Document:

Exhibit 10.5 Placement Agent Agreement

    
      

    

    U.S.
      ENERGY CORP. 

    PLACEMENT
      AGENT AGREEMENT

    

    

    Dated
      as
      of: May
      5,
      2006

    

    Newbridge
      Securities Corporation

    1451
      Cypress Creek Road, Suite 204

    Fort
      Lauderdale, Florida 33309

    

    

    Ladies
      and Gentlemen:

    

    The
      undersigned, U.S. Energy Corp., a Wyoming corporation (the “Company”),
      hereby agrees with
      Newbridge Securities Corporation (the “Placement
      Agent”)
      as
      follows:

     

    1. Offering.
      The
      Company hereby engages the Placement Agent to act as its exclusive placement
      agent in connection with the Standby Equity Distribution Agreement dated the
      date hereof between the Company and Cornell Capital Partners, LP (the
“Investor”)
      (the
“Standby
      Equity Distribution Agreement”),
      pursuant to which the Company shall issue and sell to the Investor, from time
      to
      time, and the Investor shall purchase from the Company (the “Offering”)
      up to
      Fifty Million Dollars ($50,000,000) (the “Commitment
      Amount”)
      of the
      Company’s common stock, par value $0.01 per share (the “Common
      Stock”),
      at
      price per share equal to the Purchase Price, as that term is defined in the
      Standby Equity Distribution Agreement. The
      Placement Agent services
      shall
      consist of reviewing
      the
terms
      of
the
      Standby Equity Distribution Agreement and advising
      the
      Company with
      respect to those
      terms.
      The
      Placement Agent shall provide its advice in writing to the Company.

     

    All
      capitalized terms used herein and not otherwise defined herein shall have the
      same meaning ascribed to them as in the Standby Equity Distribution Agreement.
      The Investor will be granted certain registration rights with respect to the
      Common Stock as more fully set forth in the Registration Rights Agreement
      between the Company and the Investor dated the date hereof (the “Registration
      Rights Agreement”).
      The
      documents to be executed and delivered in connection with the Offering,
      including, but not limited, to the
      Company’s latest Quarterly Report on Form 10-Q as filed with the United States
      Securities and Exchange Commission, this
      Agreement, the Standby Equity Distribution Agreement, and the Registration
      Rights Agreement are referred to sometimes hereinafter collectively as the
      “Offering
      Materials.”
The
      Company’s Common Stock
      purchased by the Investor under
      the
      Standby Equity Distribution Agreement is sometimes referred to hereinafter
      as
      the “Securities.”
The
      Placement Agent shall not be obligated to sell any Securities.

     

    2. Compensation.

     

    A. On
      April
      11, 2006 the Company issued to the Placement Agent or its designee one thousand
      three hundred thirty nine (1,399) shares of the Company’s Common Stock (the
“Placement
      Agent’s Shares”).
      The
      Placement Agent shall be entitled to “piggy-back” 

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    registration
      rights with respect to the Placement Agent’s Shares, which shall be triggered
      upon registration of any shares of Common Stock by the Company pursuant to
      the
      Registration Rights Agreement dated the date hereof. 

     

    3. Representations,
      Warranties and Covenants of the Placement Agent.

     

    A. The
      Placement Agent represents, warrants and covenants as follows:

     

    (i) The
      Placement Agent has the necessary power to enter into this Agreement and to
      consummate the transactions contemplated hereby.

     

    (ii) The
      execution and delivery by the Placement Agent of this Agreement and the
      consummation of the transactions contemplated herein will not result in any
      violation of, or be in conflict with, or constitute a default under, any
      agreement or instrument to which the Placement Agent is a party or by which
      the
      Placement Agent or its properties are bound, or any judgment, decree, order
      or,
      to the Placement Agent’s knowledge, any statute, rule or regulation applicable
      to the Placement Agent. This Agreement when executed and delivered by the
      Placement Agent, will constitute the legal, valid and binding obligations of
      the
      Placement Agent, enforceable in accordance with their respective terms, except
      to the extent that (a) the enforceability hereof or thereof may be limited
      by
      bankruptcy, insolvency, reorganization, moratorium or similar laws from time
      to
      time in effect and affecting the rights of creditors generally, (b) the
      enforceability hereof or thereof is subject to general principles of equity,
      or
      (c) the indemnification provisions hereof or thereof may be held to be in
      violation of public policy.

     

    (iii) Upon
      receipt and execution of this Agreement, the Placement Agent will promptly
      forward copies of this Agreement to the Company or its counsel and the Investor
      or its counsel.

