Document:

$150,000,000

 

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 February 10, 2012

 

TABLE OF CONTENTS

 

    	 

    	 	

    

Page

 

 

	ARTICLE I THE LOAN FACILITY	1
	Section 1.1	Maximum Note Amount	1
	Section 1.2	The Revolving Loan	1
	Section 1.3	The Term Loan	5
	Section 1.4	Development Plan	5
	Section 1.5	Advance Procedure.	6
	Section 1.6	Promissory Note	7
	Section 1.7	Interest.	7
	Section 1.8	Repayment of the Loan.	9
	Section 1.9	Time and Place of Payments.	9
	Section 1.10	Optional Prepayment of the Loan	10
	Section 1.11	Mandatory Prepayment of the Loan	10
	Section 1.12	Application of Insurance Proceeds	11
	Section 1.13	Fees.	11
	Section 1.14	Taxes.	12
	ARTICLE II SECURITY; ETC.	14
	Section 2.1	Grant of Liens and Security Interests	15
	Section 2.2	Notice of Assignment of Proceeds	15
	Section 2.3	Further Assurances	15
	Section 2.4	Release of Liens; Financing Statements; Release	15
	Section 2.5	Subordination Agreements	15
	Section 2.6	All Obligations are Pari Passu	15
	Section 2.7	Swap Obligations Beyond Maturity	16
	ARTICLE III REPRESENTATIONS AND WARRANTIES 16	 
	Section 3.1	Formation and Existence	16
	Section 3.2	Name; Executive Offices	16
	Section 3.3	Ownership; Subsidiaries	16
	Section 3.4	Authorization; Non-Contravention	16
	Section 3.5	Solvency	17
	Section 3.6	Omissions and Misstatements	17
	Section 3.7	Joint Venture	17
	Section 3.8	Commissions; Expenses	17
	Section 3.9	Tax Returns; Taxes	17
	Section 3.10	Litigation; Governmental Proceedings	18
	Section 3.11	Ownership of Collateral; Interests.	18
	Section 3.12	Debt	19
	Section 3.13	Intellectual Property	19
	Section 3.14	No Other Leases	19
	Section 3.15	Investments	19

 

    	 

    	 	

    
 

 

	Section 3.16	No Unusual Restrictions	19
	Section 3.17	No Take or Pay Agreements	19
	Section 3.18	Gas Imbalances	19
	Section 3.19	Environmental Matters	19
	Section 3.20	Permits and Licenses	20
	Section 3.21	Operation of the Properties	21
	Section 3.22	USA PATRIOT Act Representation	21
	Section 3.23	Contingent Liabilities	22
	Section 3.24	Equipment	22
	Section 3.25	Unpaid Bills	22
	Section 3.26	Taxpayer Identification	22
	Section 3.27	Investment Company	22
	Section 3.28	No Margin Trading	22
	Section 3.29	No Pending Sale or Financing	22
	Section 3.30	No Calls on Production	22
	Section 3.31	Basic Documents	23
	Section 3.32	Farmout Agreements and Subject Contracts, Etc	23
	Section 3.33	Operating Agreements	23
	Section 3.34	No Unusual Agreements	24
	Section 3.35	Suspense of Proceeds	24
	Section 3.36	Employee Plans	24
	Section 3.37	Insurance	24
	Section 3.38	No Material Adverse Effect	24
	Section 3.39	Restriction on Liens	25
	Section 3.40	Hedging Agreements	25
	Section 3.41	Marketing of Production	25
	Section 3.42	Deposit Accounts	25
	Section 3.43	Labor Matters	25
	Section 3.44	Eligible Contract Participant	25
	Section 3.45	No Default	25
	Section 3.46	Choice of Law	25
	Section 3.47	Financial Statements	26
	Section 3.48	Priority	26
	Section 3.49	Affiliate Interests in Properties	26
	ARTICLE IV FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO ADMINISTRATIVE AGENT 	 26
	Section 4.1	Monthly Reporting Package	26
	Section 4.2	Financial Reporting	26
	Section 4.3	Compliance Certificate	27
	Section 4.4	Notices of Default and Other Significant Events	27
	Section 4.5	Reserve Reports	28
	Section 4.6	Additional Information	29
	Section 4.7	Monthly Field Activity Reports	29
	Section 4.8	Test Results; Core Analyses; Surveys and Logs	30
	Section 4.9	Reports Made to a Governmental Authority	30
	Section 4.10	Charter Documents	30

 

    	 

    	 	

    
 

 

