an Authorized Officer that the resolutions have not been amended, repealed
or revoked as of the Closing Date;

 

(ii)         the
certification of an Authorized Officer as to the name, title and signatures of Persons authorized to execute Loan Documents on
behalf of Borrower; and

 

(iii)        true
and complete copies of Borrower’s Charter Documents and an original certificate of existence and/or good standing issued
by the Secretary of State of the jurisdictions in which Borrower is organized and conducts operations (in each instance, dated
as of a date acceptable to Administrative Agent), along with the certificate of an Authorized Officer that those Charter Documents
and certificates have not been amended, repealed or revoked and remain in effect on the Closing Date.

 

(j)      
    Administrative Agent will be reasonably satisfied with its review of Borrower’s management and
its back-office, accounting, business and administrative systems and functions;

 

(k)          Borrower
will provide any information required by Section 326 of the USA PATRIOT Act or deemed necessary in the reasonable opinion of Administrative
Agent to verify the identity of Borrower as required by Section 326 of the USA PATRIOT Act;

 

(l)      
    no Material Adverse Effect has occurred;

 

(m)          the
representations of each party to the Loan Documents are true, complete and correct;

 

(n)          no
suit or other proceeding is pending or threatened seeking to restrain, enjoin, declare illegal, recover damages from any Party
or seek any other relief in connection with the transactions contemplated in this Agreement;

 

(o)          Borrower
shall have reimbursed Administrative Agent for all Related Costs incurred by Administrative Agent for which invoices have been
presented to Borrower at least one Business Day prior to the Closing Date;

 

(p)          none
of the transactions contemplated by this Agreement are prohibited by Law;

 

(q)          an
environmental consultant Approved (not to be unreasonably withheld or delayed) by Administrative Agent will inspect the Properties
and deliver to Administrative Agent a reasonably satisfactory environmental site assessment of the Properties; and 

 

    	52

    	 

    

 

(r)    
      Administrative Agent will be satisfied with the terms of the Operating
Agreements.

 

Section
8.3           Conditions to the Making of Each Advance. The
following conditions must be either satisfied or waived in writing by Administrative Agent prior to the making of each Advance:

 

(a)          The
conditions described in Section 8.2 will continue to be satisfied with respect
to the Properties owned by Borrower at Closing or acquired by Borrower with the proceeds of an Advance;

 

(b)          Borrower
will prepare, execute and deliver an Advance Request to Administrative Agent and satisfy the conditions set forth in Article
I that relate to the requested Advance;

 

(c)          With
respect to any development activity to be funded with the proceeds of the requested Advance, the development activity is included
on the Development Plan and is the subject of an AFE or Reimbursement Request Approved
by Administrative Agent;

 

(d)          With
respect to any Properties acquired since the Closing Date or, with respect to any other Properties, to the extent not previously
delivered to Administrative Agent, Borrower will deliver to Administrative Agent documentation as Administrative Agent may reasonably
request to satisfy the conditions described in Section 8.2 with respect
to those additional Properties as if Borrower had owned them on the Closing Date (except that the representations and warranties
of Borrower with respect to those additional Properties will be made as of the date of the requested Advance);

 

(e)          Borrower
will obtain and deliver to Administrative Agent any additional Implementation Documents that Administrative Agent may reasonably
request;

 

(f)      
    Borrower will deliver to Administrative Agent a true and complete copy of the Operating Agreement(s)
for each Well to which the Advance Request relates to the extent not previously delivered to Administrative Agent, all of
which will be reasonably satisfactory to Administrative Agent;

 

(g)          No
Default exists or would result from the making of the requested Advance;

 

(h)          No
Material Adverse Effect exists or would result from the making of the requested Advance;

 

(i)     
     The representations of each party to the Loan Documents are true, complete and correct on the
date of which the requested Advance is to be made except to the extent any of those representations and warranties were made
as of and limited to an earlier date, in which case those representations and warranties continue to be true as of that
earlier date;

 

    	53

    	 

    

 

(j)  
        The making of the requested Advance will not cause any Lender to violate any
Law;

 

(k)          No
suit or other proceeding is pending or threatened seeking to restrain, enjoin, declare illegal, recover damages from any Party
or seek any other relief in connection with the transactions contemplated in this Agreement;

 

(l)     
     Borrower maintains a commodity price risk management program as required by Section
5.16;

 

(m)          Borrower
will deliver to Administrative Agent all insurance certificates required under this Agreement to the extent not previously delivered
pursuant to Section 5.8 and, if requested by Administrative Agent, true
and complete copies of any insurance policy maintained by Borrower;

 

(n)          There
will exist no past due bills for improvements or services to the Properties that could give rise to any Lien, including that of
a mechanic or materialman;

 

(o)          Administrative
Agent is satisfied, in its sole and absolute discretion, with the results of its due diligence examination of Borrower and the
Properties, including Borrower’s proposed development of the Properties, satisfactory information regarding existing Crude
Oil and Natural Gas sales, and all aspects of Borrower’s existing and contemplated Crude Oil and Natural Gas marketing activities;

 

(p)          Borrower
will deliver to Administrative Agent satisfactory releases of all Liens relating to the Properties that are not Permitted Encumbrances;

 

(q)          Borrower
will reimburse Administrative Agent for all Related Costs incurred by Administrative Agent for which invoices have been presented
pursuant to Section 12.9; 

 

(r)          Each
depositary bank at which Borrower maintains a deposit account will execute and deliver a Deposit Account Control Agreement to Administrative
Agent pursuant to Section 6.16 herein and Section 4.18 of the Security Agreement;

 

(s)          Borrower
will pay all fees due to Administrative Agent pursuant to Section 1.14;

 

(t)      
    Borrower will deliver to Administrative Agent, no later than 15 days prior to Borrower’s
submission of an Advance Request for the funding of development activities related to a Well, a drill site title opinion or
other evidence of title acceptable to Administrative Agent covering such new Well and showing Defensible Title to those
Properties on which the such new Well is located vested in Borrower subject only to the Permitted Encumbrances and the Liens
in favor of Administrative Agent pursuant to Section 5.17; 

 

    	54

    	 

    

 

(u)          The
mathematical average of the daily settlement prices for the next six months after the date of the Advance Request for futures contracts
for Crude Oil as reflected in the NYMEX must be equal to or greater than $70.00 per barrel; and

 

(v)  
       Borrower will provide documentary evidence satisfactory to Administrative Agent
that all seismic and other geological, geophysical, engineering and well data, interpretations and analyses relating to the
Properties to which the Advance Request relates is owned by Borrower, free of any encumbrance, subject only to the
Permitted Encumbrances and the Liens in favor of Administrative Agent.

 

Article
IX

EVENTS OF DEFAULT

 

Section
9.1           Events of Default. An “Event of Default”
will exist under this Agreement if:

 

(a)          Borrower
fails to pay when due any amount payable by Borrower to any Lender under the Promissory Note, this Agreement or any other Loan
Document, and that failure to pay continues for two Business Days after the date due;

 

(b)          Borrower
fails to comply with any material term of any Loan Document (except for a payment default described under Section 9.1(a)),
and that noncompliance continues for 20 days after the earlier of (i) the first date that Borrower becomes aware of its noncompliance
or (ii) the first date that Administrative Agent notifies Borrower of its noncompliance;

 

(c)          a
Termination Event, Additional Termination Event or Event of Default occurs under (i) the Swap Agreement or (ii) any other Hedging
Agreement, if such event, in each case, could reasonably be expected to have a Material Adverse Effect;

 

(d)          any
Obligor (other than Borrower) fails to comply with any material term of any Loan Document, and that noncompliance continues for
30 days after the earlier of (i) the first date that the Obligor becomes aware of its noncompliance or (ii) the first date that
Administrative Agent notifies the Obligor of its noncompliance;

 

(e)          Borrower
(i) executes an assignment for the benefit of its creditors, (ii) becomes or is adjudicated bankrupt or insolvent, (iii) admits
in writing its inability to pay its debts generally as they become due, (iv) applies for or consents to the appointment of a conservator,
receiver, trustee, or liquidator of Borrower or of all or any substantial part of its assets, (v) files a voluntary petition seeking
reorganization or an arrangement with creditors or to seek any other relief under any Debtor Relief Laws, (vi) files an answer
admitting the material allegations of or consenting to, or defaults in, a petition filed against it in any proceeding under any
Debtor Relief Laws, or (vii) institutes or voluntarily becomes a party to any other judicial proceedings intended to effect a discharge
of its debts, in whole or in part, or seeking to postpone the maturity or the collection of any of its debts or to suspend any
of the rights of Administrative Agent or any of its Affiliates under any of the Loan Documents; 

 

    	55

    	 

    

 

(f)          any
Person files a petition seeking reorganization of Borrower or appointing a conservator, receiver, trustee or liquidator of Borrower
or of a substantial part of its assets and the petition is not discharged within 90 days after its filing; 

 

(g)          a
court of competent jurisdiction enters an order, judgment or decree approving the reorganization of Borrower or appointing a conservator,
receiver, trustee or liquidator of Borrower, or of a substantial part of its assets, and the order, judgment or decree is not permanently
stayed or reversed within 60 days after its entry; 

 

(h)          any
certification or representation of Borrower or any other party (other than Administrative Agent, any Lender, any Affiliate of MBL
or any Affiliate of any Lender) in any Loan Document is determined by Administrative Agent to have been materially false when made
or deemed made;

 

(i)    
      any federal Tax Lien or any other Liens totaling $250,000 or more arise of record against
Borrower or the Properties, or if Borrower or one of its Affiliates is the Operator, the Operator is not fully bonded or
discharged within 30 days after Borrower receives actual or constructive notice of their filing unless (i) Borrower is
contesting the Lien(s) in good faith through appropriate proceedings timely filed and diligently prosecuted and against which
Borrower maintains adequate reserves in accordance with GAAP and (ii) all such Liens are fully bonded or discharged within 60
days after Borrower receives actual or constructive notice of their filing;

 

(j)    
      a judgment for more than $250,000 (or for any amount if the execution and
enforcement of that judgment could reasonably be expected to have a Material Adverse Effect) is entered against Borrower, or
if Borrower or one of its Affiliates is the Operator, or the Operator and not appealed and bonded or fully stayed, vacated,
paid or discharged within 30 days of its entry unless the judgment relates to a claim (i) that is fully covered by insurance
(less any deductible) and for which the insurance company has unconditionally accepted liability or (ii) for which Borrower
maintains adequate reserves in accordance with GAAP;

 

(k)          Borrower
fails to pay any Debt (other than the Obligations) in excess of $250,000 when due (whether at scheduled maturity or by acceleration,
demand or otherwise) and the failure to pay continues past the expiration of any applicable cure period unless (i) Borrower has
previously documented to the reasonable satisfaction of Administrative Agent the basis upon which Borrower intends to dispute the
Debt and (ii) Borrower maintains adequate reserves for the Debt in accordance with GAAP; 

 

(l)     
     Borrower, any other Obligor or any of their respective Affiliates, officers, directors or
members assert or allege that (i) any Loan Document is void, voidable, unenforceable or has otherwise ceased to be in full
force and effect (except in accordance with its terms), (ii) Borrower or any other Obligor is not bound by the Loan Documents
in accordance with their terms, or (iii) any Lien contemplated by any of the Security Documents is void, voidable,
unenforceable or has ceased to be perfected and/or to have the priority required by this Agreement;

 

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(m)         Borrower
fails to document to the reasonable satisfaction of Administrative Agent, within seven Business Days of Closing, that any Lien
on the Collateral (other than Permitted Encumbrances and Liens in favor of Administrative Agent) have been released or fully subordinated
to Administrative Agent;

 

(n)          if
Borrower has the legal right to Cause any Operator to comply with Laws applicable to the Properties, any Operator fails to comply
with any Laws applicable to the Properties and its noncompliance could reasonably be expected to have a Material Adverse Effect;

 

(o)          if
Borrower has the legal right to Cause or effect the choice of replacement Operator, any Operator is removed or withdraws and the
replacement Operator is not Approved (such Approval not to be unreasonably withheld or delayed) by Administrative Agent;

 

(p)          Borrower’s
Working Interest is increased or Net Revenue Interest is decreased from those set forth in Exhibit A
except in connection with Borrower’s acquisition of an additional Working Interest in the Properties in connection with which
Borrower contemporaneously realizes a proportionately higher Net Revenue Interest in the Properties that is not subject to reduction
at any time following the closing of the acquisition;

 

(q)          a
Change of Control occurs;

 

(r)          a
Material Adverse Effect occurs; or

 

(s)          Borrower
defaults under any of the Basic Documents and such default could reasonably be expected to have a Material Adverse Effect;

 

but the events described in Sections 9.1(h),
(k), (n) and (o)-(s) will constitute an Event of Default only if the event described is not remedied
by Borrower within 30 days after the earlier of (i) the first date that Borrower or any other Obligor, as applicable, becomes aware
of the occurrence of the event or (ii) Administrative Agent notifies Borrower or any other Obligor, as applicable, of the occurrence
of the event.

 

Article
X

REMEDIES OF LENDERS

 

Section
10.1         Remedies Generally.

 

(a)          Upon
an Insolvency. If an Event of Default exists under any of Sections 9.1(e)-(g), then (i) Lenders’ commitments
to make any additional Advances will automatically terminate and (ii) all amounts then outstanding under the Promissory Note together
with all other Obligations outstanding under this Agreement and the other Loan Documents (excluding the Swap Agreements) will
automatically become immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which
are waived by Borrower.

 

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(b)          Following
an Event of Default. If an Event of Default exists under Article IX other than under Sections 9.1(e)-(g),
Administrative Agent may, by notice to Borrower, take either or both of the following actions, at the same or different times:
(i) terminate Lenders’ commitments to make any additional Advances and (ii) declare all amounts then outstanding under the
Promissory Note together with all other Obligations outstanding under this Agreement and the other Loan Documents (excluding the
Swap Agreement) immediately due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration
or other notice of any kind, all of which are waived by Borrower.