     

    (iv) The
      Placement Agent will not intentionally take any action that it reasonably
      believes would cause the Offering to violate the provisions of the Securities
      Act of 1933, as amended (the “1933
      Act”),
      the
      Securities Exchange Act of 1934 (the “1934
      Act”),
      the
      respective rules and regulations promulgated thereunder
      (the
“Rules
      and Regulations”)
      or
      applicable “Blue Sky” laws of any state or jurisdiction.

     

    (v) The
      Placement Agent is a member of the National Association of Securities Dealers,
      Inc., and is a broker-dealer registered as such under the 1934 Act and under
      the
      securities laws of the states in which the Securities will be offered or sold
      by
      the Placement Agent unless an exemption for such state registration is available
      to the Placement Agent. The Placement Agent is in material
      compliance
      with the
      rules
      and regulations applicable to the Placement Agent generally and applicable
      to
      the Placement Agent’s participation in the Offering.

     

     

    
      
         

      

      
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    4. Representations
      and Warranties of the Company.

     

    A. The
      Company represents and warrants as follows:

     

    The
      representations and warranties made by the Company in Sections 4.1 through
      4.20
      of the Standby Equity Distribution Agreement incorporated by reference herein.
      

     

    (i) Subject
      to the performance by the Placement Agent of its obligations
      hereunder
      the
      offer and sale of the Securities complies,
      and
      will continue to comply,
      in all
      material respects with the requirements of Rule 506 of Regulation D promulgated
      by the SEC pursuant to the 1933 Act and any other applicable federal and state
      laws, rules, regulations and executive orders. Neither the Offering Materials
      nor any amendment or supplement thereto nor any documents prepared by the
      Company in connection with the Offering will contain any untrue statement of
      a
      material fact or omit to state any material fact required to be stated therein
      or necessary to make the statements therein, in light of the circumstances
      under
      which they were made, not misleading. All statements of material facts in the
      Offering Materials are true and correct as of the date of the Offering
      Materials.

     

    5. Certain
      Covenants and Agreements of the Company.

     

    The
      Company covenants and agrees at its expense and without any expense to the
      Placement Agent as follows:

     

    A. To
      advise
      the Placement Agent of
      any
      material adverse change in the Company’s financial condition, prospects or
      business or of any development materially affecting the Company or rendering
      untrue or misleading any material statement in the Offering Materials occurring
      at any time as soon as the Company is either informed or becomes aware
      thereof.

    B. To
      comply
      with the terms of the Offering Materials.

    

    C. Upon
      the
      effectiveness of a registration statement covering the Securities, the Company
      shall promptly provide the Placement Agent with an opinion of Counsel to the
      Company, which opinion shall be in form and substance reasonably satisfactory
      to
      and the Placement Agent.

    

    D. At
      or
      prior to the Closing, the Company shall have been furnished such documents,
      certificates and opinions as it may reasonably require for the purpose of
      enabling the Placement Agent to review or pass upon the matters referred to
      in
      this Agreement and the Offering Materials, or in order to evidence the accuracy,
      completeness or satisfaction of any of the representations, warranties or
      conditions herein contained.

    

    6. Indemnification
      and
      Limitation of Liability.

     

    A. The
      Company hereby agrees that it will indemnify and hold the Placement Agent and
      each officer, director, shareholder, employee or representative of the Placement
      Agent 

     

    
      
         

      