	Section 4.11	Certificate of Authorized Officer—Hedging Agreements	30
	Section 4.12	Certificate of Insurer—Insurance Coverage	30
	Section 4.13	Anticipated Cost Overruns	30
	Section 4.14	Updated Development Plan	31
	ARTICLE V AFFIRMATIVE COVENANTS	31
	Section 5.1	Preservation of Existence	31
	Section 5.2	Compliance with Law	31
	Section 5.3	Environmental Matters	32
	Section 5.4	Records	33
	Section 5.5	Litigation	33
	Section 5.6	Damage to Collateral	33
	Section 5.7	Solvency	33
	Section 5.8	Insurance	33
	Section 5.9	Delivery of Invoices, Receipts, Etc	34
	Section 5.10	Access to Books and Records; Inspections; Consultants	35
	Section 5.11	Creditors	35
	Section 5.12	Operators	36
	Section 5.13	Purchasers of Hydrocarbons	36
	Section 5.14	Use of Proceeds	37
	Section 5.15	Bonds	37
	Section 5.16	Hydrocarbon Price Risk Management Program	37
	Section 5.17	Evidence of Title	37
	Section 5.18	Continuing Enterprise	38
	Section 5.19	Access to Technical Data	38
	Section 5.20	Financial Ratios.	38
	Section 5.21	Maintenance of Liens	40
	Section 5.22	Payment of Taxes, Etc	40
	Section 5.23	Equipment.	40
	Section 5.24	Maintenance of Leases	40
	Section 5.25	Operator	40
	ARTICLE VI NEGATIVE COVENANTS	41
	Section 6.1	Debt	41
	Section 6.2	Accounts	41
	Section 6.3	Guaranties	42
	Section 6.4	Ownership and Business Operations.	42
	Section 6.5	Liens and Encumbrances	43
	Section 6.6	Affiliate Transactions	44
	Section 6.7	Investments	44
	Section 6.8	Subsidiaries; Structure	44
	Section 6.9	Joint Ventures	44
	Section 6.10	Dividends and Distributions	44
	Section 6.11	Modifications to Documents	44
	Section 6.12	Other.	44
	Section 6.13	Use of Loan Proceeds	45
	Section 6.14	Limitation on Leases	45
	Section 6.15	Nature of Business	45

 

    	 

    	 	

    
 

 

	Section 6.16	Deposit Accounts	45
	Section 6.17	No Severance Agreements	45
	Section 6.18	Commodity Deliveries	46
	Section 6.19	G&A Expenses	46
	ARTICLE VII FURTHER RIGHTS OF LENDERS	46
	Section 7.1	Further Assurances; Delivery of Additional Documents	46
	Section 7.2	Payments by Lenders	46
	Section 7.3	Possession and Preservation of Collateral	47
	Section 7.4	Indemnification.	47
	ARTICLE VIII CLOSING; CONDITIONS PRECEDENT	48
	Section 8.1	Closing	48
	Section 8.2	Conditions to Closing	48
	Section 8.3	Conditions to the Making of Each Advance	50
	ARTICLE IX EVENTS OF DEFAULT	53
	Section 9.1	Events of Default	53
	ARTICLE X REMEDIES OF LENDERS	55
	Section 10.1	Remedies Generally.	55
	Section 10.2	No Marshalling; Use of Collateral Pending Foreclosure; Etc	56
	Section 10.3	Set-Off Rights	56
	Section 10.4	Rights Under Operating Agreements	56
	Section 10.5	Netting of Claims	56
	Section 10.6	All Rights and Remedies are Cumulative	57
	ARTICLE XI ADMINISTRATIVE AGENT	57
	Section 11.1	Appointment and Authorization of Administrative Agent	57
	Section 11.2	Delegation of Duties	57
	Section 11.3	Liability of Administrative Agent	57
	Section 11.4	Reliance by Administrative Agent.	58
	Section 11.5	Notice of Default	58
	Section 11.6	Credit Decision; Disclosure of Information by Administrative Agent	58
	Section 11.7	Indemnification of Administrative Agent	59
	Section 11.8	Administrative Agent in its Individual Capacity	59
	Section 11.9	Successor Administrative Agent	60
	Section 11.10	Administrative Agent May File Proofs of Claim	60
	Section 11.11	Collateral Matters.	61
	Section 11.12	Advance Procedure	62
	Section 11.13	Payments	63
	Section 11.14	Application of Payments	63
	Section 11.15	Liens	63
	Section 11.16	Payment Priority	63
	Section 11.17	Sharing of Payments by Lenders	64
	Section 11.18	Relationship of Lenders	64
	Section 11.19	Actions by Administrative Agent	64
	Section 11.20	Replacement of Lenders	65
	ARTICLE XII MISCELLANEOUS	66
	Section 12.1	Assignment.	66
	Section 12.2	Notices.	66

 

    	 

    	 	

    
 

 

	Section 12.3	Waivers; Amendments; Schedules.	68
	Section 12.4	Confidentiality; Permitted Disclosures.	69
	Section 12.5	Form of Documents	70
	Section 12.6	Third-Party Beneficiaries	70
	Section 12.7	Governing Law; Venue.	70
	Section 12.8	Waiver of Jury Trial, Punitive Damages, Etc	71
	Section 12.9	Fees, Costs and Expenses	71
	Section 12.10	Compliance with Usury Laws.	72
	Section 12.11	Limited Power of Attorney	72
	Section 12.12	Severability	73
	Section 12.13	Defined Terms; Interpretation, Etc	73
	Section 12.14	This Agreement Controls if Terms Conflict	74
	Section 12.15	Counterpart Execution	74
	Section 12.16	Acknowledgment of Exculpatory Provisions	74
	Section 12.17	Final Agreement	74

 

 

 

    	 

    	 	

    

 

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	Form of Compliance Certificate
	 	 

 

Appendices:

 

	Appendix A	Definitions
	Appendix B	Lenders

 

Schedules:

 

	Schedule 1.2(a)	Debt to be Repaid at Close
	Schedule 1.5(c)	Authorized Signatories on Advance Requests
	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 6.5	Liens and Encumbrances
	Schedule 6.7	Permitted Investments
	 	 
	 	 

 

    	 

    	 	

    
 

 

CREDIT AGREEMENT

 

This $150,000,000
Credit Agreement is dated February 10, 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
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.