 

(c)          Rights
of Administrative Agent. Following a termination of Lenders’ commitments under Section 10.1(a) or (b),
Administrative Agent may at any time exercise any or all of its rights arising under any of the Loan Documents, by operation of
Law or otherwise (all of which will be cumulative), including the right of a secured party under the UCC to peacefully enter upon
any premises where the Collateral is kept and take possession pending foreclosure.

 

Section
10.2         No Marshalling; Use of Collateral Pending Foreclosure; Etc.
Administrative Agent will have no obligation to preserve the rights of any other Person in or to any Collateral or to proceed
against the Collateral in any particular order or to marshal any Collateral of any kind for the benefit of any other creditor
of Borrower or any other Person. Borrower grants to Administrative Agent a royalty-free license or other right to use, at any
time that an Event of Default exists, Borrower’s labels, rights of use of any name, trade secrets, trade names, trademarks
and advertising matter, seismic data, reserve reports, databases or any property of a similar nature related to the Collateral
and necessary in connection with Administrative Agent preparing the Collateral for sale and advertising for and conducting one
or more foreclosure sales, and Borrower’s rights under all licenses and any franchise, sales or distribution agreements
will inure to Administrative Agent’s benefit.

 

Section
10.3         Set-Off Rights. If an Event of Default exists, Lenders
or Administrative Agent, on behalf of Lenders, may, at any time and from time to time, set off and apply against the Obligations
any and all deposits (general or special, time or demand, provisional or final) or other amounts at any time credited by or owing
from Lender or Administrative Agent, on behalf of Lenders, or any depositary to Borrower, whether or not the Obligations are then
due; but this Section 10.3 will not apply to any amounts previously identified in writing to Lender or Administrative Agent
as belonging to third party Working Interest and Royalty Interest owners. Lender or Administrative Agent, as applicable, will
provide notice to Borrower within ten days following the application of any funds under this Section 10.3.

 

Section
10.4         Rights Under Operating Agreements. If an Event of Default
exists, Administrative Agent or its designee may, upon Administrative Agent’s notice to Borrower, exercise any of Borrower’s
rights under any Operating Agreement or any other Basic Document.

 

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Section
10.5         Netting of Claims. If an Event of Default exists, Administrative
Agent, Lenders and Swap Counterparties, or any of them, may, without further notice to Borrower, setoff (a) any amount then due
and owing by Borrower to Swap Counterparty under the Swap Agreement or to Administrative Agent or Lenders under any other Loan
Document, as applicable, against (b) any amounts due and owing to Borrower or any other Obligor by Swap Counterparty under or
in respect of the Swap Agreement or by Administrative Agent or Lenders under or in respect of any other Loan Document, as applicable,
without regard (in the case of the preceding clause (b)) to whether such amounts arise by set off, offset, combination of accounts,
deduction, retention, counterclaim or withholding. If an amount is unascertainable, Administrative Agent, Lenders and Swap Counterparty,
or any of them, may, acting in a commercially reasonable matter, setoff an estimated amount and account to Borrower when the amount
is ascertained.

 

Section
10.6         All Rights and Remedies are Cumulative. Each of the rights
and remedies of Administrative Agent and Lenders under this Agreement and the other Loan Documents is cumulative and non-exclusive
of any other rights or remedies it may have under any other agreement, by operation of Law, at equity or otherwise.

 

Article
XI

ADMINISTRATIVE AGENT

 

Section
11.1         Appointment and Authorization of Administrative Agent.
Subject to Section 11.19 below, each Lender hereby irrevocably appoints, designates and authorizes the Administrative Agent
to act as its agent under the Loan Documents, and to take such action on its behalf under the provisions of each Loan Document
and to exercise such powers and perform such duties as are expressly delegated to it by the terms of any Loan Document, together
with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained in any Loan Document,
Administrative Agent shall not have any duties or responsibilities, except those expressly set out herein, nor shall the Administrative
Agent have or be deemed to have any fiduciary relationship with any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into any Loan Document or otherwise exist against Administrative
Agent. Without limiting the generality of the foregoing, the use of the term “Administrative Agent” in the Loan Documents
with reference to Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising
under agency doctrine of any applicable law. Instead, such term is used merely as a matter of market custom, and is intended to
create or reflect only an administrative relationship between independent contracting parties.

 

Section
11.2         Delegation of Duties. Administrative Agent may execute
any of its duties under any Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice
of counsel and other consultants or experts concerning all matters pertaining to such duties. Administrative Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects in the absence of gross negligence
or willful misconduct on the part of Administrative Agent.

 

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Section
11.3         Liability of Administrative Agent. No Related Party of
Administrative Agent shall (a) be liable for any action taken or omitted to be taken by any of them under or in connection with
any Loan Document or the transactions contemplated hereby and thereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set out herein), or (b) be responsible in any manner to any Lender or participant for
any recital, statement, representation or warranty made by Borrower or any officer thereof, contained in any Loan Document, or
in any certificate, report, statement or other document referred to or provided for in, or received by Administrative Agent under
or in connection with any Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of any Loan
Document, or for any failure of Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder.
No Related Party of Administrative Agent shall be under any obligation to any Lender or participant to ascertain or to inquire
as to the performance of any of the agreements contained in, or conditions of, any Loan Document, or to inspect the Properties,
books or records of Borrower or any Affiliate thereof.

 

Section
11.4         Reliance by Administrative Agent.

 

(a)          Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, electronic mail
message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to Borrower), independent
accountants and other experts selected by the Administrative Agent. Administrative Agent shall be fully justified in failing or
refusing to take any action under any Loan Document unless it shall first receive such advice or concurrence of the Required Lenders
as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by Lenders against any and all
liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting, under any Loan Document in accordance with a request
or consent of the Required Lenders (or such greater number of Lenders as may be expressly required hereby in any instance) and
such request and any action taken or failure to act pursuant thereto shall be binding upon all Lenders.

 

(b)          For
purposes of determining compliance with the conditions specified in Article VIII,
each Lender shall, where applicable, be deemed to have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless Administrative
Agent shall have received notice from such Lender prior to the Closing Date or Advance date, as applicable, specifying its objection
thereto.

 

Section
11.5         Notice of Default. Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default, except with respect to defaults in the payment
of principal, interest and fees required to be paid to Administrative Agent for the account of Lenders, unless Administrative
Agent shall have received written notice from a Lender or Borrower referring to the Agreement, describing such Default or Event
of Default and stating that such notice is a “notice of default.” Administrative Agent will notify Lenders of its
receipt of any such notice. Administrative Agent shall take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest of Lenders.

 

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Section
11.6         Credit Decision; Disclosure of Information by Administrative
Agent. Each Lender acknowledges that no Related Party of Administrative Agent has made any representation or warranty to it,
and that no act by Administrative Agent hereafter taken, including any consent to and acceptance of any assignment or review of
the affairs of Borrower or any Affiliate thereof, shall be deemed to constitute any representation or warranty by any Related
Party of Administrative Agent to any Lender as to any matter, including whether such Related Party of Administrative Agent have
disclosed material information in their possession. Each Lender represents to Administrative Agent that it has, independently
and without reliance upon any Related Party of Administrative Agent and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other
condition and creditworthiness of Borrower and its Affiliates, and all applicable bank or other regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit to Borrower under
this Agreement. Each Lender also represents that it will, independently and without reliance upon any Related Party of Administrative
Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations
as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower. Except for notices, reports and other documents expressly required to be furnished to Lenders by
Administrative Agent herein, Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness
of any of Borrower or any of its Affiliates which may come into the possession of any Related Party of Administrative Agent.

 

Section
11.7         Indemnification of Administrative Agent. Whether or not
the transactions contemplated hereby are consummated, Lenders shall indemnify upon demand each Related Party of Administrative
Agent (to the extent not reimbursed by or on behalf of Borrower and without limiting the obligation of Borrower to do so), pro
rata, and hold harmless each Related Party of Administrative Agent from and against any and all liabilities and costs incurred
by it; provided that no Lender shall be liable for the payment to any Related Party of Administrative Agent of any portion of
such liabilities and costs to the extent determined in a final, non-appealable judgment by a court of competent jurisdiction to
have resulted from such Related Party’s or Administrative Agent own gross negligence or willful misconduct; provided further
that no action taken in accordance with the directions of the Required Lenders shall be deemed to constitute gross negligence
or willful misconduct for purposes of this Section 11.7. Without limitation of the foregoing, each Lender shall reimburse Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including attorneys’ fees and expenses)
incurred by Administrative Agent in connection with the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities
under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that Administrative
Agent is not reimbursed for such expenses by or on behalf of Borrower. The undertaking in this Section 11.7 shall survive termination
of the Note Amount, the payment of all other obligations and the resignation of Administrative Agent.

 

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Section
11.8         Administrative Agent in its Individual Capacity. MBL and
its Affiliates may make loans to, acquire Equity Interests in and generally engage in any kind of financial advisory, underwriting
or other business with Borrower and its Affiliates as though MBL were not Administrative Agent hereunder and without notice to
or consent of Lenders. Lenders acknowledge that, pursuant to such activities, MBL or its Affiliates may receive information regarding
Borrower or its Affiliates (including information that may be subject to confidentiality obligations in favor of Borrower or such
Affiliate), and Lenders further acknowledge that Administrative Agent shall be under no obligation to provide such information
to any of them. With respect to its Advances, MBL, in its individual capacity as a Lender, shall have the same rights and powers
under this Agreement as any other Lender and may exercise such rights and powers as though it were not Administrative Agent and
the terms “Lender” and “Lenders” include MBL in its individual capacity.

 

Section
11.9         Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided in this Section 11.9, Administrative Agent may resign as
Administrative Agent upon 30 days’ notice to Lenders and Administrative Agent may be removed at any time with or without
cause by the Required Lenders. If Administrative Agent resigns or is removed under this Agreement, the Required Lenders shall
appoint from among Lenders a successor Administrative Agent for Lenders. Such appointment will be made with the consent of Borrower
(such consent not to be unreasonably withheld, conditioned or delayed) unless an Event of Default exists, in which case Borrower’s
consent will not be required. If no successor Administrative Agent is appointed prior to the effective date of the resignation
or retirement of Administrative Agent, Administrative Agent may appoint, after consulting with Lenders and Borrower, a successor
Administrative Agent from among Lenders. Upon the acceptance of its appointment as successor Administrative Agent hereunder, the
Person acting as such successor Administrative Agent shall succeed to all the rights, powers and duties of the retiring or removed
Administrative Agent and the term “Administrative Agent” shall mean such successor Administrative Agent and the retiring
or removed Administrative Agent’s appointment, powers and duties as Administrative Agent shall be terminated. After any
retiring Administrative Agent’s resignation or removal hereunder as Administrative Agent, the provisions of this Article
XI shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under
this Agreement. If no successor Administrative Agent has accepted appointment as Administrative Agent by the date which is 30
days following a retiring Administrative Agent’s notice of resignation, the retiring or removed Administrative Agent’s
resignation or removal shall nevertheless thereupon become effective and Lenders shall perform all of the duties of Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above.

 

Section
11.10         Administrative Agent May File Proofs of Claim. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to Borrower, Administrative Agent (irrespective of whether the principal of Loan shall then
be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall
have made any demand on Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

 

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(a)          to
file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loan, and all other
Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims
of Lenders and Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances
of Lenders and Administrative Agent and their respective Related Parties and counsel and all other amounts due Lenders and Administrative
Agent under Section 1.12 and Section 12.9
allowed in such judicial proceeding; and

 

(b)          to
collect and receive any monies or other property payable or deliverable in respect of any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall
consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of Administrative Agent and its Related Parties and counsel, and any other amounts due Administrative
Agent under Section 1.12 and Section 12.9.

 

Nothing contained herein shall be deemed
to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization,
arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

Section
11.11      Collateral Matters.

 

(a)          Collateral
Matters.

 

(i)          Each
Lender authorizes and directs Administrative Agent to enter into the Security Documents for the ratable benefit of Lenders. Each
Lender agrees that (A) any action taken by Administrative Agent in respect of any Collateral in accordance with the provisions
of this Agreement or the Security Documents and (B) the exercise by the Administrative Agent of powers in respect of the Collateral
set out in any Security Documents, together with other reasonably incidental powers, shall be authorized by and binding upon all
Lenders.

 

(ii)         In
the event any Lien under any Security Document is, on its face, granted to a Lender rather than to Administrative Agent (for the
ratable benefit of all Lenders), the Administrative Agent, Lenders, and Borrower confirm that it is their intent that all such
Liens shall be granted (or deemed granted) to Administrative Agent for the ratable benefit of all Lenders. All such Security Documents
are hereby amended to the extent necessary to reflect that the Liens granted under those Security Documents are granted to Administrative
Agent (for the ratable benefit of all Lenders), and Borrower hereby grant all Liens under all Security Documents to Administrative
Agent, for the ratable benefit of Lenders.

 

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(iii)        Administrative
Agent is authorized on behalf of all Lenders, without the necessity of any notice to or further consent from any Lender, from time
to time while no Default or Event of Default exists, to take any action with respect to any Collateral or Security Documents that
may be necessary to perfect and maintain the perfection of the Liens upon the Collateral granted by the Security Documents.

 

(iv)        Administrative
Agent has no obligation whatsoever to any Lender or to any other Person to assure that the Collateral exists or is owned by the
party pledging the Collateral or is cared for, protected or insured or has been encumbered or that the Liens granted to Administrative
Agent for the benefit of Lenders under the Security Documents have been properly or sufficiently or lawfully created, perfected,
protected or enforced, or are entitled to any particular priority.

 

(v)         Administrative
Agent shall exercise the same care and prudent judgment with respect to the Collateral and the Security Documents as it normally
and customarily exercises in respect of similar collateral and security documents.

 

(b)          Release
Collateral. Lenders irrevocably authorize Administrative Agent, at its option and in its discretion, to release any Lien or
encumbrance on any property granted to or held by Administrative Agent under any Loan Document or Security Document (i) upon termination
of the Note Amount and payment in full of all Obligations (other than contingent indemnification obligations), (ii) that is sold
or to be sold as part of or in connection with any sale permitted under the Agreement or under any other Loan Document, or (iii)
if approved, authorized or ratified in writing by the Required Lenders.

