Document:

amendment11.htm

    AMENDMENT
NO. 11

     TO

    CREDIT
AGREEMENT

     

     

    THIS
AMENDMENT
NO.
11 is
entered
into
effective
as of
the
30th day
of
June,
2008,
by
and
between
WMLAND
ELECTRONICS,
INC.,
a
Minnesota
corporation
(the
"Borrower")
and
M&I
MARSHALL
&
ILSLEY
BANK,
a
banking
corporation
organized
and
existing
under
the
laws of
Wisconsin
("Bank").

     

    WHEREAS,
Borrower
and the
Bank
have
entered into
that
certain
Credit
and
Security
Agreement
dated
as
of
June
30,
2003,
as
amended
(the
"Credit Agreement")
pursuant
to
which
Bank
has
agreed
to
provide
a
revolving
credit
facility
to
Borrower
on
the
terns
and
conditions
contained
therein,
and

    WHEREAS,
Borrower
and
Bank
desire
to
amend
certain
provisions
of
the Credit
Agreement.

     

    NOW,
THEREFORE,
Bank
and
Borrower
hereby
agree
as
follows:

     

    1. 
Certain
Definitions. Capitalized
terms
used
herein
and
not
otherwise
defined
shall
have the
meanings
set
forth
in
the
Credit
Agreement.

     

    2. 
Maturity
Date. The
definition
of
"Maturity
Date"
as
set
forth
in
Section
1.1
of
the
Credit
Agreement
is
hereby
amended
by
deleting
the
date
"June
30,2008,"
and
replacing
it
with
the
date
"June
30,2009."

     

    3. 
LIBOR
Rate. The
definition
of
"LIBOR
Rate"
as
set
forth
in
Section
1.1 of
the
Credit
Agreement
is
hereby
amended
by
deleting
clause
(ii)
of
said
definition
in
its
entirety
and
replacing
the
same
with
the
following:
"(ii)
two and
three-fourths
percent
(2.75%)."

     

    4. 
Miscellaneous. Except
as
specifically
set
forth
herein,
the
Credit
Agreement
shall
remain
in
full
force
and
effect,
with
no
other
modification
or
waiver.
This Amendment shall
be
governed by,
and
construed
in
accordance with,
the
laws
of
the
State
of
Wisconsin.
This
Amendment may
be
executed
in
two
or
more
counterparts
each
of
which
shall
be
deemed
an original,
but
all
of
which
taken
together
shall
constitute
one
and
the
same
agreement.
The
Borrower
hereby
restates
and
reaffirms
its
obligation
under
the
Credit
Agreement
to
pay
on
demand
all
costs
and
expenses,
including (without
limitation)
attorneys'
fees,
incurred
by
the
Lender
in connection with
the
Obligations,
this
Amendment,
the
Loan
Documents,
and
any
other
document
or
agreement
related
hereto,
and
the
transactions
contemplated
hereby.

     

    IN
WITNESS
WHEREOF,
the
parties
hereto
have
caused
this
Amendment
No.
11
to
Credit
Agreement
to
be
executed
as
of
the
day
and
year
first written
above.

     

     

     

     

    
       

      
        	M&I
      Marshall & Ilsley Bank	 	 	 Winland
      Electronics, Inc.	 
	 	 	 	 	 
	
                /s/
      (illegible)

              	 	 	
                /s/
      Glenn A. Kermes

              	 
	
                 

              	 	 	
                Glenn
      A. Kermes

              	 
	
                Its
      Assistant Vice President

              	 	 	
                Chief
      Financial Officer

              	 

      

      
        	 	 	 	 	 
	 	 	 	 	 
	
                /s/ 
      Ryan McKinney

              	 	 	
              	 
	
                Ryan
      McKinney

              	 	 	
                 

              	 
	
                Its
      Senior Vice Presidentcreditagreement.htm

    
      

    

     EXECUTION

    

     

    AMENDED
AND RESTATED CREDIT AGREEMENT

    

     

      
        

      

    

    

    BERRY
PETROLEUM COMPANY

    

    and

    

    WELLS
FARGO BANK, NATIONAL ASSOCIATION

    as
Administrative Agent, Lead Arranger, Swing Line Lender and Joint Book
Runner

    

    SOCIÉTÉ
GÉNÉRALE and BNP PARIBAS

    as Joint
Book Runners and Co-Syndication Agents

    

    JPMORGAN
CHASE BANK, N.A.. and THE ROYAL BANK OF SCOTLAND plc

    as
Co-Documentation Agents

    

    and

    

    CERTAIN
FINANCIAL INSTITUTIONS

    as
Lenders

    

     

      
        

      

    

     

    July 15,
2008

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE OF
CONTENTS

    Page

     

    
      
        	
                ARTICLE
      I - - Definitions and References

              	
                1

              
	
                Section
      1.1.

              	
                Defined
      Terms

              	
                1

              
	
                Section
      1.2.

              	
                Exhibits
      and Schedules; Additional Definitions

              	
                24

              
	
                Section
      1.3.

              	
                Amendment
      of Defined Instruments

              	
                24

              
	
                Section
      1.4.

              	
                References
      and Titles

              	
                25

              
	
                Section
      1.5.

              	
                Calculations
      and Determinations

              	
                25

              
	
                Section
      1.6.

              	
                Joint
      Preparation; Construction of Indemnities and Releases

              	
                25

              
	 	 
	
                ARTICLE
      II - - The Loans and Letters of Credit

              	
                25

              
	
                Section
      2.1.

              	
                Commitments
      to Lend; Notes

              	
                26

              
	
                Section
      2.2.

              	
                Requests
      for New Revolving Loans

              	
                26

              
	
                Section
      2.3.

              	
                Continuations
      and Conversions of Existing Loans

              	
                27

              
	
                Section
      2.4.

              	
                Use
      of Proceeds

              	
                28

              
	
                Section
      2.5.

              	
                Interest
      Rates and Fees

              	
                28

              
	
                Section
      2.6.

              	
                Optional
      Prepayments

              	
                29

              
	
                Section
      2.7.

              	
                Mandatory
      Prepayments

              	
                30

              
	
                Section
      2.8.

              	
                Initial
      Borrowing Base

              	
                31

              
	
                Section
      2.9.

              	
                Subsequent
      Redeterminations of Borrowing Base

              	
                31

              
	
                Section
      2.10.

              	
                Decrease
      in Aggregate Commitment

              	
                32

              
	
                Section
      2.11.

              	
                Letters
      of Credit

              	
                32

              
	
                Section
      2.12.

              	
                Requesting
      Letters of Credit

              	
                33

              
	
                Section
      2.13.

              	
                Reimbursement
      and Participations

              	
                34

              
	
                Section
      2.14.

              	
                Letter
      of Credit Fees

              	
                35

              
	
                Section
      2.15.

              	
                No
      Duty to Inquire

              	
                35

              
	
                Section
      2.16.

              	
                LC
      Collateral

              	
                36

              
	
                Section
      2.17.

              	
                Swing
      Line Loans

              	
                37

              
	
                Section
      2.18.

              	
                Obligations
      of Lenders Several

              	
                40

              
	 	 
	
                ARTICLE
      III - - Payments to Lenders

              	
                40

              
	
                Section
      3.1.

              	
                General
      Procedures

              	
                40

              
	
                Section
      3.2.

              	
                Increased
      Costs

              	
                41

              
	
                Section
      3.3.

              	
                Illegality

              	
                42

              
	
                Section
      3.4.

              	
                Funding
      Losses

              	
                43

              
	
                Section
      3.5.

              	
                Taxes

              	
                43

              
	
                Section
      3.6.

              	
                Alternative
      Rate of Interest

              	
                45

              
	
                Section
      3.7.

              	
                Mitigation
      Obligations; Replacement of Lenders

              	
                45

              
	 	 
	
                ARTICLE
      IV - - Conditions Precedent to Lending

              	
                47

              
	
                Section
      4.1.

              	
                Documents
      to be Delivered

              	
                47

              
	
                Section
      4.2.

              	
                Additional
      Conditions Precedent

              	
                49

              
	 	 
	
                ARTICLE
      V - - Representations and Warranties

              	
                50

              
	
                Section
      5.1.

              	
                No
      Default

              	
                50

              
	
                Section
      5.2.

              	
                Organization
      and Good Standing

              	
                51

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
      5.3.

              	
                Authorization

              	
                51

              
	
                Section
      5.4.

              	
                No
      Conflicts or Consents

              	
                51

              
	
                Section
      5.5.

              	
                Enforceable
      Obligations

              	
                51

              
	
                Section
      5.6.

              	
                Initial
      Financial Statements

              	
                51

              
	
                Section
      5.7.

              	
                Other
      Obligations and Restrictions

              	
                51

              
	
                Section
      5.8.

              	
                Full
      Disclosure

              	
                52

              
	
                Section
      5.9.

              	
                Litigation

              	
                52

              
	
                Section
      5.10.

              	
                Labor
      Disputes and Acts of God

              	
                53

              
	
                Section
      5.11.

              	
                ERISA
      Plans and Liabilities

              	
                53

              
	
                Section
      5.12.

              	
                Environmental
      and Other Laws

              	
                53

              
	
                Section
      5.13.

              	
                Names
      and Places of Business

              	
                54

              
	
                Section
      5.14.

              	
                Borrower’s
      Subsidiaries

              	
                54

              
	
                Section
      5.15.

              	
                Government
      Regulation

              	
                54

              
	
                Section
      5.16.

              	
                Solvency

              	
                54

              
	
                Section
      5.17.

              	
                Title
      to Properties; Licenses

              	
                54

              
	
                Section
      5.18.

              	
                Leases
      and Contracts; Performance of Obligations

              	
                55

              
	
                Section
      5.19.

              	
                Gas
      Imbalances, Prepayments

              	
                55

              
	
                Section
      5.20.

              	
                Operation
      of Mineral Interests

              	
                56

              
	
                Section
      5.21.

              	
                Regulation
      U

              	
                56

              
	 	 
	
                ARTICLE
      VI - - Affirmative Covenants of Borrower

              	
                57

              
	
                Section
      6.1.

              	
                Payment
      and Performance

              	
                57

              
	
                Section
      6.2.

              	
                Books,
      Financial Statements and Reports

              	
                57

              
	
                Section
      6.3.

              	
                Other
      Information and Inspections

              	
                59

              
	
                Section
      6.4.

              	
                Notice
      of Material Events and Change of Address

              	
                59

              
	
                Section
      6.5.

              	
                Maintenance
      of Properties

              	
                60

              
	
                Section
      6.6.

              	
                Maintenance
      of Existence and Qualifications

              	
                60

              
	
                Section
      6.7.

              	
                Payment
      of Trade Liabilities, Taxes, etc

              	
                60

              
	
                Section
      6.8.

              	
                Insurance

              	
                61

              
	
                Section
      6.9.

              	
                Performance
      on Borrower’s Behalf

              	
                61

              
	
                Section
      6.10.

              	
                Interest

              	
                61

              
	
                Section
      6.11.

              	
                Compliance
      with Agreements and Law

              	
                62

              
	
                Section
      6.12.

              	
                Environmental
      Matters; Environmental Reviews

              	
                62

              
	
                Section
      6.13.

              	
                Evidence
      of Compliance

              	
                62

              
	
                Section
      6.14.

              	
                Bank
      Accounts; Offset

              	
                63

              
	
                Section
      6.15.

              	
                Guaranties
      of Borrower’s Subsidiaries

              	
                63

              
	
                Section
      6.16.

              	
                Pledge
      of Stock of Foreign Subsidiaries

              	
                63

              
	
                Section
      6.17.

              	
                Collateral

              	
                64

              
	
                Section
      6.18.

              	
                Agreement
      to Deliver Security Documents

              	
                64

              
	
                Section
      6.19.

              	
                Production
      Proceeds

              	
                65

              
	
                Section
      6.20.

              	
                Mortgaged
      Property Covenants

              	
                65

              
	 	 
	
                ARTICLE
      VII - - Negative Covenants of Borrower

              	
                65

              
	
                Section
      7.1.

              	
                Indebtedness

              	
                65

              
	
                Section
      7.2.

              	
                Limitation
      on Liens

              	
                66

              
	
                Section
      7.3.

              	
                Hedging
      Contracts

              	
                66

              
	
                Section
      7.4.

              	
                Limitation
      on Mergers, Issuances of Securities

              	
                68

              
	
                Section
      7.5.

              	
                Limitation
      on Sales of Property

              	
                69

              

      

       

      
        
          
          

        

        
          ii

          
            

          

        

        
          
          

        

      

       

      
        	
                Section
      7.6.

              	
                Limitation
      on Dividends, Stock Repurchases and Subordinated Debt

              	
                70

              
	
                Section
      7.7.

              	
                Limitation
      on Acquisitions, Investments; and New Businesses

              	
                70

              
	
                Section
      7.8.

              	
                Limitation
      on Credit Extensions

              	
                70

              
	
                Section
      7.9.

              	
                Transactions
      with Affiliates

              	
                70

              
	
                Section
      7.10.

              	
                Prohibited
      Contracts

              	
                70

              
	
                Section
      7.11.

              	
                Current
      Ratio

              	
                72

              
	
                Section
      7.12.

              	
                EBITDAX
      to Total Funded Debt Ratio

              	
                72

              
	 	 
	
                ARTICLE
      VIII - - Events of Default and Remedies

              	
                72

              
	
                Section
      8.1.

              	
                Events
      of Default

              	
                72

              
	
                Section
      8.2.

              	
                Remedies

              	
                74

              
	
                Section
      8.3.

              	
                Application
      of Proceeds After Acceleration

              	
                74

              
	 	 
	
                ARTICLE
      IX - - Administrative Agent

              	
                75

              
	
                Section
      9.1.

              	
                Appointment
      and Authority

              	
                75

              
	
                Section
      9.2.

              	
                Exculpation
      Provisions

              	
                75

              
	
                Section
      9.3.

              	
                Reliance
      by Administrative Agent

              	
                76

              
	
                Section
      9.4.

              	
                Non-Reliance
      on Administrative Agent and Other Lenders

              	
                77

              
	
                Section
      9.5.

              	
                Rights
      as Lender

              	
                77

              
	
                Section
      9.6.

              	
                Sharing
      of Set-Offs and Other Payments

              	
                77

              
	
                Section
      9.7.

              	
                Investments

              	
                78

              
	
                Section
      9.8.

              	
                Resignation
      of Administrative Agent

              	
                78

              
	
                Section
      9.9.

              	
                Delegation
      of Duties

              	
                79

              
	
                Section
      9.10.

              	
                No
      Other Duties, etc

              	
                79

              
	
                Section
      9.11.

              	
                Administrative
      Agent May File Proofs of Claim

              	
                79

              
	
                Section
      9.12.

              	
                Guaranty
      Matters

              	
                80

              
	
                Section
      9.13.

              	
                Collateral
      Matters.

              	
                80

              
	 	 
	
                ARTICLE
      X - - Miscellaneous

              	
                82

              
	
                Section
      10.1.

              	
                Waivers
      and Amendments; Acknowledgments

              	
                82

              
	
                Section
      10.2.

              	
                Survival
      of Agreements; Cumulative Nature

              	
                83

              
	
                Section
      10.3.

              	
                Notices;
      Effectiveness; Electronic Communication

              	
                84

              
	
                Section
      10.4.

              	
                Payment
      of Expenses; Indemnity

              	
                85

              
	
                Section
      10.5.

              	
                Successors
      and Assigns; Assignments

              	
                87

              
	
                Section
      10.6.

              	
                Confidentiality

              	
                89

              
	
                Section
      10.7.

              	
                Governing
      Law; Submission to Process

              	
                89

              
	
                Section
      10.8.

              	
                Limitation
      on Interest

              	
                90

              
	
                Section
      10.9.

              	
                Termination;
      Limited Survival

              	
                90

              
	
                Section
      10.10.

              	
                Severability

              	
                90

              
	
                Section
      10.11.

              	
                Counterparts;
      Fax

              	
                90

              
	
                Section
      10.12.

              	
                WAIVER
      OF JURY TRIAL, PUNITIVE DAMAGES, ETC

              	
                90

              
	
                Section
      10.13.

              	
                Ratification
      of Agreements

              	
                91

              
	
                Section
      10.14.

              	
                Amendment
      and Restatement

              	
                91

              

      

    

     

    
      
         

      

      
        iii

        
          

        

      

      
         

      

    

    Schedules and
Exhibits:

    

    
      	
              Schedule
      1

            	
              -

            	
              Lenders
      Schedule

            
	
              Schedule
      2

            	
              -

            	
              Insurance
      Schedule

            
	
              Schedule
      3

            	
              -

            	
              Security
      Schedule

            
	
              Schedule
      4

            	
              -

            	
              Post-Closing
      Obligations

            
	
              Schedule
      5

            	
              -

            	
              Addresses
      of Lenders for Notices

            
	 
      	 
      	 
      
	
              Exhibit
      A

            	
              -

            	
              Promissory
      Note

            
	
              Exhibit
      B-1

            	
              -

            	
              Borrowing
      Notice

            
	
              Exhibit
      B-2

            	
              -

            	
              Swing
      Line Loan Notice

            
	
              Exhibit
      C

            	
              -

            	
              Continuation/Conversion
      Notice

            
	
              Exhibit
      D

            	
              -

            	
              Certificate
      Accompanying Financial Statements

            
	
              Exhibit
      E

            	
              -

            	
              Opinion
      of Counsel for Restricted Persons

            
	
              Exhibit
      F

            	
              -

            	
              Assignment
      and Assumption Agreement

            

    

     

    
      
         

      

      
        iv

        
          

        

      

      
         

      

    

    AMENDED AND RESTATED CREDIT
AGREEMENT

     

    THIS
AMENDED AND RESTATED CREDIT AGREEMENT is made as of July 15, 2008, by and among
BERRY PETROLEUM COMPANY, a Delaware corporation (herein called “Borrower”), WELLS
FARGO BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent
(herein called “Administrative
Agent”), and the Lenders referred to below.  In consideration
of the mutual covenants and agreements contained herein the parties hereto agree
as follows:

     

    WHEREAS,
Borrower, certain of the Lenders, and Administrative Agent are parties to the
Existing Credit Agreement (as defined below), pursuant to which the Lenders have
made revolving credit loans to Borrower and have issued or participated in
letters of credit for the account of Borrower; and

     

    WHEREAS,
Borrower has requested that (i) the Loans outstanding under the Existing Credit
Agreement and the Existing Letters of Credit (as defined below) outstanding
under the Existing Credit Agreement be continued as Loans and Letters of Credit
under this Agreement, the proceeds of which are to be used by Borrower for the
purposes described hereinbelow, and (ii) the Existing Credit Agreement otherwise
be amended and restated in its entirety as set forth below in this Agreement;
and

     

    WHEREAS,
the Lenders are willing, on and subject to the terms and conditions set forth in
this Agreement, to amend and restate the terms of the Existing Credit Agreement
and to extend credit under this Agreement as more particularly hereinafter set
forth.

     

    ACCORDINGLY,
in consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

     

     

    ARTICLE I
-  - Definitions and
References

     

    Section
1.1.          Defined
Terms.  As
used in this Agreement, each of the following terms has the meaning given to
such term in this Section 1.1 or in the sections and subsections referred to
below:

     

    “Acquisition
Documents” means (a) Purchase And Sale Agreement Between O'Brien
Resources, LLC, Sepco II, LLC, Liberty Energy, LLC, Crow Horizons Company and
O'Benco II, LP, collectively, as Seller, and Berry Petroleum Company, as
Purchaser dated as of June 10, 2008, (b) the Assignment of Bill and Sale
by  such seller in favor of Borrower, and (c) all other agreements or
instruments delivered in connection therewith to consummate the acquisition
contemplated thereby.

    

    “Adjusted Base Rate”
means, for any day, the Base Rate plus the Base Rate Margin for such day,
provided that the Adjusted Base Rate charged by any Person shall never exceed
the Highest Lawful Rate.

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    “Adjusted EBITDAX”
means, for any period, EBITDAX for such period adjusted (a) as permitted and in
accordance with Article 11 of Regulation S-X promulgated by the SEC, and (b) to
give  effect to any acquisition or divestiture made by Borrower or any
of its Consolidated subsidiaries during such period as if such transactions had
occurred on the first day of such period, regardless of whether the effect is
positive or negative.

     

    “Adjusted Eurodollar
Rate” means, for any Eurodollar Loan for any day during any Interest
Period therefor, the rate per annum equal to the sum of (a) the Eurodollar
Margin for such day plus (b) the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by Administrative Agent to be equal to
the quotient obtained by dividing (i) the Eurodollar Rate for such Eurodollar
Loan for such Interest Period by (ii) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period, provided that no Adjusted Eurodollar
Rate charged by any Person shall ever exceed the Highest Lawful
Rate.  The Adjusted Eurodollar Rate for any Eurodollar Loan shall
change whenever the Eurodollar Margin or the Reserve Requirement
changes.

     

    “Administrative Agent”
means Wells Fargo, as Administrative Agent hereunder, and its successors in such
capacity.

     

    “Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied
by Administrative Agent.

     

    “Affiliate” means, as
to any Person, each other Person that directly or indirectly (through one or
more intermediaries or otherwise) controls, is controlled by, or is under common
control with, such Person.  A Person shall be deemed to be “controlled
by” any other Person if such other Person possesses, directly or indirectly,
power

     

    (a)           to
vote 10% or more of the Equity Interests in such Person (on a fully diluted
basis) having ordinary voting power for the election of directors or similar
managing group; or

     

    (b)           to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.

     

    “Aggregate Commitment”
means the aggregate amount of the Commitments of the Lenders; provided that in
no event shall the Aggregate Commitment exceed the Maximum Credit
Amount.

     

    “Agreement” means this
Credit Agreement.

     

    “Applicable Lending
Office” means, with respect to each Lender, such Lender’s Domestic
Lending Office in the case of Base Rate Loans and such Lender’s Eurodollar
Lending Office in the case of Eurodollar Loans.

     

    “Approved Fund” means
any Fund that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     “Assignment and
Assumption” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 10.5), and accepted by Administrative Agent, in
substantially the form of Exhibit F or any other form approved by
Administrative Agent.

     

    “Availability” means
on any day during the Commitment Period, the unused portion of the Borrowing
Base, determined for such day by deducting from such lesser amount at the end of
such day, the Facility Usage.

     

    “Base Rate” means,
for any day, the rate per annum equal to the higher of (a) the Federal Funds
Rate for such day plus one-half of one percent (.5%) and (b) the Prime Rate for
such day.  Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or Federal Funds Rate.  As used in this
definition, “Prime
Rate” means, at any time, the per annum rate of interest most recently
announced within Wells Fargo at its principal office in San Francisco as its
Prime Rate, with the understanding that Wells Fargo’s Prime Rate is one of its
base rates and serves as the basis upon which effective rates of interest are
calculated for those loans making reference thereto, and is evidenced by the
recording thereof after its announcement in such internal publication or
publications as Wells Fargo may designate.  Each change in the Prime
Rate will be effective on the day the change is announced within Wells
Fargo.

     

    “Base Rate Loan” means
a Loan which does not bear interest at the Adjusted Eurodollar
Rate.

     

    “Base Rate Margin”
means, on any day, the following percentages per annum based on the Utilization
Percentage as set forth below:

     

    
      	 
      	
              Utilization
      Percentage

            	
              Base
      Rate Margin

            
	
              Level
      1

            	
              < 50%

            	
              0.125%

            
	
              Level
      2

            	
              ≥
      50% but < 75%

            	
              0.125%

            
	
              Level
      3

            	
              ≥
      75% but < 90%

            	
              0.375%

            
	
              Level
      4

            	
              ≥
      90%

            	
              0.625%

            

    

     

    “Borrowing” means a
borrowing of new Revolving Loans of a single Type, and in the case of Eurodollar
Loans, with the same Interest Period, pursuant to Section 2.2, a Continuation or
Conversion of existing Loans into a single Type (and, in the case of Eurodollar
Loans, with the same Interest Period) pursuant to Section 2.3, or a borrowing of
a Swing Line Loan pursuant to Section 2.17 as the context may
require.

     

    “Borrowing Base”
means, at the particular time in question, either the amount provided for in
Section 2.8 or the amount determined by Administrative Agent and Required
Lenders (or in the case of an increase in the Borrowing Base, all Lenders) in
accordance with the provisions of Section 2.9; provided, however, that in no
event shall the Borrowing Base ever exceed the Aggregate
Commitment.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    “Borrowing Base
Deficiency” has the meaning given to such term in Section
2.7(a).

     

    “Borrowing Notice”
means a written or telephonic request, or a written confirmation, made by
Borrower which meets the requirements of Section 2.2.

     

    “Borrowing Base
Properties” means the Mineral Interests evaluated by Lenders for purposes
of establishing the Borrowing Base.

     

    “Business Day” means a
day, other than a Saturday or Sunday, on which commercial banks are open for
business with the public in Denver, Colorado.  Any Business Day in any
way relating to Eurodollar Loans (such as the day on which an Interest Period
begins or ends) must also be a day on which, in the judgment of Administrative
Agent, significant transactions in dollars are carried out in the interbank
eurocurrency market.

     

    “Capital Lease” means
a lease with respect to which the lessee is required concurrently to recognize
the acquisition of an asset and the incurrence of a liability in accordance with
GAAP.

     

    “Capital Lease
Obligation” means, with respect to any Person and a Capital Lease, the
amount of the obligation of such Person as the lessee under such Capital Lease
which should, in accordance with GAAP, appear as a liability on the balance
sheet of such Person.

     

    “Cash Equivalents”
means Investments in:

     

    (a)           marketable
obligations, maturing within twelve months after acquisition thereof, issued or
unconditionally guaranteed by the United States of America or an instrumentality
or agency thereof and entitled to the full faith and credit of the United States
of America;

     

    (b)           demand
deposits, and time deposits (including certificates of deposit) maturing within
twelve months from the date of deposit thereof, with any office of any Lender or
with a domestic office of any national or state bank or trust company which is
organized under the Laws of the United States of America or any state therein,
which has capital, surplus and undivided profits of at least $500,000,000, and
whose long term certificates of deposit are rated at least A2 by Moody’s or A by
S & P;

     

    (c)           repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in subsection (a) above entered into with any commercial
bank meeting the specifications of subsection (b) above;

     

    (d)           open
market commercial paper, maturing within 270 days after acquisition thereof,
which are rated at least P-1 by Moody’s or A-1 by S & P; and

     

    (e)           money
market or other mutual funds substantially all of whose assets comprise
securities of the types described in subsections (a) through (d)
above.

     

    “Change in Law” means
the occurrence, after the date of this Agreement, of any of the following: (a)
the adoption or taking effect of any law, rule, regulation or treaty, (b) any
change in any law, rule, regulation or treaty or in the administration,
interpretation or application thereof by any Governmental Authority or (c) the
making or issuance of any request, guideline or directive (whether or not having
the force of law) by any Governmental Authority.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    “Change of Control”
means the occurrence of either of the following events: (a) any Person or two or
more Persons acting as a group shall acquire beneficial ownership (within the
meaning of Rule 13d-3 of the SEC under the Securities Act of 1934, as amended,
and including holding proxies to vote for the election of directors other than
proxies held by Borrower’s management or their designees to be voted in favor of
Persons nominated by Borrower’s Board of Directors) of 30% or more of the
outstanding voting securities of Borrower, measured by voting power (including
both common stock and any preferred stock or other equity securities entitling
the holders thereof to vote with the holders of common stock in elections for
directors of Borrower) or (b) one-third or more of the directors of Borrower
shall consist of Persons not nominated by Borrower’s Board of Directors (not
including as Board nominees any directors which the Board is obligated to
nominate pursuant to shareholders agreements, voting trust arrangements or
similar arrangements).

     

    “Closing Date” means
the date on which all of the conditions precedent set forth in Section 4.1 and
Section 4.2 shall have been satisfied or waived.

     

     “Collateral” means all
property of any kind which is subject to a Lien in favor of Lenders (or in favor
of Administrative Agent for the benefit of Lenders) or which, under the terms of
any Security Document, is purported to be subject to such a Lien, in each case
that secures the Secured Obligations.

     

    “Commitment” means,
for each Lender, the obligation of such Lender to make Loans to, and participate
in Letters of Credit issued upon the application of, Borrower in an aggregate
amount not exceeding the amount set forth on the Lenders Schedule or as set
forth in any Assignment and Assumption relating to any assignment that has
become effective pursuant to Section 10.5, as such amount may be modified from
time to time pursuant to the terms hereof; provided that no Lender’s Commitment
shall ever exceed such Lender’s Percentage Share of the Aggregate
Commitment.

     

    “Commitment Fee Rate”
means, on any day, the following percentages per annum based on the Utilization
Percentage set forth below; provided that the outstanding Swing Line Loans shall
be excluded for purposes of calculating the Commitment Fee Rate:

     

    
      	 
      	
              Utilization
      Percentage

            	
              Commitment
      Fee

            
	
              Level
      1

            	
              < 50%

            	
              0.25%

            
	
              Level
      2

            	
              ≥
      50% but < 75%

            	
              0.30%

            
	
              Level
      3

            	
              ≥
      75% ut < 90%

            	
              0.375%

            
	
              Level
      4

            	
              ≥
      90%

            	
              0.375%

            

    

    

    “Commitment Period”
means the period from and including the Closing Date until the Maturity Date
(or, if earlier, the day on which the obligations of Lenders to make Loans
hereunder and the obligations of LC Issuer to issue Letters of Credit hereunder
have been terminated or the Notes first become due and payable in
full).

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    “Consolidated” refers
to the consolidation of any Person, in accordance with GAAP, with its properly
consolidated subsidiaries.  References herein to a Person’s
Consolidated financial statements, financial position, financial condition,
liabilities, etc. refer to the consolidated financial statements, financial
position, financial condition, liabilities, etc. of such Person and its properly
consolidated subsidiaries.

     

    “Continuation” shall
refer to the continuation pursuant to Section 2.3 hereof of a Eurodollar Loan as
a Eurodollar Loan from one Interest Period to the next Interest
Period.

     

    “Continuation/Conversion
Notice” means a written or telephonic request, or a written confirmation,
made by Borrower which meets the requirements of Section 2.3.

     

    “Conversion” shall
refer to a conversion pursuant to Section 2.3 or ARTICLE III - of one Type of
Loan into another Type of Loan.

     

    “Core Acquisitions and
Investments” means (i) acquisitions of Mineral Interests and
acquisitions of assets used in the producing, drilling, transportation,
processing, refining or marketing of petroleum products that are related to
Borrower’s producing Mineral Interests, and (ii) acquisitions of or
Investments in Persons engaged primarily in the business of acquiring,
developing and producing Mineral Interests or transporting, processing, refining
or marketing petroleum products that are related to Borrower’s producing Mineral
Interests; provided that with respect to any acquisition or Investment described
in this clause (ii), either (A) immediately after making such acquisition or
Investment, Borrower shall own at least fifty-one percent (51%) of the Equity
Interests of such Person, measured by voting power, or (B) such Person shall not
be a publicly traded entity and such acquisition or Investment shall be related
to the business and operations of Borrower or one of its
Subsidiaries.

     

    “Current Assets” means
the sum of the current assets of Borrower and its Consolidated Subsidiaries at
such time, plus the Availability at such time, but excluding, for purposes of
this definition any non-cash gains for any Hedging Contract resulting from the
requirements at such time of SFAS 133 or any replacement accounting
standard.

     

    “Current Liabilities”
means the current liabilities of Borrower and its Consolidated Subsidiaries at
such time, but excluding for purposes of this definition, (i) any non-cash
losses or charges on any Hedging Contract resulting from the requirement at such
time of SFAS 133 or any replacement accounting standard and (ii) current
maturities of the Obligations.

     

    “Default” means any
Event of Default and any default, event or condition which would, with the
giving of any requisite notices and the passage of any requisite periods of
time, constitute an Event of Default.

     

    “Default Rate” means,
at the time in question (a) with respect to any Base Rate Loan and any Swing
Line Loan, the rate per annum equal to three percent (3%) above the Adjusted
Base Rate then in effect and (b) with respect to any Eurodollar Loan, the rate
per annum equal to three percent (3%) above the Adjusted Eurodollar Rate then in
effect for such Loan, provided in each case that no Default Rate charged by any
Person shall ever exceed the Highest Lawful Rate.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    “Determination Date”
has the meaning given to such term in Section 2.9.

     

    “Disclosure Letter”
means the letter of even date with the Agreement from Borrower to the
Agent.

     

    “Disclosure Report”
means either a notice given by Borrower under Section 6.4 or a certificate given
by Borrower’s Chief Financial Officer under Section 6.2(a).

     

    “Dividend” means any
dividend or other distribution made by a Restricted Person on or in respect of
any stock, partnership interest, or other equity interest in such Restricted
Person or any other Restricted Person (including any option or warrant to buy
such an equity interest), excluding Stock Repurchases.

     

    “Domestic Lending
Office” means, with respect to any Lender, the office of such Lender
specified as its “Domestic Lending Office” below its name on the Lenders
Schedule, or such other office as such Lender may from time to time specify to
Borrower and Administrative Agent; with respect to LC Issuer, the office,
branch, or agency through which it issues Letters of Credit; and, with respect
to Administrative Agent, the office, branch, or agency through which it
administers this Agreement.

     

    “Domestic Subsidiary”
means any Subsidiary that is organized under the laws of any political
subdivision of the United States.

     

    “EBITDAX” means, for
any period, the sum of (without duplication, and without giving effect to any
extraordinary losses or gains during such period) the following determined on a
Consolidated basis (1) Net Income during such period, plus (2) all interest
paid or accrued during such period on Indebtedness (including amortization of
original issue discount and the interest component of any deferred payment
obligations and capital lease obligations) which was deducted in determining
such Net Income, plus (3) all income taxes which were deducted in determining
such Net Income, plus (4) all depreciation, amortization (including amortization
of goodwill and debt issue costs), depletion, accretion and other non-cash
charges (including any provision for the reduction in the carrying value of
assets recorded in accordance with GAAP) which were deducted in determining such
Net Income, plus (5) all exploration expenses which were deducted in determining
such Net Income, minus (6) all non-cash items of income which were included in
determining such Net Income.

     

    “Eligible Assignee”
means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved
Fund, and (d) any other Person (other than a natural person), approved by
(i) Administrative Agent, (ii) in the case of any assignment of a
Commitment, the LC Issuer, and (iii) unless a Default has occurred and is
continuing, Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible Assignee” shall
not include Borrower or any of Borrower’s Affiliates or
Subsidiaries.

    

    “Engineering Report”
means the Initial Engineering Report and each engineering report delivered
pursuant to Section 6.2.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    “Environmental Laws”
means any and all Laws relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes into the environment
including ambient air, surface water, ground water, or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of pollutants, contaminants, chemicals, or
industrial, toxic or hazardous substances or wastes.

     

    “Equity Interest”
means (i) with respect to any corporation, the capital stock of such
corporation, (ii) with respect to any limited liability company, the membership
interests in such limited liability company, (iii) with respect to any
partnership or joint venture, the partnership or joint venture interests
therein, and (iv) with respect to any other legal entity, the ownership
interests in such entity.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any successor statutes or statute, together with all rules and regulations
promulgated with respect thereto.

     

    “ERISA Affiliate”
means each Restricted Person and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control that, together with such Restricted Person, are treated as a
single employer under Section 414 of the Internal Revenue Code.

     

    “ERISA Plan” means any
employee pension benefit plan subject to Title IV of ERISA maintained by any
ERISA Affiliate with respect to which any Restricted Person has a fixed or
contingent liability.

     

    “Eurodollar Lending
Office” means, with respect to any Lender, the office of such Lender
specified as its “Eurodollar Lending Office” below its name on the Lenders
Schedule (or, if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to time specify to
Borrower and Administrative Agent.

     

    “Eurodollar Loan”
means a Loan that bears interest at the Adjusted Eurodollar Rate.