 

B.           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 $100,000,000 (the “Revolving Loan Note Amount”) and (ii) a senior secured term loan (the
“Term Loan”) not to exceed $50,000,000 (the “Term 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.

    	1

    	 

    

 

(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; 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).

 

(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.

    	2

    	 

    

 

(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.

 

(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;

    	3

    	 

    

 

(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 1.13(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 1.14 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).

 

(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.

    	4

    	 

    

 

(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.  At Closing the Term Loan is uncommitted and subject to the Approval by Administrative Agent of
the initial Development Plan and the satisfaction of the conditions in Section 8.3.  The Term Loan shall be used
for the purposes set forth in Section 1.3(b) below.  Subject to the foregoing, the Administrative Agent will notify
Borrower in writing of the amount of the committed portion of the Term Loan.

 

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

 

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

 

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

 

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

 

(iv)    pay
Related Costs; and

 

(v)     with
the Approval (not to be unreasonably withheld or delayed) of Administrative Agent, eliminate a Borrowing Base Deficiency in accordance
with Section 1.11(b)(iii)

 

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

 

Section 1.4    Development
Plan.

 

(a)       Borrower
will prepare and submit to Administrative Agent for Approval the initial Development Plan (together with AFEs and all Supporting
Documentation and Reimbursement Requests) at least 30 days before requesting an Advance under the Term Loan to fund development
activities in accordance with Section 1.3(b)(ii).   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.

    	5

    	 

    

 

(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.

 

Section 1.5    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 will be made to an account or accounts specified in Schedule 3.42.

    	6

    	 

    

 

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

 

(c)      Authorized
Signatories.  Schedule 1.5(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 1.5(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.

 

Section 1.6       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.

    	7

    	 

    

 

Section 1.7        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
1.7(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 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.

 

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

 

(e)     Subject
to the provisions of this Section 1.7(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

    	8

    	 

    

 

(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 1.8      Repayment
of the Loan.

 

(a)        
Repayment of the Loan.  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.

 

(b)       
Application of Funds.  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 Revolving Loan, (iii) third to accrued interest on the Term Loan, (iv) fourth to principal
on the Revolving Loan, and (v) fifth to principal on the Term Loan until the amount outstanding under the Term Loan
is reduced to zero .

 

Section 1.9     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

 

    	9

    	 

    
 

 

	 	 	 
	 	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 1.10      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 1.10 will be immediately applied as a prepayment of the Loan pursuant to Section 1.8(b).

 

Section 1.11        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
1.11 will be immediately applied as a prepayment of the Loan pursuant to Section 1.8(b).

 

(b)           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;

    	10

    	 

    

 

(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 1.12      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 1.12 will be immediately applied as a prepayment of the
Loan pursuant to Section 1.8(b).

 

Section 1.13      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 1.5(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; and

 

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

 

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.

    	11

    	 

    

 

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

 

Section 1.14       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 1.14(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 1.14(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 1.14(a), or (iii) any amounts paid under FATCA.

 

(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 1.14(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 1.14(c) and paid by Administrative Agent or Lenders on behalf of Borrower and (ii) all
liabilities (including penalties, interest and reasonable attorneys 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 1.14(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 1.14(c) will survive the repayment of the Obligations and the termination of this Agreement.

    	12

    	 

    

 

(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.

 

(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 1.14(d), “FATCA” shall include any amendments made to FATCA after the date of this
Agreement.

    	13

    	 

    

 

(e)    Certain
Recoveries.  If a Lender becomes subject to Taxes because of its failure to deliver a form required under Section
1.14(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 1.14, 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 1.14  Nothing in this Section 1.14(g) will affect or
postpone any of the obligations of Borrower or the rights of such Lender provided in this section.

 

(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 1.14.  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 1.14,
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 1.14 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.

    	14

    	 

    

 

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.  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.

 

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                      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.

    	15

    	 

    

 

Section 2.7                      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.

 

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).  Borrower has no Subsidiaries.

 

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;

    	16

    	 

    

 

(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.

 

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.

    	17

    	 

    

 

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).

 

(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.

    	18

    	 

    

 

(d)           Except
for the Properties identified on Exhibit A, (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 or 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.

 

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:

    	19

    	 

    

 

(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.

 

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.

    	20

    	 

    

 

(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.

 

(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.