 

(c)          Subordinate
Liens. Lenders irrevocably authorize Administrative Agent, at its option and in its discretion, to subordinate any Lien or
encumbrance on any property granted to or held by Administrative Agent under any Loan Document or Security Document to the holder
of any Lien or encumbrance on such property that constitutes a purchase money lien or a capital lease.

 

(d)          Confirm
Authority. Upon request by Administrative Agent at any time, the Required Lenders will confirm in writing Administrative Agent’s
authority to release or subordinate its interest in particular types or items of property.

 

Section
11.12       Advance Procedure.

 

(a)          Subject
to compliance with Section 1.4 and Article VIII,
Borrower may request the Advance of the Loan by submitting an Advance Request to Administrative Agent, and Administrative Agent
shall promptly notify each Lender of the Advance Request and its contents. An Advance Request is irrevocable and binding on Borrower.
Each Advance Request must be received by Administrative Agent no later than 12:00 p.m. Houston, Texas, Time on the third (3rd)
Business Day preceding the proposed Advance date.

 

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(b)          By
11:00 a.m. Houston, Texas, time on the Advance date, each Lender shall remit its Percentage Share of each requested Advance
by wire transfer to Administrative Agent pursuant to Administrative Agent’s wire transfer instructions on Appendix B
(or as otherwise directed by Administrative Agent) in funds that are available for immediate use by Administrative Agent.
Subject to receipt of such funds, Administrative Agent shall make such funds available to Borrower as directed in the Advance
Request (unless it has actual knowledge that any applicable condition precedent has not been satisfied by Borrower).

 

(c)          Absent
contrary written notice from a Lender, Administrative Agent may assume that each Lender has made its Percentage Share of the requested
Advance available to Administrative Agent on the applicable Advance date, and Administrative Agent may, in reliance upon such assumption
(but is not required to), make available to Borrower a corresponding amount. If a Lender fails to make its Percentage Share of
any requested Advance available to Administrative Agent on the applicable Advance date, Administrative Agent may (to the extent
such amount was actually advanced to Borrower) recover the applicable amount on demand from that Lender, together with interest
at the Prime Rate for the period commencing on the date the amount was made available to Borrower by Administrative Agent and ending
on (but excluding) the date Administrative Agent recovers the amount from that Lender.

 

Section
11.13      Payments. Borrower shall make each payment on the Obligations
as provided in this Agreement, provided that all such payments shall be paid to Administrative Agent and shall be without offset,
counterclaim or deduction. Any payment of the Obligations from Borrower or any of its Affiliates which is received by any Lender
(including under Section 10.4), shall be promptly forwarded to Administrative Agent. Payments received after the designated
time will be deemed received on the next Business Day. Administrative Agent shall pay each Lender any payment to which that Lender
is entitled on the Business Day following the day Administrative Agent receives the funds from Borrower. If and to the extent
that Administrative Agent does not make a payment to Lenders when due, the unpaid amounts shall accrue interest at the Prime Rate
from the due date until (but not including) the date paid and such interest shall be paid by Administrative Agent to that Lender.

 

Section
11.14       Application of Payments.

 

(a)          If
no Default or Event of Default then exists, all scheduled payments shall be applied ratably in accordance with Section
1.9(b) above.

 

(b)          If
no Default or Event of Default then exists, all prepayments shall be applied ratably in accordance with Section 1.9(b)
above.

 

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(c)          All
proceeds realized from the liquidation or other disposition of Collateral or otherwise received after maturity of the Promissory
Notes, whether by acceleration or otherwise, shall be applied: first, to reimbursement of expenses and indemnities provided for
in this Agreement and the Security Documents; second, to accrued interest on the Promissory Notes; third, to fees; fourth, pro
rata to principal outstanding on the Promissory Notes and Obligations in respect of the Swap Agreement; fifth, to any other Obligations;
and any excess shall be paid to the Borrower or as otherwise required by any Governmental Authority.

 

Section
11.15      Liens. The Liens granted by Borrower under the Loan Documents
are granted to Administrative Agent for the ratable benefit of Lenders and Swap Counterparty.

 

Section
11.16      Payment Priority. The right of each Lender to receive
any payments or prepayments under or in respect of the Agreement, any Loan Document, or any Collateral shall be pari passu
with the payment rights of all other Lenders acting in their capacity as a Lender pursuant to this Agreement, provided that
payments of principal and interest will be allocated to each Lender in accordance with its Percentage Share of such payment or
prepayment.

 

Section
11.17       Sharing of Payments by Lenders. If any Lender shall,
by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on
any of its Advances or fees resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its
Advances or fees and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the Advances or fees of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Advances; provided that (a) if any such participations are purchased
and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (b) the provisions of this Section 11.17 shall not
be construed to apply to any payment made by Borrower pursuant to and in accordance with the express terms of this Agreement or
any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Advances to any
assignee or participant, other than to Borrower or any Affiliate thereof (as to which the provisions of this Section 11.17
shall apply). Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law,
that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower rights of set-off
and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrower in the amount
of such participation.

 

Section
11.18      Relationship of Lenders. This Agreement, and the documents
delivered in connection herewith, does not create a partnership or joint venture among Administrative Agent and Lenders or among
Lenders.

 

Section
11.19      Actions by Administrative Agent. Notwithstanding Section
11.1 above, Administrative Agent shall not take any of the following actions (collectively, the “Material Changes”):

 

(a)          increase
the Commitment of any Lender without the written consent of such Lender;

 

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(b)          reduce
the principal amount of any Advance or reduce the rate of interest thereon, or reduce any fees payable hereunder, or reduce any
other Obligations hereunder or under any other Loan Document, without the written consent of each Lender affected thereby;

 

(c)          postpone
the scheduled date of payment of the principal amount of any Advance, or any interest thereon, or any fees payable hereunder, or
any other Obligations hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment, or
postpone or extend the Availability Termination Date without the written consent of each Lender affected thereby;

 

(d)          change
this Agreement in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each
Lender;

 

(e)          release
any of the Collateral (except as expressly provided in Section 11.11(b));

 

(f)          change
Section 5.20, without the written consent of each Lender; or

 

(g)          change
(i) any of the provisions of this Section 11.19, (ii) the definition of
“Required Lenders” or (iii) any other provision hereof specifying the number or percentage of Lenders required to (A)
waive, amend or modify any rights hereunder or under any other Loan Documents or (B) make any determination or grant any consent
hereunder or any other Loan Documents, without the written consent of each Lender.

 

Section
11.20       Replacement of Lenders.

 

(a)          If
any Lender becomes a Defaulting Lender, then (i) Administrative Agent may, upon notice to the Defaulting Lender and Borrower, require
such Defaulting Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in,
and consents required by, Section 12.1), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee, pursuant to the terms and conditions of Section
12.1, that shall assume such obligations (which assignee may be another Lender, if
a Lender accepts such assignment) and (ii) Borrower may, as long as no Event of Default exists and upon notice to the Defaulting
Lender and Administrative Agent and at Borrower’s sole cost and expense, require such Defaulting Lender to assign, without
recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 12.1),
all of its interests, rights and obligations under this Agreement and the related Loan Documents to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(A)         as
to assignments required by Borrower, Borrower shall have paid to Administrative Agent the expenses specified in Section 12.1;

 

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(B)         such
Defaulting Lender shall have received payment of an amount equal to the outstanding principal of its Advances, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any Breakage
Costs) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or Borrower (in the case of
all other amounts);

 

(C)         any
such assignment is consistent with the requirements of Section 12.1;

 

(D)         such
assignment does not conflict with applicable Law; and

 

(E)         the
proposed agreement, amendment, waiver, consent or release with respect to this Agreement or any other Loan Document has been Approved
by the Required Lenders and such agreement, amendment, waiver, consent or release can be effected as a result of the assignment
contemplated by this Section.

 

(b)          A
Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender
or otherwise, the circumstances entitling Borrower to require such assignment and delegation cease to apply. Solely for purposes
of effecting the assignment required for a Defaulting Lender under this Section 11.20
and to the extent permitted under applicable Law, each Lender hereby designates and appoints Administrative Agent as true and lawful
agent and attorney-in-fact, with full power and authority, for and on behalf of and in the name of such Lender to execute, acknowledge
and deliver the assignment required hereunder if such Lender was a Defaulting Lender and such Lender shall be bound thereby as
fully and effectively as if such Lender had personally executed, acknowledged and delivered the same. In lieu of Borrower or Administrative
Agent replacing a Defaulting Lender as provided in this Section 11.20, Borrower
may terminate such Defaulting Lender’s Percentage Share as provided herein.

 

Article
XII

MISCELLANEOUS

 

Section
12.1         Assignment.

 

(a)          This
Agreement is entered into for the benefit of Borrower and Lenders and their respective successors and permitted assignees; it will
be binding upon and inure to the benefit of those parties and their respective successors and permitted assignees. Neither the
rights nor the obligations of Borrower or any other Obligor under any of the Loan Documents may be assigned without the Consent
of Administrative Agent. Each Lender may, upon notice to Borrower, assign any of such Lender’s rights and obligations under
any of the Loan Documents (i) to any Affiliate of such Lender at any time, or (ii) to any other Person if an Event of Default exists.
If no Event of Default exists, each Lender may assign any of its rights and obligations to any Person that is not an Affiliate
upon the prior written consent of Borrower, such consent not to be unreasonably withheld, delayed or conditioned.

 

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(b)          If
any Lender makes an assignment pursuant to Section 12.1(a), Borrower shall,
at its expense, execute and deliver to such Lender and the assignee such documents as such Lender may reasonably request in connection
with that transaction, including the issuance of one or more replacement Promissory Notes. In addition, any Person that owns or
acquires an interest in the Loan can (as long as Borrower’s rights and obligations hereunder are not adversely affected)
grant a Lien over that interest to its own lender(s) to secure any Debt.

 

Section
12.2         Notices.

 

(a)          Addresses
for Notices. Any notice, demand or document which either party is required or may desire to give to the other will be in writing
and, except as otherwise provided in this Agreement, given by messenger, nationally recognized courier, overnight delivery, facsimile
or other electronic transmission, or United States certified mail, postage prepaid, return receipt requested, addressed to the
recipient at the location shown below, or at any other address as either party may furnish to the other by notice given in accordance
with this provision.

 

If to Administrative Agent, to:

 

	 	Macquarie Bank Limited
	 	Level 15, No. 1 Martin Place
	 	Metals and Energy Capital
	 	Sydney
	 	New South Wales 2000
	 	Australia
	 	Attention:	Executive Director
	 	Telephone:	+61 2 8232 3333
	 	Facsimile:	+61 2 8232 3590
	 	E-Mail:	katie.choi@macquarie.com

 

with a copy to:

 

	 	Macquarie Bank Limited
	 	Houston Representative Office
	 	500 Dallas Street, Suite 3250
	 	Houston, Texas  77002
	 	Attention:	Michael Sextro
	 	Telephone:	(713) 275-6207
	 	Facsimile:	(713) 275-6222
	 	E-Mail:	MECLoansHouston@macquarie.com

 

If to Borrower, to its principal
place of business at:

 

	 	Voyager Oil & Gas, Inc.
	 	1600 Broadway, Suite 1040
	 	Denver, Colorado  80202
	 	Attention:	Mitch Thompson
	 	Telephone:	(406) 245-4901
	 	Facsimile:	(406) 245-4914
	 	E-Mail:	mitch.thompson@voyageroil.com

 

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If a notice is to be sent to any other
Obligor, it will be sent to Borrower and to the address set forth in Loan Document to which that Obligor is a party.

 

(b)          Notice
is Effective Upon Receipt. Any notice delivered or made by messenger, facsimile, electronic mail or United States mail will
be deemed to be given on the date of actual delivery as shown by messenger receipt, the sender’s facsimile machine confirmation
or other verifiable electronic receipt, or the registry or certification receipt.

 

(c)          Unintelligible
E-Mail Messages. Notwithstanding Section 12.2(b), if either party receives from the other any message via electronic
mail that purports to be a notice under this Agreement but that contains information that is syntactically incorrect, garbled
or otherwise unintelligible, the recipient will promptly (and in any event within one Business Day) notify the sender. If the
recipient so notifies the sender, then the notice will not be deemed to be given until it is successfully delivered (including
redelivery by electronic mail) pursuant to this Section 12.2.

 

(d)          When
Oral Notice is Effective. If Administrative Agent receives oral notice from an Authorized Officer that an event or circumstance
has occurred that would constitute a Default under this Agreement, Administrative Agent is conclusively entitled to rely on that
notice from the date that it is received and as if it had been given in writing pursuant to this Section 12.2. If a discrepancy
exists or arises between that oral notice and any written confirmation received by Administrative Agent from Borrower (or in the
absence of a written confirmation), the oral notice, as reasonably understood by Administrative Agent, will be deemed the controlling
notice for all purposes.

 

Section
12.3         Waivers; Amendments; Schedules.

 

(a)          No
(i) restraint or delay by Administrative Agent in exercising any of its rights or remedies under the Loan Documents (regardless
of the length of that delay), (ii) abandonment or suspension by Administrative Agent of any efforts to assert or enforce any of
those rights or remedies, or (iii) alleged course of conduct or course of dealing between Administrative Agent, Lenders and any
other Person, will operate as a waiver or limitation of any of the rights and remedies of Administrative Agent or Lenders under
the Loan Documents.

 

(b)          No
single or partial exercise by Administrative Agent or Lenders of any right or remedy under the Loan Documents will preclude any
other or further exercise of the same—or any other—right or remedy of Administrative Agent or Lenders under the Loan
Documents.