      
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    and
      each
      person controlling, controlled by or under common control with the Placement
      Agent within the meaning of Section 15 of the 1933 Act or Section 20 of the
      1934
      Act or the SEC’s Rules and Regulations promulgated thereunder (the “Rules
      and Regulations”),
      harmless from and against any and all loss, claim, damage, liability, cost
      or
      expense whatsoever (including, but not limited to, any and all reasonable legal
      fees and other expenses and disbursements incurred in connection with
      investigating, preparing to defend or defending any action, suit or proceeding,
      including any inquiry or investigation, commenced or threatened, or any claim
      whatsoever or in appearing or preparing for appearance as a witness in any
      action, suit or proceeding, including any inquiry, investigation or pretrial
      proceeding such as a deposition) to which the Placement Agent or such
      indemnified person of the Placement Agent may become subject under the 1933
      Act,
      the 1934 Act, the Rules and Regulations, or any other federal or state law
      or
      regulation, common law or otherwise, arising out of or based upon (i) any untrue
      statement or alleged untrue statement of a material fact contained in (a)
      Section 4 of this Agreement, (b) the Offering Materials (except those written
      statements relating to the Placement Agent given by the
      Placement Agent
      for
      inclusion therein), (c) any application or other document or written
      communication executed by the Company or based upon written information
      furnished by the Company filed in any jurisdiction in order to qualify the
      Common Stock under the securities laws thereof, or any state securities
      commission or agency; (ii) the omission or alleged omission from documents
      described in clauses (a), (b) or (c) above of a material fact required to be
      stated therein or necessary to make the statements therein not misleading;
      or
      (iii) the breach of any representation, warranty, covenant or agreement made
      by
      the Company in this Agreement. The Company further agrees that upon demand
      by an
      indemnified person, at any time or from time to time, it will promptly reimburse
      such indemnified person for any loss, claim, damage, liability, cost or expense
      actually and reasonably paid by the indemnified person as to which the Company
      has indemnified such person pursuant hereto. Notwithstanding the foregoing
      provisions of this Paragraph 7(A), any such payment or reimbursement by the
      Company of fees, expenses or disbursements incurred by an indemnified person
      in
      any proceeding in which a final judgment by a court of competent jurisdiction
      (after all appeals or the expiration of time to appeal) is entered against
      the
      Placement Agent or such indemnified person based upon specific finding of fact
      that the Placement Agent or such indemnified person’s gross negligence or
      willful misfeasance will be promptly repaid to the Company.

     

    B.  The
      Placement Agent hereby agrees that it will indemnify and hold the Company and
      each officer, director, shareholder, employee or representative of the Company,
      and each person controlling, controlled by or under common control with the
      Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
      1934 Act or the Rules and Regulations, harmless from and against any and all
      loss, claim, damage, liability, cost or expense whatsoever (including, but
      not
      limited to, any and all reasonable legal fees and other expenses and
      disbursements incurred in connection with investigating, preparing to defend
      or
      defending any action, suit or proceeding, including any inquiry or
      investigation, commenced or threatened, or any claim whatsoever or in appearing
      or preparing for appearance as a witness in any action, suit or proceeding,
      including any inquiry, investigation or pretrial proceeding such as a
      deposition) to which the Company or such indemnified person of the Company
      may
      become subject under the 1933 Act, the 1934 Act, the Rules and Regulations,
      or
      any other federal or state law or regulation, common law or otherwise, arising
      out of or based upon (i) the material
      breach of any representation, warranty, covenant or agreement made by the
      Placement Agent in this Agreement, or (ii)
      any
      false or misleading information provided to the Company in
      writing by
      

     

    
      
         

      

      
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    one
      of
      the Placement Agent’s indemnified persons
      specifically for inclusion in the Offering Materials.

     

    C. Promptly
      after receipt by an indemnified party of notice of commencement of any action
      covered by Section 7(A) or (B), the party to be indemnified shall, within five
      (5) business days, notify the indemnifying party of the commencement thereof;
      the omission by one (1) indemnified party to so notify the indemnifying
      party shall not relieve the indemnifying party of its obligation to indemnify
      any other indemnified party that has given such notice and shall not relieve
      the
      indemnifying party of any liability outside of this indemnification if not
      materially prejudiced thereby. In the event that any action is brought against
      the indemnified party, the indemnifying party will be entitled to participate
      therein and, to the extent it may desire, to assume and control the defense
      thereof with counsel chosen by it which is reasonably acceptable to the
      indemnified party. After notice from the indemnifying party to such indemnified
      party of its election to so assume the defense thereof, the indemnifying party
      will not be liable to such indemnified party under such Section 7(A) or (B),
      for
      any legal or other expenses subsequently incurred by such indemnified party
      in
      connection with the defense thereof, but the indemnified party may, at its
      own
      expense, participate in such defense by counsel chosen by it, without, however,
      impairing the indemnifying party’s control of the defense. Subject to the
      proviso of this sentence and notwithstanding any other statement to the contrary
      contained herein, the indemnified party or parties shall have the right to
      choose its or their own counsel and control the defense of any action, all
      at
      the expense of the indemnifying party if (i) the employment of such counsel
      shall have been authorized in writing by the indemnifying party in connection
      with the defense of such action at the expense of the indemnifying party, or
      (ii) the indemnifying party shall not have employed counsel reasonably
      satisfactory to such indemnified party to have charge of the defense of such
      action within a reasonable time after notice of commencement of the action,
      or
      (iii) such indemnified party or parties shall have reasonably concluded that
      there may be defenses available to it or them which are different from or
      additional to those available to one or all of the indemnifying parties (in
      which case the indemnifying parties shall not have the right to direct the
      defense of such action on behalf of the indemnified party or parties), in any
      of
      which events such fees and expenses of one additional counsel shall be borne
      by
      the indemnifying party; provided, however, that the indemnifying party shall
      not, in connection with any one action or separate but substantially similar
      or
      related actions in the same jurisdiction arising out of the same general
      allegations or circumstance, be liable for the reasonable fees and expenses
      of
      more than one separate firm of attorneys at any time for all such indemnified
      parties. No settlement of any action or proceeding against an indemnified party
      shall be made without the consent of the indemnifying party.