     

    “Eurodollar Margin”
means, on any day, the following percentages per annum based on the Utilization
Percentage as set forth below:

     

    
      	 
      	
              Utilization
      Percentage

            	
              Eurodollar
      Margin

            
	
              Level
      1

            	
              <
      50%

            	
              1.125%

            
	
              Level
      2

            	
              ≥
      50% but < 75%

            	
              1.375%

            
	
              Level
      3

            	
              ≥
      75% but < 90%

            	
              1.625%

            
	
              Level
      4

            	
              ≥
      90%

            	
               1.875%

            

    

    

     

    “Eurodollar Rate”
means, for any Eurodollar Loan within a Borrowing and with respect to the
related Interest Period therefor, (a) the interest rate per annum (carried out
to the fifth decimal place) equal to the applicable London interbank offered
rate for deposits in the requested currency appearing on the Reuters Reference
LIBOR01 page for such currency as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, or (b) in the event the rate
referenced in the preceding subsection (a) does not appear on such page or
service or such page or service shall cease to be available, the rate per annum
(carried out to the fifth decimal place) equal to the rate determined by
Administrative Agent to be the offered rate on Page BBAM of the Bloomberg
Financial Market Information Service as of 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or (c) in the event the
rates referenced in the preceding subsections (a) and (b) are not available, the
rate per annum determined by Administrative Agent as the rate of interest at
which deposits in U.S. dollars (for delivery on the first day of such Interest
Period) in same day funds in the approximate amount of the applicable Eurodollar
Loan and with a term equivalent to such Interest Period would be offered by
Wells Fargo or one of its Affiliate banks to major banks in the London interbank
market at their request at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    “Event of Default” has
the meaning given to such term in Section 8.1.

     

    “Excluded Property”
has the meaning given to such term in the Security Documents.

     

    “Excluded Taxes”
means, with respect to Administrative Agent, any Lender, LC Issuer or any other
recipient of any payment to be made by or on account of any obligation of
Borrower hereunder, (a) taxes imposed on or measured by its overall net income
(however denominated), and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its Applicable Lending Office is
located, (b) any branch profits taxes imposed by the United States of America or
any similar tax imposed by any other jurisdiction in which Borrower is located;
and (c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by Borrower under Section 3.7(b), any withholding tax that is imposed on
amounts payable to such Foreign Lender at the time such Foreign Lender becomes a
party hereto (or designates a new lending office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in
Law) to comply with Section 3.5(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from Borrower
with respect to such withholding tax pursuant to Section 3.5(a).

     

    “Existing Credit
Agreement” means that certain Credit Agreement dated as of April 28,
2006, among Borrower, Wells Fargo Bank, National Association, as Administrative
Agent, and a syndicate of Lenders as amended by the First
Amendment  to Credit Agreement dated as of May 14, 2007, and as
amended by the Second Amendment to Credit Agreement dated as of April 29, 2008,
among Borrower, Wells Fargo Bank, National Association, as Administrative Agent
and a syndicate of Lenders.

     

    “Existing Credit
Documents” means the Existing Credit Agreement, together with the
promissory notes made by Borrower thereunder and all other agreements,
certificates, documents, instruments and writings at any time delivered in
connection therewith.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    “Existing
Indebtedness” means all Indebtedness outstanding under the Existing
Credit Agreement on the date hereof.

     

    “Existing Letters of
Credit” means the letters of credit issued pursuant to the Existing
Credit Agreement.

     

    “Facility Usage”
means, at the time in question, the aggregate principal amount of outstanding
Loans and existing LC Obligations at such time.

     

    “Federal Funds Rate”
means, for any day, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of one percent) equal to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such day, provided
that (a) if the day for which such rate is to be determined is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day as so published on the next succeeding
Business Day, and (b) if such rate is not so published for any day, the Federal
Funds Rate for such day shall be the average rate quoted to Administrative Agent
on such day on such transactions as determined by Administrative
Agent.

     

    “Fiscal Quarter” means
a three-month period ending on March 31, June 30, September 30 or December 31 of
any year.

     

    “Fiscal Year” means a
twelve-month period ending on December 31 of any year.

     

    “Foreign Lender” means
any Lender that is organized under the laws of a jurisdiction other than that in
which Borrower is resident for tax purposes.  For purposes of this
definition, the United States of America, each State thereof and the District of
Columbia shall be deemed to constitute a single jurisdiction.

    

    “Foreign Subsidiary”
means any Subsidiary of Borrower that is not a Domestic Subsidiary.

    

     “Four-Quarter Period”
means any period of four consecutive Fiscal Quarters.

     

    “Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.

     

    “GAAP” means those
generally accepted accounting principles and practices which are recognized as
such by the Financial Accounting Standards Board (or any generally recognized
successor) and which, in the case of Borrower and its Consolidated Subsidiaries,
are applied for all periods after the date hereof in a manner consistent with
the manner in which such principles and practices were applied to the audited
Initial Financial Statements.  If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board
(or any such successor) in order for such principle or practice to continue as a
generally accepted accounting principle or practice, all reports and financial
statements required hereunder with respect to Borrower or with respect to
Borrower and its Consolidated Subsidiaries shall be prepared in accordance with
such change, which change shall be disclosed to Administrative Agent on the next
date on which financial statements are required to be delivered to Lenders
pursuant to Section 6.2(a); provided that, unless the Majority Lenders shall
otherwise agree in writing, no such change shall modify or affect the manner in
which compliance with the covenants contained in Article VII are computed such
that all such computations shall be conducted utilizing financial information
presented consistently with prior periods.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    “Governmental
Authority” means the government of the United States or any other nation,
or of any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government (including any
supra-national bodies such as the European Union or the European Central
Bank).

     

    “Guarantor” means any
Person who has guaranteed some or all of the Secured Obligations pursuant to a
guaranty listed on the Security Schedule or any other Person who has guaranteed
some or all of the Secured Obligations and who has been accepted by
Administrative Agent as a Guarantor or any Subsidiary of Borrower which now or
hereafter executes and delivers a guaranty to Administrative Agent pursuant to
Section 6.15.

     

    “Hazardous Materials”
means any substances regulated under any Environmental Law, whether as
pollutants, contaminants, or chemicals, or as industrial, toxic or hazardous
substances or wastes, or otherwise.

     

    “Hedging Contract”
means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index 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 or any
combination of any of the foregoing (including any options to enter into any of
the foregoing), whether or not any such transaction is governed by or subject to
any master agreement, and (b) any and all transactions of any kind, and the
related confirmations, which are subject to the terms and conditions of, or
governed by, any form of master agreement published by the International Swaps
and Derivatives Association, Inc., any International Foreign Exchange Master
Agreement, or any other master agreement (any such master agreement, together
with any related schedules, a “Master Agreement”),
including any such obligations or liabilities under any Master
Agreement.

     

    “Highest Lawful Rate”
means, with respect to each Lender Party to whom Obligations are owed, the
maximum nonusurious rate of interest that such Lender Party is permitted under
applicable Law to contract for, take, charge, or receive with respect to such
Obligations.  All determinations herein of the Highest Lawful Rate, or
of any interest rate determined by reference to the Highest Lawful Rate, shall
be made separately for each Lender Party as appropriate to assure that the Loan
Documents are not construed to obligate any Person to pay interest to any Lender
Party at a rate in excess of the Highest Lawful Rate applicable to such Lender
Party.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    “Indebtedness” of any
Person means Liabilities in any of the following categories (without
duplication):

     

    (a)           Liabilities
for borrowed money,

     

    (b)           Liabilities
constituting an obligation to pay the deferred purchase price of property or
services,

     

    (c)           Liabilities
evidenced by a bond, debenture, note or similar instrument,

     

    (d)           Liabilities
which (i) would under GAAP be shown on such Person’s balance sheet as a
liability, and (ii) are payable more than one year from the date of creation
thereof (other than reserves for taxes and reserves for contingent
obligations),

     

    (e)           Liabilities
arising under Hedging Contracts,

     

    (f)           Liabilities
constituting principal under leases capitalized in accordance with
GAAP,

     

    (g)           Liabilities
arising under conditional sales or other title retention
agreements,

     

    (h)           Liabilities
owing under direct or indirect guaranties of Liabilities of any other Person or
otherwise constituting obligations to purchase or acquire or to otherwise
protect or insure a creditor against loss in respect of Liabilities of any other
Person (such as obligations under working capital maintenance agreements,
agreements to keep-well, or agreements to purchase Liabilities, assets, goods,
securities or services), but excluding endorsements in the ordinary course of
business of negotiable instruments in the course of collection,

     

    (i)           Liabilities
(for example, repurchase agreements, mandatorily redeemable preferred stock and
sale/leaseback agreements) consisting of an obligation to purchase or redeem
securities or other property, if such Liabilities arises out of or in connection
with the sale or issuance of the same or similar securities or
property,

     

    (j)           Liabilities
with respect to letters of credit or applications or reimbursement agreements
therefor;

     

    (k)           Liabilities
with respect to payments received in consideration of oil, gas, or other
minerals yet to be acquired or produced at the time of payment (including
obligations under “take-or-pay” contracts to deliver gas in return for payments
already received and the undischarged balance of any production payment created
by such Person or for the creation of which such Person directly or indirectly
received payment),

     

    (l)           Liabilities
with respect to other obligations to deliver goods or services in consideration
of advance payments therefor; or

     

    (m)           Liabilities
with respect to bankers acceptances, provided, however, that the “Indebtedness”
of any Person shall not include Liabilities that were incurred by such Person on
ordinary trade terms to vendors, suppliers, or other Persons providing goods and
services for use by such Person in the ordinary course of its business which are
paid as required by Section 6.7.

     

    
      
         

      

      
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    “Indemnified Taxes”
means Taxes other than Excluded Taxes.

     

    “Independent
Engineers” means an independent petroleum engineering firm chosen by
Borrower and acceptable to Administrative Agent.

     

    “Initial Borrowing
Base” has the meaning given to such term in Section 2.8.

     

    “Initial Engineering
Report” means the engineering reports concerning Mineral Interests of
Restricted Persons, including the Mineral Interests being acquired pursuant to
the Acquisition Documents, prepared by Degolyer and MacNaughton as of January 1,
2008 and Ryder Scott Company as of February 1, 2008.

     

    “Initial Financial
Statements” means the audited annual financial statements of Borrower
dated as of December 31, 2007 and the quarterly unaudited financial statements
of Borrower dated as of March 31, 2008.

     

    “Insolvent” means with
respect to any Person, that such Person (a) is insolvent (as such term is
defined in the United States Bankruptcy Code, Title 11 U.S.C., as amended (the
“Bankruptcy
Code”), and with all terms used in this Section that are defined in the
Bankruptcy Code having the meanings ascribed to those terms in the text and
interpretive case law applicable to the Bankruptcy Code), or (b) the sum of such
Person’s debts, including absolute and contingent liabilities, the Obligations
or guarantees thereof, exceeds the value of such Person’s assets, at a fair
valuation, and (c) such Person’s capital is unreasonably small for the business
in which such Person is engaged and intends to be engaged.  Such
Person has incurred (whether under the Loan Documents or otherwise), or intends
to incur debts which will be beyond its ability to pay as such debts
mature.  In determining whether a Person is “Insolvent” all rights of
contribution of each Restricted Party against other Restricted Parties under the
Guaranty, at law, in equity or otherwise shall be taken into
account.

     

    “Insurance Schedule”
means Schedule 2 attached hereto.

     

    “Interest Payment
Date” means (a) with respect to each Base Rate Loan, the last day of each
Fiscal Quarter, (b) with respect to each Eurodollar Loan, the last day of the
Interest Period that is applicable thereto and, if such Interest Period is six,
nine or twelve months in length, each date specified by Administrative Agent
which is approximately three, six or nine months after such Interest Period
begins, and (c) with respect to each Swing Line Loan, the fifth and the
twentieth day of each calendar month.

     

    “Interest Period”
means, with respect to each particular Eurodollar Loan in a Borrowing, the
period specified in the Borrowing Notice or Continuation/Conversion Notice
applicable thereto, beginning on and including the date specified in such
Borrowing Notice or  Continuation/Conversion Notice (which must be a
Business Day), and ending one, two, three, or six months and, if available, nine
or twelve months thereafter, as Borrower may elect in such notice; provided
that:  (a) any Interest Period which would otherwise end on a day
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Business Day; (b) any Interest
Period which begins on the last Business Day in a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at the
end of such Interest Period) shall end on the last Business Day in a calendar
month; and (c) notwithstanding the foregoing, any Interest Period which would
otherwise end after the last day of the Commitment Period shall end on the last
day of the Commitment Period (or, if the last day of the Commitment Period is
not a Business Day, on the next preceding Business Day).

     

    
      
         

      

      
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    “Internal Revenue
Code” means the United States Internal Revenue Code of 1986, as amended
from time to time and any successor statute or statutes, together with all rules
and regulations promulgated with respect thereto.

     

    “Investment” means any
investment, made directly or indirectly, in any Person or any property, whether
by purchase, acquisition of shares of capital stock, indebtedness or other
obligations or securities or by loan, advance, capital contribution or otherwise
and whether made in cash, by the transfer of property, or by any other
means.

     

    “Law” means any
statute, law, regulation, ordinance, rule, treaty, judgment, order, decree,
permit, concession, franchise, license, agreement or other governmental
restriction of the United States or any state or political subdivision thereof
or of any foreign country or any department, province or other political
subdivision thereof.  Any reference to a Law includes any amendment or
modification to such Law, and all regulations, rulings, and other Laws
promulgated under such Law.

     

    “LC Application” means
any application for a Letter of Credit hereafter made by Borrower to LC
Issuer.

     

     “LC Collateral” has
the meaning given to such term in Section 2.16(a).

     

    “LC Conditions” has
the meaning given to such term in Section 2.11.

     

    “LC Issuer” means
Wells Fargo in its capacity as the issuer of Letters of Credit hereunder, and
its successors in such capacity.  Administrative Agent may, with the
consent of Borrower and the Lender in question, appoint any Lender hereunder as
an LC Issuer in place of or in addition to Wells Fargo.

     

    “LC Obligations”
means, at the time in question, the sum of all Matured LC Obligations plus the
maximum amounts which LC Issuer might then or thereafter be called upon to
advance under all Letters of Credit then outstanding.

     

    “LC Sublimit” means
$100,000,000.

     

    “Lender
Counterparties” means each Lender and each Affiliate of a Lender to whom
Lender Hedging Obligations are owed.

     

    
      
         

      

      
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    “Lender Hedging
Obligations” means all obligations arising from time to time under
Hedging Contracts entered into from time to time between Borrower or any
Guarantor and a Lender Counterparty; provided that if such Lender Counterparty
ceases to be a Lender hereunder or an Affiliate of a Lender hereunder, Lender
Hedging Obligations shall only include such obligations to the extent arising
from transactions entered into at the time such counterparty was a Lender
hereunder or an Affiliate of a Lender hereunder.

     

    “Lender Parties” means
Administrative Agent, LC Issuer, and all Lenders.

     

     “Lenders” means each
signatory hereto (other than Borrower and any Restricted Person that is a party
hereto), including Wells Fargo in its capacity as a Lender and the Swing Line
Lender hereunder rather than as Administrative Agent or LC Issuer, and the
successors of each such party as holder of a Note.

     

    “Lenders Schedule”
means Schedule 1 hereto.

     

    “Letter of Credit”
means any standby letter of credit issued by LC Issuer hereunder at the
application of Borrower and shall include the Existing Letters of
Credit.

     

    “Letter of Credit Termination
Date” means the date which is seven (7) days prior to the Maturity Date
or if such day is not a Business Day, the next preceding Business
Day.

     

    “Liabilities” means,
as to any Person, all indebtedness, liabilities and obligations of such Person,
whether matured or unmatured, liquidated or unliquidated, primary or secondary,
direct or indirect, absolute, fixed or contingent, and whether or not required
to be considered pursuant to GAAP.

     

    “Lien” means, with
respect to any property or assets, any right or interest therein of a creditor
to secure Liabilities owed to it or any other arrangement with such creditor
which provides for the payment of such Liabilities out of such property or
assets or which allows such creditor to have such Liabilities satisfied out of
such property or assets prior to the general creditors of any owner thereof,
including any lien, mortgage, security interest, pledge, deposit, production
payment, rights of a vendor under any title retention or conditional sale
agreement or lease substantially equivalent thereto, tax lien, mechanic’s or
materialman’s lien, or any other charge or encumbrance for security purposes,
whether arising by Law or agreement or otherwise, but excluding any right of
offset which arises without agreement in the ordinary course of
business.  “Lien” also means any filed financing statement, any
registration of a pledge (such as with an issuer of uncertificated securities),
or any other arrangement or action which would serve to perfect a Lien described
in the preceding sentence, regardless of whether such financing statement is
filed, such registration is made, or such arrangement or action is undertaken
before or after such Lien exists.

     

    “Liquidity Bridge
Facility” means an unsecured revolving credit facility in an aggregate
principal amount not to exceed $100,000,000 at any time outstanding made
available to Borrower by SG and certain other financial institutions, which has
a maturity date of December 31, 2008.

     

    
      
         

      

      
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    “Loan” means an
extension of credit by a Lender to Borrower under Article II in the form of a
Revolving Loan or a Swing Line Loan.

     

    “Loan Documents” means
this Agreement, the Notes, the Security Documents, the Letters of Credit, the LC
Applications, and all other agreements, certificates, documents, instruments and
writings at any time delivered in connection herewith or therewith (exclusive of
term sheets and commitment letters).

     

    “Majority Lenders”
means two or more Lenders whose aggregate Percentage Shares equal or exceed
fifty-one percent (51%).

     

    “Material Adverse
Change” means a material and adverse change, from the state of affairs
presented in the Initial Financial Statements or as represented or warranted in
any Loan Document, to (a) Borrower’s Consolidated financial condition, (b)
Borrower’s Consolidated operations, properties or prospects, considered as a
whole, (c) Borrower’s ability to timely pay the Obligations, (d) the
enforceability of the material terms of any Loan Documents, or (e) the rights
and remedies of Administrative Agent or Lenders under the Loan
Documents.

     

    “Material Subsidiary”
means a Subsidiary of Borrower that (a) owns assets representing five percent
(5%) of the market value of Borrower’s Consolidated assets or (b) has EBITDAX
for the Four-Quarter Period most recently ended that equals or exceeds five
percent (5%) of Borrower’s Consolidated EBITDAX for such period.

     

    “Matured LC
Obligations” means all amounts paid by LC Issuer on drafts or demands for
payment drawn or made under or purported to be drawn on or made under any Letter
of Credit and all other amounts due and owing to LC Issuer under any LC
Application for any Letter of Credit, to the extent the same have not been
repaid to LC Issuer (with the proceeds of Loans or otherwise).

     

    “Maturity Date” means
July15, 2013.

     

    “Maximum Drawing
Amount” means at the time in question the sum of the maximum amounts
which LC Issuer might then or thereafter be called upon to advance under all
Letters of Credit which are then outstanding.

     

    “Maximum Credit
Amount” means $1,500,000,000.

     

    “Mineral Interests”
means rights, estates, titles, and interests in and to oil, gas, sulfur, or
other mineral leases and any mineral interests, royalty and overriding royalty
interest, production payment, net profits interests, mineral fee interests, and
other rights therein, including, without limitation, any reversionary or carried
interests relating to the foregoing, together with rights, titles, and interests
created by or arising under the terms of any unitization, communization, and
pooling agreements or arrangements, and all properties, rights and interests
covered thereby, whether arising by contract, by order, or by operation of Law,
which now or hereafter include all or any part of the foregoing.

     

    “Minimum Collateral
Amount” means Mineral Interests representing eighty percent (80%) of the
Present Value of the Proved Reserves properly attributed to the Borrowing Base
Properties or such higher percentage of the Borrowing Base Properties
that  may be designated by Administrative Agent.

     

    
      
         

      

      
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    “Money Market
Facility” means a credit facility which (a) is evidenced by a bond,
debenture, note or similar instrument, (b) has financial covenants that are not
more restrictive with respect to the Restricted Persons than the financial
covenants under this Agreement and has other covenants and events of default
governing the Indebtedness evidenced by such credit facility that are not
materially more restrictive with respect to the Restricted Persons than the
covenants and Events of Default under this Agreement, and (c) the Indebtedness
of which is not subordinated to any other Indebtedness of the Restricted
Persons.

     

    “Moody’s” means
Moody’s Investors Service, Inc. or its successor.

     

    “Net Income” means,
for any period, the net income (or loss) of Borrower and its properly
consolidated Subsidiaries for such period, calculated on a consolidated
basis.

     

    “Net Worth” of any
Person means, as of any date, the remainder of all Consolidated assets of such
Person minus such Person's Consolidated liabilities, each as determined by GAAP,
but excluding, for purposes of this definition any assets and liabilities for
any Hedging Contract resulting from the requirements of SFAS 133 at such
time.

     

    “Non-Core Acquisitions and
Investments” means acquisitions and Investments that are not Core
Acquisitions and Investments.

     

    “Note” has the meaning
given to such term in Section 2.1.

     

    “Obligations” means
all Liabilities from time to time owing by any Restricted Person to any Lender
Party under or pursuant to any of the Loan Documents, including all LC
Obligations.  “Obligation” means any part of the
Obligations.

     

    “Organization
Documents” means, (a) with respect to any corporation, the certificate or
articles of incorporation and the bylaws (or equivalent or comparable
constitutive documents with respect to any non-U.S. jurisdiction); (b) with
respect to any limited liability company, the certificate or articles of
formation or organization and operating agreement; and (c) with respect to any
partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.

     

    “Other Taxes” means
all present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies arising from any payment made hereunder or
under any other Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, this Agreement or any other Loan
Document.

     

    “Participant” has the
meaning assigned to such term in clause (d) of Section 10.5.

     

    
      
         

      

      
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    “Percentage Share”
means, with respect to any Lender, the percentage set forth below such Lender’s
name on Lenders Schedule or as set forth in any Assignment and Assumption
relating to any assignment that has become effective pursuant to Section 10.5,
as such amount may be modified from time to time pursuant to the terms
hereof.  Notwithstanding the foregoing, if the Commitments of the
Lenders have been terminated or have expired, “Percentage
Share” shall mean with respect to any Lender, the percentage obtained by
dividing (i) the sum of the unpaid principal balance of such Lender’s Loans at
the time in question plus the Matured LC Obligations which such Lender has
funded pursuant to Section 2.13(c) plus the portion of the Maximum Drawing
Amount which such Lender might be obligated to fund under Section 2.13(c), by
(ii) the sum of the aggregate unpaid principal balance of all Loans at such time
plus the aggregate amount of LC Obligations outstanding at such
time.

     

    “Permitted
Investments” means (a) Cash Equivalents, (b) property of the Restricted
Persons used in the ordinary course of business of the Restricted Persons, (c)
current assets arising from the sale or lease of goods and services in the
ordinary course of business by the Restricted Persons or from sales permitted
under Section 7.5, (d) investments, in an aggregate amount not to exceed
$4,000,000, in a Person engaged in the sole business of ownership and operation
of drilling rigs, and (e) sales or leases permitted under Section
7.5.

     

    “Permitted Liens”
means:

     

    (a)           statutory
Liens for taxes, assessments or other governmental charges or levies which are
not yet delinquent or which are being contested in good faith by appropriate
action and for which adequate reserves have been maintained in accordance with
GAAP;

     

    (b)           landlords’,
operators’, carriers’, warehousemen’s, repairmen’s, mechanics’, materialmen’s,
or other like Liens which do not secure Indebtedness, in each case only to the
extent arising in the ordinary course of business and only to the extent
securing obligations which are not delinquent or which are being contested in
good faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP;

     

    (c)           minor
defects and irregularities in title to any property, so long as such defects and
irregularities neither secure Indebtedness nor materially impair the value of
such property or the use of such property for the purposes for which such
property is held;

     

    (d)           deposits
of cash or securities to secure the performance of bids, acquisition agreements,
trade contracts, leases, statutory obligations and other obligations of a like
nature (excluding appeal bonds) incurred in the ordinary course of
business;

     

    (e)           Liens
under the Security Documents;

     

    (f)           easements,
restrictions, servitudes, permits, conditions, covenants, exceptions or
reservations in any property of Borrower or any of its Subsidiaries for the
purpose of roads, pipelines, transmission lines, transportation lines,
distribution lines for the removal of gas, oil, coal or other minerals or
timber, and other like purposes, or for the joint or common use of real estate,
rights of way, facilities and equipment, that do not secure any monetary
obligations and that do not materially interfere with the future development of
such property or with cash flow from such property as reflected in the most
recent Engineering Report;

     

    
      
         

      

      
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    (g)           Liens
under joint operating agreements, pooling or unitization agreements, partnership
agreements, oil and gas leases, farm-out agreements, division orders, contracts
for the sale, purchase, transportation, processing or exchange of oil, gas or
other hydrocarbons, unitization and pooling declarations and agreements, area of
mutual interest agreements, development agreements, joint ownership arrangements
or similar contractual arrangements arising in the ordinary course of the
business of Borrower or its Subsidiaries to secure amounts owing under such
agreements and contracts, which amounts are not more than 90 days past due or
are being contested in good faith by appropriate proceedings, if such reserve as
may be required by GAAP shall have been made therefor;

     

    (h)           (i)
Liens on fixed or capital assets acquired, constructed or improved by Borrower
or its Subsidiaries; provided, that (A) such Liens secure Indebtedness permitted
under Section 7.1, (B) such Liens and the Indebtedness secured thereby are
incurred substantially simultaneously with the acquisition, construction or
improvement of such fixed or capital assets or within 180 days thereafter, (C)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (D) the amount of Indebtedness secured thereby
is not more than 100% of the purchase price, and (ii) Liens in the nature of
precautionary financing statements filed against leased property by lessors
holding Capital Lease Obligations included in Indebtedness permitted under
Section 7.1;

     

    (i)           all
lessors’ royalties, overriding royalties, net profits interests, carried
interests, production payments that do not constitute Indebtedness, reversionary
interests and other burdens on or deductions from the proceeds of production
with respect to each Mineral Interest (in each case) that do not operate to
reduce the net revenue interest for such Mineral Interest (if any) as reflected
in any Security Document or Engineering Report or increase the working interest
for such Mineral Interest (if any) as reflected in any Security Document or
Engineering Report without a corresponding increase in the corresponding net
revenue interest; .

     

    (j)           rights
of first refusal, purchase options and similar rights granted pursuant to joint
operating agreements, joint ownership agreements, stockholders agreements,
organic documents and other similar agreements and documents which are described
in the Disclosure Letter;

     

    (k)           pre-judgment
Liens and judgment Liens provided no Event of Default has occurred under Section
8.1;

     

    (l)           customary
Liens for the fees, costs and expenses of trustees and escrow agents pursuant to
the indenture, escrow agreement or other similar agreement establishing such
trust or escrow arrangement;

     

    (m)           Liens
pursuant to merger agreements, stock purchase agreements, asset sale agreements
and similar agreements (i) limiting the transfer of properties and assets
pending consummation of the subject transaction and (ii) in respect of earnest
money deposits, good faith deposits, purchase price adjustment escrows and
similar deposits and escrow arrangements made or established thereunder;
and

     

    (n)           rights
reserved to or vested in any municipality or governmental, statutory or public
authority by the terms of any right, power, franchise, grant, license or permit,
or by any provision of law, to terminate such right, power, franchise, grant,
license or permit or to purchase, condemn, expropriate or recapture or to
designate a purchaser of any of the property of such Person; rights reserved to
or vested in any municipality or governmental, statutory or public authority to
control or regulate any property of such Person, or to use such property in a
manner which does not materially impair the use of such property for the
purposes for which it is held by such Person; and any obligation or duties
affecting the property of such Person to any municipality or governmental,
statutory or public authority with respect to any franchise, grant, license or
permit.

     

    
      
         

      

      
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    “Permitted Subordinated
Debt” means Indebtedness in respect of subordinated notes issued by
Borrower from time to time, that complies with all of the following
requirements:

     

    (a)           such
Indebtedness is and shall remain unsecured at all times;

     

    (b)           no
payment of principal of such Indebtedness is due on or before the Maturity Date
as in effect on the date such Indebtedness is issued (in this definition called
the “Date of
Issuance”);

     

    (c)           the
financial covenants are no more restrictive with respect to the Restricted
Persons than the financial covenants under this Agreement and all of the
covenants and events of default governing such Indebtedness are not, taken as a
whole, materially more restrictive with respect to the Restricted Persons than
the covenants and Events of Default under this Agreement;

     

    (d)           on
the Date of Issuance and after giving effect to such Indebtedness (i) Borrower
is in compliance on a pro forma basis with Section 7.11 and Section 7.12 of this
Agreement, calculated for the most recent Four-Quarter Period for which the
financial statements described in Section 6.2(b) are available to
Lender;

     

    (e)           no
Default or Event of Default exists on the Date of Issuance or will occur as a
result of the issuance of the subordinated notes evidencing such
Indebtedness;

     

    (f)           the
payment of such Indebtedness is subordinated to payment of the Obligations
pursuant to a written agreement (whether contained in the applicable indenture
or a separate subordination agreement) in form and substance acceptable to
Administrative Agent, in its sole discretion; and

     

    (g)           Borrower
shall have delivered to Administrative Agent a certificate in reasonable detail
reflecting compliance with the foregoing requirements.

     

    “Person” means an
individual, corporation, partnership, limited liability company, association,
joint stock company, trust or trustee thereof, estate or executor thereof,
unincorporated organization or joint venture, Governmental Authority or any
other legally recognizable entity.

     

    “Present Value” of any
Mineral Interest means the present value of the future net revenues attributed
to such Mineral Interest in the most recent Engineering Report using a discount
rate of ten percent (10%).

     

    
      
         

      

      
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    “Prescribed Forms”
means such duly executed forms or statements, and in such number of copies,
which may, from time to time, be prescribed by Law and which, pursuant to
applicable provisions of (a) an income tax treaty between the United States
and the country of residence of the Lender Party providing the forms or
statements, (b) the Internal Revenue Code, or (c) any applicable rules
or regulations thereunder, permit Borrower to make payments hereunder for the
account of such Lender Party free of such deduction or withholding of income or
similar taxes.

     

    “Projected Gas
Production” means the projected production of gas (measured by BTU
equivalent, not sales price) for the term of the contracts or a particular
month, as applicable, from properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Developed Producing Reserves, as such production is
projected in the most recent report delivered pursuant to Section 6.2(d) or (e),
after deducting projected production from any properties or interests sold or
under contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
report meeting the requirements of such Section 6.2(d) or (e) above and
otherwise are satisfactory to Administrative Agent.

     

    “Projected NGL
Production” means the projected production of natural gas liquids
(measured by volume unit, not sales price) for the term of the contracts or a
particular month, as applicable, from properties and interests owned by any
Restricted Person which are located in or offshore of the United States and
which have attributable to them Proved Developed Producing Reserves, as such
production is projected in the most recent report delivered pursuant to Section
6.2(d) or (e), after deducting projected production from any properties or
interests sold or under contract for sale that had been included in such report
and after adding projected production from any properties or interests that had
not been reflected in such report but that are reflected in a separate or
supplemental report meeting the requirements of such Section 6.2(d) or (e) above
and otherwise are satisfactory to Administrative Agent.

     

    “Projected Oil
Production” means the projected production of oil or gas (measured by
volume unit , not sales price) for the term of the contracts or a particular
month, as applicable, from properties and interests owned by any Restricted
Person which are located in or offshore of the United States and which have
attributable to them Proved Developed Producing Reserves, as such production is
projected in the most recent report delivered pursuant to Section 6.2(d) or (e),
after deducting projected production from any properties or interests sold or
under contract for sale that had been included in such report and after adding
projected production from any properties or interests that had not been
reflected in such report but that are reflected in a separate or supplemental
report meeting the requirements of such Section 6.2(d) or (e) above and
otherwise are satisfactory to Administrative Agent.

     

    “Proved Reserves”
means “Proved Reserves” as defined in Definitions for Oil and Gas Reserves (in
this paragraph, the “Definitions”) promulgated by the Society for Petroleum
Engineers (or any generally recognized successor) as in effect at the time in
question.  “Proved Developed Producing Reserves” are Proved Reserves,
which are categorized as both “Developed” and “Producing” in the
Definitions.

     

    “Rating Agency” means
either S & P or Moody’s.

     

    
      
         

      

      
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    “Redetermination”
means a Scheduled Redetermination or a Special Redetermination.

     

    “Regulation D” means
Regulation D of the Board of Governors of the Federal Reserve System as from
time to time in effect.

     

    “Related Parties”
means, with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.

    

    “Required  Lenders”
means two or more Lenders whose aggregate Percentage Shares equal or exceed
sixty-six and two-thirds percent (66 2/3%).

     

    “Reserve Requirement”
means, at any time, the maximum rate at which reserves (including any marginal,
special, supplemental, or emergency reserves) are required to be maintained
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) by member banks of the Federal Reserve
System against “Eurocurrency liabilities” (as such term is used in Regulation
D).  Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be determined,
or (b) any category of extensions of credit or other assets which include
Eurodollar Loans.

     

    “Responsible Officer”
means, with respect to Borrower, the Chief Executive Officer, President, Chief
Operating Officer, or Chief Financial Officer of Borrower, and with respect to
any other Restricted Person, if such Restricted Person is a limited liability
company, a Manager of such Restricted Person, and if such Restricted Person is a
corporation, the President or Chief Financial Officer of such Restricted
Person.

     

    “Restricted Person”
means any of Borrower and each Subsidiary of Borrower.

     

    “Revolving Loans” has
the meaning given to such term in Section 2.1.

     

    “SG” means Société
Générale in its capacity as the lender under the SG Money Market Facility and
not as a Lender hereunder.

    

    “SG Money Market
Facility” means the Money Market Facility in the amount of $30,000,000
made available to Borrowers by SG pursuant to a Letter Agreement between
Borrower and SG.

    

    “SG Obligations” means
the Indebtedness arising under the SG Money Market Facility in an aggregate
principal amount not to exceed $30,000,000, plus all interest accrued thereon
all and fees, expenses and other Liabilities payable with respect
thereto.

    

    “S & P” means
Standard & Poor’s Ratings Services (a division of The McGraw-Hill
Companies), or its successor.

     

    
      
         

      

      
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    “Scheduled
Redetermination” means any redetermination of the Borrowing Base pursuant
to Section 2.9(a).

     

    “SEC” means the
Securities and Exchange Commission, or any Governmental Authority succeeding to
any of its principal functions.

     

    “Secured Obligations”
means all Obligations, all Lender Hedging Obligations and the SG
Obligations.

     

    “Security Documents”
means all security agreements, deeds of trust, mortgages, chattel mortgages,
pledges, guaranties, financing statements, continuation statements, extension
agreements, subordination agreements, intercreditor agreements, and other
agreements or instruments now, heretofore, or hereafter delivered by any
Restricted Person to Administrative Agent in connection with this Agreement or
any transaction contemplated hereby to secure or guarantee the payment of any
part of the Secured Obligations.

     

    “Security Schedule”
means Schedule 3 hereto.

     

    “Special
Redetermination” means any redetermination of the Borrowing Base pursuant
to Section 2.9(b) or Section 2.9(c).

     

    “Staff Engineers”
means petroleum engineers who are employees of Borrower or of a staffing company
that provides its employees to Borrower.

     

    “Stock Repurchase”
means any payment made by a Restricted Person to purchase, redeem, acquire or
retire any Equity Interest in such Restricted Person or any other Restricted
Person (including any option or warrant to purchase such an Equity
Interest).

     

    “Subsidiary” means,
with respect to any Person, any corporation, association, partnership, limited
liability company, joint venture, or other business or corporate entity,
enterprise or organization which is directly or indirectly (through one or more
intermediaries) controlled by or owned fifty percent or more by such Person,
provided that associations, joint ventures or other relationships (a) which are
established pursuant to a standard form operating agreement or similar agreement
or which are partnerships for purposes of federal income taxation only, (b)
which are not corporations or partnerships (or subject to the Uniform
Partnership Act) under applicable state Law, and (c) whose businesses are
limited to the exploration, development and operation of oil, gas or mineral
properties and interests owned directly by the parties in such associations,
joint ventures or relationships, shall not be deemed to be “Subsidiaries” of
such Person.