    	21

    	 

    

 

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.

 

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.

    	22

    	 

    

 

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;

 

(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:

    	23

    	 

    

 

(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 to Administrative
Agent, Borrower has no Employee Plans.

 

Section 3.37     Insurance.  Commencing
on or before the thirtieth day after Closing, 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.

    	24

    	 

    

 

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.

 

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.

    	25

    	 

    

 

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.

 

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.

    	26

    	 

    

 

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;

 

(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;

    	27

    	 

    

 

(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;

 

(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;

    	28

    	 

    

 

(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.

 

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.

    	29

    	 

    

 

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.

 

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.

    	30

    	 

    

 

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.

 

(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.

    	31

    	 

    

 

(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.

 

(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.

    	32

    	 

    

 

(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.

 

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

 

Section 5.8   Insurance.  On
or before the thirtieth day after Closing,

 

(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.

    	33

    	 

    

 

(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
1.11, 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.

 

(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.

    	34

    	 

    

 

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.

    	35

    	 

    

 

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.

 

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).

    	36

    	 

    

 

(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 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.

 

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.

    	37

    	 

    

 

(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.  Commencing March 31, 2012, Borrower will maintain a Current Ratio of at least 1.00 to 1.00.

 

(b)    Debt
Coverage Ratio.  Commencing on the last day of the fiscal quarter following any fiscal quarter in which there are,
on any day that fiscal quarter, outstanding Advances under the Term Loan (such date, the “Debt Coverage Ratio Commencement
Date”), Borrower shall maintain a Debt Coverage Ratio of no more than 3.50 to 1.00.

 

(c)     Interest
Coverage Ratio.  Commencing March 31, 2012, and continuing on a quarterly basis, Borrower will maintain an Interest
Coverage Ratio of at least 2.50 to 1.00.

    	38

    	 

    

 

(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.

 

(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.

    	39

    	 

    

 

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.

 

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.

    	40

    	 

    

 

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.

 

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.

    	41

    	 

    

 

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.

 

Section 6.4    Ownership
and Business Operations.

 

(a)    
Merge with or into any other Person;

 

(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 materialDebt 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;

 

(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;

    	42

    	 

    

 

(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; or

 

(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.

 

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.

    	43

    	 

    

 

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.

 

Section 6.8       Subsidiaries;
Structure.  Create any direct or indirect Subsidiary 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)    purchase
or redeem any of its Equity Interests or other securities; or

 

(d)    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;

    	44

    	 

    

 

(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;

 

(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.

    	45

    	 

    

 

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.

 

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

 

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.

 

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 attorneys 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.

    	46

    	 

    

 

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;

 

(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

    	47

    	 

    

 

(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 1.14(c).

 

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:

    	48

    	 

    

 

(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:

 

(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

    	49

    	 

    

 

(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

 

(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:

    	50

    	 

    

 

(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;

 

(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;

    	51

    	 

    

 

(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 1.13;

 

(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;

 

(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.

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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;

 

(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;

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(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;

 

(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;

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(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.

 

(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.

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(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.

 

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.

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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.

 

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.

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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 of 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.

 

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.

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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:

 

(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 1.11 and Section 12.9 allowed in such judicial proceeding; and

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(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 1.11 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.

 

(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.

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(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.

 

(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).

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(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 1.8(b)
above.

 

(b)     If
no Default or Event of Default then exists, all prepayments shall be applied ratably in accordance with Section 1.8(b) above.

 

(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.

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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;

 

(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;

    	64

    	 

    

 

(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;

 

(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.

 

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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.

 

(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.

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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.

2718 Montana Ave.

Suite 220

Billings, Montana 59101

Attention:   Mitchell
R. Thompson

Telephone:   (406)
245-4901

Facsimile:   (406)
245-4914

E-Mail:   mitch.thompson@voyageroil.com

 

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.

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(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.

 

(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.

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(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;

 

(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.

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(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

 

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.

    	70

    	 

    

 

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;

 

(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.

    	71

    	 

    

 

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.

 

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.

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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.

 

(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.

    	73

    	 

    

 

(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.”

 

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.

    	74

    	 

    

 

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 •

 

    	75

    	 

    

 

 

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/ J.R. Reger
	 	 	James Russell (J.R.) Reger
	 	 	Chief Executive Officer

 

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, Macquarie Bank Limited
	 	 	 
	 	 	 
	 	By:	/s/ Robert McRobbie
	 	Name:	Robert McRobbie
	 	Title:	Division Director, Legal Risk Management
	 	 	 
	 	 	 
	 	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 1.13(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-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%

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

 

“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 and (b) with respect to the Term Loan
[insert date that is exactly 30 months after Closing].

 

“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 1.7(c).

 

“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.

 

“Board”
is defined in Section 3.28 of this Agreement.

 

“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).

    	Appendix-2

    	 

    

 

“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.

 

“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:

 

(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;

    	Appendix-3

    	 

    

 

(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

 

(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 Mitch Thompson cease to be materially involved in the management of the Borrower and the development of the
Properties or either resign or are removed as Chief Executive Officer and Chief Financial 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.