 

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(c)          No
waiver by Administrative Agent or Lenders of any right or remedy under the Loan Documents—nor any consent by Administrative
Agent or Lenders to Borrower’s non-compliance with any provision of the Loan Documents—will be effective unless it
is in writing and signed by Administrative Agent or Lenders, as applicable. Any written waiver or consent given by Administrative
Agent or Lenders will be effective only in the specific instance and for the specific purpose for which it is given. The making
of an Advance will not constitute a waiver of any Default, even if the Administrative Agent or Lenders had notice of the Default
at the time the Advance was made.

 

(d)          Should
any of the information or disclosures provided on any of the Schedules originally attached hereto become outdated or incorrect
in any material respect, Borrower shall deliver to Administrative Agent within thirty (30) days after the end of the month in which
such change occurs, along with the compliance certificate required under Section 4.3,
such revisions or updates to such Schedule(s) as may be necessary or appropriate to update or correct such Schedule(s); provided
that no such revisions or updates to any Schedule(s) shall be deemed to have amended, modified or superseded such Schedule(s) as
originally attached hereto, or to have cured any breach of warranty or representation resulting from the inaccuracy or incompleteness
of any such Schedule(s), unless and until Administrative Agent shall have Approved in writing such proposed revisions or updates
to such Schedule(s). Without limiting the generality of the foregoing or of Section 4.3,
each representation and warranty contained in this Agreement and the other Loan Documents shall be continuous in nature and shall
remain accurate, complete and not misleading in all material respects at all times during the term of this Agreement, except for
revisions or updates to any Schedule(s) approved by Administrative Agent pursuant to the preceding sentence and such changes in
the circumstances of Borrower that are expressly permitted under this Agreement.

 

Section
12.4         Confidentiality; Permitted Disclosures.

 

(a)          For
as long as this Agreement is in effect and for twelve months thereafter, unless disclosure is authorized under Section
12.4(b) or (c),

 

(i)          Borrower
will keep confidential the Loan Documents and the terms and conditions of the Loan extended to it by Lenders under this Agreement,

 

(ii)         Administrative
Agent and Lenders will keep confidential all agreements, documents, certificates, reports, and other information delivered to it
by Borrower under this Agreement.

 

(b)          Notwithstanding
that Section 12.4(a) would otherwise require it to maintain such information
in confidence, either party may disclose confidential information described in Section 12.4(a):

 

(i)          where
the disclosure is required by Law but, to the extent practicable and if the disclosing party can lawfully do so, it first gives
prompt written notice of the planned disclosure to the other party;

 

(ii)         if
the information becomes known to the disclosing party through a source that is not subject to a confidentiality obligation with
respect to that same information;

 

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(iii)        in
connection with any court or arbitration proceeding to enforce or interpret any of the Loan Documents;

 

(iv)        to
its attorneys, accountants, engineers and other advisors and consultants if (A) the disclosure of the confidential information
is reasonably necessary to facilitate their representation of Borrower and (B) prior to disclosure, the disclosing party makes
the recipient aware of (and obtains, for the express benefit of the party to whom the confidentiality obligation is owed, the recipient’s
agreement to comply with) the confidentiality obligations imposed by this Section 12.4.

 

(c)          In
addition, and notwithstanding that Section 12.4(a) would otherwise require
it to maintain such information in confidence, Administrative Agent and Lenders may disclose confidential information described
in Section 12.4(a):

 

(i)          to
create, perfect, maintain or continue any Lien in favor of Administrative Agent, for the ratable benefit of each Lender or the
Swap Counterparty;

 

(ii)         in
connection with the exercise of any right or remedy of Administrative Agent under the Loan Documents or under any Law, including
the publication of notices related to any public or private foreclosure sale; or

 

(iii)        to
potential lenders, participants, assignees and investment bankers and their respective attorneys, accountants, engineers and other
advisors and consultants if (A) disclosure of the confidential information is reasonably necessary to facilitate their representation
of the disclosing party and (B) prior to disclosure, the disclosing party makes the recipient aware of (and obtains, for the express
benefit of the party to whom the confidentiality obligation is owed, the recipient’s agreement to comply with) the confidentiality
obligations imposed by this Section 12.4.

 

(d)          Neither
party will issue (or allow the issuance of) any press release or other public announcement relating to the Loan without the prior
written consent of the other party; but each of them may each publish a customary “tombstone” announcement regarding
the Loan.

 

(e)          This
Section 12.4 supersedes any prior agreement between Administrative Agent,
Lenders and Borrower or any of its Affiliates regarding the confidentiality of information described in Section 12.4(a)(ii).

 

Section
12.5         Form of Documents. In all instances where this Agreement
or any other Loan Document requires Borrower to (or to Cause another Person to) prepare, execute or deliver any document to Administrative
Agent, the document will be in form and substance reasonably satisfactory to Administrative Agent

 

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Section
12.6         Third-Party Beneficiaries. Except for the benefits expressly
transferred to a permitted assignee under Section 12.1, the benefits of this Agreement will not inure to any Person other
than Borrower, Administrative Agent and Lenders. None of the Loan Documents will be construed to create any rights, claims or
causes of action against Administrative Agent or Lenders or any of their respective Related Parties by any Person other than Borrower,
notwithstanding anything contained in any Loan Document or any course of dealing or course of conduct by any party or its representatives
before or after signing this Agreement.

 

Section
12.7         Governing Law; Venue.

 

(a)          The
Loan Documents (except to the extent any of the Security Documents are deemed to be performable in another jurisdiction) and the
transactions contemplated by them are to be performed in the State of Texas. Except to the extent the Laws of another jurisdiction
are mandatorily applicable, all of the Loan Documents and the transactions contemplated by them are to be governed by, interpreted
and construed under and enforced pursuant to the Laws of the State of Texas, regardless of that jurisdiction’s conflicts
of laws provisions.

 

(b)          The
parties agree that any proceeding arising from or related to the Loan Documents or the transactions contemplated by them will be
brought exclusively in the State and Federal courts located in Harris County, Texas. This choice of venue is intended by the parties
to be (a) mandatory and not permissive in nature and (b) preclude any party from commencing or maintaining any proceeding against
another party in any jurisdiction other than the State and Federal courts located in Harris County, Texas if that proceeding arises
from or is related to the Loan Documents or the transactions contemplated by them. Each party irrevocably waives any right it may
have to assert the doctrine of forum non conveniens or similar doctrine or to object to venue with respect to any proceeding commenced
or maintained in accordance with this Section 12.7(b). Each party stipulates that the State and Federal courts located in Harris
County, Texas shall have in personam jurisdiction and venue over each of them in connection with any proceeding arising out of
or related to the Loan Documents or the transactions contemplated by them. Any final judgment rendered against a party in any proceeding
will be conclusive with respect to the subject matter of that final judgment and may be enforced in any jurisdiction in any manner
provided by Law.

 

Section
12.8         Waiver of Jury Trial, Punitive Damages, Etc. Borrower,
Administrative Agent and Lenders each:

 

(a)          knowingly,
voluntarily, intentionally and irrevocably waive, to the maximum extent not prohibited by Law, any right it may have to (i) a trial
by jury in any connection with any litigation arising from or related to the Loan, the Loan Documents or any transaction contemplated
by any of the Loan Documents, whether before or after the Maturity Date, or (ii) claim or recover in any such litigation any Special
Damages;

 

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(b)          represent
and warrant to the other that the party making the representation is not relying on any representation, understanding or suggestion
(whether express or implied) by the other party that the other party would not, in the event of litigation, seek to enforce the
waivers in Section 12.8(a); and

 

(c)          acknowledge
that its waivers, representations and warranties in this Section 12.8 constitute a material inducement to the other party to enter
into the transactions contemplated by this Agreement and the other Loan Documents.

 

Section
12.9         Fees, Costs and Expenses. Borrower will promptly (and,
in any event, within 30 days after the presentation of any invoice by Administrative Agent) pay (a) all Related Costs, (b) all
transfer, stamp, mortgage, documentary or other similar Taxes, assessments or charges levied by any Taxing Authority in connection
with the Loan Documents or the transactions contemplated by them, (c) all reasonable out-of-pocket costs and expenses incurred
by or on behalf of Administrative Agent and Lenders (including the reasonable fees, expenses and disbursements of its attorneys
and consultants) in connection with (i) preparing the Loan Documents and any modifications to them, (ii) filing, recording and
registering any Security Documents, (iii) making Advances, (iv) administering the Loan and monitoring Borrower’s compliance
with the Loan Documents, (v) enforcing Administrative Agent or Lender’s rights and remedies under the Loan Documents, and
(vi) investigating, prosecuting or defending any claim or alleged claim arising under or in connection with the Loan Documents
and the transactions contemplated by them.

 

Section
12.10       Compliance with Usury Laws.

 

(a)          Administrative
Agent, Lenders, Borrower and the other Obligors intend to comply with all applicable usury Laws, whether existing on the date of
this Agreement or to be enacted in the future. As such, and notwithstanding any provision of any Loan Document, no Loan Document
will be construed to require the payment or permit the collection of interest in excess of the maximum amount permitted by Law.

 

(b)          If
ever the performance of any provision of any Loan Document will resulting in the charging or collection of interest in excess of
the maximum amount permitted by Law, then the obligation to be fulfilled will, ipso facto, be reduced to the allowable limit. In
addition, if Administrative Agent or Lenders ever receive under any Loan Document anything of value as interest or that is deemed
to be interest under Law such the amount of interest received by Administrative Agent or Lender would exceed the Highest Lawful
Rate, then (i) the amount that would otherwise constitute excessive interest will instead be applied by Administrative Agent as
a prepayment of the principal outstanding under the Promissory Note or on account of any other Obligations, and (ii) if no such
principal amount or Obligations exists, then Administrative Agent or such Lender will refund the excess amount to Borrower.

 

(c)          In
determining whether or not the interest paid or payable under the Loan Documents exceeds the Highest Lawful Rate, Borrower, Administrative
Agent and Lenders will, to the maximum extent permitted by Law, (i) characterize any non principal payment as an expense, fee or
premium rather than as interest, (ii) exclude voluntary prepayments and the effects of them, (iii) amortize, prorate, allocate
and spread the total amount of interest actually paid throughout the full term of the indebtedness so that the actual rate of interest
does not exceed the Highest Lawful Rate, and (iv) allocate interest between portions of the Obligations so that no portion will
bear interest at a rate greater than that permitted by Law.

 

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Section
12.11       Limited Power of Attorney. Borrower grants to Administrative Agent
a power of attorney for the purpose of executing on behalf of Borrower, whenever an Event of Default exists, documents related
to the enforcement of Administrative Agent’s rights and remedies under the Loan Documents, including to the execution of
any document to be filed with or approved by any Governmental Authority in connection with a foreclosure on any of the Collateral.
This power of attorney is a right coupled with an interest and will be irrevocable for as long as any of the Obligations remain
outstanding.

 

Section
12.12       Severability. If any provision of this Agreement is determined by
the final, non-appealable judgment of a court of competent jurisdiction to be invalid, illegal or unenforceable, it will not impair,
invalidate or nullify the remainder of this Agreement.

 

Section
12.13       Defined Terms; Interpretation, Etc.

 

(a)          Defined
Terms. Capitalized terms used but not defined elsewhere in this Agreement are defined in Appendix A.

 

(b)          Exhibits
and Schedules. All exhibits, appendices and schedules attached to this Agreement are part of this Agreement for all purposes.

 

(c)          References
to Documents. Unless the context otherwise requires or unless this Agreement otherwise provides, references in this Agreement
to a particular document also refer to and include all amendments and restatements of that document. The previous sentence will
not, however, be construed to authorize any amendment or restatement.

 

(d)          Exhibits
and Schedules. References in this Agreement to exhibits, appendices, schedules, articles, sections, subsections and other
subdivisions refer to the exhibits, appendices, schedules, articles, sections, subsections and other subdivisions of this Agreement
unless this Agreement provides otherwise.

 

(e)          Headings
and Titles. Headings and titles appearing throughout this Agreement are for convenience only, do not constitute any part of
the provisions of this Agreement, and are to be disregarded when construing the terms and conditions of this Agreement.

 

(f)          Interpretation.
The words “this Agreement,” “herein” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless the context otherwise requires; “this section,” “this subsection”
and similar phrases refer only to the sections or subsections of this Agreement in which those phrases occur; the word “or”
is not exclusive; the word “including” (in its various forms) means “including without limitation;” and
the word “will” has the same meaning and effect as “shall.” In determining any time period, the word “from”
means “from and including;” and the word “to” means “to and including.” Pronouns in masculine,
feminine and neuter genders include any other gender; words in the singular form include the plural and vice versa. Unless the
context requires otherwise, references to any Person include that Person’s successors and permitted assigns.

 

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(g)          Knowledge.
Where any statement is made “to Borrower’s knowledge,” it is made to the best of Borrower’s knowledge,
after making due inquiry to those Persons within Borrower’s organization and among Borrower’s consultants and contractors
who are believed to be best situated to have information bearing on the statement made.

 

(h)          Joint
Drafting. Borrower acknowledges that it and its legal counsel have actively participated in the drafting and negotiation of
the Loan Documents and, as such, each of the Loan Documents will be construed as having been jointly drafted by Borrower, Administrative
Agent and Lenders.

 

(i)       
   Accounting Terms. All accounting terms used herein shall be interpreted, and all financial
statements and certificates and reports as to financial matters required to be delivered to Administrative Agent hereunder
shall be prepared, in accordance with GAAP applied on a basis consistent with those used in the preparation of the latest
financial statements furnished to Administrative Agent hereunder. All calculations made for the purposes of determining
compliance with this Agreement shall be made by application of GAAP applied on a basis consistent with those used in the
preparation of the annual or quarterly financial statements furnished to Administrative Agent pursuant to Section 4.2
most recently delivered prior to or concurrently with such calculations (or, prior to the delivery of the first financial
statements under Section 4.2, used in the preparation of the financial statements delivered to Administrative Agent
prior to Closing).

 

Section
12.14       This Agreement Controls if Terms Conflict. In the event
of a conflict between the terms of this Agreement and any other Loan Document, the terms of this Agreement will control.