     

    “Swing Line Borrowing”
means a borrowing of a Swing Line Loan pursuant to Section 2.17.

     

    “Swing Line Lender”
means Wells Fargo, in its capacity as provider of Swing Line Loans, or any
successor swing line lender hereunder.

     

    “Swing Line Loan” has
the meaning given to such term in Section 2.17.

     

    
      
         

      

      
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    “Swing Line Loan
Notice” means a notice of a Swing Line Borrowing pursuant to Section
2.17, which, if in writing, shall be substantially in the form of Exhibit
B-2.

     

    “Swing Line Sublimit”
means an amount equal to $100,000,000.  The Swing Line Sublimit is
part of, and not in addition to, the Aggregate Commitment.

     

    “Taxes” means all
present or future taxes, levies, imposts, duties, deductions, withholdings,
assessments, fees or other charges imposed by any Governmental Authority,
including any interest, additions to tax or penalties applicable
thereto.

     

    “Termination Event”
means (a) the occurrence with respect to any ERISA Plan of (i) a reportable
event described in Section 4043(b)(5) or (6) of ERISA or (ii) any other
reportable event described in Section 4043(b) of ERISA other than a reportable
event not subject to the provision for 30-day notice to the Pension Benefit
Guaranty Corporation pursuant to a waiver by such corporation under Section
4043(a) of ERISA, or (b) the withdrawal of any ERISA Affiliate from an ERISA
Plan during a plan year in which it was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA, or (c) the filing of a notice of intent to
terminate any ERISA Plan or the treatment of any ERISA Plan amendment as a
termination under Section 4041 of ERISA, or (d) the institution of proceedings
to terminate any ERISA Plan by the Pension Benefit Guaranty Corporation under
Section 4042 of ERISA, or (e) any other event or condition which might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any ERISA Plan.

     

    “Total Funded Debt”
means all Liabilities of the Restricted Persons of the types described in
clauses (a), (b), (c), (d), (f), (h), (j) of the definition of
Indebtedness.

     

    “Type” means, with
respect to any Loans, the characterization of such Loans as either Base Rate
Loans or Eurodollar Loans.

     

    “UCC” means the
Uniform Commercial Code in effect in the State of California from time to
time.

     

    “Utilization
Percentage” means, for any day, the Facility Usage (excluding Swing Line
Loans) for such day, divided by the lesser of (i) the Borrowing Base in effect
on such day or (ii)  the Aggregate Commitments in effect on such day,
in each case expressed as a percentage.

     

    “Wells Fargo” means
Wells Fargo Bank, National Association.

     

    Section
1.2.          Exhibits and Schedules;
Additional Definitions.  All
Exhibits and Schedules attached to this Agreement are a part hereof for all
purposes.  Reference is hereby made to the Security Schedule for the
meaning of certain terms defined therein and used but not defined herein, which
definitions are incorporated herein by reference.

     

    Section
1.3.          Amendment of Defined
Instruments.  Unless
the context otherwise requires or unless otherwise provided herein the terms
defined in this Agreement which refer to a particular agreement, instrument or
document also refer to and include all renewals, extensions, modifications,
amendments and restatements of such agreement, instrument or document, provided
that nothing contained in this section shall be construed to authorize any such
renewal, extension, modification, amendment or restatement.

     

    
      
         

      

      
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    Section
1.4.           References and
Titles.  All
references in this Agreement to Exhibits, Schedules, articles, sections,
subsections and other subdivisions refer to the Exhibits, Schedules, articles,
sections, subsections and other subdivisions of this Agreement unless expressly
provided otherwise.  Exhibits and Schedules to any Loan Document shall
be deemed incorporated by reference in such Loan Document.  References
to any document, instrument, or agreement (a) shall include all exhibits,
schedules, and other attachments thereto, and (b) shall include all documents,
instruments, or agreements issued or executed in replacement
thereof.  Titles appearing at the beginning of any subdivisions are
for convenience only and do not constitute any part of such subdivisions and
shall be disregarded in construing the language contained in such
subdivisions.  The words “this Agreement”, “this instrument”,
“herein”, “hereof”, “hereby”, “hereunder” and words of similar import refer to
this Agreement as a whole and not to any particular subdivision unless expressly
so limited.  The phrases “this section” and “this subsection” and
similar phrases refer only to the sections or subsections hereof in which such
phrases occur.  The word “or” is not exclusive, and the word
“including” (in its various forms) means “including without
limitation”.  Pronouns in masculine, feminine and neuter genders shall
be construed to include any other gender, and words in the singular form shall
be construed to include the plural and vice versa, unless the context otherwise
requires.  Accounting terms have the meanings assigned to them by
GAAP, as applied by the accounting entity to which they
refer.  References to “days” shall mean calendar days, unless the term
“Business Day” is used.  Unless otherwise specified, references herein
to any particular Person also refer to its successors and permitted
assigns.

     

    Section
1.5.          Calculations and
Determinations.  All
calculations under the Loan Documents shall be made on the basis of actual days
elapsed (including the first day but excluding the last) and a year of 360
days.  Each determination by a Lender Party of amounts to be paid
under Article III or any other matters which are to be determined hereunder by a
Lender Party (such as any Eurodollar Rate, Adjusted Eurodollar Rate, Business
Day, Interest Period, or Reserve Requirement) shall, in the absence of manifest
error, be conclusive and binding.  Unless otherwise expressly provided
herein or unless Majority Lenders otherwise consent all financial statements and
reports furnished to any Lender Party hereunder shall be prepared and all
financial computations and determinations pursuant hereto shall be made in
accordance with GAAP.

     

    Section
1.6.          Joint Preparation;
Construction of Indemnities and Releases.  This
Agreement and the other Loan Documents have been reviewed and negotiated by
sophisticated parties with access to legal counsel and no rule of construction
shall apply hereto or thereto which would require or allow any Loan Document to
be construed against any party because of its role in drafting such Loan
Document.  All indemnification and release provisions of this
Agreement shall be construed broadly (and not narrowly) in favor of the Persons
receiving indemnification or being released.

     

     

    ARTICLE
II - - The Loans and
Letters of Credit

    
      
         

      

      
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    Section
2.1.          Commitments to Lend;
Notes.  Subject
to the terms and conditions hereof, each Lender agrees to make loans to Borrower
(herein called such Lender’s “Revolving Loans”)
upon Borrower’s request from time to time during the Commitment Period, provided
that (a) subject to Section 3.3, Section 3.4, and Section 3.6, all Lenders are
requested to make Revolving Loans of the same Type in accordance with their
respective Percentage Shares and as part of the same Borrowing, and (b) after
giving effect to such Revolving Loans (i) the sum of the Facility Usage and the
principal amount of SG Obligations then outstanding does not exceed (ii) the
Borrowing Base determined as of the date on which the requested Revolving Loans
are to be made.  The aggregate amount of all Revolving Loans in any
Borrowing of Base Rate Loans must be greater than or equal to $500,000 or a
higher integral multiple of $100,000 or must equal the remaining Availability,
and the aggregate amount of all Revolving Loans in any Borrowing of Eurodollar
Loans must be greater than or equal to $3,000,000 or any higher integral
multiple of $1,000,000 or must equal the remaining
Availability.  Borrower may have no more than ten Borrowings of
Eurodollar Loans outstanding at any time.  The obligation of Borrower
to repay to each Lender the aggregate amount of all Loans made by such Lender,
together with interest accruing in connection therewith, shall be evidenced by a
single promissory note (herein called such Lender’s “Note”) made by
Borrower payable to the order of such Lender in the form of Exhibit A with
appropriate insertions.  The amount of principal owing on any Lender’s
Note at any given time shall be the aggregate amount of all Loans theretofore
made by such Lender minus all payments of principal theretofore received by such
Lender on such Note.  Interest on each Note shall accrue and be due
and payable as provided herein and therein.  Each Note shall be due
and payable as provided herein and therein, and shall be due and payable in full
on the Maturity Date.  Subject to the terms and conditions hereof,
Borrower may borrow, repay, and reborrow hereunder.

     

    Section
2.2.          Requests for New Revolving
Loans.  Borrower
must give to Administrative Agent written or electronic notice (or telephonic
notice promptly confirmed in writing) of any requested Borrowing of new
Revolving Loans to be advanced by Lenders.  Each such notice
constitutes a “Borrowing Notice” hereunder and must:

     

    (a)           specify
(i) the aggregate amount of any such Borrowing of new Base Rate Loans and the
date on which such Base Rate Loans are to be advanced, or (ii) the aggregate
amount of any such Borrowing of new Eurodollar Loans, the date on which such
Eurodollar Loans are to be advanced (which shall be the first day of the
Interest Period which is to apply thereto), and the length of the applicable
Interest Period; and

     

    (b)           be
received by Administrative Agent not later than 11:00 a.m., Denver, Colorado
time on, (i) the day on which any such Base Rate Loans are to be made, or (ii)
the third Business Day preceding the day on which any such Eurodollar Loans are
to be made.

     

    Each such
written request or confirmation must be made in the form and substance of the
“Borrowing Notice” attached hereto as Exhibit B-1, duly
completed.  Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written
confirmation.  Upon receipt of any such Borrowing Notice,
Administrative Agent shall give each Lender prompt notice of the terms
thereof.  If all conditions precedent to such new Revolving Loans have
been met, each Lender will on the date requested promptly remit to
Administrative Agent at Administrative Agent’s office in Denver, Colorado the
amount of such Lender’s new Revolving Loan in immediately available funds, and
upon receipt of such funds, unless to its actual knowledge any conditions
precedent to such Revolving Loans have been neither met nor waived as provided
herein, Administrative Agent shall promptly make such Revolving Loans available
to Borrower.  Unless Administrative Agent shall have received prompt
notice from a Lender that such Lender will not make available to Administrative
Agent such Lender’s new Revolving Loan, Administrative Agent may in its
discretion assume that such Lender has made such Revolving Loan available to
Administrative Agent in accordance with this section and Administrative Agent
may if it chooses, in reliance upon such assumption, make such Revolving Loan
available to Borrower.  In such event, if a Lender has not in fact
made its share of the applicable Revolving Loan available to Administrative
Agent, then the applicable Lender and Borrower severally agree to pay to
Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available
to Borrower to but excluding the date of payment to Administrative Agent, at (i)
in the case of a payment to be made by such Lender, the greater of the Federal
Funds Rate and a rate determined by Administrative Agent in accordance with
banking industry rules on interbank compensation and (ii) in the case of a
payment to be made by Borrower, the interest rate applicable to Base Rate
Loans.  If Borrower and such Lender shall pay such interest to
Administrative Agent for the same or an overlapping period, Administrative Agent
shall promptly remit to Borrower the amount of such interest paid by Borrower
for such period.  If such Lender pays its share of the applicable
Borrowing to Administrative Agent, then the amount so paid shall constitute such
Lender’s Revolving Loan included in such Borrowing.  Any payment by
Borrower shall be without prejudice to any claim Borrower may have against a
Lender that shall have failed to make such payment to Administrative
Agent.

     

    
      
         

      

      
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    Section
2.3.          Continuations and
Conversions of Existing Loans.  Borrower
may make the following elections with respect to Revolving Loans already
outstanding: to convert Base Rate Loans to Eurodollar Loans, to convert
Eurodollar Loans to Base Rate Loans on the last day of the Interest Period
applicable thereto, and to continue Eurodollar Loans beyond the expiration of
such Interest Period by designating a new Interest Period to take effect at the
time of such expiration.  In making such elections, Borrower may
combine existing Revolving Loans made pursuant to separate Borrowings into one
new Borrowing or divide existing Revolving Loans made pursuant to one Borrowing
into separate new Borrowings, provided that Borrower may have no more than ten
Borrowings of Eurodollar Loans outstanding at any time.  To make any
such election, Borrower must give to Administrative Agent written notice (or
telephonic notice promptly confirmed in writing) of any such Conversion or
Continuation of existing Revolving Loans, with a separate notice given for each
new Borrowing.  Each such notice constitutes a
“Continuation/Conversion Notice” hereunder and must:

     

    (a)           specify
the existing Revolving Loans which are to be Continued or
Converted;

     

    (b)           specify
(i) the aggregate amount of any Borrowing of Base Rate Loans into which such
existing Revolving Loans are to be continued or converted and the date on which
such Continuation or Conversion is to occur, or (ii) the aggregate amount of any
Borrowing of Eurodollar Loans into which such existing Revolving Loans are to be
continued or converted, the date on which such Continuation or Conversion is to
occur (which shall be the first day of the Interest Period which is to apply to
such Eurodollar Loans), and the length of the applicable Interest Period;
and

     

    
      
         

      

      
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    (c)           be
received by Administrative Agent not later than 11:00 a.m., Denver, Colorado
time, on (i) the day on which any such Continuation or Conversion to Base Rate
Loans is to occur, or (ii) the third Business Day preceding the day on which any
such Continuation or Conversion to Eurodollar Loans is to occur.

     

    Each such
written request or confirmation must be made in the form and substance of the
“Continuation/Conversion Notice” attached hereto as Exhibit C, duly
completed.  Each such telephonic request shall be deemed a
representation, warranty, acknowledgment and agreement by Borrower as to the
matters which are required to be set out in such written
confirmation.  Upon receipt of any such Continuation/Conversion
Notice, Administrative Agent shall give each Lender prompt notice of the terms
thereof.  Each Continuation/Conversion Notice shall be irrevocable and
binding on Borrower.  During the continuance of any Default, Borrower
may not make any election to convert existing Revolving Loans into Eurodollar
Loans or continue existing Revolving Loans as Eurodollar Loans.  If
(due to the existence of a Default or for any other reason) Borrower fails to
timely and properly give any Continuation/Conversion Notice with respect to a
Borrowing of existing Eurodollar Loans at least three days prior to the end of
the Interest Period applicable thereto, such Eurodollar Loans shall
automatically be converted into Base Rate Loans at the end of such Interest
Period.  No new funds shall be repaid by Borrower or advanced by any
Lender in connection with any Continuation or Conversion of existing Revolving
Loans pursuant to this section, and no such Continuation or Conversion shall be
deemed to be a new advance of funds for any purpose; such Continuations and
Conversions merely constitute a change in the interest rate applicable to
already outstanding Revolving Loans. Notwithstanding anything to the contrary
herein, a Swing Line Loan may not be converted to a Eurodollar
Loan.

     

    Section
2.4.          Use of
Proceeds.  Borrower
shall use all Loans to refinance Existing Indebtedness of Borrower including
existing indebtedness under the Existing Credit Documents, to make acquisitions
permitted by this Agreement, to finance capital expenditures, to refinance
Matured LC Obligations, and provide working capital for its operations and for
other general business purposes.  Borrower shall use all Letters of
Credit for its general corporate purposes.  In no event shall the
funds from any Loan or any Letter of Credit be used directly or indirectly by
any Person for personal, family, household or agricultural purposes or for the
purpose, whether immediate, incidental or ultimate, of purchasing, acquiring or
carrying any “margin stock” (as such term is defined in Regulation U promulgated
by the Board of Governors of the Federal Reserve System) or to extend credit to
others directly or indirectly for the purpose of purchasing or carrying any such
margin stock.  Borrower represents and warrants that Borrower is not
engaged principally, or as one of Borrower’s important activities, in the
business of extending credit to others for the purpose of purchasing or carrying
such margin stock.

     

    Section
2.5.          Interest Rates and
Fees.

     

    (a)           Base Rate
Loans.  So long as no Event of Default has occurred and is
continuing, all Base Rate Loans (exclusive of any past due principal or
interest) from time to time outstanding shall bear interest on each day
outstanding at the Adjusted Base Rate in effect on such day.  If an
Event of Default has occurred and is continuing, all Base Rate Loans (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date Borrower shall pay to the
holder hereof all unpaid interest which has accrued on the Base Rate Loans to
but not including such Interest Payment Date.

     

    
      
         

      

      
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    (b)           Eurodollar
Loans.  So long as no Event of Default has occurred and is
continuing, each Eurodollar Loan (exclusive of any past due principal or
interest) shall bear interest on each day during the related Interest Period at
the related Adjusted Eurodollar Rate in effect on such day.  If an
Event of Default has occurred and is continuing, all Eurodollar Loans (exclusive
of any past due principal or interest) from time to time outstanding shall bear
interest on each day outstanding at the applicable Default Rate in effect on
such day.  On each Interest Payment Date relating to such Eurodollar
Loan, Borrower shall pay to the holder hereof all unpaid interest which has
accrued on such Eurodollar Loan to but not including such Interest Payment
Date.

     

    (c)           Swing Line
Loans.   Each Swing Line Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Adjusted Base Rate. If an Event of Default has
occurred and is continuing, all Swing Line Loans (exclusive of any past due
principal or interest) from time to time outstanding shall bear interest on each
day outstanding at the applicable Default Rate in effect on such
day.  On each Interest Payment Date Borrower shall pay to the holder
hereof all unpaid interest which has accrued on the Swing Line Loans to but not
including such Interest Payment Date.

     

    (d)           Past Due Principal and
Interest.  All past due principal of and past due interest on
the Loans shall bear interest on each day outstanding at the Default Rate in
effect on such day, and such interest shall be due and payable daily as it
accrues.

     

    (e)           Commitment
Fees.  In consideration of each Lender’s commitment to make
Loans, Borrower will pay to Administrative Agent for the account of each Lender
a commitment fee determined on a daily basis by applying the Commitment Fee Rate
to such Lender’s Percentage Share of the Availability (calculated excluding
outstanding Swing Line Loans) each day during the Commitment
Period.  This commitment fee shall be due and payable in arrears on
the last day of each Fiscal Quarter and at the end of the Commitment
Period.

     

    (f)           Administrative Agent’s
Fees.  In addition to all other amounts due to Administrative
Agent under the Loan Documents, Borrower will pay fees to Administrative Agent
as described in a Fee Letter dated June 10, 2008 between Administrative Agent
and Borrower.

     

    Section
2.6.          Optional
Prepayments.

     

    (a)           
Borrower may from time to time and without premium or penalty prepay the Notes,
in whole or in part, so long as the aggregate amount of Base Rate Loans prepaid
at any time must be equal to $500,000 or a higher integral multiple of $100,000,
and the aggregate amount of Eurodollar Loans prepaid at any time must be equal
to $3,000,000 or any higher integral multiple of $1,000,000, provided that if
Borrower prepays any Base Rate Loan, it shall give notice to Administrative
Agent at least one Business Day’s prior notice to the date such prepayment is
made and further provided that if Borrower prepays any Eurodollar Loan, it shall
give notice to Administrative Agent at least three Business Days’ prior to the
date such prepayment is made and pay to Lenders any amounts due under Section
3.5.

     

    
      
         

      

      
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    (b)           Borrower
may, upon notice to the Swing Line Lender (with a copy to Administrative Agent),
prepay Swing Line Loans in whole or in part without premium or penalty; provided
that (A) such notice must be received by the Swing Line Lender and
Administrative Agent not later than 2:00 p.m. Denver, Colorado time on the date
of the prepayment, and (B) any such prepayment shall be in a minimum principal
amount of $100,000.  Each such notice shall specify the date and
amount of such prepayment.  If such notice is given by Borrower,
Borrower shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein.

     

    Section
2.7.          Mandatory
Prepayments.

     

    (a)           If
at any time the sum of the Facility Usage and the principal amount of SG
Obligations then outstanding is in excess of the Borrowing Base (such excess
being herein called a “Borrowing Base
Deficiency”), Borrower shall within 30 days after Administrative Agent
gives notice to Borrower of such Borrowing Base Deficiency elect to take either
of the following actions or a combination thereof (i) prepay the SG Obligations
and/or the principal of the Obligations in an aggregate amount at least equal to
such Borrowing Base Deficiency in two equal installments, one being due and
payable on the 90th day after the date on which Administrative Agent gives
notice of such Borrowing Base Deficiency to Borrower and the other being payable
on the 180th day after the date on which such notice is given to Borrower (or,
if the Loans have been paid in full, pay to LC Issuer LC Collateral as required
under Section 2.16(a)), or (ii) give notice to Administrative Agent that
Borrower desires to provide (or cause to be provided by other Restricted
Persons) Administrative Agent with deeds of trust, mortgages, chattel mortgages,
security agreements, financing statements and other security documents in form
and substance similar to the Security Documents previously delivered to
Administrative Agent (with any changes required to conform to changes in Law or
changes in the type of collateral covered thereby), and otherwise reasonably
satisfactory to Administrative Agent, granting, confirming, and perfecting first
and prior liens or security interests in collateral acceptable to all Lenders
subject to no liens other than Permitted Liens, to the extent needed to allow
all Lenders to increase the Borrowing Base (as they in their reasonable
discretion deem consistent with prudent oil and gas banking industry lending
standards at the time) to an amount which eliminates such Borrowing Base
Deficiency, and such Security Documents shall be executed and delivered to
Administrative Agent within thirty days after Administrative Agent confirms to
Borrower what collateral shall be required.  If, prior to any such
specification by Administrative Agent, Required Lenders determine that the
giving of such Security Documents will not serve to eliminate such Borrowing
Base Deficiency, then, within five Business Days after receiving notice of such
determination from Administrative Agent, Borrower will elect to make, and will
thereafter make, the prepayments specified in the preceding subsection (i) of
this subsection (a).

     

    (b)           Immediately
upon the reduction of the Borrowing Base pursuant to Section 7.5, Borrower shall
make a mandatory prepayment on the Loans in an amount, if any, required to
eliminate any Borrowing Base Deficiency.

    
      
         

      

      
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    (c)           Each
prepayment of principal under this section shall be accompanied by all interest
then accrued and unpaid on the principal so prepaid and any amounts due under
Section 3.4.  Any principal or interest prepaid pursuant to this
section shall be in addition to, and not in lieu of, all payments otherwise
required to be paid under the Loan Documents at the time of such
prepayment.

     

    Section
2.8.          Initial Borrowing
Base.  During
the period from the date hereof to the first Determination Date the Borrowing
Base shall be $1,000,000,000.

     

    Section
2.9.          Subsequent Redeterminations
of Borrowing Base.

     

    (a)           Scheduled Determinations of
Borrowing Base.  By March 15 and September 15 of each year
Borrower shall furnish to each Lender all information, reports and data which
Administrative Agent has then requested concerning Restricted Persons’
businesses and properties (including their Mineral Interests and the reserves
and production relating thereto), together with the Engineering Report described
in Section 6.2(d) or 6.2(e), as applicable.  Within forty-five days
after receiving such information, reports and data, or as promptly thereafter as
practicable, Required Lenders shall agree upon an amount for the Borrowing Base
(provided that all Lenders must agree to any increase in the Borrowing Base) and
Administrative Agent shall by notice to Borrower designate such amount as the
new Borrowing Base available to Borrower hereunder, which designation shall take
effect immediately on the date such notice is sent (herein called a “Determination Date”)
and shall remain in effect until but not including the next date as of which the
Borrowing Base is redetermined.  If Borrower does not furnish all such
information, reports and data by the date specified in the first sentence of
this section, Administrative Agent may nonetheless designate the Borrowing Base
at any amount which Required Lenders determine and may redesignate the Borrowing
Base from time to time thereafter (provided that all Lenders must agree to any
increase in the Borrowing Base) until each Lender receives all such information,
reports and data, whereupon Required Lenders shall designate a new Borrowing
Base as described above.  Required Lenders shall determine the amount
of the Borrowing Base in their sole discretion consistent with normal and
customary oil and gas lending practice of the Lenders based upon the loan
collateral value which they in their discretion assign to the various Mineral
Interests of Restricted Persons at the time in question and based upon such
other credit factors (including without limitation the assets, liabilities, cash
flow, hedged and unhedged exposure to price, foreign exchange rate, and interest
rate changes, business, properties, prospects, management and ownership of
Borrower and its Affiliates) as they in their discretion deem
significant.  It is expressly understood that Lenders and
Administrative Agent have no obligation to agree upon or designate the Borrowing
Base at any particular amount, whether in relation to the Maximum Credit Amount
or otherwise, and that Lenders’ commitments to advance funds hereunder is
determined by reference to the Borrowing Base from time to time in
effect.

     

    (b)           Lenders’ Special
Redeterminations of Borrowing Base .  In addition to Scheduled
Redeterminations, Required Lenders shall be permitted to make a Special
Redetermination of the Borrowing Base once between each two consecutive
Scheduled Redeterminations.  Any request by Required Lenders pursuant
to this Section 2.9(b) shall be submitted to Administrative Agent and
Borrower.  As soon as reasonably possible, Borrower shall deliver to
Administrative Agent and Lenders an Engineering Report prepared as of a date
which is no more than thirty (30) days prior to the date of such
request.

     

    
      
         

      

      
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    (c)           Borrower’s Special
Redetermination of Borrowing Base.  In addition to Scheduled
Redeterminations, Borrower shall be permitted to request a Special
Redetermination of the Borrowing Base once between each two consecutive
Scheduled Redeterminations.  Such request shall be submitted to
Administrative Agent and Lenders and at the time of such request Borrower shall
(i) deliver to Administrative Agent and each Lender an Engineering Report
prepared as of a date which is no more than thirty (30) days prior to the date
of such request and (ii) notify Administrative Agent and each Lender of the
Borrowing Base requested by Borrower in connection with such Special
Redetermination.

     

    (d)           Procedures for Special
Redeterminations.  Any Special Redetermination shall be made by
Lenders in accordance with the procedures and standards set forth in Section
2.9(a).

     

    (e)           Reduction of Borrowing Base
in Connection with Asset Sales.  In addition to Scheduled
Redeterminations and Special Redeterminations, the Borrowing Base may be reduced
from time to time as provided in Section 7.5.

     

    Section
2.10.        Decrease in Aggregate
Commitment.  Borrower
may at any time reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders in the amount of $5,000,000 or any higher integral multiple of
$1,000,000, upon at least three Business Days’ written notice to the
Administrative Agent, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Aggregate Commitment may
not be reduced below the Facility Usage and may not be reinstated.

     

    Section
2.11.        Letters of
Credit.  Subject
to the terms and conditions hereof, Borrower may during the Commitment Period
request LC Issuer to issue, increase the amount of or otherwise amend or extend
one or more Letters of Credit, provided that, after taking such Letter of Credit
into account:

     

    (a)           the
sum of  the Facility Usage and the principal amount of the SG
Obligations then outstanding does not exceed the Borrowing Base determined as of
the date on which the requested Letter of Credit is to be issued;

     

    (b)           the
aggregate amount of LC Obligations at such time does not exceed the LC Sublimit;
and

     

    (c)           the
expiration date of such Letter of Credit (as extended if applicable) is prior to
the Letter of Credit Termination Date.

     

    and
further provided that:

     

    (d)           such
Letter of Credit is to be used for general corporate purposes of Restricted
Persons;

     

    
      
         

      

      
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    (e)           such
Letter of Credit is not directly or indirectly used to assure payment of or
otherwise support any Indebtedness of any Person except Indebtedness of
Restricted Persons;

     

    (f)           the
issuance of such Letter of Credit will be in compliance with all applicable
governmental restrictions, policies, and guidelines and will not subject LC
Issuer to any cost which is not reimbursable under Article III;

     

    (g)           the
form and terms of such Letter of Credit are acceptable to LC Issuer in its sole
and absolute discretion; and

     

    (h)           all
other conditions in this Agreement to the issuance of such Letter of Credit have
been satisfied.

     

    LC Issuer
will honor any such request if the foregoing conditions (a) through (h) (in the
following Section 2.12 called the “LC Conditions”) have
been met as of the date of issuance of such Letter of Credit.  LC
Issuer may choose to honor any such request for any other Letter of Credit but
has no obligation to do so and may refuse to issue any other requested Letter of
Credit for any reason which LC Issuer in its sole discretion deems
relevant.  All Existing Letters of Credit shall be deemed to have been
issued pursuant hereto and, from and after the date hereof, shall be subject to
and governed by the terms and conditions hereof.

     

    Section
2.12.        Requesting Letters of
Credit.

     

    (a)           Borrower
must make written application for any Letter of Credit or amendment or extension
of any Letter of Credit at least five Business Days before the date on which
Borrower desires for LC Issuer to issue such Letter of Credit.  By
making any such written application Borrower shall be deemed to have represented
and warranted that the LC Conditions described in Section 2.11 will be met as of
the date of issuance of such Letter of Credit.  Each such written
application for a Letter of Credit must be made in writing in the form
customarily used by LC Issuer, the terms and provisions of which are hereby
incorporated herein by reference (or in such other form as may mutually be
agreed upon by LC Issuer and Borrower).

     

    (b)           If
Borrower so requests in any applicable LC Application, the LC Issuer may, in its
sole and absolute discretion, agree to issue a Letter of Credit that has
automatic extension provisions (each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of Credit must
permit the LC Issuer to prevent any such extension at least once in each
twelve-month period (commencing with the date of issuance of such Letter of
Credit) by giving prior notice to the beneficiary thereof not later than a day
(the “Non-Extension
Notice Date”) in each such twelve-month period to be agreed upon at the
time such Letter of Credit is issued.  Unless otherwise directed by
the LC Issuer, Borrower shall not be required to make a specific request to the
LC Issuer for any such extension.  Once an Auto-Extension Letter of
Credit has been issued, the Lenders shall be deemed to have authorized (but may
not require) the LC Issuer to permit the extension of such Letter of Credit at
any time to an expiry date not later than the Letter of Credit Expiration Date;
provided, however, that the LC
Issuer shall not permit any such extension if (A) the LC Issuer has determined
that it would not be permitted, or would have no obligation at such time to
issue such Letter of Credit in its revised form (as extended) under the terms
hereof (by reason of the provisions of Section 2.10 or otherwise), or (B) it has
received notice (which may be by telephone or in writing) on or before the day
that is five Business Days before the Non-Extension Notice Date (1) from
Administrative Agent that the Required Lenders have elected not to permit such
extension or (2) from Administrative Agent, any Lender or Borrower that one or
more of the applicable conditions specified in Section 4.2 is not then
satisfied, and in each such case directing the LC Issuer not to permit such
extension.

     

    
      
         

      

      
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    (c)           Two
Business Days after the LC Conditions for a Letter of Credit have been met as
described in Section 2.11 (or if LC Issuer otherwise desires to issue such
Letter of Credit), LC Issuer will issue such Letter of Credit at LC Issuer’s
office in San Francisco, California.  If any provisions of any LC
Application conflict with any provisions of this Agreement, the provisions of
this Agreement shall govern and control.

     

    Section
2.13.        Reimbursement and
Participations.

     

    (a)           Reimbursement by
Borrower.  Each Matured LC Obligation shall constitute a loan
by LC Issuer to Borrower.  Borrower promises to pay to LC Issuer, or
to LC Issuer’s order, on demand, the full amount of each Matured LC Obligation,
together with interest thereon at the Default Rate applicable to Base Rate
Loans.

     

    (b)           Letter of Credit
Loans.  If the beneficiary of any Letter of Credit makes a
draft or other demand for payment thereunder, then Borrower may, during the
interval between the making thereof and the honoring thereof by LC Issuer,
request Lenders to make Revolving Loans to Borrower in the amount of such draft
or demand, which Revolving Loans shall be made concurrently with LC Issuer’s
payment of such draft or demand and shall be immediately used by LC Issuer to
repay the amount of the resulting Matured LC Obligation.  Such a
request by Borrower shall be made in compliance with all of the provisions
hereof, provided that for the purposes of the first sentence of Section 2.1, the
amount of such Revolving Loans shall be considered, but the amount of the
Matured LC Obligation to be concurrently paid by such Revolving Loans shall not
be considered.

     

    (c)           Participation by
Lenders.  LC Issuer irrevocably agrees to grant and hereby
grants to each Lender, and -- to induce LC Issuer to issue Letters of Credit
hereunder -- each Lender irrevocably agrees to accept and purchase and hereby
accepts and purchases from LC Issuer, on the terms and conditions hereinafter
stated and for such Lender’s own account and risk, an undivided interest equal
to such Lender’s Percentage Share of LC Issuer’s obligations and rights under
each Letter of Credit issued hereunder and the amount of each Matured LC
Obligation paid by LC Issuer thereunder.  Each Lender unconditionally
and irrevocably agrees with LC Issuer that, if a Matured LC Obligation is paid
under any Letter of Credit for which LC Issuer is not reimbursed in full by
Borrower in accordance with the terms of this Agreement and the related LC
Application (including any reimbursement by means of concurrent Loans or by the
application of LC Collateral), such Lender shall (in all circumstances and
without set-off or counterclaim) pay to LC Issuer on demand, in immediately
available funds at LC Issuer’s address for notices hereunder, such Lender’s
Percentage Share of such Matured LC Obligation (or any portion thereof which has
not been reimbursed by Borrower).  Each Lender’s obligation to pay LC
Issuer pursuant to the terms of this subsection is irrevocable and
unconditional.  If any amount required to be paid by any Lender to LC
Issuer pursuant to this subsection is paid by such Lender to LC Issuer within
three Business Days after the date such payment is due, LC Issuer shall in
addition to such amount be entitled to recover from such Lender, on demand,
interest thereon calculated from such due date at the Federal Funds
Rate.  If any amount required to be paid by any Lender to LC Issuer
pursuant to this subsection is not paid by such Lender to LC Issuer within three
Business Days after the date such payment is due, LC Issuer shall in addition to
such amount be entitled to recover from such Lender, on demand, interest thereon
calculated from such due date at the Default Rate applicable to Base Rate
Loans.

     

    
      
         

      

      
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    (d)           Distributions to
Participants.  Whenever LC Issuer has in accordance with this
section received from any Lender payment of such Lender’s Percentage Share of
any Matured LC Obligation, if LC Issuer thereafter receives any payment of such
Matured LC Obligation or any payment of interest thereon (whether directly from
Borrower or by application of LC Collateral or otherwise, and excluding only
interest for any period prior to LC Issuer’s demand that such Lender make such
payment of its Percentage Share), LC Issuer will distribute to such Lender its
Percentage Share of the amounts so received by LC Issuer; provided, however, that if any
such payment received by LC Issuer must thereafter be returned by LC Issuer,
such Lender shall return to LC Issuer the portion thereof which LC Issuer has
previously distributed to it.

     

    (e)           Calculations.  A
written advice setting forth in reasonable detail the amounts owing under this
section, submitted by LC Issuer to Borrower or any Lender from time to time,
shall be conclusive, absent manifest error, as to the amounts
thereof.

     

    Section
2.14.        Letter of Credit
Fees.  In
consideration of LC Issuer’s issuance of any Letter of Credit, Borrower agrees
to pay (a) to Administrative Agent, for the account of all Lenders in accordance
with their respective Percentage Shares, a letter of credit issuance fee at a
rate equal to the Eurodollar Margin then in effect, and (b) to such LC
Issuer for its own account, a letter of credit fronting fee at a rate equal to
one-eighth of one percent (0.125%) per annum, but in no event less than $500 per
annum.  Each such fee will be calculated based on the face amount of
all Letters of Credit outstanding on each day at the above applicable rate and
will be payable at the end of each Fiscal Quarter in arrears.  In
addition, Borrower will pay to LC Issuer the LC Issuer’s customary fees for
administrative issuance, amendment and drawing of each Letter of
Credit.

     

    Section
2.15.        No Duty to
Inquire.

     

    (a)           Drafts and
Demands.  LC Issuer is authorized and instructed to accept and
pay drafts and demands for payment under any Letter of Credit without requiring,
and without responsibility for, any determination as to the existence of any
event giving rise to said draft, either at the time of acceptance or payment or
thereafter.  LC Issuer is under no duty to determine the proper
identity of anyone presenting such a draft or making such a demand (whether by
tested telex or otherwise) as the officer, representative or agent of any
beneficiary under any Letter of Credit, and payment by LC Issuer to any such
beneficiary when requested by any such purported officer, representative or
agent is hereby authorized and approved.  Borrower releases each
Lender Party from, and agrees to hold each Lender Party harmless and indemnified
against, any liability or claim in connection with or arising out of the subject
matter of this section, which indemnity shall apply whether or not any such
liability or claim is in any way or to any extent caused, in whole or in part,
by any negligent act or omission of any kind by any Lender Party, provided only
that no Lender Party shall be entitled to indemnification for that portion, if
any, of any liability or claim which is proximately caused by its own individual
gross negligence or willful misconduct, as determined in a final
judgment.