     

    D.  In
      order
      to provide for just and equitable contribution in circumstances in which the
      indemnification provided for in Section 7(A) or 7(B) is due in accordance with
      its terms but is for any reason held by a court to be unavailable on grounds
      of
      policy or otherwise, the Company and the Placement Agent shall contribute to
      the
      aggregate losses, claims, damages and liabilities (including legal or other
      expenses reasonably incurred in connection with the investigation or defense
      of
      same) which the other may incur in such proportion so that the Placement Agent
      shall be responsible for such percent of the aggregate of such losses, claims,
      damages and liabilities as shall equal the percentage of the gross proceeds
      paid
      to the Placement Agent and the Company shall be responsible for the balance;
      provided, however, that no person guilty of fraudulent misrepresentation within
      the meaning of Section 11(f) of the 1933 Act shall 

     

    
      
         

      

      
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    be
      entitled to contribution from any person who was not guilty of such fraudulent
      misrepresentation. For purposes of this Section 7(D), any person controlling,
      controlled by or under common control with the Placement Agent, or any partner,
      director, officer, employee, representative or any agent of any thereof, shall
      have the same rights to contribution as the Placement Agent and each person
      controlling, controlled by or under common control with the Company within
      the
      meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each
      officer of the Company and each director of the Company shall have the same
      rights to contribution as the Company. Any party entitled to contribution will,
      promptly after receipt of notice of commencement of any action, suit or
      proceeding against such party in respect of which a claim for contribution
      may
      be made against the other party under this Section 7(D), notify such party
      from
      whom contribution may be sought, but the omission to so notify such party shall
      not relieve the party from whom contribution may be sought from any obligation
      they may have hereunder or otherwise if the party from whom contribution may
      be
      sought is not materially prejudiced thereby. 

     

    E. The
      indemnity and contribution agreements contained in this Section 7 shall remain
      operative and in full force and effect regardless of any investigation made
      by
      or on behalf of any indemnified person or any termination of this
      Agreement.

     

    F. The
      Company hereby waives, to the fullest extent permitted by law, any right to
      or
      claim of any punitive, exemplary, incidental, indirect, special, consequential
      or other damages (including, without limitation, loss of profits) against the
      Placement Agent and each officer, director, shareholder, employee or
      representative of the placement agent and each person controlling, controlled
      by
      or under common control with the Placement Agent within the meaning of Section
      15 of the 1933 Act or Section 20 of the 1934 Act or the Rules and Regulations
      arising out of any cause whatsoever (whether such cause be based in contract,
      negligence, strict liability, other tort or otherwise). Notwithstanding anything
      to the contrary contained herein, the aggregate liability of the Placement
      Agent
      and each officer, director, shareholder, employee or representative of the
      Placement Agent and each person controlling, controlled by or under common
      control with the Placement Agent within the meaning of Section 15 of the 1933
      Act or Section 20 of the 1934 Act or the Rules and Regulations shall not exceed
      the compensation received by the Placement Agent pursuant to Section 2 hereof.
      This limitation of liability shall apply regardless of the cause of action,
      whether contract, tort (including, without limitation, negligence) or breach
      of
      statute or any other legal or equitable obligation.

     

    7. Payment
      of Expenses.

     

    The
      Company hereby agrees to bear all of the expenses in connection with the
      Offering, including, but not limited to the following: filing fees, printing
      and
      duplicating costs, advertisements, postage and mailing expenses with respect
      to
      the transmission of Offering Materials, registrar and transfer agent fees,
      escrow agent fees and expenses, fees of the Company’s counsel and accountants,
      issue and transfer taxes, if any.

     

    8. Termination.

     

    This
      Agreement shall be co-terminus with, and terminate upon the same terms and
      conditions as those set forth in the Standby Equity Distribution
      Agreement.