 

Section
12.15       Counterpart Execution. This Agreement may be executed
simultaneously in one or more counterparts, each of which will be deemed an original, but all of which together will constitute
one and the same instrument. Delivery of an executed counterpart signature page of this Agreement by facsimile or electronic transmission
is as effective as executing and delivering this Agreement in the presence of the other parties to this Agreement.

 

Section
12.16       Acknowledgment of Exculpatory Provisions. Borrower acknowledges that
it (a) has had the benefit of independent legal counsel of its choosing in connection with the drafting and negotiation of the
Loan Documents, (b) has consulted (or had ample opportunity to consult) with its legal counsel with respect to all of the Loan
Documents prior to Closing, (c) has a duty to read—and has in fact read—each of the Loan Documents prior to executing
them at Closing, (d) is fully informed and has notice of all of the terms and conditions of the Loan Documents. Borrower
further acknowledges that the Loan Documents obligate Borrower to assume liability for and indemnify Administrative Agent, Lenders
and other Persons against certain liabilities—including, in some instances, liabilities that arise from the negligence of
Administrative Agent, Lenders and/or those other Persons. Borrower agrees that it will not contest the validity or enforceability
of any exculpatory provision in this Agreement or the other Loan Documents on the basis that it had no notice or knowledge of
the provision or that the provision is not “conspicuous.”

 

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Section
12.17       Final Agreement. The Loan Documents and the exhibits, schedules
and annexes attached to them constitute the final, entire agreement among the parties and supersede all prior or contemporaneous
proposals, commitments, promises, agreements and understandings (in each instance, whether oral or written) between the parties
with respect to the subject matter of this Agreement and the other Loan Documents, all of which are merged into and replaced by
the Loan Documents.

 

The Loan Documents cannot be contradicted
by evidence of any prior, contemporaneous or subsequent oral agreement between the parties.

 

There are no unwritten oral agreements
between the parties.

 

• Signatures
Begin on the Following Page •

 

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IN WITNESS WHEREOF,
the undersigned has caused this Agreement to be executed by its duly authorized undersigned officer effective as of the date first
written above.

 

	 	Borrower:
	 	 
	 	Voyager Oil & Gas, Inc.,
	 	a Montana corporation

 

	 	By:	/s/ Mitchell R. Thompson

 

Signature Page to Credit Agreement

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the undersigned has caused this Agreement to be executed by its duly authorized undersigned representatives effective as of the
date first written above.

 

	 	Administrative Agent and a Lender:
	 	 
	 	Macquarie Bank Limited,
	 	a bank incorporated under the laws of Australia

 

	 	By:	/s/ Katie Choi
	 	Name:	Katie Choi
	 	Title:	Division Director
	 	 	 
	 	By:	/s/ Margot Branson
	 	Name:	Margot Branson
	 	Title:	Division Director

 

	 	Macquarie
    POA No. 594/10 dated 25 November 2010,
	 	expiring 30 November
    2012, signed in Sydney

 

Signature Page to Credit Agreement

 

    	 

    	 

    

 

Appendix A

 

Definitions

 

“Acceptable
Bank” means:

 

(a)          a
financial institution that has a rating for its long-term unsecured and non credit-enhanced debt obligations of A or higher by
Standard & Poor’s Rating Services, A or higher by Fitch Ratings Ltd., or A-2 or higher by Moody’s Investor Services
Limited (an “’A’ Equivalent Rating”); or

 

(b)          any
other financial institution Approved by Administrative Agent in its reasonable discretion.

 

“Action”
is defined in Section 3.10.

 

“Advance”
means an advance of funds under the Loan.

 

“Advance Fee”
is defined in Section 1.14(b).

 

“Advance Request”
means a written request for an Advance substantially in the form of Exhibit C together with all supporting documentation
required by this Agreement.

 

“AFE”
means an authorization for expenditure representing an estimate of work to be performed for a specific drilling, completion or
other operation.

 

“Affiliate”
means as to any Person (a) any other Person who directly or indirectly controls, is under common control with, or is controlled
by that Person; (b) any director or officer of that Person or of any Person referred to in clause (a); or (c) if any Person in
clause (a) is an individual, any member of her immediate family (including parents, spouse and children), any trust whose principal
beneficiary is the individual or one or more members of his immediate family, and any Person who is controlled by any such family
member or trust. As used in this definition, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) means possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of Equity Interests, by contract or otherwise); but any Subsidiary
of Borrower is an Affiliate of Borrower. For the avoidance of doubt, neither (x) MBL nor any of its Affiliates will be deemed to
be an Affiliate of Borrower.

 

“Agreement”
means this Credit Agreement and includes any amendment, modification, supplement or restatement.

 

“Applicable
Margin” means

 

(a) with respect to
a Revolving Loan, the margin set forth at the appropriate intersection in the table below, based upon the Borrowing Base Utilization
and the type of Loan:

 

Appendix
A - 1

 

    	 

    	 

    

 

	
        Borrowing Base

        Utilization
	 	LIBOR Loan	 	Base Rate Loan
	≥.75	 	3.25%	 	2.25%
	≥.50 and <.75	 	3.00%	 	2.00%
	<.50	 	2.75%	 	1.75%

 

(b) with respect to
a Term Loan seven and one-half percent (7.5%); and

 

(c) with respect to
a Bridge Loan the margin set forth at the appropriate intersection in the table below, for the applicable time period:

 

	Time Period	 	LIBOR Loan
	Closing−9/30/12	 	9.00%
	10/1/12−10/31/12	 	11.50%
	11/1/12−Maturity	 	15.00%

 

“Approval”
and “Consent” mean, with respect to any consent or approval sought by Borrower and given by Administrative Agent,
the writings executed by Administrative Agent that (a) authorize Borrower to take the action for which the consent or approval
is sought and (b) set forth the conditions, if any, upon which the consent or approval is given by Administrative Agent. “Approve”
and “Approved” have the correlative meaning.

 

“Approved
Marketing Contract” is defined in Section 3.41.

 

“Authorized
Officer” is defined in Section 4.3.

 

“Availability
Termination Date” means (a) with respect to the Revolving Loan, the Maturity Date (b) with respect to the Term Loan,
August 10, 2014, and (c) with respect to the first $15,000,000 of the Bridge Loan, Closing, and with respect to the remaining $5,000,000
of the Bridge Loan, the Maturity Date.

 

“Bankruptcy
Code” means Title 11 of the United States Code as amended from time to time, and any successor statute and all rules
and regulations promulgated thereunder.

 

“Base Rate
Loan” is defined in Section 1.8(c).

 

Appendix
A - 2

 

    	 

    	 

    

 

“Basic Documents”
includes all agreements necessary or convenient to the ownership and operation of the Properties, including all Leases; Operating
Agreements; Hydrocarbon purchase, sales, exchange, processing, gathering, treatment, compression and transportation agreements;
farm-out or farm-in agreements; pooling or unitization agreements; joint venture, exploration, limited or general partnership,
dry hole, bottom hole, acreage contribution, purchase and acquisition agreements; area of mutual interest agreements; salt water
disposal agreements; servicing contracts; and easements, surface leases, permits, licenses, rights-of-way, servitudes, or other
similar interests; in each instance, to the extent it relates to the Properties or the Hydrocarbons produced from the Properties.

 

“Blocked Checking
Account” is defined in Section 2.9.

 

“Board”
is defined in Section 3.28.

 

“Borrowing
Base” means, subject to the Revolving Loan Note Amount, the loan amount for the Revolving Loan, as determined by Administrative
Agent from time to time in accordance with Section 1.2(b).

 

“Borrowing
Base Deficiency” means, and occurs when, the amount by which the outstanding principal amount of the Revolving Loan,
together with accrued and unpaid interest, exceeds the Borrowing Base in effect at such time, whether as the result of a
redetermination, a scheduled reduction, or otherwise.

 

“Borrowing
Base Utilization” means at any time, an amount equal to the quotient of (a) the aggregate principal amount of the Revolving
Loan then outstanding, divided by (b) the Borrowing Base then in effect.

 

“Borrower”
is defined in the first paragraph of this Agreement.

 

“Breakage
Costs” includes all costs, expenses and losses incurred by any Lender that result from any prepayment of a LIBOR Loan
on a day prior to the day on which the applicable Interest Period ends (whether voluntary, mandatory, automatic, by reason of acceleration,
or otherwise), including any cost, expense or loss arising from the liquidation or reemployment of funds obtained by such Lender
to maintain that Loan or from fees payable to terminate the deposits from which those funds were obtained.

 

“Bridge Loan”
is defined in Section 1.1(a).

 

“Bridge Loan
Note Amount” is defined in Section 1.1(a).

 

“Business
Day” means (a) any day other than a day on which commercial banks are authorized or required to close in Houston, Texas,
or Sydney, Australia, and (b) if such day relates to the making of any Advance by Lenders, the making of any payment or prepayment
by Borrower or the continuation of any Interest Period, in each case with respect to a LIBOR Loan any day that is both (i) a “Business
Day” under the preceding clause (a) and (ii) a day on which dealings in Dollar deposits are carried out in the London
interbank market.

 

“Capital Leases”
means all leases that have been, or should have been, in accordance with GAAP, recorded as capital leases on the balance sheet
of the Person that is liable (whether contingent or otherwise) for the payment of rent under those leases.

 

“Cash Equivalents”
means at any time:

 

Appendix
A - 3

 

    	 

    	 

    

 

(a)          certificates
of deposit, time deposits, Eurodollar time deposits or overnight bank deposits maturing within one year after the relevant date
of calculation and issued by an Acceptable Bank;

 

(b)          any
investment in marketable debt obligations issued or guaranteed by the government of the United States of America (or any of its
instrumentalities or agencies having an equivalent credit rating) maturing within one year after the relevant date of calculation
and not convertible into or exchangeable for any other security;

 

(c)          commercial
paper that is not convertible into or exchangeable for any other security and that (i) trades on a recognized market, (ii) matures
within one year after the relevant date of calculation, and (iii) has a credit rating of either A-1 or higher by Standard &
Poor’s Rating Services or F-1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody’s Investor Services Limited
(an “’A-1’ Equivalent Rating”), or, if no rating is available in respect of the commercial paper, the issuer
of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating;

 

(d)          any
investment in money market funds that (i) have an ‘A-1’ Equivalent Rating, (ii) invest substantially all of their assets
in securities of the types described in paragraphs (a)–(c), and (iii) can be converted into cash on not more than
30 days’ notice.

 

“Cause”
means, when any Person is obligated to cause another Person to take or refrain from taking any action, (a) that such Person in
fact causes its Affiliates to take or refrain from taking the specified action, or (b) that such Person uses all commercially reasonable
efforts to cause any non-Affiliate to take or refrain from taking the specified action, as applicable.

 

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

 

“Change of
Control” means the occurrence of any event pursuant to which:

 

(a)          any
Person who is not an Affiliate (either alone or jointly with any other Person) acquires control of Borrower, or Borrower becomes
a Subsidiary of any such Person, or any such Person or group of Persons acting in concert to gain direct or indirect control of
Borrower succeeds in gaining direct or indirect control of Borrower, in a transaction not approved by the Continuing Directors
or members, as applicable; for purposes of this definition, control means:

 

(i)          the
power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

 

(A)         cast,
or control the casting of, more than thirty-five percent (35%) of the maximum number of votes that might be cast at a general meeting
of Borrower, as applicable; or

 

(B)         appoint
or remove all, or the majority, of the directors or other equivalent officers of Borrower; or

 

Appendix
A - 4

 

    	 

    	 

    

 

(C)         give
directions with respect to the operating and financial policies of Borrower with which the directors or other equivalent officers
of Borrower are obliged to comply.

 

(ii)         the
holding beneficially of more than thirty-five percent (35%) of the issued share capital of; and

 

(iii)        “acting
in concert” means, a group of Persons who, pursuant to an agreement or understanding (whether formal or informal), actively
co-operate, through the acquisition of shares directly or indirectly in Borrower by any of them, either directly or indirectly,
to obtain or consolidate control of Borrower;

 

(b)          Either
J.R. Reger or Michael Krzus cease to be materially involved in the management of the Borrower
and the development of the Properties or either resign or are removed as Head of Land and Chief Executive Officer, respectively,
of Borrower and a replacement reasonably acceptable to the Administrative Agent is not identified to Administrative Agent within
ninety (90) days of such removal or resignation and is not employed by Borrower within an additional thirty (30) days after such
identification.

 

“Charter Documents”
means, as applicable for any Person that is not an individual, the articles or certificate of incorporation or formation, company
agreement, certificate of limited partnership, regulations, bylaws, partnership or limited partnership agreement, and all similar
documents related to the formation and governance of that Person, together with all amendments to any of those documents.

 

“Claims”
is defined in Section 7.4.

 

“Closing”
is defined in Section 8.1.

 

“Closing Date”
is defined in Section 8.1.

 

“Collateral”
means (a) the Pledged Interests and (b) all of the Properties.

 

“Commitment
Fee” is defined in Section 1.14(a).

 

“Commitment
Termination Date” means the earlier of (a) the Maturity Date and (b) the termination in whole of Lenders’ commitments
to provide the Loan hereunder pursuant to Section 1.2(d).

 

“Continuation
Notice” is defined in Section 1.8(e).

 

“Continuing
Directors” means (a) any member of the board of directors who was a director (or comparable manager) of Borrower on the
Closing Date, and (b) any individual who becomes a member of the board of directors after the Closing Date if such individual was
recommended, appointed or nominated for election to the board of directors by a majority of the continuing directors, but excluding
any such individual originally proposed for election in opposition to the board of directors in office at the Closing Date in an
actual or threatened election contest relating to the election of the directors (or comparable managers) of Borrower and whose
initial assumption of office resulted from such contest or the settlement thereof.