     

    
      
         

      

      
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    (b)           Extension of
Maturity.  If the maturity of any Letter of Credit is extended
by its terms or by Law or governmental action, if any extension of the maturity
or time for presentation of drafts or any other modification of the terms of any
Letter of Credit is made at the request of any Restricted Person, or if the
amount of any Letter of Credit is increased at the request of any Restricted
Person, this Agreement shall be binding upon all Restricted Persons with respect
to such Letter of Credit as so extended, increased or otherwise modified, with
respect to drafts and property covered thereby, and with respect to any action
taken by LC Issuer, LC Issuer’s correspondents, or any Lender Party in
accordance with such extension, increase or other modification.

     

    (c)           Transferees of Letters of
Credit.  If any Letter of Credit provides that it is
transferable, LC Issuer shall have no duty to determine the proper identity of
anyone appearing as transferee of such Letter of Credit, nor shall LC Issuer be
charged with responsibility of any nature or character for the validity or
correctness of any transfer or successive transfers, and payment by LC Issuer to
any purported transferee or transferees as determined by LC Issuer is hereby
authorized and approved, and Borrower releases each Lender Party from, and
agrees to hold each Lender Party harmless and indemnified against, any liability
or claim in connection with or arising out of the foregoing, which indemnity
shall apply whether or not any such liability or claim is in any way or to any
extent caused, in whole or in part, by any negligent act or omission of any kind
by any Lender Party, provided only that no Lender Party shall be entitled to
indemnification for that portion, if any, of any liability or claim which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment.

     

    Section
2.16.        LC
Collateral.

     

    (a)           LC Obligations in Excess of
Borrowing Base.  If, after the making of all mandatory
prepayments required under Section 2.7, the sum of the outstanding LC
Obligations and the outstanding principal amount of the SG Obligations will
exceed the lesser of Borrowing Base or the Aggregate Commitment, then Borrower
will immediately pay to LC Issuer an amount equal to such excess.  LC
Issuer will hold such amount as security for the remaining LC Obligations (all
such amounts held as security for LC Obligations being herein collectively
called “LC
Collateral”) and the other Obligations, and such collateral may be
applied from time to time to any Matured LC Obligations or other Obligations
which are due and payable.  Neither this subsection nor the following
subsection shall, however, limit or impair any rights which LC Issuer may have
under any other document or agreement relating to any Letter of Credit, LC
Collateral or LC Obligation, including any LC Application, or any rights which
any Lender Party may have to otherwise apply any payments by Borrower and any LC
Collateral under Section 3.1.

     

    (b)           Acceleration of LC
Obligations.  If the Obligations or any part thereof become
immediately due and payable pursuant to Section 8.1 then, unless Majority
Lenders otherwise specifically elect to the contrary (which election may
thereafter be retracted by Majority Lenders at any time), all LC Obligations
shall become immediately due and payable without regard to whether or not actual
drawings or payments on the Letters of Credit have occurred, and Borrower shall
be obligated to pay to LC Issuer immediately an amount equal to the aggregate LC
Obligations which are then outstanding, which amount shall be held by LC Issuer
as LC Collateral securing the remaining LC Obligations and the other
Obligations, and such LC Collateral may be applied from time to time to any
Matured LC Obligations or any other Obligations which are due and
payable.

     

    
      
         

      

      
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    (c)           Investment of LC
Collateral.  Pending application thereof, all LC Collateral
shall be invested by LC Issuer in such Investments as LC Issuer may choose in
its sole discretion.  All interest on (and other proceeds of) such
Investments shall be reinvested or applied to Matured LC Obligations or other
Obligations which are due and payable.  When all Obligations have been
satisfied in full, including all LC Obligations, all Letters of Credit have
expired or been terminated, and all of Borrower’s reimbursement obligations in
connection therewith have been satisfied in full, LC Issuer shall release any
remaining LC Collateral.  Borrower hereby assigns and grants to LC
Issuer a continuing security interest in all LC Collateral paid by it to LC
Issuer, all Investments purchased with such LC Collateral, and all proceeds
thereof to secure its Matured LC Obligations and its Obligations under this
Agreement, each Note, and the other Loan Documents and Borrower agrees that such
LC Collateral, Investments and proceeds shall be subject to all of the terms and
conditions of the Security Documents.  Borrower further agrees that LC
Issuer shall have all of the rights and remedies of a secured party under the
UCC with respect to such security interest and that an Event of Default under
this Agreement shall constitute a default for purposes of such security
interest.

     

    (d)           Payment of LC
Collateral.  When Borrower is required to provide LC Collateral
for any reason and fails to do so on the day when required, LC Issuer may
without notice to Borrower or any other Restricted Person provide such LC
Collateral (whether by transfers from other accounts maintained with LC Issuer
or otherwise) using any available funds of Borrower or any other Person also
liable to make such payments.  Any such amounts which are required to
be provided as LC Collateral and which are not provided on the date required
shall, for purposes of each Security Document, be considered past due
Obligations owing hereunder.

     

    Section
2.17.        Swing Line
Loans.

     

    (a)           The Swing
Line.  Subject to the terms and conditions set forth herein,
the Swing Line Lender agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.17, to make loans (each such loan, a “Swing Line Loan”) to
Borrower from time to time on any Business Day during the Commitment Period in
an aggregate amount not to exceed at any time outstanding the amount of the
Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Swing Line Lender’s Percentage Share of the outstanding
principal balance of Swing Line Lender’s Revolving Loans, may exceed the amount
of the Swing Line Lender’s Commitment; provided, however, that after
giving effect to any Swing Line Loan, the sum of the Facility Usage and the
principal amount of the SG Obligations then outstanding does not exceed the
Borrowing Base; and provided further that Borrower
shall not use the proceeds of any Swing Line Loan to refinance any outstanding
Swing Line Loan.  Within the foregoing limits, and subject to the
other terms and conditions hereof, Borrower may borrow under this Section 2.17,
prepay under Section 2.6 and reborrow under this Section 2.17.  Each
Swing Line Loan shall bear interest at the Adjusted Base Rate and all
outstanding Swing Line Loans shall be due and payable in full on the fifth and
the twentieth day of each calendar month.  Immediately upon the making
of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to the product of such
Lender’s Percentage Share times the amount of
such Swing Line Loan.

     

    
      
         

      

      
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    (b)           Borrowing
Procedures.     Each Swing Line Borrowing shall
be made upon Borrower’s irrevocable notice to the Swing Line Lender and
Administrative Agent, which may be given by telephone.  Each such
notice must be received by the Swing Line Lender and Administrative Agent not
later than 1:00 p.m., Denver, Colorado time, on the requested borrowing date,
and shall specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and (ii) the requested borrowing date, which shall be a Business
Day.  Each such telephonic notice must be confirmed promptly by
delivery to the Swing Line Lender and Administrative Agent of a written Swing
Line Loan Notice appropriately completed.  Promptly after receipt by
the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line
Lender will confirm with Administrative Agent (by telephone or in writing) that
Administrative Agent has also received such Swing Line Loan Notice and, if not,
the Swing Line Lender will notify Administrative Agent (by telephone or in
writing) of the contents thereof.  Unless the Swing Line Lender has
received notice (by telephone or in writing) from Administrative Agent
(including at the request of any Lender) prior to 2:00 p.m., Denver, Colorado
time, on the date of the proposed Swing Line Borrowing (A) directing the Swing
Line Lender not to make such Swing Line Loan as a result of the limitations set
forth in the first proviso to the first sentence of Section 2.17(a), or (B) that
one or more of the applicable conditions specified in Article IV is not then
satisfied, then, subject to the terms and conditions hereof, the Swing Line
Lender will, not later than 3:00 p.m., Denver, Colorado time, on the borrowing
date specified in such Swing Line Loan Notice, make the amount of its Swing Line
Loan available to Borrower at its office by crediting the account of Borrower on
the books of the Swing Line Lender in immediately available funds.

     

    (c)           Refinancing of Swing Line
Loans.

     

    (i)           
The Swing Line Lender at any time in its sole and absolute discretion may
request, on behalf of Borrower (which hereby irrevocably authorizes the Swing
Line Lender to so request on its behalf), that each Lender make a Revolving Loan
in an amount equal to such Lender’s Percentage Share of the amount of Swing Line
Loans then outstanding.  Such request shall be made in writing (which
written request shall be deemed to be a Borrowing Notice for purposes hereof)
and in accordance with the requirements of Section 2.2, without regard to the
minimum and multiples specified therein for the principal amount of Revolving
Loans, but subject to the unutilized portion of the Aggregate Commitments and
the conditions set forth in Section 4.2.  The Swing Line Lender shall
furnish Borrower with a copy of the applicable Borrowing Notice promptly after
delivering such notice to Administrative Agent.  Each Lender shall
make an amount equal to its Percentage Share of the amount specified in such
Borrowing Notice available to Administrative Agent in immediately available
funds for the account of the Swing Line Lender at Administrative Agent’s office
not later than 1:00 p.m., Denver, Colorado time, on the day specified in such
Borrowing Notice, whereupon, subject to Section 2.17(c)(ii), each Lender that so
makes funds available shall be deemed to have made a Revolving Loan to Borrower
in such amount.  Administrative Agent shall remit the funds so
received to the Swing Line Lender.

     

    
      
         

      

      
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    (ii)           If
for any reason any Swing Line Loan cannot be refinanced by such a Revolving Loan
in accordance with Section 2.17(c), the request for Revolving Loans submitted by
the Swing Line Lender as set forth herein shall be deemed to be a request by the
Swing Line Lender that each of the Lenders fund its risk participation in the
relevant Swing Line Loan and each Lender’s payment to Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.17(c)(i) shall be
deemed payment in respect of such participation.

     

    (iii)           If
any Lender fails to make available to Administrative Agent for the account of
the Swing Line Lender any amount required to be paid by such Lender pursuant to
the foregoing provisions of this Section 2.17(c) by the time specified in
2.17(c)(i), the Swing Line Lender shall be entitled to recover from such Lender
(acting through Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the date on
which such payment is immediately available to the Swing Line Lender at a rate
per annum equal to the greater of the Federal Funds Rate and a rate determined
by the Swing Line Lender in accordance with banking industry rules on interbank
compensation, plus any administrative, processing or similar fees customarily
charged by the Swing Line Lender in connection with the foregoing.  If
such Lender pays such amount (with interest and fees as aforesaid), the amount
so paid shall constitute such Lender’s Revolving Loan included in the relevant
Swing Line Loan or funded participation in the relevant Swing Line Loan as the
case may be.  A certificate of the Swing Line Lender submitted to any
Lender (through Administrative Agent) with respect to any amounts owing under
this clause (iii) shall be conclusive absent manifest error.

     

    (iv)           Each
Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.17(c) shall be
absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, defense or other right which
such Lender may have against the Swing Line Lender, Borrower or any other Person
for any reason whatsoever, (B) the occurrence or continuation of a Default, or
(C) any other occurrence, event or condition, whether or not similar to any of
the foregoing; provided, however, that each
Lender’s obligation to make Revolving Loans pursuant to this Section 2.17(c) is
subject to the conditions set forth in Section 4.2.  No such funding
of risk participations shall relieve or otherwise impair the obligation of
Borrower to repay Swing Line Loans, together with interest provided
herein.

     

    (d)           Repayment of
Participations.

     

    (i)           At
any time after any Lender has purchased and funded a risk participation in a
Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Lender its
Percentage Share thereof in the same funds as those received by the Swing Line
Lender.

     

    
      
         

      

      
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    (ii)           If
any payment received by the Swing Line Lender in respect of principal or
interest on any Swing Line Loan is required to be returned by the Swing Line
Lender under any of the circumstances described in Section 9.6 (including
pursuant to any settlement entered into by the Swing Line Lender in its
discretion), each Lender shall pay to the Swing Line Lender its Percentage Share
thereof on demand of Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned, at a rate per
annum equal to the Federal Funds Rate.  Administrative Agent will make
such demand upon the request of the Swing Line Lender.  The
obligations of the Lenders under this clause shall survive payment in full of
the Obligations and the termination of this Agreement.

     

    (e)           Interest Account of Swing
Line Lender.  The Swing Line Lender shall be responsible for
invoicing Borrower for interest on the Swing Line Loans.  Until each
Lender funds its Revolving Loan or risk participation pursuant to this Section
2.17 to refinance such Lender’s Percentage Share of any Swing Line Loan,
interest in respect of such Percentage Share shall be solely for the account of
the Swing Line Lender.

     

    (f)           Payments Directly to Swing
Line Lender.  Borrower shall make all payments of principal and
interest in respect of the Swing Line Loans directly to the Swing Line
Lender.

     

    Section
2.18.        Obligations of Lenders
Several. The
obligations of the Lenders hereunder to make Loans, to fund participations in
Letters of Credit and Swing Line Loans, and to make payments pursuant to Section
2.2 are several and not joint.  The failure of any Lender to make any
Loan; to fund any such participation or to make any payment under Section
10.4(b) on any date required hereunder shall not relieve any other Lender of its
corresponding obligation to do so on such date, and no Lender shall be
responsible for the failure of any other Lender to so make its Committed Loan,
to purchase its participation or to make its payment under Section
10.4(b).

     

     

    ARTICLE
III -  - Payments to
Lenders

     

    Section
3.1.          General
Procedures.  Borrower
will make each payment which it owes under the Loan Documents to Administrative
Agent for the account of the Lender Party to whom such payment is owed, in
lawful money of the United States of America, without set-off, deduction or
counterclaim, and in immediately available funds.  Each such payment
must be received by Administrative Agent not later than 11:00 a.m., Denver,
Colorado time, on the date such payment becomes due and payable.  Any
payment received by Administrative Agent after such time will be deemed to have
been made on the next following Business Day.  Should any such payment
become due and payable on a day other than a Business Day, the maturity of such
payment shall be extended to the next succeeding Business Day, and, in the case
of a payment of principal or past due interest, interest shall accrue and be
payable thereon for the period of such extension as provided in the Loan
Document under which such payment is due.  Each payment under a Loan
Document shall be due and payable at the place set forth for Administrative
Agent on the Lenders Schedule. When Administrative Agent collects or receives
money on account of the Obligations, Administrative Agent shall distribute all
money so collected or received, and each Lender Party shall apply all such money
so distributed, as follows (except as otherwise provided in Section
8.3):

     

    
      
         

      

      
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    (a)           first,
for the payment of all Obligations which are then due (and if such money is
insufficient to pay all such Obligations, first to any reimbursements due to
Administrative Agent under Section 6.9 or 10.4 and then to the partial payment
of all other Obligations then due in proportion to the amounts thereof, or as
Lender Parties shall otherwise agree);

     

    (b)           then
for the prepayment of amounts owing under the Loan Documents (other than
principal on the Notes) if so specified by Borrower;

     

    (c)           then
for the prepayment of principal on the Notes, together with accrued and unpaid
interest on the principal so prepaid; and

     

    (d)           last,
for the payment or prepayment of any other Obligations.

     

    All
payments applied to principal or interest on any Note shall be applied first to
any interest then due and payable, then to principal then due and payable, and
last to any prepayment of principal and interest in compliance with Sections 2.6
and 2.7.  All distributions of amounts described in any of subsections
(b), (c) or (d) above shall be made by Administrative Agent pro rata to each
Lender Party then owed Obligations described in such subsection in proportion to
all amounts owed to all Lender Parties which are described in such subsection;
provided that if any Lender then owes payments to LC Issuer for the purchase of
a participation under Section 2.13(c) or to Administrative Agent under
Section 10.4(b), any amounts otherwise distributable under this section to such
Lender shall be deemed to belong to LC Issuer, or Administrative Agent,
respectively, to the extent of such unpaid payments, and Administrative Agent
shall apply such amounts to make such unpaid payments rather than distribute
such amounts to such Lender.

     

    Section
3.2.          Increased
Costs.

     

    (a)           Increased Costs
Generally.  If any Change in Law shall:

     

    (i)           impose,
modify or deem applicable any reserve, special deposit, compulsory loan,
insurance charge or similar requirement against assets of, deposits with or for
the account of, or credit extended or participated in by, any Lender (except any
reserve requirement reflected in the Adjusted Eurodollar Rate) or LC
Issuer;

     

    (ii)           subject
any Lender or LC Issuer to any Tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any participation in a Letter of Credit or any
Eurodollar Loan made by it, or change the basis of taxation of payments to such
Lender or LC Issuer in respect thereof (except for Indemnified Taxes or Other
Taxes covered by Section 3.5 and the imposition of, or any change in the rate
of, any Excluded Tax payable by such Lender or LC Issuer); or

     

    (iii)           impose
on any Lender or LC Issuer or the London interbank market any other condition,
cost or expense affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein;

     

    
      
         

      

      
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    and the
result of any of the foregoing shall be to increase the cost to such Lender of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan), or to increase the cost to such Lender or LC Issuer of
participating in, issuing or maintaining any Letter of Credit (or of maintaining
its obligation to participate in or to issue any Letter of Credit), or to reduce
the amount of any sum received or receivable by such Lender or LC Issuer
hereunder (whether of principal, interest or any other amount) then, upon
request of such Lender or LC Issuer, Borrower will pay to such Lender or LC
Issuer, as the case may be, such additional amount or amounts as will compensate
such Lender or LC Issuer, as the case may be, for such additional costs incurred
or reduction suffered.

     

    (b)           Capital
Requirements.  If any Lender or LC Issuer determines that any
Change in Law affecting such Lender or LC Issuer or any lending office of such
Lender or such Lender’s or LC Issuer’s holding company, if any, regarding
capital requirements has or would have the effect of reducing the rate of return
on such Lender’s or LC Issuer’s capital or on the capital of such Lender’s or LC
Issuer’s holding company, if any, as a consequence of this Agreement, the
Commitments of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by LC Issuer, to a
level below that which such Lender or LC Issuer or such Lender’s or LC Issuer’s
holding company could have achieved but for such Change in Law (taking into
consideration such Lender’s or LC Issuer’s policies and the policies of such
Lender’s or LC Issuer’s holding company with respect to capital adequacy), then
from time to time Borrower will pay to such Lender or LC Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or LC
Issuer or such Lender’s or LC Issuer’s holding company for any such reduction
suffered.

     

    (c)           Certificates for
Reimbursement.  A certificate of a Lender or LC Issuer setting
forth the amount or amounts necessary to compensate such Lender or LC Issuer or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section and delivered to Borrower shall be conclusive absent manifest
error.  Borrower shall pay such Lender or LC Issuer, as the case may
be, the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

     

    (d)           Delay in
Requests.  Failure or delay on the part of any Lender or LC
Issuer to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender’s or LC Issuer’s right to demand such compensation,
provided that Borrower shall not be required to compensate a Lender or LC Issuer
pursuant to this Section for any increased costs incurred or reductions suffered
more than nine months prior to the date that such Lender or LC Issuer, as the
case may be, notifies Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender’s or LC Issuer’s intention to
claim compensation therefor (except that, if the Change in Law giving rise to
such increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).

     

    Section
3.3.          Illegality.  If
any Change in Law after the date hereof shall make it unlawful for any Lender
Party to fund or maintain Eurodollar Loans, then, upon notice by such Lender
Party to Borrower and Administrative Agent, (a) Borrower’s right to elect
Eurodollar Loans from such Lender Party shall be suspended to the extent and for
the duration of such illegality, (b) all Eurodollar Loans of such Lender Party
which are then the subject of any Borrowing Notice and which cannot be lawfully
funded shall be funded as Base Rate Loans of such Lender Party, and (c) all
Eurodollar Loans of such Lender Party shall be converted automatically to Base
Rate Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by
Law.  If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, Borrower shall pay to such Lender Party such amounts, if any, as may be
required pursuant to Section 3.4.

     

    
      
         

      

      
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    Section
3.4.          Funding
Losses.  In
addition to its other obligations hereunder, Borrower will indemnify each Lender
Party against, and reimburse each Lender Party on demand for, any loss or
expense incurred or sustained by such Lender Party (including any loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by a Lender Party to fund or maintain Eurodollar Loans), as
a result of (a) any payment or prepayment (whether authorized or required
hereunder or otherwise) of all or a portion of a Eurodollar Loan on a day other
than the day on which the applicable Interest Period ends, (b) any payment or
prepayment, whether required hereunder or otherwise, of a Loan made after the
delivery, but before the effective date, of a Continuation/Conversion Notice
requesting the continuation of outstanding Eurodollar Loans as, or the
conversion of outstanding Base Rate Loans to, Eurodollar Loans, if such payment
or prepayment prevents such Continuation/ Conversion Notice from becoming fully
effective, (c) the failure of any Revolving Loan to be made or of any
Continuation/Conversion Notice requesting the continuation of outstanding
Eurodollar Loans as, or the conversion of outstanding Base Rate Loans to,
Eurodollar Loans to become effective due to any condition precedent not being
satisfied or due to any other action or inaction of any Restricted Person, (d)
any Conversion (whether authorized or required hereunder or otherwise) of all or
any portion of any Eurodollar Loan into a Base Rate Loan or into a different
Eurodollar Loan on a day other than the day on which the applicable Interest
Period ends, or (e) any assignment of a Eurodollar Loan on a day other than
the last day of the Interest Period therefor as a result of a request by
Borrower pursuant to Section 3.7(b).  Such indemnification shall be on
an after-tax basis.

     

    Section
3.5.          Taxes.

     

    (a)           Payment Free of
Taxes.   Any and all payments by or on account of any
obligation of Borrower hereunder or under any other Loan Document shall be made
free and clear of and without reduction or withholding for any Indemnified Taxes
or Other Taxes, provided that if Borrower shall be required by applicable law to
deduct any Indemnified Taxes (including any Other Taxes) from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) Administrative Agent, Lender or LC Issuer, as the
case may be, receives an amount equal to the sum it would have received had no
such deductions been made, (ii) Borrower shall make such deductions and (iii)
Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.

     

    (b)           Payment of Other Taxes by
Borrower.  Without limiting the provisions of paragraph (a)
above, Borrower shall timely pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.

     

    
      
         

      

      
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    (c)           Indemnification by
Borrower.  Borrower shall indemnify Administrative Agent, each
Lender and LC Issuer, within ten (10) days after demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by Administrative Agent, such Lender or LC Issuer, as the case may
be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  A certificate as to the amount of such payment or
liability delivered to Borrower by a Lender or LC Issuer (with a copy to
Administrative Agent), or by Administrative Agent on its own behalf or on behalf
of a Lender or LC Issuer, shall be conclusive absent manifest
error.

     

    (d)           Evidence of
Payments.  As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by Borrower to a Governmental Authority,
Borrower shall deliver to Administrative Agent the original or a certified copy
of a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to Administrative Agent.

     

    (e)           Status of
Lenders.  Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
Borrower is resident for tax purposes, or any treaty to which such jurisdiction
is a party, with respect to payments hereunder or under any other Loan Document
shall deliver to Borrower (with a copy to Administrative Agent), at the time or
times prescribed by applicable law or reasonably requested by Borrower or
Administrative Agent, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without
withholding or at a reduced rate of withholding.  In addition, any
Lender, if requested by Borrower or Administrative Agent, shall deliver such
other documentation prescribed by applicable law or reasonably requested by
Borrower or Administrative Agent as will enable Borrower or Administrative Agent
to determine whether or not such Lender is subject to backup withholding or
information reporting requirements.

     

    Without
limiting the generality of the foregoing, in the event that Borrower is resident
for tax purposes in the United States of America, any Foreign Lender shall
deliver to Borrower and Administrative Agent (in such number of copies as shall
be requested by the recipient) on or prior to the date on which such Foreign
Lender becomes a Lender under this Agreement (and from time to time thereafter
upon the request of Borrower or Administrative Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is
applicable:

    

    (i)           duly
completed copies of Internal Revenue Service Form W-8BEN claiming eligibility
for benefits of an income tax treaty to which the United States of America is a
party,

     

    (ii)           duly
completed copies of Internal Revenue Service Form W-8ECI,

     

    (iii)           in
the case of a Foreign Lender claiming the benefits of the exemption for
portfolio interest under section 881(c) of the Code, (x) a certificate to the
effect that such Foreign Lender is not (A) a “bank” within the meaning of
section 881(c)(3)(A) of the Internal Revenue Code, (B) a “10 percent
shareholder” of Borrower within the meaning of section 881(c)(3)(B) of the
Internal Revenue Code, or (C) a “controlled foreign corporation” described in
section 881(c)(3)(C) of the Internal Revenue Code and (y) duly completed
copies of  Internal Revenue Service Form W-8BEN, or

     

    
      
         

      

      
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    (iv)           any
other form prescribed by applicable law as a basis for claiming exemption from
or a reduction in United States Federal withholding tax duly completed together
with such supplementary documentation as may be prescribed by applicable law to
permit Borrower to determine the withholding or deduction required to be
made.

     

    (f)           Treatment of Certain
Refunds.  If Administrative Agent, a Lender or LC Issuer
receives a refund of any Taxes or Other Taxes as to which it has been
indemnified by Borrower or with respect to which Borrower has paid additional
amounts pursuant to this Section, it shall pay to Borrower an amount equal to
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of
Administrative Agent, such Lender or LC Issuer, as the case may be, and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund), provided that Borrower, upon the request of
Administrative Agent, such Lender or LC Issuer, agrees to repay the amount paid
over to Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to Administrative Agent, such Lender or LC
Issuer in the event Administrative Agent, such Lender or LC Issuer is required
to repay such refund to such Governmental Authority.  This subsection
shall not be construed to require Administrative Agent, any Lender or LC Issuer
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to Borrower or any other Person.

     

    Section
3.6.          Alternative Rate of
Interest.  If
prior to the commencement of any Interest Period for a Borrowing of Eurodollar
Loans:

     

    (a)           Administrative
Agent determines that adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period (any such
determination shall be conclusive absent manifest error); or

     

    (b)           Administrative
Agent is advised by Required Lenders that the Eurodollar Rate for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of making
or maintaining their Loans included in such Borrowing for such Interest
Period;

     

    then
Administrative Agent shall give notice thereof to Borrower and Lenders by
telephone or facsimile as promptly as practicable thereafter and, until
Administrative Agent notifies Borrower and Lenders that the circumstances giving
rise to such notice no longer exist, (i) any Continuation/Conversion Notice that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Borrowing of Eurodollar Loans shall be ineffective and shall be deemed a
request to continue such Borrowing as a Borrowing of Base Rate Loans and (ii) if
any Borrowing Notice requests a Borrowing of Eurodollar Loans, such Borrowing
shall be made as a Borrowing of Base Rate Loans.  Upon receipt of such
notice, Borrower may revoke any pending request for a Borrowing of, conversion
to or continuation of Eurodollar Loans.

     

    Section
3.7.          Mitigation Obligations;
Replacement of Lenders

     

    
      
         

      

      
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    (a)           Designation of a Different
Lending Office. If any Lender requests compensation under Section 3.2, or
requires Borrower to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 3.5, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 3.2 or 3.5, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such
Lender.  Borrower hereby agrees to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.

     

    (b)           Replacement of
Lenders.  If any Lender requests compensation under
Section 3.2, or if any Lender gives notice to Borrower under Section 3.3
that it is unlawful for such Lender to fund or maintain Eurodollar Loans, or if
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 3.5, or
if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender fails to consent to any increase in the Borrowing Base proposed by
Administrative Agent, or if any Lender has been deemed insolvent or becomes the
subject of a bankruptcy or insolvency proceeding, or if, in connection with any
consent or approval of any proposed amendment, modification, waiver, or consent
that requires consent of each Lender, the consent of Required Lenders shall have
been obtained but any Lender has not so consented or approved (any such Lender,
a “Non-Consenting
Lender”), then Borrower may, at its sole expense and effort, upon notice
to such Lender and Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 10.5), 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:

     

    (i)           Borrower
shall have paid to Administrative Agent the assignment fee specified in Section
10.5;

     

    (ii)           such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in Matured LC Obligations, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder and
under the other Loan Documents (including any amounts under Section 3.4) from
the assignee (to the extent of such outstanding principal and accrued interest
and fees) or Borrower (in the case of all other amounts);

     

    (iii)           (A)
in the case of any such assignment resulting from a Lender becoming a
Non-Consenting Lender, the applicable assignees shall have agreed to, and shall
be sufficient (together with all other consenting Lenders) to cause the adoption
of, the applicable departure, waiver or amendment of the Loan Documents and (B)
in the case of any such assignment resulting from a claim for compensation under
Section 3.2 or payments required to be made pursuant to Section 3.5, such
assignment will result in a reduction in such compensation or payments
thereafter and (C) in the case of any assignment due to illegality, such
assignee can fund and maintain Eurodollar Loans; and

     

    
      
         

      

      
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    (iv)           such
assignment does not conflict with applicable law.

     

    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.  In connection with any such replacement, if any such Lender
does not execute and deliver to Administrative Agent a duly executed assignment
specified in Section 10.5 reflecting such replacement within five (5) Business
Days of the date on which the assignee Lender executes and delivers such
assignment to such Lender, then such Lender shall be deemed to have executed and
delivered such assignment without any action on the part of such
Lender.

     

     

    ARTICLE
IV - - Conditions
Precedent to Lending

     

    Section
4.1.          Documents to be
Delivered.  No
Lender has any obligation to make its first Loan, and LC Issuer has no
obligation to issue the first Letter of Credit, under this Agreement, and the
effectiveness of the amendment and restatement of the Existing Credit Agreement
shall not be effective, unless Administrative Agent shall have received all of
the following, at Administrative Agent’s office in Denver, Colorado, duly
executed and delivered and in form, substance and date satisfactory to
Administrative Agent:

     

    (a)           Loan
Documents.  Administrative Agent shall have received
counterparts of each Loan Document originally executed and delivered by each
applicable Restricted Person and Lenders and in such numbers as Administrative
Agent or its counsel may reasonably request.

     

    (b)           Organizational Documents;
Incumbency.  Administrative Agent shall have received (i)
copies of each Organizational Document executed and delivered by each Restricted
Person, as applicable, and, to the extent applicable, certified as of a recent
date by the appropriate governmental official, each dated the Closing Date or a
recent date prior thereto; (ii) signature and incumbency certificates of the
officers of such Person executing the Loan Documents to which it is a party;
(iii) resolutions of the Board of Directors or similar governing body of each
Restricted Person approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party or by which it or its assets may be bound as of the Closing Date,
certified as of the Closing Date by an Responsible Officer as being in full
force and effect without modification or amendment; (iv) an existence and good
standing certificate from the applicable Governmental Authority of each
Restricted Person’s jurisdiction of incorporation, organization or formation and
in each jurisdiction in which it owns real property Collateral, each dated a
recent date prior to the Closing Date; and (v) such other documents as
Administrative Agent may reasonably request.

     

    (c)           Closing
Certificate.  Administrative Agent shall have received a
“Closing Certificate” of a Responsible Officer of Borrower, of even date with
this Agreement, in which such officer certifies to the satisfaction of each of
the conditions set out in Section 4.1 and Section 4.2.

     

    (d)           Governmental Authorizations
and Consents.  Each Restricted Person shall have obtained
all Governmental Authorizations and all consents of other Persons, in each
case that are necessary or advisable in connection with the transactions
contemplated by the Loan Documents and each of the foregoing shall be in full
force and effect and in form and substance reasonably satisfactory to
Administrative Agent.  All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated by the Loan Documents or the financing thereof and no
action, request for stay, petition for review or rehearing, reconsideration, or
appeal with respect to any of the foregoing shall be pending, and the time for
any applicable agency to take action to set aside its consent on its own motion
shall have expired.

     

    
      
         

      

      
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    (e)           Environmental
Reports.  Administrative Agent shall have received reports and
other information, in form, scope and substance reasonably satisfactory to
Administrative Agent, regarding environmental matters relating to Borrower’s
material real property assets.

     

    (f)           Evidence of
Insurance.  Administrative Agent shall have received a
certificate from Borrower’s insurance broker or other evidence reasonably
satisfactory to it that all insurance required to be maintained pursuant to
Section 6.8 is in full force and effect and that Administrative Agent had been
named as additional insured and loss payee thereunder as its interests may
appear and to the extent required under Section 6.8.

     

    (g)           Opinions of
Counsel.  Administrative Agent shall have received originally
executed copies of the favorable written opinions of (i) Musick, Peeler &
Garrett LLP, counsel to Restricted Persons, in the form of Exhibit E and opining
as to such other matters as Administrative Agent may reasonably request at least
three days prior to the Closing Date, dated as of the Closing Date and otherwise
in form and substance reasonably satisfactory to Administrative Agent (and each
Restricted Person hereby instructs such counsel to deliver such opinions to
Administrative Agent and Lenders), and (ii) Jeffer Mangels Butler & Marmaro
LLP, California local counsel to Administrative Agent, opining as to such
matters as Administrative Agent may reasonably request, dated as of the Closing
Date and otherwise in form and substance reasonably satisfactory to
Administrative Agent.

     

    (h)           Fees.  Administrative
Agent shall have received all commitment, facility, agency, recording, filing,
and other fees required to be paid to Administrative Agent or any Lender
pursuant to any Loan Documents or any commitment agreement heretofore entered
into.

     

    (i)           Financial
Statements.  Lenders shall have received the Initial Financial
Statements, which shall be in form and substance reasonably satisfactory to
Administrative Agent, together with a certificate by an Responsible Officer
certifying the Initial Financial Statements.

     

    (j)           Initial Engineering
Report.  Lenders shall have received the Initial Engineering
Report, which shall be in form and substance reasonably satisfactory to
Administrative Agent.

     

    (k)           Title.  Administrative
Agent shall have received title reports, title opinions and other title
information in form, substance and authorship reasonably satisfactory to
Administrative Agent, with respect to the Borrowing Base Properties that are
subject to the Security Documents on the Closing Date.

     

    
      
         

      

      
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    (l)           Acquisition.  Administrative
Agent shall have received a copy of each Acquisition Document, duly executed and
delivered by each party thereto, together with a pro forma balance sheet
reflecting assets and liabilities of Borrower immediately after consummation of
the Acquisition contemplated by the Acquisition
Documents.  Simultaneously with making of the Loans on the date
hereof, the transactions contemplated by the Acquisition Documents to be
consummated on the date hereof shall contemporaneously be consummated in
compliance with the terms and conditions of the Acquisition Documents and all
conditions precedent to such consummation will be fully satisfied.

     

    (m)           No
Litigation.  There shall not exist any action, suit,
investigation, litigation or proceeding or other legal or regulatory
developments, pending or threatened in any court or before any arbitrator or
Governmental Authority that, in the reasonable opinion of Administrative Agent,
singly or in the aggregate, materially impairs the financing hereunder or any of
the other transactions contemplated by the Loan Documents, or that could
reasonably be expected to cause a Material Adverse Change.

     

    (n)           Completion of
Proceedings.  All partnership, corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by
Administrative Agent and its counsel shall be reasonably satisfactory in form
and substance to Administrative Agent and such counsel, and Administrative Agent
and such counsel shall have received all such counterpart originals or certified
copies of such documents as Administrative Agent may reasonably
request.

     

    (o)           Material Adverse
Change.  No event or circumstance shall have occurred or be
continuing since the date of the Initial Financial Statements that has had, or
could be reasonably expected to cause, either individually or in the aggregate,
a Material Adverse Change.

     

    (p)           Due
Diligence.  Administrative Agent and Lenders shall have
completed satisfactory due diligence review of the assets, liabilities,
business, operations and condition (financial or otherwise) of the Restricted
Persons, including, a review of their Mineral Interests and all legal,
financial, accounting, governmental, environmental, tax and regulatory matters,
and fiduciary aspects of the proposed financing.

     

    (q)           Other
Documentation.  Administrative Agent shall have received all
documents and instruments which Administrative Agent has then reasonably
requested, in addition to those described in this
Section 4.1.  All such additional documents and instruments shall
be reasonably satisfactory to Administrative Agent in form, substance and
date.  For purposes of determining compliance with the conditions
specified in this Section 4.1, each Lender that has executed and delivered this
Agreement shall 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 the
Administrative Agent shall have received notice from such Lender prior to the
proposed Closing Date specifying its objection thereto.