    	Appendix-4

    	 

    

 

“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 all of the Properties.

 

“Commitment
Fee” is defined in Section 1.13(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 1.7(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.

 

“Contract
Rate” means (a) with respect to a Term 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 1.7(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.

    	Appendix-5

    	 

    

 

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

 

“Current
Assets” means on any date of determination, the consolidated 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 consolidated 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;

 

(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;

    	Appendix-6

    	 

    

 

(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 occurring in whole or in part after the Debt Coverage Ratio Commencement Date;
provided that (x) for the first fiscal quarter after the Debt Coverage Ratio Commencement Date, 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 Debt Coverage Ratio Commencement Date, 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 Debt Coverage
Ratio Commencement Date, 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).

 

“Debt Coverage
Ratio Commencement Date” is defined in Section 5.20(b).

 

“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 1.7(a).

 

“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

    	Appendix-7

    	 

    

 

(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 consolidated (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).

 

“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.

    	Appendix-8

    	 

    

 

“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.

 

“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.

    	Appendix-9

    	 

    

 

“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 1.14(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 1.14(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).

 

“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.

    	Appendix-10

    	 

    

 

“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.

 

“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

    	Appendix-11

    	 

    

 

(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)

 

“Indefeasibly”
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).

 

“Interest
Coverage Ratio” means, as of any date, the ratio of (a Borrower’s EBITDA for the four (4) most recent fiscal quarters
occurring in whole or in part after the Debt Coverage Ratio Commencement Date; provided that (i) for the first fiscal
quarter after the Debt Coverage Ratio Commencement Date, the Debt Coverage Ratio will be calculated using Borrowers’ EBITDA
for that first fiscal quarter multiplied by four; (ii) for the second fiscal quarter after the Debt Coverage Ratio Commencement
Date, the Debt 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 Debt Coverage Ratio Commencement Date, 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) 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 1.7(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;

    	Appendix-12

    	 

    

 

(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.

 

“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.

 

“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 1.7(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

    	Appendix-13

    	 

    

 

(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

 

(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 and the Term Loan, each as applicable.

 

“Loan Documents”
means this Agreement, the Promissory Note, the Security Documents,  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 1.7(g).

 

“Material
Adverse Effect” means any event or circumstance:

 

(a) 
that has a materially adverse effect on:

    	Appendix-14

    	 

    

 

(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

 

(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 [insert date that is exactly 36 months from Closing].

 

“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 and the Revolving 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.

    	Appendix-15

    	 

    

 

“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.

 

“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 1.14(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-16

    	 

    

 

“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.

 

“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 1.9(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-17

    	 

    

 

“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 1.4(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-18

    	 

    

 

“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 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 1.7(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-19

    	 

    

 

“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.

 

“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).

    	Appendix-20

    	 

    

 

“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.

 

“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-21

    	 

    
 

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-1NEITHER THE ISSUANCE AND SALE OF
THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144
OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

 

American Standard Energy Corp.

 

Warrant
To Purchase Common Stock

 

Warrant No.:                                                      

Date of Issuance: February 9, 2012 (“Issuance
Date”)

 

American Standard
Energy Corp., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted assigns (the
“Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or
after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), [                   ] (______) (subject
to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in
Section 16. This Warrant is issued pursuant to that certain Note and Warrant Purchase Agreement, dated as of February __, 2012,
by and among the Company, ASEN 2, Corp., a Delaware corporation, and the Holder (the “Purchase Agreement”).

 

    	 

    	 

    

 

		1.	EXERCISE OF WARRANT.

 

(a)           Mechanics
of Exercise. Subject to the terms and conditions hereof, this Warrant may be exercised by the Holder on any day on or after
the Issuance Date, in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached
hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant.
Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company
of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to
which this Warrant was so exercised (the “Aggregate Exercise Price”) in cash or via wire transfer of immediately
available funds. The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder.
Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as
cancellation of the original of this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number
of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same
effect as cancellation of the original of this Warrant after delivery of the Warrant Shares in accordance with the terms hereof.
On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall
transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit
B, to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the third (3rd)
Trading Day following the date on which the Company has received such Exercise Notice, the Company shall (X) provided that the
Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant
to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/ Withdrawal at Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver
to the Holder or, at the Holder’s instruction pursuant to the Exercise Notice, the Holder’s agent or designee, in each
case, sent by reputable overnight courier to the address as specified in the applicable Exercise Notice, a certificate, registered
in the Company’s share register in the name of the Holder or its designee (as indicated in the applicable Exercise Notice),
for the number of shares of Common Stock to which the Holder is entitled pursuant to such exercise. Upon delivery of an Exercise
Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect
to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account
or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in
connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted
for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then, at the request of the Holder,
the Company shall as soon as practicable and in no event later than three (3) Business Days after any exercise and at its own expense,
issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares
with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company
shall pay any and all taxes and fees which may be payable with respect to the issuance and delivery of Warrant Shares to the Holder
upon exercise of this Warrant. Notwithstanding the foregoing, the Company’s failure to deliver Warrant Shares to the Holder
on or prior to the second (2nd) Trading Day after the Company’s receipt of the Aggregate Exercise Price shall not be deemed
to be a breach of this Warrant.