 

Appendix
A - 5

 

    	 

    	 

    

 

“Contract
Rate” means:

 

(a) with respect to
a Term Loan or a Bridge Loan, a rate per annum equal to the lesser of (i) the LIBOR Rate plus the Applicable Margin, and (ii) the
Highest Lawful Rate, and

 

(b) with respect to
a Revolving Loan, a rate per annum equal to (i) the lesser of (A) Prime Rate plus the Applicable Margin and (B) the Highest Lawful
Rate or (ii) the lesser of (A) the LIBOR Rate plus the Applicable Margin, and (B) the Highest Lawful Rate, as selected by Borrower
in the Advance Request or in accordance with Section 1.8(c).

 

“COPAS”
means the Accounting Procedures for Joint Operations Recommended by the Council of Petroleum Accountants Societies, then in effect,
with respect to onshore or offshore operations, as applicable, and as applied to properties located in the same geographical area
as the Leases.

 

“Crude Oil”
means all crude oil, condensate and other liquid hydrocarbon substances.

 

“Curative
Equity” is defined in Section 5.20(d).

 

“Current Assets”
means on any date of determination, the current assets that would, in accordance with GAAP, be classified as of that date as current
assets, including any amounts under the Loan which are committed hereunder, but not yet funded by Lenders, less any non-cash amount
required to be included in current assets as the result of the application of GAAP, including non-cash commodity and interest rate
hedges assets and liabilities.

 

“Current Liabilities”
means, on any date of determination, the obligations that would, in accordance with GAAP, be classified as of that date as current
liabilities, excluding (a) non-cash obligations under GAAP including non-cash commodity and interest rate hedges assets and liabilities,
and (b) the current portion of long-term Debt (including the long-term Debt arising under this Agreement).

 

“Current Ratio”
means, as of any date, the ratio of (i) Borrower’s Current Assets to (ii) Borrower’s Current Liabilities on that date.

 

“Debt”
means, for any Person, the sum of all of the following (without duplication):

 

(a)          obligations
for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, notes or other similar instruments;

 

(b)          obligations
(whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments;

 

(c)          obligations
to pay for goods or services and other accounts payable, including all accrued expenses, liabilities or other obligations to pay
the deferred purchase price of goods or services;

 

Appendix
A - 6

 

    	 

    	 

    

 

(d)          Capital
Lease obligations that are required to be recorded as a balance sheet liability under GAAP;

 

(e)          Synthetic
Lease obligations;

 

(f)      
   obligations or undertakings to maintain (or cause another Person to maintain) the financial position
or covenants of another Person or to purchase the Debt or property of another Person;

 

(g)          obligations
to deliver any commodities, goods, or services in consideration of one or more advance payments except for Natural Gas balancing
arrangements in the ordinary course of business;

 

(h)          Disqualified
Capital Stock;

 

(i)      
    the undischarged balance of any production payment created by that Person or pursuant to which that
Person received any direct or indirect payment;

 

(j)     
    other monetary obligations (including obligations of another Person) for which that Person is
or becomes directly or indirectly liable or that are or become secured by any of the Collateral, even if that obligation is
not considered to be a liability of that Person under GAAP.

 

“Debt Coverage
Ratio” means, as of the last day of any fiscal quarter, the ratio of (i) Borrower’s Debt to (ii) Borrower’s
EBITDA for the four (4) most recent fiscal quarters; provided that (x) for the first fiscal quarter after Closing
of the Original Credit Agreement, the Debt Coverage Ratio will be calculated using Borrowers’ EBITDA for that first fiscal
quarter multiplied by four; (y) for the second fiscal quarter after the Closing of the Original Credit Agreement, the Debt
Coverage Ratio will be calculated using Borrowers’ aggregate EBITDA for those first two fiscal quarters multiplied
by two; and (z) for the third fiscal quarter after the Closing of the Original Credit Agreement, the Debt Coverage Ratio will be
calculated using Borrowers’ aggregate EBITDA for those first three fiscal quarters multiplied by one and one-third
(1.33).

 

“Debtor Relief
Laws” means the Bankruptcy Code and all other applicable liquidation, conservatorship, bankruptcy, insolvency, rearrangement,
moratorium, reorganization, fraudulent transfer or conveyance or similar debtor relief laws affecting the rights of creditors generally
from time to time in effect.

 

“Default”
means the occurrence of any event which, with the passing of time or the giving of notice or both, will become an Event of Default.

 

“Default Rate”
is defined in Section 1.8(a).

 

Appendix
A - 7

 

    	 

    	 

    

 

“Defaulting
Lender” means any Lender that (a) has failed to fund any portion of the Loan it is required to fund under this Agreement
within one Business Day of the date such funding is required, (b) has otherwise failed or notified Borrower or Administrative Agent
in writing or has made a public statement to the effect that it does not intend or expect to pay over to Administrative Agent or
any other Lender any other amount required to be paid by it under this Agreement or any other Loan Document within one Business
Day of the date when due, or (c) has become insolvent or become the subject of a bankruptcy or insolvency proceeding under any
Debtor Relief Law.

 

“Defensible
Title” means, with respect to each Property, title that:

 

(a)          entitles
the owner to receive (free and clear of all royalties, overriding royalties and net profits interests or other burdens on or measured
by the production of Hydrocarbons, without regard to whether such interest appears of record) not less than the Net Revenue Interest
set forth on Exhibit A (or in such other certificate or writing provided to Administrative Agent representing the interests
in the Properties, including any Mortgage) in all Hydrocarbons produced, saved and marketed from the Property for the productive
life of the Property, free and clear of all Liens except (i) the Permitted Encumbrances, and (ii) Liens in favor of Administrative
Agent to secure the Obligations; and

 

(b)          obligates
the owner to bear costs and expenses relating to the maintenance, development and operation of such Property in an amount not greater
than the Working Interest set forth on Exhibit A for the productive life of such Property.

 

“Deposit Account
Control Agreement” means Deposit Account Control Agreement(s) among Borrower, Administrative Agent and the depository
bank(s) in form and substance reasonably acceptable to Administrative Agent and covering the deposit accounts set forth in Schedule
3.42.

 

“Development
Plan” means the comprehensive plan or plans in effect from time to time with respect to the development of the Properties
and any other expenditures that have been Approved (not to be unreasonably withheld or delayed) by Administrative Agent. A Development
Plan shall provide for, among other things, the location, timing and estimated costs of Wells to be drilled or recompleted as well
as names of key personnel known to Borrower to be required to undertake those operations and their associated responsibilities.

 

“Disqualified
Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible
or for which it is exchangeable) or upon the happening of any event (a) requires the issuer to make any payments to the holder,
(b) is redeemable for cash or other consideration, or (c) is convertible or exchangeable into any other instrument except other
Equity Interests that are not also Disqualified Capital Stock, prior to the first anniversary of the Maturity Date.

 

“EBITDA”
means for Borrower for any period, the (a) net income, in accordance with GAAP for such period plus (b) to the extent deducted
in determining net income for such period, interest expense, income Taxes, non-cash stock-based compensation expense, non-cash
accretion of asset retirement obligations and non-cash depreciation and amortization expense for such period, minus (c) non-cash
mark-to-market unrealized income and plus (d) non-cash mark-to-market unrealized expense added to net income for such period. EBITDA
shall be calculated without including non-cash mark-to-market adjustments arising from the application of FASB Statement 133 or
FASB Statement 143 (or any successor GAAP which serves to amend, supplement or replace FASB Statements 133 and 143).

 

Appendix
A - 8

 

    	 

    	 

    

 

“Emerald Basic
Documents” includes all agreements necessary or convenient to the ownership and operation of the properties owned by
the Emerald US Entities, including all leases; operating agreements; Hydrocarbon purchase, sales, exchange, processing, gathering,
treatment, compression and transportation agreements; farm-out or farm-in agreements; pooling or unitization agreements; joint
venture, exploration, limited or general partnership, dry hole, bottom hole, acreage contribution, purchase and acquisition agreements;
area of mutual interest agreements; salt water disposal agreements; servicing contracts; and easements, surface leases, permits,
licenses, rights-of-way, servitudes, or other similar interests; in each instance, to the extent it relates to the properties owned
by the Emerald US Entities or the Hydrocarbons produced therefrom.

 

“Emerald Oil”
means Emerald Oil Inc., a Delaware corporation.

 

“Emerald US
Entities” mean Emerald Oil, Emerald GRB LLC, a Colorado limited liability company and Emerald WB LLC, a Colorado limited
liability company.

 

“Employee
Plan” means an employee pension benefit plan covered by Title IV of ERISA.

 

“Engineers”
means an independent reservoir petroleum engineering firm selected by Borrower and Approved by Administrative Agent, such approval
not to be unreasonably withheld or delayed.

 

“EHS Regulations”
means all applicable federal, state or local Laws with respect to any environmental, pollution, toxic or hazardous waste or health
and safety law, including those promulgated by the United States Environmental Protection Agency, the Federal Energy Regulatory
Commission, the Department of Energy, the Occupational Safety and Health Administration, the Department of the Interior, or any
other Governmental Authority, or any of their predecessor or successor agencies.

 

“Environmental
Laws” shall mean any and all Laws and EHS Regulations pertaining to health or the environment in effect in any and all
jurisdictions in which Borrower is conducting or at any time has conducted business, or where any Property is located, including,
the OPA, CERCLA, RCRA, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended, and other environmental conservation
or protection laws. The term “oil” shall have the meaning specified in OPA, the term “hazardous substance”
has the meaning specified in CERCLA, and the terms “solid waste” and “disposal” (or “disposed”)
have the meanings specified in RCRA; but (a) in the event either OPA, CERCLA or RCRA 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 and (b) to the extent
the laws of the state in which any Property is located establish a meaning for “oil,” “hazardous substance,”
“solid waste” or “disposal” which is broader than that specified in either OPA, CERCLA or
RCRA, such broader meaning shall apply to those issues covered by the applicable state laws.

 

Appendix
A - 9

 

    	 

    	 

    

 

“Equipment”
has the meaning given to it in the UCC and includes all surface or subsurface machinery, goods, equipment, fixtures, facilities,
supplies or other personal or moveable property of any kind (excluding property rented by Borrower or taken to the premises for
temporary uses) now owned or later acquired by Borrower that are at any time located on or under any of the lands attributable
to the Properties and that are used in connection with the production, gathering, treatment, processing, storage or transportation
of Hydrocarbons and whether or not attributable to the Properties, including (a) all Wells, casing, tubing, tubular goods, rods,
pumping units and engines, Christmas trees, platforms, derricks, separators, compressors, gun barrels, flow lines, water injection
lines, tanks, gas systems (for gathering, treating and compression), pipelines (including gathering lines, laterals and trunklines),
chemicals, solutions, water systems (for treating, disposal and injection), power plants, poles, lines, transformers, starters
and controllers, machine shops, tools, storage yards and equipment stored therein, telegraph, telephone and other communication
systems, loading docks, loading racks, shipping facilities, platforms, well equipment, wellhead valves, meters, motors, pumps,
tankage, regulators, furniture, fixtures, automotive equipment, forklifts, storage and handling equipment, (b) all accessions,
additions, attachments, replacements, accessories and parts, (c) all manuals, blueprints, documentation, warranties and other similar
rights against suppliers, manufacturers and other Persons, and (d) to the extent not prohibited by written agreement between Borrower
and any other Person, all seismic data, geological data and geophysical data and all analyses and interpretations of any of them.

 

“Equity Equivalents”
means any rights, warrants, options, convertible securities, exchangeable securities, indebtedness or other rights issued by a
Person that are exercisable for or convertible or exchangeable into, directly or indirectly, Equity Interests of that Person, even
if the right to exercise, convert or exchange is conditioned upon the passage of time or the occurrence of some future event.

 

“Equity Interests”
means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests
in a trust or other equity ownership interests in a Person, and any Equity Equivalents of that Person.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and related rules and regulations.

 

“Event of
Default” is defined in Section 9.1.

 

“Excluded
Taxes” means, with respect to Administrative Agent or any Lender: (a) income, branch profits or franchise Taxes imposed
on (or measured by) net income and any similar Tax imposed on it in lieu of net income, net worth Taxes, capital Taxes, Taxes on
Loans or liabilities or any similar Taxes, in each case by any jurisdiction, or as a result of a present or former connection between
such Borrower and the jurisdiction imposing such Tax or any political subdivision or taxing authority thereof (other than any such
connection arising solely from such recipient having executed, delivered or performed its obligations or received any payment under,
or enforced, this Agreement or any other Loan Document), (b) any U.S. Federal withholding Taxes resulting from any law in effect
on the date such Lender or Administrative Agent becomes a party to this Agreement (or designates a new lending office) or is attributable
to such Lender or Administrative Agent’s failure to comply with Section 1.15(d), except to the extent that such Lender
or Administrative agent (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment),
to receive additional amounts from the Borrower with respect to such withholding Taxes pursuant to Section 1.15(d), (c)
any Taxes payable under FATCA, and (d) all related interest, penalties, fines and additions to tax now or hereafter imposed under
clauses (a) and (b).

 

Appendix
A - 10

 

    	 

    	 

    

 

“Facility
Termination Date” means the earliest of (i) the Maturity Date, (ii) the date on which all of Obligations under the Loan
Documents are Indefeasibly paid in full in cash (other than indemnity obligations and similar obligations that survive the termination
of this Agreement) and Lenders have no further obligation to make any Advance, or (iii) the date on which Administrative Agent
notifies Borrower of the acceleration of Obligations under this Agreement following an Event of Default.

 

“FATCA”
means Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended, as of the date of this Agreement and any regulations
or official interpretations thereof.

 

“Financial
Accounting Standards Board” or “FASB” means the board by this name (or its successor) recognized by
the United States Securities and Exchange Commission.

 

“First Reserve
Report Date” means December 31, 2011.

 

“G&A Expenses”
means the actual general and administrative expenses of Borrower including capitalized general and administrative expenses, calculated
in accordance with GAAP, but, excluding non-cash compensation, audit fees associated with Annual Financial Statements and fees
associated with any Reserve Report.