     

    Section
4.2.          Additional Conditions
Precedent.  No
Lender has any obligation to make any Loan (including its first), and LC Issuer
has no obligation to issue any Letter of Credit (including its first), unless
the following conditions precedent have been satisfied:

     

    
      
         

      

      
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    (a)           All
representations and warranties made by any Restricted Person in any Loan
Document shall be true and correct in all material respects on and as of the
date of such Loan or the date of issuance of such Letter of Credit as if such
representations and warranties had been made as of the date of such Loan or the
date of issuance of such Letter of Credit, except to the extent that such
representation or warranty was made as of a specific date or updated, modified
or supplemented as of a subsequent date with the consent of Required Lenders and
Administrative Agent, in which cases such representations and warranties shall
have been true and correct in all material respects on and of such earlier
date.

     

    (b)           No
Default shall exist at the date of such Loan or the date of issuance of such
Letter of Credit.

     

    (c)           No
Material Adverse Change shall have occurred to, and no event or circumstance
shall have occurred that could reasonably be expected to cause a Material
Adverse Change to, Borrower’s Consolidated financial condition or businesses
since the date of the Initial Financial Statements.

     

    (d)           Each
Restricted Person shall have performed and complied with all agreements and
conditions required in the Loan Documents to be performed or complied with by it
on or prior to the date of such Loan or the date of issuance of such Letter of
Credit.

     

    (e)           The
making of such Loan or the issuance of such Letter of Credit shall not be
prohibited by any Law and shall not subject any Lender or any LC Issuer to any
penalty or other onerous condition under or pursuant to any such
Law.

     

    (f)           Administrative
Agent shall have received all documents and instruments which Administrative
Agent has then reasonably requested, in addition to those described in Section
4.1 (including opinions of legal counsel for Restricted Persons and
Administrative Agent; corporate documents and records; documents evidencing
governmental authorizations, consents, approvals, licenses and exemptions; and
certificates of public officials and of officers and representatives of Borrower
and other Persons), as to (i) the accuracy and validity of or compliance with
all representations, warranties and covenants made by any Restricted Person in
this Agreement and the other Loan Documents, (ii) the satisfaction of all
conditions contained herein or therein, and (iii) all other matters pertaining
hereto and thereto.  All such additional documents and instruments
shall be reasonably satisfactory to Administrative Agent in form, substance and
date.

     

     

    ARTICLE V
- - Representations
and Warranties

     

    To
confirm each Lender’s understanding concerning Restricted Persons and Restricted
Persons’ businesses, properties and obligations and to induce each Lender to
enter into this Agreement and to extend credit hereunder, Borrower represents
and warrants to each Lender that:

     

    Section
5.1.          No
Default.  No
event has occurred and is continuing which constitutes a
Default.

    
      
         

      

      
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    Section
5.2.          Organization and Good
Standing.  Each
Restricted Person is duly organized, validly existing and in good standing under
the Laws of its jurisdiction of organization, having all powers required to
carry on its business and enter into and carry out the transactions contemplated
hereby.  Each Restricted Person is duly qualified, in good standing,
and authorized to do business in all other jurisdictions within the United
States wherein the character of the properties owned or held by it or the nature
of the business transacted by it makes such qualification
necessary.  Each Restricted Person has taken all actions and
procedures customarily taken in order to enter, for the purpose of conducting
business or owning property, each jurisdiction outside the United States wherein
the character of the properties owned or held by it or the nature of the
business transacted by it makes such actions and procedures
desirable.

     

    Section
5.3.          Authorization.  Each
Restricted Person has duly taken all action necessary to authorize the execution
and delivery by it of the Loan Documents to which it is a party and to authorize
the consummation of the transactions contemplated thereby and the performance of
its obligations thereunder.  Borrower is duly authorized to borrow
funds hereunder.

     

    Section
5.4.          No Conflicts or
Consents.  The
execution and delivery by the various Restricted Persons of the Loan Documents
to which each is a party, the performance by each of its obligations under such
Loan Documents, and the consummation of the transactions contemplated by the
various Loan Documents, do not and will not (a) conflict with any provision of
(i) any Law, (ii) the organizational documents of any Restricted Person, or
(iii) any agreement, judgment, license, order or permit applicable to or binding
upon any Restricted Person in any material respect, (b) result in the
acceleration of any Indebtedness owed by any Restricted Person, or (c) result in
or require the creation of any Lien upon any assets or properties of any
Restricted Person except as expressly contemplated or permitted in the Loan
Documents.  Except as expressly contemplated in the Loan Documents no
consent, approval, authorization or order of, and no notice to or filing with,
any Governmental Authority or third party is required in connection with the
execution, delivery or performance by any Restricted Person of any Loan Document
or to consummate any transactions contemplated by the Loan
Documents.

     

    Section
5.5.          Enforceable
Obligations.  This
Agreement is, and the other Loan Documents when duly executed and delivered will
be, legal, valid and binding obligations of each Restricted Person which is a
party hereto or thereto, enforceable in accordance with their terms except as
such enforcement may be limited by bankruptcy, insolvency or similar Laws of
general application relating to the enforcement of creditors’
rights.

     

    Section
5.6.          Initial Financial
Statements.  Borrower
has heretofore delivered to each Lender true, correct and complete copies of the
Initial Financial Statements.  The Initial Financial Statements fairly
present Borrower’s Consolidated financial position at the respective dates
thereof and the Consolidated results of Borrower’s operations and Borrower’s
Consolidated cash flows for the respective periods thereof.  Since the
date of the annual Initial Financial Statements no Material Adverse Change has
occurred, except as reflected in the quarterly Initial Financial Statements or
in Section 5.6 of the Disclosure Letter.  All Initial Financial
Statements were prepared in accordance with GAAP.

     

    Section
5.7.          Other Obligations and
Restrictions.  No
Restricted Person has any outstanding Liabilities of any kind (including
contingent obligations, tax assessments, and unusual forward or long-term
commitments) which are, in the aggregate, material to Borrower or material with
respect to Borrower’s Consolidated financial condition and not shown in the
Initial Financial Statements or disclosed in Section 5.7 of the Disclosure
Letter or a Disclosure Report.  Except as shown in the Initial
Financial Statements or disclosed in Section 5.7 of the Disclosure Letter or a
Disclosure Report, no Restricted Person is subject to or restricted by any
franchise, contract, deed, charter restriction, or other instrument or
restriction which could reasonably be expected to cause a Material Adverse
Change.

     

    
      
         

      

      
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    Section
5.8.          Full
Disclosure.  No
certificate, statement or other information delivered herewith or heretofore by
any Restricted Person to any Lender in connection with the negotiation of this
Agreement or in connection with any transaction contemplated hereby (excluding
projections, estimates and Engineering Reports) contains any untrue statement of
a material fact or omits to state any material fact known to any Restricted
Person (other than industry-wide risks normally associated with the types of
businesses conducted by Restricted Persons) necessary to make the statements
contained herein or therein not misleading as of the date made or deemed made;
provided that, with respect to the estimates, projections and pro forma
financial information contained in the materials referenced above, Borrower only
represents that they are based upon good faith estimates and assumptions
believed by management of Borrower to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount.  There is no
fact known to any Restricted Person (other than industry-wide risks normally
associated with the types of businesses conducted by Restricted Persons) that
has not been disclosed to each Lender in writing which could reasonably be
expected to cause a Material Adverse Change.  There are no statements
or conclusions in any Engineering Report which are based upon or include
misleading information or fail to take into account material information
regarding the matters reported therein, it being understood that each
Engineering Report is necessarily based upon professional opinions, estimates
and projections and that Borrower does not warrant that such opinions, estimates
and projections will ultimately prove to have been accurate. Borrower has
heretofore delivered to each Lender true, correct and complete copies of the
Initial Engineering Report.

     

    Section
5.9.          Litigation.  Except
as disclosed in the Initial Financial Statements or in Section 5.9 of the
Disclosure Letter:  (a) there are no actions, suits or legal,
equitable, arbitrative or administrative proceedings pending, or to the
knowledge of any Restricted Person threatened, against any Restricted Person or
affecting any Collateral (including any which challenge or otherwise pertain to
any Restricted Person’s title to any Collateral) before any Governmental
Authority which could reasonably be expected to cause a Material Adverse Change,
(b) there are no outstanding judgments, injunctions, writs, rulings or orders by
any such Governmental Authority against any Restricted Person or any Restricted
Person’s stockholders, partners, directors or officers or affecting any
Collateral or any of its material assets or property which could reasonably be
expected to cause a Material Adverse Change, and (c) there are no cease and
desist, noncompliance orders or notices from the California Division of Oil, Gas
and Geothermal Resources or other Governmental Authorities which could
reasonably be expected to cause a Material Adverse Change.

     

    
      
         

      

      
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    Section
5.10.        Labor Disputes and Acts of
God.  Except
as disclosed in Section 5.10 of the Disclosure Letter or a Disclosure Report,
neither the business nor the properties of any Restricted Person has been
affected by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the public
enemy or other casualty (whether or not covered by insurance), which could
reasonably be expected to cause a Material Adverse Change.

     

    Section
5.11.        ERISA Plans and
Liabilities.  All
currently existing ERISA Plans are listed in Section 5.11 of the Disclosure
Letter or a Disclosure Report.  Except as disclosed in the Initial
Financial Statements or in Section 5.11 of the Disclosure Letter or a Disclosure
Report, no Termination Event has occurred with respect to any ERISA Plan and all
ERISA Affiliates are in compliance with ERISA in all material
respects.  No ERISA Affiliate is required to contribute to, or has any
other absolute or contingent liability in respect of, any “multiemployer plan”
as defined in Section 4001 of ERISA.  Except as set forth in Section
5.11 of the Disclosure Letter or a Disclosure Report:  (a) no
“accumulated funding deficiency” (as defined in Section 412(a) of the Internal
Revenue Code) exists with respect to any ERISA Plan, whether or not waived by
the Secretary of the Treasury or his delegate, and (b) the current value of each
ERISA Plan’s benefits does not exceed the current value of such ERISA Plan’s
assets available for the payment of such benefits by more than
$500,000.

     

    Section
5.12.        Environmental and Other
Laws.  Except
as disclosed in Section 5.12 of the Disclosure Letter or a Disclosure Report:
(a) Restricted Persons are conducting their businesses in material compliance
with all applicable Laws, including Environmental Laws, and have and are in
compliance with all material licenses, permits and bonds required under any such
Laws; (b) none of the operations or properties of any Restricted Person is the
subject of federal, state or local investigation evaluating whether any material
remedial action is needed to respond to a release of any Hazardous Materials
into the environment or to the improper storage or disposal (including storage
or disposal at offsite locations) of any Hazardous Materials; (c) no Restricted
Person (and to the best knowledge of Borrower, no other Person) has filed any
notice under any Law indicating that any Restricted Person is responsible for
the improper release into the environment, or the improper storage or disposal,
of any material amount of any Hazardous Materials or that any Hazardous
Materials have been improperly released, or are improperly stored or disposed
of, upon any property of any Restricted Person; (d) no Restricted Person has
transported or arranged for the transportation of any Hazardous Material to any
location which is (i) listed on the National Priorities List under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, listed for possible inclusion on such National Priorities List by the
Environmental Protection Agency in its Comprehensive Environmental Response,
Compensation and Liability Information System List, or listed on any similar
state list or (ii) the subject of federal, state or local enforcement actions or
other investigations which may lead to claims against any Restricted Person for
clean-up costs, remedial work, damages to natural resources or for personal
injury claims (whether under Environmental Laws or otherwise); and (e) no
Restricted Person otherwise has any known material contingent liability under
any Environmental Laws or in connection with the release into the environment,
or the storage or disposal, of any Hazardous Materials.  Each
Restricted Person undertook, at the time of its acquisition of each of its
material properties, all appropriate inquiry into the previous ownership and
uses of the Property and any potential environmental liabilities associated
therewith.

     

    
      
         

      

      
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    Section
5.13.        Names and Places of
Business.  No
Restricted Person has, during the preceding five years, had, been known by, or
used any other trade or fictitious name, except as disclosed in Section 5.13 of
the Disclosure Letter or a Disclosure Report.  Except as otherwise
indicated in Section 5.13 of the Disclosure Letter or a Disclosure Report, the
chief executive office and principal place of business of each Restricted Person
are (and for the preceding five years have been) located at the address of
Borrower set out on the signature pages hereto.  Except as indicated
in Section 5.13 of the Disclosure Letter or a Disclosure Report, no Restricted
Person has any other office or place of business.

     

    Section
5.14.        Borrower’s
Subsidiaries.  Borrower
does not presently have any Subsidiary or own any stock in any other corporation
or association except those listed in Section 5.14 of the Disclosure Letter or a
Disclosure Report.  Neither Borrower nor any Restricted Person is a
member of any general or limited partnership, joint venture or association of
any type whatsoever except those listed in Section 5.14 of the Disclosure Letter
or a Disclosure Report, and associations, joint ventures or other relationships
(a) which are established pursuant to a standard form operating agreement or
similar agreement or which are partnerships for purposes of federal income
taxation only, (b) which are not corporations or partnerships (or subject to the
Uniform Partnership Act) under applicable state Law, and (c) whose businesses
are limited to the exploration, development and operation of oil, gas or mineral
properties and interests owned directly by the parties in such associations,
joint ventures or relationships.  Except as otherwise revealed in a
Disclosure Report, Borrower owns, directly or indirectly, the Equity Interest in
each of its Subsidiaries which is indicated in Section 5.14 of the Disclosure
Letter.

     

    Section
5.15.        Government
Regulation.  Neither
Borrower nor any other Restricted Person owing Obligations is subject to
regulation under the Federal Power Act, the Investment Company Act of 1940 (as
any of the preceding acts have been amended) or any other Law which regulates
the incurring by such Person of Indebtedness, including Laws relating to common
contract carriers or the sale of electricity, gas, steam, water or other public
utility services.

     

    Section
5.16.        Solvency.  Upon
giving effect to the issuance of the Notes, the execution of the Loan Documents
by Borrower and each Guarantor and the consummation of the transactions
contemplated hereby, no Restricted Person will be Insolvent.

     

    Section
5.17.        Title to Properties;
Licenses.  Except
for those Mineral Interests disposed of in accordance with this Agreement and
oil and gas leases that have expired in accordance with their terms, each
Restricted Person has (a) good and defensible title to, or valid leasehold
interests in, all of the Mineral Interests covered by the most recently
delivered Engineering Report, free and clear of all Liens, encumbrances, or
adverse claims other than Permitted Liens; and (b) good and valid title to,
or valid leasehold interests in, licenses of, or rights to use, all other
Collateral owned or leased by such Restricted Person, free and clear of all
Liens, encumbrances, or adverse claims other than Permitted Liens, except in the
case of clauses (a) and  (b) of this section, defects in title or
adverse claims which could not reasonably be expected to cause a Material
Adverse Change; provided that no representation or warranty is made in this
section with respect to any Mineral Interest to which no Proved Reserves are
properly attributed.     Other than changes which arise
pursuant to non-consent provisions of operating agreements or other agreements
(if any) described in Exhibit A to any Security Document and except for
properties disposed of in compliance with this Agreement or leases that have
expired in accordance with their terms: (x) each Restricted Person owns the
net interests in production attributable to the wells and units of such
Restricted Person evaluated in the most recently delivered Engineering Report
subject to Permitted Liens and (y) the ownership of such properties does
not in the aggregate in any material respect obligate such Restricted Person to
bear the costs and expenses relating to the maintenance, development and
operations of such properties in an amount materially in excess of the working
interest of such properties set forth in such Engineering
Report.  Upon delivery of each Engineering Report furnished to the
Lenders pursuant to Sections 6.2(d) and (f), the statements made in the
preceding sentences of this section and in Section 5.8 shall be true with
respect to such Engineering Report.  Each Restricted Person possesses
all licenses, permits, franchises, or otherwise has valid rights, rights to use
all patents, copyrights, trademarks and trade names, and other intellectual
property (or otherwise possesses the right to use such intellectual property
without violation of the rights of any other Person) which are necessary to
carry out its business as presently conducted and as presently proposed to be
conducted hereafter, and no Restricted Person is in violation in any material
respect of the terms under which it possesses such intellectual property or the
right to use such intellectual property.

     

    
      
         

      

      
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    Section
5.18.        Leases and Contracts;
Performance of Obligations.  Except
for those Mineral Interests disposed of in accordance with this Agreement and
oil and gas leases that have expired in accordance with their terms, the leases,
contracts, servitudes and other agreements forming a part of the Mineral
Interests of the Restricted Persons covered by the most recently delivered
Engineering Report are in full force and effect unless (i) disputed in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP, or (ii) the failure to be in full force and
effect could not reasonably be expected to cause a Material Adverse
Change.  All rents, royalties and other payments due and payable under
such leases, contracts, servitudes and other agreements, or under any Permitted
Liens, or otherwise attendant to the ownership or operation of any Mineral
Interests covered by the most recently delivered Engineering Report, have been
properly and timely paid or will be paid prior to deliquency unless (i) disputed
in good faith by appropriate proceedings and for which adequate reserves have
been maintained in accordance with GAAP or (ii) the failure to pay could not
reasonably be expected to cause a Material Adverse Change.  No
Restricted Person is in default with respect to its obligations (and no
Restricted Person is aware of any default by any third party with respect to
such third party’s obligations) under any such leases, contracts, servitudes and
other agreements, or under any Permitted Liens, or otherwise attendant to the
ownership or operation of any part of the Mineral Interests covered by the
Engineering Report, where such failure could reasonably be expected to cause a
Material Adverse Change.  No Restricted Person is currently accounting
for any royalties, or overriding royalties or other payments out of production,
on a basis (other than delivery in kind) less favorable to such Restricted
Person than proceeds received by such Restricted Person (calculated at the well)
from sale of production, and no Restricted Person has any liability (or alleged
liability) to account for the same on any such less favorable
basis.

     

    Section
5.19.        Gas Imbalances,
Prepayments.  Except
as listed on the Disclosure Letter, on a net basis there are no gas imbalances,
take or pay or other prepayments (excluding firm transportation contracts
entered into in the ordinary course of business) which would require the
Borrower or any of its Subsidiaries to deliver Mineral Interests produced from
the Oil and Gas Properties at some future time without then or thereafter
receiving full payment therefor exceeding 1 Bcf of gas or the energy equivalent
for oil in the aggregate.  Except for contracts listed in the
Disclosure Letter or included in the most recently delivered Engineering Report
(with respect to all of which contracts the Borrower represents that it or its
Subsidiaries are receiving a price for all production sold thereunder which is
computed substantially in accordance with the terms of the relevant contract and
are not having deliveries curtailed substantially below the subject property’s
delivery capacity except as disclosed in the Disclosure Letter or the most
recently delivered Engineering Report), no material agreements exist which are
not cancelable on 120 days notice or less without penalty or detriment for the
sale of production from the Borrower’s or its Subsidiaries’ Mineral Interests
(including, without limitation, calls on or other rights to purchase,
production, whether or not the same are currently being exercised) that (a)
pertain to the sale of production at a fixed price and (b) have a maturity or
expiry date of longer than six (6) months.

     

    
      
         

      

      
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    Section
5.20.        Operation of Mineral
Interests. Except
for those Mineral Interests disposed of in accordance with this Agreement and
oil and gas leases that have expired in accordance with their terms, the Mineral
Interests covered by the most recently delivered Engineering Report (and all
properties unitized therewith) are being (and, to the extent the same could
adversely affect the ownership or operation of the Mineral Interests covered by
the most recently delivered Engineering Report after the date hereof, have in
the past been) maintained, operated and developed in a good and workmanlike
manner, in accordance with prudent industry standards and in conformity with all
applicable Laws and in conformity with all oil, gas or other mineral leases and
other contracts and agreements forming a part of the Mineral Interest covered by
the most recently delivered Engineering Report and in conformity with the
Permitted Liens except where the failure to do so could not reasonably be expect
to have a Material Adverse Change.  No Mineral Interest covered by the
most recently delivered Engineering Report is subject to having allowable
production after the date hereof reduced below the full and regular allowable
(including the maximum permissible tolerance) because of any overproduction
(whether or not the same was permissible at the time) prior to the date hereof
and none of the wells located on the Mineral Interests covered by the most
recently delivered Engineering Report (or properties unitized therewith) are or
will be deviated from the vertical more than the maximum permitted by applicable
laws, regulations, rules and orders, and such wells are bottomed under and
producing from, with the well bores wholly within, the Mineral Interests covered
by the most recently delivered Engineering Report (or, in the case of wells
located on properties unitized therewith, such unitized properties) except where
such matter could not reasonably be expect to have a Material Adverse
Change.  Each Restricted Person has all governmental licenses, permits
and bonds necessary or appropriate to own and operate its Mineral Interests
covered by the most recently delivered Engineering Report, and no Restricted
Person has received notice of any violations in respect of any such licenses or
permits, except where the failure to do, or any such violation, so could not
reasonably be expect to have a Material Adverse Change.

     

    Section
5.21.        Regulation
U.  None
of Borrower and its Subsidiaries are engaged in the business of extending credit
for the purpose of purchasing or carrying margin stock, and no proceeds of any
Loans will be used for a purpose which violates Regulation U.

     

    
      
         

      

      
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    ARTICLE
VI - - Affirmative
Covenants of Borrower

     

    To
conform with the terms and conditions under which each Lender is willing to have
credit outstanding to Borrower, and to induce each Lender to enter into this
Agreement and extend credit hereunder, Borrower warrants, covenants and agrees
that until the full and final payment of the Obligations and the termination of
this Agreement, unless Majority Lenders have previously agreed
otherwise:

     

    Section
6.1.          Payment and
Performance.  Borrower
will pay all amounts due under the Loan Documents in accordance with the terms
thereof and will observe, perform and comply with every covenant, term and
condition expressed or implied in the Loan Documents.  Borrower will
cause each other Restricted Person to observe, perform and comply with every
such term, covenant and condition in any Loan Document.

     

    Section
6.2.          Books, Financial Statements
and Reports.  Each
Restricted Person will at all times maintain full and accurate books of account
and records.  Borrower will maintain and will cause its Subsidiaries
to maintain a standard system of accounting, will maintain its Fiscal Year, and
will furnish the following statements and reports to each Lender Party at
Borrower’s expense:

     

    (a)           As
soon as available, and in any event within ninety (90) days after the end of
each Fiscal Year, complete Consolidated and consolidating financial statements
of Borrower together with all notes thereto, prepared in reasonable detail in
accordance with GAAP, together with an unqualified opinion, based on an audit
using generally accepted auditing standards, by independent certified public
accountants selected by Borrower and acceptable to Majority Lenders, stating
that such Consolidated financial statements have been so
prepared.  These financial statements shall contain a Consolidated and
consolidating balance sheet as of the end of such Fiscal Year and Consolidated
and consolidating statements of earnings, of cash flows, and of changes in
owners’ equity for such Fiscal Year, each setting forth in comparative form the
corresponding figures for the preceding Fiscal Year.

     

    (b)           As
soon as available, and in any event within forty-five (45) days after the end of
the first three Fiscal Quarters in each Fiscal Year, Borrower’s Consolidated and
consolidating balance sheet as of the end of such Fiscal Quarter and
Consolidated and consolidating statements of Borrower’s earnings and cash flows
for the period from the beginning of the then current Fiscal Year to the end of
such Fiscal Quarter, all in reasonable detail and prepared in accordance with
GAAP, subject to changes resulting from normal year-end
adjustments.  In addition Borrower will, together with each such set
of financial statements and each set of financial statements furnished under
subsection (a) of this section, furnish a certificate in the form of Exhibit D
signed by the Chief Financial Officer or the Treasurer of Borrower stating that
such financial statements are accurate and complete (subject to normal year-end
adjustments), stating that he has reviewed the Loan Documents, containing
calculations showing compliance (or non-compliance) at the end of such Fiscal
Quarter with the requirements of Section 7.11 and Section 7.12 and stating that
no Default exists at the end of such Fiscal Quarter or at the time of such
certificate or specifying the nature and period of existence of any such
Default.

     

    
      
         

      

      
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    (c)           As
soon as available, and in any event within fifteen (15) days after the date
required to be delivered to the SEC, Borrower will deliver copies of all
financial statements, reports, notices and proxy statements sent by any
Restricted Person to its stockholders and all registration statements, periodic
reports and other statements and schedules filed by any Restricted Person with
any securities exchange, the SEC or any similar governmental
authority.  Documents required to be delivered pursuant to Section
6.2(a), (b) or (c) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Borrower posts such documents, or provides a link thereto, on Borrower’s website
on the Internet at the website address listed in the Disclosure Letter; or (ii)
on which such documents are posted on Borrower’s behalf on
IntraLinks/IntraAgency or another relevant website, if any, including, but not
limited to any filings made on EDGAR to which each Lender and Administrative
Agent have access (whether a commercial, third-party website or whether
sponsored by Administrative Agent); provided that: (x) Borrower shall deliver
paper copies of such documents to Administrative Agent or any Lender that
requests Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by Administrative Agent or such Lender and (y)
Borrower shall notify (which may be by facsimile or electronic mail)
Administrative Agent and each Lender of the posting of any such documents and
provide to Administrative Agent by electronic mail electronic versions (i.e., soft copies) of
such documents.  Notwithstanding anything contained herein, in every
instance Borrower shall be required to provide paper copies of the Compliance
Certificates required by Section 6.2(b) to Administrative Agent and each of the
Lenders.  Except for such Compliance Certificates, Administrative
Agent shall have no obligation to request the delivery or to maintain copies of
the documents referred to above, and in any event shall have no responsibility
to monitor compliance by Borrower with any such request for delivery, and each
Lender shall be solely responsible for requesting delivery to it or maintaining
its copies of such documents.

     

    (d)           By
March 15 of each year, Borrower will deliver an Engineering Report prepared by
Independent Engineers as of January 1 of such year, concerning all oil and gas
properties and interests owned by any Restricted Person which are located in or
offshore of the United States and which have attributable to them Proved
Reserves.  This report shall be satisfactory to Administrative Agent,
shall contain sufficient information to enable Borrower to meet the reporting
requirements concerning oil and gas reserves contained in Regulations S-K and
S-X promulgated by the SEC and shall contain information and analysis comparable
in scope to that contained in the Initial Engineering Report.  This
report shall distinguish (or shall be delivered together with a certificate from
an appropriate officer of Borrower which distinguishes) those properties treated
in the report which are Collateral from those properties treated in the report
which are not Collateral.

     

    (e)           By
September 15 of each year, commencing September 15, 2008, and promptly following
notice of a Special Redetermination under Section 2.9 Borrower will deliver an
engineering report prepared by Staff Engineers consistent in form and scope of
the Engineering Reports described in (d) above, as of July 1 of such year in the
case of Scheduled Redeterminations and as of the date specified in Section
2.9(c) in the case of Special Redeterminations.

     

    
      
         

      

      
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    (f)           Together
with each Engineering Report required under Section 2.9(d) and each Engineering
Report required under Section 2.9(e), Borrower will furnish lease operating
statements for twelve consecutive calendar months then ended, which include
lease operating statements for such period and for each month during such
period, for properties covered by such Engineering Report.

     

    (g)           Together
with each set of financial statements furnished under subsections (a) and (b) of
this section, Borrower will furnish a report (in form reasonably satisfactory to
Administrative Agent) of all Hedging Contracts of Borrower and each of its
Subsidiaries, setting forth the type, term, effective date, termination date and
notional amounts or volumes and the counterparty to each such
agreement.

     

    (h)            As soon as available,
and in any event within forty-five (45) days after the end of each calendar
quarter, Borrower will deliver a report describing by lease or unit the gross
volume of production and sales attributable to production during such quarter
from the properties described in the most recent Engineering Report and
describing the related severance taxes, other taxes, leasehold operating
expenses and capital costs attributable thereto and incurred during such
quarter.

     

    (i)           When
Borrower or a Consolidated subsidiary of Borrower acquires assets during a
Four-Quarter Period and such assets are included in the calculation of Adjusted
EBITDAX for such Four-Quarter Period, Borrower shall deliver to Administrative
Agent and Lenders, together with the financial statements described in Section
6.2(b), pro forma financial statements of Borrower for such period prepared on a
Consolidated basis as if such assets had been acquired by Borrower or such
subsidiary on the first day of such Four-Quarter Period.

     

    (j)           Concurrently
with the reports referred to in Section 6.2(d), Borrower will deliver a report
describing material gas imbalances and curtailments of production for the
Collateral.

     

    Section
6.3.          Other Information and
Inspections.  Each
Restricted Person will furnish to each Lender any information which
Administrative Agent may from time to time reasonably request concerning any
provision of the Loan Documents, any Collateral, or any matter in connection
with Restricted Persons’ businesses, properties, prospects, financial condition
and operations.  Each Restricted Person will permit representatives
appointed by Administrative Agent (including independent accountants, auditors,
Administrative Agents, attorneys, appraisers and any other Persons) to visit and
inspect during normal business hours any of such Restricted Person’s property,
including its books of account, other books and records, and any facilities or
other business assets, and to make extra copies therefrom and photocopies and
photographs thereof, and to write down and record any information such
representatives obtain, and each Restricted Person shall permit Administrative
Agent or its representatives to investigate and verify the accuracy of the
information furnished to Administrative Agent or any Lender in connection with
the Loan Documents and to discuss all such matters with its officers, employees
and representatives.

     

    Section
6.4.          Notice of Material Events
and Change of Address.  Borrower
will promptly notify each Lender in writing, stating that such notice is being
given pursuant to this Agreement, of:

     

    
      
         

      

      
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    (a)           occurrence
of any Material Adverse Change,

     

    (b)           the
occurrence of any Default,

     

    (c)           the
acceleration of the maturity of any Indebtedness owed by any Restricted Person
or of any default by any Restricted Person under any indenture, mortgage,
agreement, contract or other instrument to which any of them is a party or by
which any of them or any of their properties is bound, if such acceleration or
default could cause a Material Adverse Change,

     

    (d)           the
occurrence of any Termination Event,

     

    (e)           any
claim of $10,000,000 or more, any notice of potential liability under any
Environmental Laws which might exceed such amount, or any other material adverse
claim asserted against any Restricted Person or with respect to any Restricted
Person’s properties, and

     

    (f)           the
filing of any suit or proceeding against any Restricted Person in which an
adverse decision could reasonably be expected to cause a Material Adverse
Change.

     

    Upon the
occurrence of any of the foregoing Restricted Persons will take all necessary or
appropriate steps to remedy promptly any such Material Adverse Change, Default,
acceleration, default or Termination Event, to protect against any such adverse
claim, to defend any such suit or proceeding, and to resolve all controversies
on account of any of the foregoing.  Borrower will also notify
Administrative Agent and Administrative Agent’s counsel in writing at least
twenty Business Days prior to the date that any Restricted Person changes its
name or the location of its chief executive office or principal place of
business or the place where it keeps its books and records, furnishing with such
notice any necessary financing statement amendments or requesting Administrative
Agent and its counsel to prepare the same.

     

    Section
6.5.          Maintenance of
Properties.  Each
Restricted Person will maintain, preserve, protect, and keep all Collateral and
all other property used or useful in the conduct of its business in good
condition and in compliance with all applicable Laws in all material respects,
and will from time to time make all repairs, renewals and replacements needed to
enable the business and operations carried on in connection therewith to be
promptly and advantageously conducted at all times.

     

    Section
6.6.          Maintenance of Existence and
Qualifications.  Each
Restricted Person will maintain and preserve its existence and its rights and
franchises in full force and effect and will qualify to do business in all
states or jurisdictions where required by applicable Law, except where the
failure so to qualify will not cause a Material Adverse Change.  The
foregoing shall not restrict (i) any merger or consolidation permitted by
Section 7.4 or (ii) the liquidation or dissolution of any Subsidiary if Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of Borrower and is not materially disadvantageous to the
Lenders.

     

    Section
6.7.          Payment of Trade
Liabilities, Taxes, etc.  Each
Restricted Person will (a) timely file all required tax returns; (b) timely pay
all taxes, assessments, and other governmental charges or levies imposed upon it
or upon its income, profits or property; (c) pay all Liabilities owed by it on
ordinary trade terms to vendors, suppliers and other Persons providing goods and
services used by it in the ordinary course of its business within a period of
time after the invoice date that is customary in the oil and gas industry; (d)
pay and discharge when due all other Liabilities now or hereafter owed by it;
and (e) maintain appropriate accruals and reserves for all of the foregoing in
accordance with GAAP.  Each Restricted Person may, however, delay
paying or discharging any of the foregoing so long as (i) it is in good faith
contesting the validity thereof by appropriate proceedings and has set aside on
its books adequate reserves therefor or (ii) the nonpayment or nondischarge
could not reasonably be expected to cause a Material Adverse
Change.

     

    
      
         

      

      
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    Section
6.8.          Insurance.

     

    (a)           Each
Restricted Person shall at all times maintain (at its own expense) insurance for
its property in accordance with the Insurance Schedule in at least such amounts,
with at least such limitations on deductibles, and against such risks, in such
form and with such financially sound and reputable insurers as shall be
reasonably satisfactory to Administrative Agent from time to time. Each
Restricted Person shall at all times maintain insurance against its liability
for injury to persons or property in accordance with the Insurance Schedule,
which insurance shall be by financially sound and reputable
insurers.

     

    (b)           All
insurance policies shall be modified or endorsed as necessary to (A) name
the Administrative Agent as loss payee on policies insuring loss or damage of
Collateral and as additional insured on policies insuring against liability for
injury to persons or property, and (B) prevent any expiration, or
cancellation of the coverage provided by such policies without at least thirty
(30) days prior written notice to Administrative Agent by the
insurer.  Each Restricted Person shall, if so requested by
Administrative Agent, deliver to Administrative Agent original or duplicate
policies of such insurance and, as often as Administrative Agent may reasonably
request, a report of a reputable insurance broker with respect to such
insurance.  Administrative Agent shall, upon the occurrence and during
the continuance of an Event of Default, have the right to collect and Borrower
hereby assigns to Administrative Agent for the benefit of Lenders (and hereby
agrees to cause each other Restricted Person to assign), any and all moneys that
may become payable under any such policies of insurance by reason of damage,
loss or destruction of any of the Collateral or any part thereof and to apply
such moneys to the payment of the Obligations as herein
provided.  Reimbursement under any liability insurance maintained by
Restricted Persons pursuant to this Section 6.8 may be paid directly to the
Person who has incurred the liability covered by such insurance.

     

    Section
6.9.          Performance on Borrower’s
Behalf.  If
any Restricted Person fails to pay any taxes, insurance premiums, expenses,
attorneys’ fees or other amounts it is required to pay under any Loan Document,
Administrative Agent may pay the same.  Borrower shall immediately
reimburse Administrative Agent for any such payments and each amount paid by
Administrative Agent shall constitute an Obligation owed hereunder which is due
and payable on the date such amount is paid by Administrative
Agent.

     

    Section
6.10.        Interest.  Borrower
hereby promises to each Lender Party to pay interest at the Default Rate
applicable to Base Rate Loans on all Obligations (including Obligations to pay
fees or to reimburse or indemnify any Lender) which Borrower has in this
Agreement promised to pay to such Lender Party and which are not paid when
due.  Such interest shall accrue from the date such Obligations become
due until they are paid.

     

    
      
         

      

      
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    Section
6.11.        Compliance with Agreements
and Law.  Each
Restricted Person will perform all material obligations it is required to
perform under the terms of each indenture, mortgage, deed of trust, security
agreement, lease, franchise, agreement, contract or other instrument or
obligation to which it is a party or by which it or any of its properties is
bound, except when failure to do so could not reasonably be expected to cause a
Material Adverse Change.  Each Restricted Person will conduct its
business and affairs in compliance with all Laws applicable thereto and will
maintain in good standing all licenses that may be necessary or appropriate to
carry on its business.