 

(b)           Exercise
Price. For purposes of this Warrant, “Exercise Price” means $2.50, subject to adjustment as provided herein.

 

(c)           Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, to issue to the Holder within
the later of (i) three (3) Trading Days after receipt of the applicable Exercise Notice (or four (4) Trading Days if the Exercise
Notice is delivered after 5:00 P.M., New York City time, on the Exercise Date) and (ii) two (2) Trading Days after the Company’s
receipt of the Aggregate Exercise Price (or three (3) Trading Days if the Company receives the Aggregate Exercise Price after 5:00
P.M., New York City time, on the Exercise Date) (such later date, the “Share Delivery Deadline”), a certificate
for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or to credit the Holder’s balance account with DTC for such number of shares of Common Stock to which the
Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be) (A) the Holder shall have the right to
rescind its exercise or (B) if on or after such Share Delivery Deadline the Holder purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion of the number of shares
of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common
Stock, issuable upon such exercise that the Holder so anticipated receiving from the Company, then, in addition to all other remedies
available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s
discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation,
by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s
obligation to so issue and deliver such certificate or credit the Holder’s balance account with DTC for the number of shares
of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such
shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a certificate
or certificates representing such shares of Common Stock or credit the Holder’s balance account with DTC for the number of
shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay
cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares
of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii).

 

    	 

    	 

    

(d)             Mandatory
Exercise. Prior to the Expiration Date, upon the occurrence of a Mandatory Exercise Event (as defined below), the Company may
mandatorily cause the exercise by the Holder of a number of Warrant Shares equal to the lesser of (i) fifty percent (50%) of the
Warrant Shares exercisable on the Issuance Date or (ii) the outstanding Warrant Shares on the date of the Mandatory Exercise Notice
(as defined herein) (the “Mandatory Exercise”). A “Mandatory Exercise Event” shall have occurred
if (i) the Closing Sale Price for any twenty (20) consecutive Trading Days is equal to or greater than $5.00 (as adjusted for a
stock split, stock dividend, reverse stock split, subdivision, combination, reclassification or similar change in the capital structure
of the Company) or (ii) the Closing Sale Price for any twenty (20) consecutive Trading Days is equal to or greater than $9.00 (as
adjusted for a stock split, stock dividend, reverse stock split, subdivision, combination, reclassification or similar change in
the capital structure of the Company).

 

		(i)	Mandatory Exercise Notice. Upon the occurrence of a Mandatory Exercise Event, the Company
will deliver to Holder written notice thereof (a “Mandatory Exercise Notice”) within ten (10) Trading Days of
the Mandatory Exercise Event stating the number of the Warrant Shares to be issued pursuant to such Mandatory Exercise and the
applicable Aggregate Exercise Price. The Holder shall by the fifth Trading Day (the “Mandatory Exercise Payment Date”)
from receipt of the Mandatory Exercise Notice deliver to the Company the original Warrant that is being exercised, the Exercise
Notice and the Aggregate Exercise Price in cash or via wire transfer of immediately available funds. In no event shall the Holder
sell, assign or otherwise transfer any Warrants with respect to which a Mandatory Exercise Notice has been delivered to such Holder.

 

(e)           Limitations
on Exercises.  Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable
by the Holder hereof to the extent (but only to the extent) that the Holder together with any of its affiliates would beneficially
own in excess of  9.9% (the “Maximum Percentage”) of the Common Stock after giving effect to such
exercise. To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable (vis-à-vis
other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities
shall be exercisable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be
determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior
inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this
paragraph with respect to any subsequent determination of exercisability. For the purposes of this paragraph, beneficial ownership
and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall
be determined in accordance with Section 13(d) of the 1934 Act (as defined in the Securities Purchase Agreement) and the rules
and regulations promulgated thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict
conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary
or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply
to a successor Holder of this Warrant. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding,
including by virtue of any prior conversion or exercise of convertible or exercisable securities into Common Stock, including,
without limitation, pursuant to this Warrant or securities issued pursuant to the Purchase Agreement.  By written notice
to the Company, any Holder may increase or decrease the Maximum Percentage to any other percentage specified in such notice; provided
that (i) any such increase will not be effective until the 61st day after such notice is delivered to the Company, and (ii) any
such increase or decrease will apply only to the Holder sending such notice and not to any other holder of Warrants. The Maximum
Percentage limitation contained in this Section 1(e) shall not apply to a Mandatory Exercise Event pursuant to Section 1(d) or
in connection with the exercise of the Holder’s rights pursuant to a Fundamental Transaction set forth in Section 4(b).

 

(f)           Disputes.  In
the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are
not disputed and resolve such dispute in accordance with Section 13.