 

“GAAP”
means generally accepted accounting principles recognized as such by the FASB consistently applied and maintained throughout the
period indicated and consistent with all Laws, except for changes mandated by the FASB or any similar accounting authority of comparable
standing. If a change in any accounting principle or practice is required by FASB in order for that principle or practice to continue
as a generally accepted principle or practice, all financial reports or statements required under this Agreement may be prepared
in accordance with that change, but all calculations and determinations to be made under this Agreement may be made in accordance
with that change only if Borrower and Administrative Agent agree to do so. Accounting terms used but not defined in this Agreement
have the meanings given to them by GAAP.

 

“Governmental
Authority” means the government of the United States of America, any other nation or any political subdivision thereof,
whether state, local or tribal, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers, jurisdiction or functions of or pertaining
to government over Borrower or any other Obligor, the Properties, Administrative Agent, Lenders or any of their respective Affiliates.

 

“Hartz”
means Hartz Energy Capital, LLC, a New Jersey limited liability company.

 

Appendix
A - 11

 

    	 

    	 

    

 

“Hartz Loan
Documents” means that certain Credit Agreement dated as of February 21, 2012, among the Emerald US Entities and Hartz
and any and all Credit Documents (as defined therein).

 

“Hazardous
Materials” means and include (i) all elements or compounds that are contained in the list of hazardous substances adopted
by the United States Environmental Protection Agency and the list of toxic pollutants designated by the United States Congress
or the Environmental Protection Agency or under any Hazardous Substance Laws (as hereinafter defined), and (ii) any “hazardous
waste,” “hazardous substance,” “toxic substance,” “regulated substance,” “pollutant”
or “contaminant” as defined under any Hazardous Substance Laws.

 

“Hazardous
Substance Laws” means CERCLA, RCRA, the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq., the
Toxic Substances Control Act, 15 U.S.C. 2601 et seq., the Hazardous Liquid Pipeline Safety Act of 1979, as amended, 40 U.S.C. 2001
et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. 136 et seq., the Federal Clean Air Act, 42 U.S.C. 7401
et seq., any so called federal, state or local “superfund” or “super lien” statute, and any other applicable
federal, state or local law, rule, regulation or ordinance related to the remediation, clean up or reporting of environmental pollution
or contamination or imposing liability (including strict liability) or standards of conduct concerning any Hazardous Materials.

 

“Hedging Agreement”
means:

 

(a)          all
rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index options, swaps or options, bond or bond price or bond index swaps or options
or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions,
cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency
options, spot contracts or any other similar transactions (including any option to enter into any of the foregoing), whether or
not the transaction is governed by a Master Agreement (as defined in paragraph (b)), and including the Swap Agreement; and

 

(b)          all
transactions and related confirmations that are governed by or are subject to the terms and conditions of any form of master agreement
published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement (each,
with its schedules, being a “Master Agreement”).

 

“Highest Lawful
Rate” means the maximum non-usurious interest rate, if any, that any Lender is allowed by any current or future Law to
contract for, take, reserve, charge or receive in respect of the Obligations.

 

“Hydrocarbons”
means all Crude Oil and Natural Gas.

 

“Implementation
Documents” is defined in Section 7.1(a)

 

Appendix
A - 12

 

    	 

    	 

    

 

“Indefeasibly”
or “Indefeasible” means, with respect to the repayment of Borrower’s monetary Obligations, receipt by
Administrative Agent of immediately available funds equal to the total monetary Obligations then outstanding, without prejudice
to any right that Administrative Agent or any Lender may at any time have to seek to reassert or reinstate any Lien following the
defeasance, disgorgement or forfeiture of any amount received by Administrative Agent or any Lender in respect of the Obligations.

 

“Indemnified
Party” is defined in Section 7.4(a).

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement among MBL, in its individual capacity, as Swap Counterparty and
as Administrative Agent, Borrower, the Emerald US Entities and Hartz dated July 26, 2012, as amended, supplemented and modified
by the parties from time to time.

 

“Interest
Coverage Ratio” means, as of any date, the ratio of (a) Borrower’s EBITDA for the four (4) most recent fiscal quarters;
provided that (i) for the first fiscal quarter after the Closing of the Original Credit Agreement, the Interest Coverage
Ratio will be calculated using Borrowers’ EBITDA for that first fiscal quarter multiplied by four; (ii) for the second
fiscal quarter after the Closing of the Original Credit Agreement, the Interest Coverage Ratio will be calculated using Borrowers’
aggregate EBITDA for those first two fiscal quarters multiplied by two; and (iii) for the third fiscal quarter after the
Closing of the Original Credit Agreement, the Interest Coverage Ratio will be calculated using Borrowers’ aggregate EBITDA
for those first three fiscal quarters multiplied by one and one-third (1.33) to (b) Borrower’s aggregate interest
expense for all Debt (including Debt under this Agreement) for the same period.

 

“Interest
Period” means:

 

(a)          with
respect to a Base Rate Loan or a LIBOR Loan pursuant to Section 1.8(c),
the period commencing on the date of the Advance and ending on the last Business Day of the month in which the Advance is made;
and 

 

(b)          with
respect to each continuing Advance of a LIBOR Loan, the period commencing on the date of the Advance and ending on the date that
is 30, 60, or 90 days thereafter, as selected by Borrower in a Selection Notice;

 

provided,
that

 

(x)          any
Interest Period that would otherwise expire on a day that is not a Business Day will be extended to the next succeeding Business
Day unless that next Business Day falls in another calendar month, in which case the expiring Interest Period will end on the last
Business Day of the month of expiry;

 

(y)          any
Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the expiry month) will end on the last Business Day of the month of expiry; and

 

(z)          no
Interest Period will extend beyond the Maturity Date.

 

Appendix
A - 13

 

    	 

    	 

    

 

“Investment”
means, with respect to any Person: (a) the acquisition of (or agreement to acquire) any Equity Interests in another Person (including
any “short sale” or sale of any securities when those securities are not owned by the Person entering into the short
sale); (b) the making of any deposit with another Person (but excluding amounts collected in the Project Account or in a deposit
account where Borrower, Administrative Agent and the related depository bank have entered into a Deposit Account Control Agreement
with respect to such account); (c) the making of any advance, loan or other extension of credit to another Person (including the
purchase of property from that other Person with an understanding or agreement, contingent or otherwise, to resell the property
to that Person (but excluding any advance, loan or extension of credit with a term not exceeding 90 days and arising in connection
with the sale of Hydrocarbons, inventory or supplies in the ordinary course of business); or (d) agreeing to guaranty, provide
collateral or incur any other contingent obligation in respect of a Debt of another Person.

 

“Law”
means any current or future law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction,
franchise, permit, certificate, license, authorization or other directive or requirement enacted, promulgated, adopted or imposed
by any Governmental Authority.

 

“Lead Book
Runner” means the main underwriter or lead manager for the issuance of new Equity Interests by Borrower.

 

“Lease”
or “Leases” means, whether one or more, (i) the oil and gas leases, mineral estates and other mineral rights
and interests described on Exhibit A, and any other interests in the Leases or any other lease of real property, whether
now owned or later acquired, and (ii) all other oil, gas and/or mineral leases or other interests pertaining to the Properties,
whether now owned or later acquired, and that are at any time made subject to a Lien in favor of Administrative Agent, together
with all extensions, renewals, replacements, corrections, modifications, elections or amendments to any of them.

 

“Lenders”
means the Persons listed on Appendix B, any Person that shall have become a party hereto pursuant to Section 12.1,
other than any such Person that ceases to be a party hereto pursuant to Section 12.1.

 

“LIBOR Loan”
is defined in Section 1.8(c).

 

“LIBOR Rate”
means, in respect of an Interest Period and the Advance related thereto:

 

(a)          if
not less than two rates are displayed on Reuters page “LIBO” at or around 11:00 a.m. (London time) on the second
Business Day before the first day of the period for USD loans over the period which is closest to that period, the arithmetic mean
(expressed as a rate per cent per annum and rounded up to five decimal places) of not less than two of those rates selected by
Administrative Agent; or

 

(b)          if
less than two (2) rates for USD loans over that period are displayed on Reuters page “LIBO” at or around that
time, the arithmetic mean (expressed as a rate per cent per annum and rounded up to five decimal places) of the offer rates quoted
to Administrative Agent by not less than two banks which ordinarily display rates on Reuters page “LIBO” on
application by Administrative Agent for USD loans equal to that amount over the period equal to that period; or

 

Appendix
A - 14

 

    	 

    	 

    

 

(c)          if
Administrative Agent is unable to determine a rate under paragraph (a) or (b) because an insufficient number of rates are
displayed (in the case of paragraph (a)) or Administrative Agent is unable to obtain the necessary number of quotes (in
the case of paragraph (b)), the rate (expressed as a rate per cent per annum and rounded up to five decimal places) specified
in good faith by Administrative Agent at or around that time having regard, to the extent possible, to the offer rates otherwise
quoted to Administrative Agent for USD loans equal to that amount over the period equal to that period at or around that time.

 

“Lien”
means any interest in real or personal property to secure an obligation owed to, or a claim by, a Person other than the owner of
the property, whether that interest is based on the common law, statute or contract, and whether that obligation or claim is fixed
or contingent, including (a) a lien or security interest arising from a mortgage, encumbrance, pledge, security agreement, conditional
sale or trust receipt, or a lease, consignment or bailment for security purposes, (b) production payments and the like payable
out of Hydrocarbons produced from any oil and gas properties, and (c) easements, servitudes, restrictions, permits, conditions,
covenants, exceptions or reservations. For purposes of this Agreement, Borrower shall be deemed to be the owner (to the extent
of its interest therein) of any real or personal property that it has acquired or holds subject to a conditional sale agreement,
or leases under a financing lease or other arrangement pursuant to which title to the property has been retained by or vested in
some other Person in a transaction intended to create a financing.

 

“Loan”
means the Revolving Loan, the Term Loan and the Bridge Loan each as applicable.

 

“Loan Documents”
means this Agreement, the Promissory Note, the Security Documents, the Subordination Agreement(s), the Intercreditor Agreement,
the Swap Agreement, and all other agreements, certificates, documents, instruments and writings delivered at any time under or
in connection any of those documents (but excluding all term sheets, commitment letters, correspondence and similar documents used
in the negotiation of the Loan facility except to the extent those documents contain information about Borrower or its Affiliates,
properties, business or prospects).

 

“Market Disruption
Notice” is defined in Section 1.8(g).

 

“Material
Adverse Effect” means any event or circumstance:

 

(a)          that
has a materially adverse effect on:

 

(i)          the
business, assets, liabilities or condition (financial or otherwise) of Borrower; or

 

(ii)         the
ability of Borrower to pay and perform its obligations as required under the Loan Documents; or

 

Appendix
A - 15

 

    	 

    	 

    

 

(b)          that
could reasonably be expected to result in any Security Document not providing to Administrative Agent the Liens and/or security
interests in a material amount of the assets expressed to be secured under that Security Document.

 

“Material
Changes” is defined in Section 11.19.

 

“Maturity
Date” means, (a) with respect to the Revolving Loan and the Term Loan, February 10, 2015, and (b) with respect to the
Bridge Loan, November 15, 2012.

 

“MBL”
is defined in the first paragraph of this Agreement.

 

“Monthly Reporting
Package” is defined in Section 4.1.

 

“Mortgage”
means a mortgage, deed of trust, assignment of production, security agreement and financing statement substantially in the form
of Exhibit H pursuant to which any Obligor grants a first and prior Lien in a Property to Administrative Agent subject only
to the Permitted Encumbrances.

 

“Natural Gas”
means all natural gas, and any natural gas liquids and all products recovered in the processing of natural gas (other than condensate)
including natural gasoline, casinghead gas, iso butane, normal butane, propane and ethane (including such methane allowable in
commercial ethane) produced from or attributable to the Properties.

 

“Net Revenue
Interest” means, with respect to any Property, the decimal or percentage share of Hydrocarbons produced and saved from
or allocable to that Property, after deduction of Royalty Interests and other burdens on or paid out of such production.

 

“Note Amount”
means the sum of the Term Loan Note Amount, the Revolving Loan Note Amount and the Bridge Loan Note Amount.

 

“NYMEX”
means the New York Mercantile Exchange.

 

“Obligations”
include all loans and advances (including the Loan), debts, liabilities, obligations, covenants, duties and amounts owing or to
be owing by Borrower or any other Obligor to Administrative Agent, Lenders or their respective Affiliates, including any Swap Counterparty,
of any kind or nature, present or future, whether or not evidenced by any note, guaranty, letter of credit or other instrument,
arising directly or indirectly, under the Loan Documents (including the Swap Agreement), and all renewals, extensions and/or rearrangements
of any of the foregoing. The term “Obligations” also includes all interest, reasonable and documented charges,
out-of-pocket expenses, fees of attorneys and consultants and other sums payable by Borrower, or any other Obligor under the Loan
Documents and all Related Costs.

 

“Obligor”
means Borrower and any other Person who is or becomes an obligor with respect to any portion of the Obligations.

 

“OPA”
means the Oil Pollution Act of 1990, as amended.

 

Appendix
A - 16

 

    	 

    	 

    

 

“Operating
Agreement” means (a) any joint operating agreements covering or relating to any one or more of the Properties and set
forth on Schedule 3.33, (b) any other joint operating agreement covering or relating to any one or more of the Properties
executed or adopted by Borrower with Administrative Agent’s Consent after the date of this Agreement, and (c) any joint operating
agreements covering or relating to any Properties acquired by Borrower after the date of this Agreement and which exist before
Borrower’s acquisition of the Property.

 

“Operator”
means, with respect to the Properties, Borrower and any other operators, including contract operators, of the Properties, in each
case Approved (not to be unreasonably withheld or delayed) by Administrative Agent but such Approval is required only for those
Properties where Borrower or any of its Affiliates is the operator or has the legal right to control the selection of the operator.
The Operators of each of the Properties as of the date of this Agreement are identified on Schedule 3.33.

 

“Other Taxes”
is defined in Section 1.15(b).

 

“Percentage
Share” means, with respect to any Lender, the percentage of the total commitments represented by such Lender’s
commitment as such percentage is set forth on Appendix B, as modified from time to time to reflect assignments permitted
by Section 12.1.