     

    Section
6.12.        Environmental Matters;
Environmental Reviews

     

    (a)           Except
in each case where failure to do so could not reasonably be expected to cause a
Material Adverse Change, each Restricted Person will comply in all material
respects with all Environmental Laws now or hereafter applicable to such
Restricted Person, as well as all contractual obligations and agreements with
respect to environmental remediation or other environmental matters, and shall
obtain, at or prior to the time required by applicable Environmental Laws, all
environmental, health and safety permits, licenses and other authorizations
necessary for its operations and will maintain such authorizations in full force
and effect.  Except in each case where failure to do so could not
reasonably be expected to cause a Material Adverse Change, no Restricted Person
will do anything or permit anything to be done which will subject any of its
properties to any remedial obligations under, or result in noncompliance with
applicable permits and licenses issued under, any applicable Environmental Laws,
assuming disclosure to the applicable governmental authorities of all relevant
facts, conditions and circumstances.  Upon Administrative Agent’s
reasonable request, at any time and from time to time, Borrower will provide at
its own expense an environmental inspection of any of the Restricted Persons’
material real properties and audit of their environmental compliance procedures
and practices, in each case from an engineering or consulting firm reasonably
acceptable to Administrative Agent.  Administrative Agent and Lenders
will use their best efforts to protect any attorney client privilege that exists
with respect to reports or audits prepared by such engineers or
consultants.

     

    (b)           Borrower
will promptly furnish to Administrative Agent all written notices of violation,
orders, claims, citations, complaints, penalty assessments, suits or other
proceedings received by any Restricted Person, or of which Borrower otherwise
has notice, pending or threatened against any Restricted Person by any
Governmental Authority with respect to any alleged violation of or
non-compliance with any Environmental Laws or relating to potential
responsibility with respect to any investigation or clean-up of Hazardous
Material at any location, in each case which involves a claim or liability in
excess of $10,000,000.

     

    Section
6.13.        Evidence of
Compliance.  Each
Restricted Person will furnish to each Lender at such Restricted Person’s or
Borrower’s expense all evidence which Administrative Agent from time to time
reasonably requests in writing as to the accuracy and validity of or compliance
with all representations, warranties and covenants made by any Restricted Person
in the Loan Documents, the satisfaction of all conditions contained therein, and
all other matters pertaining thereto.

     

    
      
         

      

      
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    Section
6.14.        Bank Accounts;
Offset.  To
secure the repayment of the Obligations Borrower hereby grants to each Lender
and LC Issuer a security interest, a lien, and a right of offset, each of which
shall be in addition to all other interests, liens, and rights of any Lender at
common Law, under the Loan Documents, or otherwise, and each of which shall be
upon and against (a) any and all moneys, securities or other property (and the
proceeds therefrom) of Borrower now or hereafter held or received by or in
transit to any Lender or LC Issuer from or for the account of Borrower, whether
for safekeeping, custody, pledge, transmission, collection or otherwise, (b) any
and all deposits (general or special, time or demand, provisional or final) of
Borrower with any Lender or LC Issuer, and (c) any other credits and claims of
Borrower at any time existing against any Lender or LC Issuer, including claims
under certificates of deposit.  At any time and from time to time
after the occurrence of any Default, each Lender and LC Issuer is hereby
authorized to foreclose upon, or to offset against the Obligations then due and
payable (in either case without notice to Borrower), any and all items
hereinabove referred to.  The remedies of foreclosure and offset are
separate and cumulative, and either may be exercised independently of the other
without regard to procedures or restrictions applicable to the
other.

     

    Section
6.15.        Guaranties of Borrower’s
Subsidiaries.  Each
Domestic Subsidiary of Borrower that is a Material Subsidiary now existing or
created, acquired or coming into existence after the date hereof shall, promptly
upon request by Administrative Agent, execute and deliver to Administrative
Agent an absolute and unconditional guaranty of the timely repayment of the
Obligations and the due and punctual performance of the obligations of Borrower
hereunder, which guaranty shall be satisfactory to Administrative Agent in form
and substance.  Each such Domestic Subsidiary of Borrower that is a
Material Subsidiary existing on the date hereof shall duly execute and deliver
such a guaranty prior to the making of any Loan hereunder.  Borrower
will cause each such Domestic Subsidiary to deliver to Administrative Agent,
simultaneously with its delivery of such a guaranty, written evidence
satisfactory to Administrative Agent and its counsel that such Domestic
Subsidiary has taken all company action necessary to duly approve and authorize
its execution, delivery and performance of such guaranty and any other documents
which it is required to execute.

     

    Section
6.16.        Pledge of Stock of Foreign
Subsidiaries.  Borrower
shall execute and deliver to Administrative Agent (and shall cause each
Restricted Person to execute and deliver to Administrative Agent) a pledge
agreement covering sixty-six percent (66%) of its Equity Interest in each
Foreign Subsidiary of Borrower that is a Material Subsidiary now existing or
created, acquired or coming into existence after the date hereof and securing
the Obligations, in form and substance acceptable to Administrative
Agent.  Borrower shall also deliver to Administrative Agent all
certificates (or other evidence acceptable to Administrative Agent) evidencing
Borrower’s Equity Interest in such Foreign Subsidiary which shall be duly
endorsed or accompanied by stock powers executed in blank (as applicable) as
Administrative Agent shall deem necessary or appropriate to grant, evidence and
perfect a first priority Lien in Borrower’s Equity Interest in such Foreign
Subsidiary.

     

    
      
         

      

      
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    Section
6.17.        Collateral.

     

    (a)           At
all times the Secured Obligations shall be secured by first and prior Liens
(subject only to Permitted Liens) covering and encumbering (i) not less than the
Minimum Collateral Amount, and all cogeneration facilities and transportation
and gathering systems owned by any Restricted Person used in connection with the
production and development of the Mineral Interests included therein, and (ii)
all of the issued and outstanding Equity Interest of each Subsidiary of Borrower
owned by Restricted Person subject to the limitation with respect to Foreign
Subsidiaries set forth in Section 6.16, and (iii) all other personal property of
the Restricted Persons that can be perfected by the filing of a financing
statement under the UCC (excluding filings in the real property records), except
for the Excluded Property.  On the Closing Date,
Borrower and its Subsidiaries shall deliver to Administrative Agent for the
ratable benefit of each Lender and SG, Security Documents covering the
foregoing, each in form and substance acceptable to Administrative
Agent.

     

    (b)           To
the extent necessary to comply with the first sentence of Section 6.17(a),
(i) within 30 days after each Determination Date, Borrower and its
Subsidiaries shall execute and deliver to Administrative Agent, for the ratable
benefit of each Lender and SG, deeds of trust, mortgages, chattel mortgages,
security agreements and financing statements in form and substance acceptable to
Administrative Agent and duly executed by Borrower and any such Subsidiary (as
applicable) together with such other assignments, conveyances, amendments,
agreements and other writings (each duly authorized and executed) as
Administrative Agent shall deem necessary or appropriate to grant, evidence and
perfect the Liens required by this Section 6.17.

     

    (c)           Borrower
also agrees to deliver favorable title information, title opinions or updates of
title opinions in form, substance and authorship reasonable satisfactory to
Administrative Agent with respect to the properties described in subsection (b)
immediately above and confirming that such Restricted Person has good and
defensible title to such properties and interests, free and clear of all Liens
other than Permitted Liens.

     

    Section
6.18.        Agreement to Deliver
Security Documents.  Borrower
agrees to deliver and to cause each other Restricted Person to deliver to
further secure the Secured Obligations, whenever requested by Administrative
Agent in its reasonable discretion, deeds of trust, mortgages, chattel
mortgages, security agreements, financing statements and other Security
Documents in form and substance satisfactory to Administrative Agent for the
purpose of (i) granting, confirming, and perfecting first and prior liens or
security interests in any real or personal property which is at such time
Collateral or which was required or intended to be Collateral pursuant to this
Agreement or any Security Document previously executed and not then released by
Administrative Agent, and (ii) maintaining compliance with all applicable Laws,
including those of any applicable Indian tribe, the Bureau of Indian Affairs,
and the U.S. Bureau of Land Management.  Each Restricted Person hereby
authorizes Administrative Agent to file one or more financing or continuation
statements, and amendments thereto, relative to all or any part of the
collateral describing the Collateral as “all assets” without the signature of
any Restricted Person.  Furthermore, Borrower agrees to deliver and to
cause each other Restricted Person to deliver, whenever requested by
Administrative Agent upon the occurrence and during the continuance of an Event
of Default, transfer orders or letters in lieu thereof with respect to the
production and proceeds of production from the Collateral, in form and substance
satisfactory to Administrative Agent.

     

    
      
         

      

      
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    Section
6.19.        Production
Proceeds.  Notwithstanding
that, by the terms of the various Security Documents, Restricted Persons are and
will be assigning to Administrative Agent and Lenders all of the “Production
Proceeds” (as defined therein) accruing to the property covered thereby, so long
as no Event of Default has occurred Restricted Persons may continue to receive
from the purchasers of production all such Production Proceeds, subject,
however, to the Liens created under the Security Documents, which Liens are
hereby affirmed and ratified.  Upon the occurrence of an Event of
Default, Administrative Agent and Lenders may exercise all rights and remedies
granted under the Security Documents subject to the terms thereof, including the
right to obtain possession of all Production Proceeds then held by Restricted
Persons or to receive directly from the purchasers of production all other
Production Proceeds.  In no case shall any failure, whether
intentioned or inadvertent, by Administrative Agent or Lenders to collect
directly any such Production Proceeds constitute in any way a waiver, remission
or release of any of their rights under the Security Documents, nor shall any
release of any Production Proceeds by Administrative Agent or Lenders to
Restricted Persons constitute a waiver, remission, or release of any other
Production Proceeds or of any rights of Administrative Agent or Lenders to
collect other Production Proceeds thereafter.

     

    Section
6.20.        Mortgaged Property
Covenants.  Each
Restricted Person will carry out its sales of production, will operate the
Mineral Interests, and will otherwise deal with the Mineral Interests and the
production therefrom, in such a way that the representations and warranties in
Section 5.18 through 5.20 remain true and correct at, and as of, all times that
this Agreement is in effect (and not just at, and as of, the times such
representations and warranties are made).

     

    Section
6.21.        Post-Closing
Obligations.  Borrower shall deliver to Administrative Agent
within ninety (90) days after the Closing Date, the title reports and
information described in Schedule 4 hereto.

    

     

    ARTICLE
VII - - Negative
Covenants of Borrower

     

    To
conform with the terms and conditions under which each Lender is willing to have
credit outstanding to Borrower, and to induce each Lender to enter into this
Agreement and make the Loans, Borrower warrants, covenants and agrees that until
the full and final payment of the Obligations and the termination of this
Agreement, unless Majority Lenders have previously agreed
otherwise:

     

    Section
7.1.           Indebtedness.  No
Restricted Person will in any manner owe or be liable for Indebtedness
except:

     

    (a)           the
Obligations;

     

    (b)           Liabilities
for taxes and governmental assessments in the ordinary course of business that
are not yet due;

     

    (c)           Indebtedness
arising under Hedging Contracts permitted under Section 7.3;

     

    
      
         

      

      
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    (d)           Liability
for that certain royalty associated with production from Borrower’s Formax
properties;

     

    (e)           Permitted
Subordinated Debt;

     

    (f)           SG
Obligations;

     

    (g)           intercompany
Indebtedness arising from loans made by (i) Borrower to its wholly-owned
Subsidiaries that are Guarantors,  or (ii) any Subsidiary of Borrower
to Borrower; provided, however that upon the request of Administrative Agent at
any time, any such Indebtedness shall be evidenced by promissory notes having
terms reasonably satisfactory to Administrative Agent, and the sole originally
executed counterparts of which shall be pledged and delivered to Administrative
Agent, for the benefit of Administrative Agent and Lenders, as security for the
Obligations;

     

    (h)           Indebtedness
arising under the Liquidity Bridge Facility; and

     

    (i)           miscellaneous
items of Indebtedness not described in subsections (a) through (h) the
outstanding amount of which does not in the aggregate (taking into account all
such Indebtedness of all Restricted Persons) exceed at any one time an amount
equal to five percent (5%) of the Net Worth of Borrower at such
time.

     

    Section
7.2.          Limitation on
Liens.  Except
for Permitted Liens, no Restricted Person will create, assume or permit to exist
any Lien upon any of the properties or assets which it now owns or hereafter
acquires.

     

    Section
7.3.          Hedging
Contracts.  No
Restricted Person will be a party to or in any manner be liable on any Hedging
Contract except:

     

    (a)           Oil.  Contracts
entered into with the purpose and effect of fixing prices on oil expected to be
produced, sold or transported by Restricted Persons from its oil and gas
properties, provided
that at all times: (i) no such contract fixes a price for a term of more
than 60 months except (x) contracts that are directly hedged to offset a longer
term fixed rate contract and (y) contracts covering oil and gas properties in
the Midway-Sunset Field which have a term not to exceed 84 months; (ii) the
aggregate monthly production covered by all such contracts (determined, in the
case of contracts that are not settled on a monthly basis, by a monthly
proration acceptable to Administrative Agent) for any single month does not in
the aggregate exceed 90% of Restricted Persons’ aggregate Projected Oil
Production anticipated to be sold in the ordinary course of Restricted Persons’
businesses for such month, and the aggregate monthly production covered by all
such contracts having a term of more than 60 months but not more than 84 months
shall not in the aggregate exceed 60% of the Restricted Persons’ aggregate
Projected Oil Production from the Midway-Sunset Field anticipated to be sold in
the ordinary course of such Persons’ business for such month, (iii) except for
letters of credit and the Collateral under the Security Documents with respect
to Lender Hedging Obligations, no such contract requires any Restricted Person
to put up money, assets or other security against the event of its
nonperformance prior to actual default by such Restricted Person in performing
its obligations thereunder, and (iv) each such contract is with a counterparty
or has a guarantor of the obligation of the counterparty who (unless such
counterparty is a Lender or one of its Affiliates) at the time the contract is
made has long-term obligations rated A1 by Moody’s or A+ by S & P, or
better, respectively, by either Rating Agency.

     

    
      
         

      

      
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    (b)           Gas.  Contracts
entered into with the purpose and effect of fixing prices on gas expected to be
produced, sold or transported by Restricted Persons from its oil and gas
properties  or gas expected to be purchased by Restricted Persons for
use in oil production by such Restricted Persons, provided that at all
times: (i) no such contract fixes a price for a term of more than 60
months except contracts that are directly hedged to offset a longer term fixed
rate contract; (ii) the aggregate monthly production or purchase volume,
respectively, covered by all such contracts (determined, in the case of
contracts that are not settled on a monthly basis, by a monthly proration
acceptable to Administrative Agent) for any single month does not exceed 90% of
Restricted Persons’ aggregate Projected Gas Production anticipated to be sold in
the case of contracts on gas sales volumes, or 90% of Restricted Persons’
aggregate volume of projected gas purchases anticipated in the ordinary course
of Restricted Persons’ businesses for such month, (iii) except for letters of
credit and the Collateral under the Security Documents with respect to Lender
Hedging Obligations, no such contract requires any Restricted Person to put up
money, assets or other security against the event of its nonperformance prior to
actual default by such Restricted Person in performing its obligations
thereunder, and (iv) each such contract is with a counterparty or has a
guarantor of the obligation of the counterparty who (unless such counterparty is
a Lender or one of its Affiliates) at the time the contract is made has
long-term obligations rated A1 by Moody’s or A+ by S & P, or better,
respectively, by either Rating Agency.

    

    (c)           NGL.  Contracts
entered into with the purpose and effect of fixing prices on natural gas liquids
expected to be produced, sold or transported by Restricted Persons from its oil
and gas properties, provided that at all
times: (i) no such contract fixes a price for a term of more than 60
months except contracts that are directly hedged to offset a longer term fixed
rate contract; (ii) the aggregate monthly production covered by all such
contracts (determined, in the case of contracts that are not settled on a
monthly basis, by a monthly proration acceptable to Administrative Agent) for
any single month does not in the aggregate exceed 90% of Restricted Persons’
aggregate Projected  NGL Production anticipated to be sold in the
ordinary course of Restricted Persons’ businesses for such month, (iii) except
for letters of credit and the Collateral under the Security Documents with
respect to Lender Hedging Obligations, no such contract requires any Restricted
Person to put up money, assets or other security against the event of its
nonperformance prior to actual default by such Restricted Person in performing
its obligations thereunder, and (iv) each such contract is with a counterparty
or has a guarantor of the obligation of the counterparty who (unless such
counterparty is a Lender or one of its Affiliates) at the time the contract is
made has long-term obligations rated A1 by Moody’s or A+ by S & P, or
better, respectively, by either Rating Agency.

    

    (d)           Interest Rates.
Contracts entered into by a Restricted Person with the purpose and effect of
fixing or capping interest rates on a principal amount of indebtedness of such
Restricted Person that is accruing interest at a variable rate, provided that
(i) the aggregate notional amount of such contracts never exceeds eighty percent
(80%) of the anticipated outstanding principal balance of the indebtedness to be
hedged by such contracts or an average of such principal balances calculated
using a generally accepted method of matching interest hedging contracts to
declining principal balances, (ii) the floating rate index of each such contract
generally matches the index used to determine the floating rates of interest on
the corresponding indebtedness to be hedged by such contract, (iii) except for
letters of credit and the Collateral under the Security Documents with respect
to Lender Hedging Obligations, no such contract requires any Restricted Person
to put up money, assets or other security against the event of its
nonperformance prior to actual default by such Restricted Person in performing
its obligations thereunder, and (iv) each such contract is with a counterparty
or has a guarantor of the obligation of the counterparty who (unless such
counterparty is a Lender or one of its Affiliates) at the time the contract is
made has long-term obligations rated A1 by Moody’s or A+ by S & P, or
better.

     

    
      
         

      

      
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    (e)           Electricity.  Contracts
entered into with the purpose and effect of fixing prices on electricity
expected to be produced or sold by Restricted Persons, provided that at all
times:  (i) no such contract fixes a price for a term of more than
sixty (60) months, (ii) the aggregate monthly production covered by all such
contracts (determined, in the case of contracts that are not settled on a
monthly basis, by a monthly proration acceptable to Administrative Agent) for
any single month does not in the aggregate exceed ninety percent (90%) of
Restricted Persons’ aggregate Projected Electricity Production anticipated to be
sold in the ordinary course of Restricted Persons’ businesses for such month,
(iii) except for letters of credit and Collateral under the Security Documents
with respect to Lender Hedging Obligations, no such contract requires any
Restricted Person to put up money, assets or other security against the event of
its nonperformance prior to actual default by such Restricted Person in
performing its obligations thereunder, and (iv) each such contract is with a
counterparty or has a guarantor of the obligation of the counterparty who
(unless such counterparty is a Lender or one of its Affiliates) at the time the
contract is made has long-term obligations rated A1 by Moody’s or A+ by S&P,
or better, respectively, by either Rating Agency.  As used in this
subsection, the term “Projected Electricity
Production” means the projected production of electricity (measured by
volume unit or megawatt per hour equivalent, not sales price) for the term of
the contracts or a particular month, as applicable, from generating facilities
owned by any Restricted Person which are located in the United States
and  projected by Restricted Persons.

     

    (f)           Put Options; Cap
Transactions.  Notwithstanding the foregoing provisions of this
Section 7.3, there shall be no limitations on the purchase by the Restricted
Persons of put options or floor transactions with respect to oil, gas, natural
gas liquids or electricity produced by, call options or cap transactions with
respect to gas expected to be purchased by, or cap transactions with respect to
principal balances of indebtedness of, the Restricted Person; provided, however,
that any such put or call options or cap or floor transactions shall be solely
for hedging, and not for speculative purposes, and the Restricted Person shall
have no obligations thereunder other than payment of the applicable premium for
any such put or call options or cap or floor transactions.

    

    Section
7.4.          Limitation on Mergers,
Issuances of Securities.  No
Restricted Person will merge or consolidate with or into any other Person;
provided that so long as no Default has occurred and is continuing or will occur
as a result thereof (a) Borrower may merge or consolidate with another
Person so long as Borrower is the surviving business entity, (b) any
wholly-owned Subsidiary of Borrower may be merged into or consolidated with
another Person so long as Borrower or a wholly-owned Subsidiary of Borrower is
the surviving business entity, and (c) any Subsidiary of Borrower may merge or
consolidate with another Person so long as Borrower or a Subsidiary of Borrower
is the surviving business entity.  Borrower will not issue any
securities other than shares of its common stock and any options or warrants
giving the holders thereof only the right to acquire such shares.  No
Subsidiary of Borrower will issue any additional shares of its capital stock or
other securities or any options, warrants or other rights to acquire such
additional shares or other securities except to Borrower and only to the extent
not otherwise forbidden under the terms hereof.

     

    
      
         

      

      
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    Section
7.5.          Limitation on Sales of
Property.  No
Restricted Person will sell, transfer, lease, exchange, alienate or dispose of
any of its material assets or properties or any material interest therein or
portions thereof, or discount, sell, pledge or assign any notes payable to it,
accounts receivable or future income, except, to the extent not otherwise
forbidden under the Security Documents:

     

    (a)           equipment
which is worthless or obsolete or which is replaced by equipment of equal
suitability and value;

     

    (b)           inventory
(including oil and gas sold as produced and seismic data) which is sold in the
ordinary course of business on ordinary trade terms;

     

    (c)           capital
stock of any of Borrower’s Subsidiaries which is transferred to Borrower or a
wholly owned Subsidiary of Borrower;

     

    (d)           interests
in oil and gas properties or portions thereof, to which no Proved Reserves of
oil, gas or other liquid or gaseous hydrocarbons are properly
attributed;

     

    (e)           leases
of drilling rigs in the ordinary course of business and sales of drilling rigs
that are under options for sale on the Closing Date which are described in
Schedule 4;

     

    (f)           exchanges
of (i) Restricted Persons’ oil and gas leasehold interests in non-producing
zones, to which no Proved Reserves of oil, gas or other liquid or gaseous
hydrocarbons are properly attributed, whether or not such interests are subject
to Liens in favor of Administrative Agent, for (ii) other oil and gas leasehold
interests in producing or non-producing zones owned by other
Persons;

     

    (g)           exchanges
and transfers of Mineral Interests located in the DJ Basin in Colorado owned by
Restricted Persons (in this Section called the “Berry DJ Properties”) for
Mineral Interests located therein by Rosewood Resources (in this Section called
“Rosewood DJ Properties”); provided that the aggregate amount of Rosewood DJ
Properties received in exchange for Berry DJ Properties shall have a value
equivalent to the Berry DJ Properties so exchanged;

     

    (h)           transfers
among Borrower and Guarantors;

     

    (i)           sales
and dispositions of other property for a purchase price paid in cash or Mineral
Interests in an amount at least equal to the fair market value thereof; provided
that if the aggregate sales price for all such property sold during any period
of twelve (12) consecutive calendar months exceeds five percent (5%) of the
Present Value of the Borrowing Base Properties, the Borrowing Base shall be
reduced effective immediately upon such sale or disposition by an amount equal
to the value, if any, assigned to such property in the most recently delivered
Engineering Report.

     

    
      
         

      

      
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    Section
7.6.          Limitation on Dividends,
Stock Repurchases and Subordinated Debt.

     

    (a)           No
Restricted Person will declare or make any Dividends or Stock Repurchases other
than (i) Dividends payable to Borrower or Subsidiaries of Borrower, (ii) Stock
Repurchases by Borrower; provided that the aggregate amount paid by Borrower in
connection therewith does not exceed $35,000,000 during any Four-Quarter Period,
(iii) so long as no Default has occurred and is continuing or will occur as a
result thereof, Dividends payable to Borrower’s shareholders, to the extent that
the aggregate value of all such Dividends made during any Four-Quarter Period
does not exceed the greater of $20,000,000 or seventy-five percent (75%) of Net
Income for such Four-Quarter Period, and (iv) Dividends and Stock Repurchases
made with the net cash proceeds received from a substantially concurrent issue
of new shares of its common stock or other common Equity Interests.

     

    (b)           No
Restricted Person shall make any payment of principal, interest or fees on
Permitted Subordinated Debt, except to the extent expressly permitted by the
applicable subordination agreement with Administrative Agent.

     

    Section
7.7.          Limitation on Acquisitions,
Investments; and New Businesses.  Except
as expressly permitted by this section, no Restricted Person will make any
acquisitions of, or capital contributions to, or other Investments in any Person
or property; provided that the Restricted Persons (i) may make Permitted
Investments and Core Acquisitions and Investments without limitation, and (ii)
may make Non-Core Acquisitions and Investments so long as the aggregate amount
expended on Non-Core Acquisitions and Investments during the period from the
date hereof until the Maturity Date never exceeds 10% of Borrower’s Net Worth at
any time during such period.  No Restricted Person will engage
directly or indirectly in any business or conduct any operations except in
connection with or incidental to its present businesses and operations, and
(iii) transactions permitted by Section 7.8.

     

    Section
7.8.          Limitation on Credit
Extensions.  Except
for Permitted Investments, no Restricted Person will extend credit, make
advances or make loans other than normal and prudent extensions of credit to
customers buying goods and services in the ordinary course of business, which
extensions shall not be for longer periods than those extended by similar
businesses operated in a normal and prudent manner.

     

    Section
7.9.          Transactions with
Affiliates.  Neither
Borrower nor any of its Subsidiaries nor any Guarantor will engage in any
material transaction with any of its Affiliates on terms which are less
favorable to it than those which would have been obtainable at the time in
arm’s-length dealing with Persons other than such Affiliates, provided that such
restriction shall not apply to transactions among Borrower and its wholly owned
Subsidiaries.

     

    Section
7.10.        Prohibited
Contracts.

     

    (a)           Except
as expressly provided for in the Loan Documents, no Restricted Person will,
directly or indirectly, enter into, create, or otherwise allow to exist any
contract or other consensual restriction on (i) the ability of any Subsidiary of
Borrower to (1) pay dividends or make other distributions to Borrower, (2) to
redeem equity interests held in it by Borrower, (3) to repay loans and other
indebtedness owing by it to Borrower, or (4) to transfer any of its assets to
Borrower or (ii) on the ability of any Restricted Person to grant to Agent and
Lenders Liens on its assets , except:

     

    
      
         

      

      
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    (A)           any
customary encumbrance or restriction with respect to a Subsidiary imposed
pursuant to a merger agreement or an agreement entered into for the sale or
disposition of all or substantially all the capital stock or assets of such
Subsidiary pending the closing of such sale or disposition; and

     

    (B)           with
respect to the above clauses (i)(4) and
(ii)
only,

     

    (i)           any
such encumbrance or restriction consisting of customary nonassignment provisions
(including provisions forbidding subletting or sublicensing) in agreements,
leases governing leasehold interests and licenses to the extent such provisions
restrict the transfer of the agreement, lease or license or the property leased,
or licensed thereunder;

     

    (ii)           customary
restrictions contained in asset sale agreements limiting the transfer of such
assets pending the closing of such sale;

     

    (iii)           restrictions
in the instruments creating a Permitted Lien described in clause (d) or (h) of
the definition of Permitted Lien, limiting Liens on the property subject to such
Permitted Lien;

     

    (iv)           restrictions
on Equity Interests constituting minority Investments permitted by Section
7.7;

     

    (v)           existing
restrictions with respect to a Person acquired by Borrower or any of its
Subsidiaries (except to the extent such restrictions were put in place in
connection with or in contemplation of such acquisition), which restrictions are
not applicable to any Person, or the properties or assets of any Person other
than the Person, or the property or assets of the Person, so acquired;
and

     

    (vi)           customary
supermajority voting provisions and other customary provisions with respect to
the disposition or distribution of assets, each contained in corporate charters,
bylaws, stockholders’ agreements, limited liability company agreements,
partnership agreements, joint venture agreements and other similar agreements
entered into in the ordinary course of business of Borrower and its
Subsidiaries.

     

    (b)           Except
as permitted by Section 5.19, no Restricted Person will enter into any
“take-or-pay” contract or other contract or arrangement for the purchase of
goods or services which obligates it to pay for such goods or services
regardless of whether they are delivered or furnished to it, excluding firm
transportation contracts entered into in the ordinary course of business. No
Restricted Person will amend or permit any amendment to any contract or lease
which releases, qualifies, limits, makes contingent or otherwise detrimentally
affects the rights and benefits of Administrative Agent or any Lender under or
acquired pursuant to any Security Documents.  No ERISA Affiliate will
incur any obligation to contribute to any “multiemployer plan” as defined in
Section 4001 of ERISA.

     

    
      
         

      

      
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    Section
7.11.        Current
Ratio.  Beginning
with the Fiscal Quarter ending September 30, 2008, the ratio of Borrower’s
Current Assets to Borrower’s Current Liabilities will never be less than 1.0 to
1.0.

     

    Section
7.12.        EBITDAX to Total Funded Debt
Ratio.   Beginning
with the Fiscal Quarter ending September 30, 2008, the ratio of (a) Total
Funded Debt to (b) Adjusted EBITDAX for the Four-Quarter Period then ended,
will not be greater than 3.5 to 1.0 at the end of any Fiscal
Quarter.

     

     

    ARTICLE
VIII - - Events of Default and Remedies

     

    Section
8.1.          Events of
Default.  Each
of the following events constitutes an Event of Default under this
Agreement:

     

    (a)           Any
Restricted Person fails to pay any principal component of any Obligation
(including but not limited to any Borrowing Base Deficiency) when due and
payable, whether at a date for the payment of a fixed installment or as a
contingent or other payment becomes due and payable or as a result of
acceleration or otherwise;

     

    (b)           Any
Restricted Person fails to pay any Obligation (other than the Obligations in
subsection (a) above) when due and payable, whether at a date for the payment of
a fixed installment or as a contingent or other payment becomes due and payable
or as a result of acceleration or otherwise, within three Business Days after
the same becomes due;

     

    (c)           Any
“default” or “event of default” occurs under any Loan Document which defines
either such term, and the same is not remedied within the applicable period of
grace (if any) provided in such Loan Document;

     

    (d)           Any
Restricted Person fails to duly observe, perform or comply with any covenant,
agreement or provision of Section 6.4 or Article VII;

     

    (e)           Any
Restricted Person fails (other than as referred to in subsections (a), (b), (c)
or (d) above) to duly observe, perform or comply with any covenant, agreement,
condition or provision of any Loan Document, and such failure remains unremedied
for a period of thirty (30) days after notice of such failure is given by
Administrative Agent to Borrower;

     

    (f)           Any
representation or warranty previously, presently or hereafter made in writing by
or on behalf of any Restricted Person in connection with any Loan Document shall
prove to have been false or incorrect in any material respect on any date on or
as of which made, or any Loan Document at any time ceases to be valid, binding
and enforceable as warranted in Section 5.5 for any reason other than its
release or subordination by Administrative Agent;

     

    
      
         

      

      
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    (g)           Any
Restricted Person (i) fails to pay any portion, when such portion is due, (A) of
any of its Indebtedness owing under the SG Money Market Facility or under the
Liquidity Bridge Facility, or (B) any of its other Indebtedness in excess of
$25,000,000, or (ii) breaches or defaults in the performance of any agreement or
instrument by which the SG Money Market Facility, the Liquidity Bridge Facility
or any such other Indebtedness in excess of $25,000,000 is issued, evidenced,
governed, or secured, and any such failure, breach or default continues beyond
any applicable period of grace provided therefor;

     

    (h)           Either
(i) any “accumulated funding deficiency” (as defined in Section 412(a) of the
Internal Revenue Code) in excess of $5,000,000 exists with respect to any ERISA
Plan, whether or not waived by the Secretary of the Treasury or his delegate, or
(ii) any Termination Event occurs with respect to any ERISA Plan and the then
current value of such ERISA Plan’s benefit liabilities exceeds the then current
value of such ERISA Plan’s assets available for the payment of such benefit
liabilities by more than $5,000,000 (or in the case of a Termination Event
involving the withdrawal of a substantial employer, the withdrawing employer’s
proportionate share of such excess exceeds such amount);

     

    (i)           Any
Change of Control occurs; and

     

    (j)           Any
Restricted Person:

     

    (i)           suffers
the entry against it of a judgment, decree or order for relief by a Governmental
Authority of competent jurisdiction in an involuntary proceeding commenced under
any applicable bankruptcy, insolvency or other similar Law of any jurisdiction
now or hereafter in effect, including the federal Bankruptcy Code, as from time
to time amended, or has any such proceeding commenced against it which remains
undismissed for a period of sixty days; or

     

    (ii)           commences
a voluntary case under any applicable bankruptcy, insolvency or similar Law now
or hereafter in effect, including the federal Bankruptcy Code, as from time to
time amended; or applies for or consents to the entry of an order for relief in
an involuntary case under any such Law; or makes a general assignment for the
benefit of creditors; or fails generally to pay (or admits in writing its
inability to pay) its debts as such debts become due; or takes corporate or
other action to authorize any of the foregoing; or

     

    (iii)           suffers
the appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of all or a substantial
part of its assets in a proceeding brought against or initiated by it, and such
appointment or taking possession is neither made ineffective nor discharged
within sixty days after the making thereof, or such appointment or taking
possession is at any time consented to, requested by, or acquiesced to by it;
or

     

    (iv)           suffers
the entry against it of a final judgment for the payment of money in excess of
$5,000,000 (not covered by insurance satisfactory to Administrative Agent in its
discretion), unless the same is discharged within sixty days after the date of
entry thereof or an appeal or appropriate proceeding for review thereof is taken
within such period and a stay of execution pending such appeal is obtained;
or

     

    
      
         

      

      
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    (v)         suffers
a writ or warrant of attachment or any similar process to be issued by any
Governmental Authority against all or any substantial part of its assets, and
such writ or warrant of attachment or any similar process is not stayed or
released within sixty days after the entry or levy thereof or after any stay is
vacated or set aside.

     

    Upon the
occurrence of an Event of Default described in subsection (j)(i), (j)(ii) or
(j)(iii) of this section with respect to Borrower, all of the Obligations shall
thereupon be immediately due and payable, without demand, presentment, notice of
demand or of dishonor and nonpayment, protest, notice of protest, notice of
intention to accelerate, declaration or notice of acceleration, or any other
notice or declaration of any kind, all of which are hereby expressly waived by
Borrower and each Restricted Person who at any time ratifies or approves this
Agreement.  Upon any such acceleration, any obligation of any Lender
to make any further Loans and any obligation of LC Issuer to issue Letters of
Credit hereunder to make any further Loans shall be permanently
terminated.  During the continuance of any other Event of Default,
Administrative Agent at any time and from time to time may (and upon written
instructions from Majority Lenders, Administrative Agent shall), without notice
to Borrower or any other Restricted Person, do either or both of the
following:  (1) terminate any obligation of Lenders to make Loans
hereunder, and any obligation of LC Issuer to issue Letters of Credit hereunder,
and (2) declare any or all of the Obligations immediately due and payable, and
all such Obligations shall thereupon be immediately due and payable, without
demand, presentment, notice of demand or of dishonor and nonpayment, protest,
notice of protest, notice of intention to accelerate, declaration or notice of
acceleration, or any other notice or declaration of any kind, all of which are
hereby expressly waived by Borrower and each Restricted Person who at any time
ratifies or approves this Agreement.

     

    Section
8.2.          Remedies.  If
any Default shall occur and be continuing, each Lender Party may protect and
enforce its rights under the Loan Documents by any appropriate proceedings,
including proceedings for specific performance of any covenant or agreement
contained in any Loan Document, and each Lender Party may enforce the payment of
any Obligations due it or enforce any other legal or equitable right which it
may have.  All rights, remedies and powers conferred upon Lender
Parties under the Loan Documents shall be deemed cumulative and not exclusive of
any other rights, remedies or powers available under the Loan Documents or at
Law or in equity.