 

    	 

    	 

    

(g)           Insufficient
Authorized Shares. The Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of Common Stock hereunder (without regard
to any limitation otherwise contained herein with respect to the number of shares of Common Stock that may be acquirable upon exercise
of this Warrant). If, notwithstanding the foregoing, and not in limitation thereof, at any time while the Warrant remains outstanding
the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation to
reserve for issuance upon exercise of the Warrant at least a number of shares of Common Stock equal to the number of shares of
Common Stock as shall from time to time be necessary to effect the exercise of the Warrant then outstanding (the “Required
Reserve Amount”) (an “Authorized Share Failure”), then the Company shall promptly take all action
necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve
the Required Reserve Amount for the Warrant then outstanding. Without limiting the generality of the foregoing sentence, as soon
as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement or information statement and shall use its best efforts to solicit its stockholders’ approval of such
increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve
such proposal.

 

		2.	ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number
of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section
2.

 

(a)           Stock
Dividends and Splits. Without limiting any provision of Section 4, if the Company, at any time on or after the date hereof,
(i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines
(by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller
number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during
the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately
to reflect such event.

 

(b)           Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 2, the
number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so
that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise
contained herein).

 

(c)           Other
Events.  In the event that the Company shall take any action to which the provisions hereof are not strictly applicable,
or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the
provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors
shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if
applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(c) will increase
the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further
that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution,
then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally
recognized standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses
shall be borne by the Company.

 

    	 

    	 

    

 

(d)           Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

 

		3.	RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2
above, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this
Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon the complete
exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage)
immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
to the extent that the Holder’s right to participate in any such Distributions would result in the Holder exceeding the Maximum
Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or the beneficial ownership
of any such shares of Common Stock as a result of such Distribution to such extent) and such Distribution to such extent shall
be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Maximum Percentage).

 

		4.	PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.

 

(a)           Purchase
Rights.  In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired
if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to
any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent
shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding
the Maximum Percentage).

 

    	 

    	 

    

 

(b)           Fundamental
Transactions.  The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 4(b)
pursuant to written agreements, including agreements to deliver to the Holder in exchange for this Warrant a security of the Successor
Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation,
which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock
(but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the
purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction).
Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from
and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents
referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of
the Company and shall assume all of the obligations of the Company under this Warrant and the other Purchase Agreement with the
same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time
after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash,
assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common
stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable
Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the
provisions of this Warrant. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of written notice
to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant.  In
addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant
to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for
shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the
Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable
Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash,
assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities,
cash, assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would
have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately
prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant). Any exercise
of this Warrant in connection with a Fundamental Transaction may be conditioned upon the consummation of such Fundamental Transaction.

 

(c)         Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events
and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage,
applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of
this Warrant (or any such other warrant)).

 

		5.	NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by
amendment of its articles of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant
and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the
Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above
the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii)
shall, so long as the Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and
unissued shares of Common Stock, solely for the purpose of effecting the exercise of the Warrant, the maximum number of shares
of Common Stock as shall from time to time be necessary to effect the exercise of the Warrant then outstanding (without regard
to any limitations on exercise).

 

		6.	WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein,
the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed
the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer
upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any
right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise
of this Warrant.  In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the
Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company.

 

    	 

    	 

    

 

		7.	REISSUANCE OF WARRANTS.

 

(a)           Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the
Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.

 

(b)           Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to
the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the
Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase
the Warrant Shares then underlying this Warrant.

 

(c)           Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the
Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion
of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.

 

(d)           Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to
purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying
the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this
Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date,
and (iv) shall have the same rights and conditions as this Warrant.

 

		8.	NOTICES.  Whenever notice is required to be given under this Warrant, unless otherwise
provided herein, such notice shall be given in accordance with the Purchase Agreement. The Company shall provide the Holder with
prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action
and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i)
immediately upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and
certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes
its books or takes a record (A) with respect to any dividend or distribution upon the shares of Common Stock, (B) with respect
to any rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining
rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information
shall be made known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten
(10) Trading Days prior to the consummation of any Fundamental Transaction.  To the extent that any notice provided hereunder
constitutes, or contains, material, non-public information regarding the Company or any of its subsidiaries, the Company shall
simultaneously file such notice with the Securities and Exchange Commission pursuant to a Current Report on Form 8-K.

 

		9.	AMENDMENT AND WAIVER.  Except as otherwise provided herein, the provisions of
this Warrant may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company has obtained the written consent of the Holder.  No waiver shall be effective unless
it is in writing and signed by an authorized representative of the waiving party.

 

    	 

    	 

    

 

		10.	SEVERABILITY.  If any provision of this Warrant is prohibited by law or otherwise
determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the
invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long
as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would
otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid
or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited,
invalid or unenforceable provision(s).

 

		11.	GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed
by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained
herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in
any other jurisdiction to collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling
in favor of the Holder.  THE PARTIES HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

		12.	CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company
and the Holder and shall not be construed against any Person as the drafter hereof.  The headings of this Warrant are
for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant.