 

“Permit”
means any permit, license, approval and similar authorization given by or required from any Governmental Authority or other Person.

 

“Permitted
Encumbrances” means (a) Liens for property Taxes and assessments or governmental charges or levies that are either not
yet due or, if past due, are being contested in good faith by appropriate action promptly initiated and diligently conducted and
for which adequate reserves are maintained in accordance with GAAP; (b) Liens on cash and Cash Equivalents securing the performance
of bids, tenders, trade or government contracts, leases (other than Capital Leases) or licenses or to secure statutory obligations,
surety, performance or appeal bonds, letters of credit or other similar Liens incurred in the ordinary course of business and not
in connection with the borrowing of money or the acquisition of property other than oil and gas properties or as permitted by clause
(e) herein; (c) Liens arising as a matter of Law (other than a Lien imposed by ERISA) in the ordinary course of business or
incidental to the ownership of Properties (including Liens under worker’s compensation, social security, unemployment insurance
and other similar Laws, Liens in favor of carriers, mechanics, builders, suppliers, materialmen, repairmen, vendors, warehousemen,
architects, attorneys, and Liens arising under an Operating Agreement in favor of operators and non-operators) to secure for sums
that are either not yet due or, if past due, are being contested in good faith by appropriate action promptly initiated and diligently
conducted and for which adequate reserves are maintained in accordance with GAAP; (d) survey exceptions, encroachments, easements,
reservations, rights of others for rights-of-way, servitudes, utilities and other similar purposes, zoning or other restrictions
as to the use of real properties, and other issues relating to the merchantability of title or any statement of fact that an accurate
survey would disclose that could not reasonably be expected to have a Material Adverse Effect; (e) purchase money Liens against
specific Equipment securing Debt expressly authorized by this Agreement or incurred with the Consent of Administrative Agent; (f)
judgment and attachment liens not giving rise to an Event of Default (g) Liens arising under any Lease to secure the payment of
royalties due under that agreement or related to the right of a Royalty Interest owner to take in kind; (h) Liens incurred to secure
liability not exceeding $100,000 for premiums to insurance carriers for insurance obtained in the ordinary course of business;
(i) liens arising in favor of Administrative Agent under any Loan Document; and (j) liens granted with the Consent of Administrative
Agent.

 

Appendix
A - 17

 

    	 

    	 

    

 

“Person”
means an individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization,
joint stock company or other similar organization, Governmental Authority or any other legal entity, whether acting in an individual,
fiduciary or other capacity.

 

“Personal
Property” means all personal property of every kind, whether now owned or later acquired, including all goods (including
Equipment), documents, accounts, chattel paper (whether tangible or electronic), money, deposit accounts, letters of credit and
letter-of-credit rights (without regard to whether the letter of credit is evidenced by a writing), documents, securities and all
other investment property, supporting obligations, any other contract rights (including all rights in transportation agreements,
processing agreements, delivery agreements and seismic agreements) or rights to the payment of money, insurance claims and proceeds,
all general intangibles (including all payment intangibles and rights to seismic and other geophysical data) and all permits, licenses,
books and records.

 

“Pledge Agreement”
means a pledge agreement substantially in the form of Exhibit J pursuant to which Borrower grants to Administrative Agent
a first-priority security interest in the Pledged Interests.

 

“Pledged Interests”
is defined in Section 2.6.

 

“Post-Closing
Governmental Consents” is defined in Section 3.4(d).

 

“Prime Rate”
with respect to any Interest Period, the greater of (i) the prime rate of interest specified by the Wall Street Journal and (ii)
the Federal Funds Rate plus 5.5% per annum, in each case, from time to time as and when that rate changes. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate actually available.

 

“Production
Volumes” means, with respect to any or all of the Properties, the product of Borrower’s Net Revenue Interest multiplied
by the gross volume of Hydrocarbons produced and saved from those Properties.

 

“Project Account”
is defined in Section 1.10(a).

 

“Promissory
Note” means a promissory note substantially in the form of Exhibit B executed by Borrower and payable to each
Lender (including its successors its permitted assignees), together with all renewals, extensions, increases and rearrangements.

 

“Property”
or “Properties” means all real property and Personal Property of Borrower, including the Leases and Wells described
on Exhibit A. For the purposes of this Agreement, Borrower will be deemed to be the owner of any Property which it has acquired
or holds subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to which title
to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.

 

 Appendix
A - 18

 

    	 

    	 

    

 

“Proved Developed
Non-Producing Present Value” or “PDNP Present Value” means the present value (discounted at ten percent
(10%)) of future net revenues attributable to all PDNP Reserves from the Properties calculated based on a Reserve Report.

 

“Proved Developed
Producing Present Value” or “PDP Present Value” means the present value (discounted at ten percent
(10%)) of future net revenues attributable to all PDP Reserves from the Properties calculated based on a Reserve Report.

 

“Proved Reserves”
has the meaning given to that term in the definitions promulgated by the Society of Petroleum Evaluation Engineers and the World
Petroleum Congress (the “SPE/WPC Definitions”) in effect from time to time; “Proved Developed Producing
Reserves” or “PDP Reserves” means Proved Reserves which are categorized as both “Developed”
and “Producing” in the SPE/WPC Definitions; “Proved Developed Non Producing Reserves” or
“PDNP Reserves” means Proved Reserves which are categorized as both “Developed” and “Non
Producing” in the SPE/WPC Definitions; and “Proved Undeveloped Reserves” or “PUD Reserves”
means Proved Reserves which are categorized as “Undeveloped” in the SPE/WPC Definitions.

 

“Proved Undeveloped
Present Value” or “PUD Present Value” means the present value (discounted at ten percent (10%)) of
future net revenues attributable to all PUD Reserves from the Properties calculated based on a Reserve Report.

 

“Prudent Operator”
means, with respect to the Operator, a reasonable, prudent operator experienced in the exploration and production of Hydrocarbons
and who is, at the time of any specific determination, situated similarly to Borrower or Operator, as applicable, in all material
respects, and with respect to Borrower where it is not the Operator of the Property at issue, a reasonably prudent owner of a working
interest using commercially reasonable judgment who is, at the time, situated similarly to Borrower in all material respects.

 

“Purchasers”
means all Persons, including those parties listed on Exhibit D or otherwise Approved by Administrative Agent (such approval
or disapproval not to be unreasonably delayed), who purchase Hydrocarbons attributable or allocable to Borrower’s Net Revenue
Interest in the Properties.

 

“RCRA”
means the Resource Conservation and Recovery Act of 1976, as amended.

 

“Reimbursement
Request” is defined in Section 1.5(c).

 

“Related Costs”
means the reasonable and documented fees and out-of-pocket expenses of counsel for Administrative Agent, Lenders and consultants
for Administrative Agent and Lenders and such other reasonable and documented out of pocket, third-party expenses incurred by Administrative
Agent and Lenders in connection with the due diligence, negotiation and preparation of documents relating to the Loan and execution,
delivery and filing and/or recording of the Loan Documents together with any amendments, supplements or modifications thereto or
administration or enforcement thereof.

 

Appendix
A - 19

 

    	 

    	 

    

 

“Related Parties”
means, with respect to any Person, each of its Affiliates and their respective directors, officers, employees, agents and advisors
(including attorneys, accountants and other consultants and advisors) of that Person and its Affiliates.

 

“Release”
means Hazardous Materials that are pumped, spilled, leaked, disposed of, emptied, discharged or otherwise released into the environment
in violation of any Law.

 

“Remedial
Work” is defined in Section 5.3.

 

“Reported
Month” is defined in Section 4.1.

 

“Reported
Quarter” is defined in Section 4.2(a).

 

“Required
Lenders” means, when determined, Lenders holding at least a majority of the Total Committed Obligations; provided
that the holdings of any Defaulting Lender shall be excluded in the determination of Required Lenders for purposes of this definition.

 

“Reserve Report”
is defined in Section 4.5.

 

“Revolving
Loan” is defined in Section 1.1(a).

 

“Revolving
Loan Note Amount” is defined in Section 1.1(a).

 

“Royalty Interest”
means (a) an expense-free interest in any Property retained by a mineral lessor in a Lease, (b) an overriding royalty in any Property
reserved by or conveyed to a Person, or (c) any other expense-free right to receive production or revenues from any Property.

 

“Security
Agreements” means collectively, the Security Agreements and any other security agreement substantially in the form of
Exhibit E and pursuant to which any Obligor, as debtor, grants to Administrative Agent, as secured party, a first-priority
security interest in the collateral described in that agreement.

 

“Security
Documents” means this Agreement, the Mortgages, the Security Agreements, the Pledge Agreement, the Subordination Agreements,
the Deposit Account Control Agreements and any other agreement pursuant to which any Obligor grants to Administrative Agent a Lien
in, on or over any collateral to secure the Obligations.

 

“Selection
Notice” is defined in Section 1.8(c).

 

“Solvent”
means, as to any Person on any date, (a) the fair saleable value of that Person’s assets exceed the total amount of its liabilities
(including income Tax liabilities) as they become absolute and matured; and (b) that Person is able to meet its debts as they mature.

 

“Special Damages”
means any and all damages in the nature of special, consequential, indirect, exemplary or punitive damages (regardless of their
name or description), but it does not include any payments or funds that any Person has expressly promised to pay or deliver to
any other Person.

 

Appendix
A - 20

 

    	 

    	 

    

 

“Specified
Financial Covenant” is defined in Section 5.20(d).

 

“Subordination
Agreement” means a subordination agreement substantially in the form of Exhibit F.

 

“Subsidiary”
means, with respect to any Person that is not a natural person, each other Person (i) in which that Person owns, directly or indirectly,
at least 50% of the Equity Interests having ordinary voting power for the election of directors, members or general partners or
(ii)that is required by GAAP to be included in a consolidated financial statement of that Person.

 

“Supporting
Documentation” means a package containing data that is available to Borrower sufficient to support the cost estimate
and the justification for the proposed Development Plan project, including but not limited to: (a) detailed work procedure, (b)
before and after wellbore schematic, (c) detailed cost estimate plus bids on major items and other backup as appropriate, (d) reservoir
structure and isopach maps, (e) log sections, core data, and directional survey for any well being worked on plus key offset wells,
(f) notes showing Borrower’s or Engineer’s reserves calculation, if available, and (g) economic forecast.

 

“Swap Agreement”
means any ISDA Master Agreement (as defined in paragraph b) of the definition of “Hedging Agreement”) executed between
Borrower and any Swap Counterparty, together with any confirmation of trade under that agreement.

 

“Swap Counterparty”
means MBL, any Lender or any Affiliate of MBL or any Lender that is a counterparty to a Swap Agreement with Borrower or any of
its Affiliates.

 

“Synthetic
Leases” means, in respect of any Person, all leases that have been, or should have been, in accordance with GAAP, treated
as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent
under those leases, and which were properly treated as indebtedness for borrowed money for purposes of U.S. federal income Taxes,
if the lessee is obligated upon expiration or early termination of the lease to either purchase for an amount in excess of, or
pay upon early termination an amount in excess of, 80% of the residual value of the property subject to the operating lease.

 

“Taxes”
means any and all present or future taxes, levies, imposts, deductions, charges or withholdings, and all similar liabilities, plus
all related interest, penalties, fines and additions to tax, now or hereafter imposed by any federal, state, local or foreign government
or other taxing authority.

 

“Term Loan”
is defined in Section 1.1(a).

 

“Term Loan
Note Amount” is defined in Section 1.1(a).

 

“Taxing Authorities”
means any Governmental Authority that has the power to impose Taxes upon Borrower or any of the Collateral.

 

Appendix
A - 21

 

    	 

    	 

    

 

“Total Committed
Obligations” means, as of any date, the total monetary Obligations owing to Administrative Agent and Lenders under this
Agreement and Swap Counterparty under the Swap Agreement, including any Advances that Lenders are unconditionally committed to
make but have not yet funded).

 

“UCC”
means the Uniform Commercial Code presently in effect in the State of Texas or other applicable jurisdiction.

 

“USA PATRIOT
Act” means the Uniting and Strengthening America by Producing Appropriate Tools Required to Intercept and Obstruct Terrorism
(USA PATRIOT) Act of 2001, Pub. L. 707-56, as amended, and regulations promulgated under that act as in effect from time to time.

 

“USD”
or “$” or “Dollars” shall mean currency of the United States of America.

 

“Well”
means any existing or future oil or gas well, salt water disposal well, injection well, water supply well or any other well located
on or related to the Properties, and any facility or equipment in addition to or replacement of any well.

 

“WIP”
means Wells which are in the process of being drilled and completed in that drilling has commenced and spudding in has occurred,
but the Well has not yet been connected to the pipeline system for sale of product.

 

“Working Interest”
means the property interest which entitles its owner to explore and develop certain land for oil and gas production purposes, whether
under an oil and gas lease or unit, a compulsory pooling order or otherwise.

 

Appendix
A - 22

 

    	 

    	 

    

 

Appendix B

 

Lenders

 

LENDERS, LENDERS’ PERCENTAGES AND
NOTE AMOUNTS

 

	Lender	 	Note 
 Amount	 	Percentage
	 	 	 	 	 
	Macquarie Bank Limited	 	$ 150,000,000	 	100.0%

 

ADMINISTRATIVE AGENT WIRE INSTRUCTIONS

 

	Administrative Agent’s Office	 	Agent’s Wire Instructions
	 	 	 
	Macquarie Bank Limited, Administrative Agent	 	The Bank of New York Mellon
	500 Dallas Street	 	New York, New York 10004
	Suite 3250	 	ABA #021000018
	Houston, Texas 77002	 	Favour:  Macquarie Bank Limited
	Attn:  Mike Sextro	 	Sydney
	Phone: (713) 275-6207 	 	A/C No.: 8900055375
	Fax: (713) 275-6222	 	Chips UID: 236386
	Email:  MECLoansHouston@macquarie.com	 	REFERENCE: Voyager Oil & Gas, Inc.

 

Appendix
B - 1

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