     

    Section
8.3.          Application of Proceeds
After Acceleration.  After
the exercise of remedies provided for in Section 8.2 (or after the Loans have
automatically become immediately due and payable and the LC Obligations have
automatically been required to be cash collateralized as set forth in Section
2.13), any amounts received on account of the Secured Obligations shall be
applied by Administrative Agent in the following order:

     

    First, to payment of
that portion of the Obligations constituting fees, indemnities, expenses and
other amounts (including fees, charges and disbursements of counsel to
Administrative Agent (including fees and time charges for attorneys who may be
employees of Agent) and amounts payable under Article III)
payable to Administrative Agent in its capacity as such;

     

    
      
         

      

      
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    Second, to payment of
that portion of the Secured Obligations constituting fees, indemnities and other
amounts (other than principal, interest and Letter of Credit Fees) payable to
Lenders, the LC Issuer and SG (including fees, charges and disbursements of
counsel to the respective Lenders, the LC Issuer and SG and amounts payable
under Article III),
ratably among them in proportion to the respective amounts described in this
clause Second
payable to them and the Lender;

     

    Third, to payment of
that portion of the Secured Obligations constituting accrued and unpaid Letter
of Credit Fees and interest on the Loans, the Lender Hedging Obligations and the
SG Obligations, ratably among Lenders, the LC Issuer, the Lender Counterparties
and SG, in proportion to the respective amounts described in this clause Third payable to
them;

     

    Fourth, to payment of
that portion of the Secured Obligations constituting unpaid principal of the
Loans, obligations to deliver cash collateral for LC Obligations pursuant to
Section 2.13, settlements under Hedging Contracts and the unpaid principal of
the SG Obligations, ratably among Lenders, the LC Issuer, the Lender
Counterparties and SG in proportion to the respective amounts described in this
clause Fourth
held by them; and

     

    Last, the balance, if
any, after all of the Secured Obligations have been indefeasibly paid in full,
to Borrower or as otherwise required by Law.

     

    Subject
to Section 2.12, amounts used to cash collateralize the aggregate undrawn
amount of Letters of Credit pursuant to clause Fourth above shall be
applied to satisfy drawings under such Letters of Credit as they
occur.  If any amount remains on deposit as cash collateral after all
Letters of Credit have either been fully drawn or expired, such remaining amount
shall be applied to the other Secured Obligations, if any, in the order set
forth above.

     

    Administrative
Agent shall have no responsibility to determine the existence or amount of
Lender Hedging Obligations and may reserve from the application of amounts under
this Section amounts distributable in respect of Lender Hedging Obligations
until it has received evidence satisfactory to it of the existence and amount of
such Lender Hedging Obligations.

     

     

    ARTICLE
IX - - Administrative Agent

     

    Section
9.1.          Appointment and
Authority.  Each
of the Lenders, LC Issuer and SG hereby irrevocably appoints Wells Fargo to act
on its behalf as Administrative Agent hereunder and under the other Loan
Documents and authorizes Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to Administrative Agent by the
terms hereof or thereof, together with such actions and powers as are reasonably
incidental thereto.  The provisions of this Article are solely for the
benefit of Administrative Agent, the Lenders, LC Issuer and SG, and neither
Borrower nor any other Restricted Person shall have rights as a third party
beneficiary of any of such provisions.

     

    Section
9.2.          Exculpation
Provisions.  Administrative
Agent shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents.  Without limiting the
generality of the foregoing, Administrative Agent:

     

    
      
         

      

      
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    (a)           shall
not be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing;

     

    (b)           shall
not have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that Administrative Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage
of Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that Administrative Agent shall not be required to take any
action that, in its opinion or the opinion of its counsel, may expose
Administrative Agent to liability or that is contrary to any Loan Document or
applicable law; and

     

    (c)           shall
not, except as expressly set forth herein and in the other Loan Documents, have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to Borrower or any of its Affiliates that is communicated
to or obtained by the Person serving as Administrative Agent or any of its
Affiliates in any capacity.

     

    Administrative
Agent shall not be liable for any action taken or not taken by it (i) with the
consent or at the request of Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as Administrative Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 10.1 and 8.2) or (ii) in the absence of its own gross
negligence or willful misconduct.  Administrative Agent shall be
deemed not to have knowledge of any Default unless and until notice describing
such Default is given to Administrative Agent by Borrower, a Lender or LC
Issuer.

     

    Administrative
Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to Administrative
Agent.

     

    Section
9.3.          Reliance by Administrative
Agent.  Administrative
Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing (including any electronic message, Internet or
intranet website posting or other distribution) believed by it to be genuine and
to have been signed, sent or otherwise authenticated by the proper
Person.  Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to have been made by the proper
Person, and shall not incur any liability for relying thereon.  In
determining compliance with any condition hereunder to the making of a Loan, or
the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or LC Issuer, Administrative Agent may presume that
such condition is satisfactory to such Lender or LC Issuer unless Administrative
Agent shall have received notice to the contrary from such Lender or LC Issuer
prior to the making of such Loan or the issuance of such Letter of
Credit.  Administrative Agent may consult with legal counsel (who may
be counsel for Borrower), independent accountants and other experts selected by
it, and shall not be liable for any action taken or not taken by it in
accordance with the advice of any such counsel, accountants or
experts.

     

    
      
         

      

      
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    Section
9.4.          Non-Reliance on
Administrative Agent and Other Lenders. Each Lender and LC
Issuer and SG acknowledges that it has, independently and without reliance upon
Administrative Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each
Lender and LC Issuer also acknowledges that it will, independently and without
reliance upon Administrative Agent or any other Lender or any of their Related
Parties and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or
thereunder.

     

    Section
9.5.          Rights as
Lender.  The
Person serving as Administrative Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not Administrative Agent and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated or unless the context otherwise
requires, include the Person serving as Administrative Agent hereunder in its
individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with Borrower
or any Subsidiary or other Affiliate thereof as if such Person were not
Administrative Agent hereunder and without any duty to account therefor to the
Lenders.

     

    Section
9.6.          Sharing of Set-Offs and
Other Payments.  Each
Lender Party agrees that if it shall, whether through the exercise of rights
under Security Documents or rights of banker’s lien, set off, or counterclaim
against Borrower or otherwise, obtain payment of a portion of the aggregate
Obligations owed to it, taking into account all distributions made by
Administrative Agent under Section 3.1, and such payment causes such Lender
Party to have received more than it would have received had such payment been
received by Administrative Agent and distributed pursuant to Section 3.1, then
(a) it shall be deemed to have simultaneously purchased and shall be obligated
to purchase interests in the Obligations as necessary to cause all Lender
Parties to share all payments as provided for in Section 3.1, and (b) such other
adjustments shall be made from time to time as shall be equitable to ensure that
Administrative Agent and all Lender Parties share all payments of Obligations as
provided in Section 3.1; provided, however, that nothing
herein contained shall in any way affect the right of any Lender Party to obtain
payment (whether by exercise of rights of banker’s lien, set-off or counterclaim
or otherwise) of indebtedness other than the Obligations.  Borrower
expressly consents to the foregoing arrangements and agrees that any holder of
any such interest or other participation in the Obligations, whether or not
acquired pursuant to the foregoing arrangements, may to the fullest extent
permitted by Law exercise any and all rights of banker’s lien, set-off, or
counterclaim as fully as if such holder were a holder of the Obligations in the
amount of such interest or other participation.  If all or any part of
any funds transferred pursuant to this section is thereafter recovered from the
seller under this section which received the same, the purchase provided for in
this section shall be deemed to have been rescinded to the extent of such
recovery, together with interest, if any, if interest is required pursuant to
the order of a Governmental Authority order to be paid on account of the
possession of such funds prior to such recovery.

     

    
      
         

      

      
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    Section
9.7.          Investments.  Whenever
Administrative Agent in good faith determines that it is uncertain about how to
distribute to Lender Parties any funds which it has received, or whenever
Administrative Agent in good faith determines that there is any dispute among
Lender Parties about how such funds should be distributed, Administrative Agent
may choose to defer distribution of the funds which are the subject of such
uncertainty or dispute.  If Administrative Agent in good faith
believes that the uncertainty or dispute will not be promptly resolved, or if
Administrative Agent is otherwise required to invest funds pending distribution
to Lender Parties, Administrative Agent shall invest such funds pending
distribution; all interest on any such Investment shall be distributed upon the
distribution of such Investment and in the same proportion and to the same
Persons as such Investment.  All moneys received by Administrative
Agent for distribution to Lender Parties (other than to the Person who is
Administrative Agent in its separate capacity as a Lender Party) shall be held
by Administrative Agent pending such distribution solely as Administrative Agent
for such Lender Parties, and Administrative Agent shall have no equitable title
to any portion thereof.

     

    Section
9.8.          Resignation of
Administrative Agent.  Administrative
Agent may at any time give notice of its resignation to the Lenders, LC Issuer,
SG and Borrower.  Upon receipt of any such notice of resignation,
Required Lenders shall have the right, in consultation with Borrower, to appoint
a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States.  If no
such successor shall have been so appointed by Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and LC Issuer, appoint a successor Administrative Agent
meeting the qualifications set forth above provided that if Administrative Agent
shall notify Borrower and the Lenders that no qualifying Person has accepted
such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (1) the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any Collateral held by Administrative
Agent on behalf of the Lenders or LC Issuer under any of the Loan Documents, the
retiring Administrative Agent shall continue to hold such Collateral until such
time as a successor Administrative Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through
Administrative Agent shall instead be made by or to each Lender and LC Issuer
directly, until such time as Required Lenders appoint a successor Administrative
Agent as provided for above in this Section.  Upon the acceptance of a
successor’s appointment as Administrative Agent hereunder, such successor shall
succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section).  The fees payable by Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between Borrower and such
successor.  After the retiring Administrative Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 10.4 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while the
retiring Administrative Agent was acting as Administrative Agent.

     

    
      
         

      

      
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    Any
resignation by Wells Fargo as Administrative Agent pursuant to this Section
shall also constitute its resignation as Issuer and Swing Line
Lender.  Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, (i) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring LC
Issuer and Swing Line Lender, (ii) the retiring LC Issuer and Swing Line Lender
shall be discharged from all of their respective duties and obligations
hereunder or under the other Loan Documents, and (iii) the successor LC Issuer
shall issue letters of credit in substitution for the Letters of Credit, if any,
outstanding at the time of such succession or make other arrangements
satisfactory to the retiring LC Issuer to effectively assume the obligations of
the retiring LC Issuer with respect to such Letters of Credit.

     

    Section
9.9.          Delegation of
Duties.  Administrative
Agent may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Loan Document by or through any one or more
sub-agents appointed by Administrative Agent.  Administrative Agent
and any such sub-agent may perform any and all of its duties and exercise its
rights and powers by or through their respective Related Parties.  The
exculpatory provisions of this Article shall apply to any such sub-agent and to
the Related Parties of Administrative Agent and any such sub-agent, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent

     

    Section
9.10.        No Other Duties,
etc.  Anything
herein to the contrary notwithstanding, none of the Joint Bookrunners, the
Co-Syndication Agents or the Co-Documentation Agents listed on the cover page
hereof shall have any powers, duties or responsibilities under this Agreement or
any of the other Loan Documents, except in its capacity, as applicable, as
Administrative Agent, a Lender or LC Issuer hereunder.

     

    Section
9.11.        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 any Restricted Person, Administrative Agent (irrespective
of whether the principal of any Loan or LC Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether 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 Loans, LC Obligations 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, the LC Issuer and
Administrative Agent (including any claim for the reasonable compensation,
expenses, disbursements and advances of Lenders, the LC Issuer and
Administrative Agent and their respective agents and counsel and all other
amounts due Lenders, the LC Issuer and Administrative Agent under Section 2.5
and 10.4) allowed in such judicial proceeding; and

     

    
      
         

      

      
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    (b)           
to collect and receive any moneys or other property payable or deliverable on
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 and the LC Issuer 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 and the LC Issuer, to pay to Administrative Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of
Administrative Agent and its agents and counsel, and any other amounts due
Administrative Agent under Sections 2.5 and 10.4.  Nothing contained
herein shall be deemed to authorize Administrative Agent to authorize or consent
to or accept or adopt on behalf of any Lender or the LC Issuer 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
9.12.        Guaranty
Matters.  Each
Lender and the LC Issuer hereby irrevocably authorizes Administrative Agent, at
its option and in its discretion, to release any Guarantor from its obligations
under the Subsidiary Guaranty if such Person ceases to be a Subsidiary as a
result of a transaction permitted hereunder.  Upon request by
Administrative Agent at any time, each Lender and the LC Issuer will confirm in
writing Administrative Agent’s authority to release any Guarantor from its
obligations under the Subsidiary Guaranty pursuant to this Section
9.12.

    

    Section
9.13.        Collateral
Matters.

     

    (a)           Each
Lender, the LC Issuer and SG hereby irrevocably authorizes and directs
Administrative Agent to enter into the Security Documents for the benefit of
such Lender, the LC Issuer and SG.  Each Lender, the LC Issuer and SG
hereby agrees, and each holder of any Note by the acceptance thereof will be
deemed to agree, that, except as otherwise set forth in Section 10.1, any action
taken by the Required Lenders, in accordance with the provisions of this
Agreement or the Security Documents, and the exercise by the Required Lenders of
the powers set forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all of
Lenders, the LC Issuer and SG.  Administrative Agent is hereby
authorized (but not obligated) on behalf of all of Lenders, the LC Issuer and
SG, without the necessity of any notice to or further consent from any Lender,
the LC Issuer or SG from time to time prior to, an Event of Default, to take any
action with respect to any Collateral or Security Documents which may be
necessary to perfect and maintain perfected the Liens upon the Collateral
granted pursuant to the Security Documents.

     

    (b)           Each
Lender, the LC issuer and SG hereby irrevocably authorize Administrative Agent,
at its option and in its discretion,

     

    (i)           to
release any Lien on any property granted to or held by Administrative Agent
under any Loan Document (A) upon termination of each Lender’s Commitment and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, except
as otherwise provided in the Security Documents, (B) that is sold or to be sold
as part of or in connection with any sale permitted hereunder or under any other
Loan Document, (C) subject to Section 10.1, if
approved, authorized or ratified in writing by the Required Lenders, or (D) in
connection with any foreclosure sale or other disposition of Collateral after
the occurrence of an Event of Default; and

     

    
      
         

      

      
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    (ii)           to
subordinate any Lien on any property granted to or held by Administrative Agent
under any Loan Document to the holder of any Lien on such property that is
permitted by this Agreement or any other Loan Document.

     

    Upon
request by Administrative Agent at any time, each Lender and the LC Issuer will
confirm in writing Administrative Agent’s authority to release or subordinate
its interest in particular types or items of Collateral pursuant to this Section
9.13.

     

    (c)           Subject
to (b) above, Administrative Agent shall and is hereby irrevocably authorized by
each Lender, the LC Issuer and SG, to execute such documents as may be necessary
to evidence the release or subordination of the Liens granted to Administrative
Agent for the benefit of Administrative Agent and Lenders and the LC Issuer
herein or pursuant hereto upon the applicable Collateral; provided that (i)
Administrative Agent shall not be required to execute any such document on terms
which, in Administrative Agent’s opinion, would expose Administrative Agent to
or create any liability or entail any consequence other than the release or
subordination of such Liens without recourse or warranty and (ii) such release
or subordination shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of Borrower or any other
Restricted Person in respect of) all interests retained by Borrower or any other
Restricted Person, including the proceeds of the sale, all of which shall
continue to constitute part of the Collateral.  In the event of any
sale or transfer of Collateral, or any foreclosure with respect to any of the
Collateral, Administrative Agent shall be authorized to deduct all expenses
reasonably incurred by Administrative Agent from the proceeds of any such sale,
transfer or foreclosure.

     

    (d)           Administrative
Agent shall have no obligation whatsoever to any Lender, the LC Issuer, SG or
any other Person to assure that the Collateral exists or is owned by Borrower or
any other Restricted Person or is cared for, protected or insured or that the
Liens granted to Administrative Agent herein or in any of the Security Documents
or pursuant hereto or thereto have been properly or sufficiently or lawfully
created, perfected, protected or enforced or are entitled to any particular
priority, or to exercise or to continue exercising at all or in any manner or
under any duty of care, disclosure or fidelity any of the rights, authorities
and powers granted or available to Administrative Agent in this Section 9.13 or
in any of the Security Documents, it being understood and agreed that in respect
of the Collateral, or any act, omission or event related thereto, Administrative
Agent may act in any manner it may deem appropriate, in its sole discretion,
given Administrative Agent’s own interest in the Collateral as one of Lenders
and that Administrative Agent shall have no duty or liability whatsoever to
Lenders, the LC Issuer or SG.

     

    (e)           Each
Lender, the LC Issuer and SG hereby appoints each other Lender as agent for the
purpose of perfecting Lenders’ and the LC Issuer’s security interest in assets
which, in accordance with Article 9 of the UCC can be perfected only by
possession.  Should any Lender or the LC Issuer (other than
Administrative Agent) obtain possession of any such Collateral, such Lender or
the LC Issuer shall notify Administrative Agent thereof, and, promptly upon
Administrative Agent’s request therefor shall deliver such Collateral to
Administrative Agent or in accordance with Administrative Agent’s
instructions.

     

    
      
         

      

      
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    ARTICLE X
- - Miscellaneous

     

    Section
10.1.        Waivers and Amendments;
Acknowledgments.

     

    (a)           Waivers and
Amendments.  No failure or delay (whether by course of conduct
or otherwise) by any Lender in exercising any right, power or remedy which such
Lender Party may have under any of the Loan Documents shall operate as a waiver
thereof or of any other right, power or remedy, nor shall any single or partial
exercise by any Lender Party of any such right, power or remedy preclude any
other or further exercise thereof or of any other right, power or
remedy.  No waiver of any provision of any Loan Document and no
consent to any departure therefrom shall ever be effective unless it is in
writing and signed as provided below in this section, and then such waiver or
consent shall be effective only in the specific instances and for the purposes
for which given and to the extent specified in such writing.  No
notice to or demand on any Restricted Person shall in any case of itself entitle
any Restricted Person to any other or further notice or demand in similar or
other circumstances.  This Agreement and the other Loan Documents set
forth the entire understanding between the parties hereto with respect to the
transactions contemplated herein and therein and supersede all prior discussions
and understandings with respect to the subject matter hereof and thereof, and no
waiver, consent, release, modification or amendment of or supplement to this
Agreement or the other Loan Documents shall be valid or effective against any
party hereto unless the same is in writing and signed by (i) if such party is
Borrower, by Borrower, (ii) if such party is Administrative Agent, the Swing
Line Lender or LC Issuer, by such party, and (iii) if such party is a Lender, by
such Lender or by Administrative Agent on behalf of Lenders with the written
consent of Majority Lenders (which consent has already been given as to the
termination of the Loan Documents as provided in Section
10.9.  Notwithstanding the foregoing or anything to the contrary
herein, Administrative Agent shall not, without the prior consent of each
individual Lender, execute and deliver on behalf of such Lender any waiver or
amendment which would:  (1) waive any of the conditions specified in
Section 4.1 (provided that Administrative Agent may in its discretion withdraw
any request it has made under Section 4.1(q)), (2) increase the maximum amount
which such Lender is committed hereunder to lend, (3) reduce any fees payable to
such Lender hereunder, or the principal of, or interest on, such Lender’s Note,
(4) postpone any date fixed for any payment of any such fees, principal or
interest, (5) amend the definition herein of “Majority Lenders” or “Required
Lenders” or otherwise change the aggregate amount of Percentage Shares which is
required for Administrative Agent, Lenders or any of them to take any particular
action under the Loan Documents, (6) amend the definition of “Maximum Credit
Amount” to mean an amount higher than $1,500,000,000, (7) release Borrower from
its obligation to pay such Lender’s Note, or any Guarantor from its guaranty of
such payment, (8) release all or substantially all of the Collateral, except for
such releases relating to sales or dispositions of property permitted by the
Loan Documents, or (9) amend this Section 10.1(a).  Notwithstanding
the foregoing or anything to the contrary herein, Administrative Agent shall
not, without the prior consent of SG, execute and deliver on behalf of SG or any
of the Lenders any waiver or amendment which would cause the SG Money Market
Facility to cease to constitute Secured Obligations or would otherwise cause the
Indebtedness evidenced by such SG Money Market Facility to no longer receive the
benefit of the Liens granted in the Collateral pursuant to the Security
Documents on the priority basis set forth in Section 8.3 or would change the
order of payment set forth in Section 8.3.  SG shall be an intended
third party beneficiary of the provisions of the preceding sentence and shall be
entitled to enforce such provisions hereunder.

     

    
      
         

      

      
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    (b)           Acknowledgments and
Admissions.  Borrower hereby represents, warrants, acknowledges
and admits that (i) it has been advised by counsel in the negotiation, execution
and delivery of the Loan Documents to which it is a party, (ii) it has made an
independent decision to enter into this Agreement and the other Loan Documents
to which it is a party, without reliance on any representation, warranty,
covenant or undertaking by Administrative Agent or any Lender, whether written,
oral or implicit, other than as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof, (iii) there are no
representations, warranties, covenants, undertakings or agreements by any Lender
as to the Loan Documents except as expressly set out in this Agreement or in
another Loan Document delivered on or after the date hereof, (iv) no Lender has
any fiduciary obligation toward Borrower with respect to any Loan Document or
the transactions contemplated thereby, (v) the relationship pursuant to the Loan
Documents between Borrower and the other Restricted Persons, on one hand, and
each Lender, on the other hand, is and shall be solely that of debtor and
creditor, respectively, (vi) no partnership or joint venture exists with respect
to the Loan Documents between any Restricted Person and any Lender, (vii)
Administrative Agent is not Borrower’s Administrative Agent, but Administrative
Agent for Lenders, (viii) should a Default occur or exist, each Lender will
determine in its sole discretion and for its own reasons what remedies and
actions it will or will not exercise or take at that time, (ix) without limiting
any of the foregoing, Borrower is not relying upon any representation or
covenant by any Lender, or any representative thereof, and no such
representation or covenant has been made, that any Lender will, at the time of a
Default, or at any other time, waive, negotiate, discuss, or take or refrain
from taking any action permitted under the Loan Documents with respect to any
such Default or any other provision of the Loan Documents, and (x) all Lender
Parties have relied upon the truthfulness of the acknowledgments in this section
in deciding to execute and deliver this Agreement and to become obligated
hereunder.

     

    (c)           Joint
Acknowledgment.  This
written Agreement and the other Loan Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous, or subsequent oral agreements of the
parties.

     

    There
are no unwritten oral agreements between the parties.

     

    Section
10.2.        Survival of Agreements;
Cumulative Nature.  All
of Restricted Persons’ various representations, warranties, covenants and
agreements in the Loan Documents shall survive the execution and delivery of
this Agreement and the other Loan Documents and the performance hereof and
thereof, including the making or granting  of the Loans and
the  delivery of the Notes and the other Loan Documents, and shall
further survive until all of the Obligations are paid in full to each Lender
Party and all of Lender Parties’ obligations to Borrower are
terminated.  All statements and agreements contained in any
certificate or other instrument delivered by any Restricted Person to any Lender
Party under any Loan Document shall be deemed representations and warranties by
Borrower or agreements and covenants of Borrower under this
Agreement.  The representations, warranties, indemnities, and
covenants made by Restricted Persons in the Loan Documents, and the rights,
powers, and privileges granted to Lender Parties in the Loan Documents, are
cumulative, and, except for expressly specified waivers and consents, no Loan
Document shall be construed in the context of another to diminish, nullify, or
otherwise reduce the benefit to any Lender Party of any such representation,
warranty, indemnity, covenant, right, power or privilege.  In
particular and without limitation, no exception set out in this Agreement to any
representation, warranty, indemnity, or covenant herein contained shall apply to
any similar representation, warranty, indemnity, or covenant contained in any
other Loan Document, and each such similar representation, warranty, indemnity,
or covenant shall be subject only to those exceptions which are expressly made
applicable to it by the terms of the various Loan Documents.

     

    
      
         

      

      
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    Section
10.3.        Notices; Effectiveness; Electronic
Communication.

     

    (a)           Notices
Generally.  Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by facsimile as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:

     

    (i)           
if to Borrower or any other Restricted Person, Administrative Agent or LC
Issuer; to the address, facsimile number, electronic mail address or telephone
number specified for such person on the signature pages hereto;

     

    (ii)           
if to any other Lender Party, to it at its address, facsimile number, electronic
mail address or telephone number as specified on the Lenders
Schedule.

     

    Notices
sent by hand or overnight courier service, or mailed by certified or registered
mail, shall be deemed to have been given when received; notices sent by
facsimile shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient).  Notices delivered through electronic communications to
the extent provided in subsection (b) below, shall be effective as provided in
said subsection (b).

     

    (b)           Electronic
Communications.  Notices and other communications to the
Lenders and the LC Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender or LC Issuer pursuant to
Article II if such Lender or LC Issuer, as applicable, has notified
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication.  Administrative Agent or Borrower
or any other Restricted Person may, in its discretion, agree to accept notices
and other communications to it hereunder by electronic communications pursuant
to procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.

     

    
      
         

      

      
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    Unless
Administrative Agent otherwise prescribes, (i) notices and other communications
sent to an e-mail address shall be deemed received upon the sender’s receipt of
an acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is not
sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.

     

    (c)           Change of Address,
Etc.  Each of Borrower, any other Restricted Person,
Administrative Agent and LC Issuer may change its address, facsimile or
telephone number for notices and other communications hereunder by notice to the
other parties hereto.  Each other Lender Party may change its address,
facsimile or telephone number for notices and other communications hereunder by
notice to Borrower, Administrative Agent and LC Issuer.

     

    Section
10.4.        Payment of Expenses;
Indemnity.

     

    (a)           Payment of
Expenses.  Whether or not the transactions contemplated by this
Agreement are consummated, Borrower will promptly (and in any event, within 30
days after any invoice or other statement or notice) pay: (i) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Loan Documents or any other document or transaction referred to herein or
therein, (ii) all reasonable costs and expenses incurred by or on behalf of
Administrative Agent (including without limitation attorneys’ fees and
engineering fees, travel costs and miscellaneous expenses) in connection with
(1) the negotiation, preparation, execution and delivery of the Loan Documents,
and any and all consents, waivers or other documents or instruments relating
thereto, (2) the borrowings hereunder and other action reasonably required in
the course of administration hereof, (3) monitoring or confirming (or
preparation or negotiation of any document related to) any Restricted Person’s
compliance with any covenants or conditions contained in this Agreement or in
any Loan Document, and (iii) all reasonable costs and expenses incurred by or on
behalf of any Lender Party (including without limitation attorneys’ fees,
consultants’ fees and accounting fees) in connection with the preservation of
any rights under the Loan Documents or the defense or enforcement of any of the
Loan Documents (including this section), any attempt to cure any breach
thereunder by any Restricted Person, or the defense of any Lender Party’s
exercise of its rights thereunder.  In addition to the foregoing,
until all Obligations have been paid in full, Borrower will also pay or
reimburse Administrative Agent for all reasonable out-of-pocket costs and
expenses of Administrative Agent or its Administrative Agents or employees in
connection with the continuing administration of the Loans and the related due
diligence of Administrative Agent, including reasonable travel and miscellaneous
expenses and fees and expenses of Administrative Agent’s outside counsel,
reserve engineers and consultants engaged in connection with the Loan
Documents.

     

    
      
         

      

      
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    (b)           Reimbursement by
Lenders.  To the extent
that Borrower for any reason fails to indefeasibly pay any amount required under
paragraph (a) or (b) of this Section to be paid by it to Administrative Agent
(or any sub-agent thereof), LC Issuer or any Related Party of any of the
foregoing, each Lender severally agrees to pay to Administrative Agent (or any
such sub-agent), LC Issuer or such Related Party, as the case may be, such
Lender’s Percentage Share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against Administrative Agent (or any such sub-agent) or LC Issuer in its
capacity as such, or against any Related Party of any of the foregoing acting
for Administrative Agent (or any such sub-agent) or LC Issuer in connection with
such capacity.  The obligations of the Lenders under this paragraph
(c) are subject to the provisions of Section 2.18.

     

    (c)           Indemnity.  Borrower agrees to
indemnify each Lender Party, upon demand, from and against any and all
liabilities, obligations, broker’s fees, claims, losses, damages, penalties,
fines, actions, judgments, suits, settlements, costs, expenses or disbursements
(including reasonable fees of attorneys, accountants, experts and advisors) of
any kind or nature whatsoever (in this section collectively called “liabilities
and costs”) which to any extent (in whole or in part) may be imposed on,
incurred by, or asserted against such Lender Party growing out of, resulting
from or in any other way associated with the Loan Documents and the transactions
and events (including the enforcement or defense thereof) at any time associated
therewith or contemplated therein (whether arising in contract or in tort or
otherwise).  Among other things, the foregoing indemnification covers
all liabilities and costs incurred by any Lender Party related to any breach of
a Loan Document by a Restricted Person, any bodily injury to any Person or
damage to any Person’s property, or any violation or noncompliance with any
Environmental Laws by any Lender Party or any other Person or any liabilities or
duties of any Lender Party or any other Person with respect to Hazardous
Materials found in or released into the environment.

     

    The
foregoing indemnification shall apply whether or not such liabilities and costs
are in any way or to any extent owed, in whole or in part, under any claim or
theory of strict liability or caused, in whole or in part by any negligent act
or omission of any kind by any Lender Party,

     

    provided
only that no Lender Party shall be entitled under this section to receive
indemnification for that portion, if any, of any liabilities and costs which is
proximately caused by its own individual gross negligence or willful misconduct,
as determined in a final judgment.  If any Person (including Borrower
or any of its Affiliates) ever alleges such gross negligence or willful
misconduct by any Lender Party, the indemnification provided for in this section
shall nonetheless be paid upon demand, subject to later adjustment or
reimbursement, until such time as a court of competent jurisdiction enters a
final judgment as to the extent and effect of the alleged gross negligence or
willful misconduct.  As used in this section the term “Lender Party”
shall refer not only to each Person designated as such in Section 1.1 but also
to each director, officer, Administrative Agent, agent, advisor, trustee,
attorney, employee, representative and Affiliate of or for such
Person.

     

    
      
         

      

      
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    Section
10.5.        Successors and Assigns;
Assignments.

     

    (a)  Successors and Assigns
Generally.  The provisions of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that neither Borrower nor any
other Restricted Person may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of Administrative Agent
and each Lender, and no Lender may assign or otherwise transfer any of its
rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of paragraph (b) of this Section,
(ii) by way of participation in accordance with the provisions of
paragraph (d) of this Section or (iii) by way of pledge or assignment
of a security interest subject to the restrictions of paragraph (f) of this
Section (and any other attempted assignment or transfer by any party hereto
shall be null and void).  Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

    

    (b)  Assignments by
Lenders.  Any Lender may at any time assign to one or more
Eligible Assignees all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans (including
for purposes of this Section 10.5(b), participations in LC Obligations and in
Swing Line Loans) at the time owing to it); provided that

    

    (i)  except
in the case of an assignment of the entire remaining amount of the assigning
Lender’s Commitment and the Loans at the time owing to it or in the case of an
assignment to a Lender or an Affiliate of a Lender or an Approved Fund with
respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment
is not then in effect, the principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to
Administrative Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date) shall not be less than
$5,000,000;

    

    (ii)  each
partial assignment shall be made as an assignment of a proportionate part of all
the assigning Lender’s rights and obligations under this Agreement with respect
to the Loan or the Commitment assigned;

    

    (iii)  any
assignment of a Commitment must be approved by Administrative Agent, the Swing
Line Lender and the LC Issuer unless the Person that is the proposed assignee is
itself a Lender with a Commitment (whether or not the proposed assignee would
otherwise qualify as an Eligible Assignee); and

    

    (iv)  the
parties to each assignment shall execute and deliver to Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,000, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
Administrative Agent an Administrative Questionnaire.

     

    
      
         

      

      
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    Subject
to acceptance and recording thereof by Administrative Agent pursuant to
paragraph (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Article III and Section 10.4 and
Section 10.12 with respect to facts and circumstances occurring prior to the
effective date of such assignment.  Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (d) of this Section.

    

    (c)  Register.  Administrative
Agent, acting solely for this purpose as an agent of Borrower, shall maintain at
one of its offices a copy of each Assignment and Assumption delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The
entries in the Register shall be conclusive, and Borrower, Administrative Agent
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary.  The Register shall
be available for inspection by Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.

    

    (d)  Participations.  Any
Lender may at any time, without the consent of, or notice to, Borrower or
Administrative Agent, sell participations to any Person (other than a natural
person or Borrower or any of Borrower’s Affiliates or Subsidiaries) (each, a
“Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of its Commitment and/or the Loans owing
to it); provided that (i) such Lender’s obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations and (iii) 
Borrower, Administrative Agent and the Lenders and LC Issuer shall continue to
deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement.

    

    Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the fifth sentence of Section
10.1(a) that affects such Participant.  Subject to paragraph (e)
of this Section, Borrower agrees that each Participant shall be entitled to the
benefits of Article III to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 6.14 as
though it were a Lender, provided such Participant agrees to be subject to
Section 9.6  as
though it were a Lender.

    
      
         

      

      
        88

        
          

        

      

      
         

      

    

    (e)  Limitations upon Participant
Rights.  A Participant shall not be entitled to receive any
greater payment under Article III than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with Borrower’s
prior written consent.  A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of
Section 3.5 unless Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of Borrower, to comply with Section 3.5(e) as though it were a
Lender.

    

    (f)  Certain
Pledges.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party
hereto.

    

    Section
10.6.        Confidentiality.  Administrative
Agent and each Lender (each, a “Lending Party”)
agrees to keep confidential any information furnished or made available to it by
any Restricted Person pursuant to this Agreement that is marked confidential;
provided that nothing herein shall prevent any Lending Party from disclosing
such information (a) to any other Lending Party or any Affiliate of any Lending
Party, or any officer, director, employee, Administrative Agent, or advisor of
any Lending Party or Affiliate of any Lending Party, (b) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (c) as required by any Law, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any Governmental
Authority, (f) that is or becomes available to the public or that is or becomes
available to any Lending Party other than as a result of a disclosure by any
Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party;
provided that such Lending Party makes reasonable efforts to obtain from the
applicable court protective orders or similar confidential procedures protecting
such confidential information, (h) to the extent necessary in connection with
the exercise of any right or remedy under this Agreement or any other Loan
Document, and (i) subject to provisions substantially similar to those contained
in this section, to (1) any actual or proposed participant or assignee or (2)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to Borrower and its obligations.

     

    Section
10.7.        Governing Law; Submission to
Process.  Except
to the extent that the law of another jurisdiction is expressly elected in a
Loan Document, the Loan Documents shall be deemed contracts and instruments made
under the laws of the State of California and shall be construed and enforced in
accordance with and governed by the laws of the State of California and the laws
of the United States of America, without regard to principles of conflicts of
law.  Borrower hereby irrevocably submits itself to the non-exclusive
jurisdiction of the state and federal courts sitting in the Northern District of
California for the United States District Court and agrees and consents that
service of process may be made upon it in any legal proceeding relating to the
Loan Documents or the Obligations by any means allowed under California or
federal law.

     

    
      
         

      

      
        89

        
          

        

      

      
         

      

    

    Section
10.8.        Limitation on
Interest.  Lender
Parties, Restricted Persons and the other parties to the Loan Documents intend
to contract in strict compliance with applicable usury Law from time to time in
effect.  In furtherance thereof such persons stipulate and agree that
none of the terms and provisions contained in the Loan Documents shall ever be
construed to provide for interest in excess of the maximum amount of interest
permitted to be contracted for, charged, or received by applicable Law from time
to time in effect.  Neither any Restricted Person nor any present or
future guarantors, endorsers, or other Persons hereafter becoming liable for
payment of any Obligation shall ever be liable for unearned interest thereon or
shall ever be required to pay interest thereon in excess of the maximum amount
that may be lawfully contracted for, charged, or received under applicable Law
from time to time in effect, and the provisions of this section shall control
over all other provisions of the Loan Documents which may be in conflict or
apparent conflict herewith.