 

		13.	DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price,
the Closing Sale Price, the Bid Price or fair market value or the arithmetic calculation of the Warrant Shares (as the case may
be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the
case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute
to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination
or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the number
of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation
being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit
via facsimile (a) the disputed determination of the Exercise Price, the Closing Sale Price, the Bid Price or fair market value
(as the case may be) to an independent, reputable investment bank selected by the Holder or (b) the disputed arithmetic calculation
of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment
bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company
and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations
(as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall
be binding upon all parties absent demonstrable error.

 

    	 

    	 

    

 

		14.	REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction
Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein
shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any
other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to
all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without
any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested
by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including,
without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for shares as contemplated hereby
upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs
in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer
involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.

 

		15.	TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the
consent of the Company, provided that the assignee makes the representations set forth in Section 2.3 of the Purchase Agreement.

 

		16.	CERTAIN DEFINITIONS.  For purposes of this Warrant, the following terms shall
have the following meanings:

 

(a)           “Additional
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance
or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described
in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with,
or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar
rights).

 

(b)           “Approved
Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to
or subsequent to the date hereof pursuant to which shares of Common Stock and standard options to purchase Common Stock may be
issued to any employee, officer or director for services provided to the Company in their capacity as such.

 

(c)           “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not
apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported
by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time
of determination, the average of the bid prices of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for
a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such
time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company and
the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during such period.

 

(d)           “Bloomberg”
means Bloomberg, L.P.

 

(e)           “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

 

    	 

    	 

    

 

(f)           “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market,
as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if
the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin
board for such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average
of the ask prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc.
(formerly Pink Sheets LLC). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute
shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted
for any stock dividend, stock split, stock combination or other similar transaction during such period.

 

(g)           “Common
Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(h)           “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

 

(i)           “Eligible
Market” means The New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market,
the Nasdaq Capital Market or the Principal Market.

 

(j)           “Expiration
Date” means the earlier of (i) the date that is the fifth (5th) anniversary of the Issuance Date or, if such date falls
on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday or (ii) the Mandatory Exercise Payment Date if the Company delivers a Mandatory Exercise Notice
to the Holder pertaining to the balance of all outstanding Warrant Shares in accordance with Section 1(d)..

 

(k)           “Fundamental
Transaction” means that (i) the Company or any of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, (1) consolidate or merge with or into (whether or not the Company or any of its Subsidiaries is the surviving corporation)
any other Person, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) allow any other Person to make a purchase, tender or exchange offer
that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares
of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons
making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including
any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) reorganize,
recapitalize or reclassify the Common Stock, or (ii) any “person” or “group” (as these terms are used
for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and regulations promulgated thereunder) is or shall become
the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate
ordinary voting power represented by issued and outstanding Voting Stock of the Company.

 

(l)           “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.

   

    	 

    	 

    

 

(m)           “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.

 

(n)           “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.

 

(o)           “Principal
Market” means the OTC Bulletin Board.

 

(p)           “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.

 

(q)           “Trading
Day” means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common
Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the
final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time
of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise
designated as a Trading Day in writing by the Holder.

 

(r)           “Voting
Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have
the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or
trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might
have voting power by reason of the happening of any contingency).

 

[signature page follows]

 

    	 

    	 

    

 

IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.

 

	 	AMERICAN STANDARD ENERGY CORP.	 
	 	 	 	 
	 	By: 	 	 
	 	 	Name:  Scott Feldhacker	 
	 	 	Title:  Chief Executive Officer	 

 

    	 

    	 

    

 

EXHIBIT A

 

EXERCISE NOTICE

 

TO BE EXECUTED BY THE REGISTERED HOLDER
TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

AMERICAN STANDARD ENERGY CORP.

 

The undersigned
holder hereby exercises the right to purchase _________________ of the shares of Common Stock (“Warrant Shares”)
of American Standard Energy Corp. a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Common
Stock No. ___ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Warrant.

 

1.           Form
of Exercise Price.  The Holder intends that payment of the Exercise Price shall be made as:

 

		 ̈	a “Cash Exercise” with respect to _________________
Warrant Shares.

 

2.           Payment
of Exercise Price. The Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.

 

3.           Delivery
of Warrant Shares.  The Company shall deliver to Holder, or its designee or agent as specified below, the Warrant
Shares in accordance with the terms of the Warrant.  Delivery shall be made to Holder, or for its benefit, to the following
address:

 

_______________________

_______________________

_______________________

_______________________

 

4.          Accredited
Investor. The undersigned represents that the representations set forth in Section 2.3 of the Purchase Agreement are true and
correct as of the date of this Notice of Exercise.

 

Date: _______________ __, ______

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity:
_________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

    	 

    	 

    

 

EXHIBIT B

 

ACKNOWLEDGMENT

 

The Company hereby
acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common Stock
in accordance with the Transfer Agent Instructions dated ________, from the Company and acknowledged and agreed to by _______________.

 

	 	AMERICAN STANDARD ENERGY CORP.	 
	 	 	 	 
	 	By: 	 	 
	 	 	Name: 	 
	 	 	Title:

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