     

    Section
10.9.        Termination; Limited
Survival.  In
its sole and absolute discretion Borrower may at any time that no Obligations
are owing elect in a written notice delivered to Administrative Agent to
terminate this Agreement.  Upon receipt by Administrative Agent of
such a notice, if no Obligations are then owing, this Agreement and all other
Loan Documents shall thereupon be terminated and the parties thereto released
from all prospective obligations thereunder, except as otherwise provided in
such Loan Documents.  Notwithstanding the foregoing or anything herein
to the contrary, any waivers or admissions made by any Restricted Person in any
Loan Document, any Obligations under Sections 3.2 through Section 3.5, any
obligations which any Person may have to indemnify or compensate any Lender
Party and the provisions of Article IX and Section 10.1(a) with respect to any
Security Documents which remain in effect after the termination of this
Agreement, shall survive any termination of this Agreement or any other Loan
Document.  At the request and expense of Borrower, Administrative
Agent shall prepare and execute all necessary instruments to reflect and effect
such termination of the Loan Documents.  Administrative Agent is
hereby authorized to execute all such instruments on behalf of all Lenders,
without the joinder of or further action by any Lender.

     

    Section
10.10.      Severability.  If
any term or provision of any Loan Document shall be determined to be illegal or
unenforceable all other terms and provisions of the Loan Documents shall
nevertheless remain effective and shall be enforced to the fullest extent
permitted by applicable Law.

     

    Section
10.11.      Counterparts;
Fax.  This
Agreement may be separately executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to constitute one and the same
Agreement.  This Agreement and the Loan Documents may be validly
executed and delivered by facsimile or other electronic
transmission.

     

    SECTION
10.12.  WAIVER OF JURY TRIAL,
PUNITIVE DAMAGES, ETC.  BORROWER
AND EACH LENDER PARTY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY, AND
IRREVOCABLY (A) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
DIRECTLY OR INDIRECTLY AT ANY TIME ARISING OUT OF, UNDER OR IN CONNECTION WITH
THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED THEREBY OR ASSOCIATED
THEREWITH, BEFORE OR AFTER MATURITY; (B) WAIVES, TO THE MAXIMUM EXTENT NOT
PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
LITIGATION ANY “SPECIAL DAMAGES”, AS DEFINED BELOW, (C) CERTIFIES THAT NO PARTY
HERETO NOR ANY REPRESENTATIVE OR ADMINISTRATIVE AGENT OR COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (D)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE OTHER
LOAN DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS
SECTION.  AS USED IN THIS SECTION, “SPECIAL DAMAGES”
INCLUDES ALL SPECIAL, CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES (REGARDLESS
OF HOW NAMED), BUT DOES NOT INCLUDE ANY PAYMENTS OR FUNDS WHICH ANY PARTY HERETO
HAS EXPRESSLY PROMISED TO PAY OR DELIVER TO ANY OTHER PARTY
HERETO.  NO “ADMINISTRATIVE AGENT” REFERRED TO IN 10.4 ABOVE, AND NO
“LENDER PARTY” REFERRED TO IN SECTION 10.4 ABOVE, SHALL BE LIABLE FOR ANY
DAMAGES ARISING FROM THE USE BY UNINTENDED RECIPIENTS OF ANY INFORMATION OR
OTHER MATERIALS DISTRIBUTED BY IT THROUGH TELECOMMUNICATIONS, ELECTRONIC OR
OTHER INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT OR THE
OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.

     

    
      
         

      

      
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    Section
10.13.      Ratification of
Agreements.  This
Agreement amends and restates in its entirety the Existing Credit Agreement,
together with the promissory notes made by Borrower
thereunder.  Borrower hereby agrees that the Indebtedness outstanding
under the Existing Credit Documents and all accrued and unpaid interest thereon
and all accrued and unpaid fees under the Existing Credit Documents shall be
deemed to be outstanding under and governed by this Agreement.

     

    Section
10.14.      Amendment and
Restatement.  This
Agreement amends and restates in its entirety the Existing Credit Agreement, and
from and after the date hereof, the terms and provisions of the Existing Credit
Agreement shall be superseded by the terms and provisions of this
Agreement.  Borrower hereby agrees that the Existing Indebtedness, all
accrued and unpaid interest thereon, and all accrued and unpaid fees under the
Existing Credit Agreement shall be deemed to be Indebtedness of Borrower
outstanding under and governed by this Agreement.

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Agreement is executed as of the date first written
above.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY,

            
	 
      	
              Borrower

               

            
	 
      	
              By:

            	 
      
	 
      	 
      	
              Shawn
      M. Canaday

            
	 
      	 
      	
              Vice
      President

               

            
	 
      	
              Address:

               

            
	 
      	
              1999
      Broadway, Suite 3700

            
	 
      	
              Denver,
      Colorado 80202

            
	 
      	
              Attention:    Shawn
      Canaday

               

            
	 
      	
              Telephone:  403/999-4000

            
	 
      	
              Fax:             
       403/999-4100

            
	 
      	
              Email:           
      smc@bry.com

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              WELLS
      FARGO BANK, NATIONAL

            
	 
      	
              ASSOCIATION,
      Administrative Agent,

            
	 
      	
              LC
      Issuer and Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Guy
      C. Evangelista

            
	 
      	 
      	
              Vice
      President

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              BNP
      PARIBAS, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              SOCIÉTÉ
      GÉNÉRALE, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              JPMORGAN
      CHASE BANK, N.A., Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              THE
      ROYAL BANK OF SCOTLAND plc, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              THE
      BANK OF NOVA SCOTIA, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              WACHOVIA
      BANK, N.A., Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              UNION
      BANK OF CALIFORNIA, N.A., Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              COMPASS
      BANK, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              U.S.
      BANK NATIONAL ASSOCIATION, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CREDIT
      SUISSE, CAYMAN ISLANDS BRANCH, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              BANK
      OF SCOTLAND plc, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              NATIXIS,
      Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              BANK
      OF OKLAHOMA N.A., Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              RAYMOND
      JAMES BANK, FSB, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              GUARANTY
      BANK AND TRUST COMPANY, Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              DZ
      BANK AG

            
	 
      	
              DEUTSCHE
      ZENTRAL – GENOSSENSCHAFTSBANK FRANKFURT aur MAIN, NEW YORK BRANCH,
      Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              CITIBANK,
      N.A., Lender

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
1

     

    LENDERS
SCHEDULE

     

    

     

    
      	
              LENDER

            	 	
              PERCENTAGE
      SHARE

            	 	 	
              PERCENTAGE
      SHARE OF BORROWING BASE IN EFFECT ON CLOSING DATE

            	 	 	
              COMMITMENT
      AMOUNT*

            	 
	
              Wells
      Fargo Bank, National Association

            	 	 	12.50000000000	%	 	$	125,000,000	 	 	$	187,500,000	 
	
              Societe
      Generale

            	 	 	10.00000000000	%	 	$	100,000,000	 	 	$	150,000,000	 
	
              BNP
      Paribas

            	 	 	10.00000000000	%	 	$	100,000,000	 	 	$	150,000,000	 
	
              JPMorgan
      Chase Bank, N.A.

            	 	 	10.00000000000	%	 	$	100,000,000	 	 	$	150,000,000	 
	
              The
      Royal Bank of Scotland

            	 	 	10.00000000000	%	 	$	100,000,000	 	 	$	150,000,000	 
	
              The
      Bank of Nova Scotia

            	 	 	5.70000000000	%	 	$	57,000,000	 	 	$	85,500,000	 
	
              Wachovia
      Bank, N.A.

            	 	 	5.70000000000	%	 	$	57,000,000	 	 	$	85,500,000	 
	
              Union
      Bank of California, N.A.

            	 	 	5.70000000000	%	 	$	57,000,000	 	 	$	85,500,000	 
	
              Citibank,
      N.A.

            	 	 	5.00000000000	%	 	$	50,000,000	 	 	$	75,000,000	 
	
              Compass
      Bank

            	 	 	4.00000000000	%	 	$	40,000,000	 	 	$	60,000,000	 
	
              U.S.
      Bank National Association

            	 	 	4.00000000000	%	 	$	40,000,000	 	 	$	60,000,000	 
	
              Credit
      Suisse, Cayman Islands Branch

            	 	 	3.50000000000	%	 	$	35,000,000	 	 	$	52,500,000	 
	
              Bank
      of Scotland plc

            	 	 	3.00000000000	%	 	$	30,000,000	 	 	$	45,000,000	 
	
              DZ
      Bank

            	 	 	3.00000000000	%	 	$	30,000,000	 	 	$	45,000,000	 
	
              Natixis

            	 	 	2.00000000000	%	 	$	20,000,000	 	 	$	30,000,000	 
	
              Bank
      of Oklahoma N.A.

            	 	 	2.00000000000	%	 	$	20,000,000	 	 	$	30,000,000	 
	
              Raymond
      James Bank, FSB

            	 	 	2.00000000000	%	 	$	20,000,000	 	 	$	30,000,000	 
	
              Guaranty
      Bank and Trust Company

            	 	 	1.90000000000	%	 	$	19,000,000	 	 	$	28,500,000	 
	
              TOTAL

            	 	 	100.00000000000	%	 	$	1,000,000,000	 	 	$	1,500,000,000	 

    

    

     

    * Each
Lender’s Commitment Amount is equal to such Lender’s Percentage Share of the
Aggregate Commitment; provided that the Facility Usage cannot exceed the
Borrowing Base and any increase in the Borrowing Base must be approved by all
Lenders.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
2

     

    INSURANCE
SCHEDULE

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
3

    

    SECURITY
SCHEDULE

    

    

    1.           Security
Agreement of even date herewith from Borrower to Administrative Agent for the
benefit of Lenders (the “Security Agreement”)

     

    2.           Deed
of Trust Assignment, Security Agreement, Fixture Filing and Financing Statement
of even date herewith from Borrower to Administrative Agent for the benefit of
Lenders covering properties located in California (the “California Deed of
Trust”)

     

    3.           Deed
of Trust Assignment, Security Agreement, Fixture Filing and Financing Statement
of even date herewith from Borrower to Administrative Agent for the benefit of
Lenders covering properties located in Texas (the “Texas Deed of
Trust”)

     

    4.           Deed
of Trust Assignment, Security Agreement, Fixture Filing and Financing Statement
of even date herewith from Borrower to Administrative Agent for the benefit of
Lenders covering properties located in Utah (the “Utah Deed of
Trust”)

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
4

    

    POST–CLOSING
OBLIGATIONS

    

    1.           Within
ninety (90) days after the Closing, Borrower shall deliver to Agent either (i)
supplemental title opinions reflecting Borrower’s ownership interest in the
Brundage Canyon properties or (ii) runsheets listing all documents recorded in
Duchesne County, Utah since the date of the last title opinion that affect
Borrower’s interest in the Brundage Canyon properties, together with copies of
all such documents

    

    2.           Within
fifteen (15) days after the Closing, Borrower shall deliver to Agent title
materials prepared by Petru Corporation for the Kennedy-NRC properties in the
Placerita field in Los Angeles County, California that reflect Borrower’s
ownership interest in such properties.

    

    3.           Within
ninety (90) days after the Closing, Borrower shall use commercially reasonable
efforts to deliver to Administrative Agent consents to the assignment of the
following contracts to Administrative Agent:

    

    (a)           Carry
and Earning Agreement, dated June 7, 2006, between Registrant and EnCana Oil
& Gas (USA), Inc.

     

    (b)           Crude
oil purchase contract, dated November 14, 2005 between Registrant and Big West
of California, LLC.

     

    (c)           Crude
Oil Supply Agreement between the Registrant and Holly Refining and Marketing
Company - Woods Cross.

     

    (d)           Standard
Offer 2 Power Purchase Agreement by and between Southern California Edison
Company and Borrower, as amended.  (QFID 2206).

     

    (e)           Reformed
Standard Offer 1 Power Purchase Agreement by and between Southern California
Edison Company and Borrower, as amended (QFID 2224).

     

    (f)           Standard
Offer # 2 Power Purchase Agreement by and between Pacific Gas and Electric
Company and Borrower, as reinstated and amended (PG&E Log #
25C151EO1).

     

    (g)           Uniform
Standard Offer 1 Power Purchase Agreement by and between Pacific Gas and
Electric Company and Borrower, as reinstated and amended (PG&E Log #
25C099EO1).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
      	 
      	
              SCHEDULE
      5

            

    

    

    ADDRESSES
OF LENDERS FOR NOTICES

    

    

    WELLS
FARGO BANK, NATIONAL ASSOCIATION

    1700
Lincoln St.

    Denver,
Colorado  80203

    Attention:      Guy
C. Evangelista

    Tel:                 303.863.5793

    Fax:                 303.863.5196

    Email:              guy.c.evangelista@wellsfargo.com

     

    

    BNP
PARIBAS

    1200
Smith Street

    Suite
3100

    Houston,
Texas  77002

    Attention:      Robert
J. Long

    Tel:                 713.982.1165

    Fax:                 713.659.6915

    Email:              robert.j.long@americas.bnpparibas.com

    

     

    SOCIÉTÉ
GÉNÉRALE

    1111
Bagby, Suite 2020

    Houston,
Texas  77002

    Attention:      Josh
Rogers

    Tel:                 713.759.6315

    Fax:                 713.650.0824

    Email:              josh.rogers@us.socgen.com

     

    

    JPMORGAN
CHASE BANK, N.A.

    [10 South
Dearborn, Floor 19

    IL1-0010

    Chicago,
Illinois 60603-2003

    Attention:      Yuvette
Owens]

    Tel:             
    [312.385.7021]

    Fax:            
     [312.385.7103]

    Email:              [yuvette.owens@jpmchase.com]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    THE
ROYAL BANK OF SCOTLAND plc

    101 Park
Avenue – 6th
Floor

    New York,
New York 10178

    Attention:  Claudio
R. Truglia

    Tel:          
       203.971.7658

    Fax:           
      212.401.1494

    Email:              claudio.truglia@rbs.com

    

    

    600
Travis Street, Suite 6500

    Houston,
TX 77002

    Attention:
Mark Lumpkin, Jr.

    Tel:
713.221.2419

    Fax:
713.221.2428

    Email:
mark.lumpkin@RBS.com

    

     

    THE
BANK OF NOVA SCOTIA

    711
Louisiana, 14th
Floor

    Houston,
Texas 77002

    Attention:  Alan
Dawson

    Tel:            713.759.3445

    Fax:            713.752.2425

    Email:     
   alan_dawsoon@scotiacapital.com

    

    

    

    WACHOVIA
BANK, N.A.

    ____________________

    ____________________

    Attention:  ___________

    Tel:

    Fax:

    Email:

     

    

    UNION
BANK OF CALIFORNIA, N.A.

    500 N.
Akard, Suite 4200

    Dallas,
Texas  75201

    Attention:    
  Douglas Gale

    Tel:              
   214.922.4200

    Fax:            
     214.922.4209

    [dustin.gaspari@uboc.com]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    COMPASS
BANK

    _______________

    _______________

    Attention:
_________

    Tel:

    Fax:

    Email:

     

    

    U.S.
BANK NATIONAL ASSOCIATION

    950
17th
Street, DNCOT8E

    Denver,
CO 80202

    Attention:  Justin
Alexander

    Telephone:         303.585.4201

    Fax:                      303.585.4362

    Email:                   Justin.alexander@usbank.com

    

     

    CREDIT
SUISSE, CAYMAND ISLANDS BRANCH

    Eleven
Madison Avenue

    New York,
New York 10010

    Attention:  Vanessa
Gomez

    Tel:             212.528.2993

    Fax:            
212.448.3755

    Email:         
Vanessa.gomez@credit-suisse.com

    

    

    BANK
OF SCOTLAND plc

    One City
Centre

    1021 Main
Street, Suite 1370

    Houston,
Texas 77002

    Attention:  Trudy
Nelson

    Tel:            713.651.0840

    Fax:     
      713.651.9714

    Email:  
     trudynelson@bankofscotlandusa.com

    

    

    NATIXIS

    333 Clay
Street, Suite 4340

    Houston,
Texas  77002

    Attention:  Liana
Tchernysheva

    Tel:           713.759.9404

    Fax:       
   713.571.6167

    Email:

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    BANK
OF OKLAHOMA N.A.

    1675
Broadway, Suite 1650

    Denver,
Colorado 80202

    Attention:  Thomas
M. Foncannon

    Tel:            303.864.7341

    Fax:         
  303.864.7349

    Email:     
   tfoncannon@bokf.com

    

    

    RAYMOND
JAMES BANK, FSB

    710
Carillon Parkway

    St.
Petersburg, Florida 33716

    Attention:  Garrett
T. McKinnon

    Tel:            727.567.4324

    Fax:       
    727.567.8830

    Email:    
    garrett.mckinnon@raymondjames.com

    

    

    GUARANTY
BANK AND TRUST COMPANY

    1331
17th
Street

    Denver,
Colorado 80202

    Attention:  Gail
J. Nofsinger

    Tel:            303.293.5521

    Fax:        
   303.675.1130

    Email:     
   gail.nofsinger@guarantybankco.com

    

    

    DZ
BANK

    609 Fifth
Avenue

    New York,
New York 10017

    Attention:  Daria
A. Pishko

    Tel:            212.745.1545

    Fax:        
   212.745.1552

    Email:     
  daria.pishko@dzbank.de

    

    

    CITIBANK,
N.A.

    333 Clay
St., Suite 3700

    Houston,
Texas 77002

    Attention:  David
E. Hunt

    Tel:            713.654.2829

    Fax:         
  713.481.0255

    Email:      
 david.e.hunt@citi.com

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
A

    PROMISSORY
NOTE

     

    [_______________],
2008

     

    FOR VALUE
RECEIVED, the undersigned, Berry Petroleum Company, a Delaware corporation
(herein called “Borrower”), hereby promises to pay to the order of
[________________________________________________] (herein called “Lender”), the
principal sum equal to the amount of such Lender’s Commitment, or, if greater or
less, the aggregate unpaid principal amount of the Loans made under this Note by
Lender to Borrower pursuant to the terms of the Credit Agreement (as hereinafter
defined), together with interest on the unpaid principal balance thereof as
hereinafter set forth, both principal and interest payable as herein provided in
lawful money of the United States of America at the offices of Administrative
Agent under the Credit Agreement, 1740 Broadway, 4th Floor,
Denver, Colorado  80274, or at such other place as from time to time
may be designated by the holder of this Note.

     

    This Note
(a) is issued and delivered under that certain Credit Agreement of even date
herewith among Borrower, Wells Fargo Bank, National Association, as
Administrative Agent, and the lenders (including Lender) referred to therein
(herein, as from time to time supplemented, amended or restated, called the
“Credit Agreement”), and is a “Note” as defined therein, (b) is subject to the
terms and provisions of the Credit Agreement, which contains provisions for
payments and prepayments hereunder and acceleration of the maturity hereof upon
the happening of certain stated events, and (c) is secured by and entitled to
the benefits of certain Security Documents (as identified and defined in the
Credit Agreement).  Payments of principal and interest on this Note
shall be made and applied as provided herein and in the Credit
Agreement.  Reference is hereby made to the Credit Agreement for a
description of certain rights, limitations of rights, obligations and duties of
the parties hereto and for the meanings assigned to terms used and not defined
herein and to the Security Documents for a description of the nature and extent
of the security thereby provided and the rights of the parties
thereto.

     

    The
principal amount of this Note, together with all interest accrued hereon, shall
be due and payable in full on the Maturity Date.

     

    If this
Note is placed in the hands of an attorney for collection after default, or if
all or any part of the indebtedness represented hereby is proved, established or
collected in any court or in any bankruptcy, receivership, debtor relief,
probate or other court proceedings, Borrower and all endorsers, sureties and
guarantors of this Note jointly and severally agree to pay reasonable attorneys’
fees and collection costs to the holder hereof in addition to the principal and
interest payable hereunder.

     

    Borrower
and all endorsers, sureties and guarantors of this Note hereby severally waive
demand, presentment, notice of demand and of dishonor and nonpayment of this
Note, protest, notice of protest, notice of intention to accelerate the maturity
of this Note, declaration or notice of acceleration of the maturity of this
Note, diligence in collecting, the bringing of any suit against any party and
any notice of or defense on account of any extensions, renewals, partial
payments or changes in any manner of or in this Note or in any of its terms,
provisions and covenants, or any releases or substitutions of any security, or
any delay, indulgence or other act of any trustee or any holder hereof, whether
before or after maturity.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This Note
and the rights and duties of the parties hereto shall be governed by the Laws of
the State of California (without regard to principles of conflicts of law),
except to the extent the same are governed by applicable federal
Law.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B-1

     

    BORROWING
NOTICE

     

    Reference
is made to that certain Credit Agreement dated as of _______________, 2008 (as
from time to time amended, the “Agreement”), by and among Berry Petroleum
Company (“Borrower”), Wells Fargo Bank, National Association, as Administrative
Agent, and certain financial institutions (“Lenders”).  Terms which
are defined in the Agreement are used herein with the meanings given them in the
Agreement.  Pursuant to the terms of the Agreement Borrower hereby
requests a Borrowing of new Loans to be advanced pursuant to Section 2.2(a) of
the Agreement as follows:

     

    
      	
              Aggregate
      amount of Borrowing:

            	 	$	 	 
	 
      	 	 	 	 
	
              Type
      of Loans in Borrowing:

            	 	 	 	 
	 
      	 	 	 	 
	
              Date
      on which Loans are to

            	 	 	 	 
	
              be
      advanced:

            	 	 	 	 
	 
      	 	 	 	 
	
              Length
      of Interest Period for

            	 	 	 	 
	
              Eurodollar
      Loans (1, 2, 3, 6, 9 or 12 months):

            	 	
              months

            	 

    

    

    If combined with existing
Loans

    see attached Continuation/Conversion
Notice.

    

    To induce
Lenders to make such Loans, Borrower hereby represents, warrants, acknowledges,
and agrees to and with Administrative Agent and each Lender that:

     

    (a)           The
officer of Borrower signing this instrument is the duly elected, qualified and
acting officer of Borrower as indicated below such officer’s signature hereto
having all necessary authority to act for Borrower in making the request herein
contained.

     

    (b)           The
representations and warranties of Borrower set forth in the Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date hereof  as if such representations and warranties have been
made as of the date hereof, except to the extent that such representations or
warranties were made as of a specific date or updated, modified or supplemented
as of a subsequent date with the consent of Required Lenders and Administrative
Agent, in which case such representations and warranties shall have been true
and correct in all material respects on and of such date.

     

    (c)           There
does not exist on the date hereof any condition or event which constitutes a
Default which has not been waived in writing as provided in Section 10.1(a) of
the Agreement; nor will any such Default exist upon Borrower’s receipt and
application of the Loans requested hereby.  Borrower will use the
Loans hereby requested in compliance with Section 2.4 of the
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           Except
to the extent waived in writing as provided in Section 10.1(a) of the Agreement,
Borrower has performed and complied with all agreements and conditions in the
Agreement required to be performed or complied with by Borrower on or prior to
the date hereof, and each of the conditions precedent to Loans contained in the
Agreement remains satisfied.

     

    (e)           The
Facility Usage, after the making of the Loans requested hereby, will not be in
excess of the Borrowing Base on the date requested for the making of such
Loans.

     

    (f)           The
Loan Documents have not been modified, amended or supplemented by any unwritten
representations or promises, by any course of dealing, or by any other means not
provided for in Section 10.1(a) of the Agreement.  The Agreement and
the other Loan Documents are hereby ratified, approved, and confirmed in all
respects.

     

    The
officer of Borrower signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and
complete.

     

    IN
WITNESS WHEREOF, this instrument is executed as of ____________,
20__.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
B-2

     

    SWING LINE LOAN
NOTICE

     

    Reference
is made to that certain Amended and Restated Credit Agreement dated as of July
15, 2008 (as from time to time amended, the “Agreement”), by and among Berry
Petroleum Company (“Borrower”), Wells Fargo Bank, National Association, as
Administrative Agent, and certain financial institutions
(“Lenders”).  Terms which are defined in the Agreement are used herein
with the meanings given them in the Agreement.  Pursuant to the terms
of the Agreement Borrower hereby requests a Borrowing of Swing Line Loans to be
advanced pursuant to Section 2.17 of the Agreement as follows:

     

    
      	
              Aggregate
      amount of Borrowing:

            	 	$	 	 
	 
      	 	 	 	 
	
              Date
      on which Swing Line Loan is to

            	 	 	 	 
	
              be
      advanced:

            	 	 	 	 

    

    

    To induce Swing Line Lender to make
such Loans, Borrower hereby represents, warrants, acknowledges, and agrees to
and with Administrative Agent and Swing Line Lender that:

    

    (a)           The
officer of Borrower signing this instrument is the duly elected, qualified and
acting officer of Borrower as indicated below such officer’s signature hereto
having all necessary authority to act for Borrower in making the request herein
contained.

     

    (b)           The
representations and warranties of Borrower set forth in the Agreement and the
other Loan Documents are true and correct in all material respects on and as of
the date hereof  as if such representations and warranties have been
made as of the date hereof, except to the extent that such representations or
warranties were made as of a specific date or updated, modified or supplemented
as of a subsequent date with the consent of Required Lenders and Administrative
Agent, in which case such representations and warranties shall have been true
and correct in all material respects on and of such date.

     

    (c)           There
does not exist on the date hereof any condition or event which constitutes a
Default which has not been waived in writing as provided in Section 10.1(a) of
the Agreement; nor will any such Default exist upon Borrower’s receipt and
application of the  Swing Line Loan requested
hereby.  Borrower will use the Swing Line Loans hereby requested in
compliance with Section 2.4 of the Agreement.

     

    (d)           Except
to the extent waived in writing as provided in Section 10.1(a) of the Agreement,
Borrower has performed and complied with all agreements and conditions in the
Agreement required to be performed or complied with by Borrower on or prior to
the date hereof, and each of the conditions precedent to Loans contained in the
Agreement remains satisfied.

     

    (e)           The
Facility Usage, after the making of the Loans requested hereby, will not be in
excess of the Borrowing Base on the date requested for the making of such
Loans.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)           The
Loan Documents have not been modified, amended or supplemented by any unwritten
representations or promises, by any course of dealing, or by any other means not
provided for in Section 10.1(a) of the Agreement.  The Agreement and
the other Loan Documents are hereby ratified, approved, and confirmed in all
respects.

     

    The
officer of Borrower signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and
complete.

     

    IN
WITNESS WHEREOF, this instrument is executed as of ____________,
20__.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    EXHIBIT
C

     

    CONTINUATION/CONVERSION
NOTICE

     

    Reference
is made to that certain Credit Agreement dated as of _________________, 2008 (as
from time to time amended, the “Agreement”), by and among Berry Petroleum
Company (“Borrower”), Wells Fargo Bank, National Association, as Administrative
Agent, and the lenders referred to therein (“Lenders”).  Terms which
are defined in the Agreement are used herein with the meanings given them in the
Agreement.

     

    Borrower
hereby requests a Conversion or Continuation of existing Loans into a new
Borrowing pursuant to Section 2.3 of the Agreement as follows:

     

    Existing
Borrowing(s) to be continued or converted:

     

    
      	
              $____________

            	
              of
      Eurodollar Loans with Interest Period ending

            
	
              _____________

            	 
      
	 
      	 
      
	
              $____________

            	
              of
      Base Rate Loans

            

    

    

    If being combined with new Loans,
$____________ of new Loans to be advanced on ____________

    

    
      	
              Aggregate
      amount of Borrowing:

            	 	$	 	 
	 
      	 	 	 	 
	
              Type
      of Loans in new Borrowing:

            	 	 	 	 
	 
      	 	 	 	 
	
              Date
      of Continuation or Conversion:

            	 	 	 	 
	 
      	 	 	 	 
	
              Length
      of Interest Period for Eurodollar Loans

            	 	 	 	 
	
              (1,
      2, 3, 6, 9 or 12 months):

            	 	
              months

            	 

    

    

    To meet
the conditions set out in the Agreement for such conversion/continuation,
Borrower hereby represents, warrants, acknowledges, and agrees to and with
Administrative Agent and each Lender that:

     

    (a)           The
officer of Borrower signing this instrument is the duly elected, qualified and
acting officer of Borrower as indicated below such officer’s signature hereto
having all necessary authority to act for Borrower in making the request herein
contained.

     

    (b)           There
does not exist on the date hereof any condition or event which constitutes a
Default which has not been waived in writing as provided in Section 10.1(a) of
the Agreement.

     

    (c)           The
Loan Documents have not been modified, amended or supplemented by any unwritten
representations or promises, by any course of dealing, or by any other means not
provided for in Section 10.1(a) of the Agreement.  The Agreement and
the other Loan Documents are hereby ratified, approved, and confirmed in all
respects.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
officer of Borrower signing this instrument hereby certifies that, to the best
of his knowledge after due inquiry, the above representations, warranties,
acknowledgments, and agreements of Borrower are true, correct and
complete.

     

    IN
WITNESS WHEREOF this instrument is executed as of
__________________.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
D

     

    CERTIFICATE
ACCOMPANYING

    FINANCIAL
STATEMENTS

     

    Reference
is made to that certain Credit Agreement dated as of __________________, 2008
(as from time to time amended, the “Agreement”), by and among Berry Petroleum
Company (“Borrower”), Wells Fargo Bank, National Association, as Administrative
Agent, and certain financial institutions (“Lenders”), which Agreement is in
full force and effect on the date hereof.  Terms which are defined in
the Agreement are used herein with the meanings given them in the
Agreement.

     

    This
Certificate is furnished pursuant to Section 6.2(b) of the
Agreement.  Together herewith Borrower is furnishing to Administrative
Agent and each Lender Borrower’s *[audited/unaudited] financial statements (the
“Financial Statements”) as at ____________ (the “Reporting
Date”).  Borrower hereby represents, warrants, and acknowledges to
Administrative Agent and each Lender that:

     

    (a)           the
officer of Borrower signing this instrument is the duly elected, qualified and
acting ____________ of Borrower and as such is Borrower’s Chief Financial
Officer;

     

    (b)           the
Financial Statements are accurate and complete and satisfy the requirements of
the Agreement;

     

    (c)           attached
hereto is a schedule of calculations showing Borrower’s compliance as of the
Reporting Date with the requirements of Sections 7.11 and 7.12 of the Agreement
*[and Borrower’s non-compliance as of such date with the requirements of
Section(s) ____________ of the Agreement];

     

    (d)           on
the Reporting Date Borrower was, and on the date hereof Borrower is, in full
compliance with the disclosure requirements of Section 6.4 of the Agreement, and
no Default otherwise existed on the Reporting Date or otherwise exists on the
date of this instrument *[except for Default(s) under Section(s) ____________ of
the Agreement, which *[is/are] more fully described on a schedule attached
hereto].

     

    (e)           *[Unless
otherwise disclosed on a schedule attached hereto,] The representations and
warranties of Borrower set forth in the Agreement and the other Loan Documents
are true and correct in all material respects on and as of the date hereof as if
such representations and warranties have been made as of the date hereof, except
to the extent that such representations or warranties were made as of a specific
date or updated, modified or supplemented as of a subsequent date with the
consent of Required Lenders and Administrative Agent, in which case such
representations and warranties shall have been true and correct in all material
respects on and of such date.

     

    The
officer of Borrower signing this instrument hereby certifies that he has
reviewed the Loan Documents and the Financial Statements and has otherwise
undertaken such inquiry as is in his opinion necessary to enable him to express
an informed opinion with respect to the above representations, warranties and
acknowledgments of Borrower and, to the best of his knowledge, such
representations, warranties, and acknowledgments are true, correct and
complete.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, this instrument is executed as of ____________,
20__.

     

    
      	 
      	
              BERRY
      PETROLEUM COMPANY

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
E

     

    OPINION OF COUNSEL FOR
RESTRICTED PERSONS

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
F

     

    ASSIGNMENT
AND ASSUMPTION

     

    This Assignment and Assumption (this
“Assignment and
Assumption”) is dated as of the Effective Date set forth below and is
entered into by and between [Insert name of Assignor] (the
“Assignor”) and
[Insert name of
Assignee] (the “Assignee”).  Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement identified below (as from time to time amended, the “Credit Agreement”),
receipt of a copy of which is hereby acknowledged by the
Assignee.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Assumption as if set forth herein in
full.

    

    For an agreed consideration, the
Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee
hereby irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and Conditions attached hereto as Annex 1 and
the Credit Agreement, as of the Effective Date inserted by Administrative Agent
as contemplated below (i) all of the Assignor's rights and obligations in its
capacity as a Lender under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of the Assignor under the respective facilities identified below
(including, without limitation, the Letters of Credit or guarantees included in
such facilities) and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the “Assigned
Interest”).  Such sale and assignment is without recourse to
the Assignor and, except as expressly provided in this Assignment and
Assumption, without representation or warranty by the Assignor.

    

    
      	
              1.

            	
              Assignor:

            	
              ______________________________

            

    

    

    
      	
              2.

            	
              Assignee:

            	
              ______________________________
      [and is an Affiliate/Approved Fund of [identify
      Lender]]

            

    

    

    
      	
              3.

            	
              Borrower:

            	
              Berry
      Petroleum Company

            

    

    

    
      	
              4.

            	
              Administrative
      Agent: Wells Fargo Bank, National Association, as Administrative
      Agent under the Credit
Agreement

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
        	
                5. 

              	
                Credit
      Agreement: Credit
      Agreement dated as of ______________, 2008, by and among
      Borrower, Administrative Agent, and certain financial institutions
      (“Lenders”) 

              

      

    

    

    
      	
              6.

            	
              Assigned
      Interest:

            

    

    

    
      	
              Aggregate

              Amount
      of

              Commitment/Loans

              for all Lenders*

            	
              Amount
      of

              Commitment/Loans

              Assigned

            	
              Percentage

              Assigned
      of

              Commitment/Loans

            
	 
      	 
      	 
      
	
              $________________

            	
              $________________

            	
              ______________%

            
	
              $________________

            	
              $________________

            	
              ______________%

            
	
              $________________

            	
              $________________

            	
              ______________%

            

    

     

    [7.           Trade
Date:                                __________________]

     

    Effective
Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

    

    The terms set forth in this Assignment
and Assumption are hereby agreed to:

    

    
      	 
      	
              ASSIGNOR

            
	 
      	
              [NAME
      OF ASSIGNOR]

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            
	 
      	 
      	 
      
	 
      	
              ASSIGNEE

            
	 
      	
              [NAME
      OF ASSIGNEE]

            
	 
      	 
      	 
      
	 
      	
              By:

            	 
      
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    [Consented
to and] Accepted:

    

    
      	
              WELLS
      FARGO BANK, NATIONAL ASSOCIATION,

            
	
              as
      Administrative Agent

            
	 
      	 
      
	
              By:

            	 
      
	 
      	
              Name:

            
	 
      	
              Title:

            
	 
      	 
      
	
              [Consented
      to:]

            
	 
      	 
      
	
              By:

            	 
      
	 
      	
              Name:

            
	 
      	
              Title:

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX 1
TO ASSIGNMENT AND ASSUMPTION

    

    STANDARD
TERMS AND CONDITIONS FOR

    ASSIGNMENT
AND ASSUMPTION

    

    1.         Representations and
Warranties.

    

    1.1.              Assignor.  The
Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of
any lien, encumbrance or other adverse claim and (iii) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any statements,
warranties or representations made in or in connection with the Credit Agreement
or any other Loan Document, (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
collateral thereunder, (iii) the financial condition of Borrower, any of its
Subsidiaries or Affiliates or any other Person obligated in respect of any Loan
Document or (iv) the performance or observance by Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

    

    1.2.              Assignee.  The
Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii) it meets all requirements of an
Eligible Assignee under the Credit Agreement (subject to receipt of such
consents as may be required under the Credit Agreement), (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
as a Lender thereunder and, to the extent of the Assigned Interest, shall have
the obligations of a Lender thereunder, (iv) it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.2(a) and (b) thereof, as applicable, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision independently and without reliance on Administrative Agent or any
other Lender, and (v) if it is a Foreign Lender, attached to the Assignment and
Assumption is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on
Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

    

    2.         Payments.  From
and after the Effective Date, Administrative Agent shall make all payments in
respect of the Assigned Interest (including payments of principal, interest,
fees and other amounts) to the Assignor for amounts which have accrued to but
excluding the Effective Date and to the Assignee for amounts which have accrued
from and after the Effective Date.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.         General
Provisions.  This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns.  This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument.  Delivery of an executed counterpart of a signature page
of this Assignment and Assumption by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment and
Assumption.  This Assignment and Assumption shall be governed by, and
construed in accordance with, the law of the State of California.

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