     

     

    
      
         

      

      
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    	9.  	
            Miscellaneous.

          

     

    A. This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed to be an original, but all which shall be deemed to be one and the same
      instrument.

     

    B. Any
      notice required or permitted to be given hereunder shall be given in writing
      and
      shall be deemed effective when deposited in the United States mail, postage
      prepaid, or when received if personally delivered or faxed (upon confirmation
      of
      receipt received by the sending party), addressed as follows
      to such
      other address of which written notice is given to the others):

     

    
      	
              If
                to Placement Agent, to:

            	
              Newbridge
                Securities Corporation

            
	 	
              1451
                Cypress Creek Road, Suite 204

            
	 	
              Fort
                Lauderdale, Florida 33309

            
	 	
              Attention: Doug
                Aguililla

            
	 	
              Telephone: (954)
                334-3450

            
	 	
              Facsimile: (954)
                229-9937

            
	 	 
	
              If
                to the Company, to:

            	
              U.S.
                Energy Corp. 

            
	 	
              877
                North 8th
                West

            
	 	
              Glen
                L. Larsen Building

            
	 	
              Riverton,
                WY 82501

            
	 	
              Attention:
                Mark J. Larsen

            
	 	
              Telephone:
                (307)
                856-9271

            
	 	
              Facsimile:
                (307)
                857-3050

            
	 	 
	
              With
                a copy to:

            	
              The
                Law Office of Stephen E. Rounds

            
	 	
              1544
                York Street, Suite 110

            
	 	
              Denver,
                CO 80206

            
	 	
              Attention
                : Stephen E. Rounds

            
	 	
              Telephone:
                (303) 377-6997

            
	 	
              Facsimile:
                (303) 377-0231

            
	 	 
	 	 

    

     

    C. This
      Agreement shall be governed by and construed in all respects under the laws
      of
      the State of New Jersey, without reference to its conflict of laws rules or
      principles. Any suit, action, proceeding or litigation arising out of or
      relating to this Agreement shall be brought and prosecuted in such federal
      or
      state court or courts located within the State of New Jersey as provided by
      law.
      The parties hereby irrevocably and unconditionally consent to the jurisdiction
      of each such court or courts located within the State of New Jersey and to
      service of process by registered or certified mail, return receipt requested,
      or
      by any other manner provided by applicable law, and hereby irrevocably and
      unconditionally waive any right to claim that any suit, action, proceeding
      or
      litigation so commenced has been commenced in an inconvenient
      forum.

     

    
      
         

      

      
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    D. This
      Agreement and the other agreements referenced herein contain the entire
      understanding between the parties hereto and may not be modified or amended
      except by a writing duly signed by the party against whom enforcement of the
      modification or amendment is sought.

     

    E. If
      any
      provision of this Agreement shall be held to be invalid or unenforceable, such
      invalidity or unenforceability shall not affect any other provision of this
      Agreement.

     

    [REMAINDER
      OF PAGE INTENTIALLY LEFT BLANK]

    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the
      parties hereto have executed this Placement Agent Agreement as of the date
      first
      written above.

     

    
      	 	 
	 	
              U.S.
                Energy Corp.

            
	 	 
	 	
              By: /s/
                Mark J. Larsen   

            
	 	
              Name: 
                Mark J. Larsen

            
	 	
              Title: 
                President

            
	 	 
	 	 
	 	 
	 	
              Newbridge
                Securities Corporation

            
	 	 
	 	
              By: Guy
                S. Amico    

            
	 	
              Name: Guy
                S. Amico

            
	 	
              Title: President

            
	 	 
	 	 

    

    

    

    
      
         

      

      
        9Second Amendment to Credit Agreement dated as of April 28, 2006 by and between
      the Registrant and Wells Fargo Bank, N.A. and other financial institutions

    
      

    

    [EXECUTION]

    

     

    CREDIT
      AGREEMENT

    

    

    
      
        

      

    

     

    

    BERRY
      PETROLEUM COMPANY

    

    and

    

    WELLS
      FARGO BANK, NATIONAL ASSOCIATION

    as
      Administrative Agent, Lead Arranger and Sole Book Runner

    

    SOCIETE
      GENERALE AND BNP PARIBAS

    as
      Co-Syndication Agents

    

    JPMORGAN
      CHASE BANK, N.A. AND CITIBANK (WEST), FSB

    as
      Co-Documentation Agents

    

    and

    

    CERTAIN
      FINANCIAL INSTITUTIONS

    as
      Lenders

    

     

      
        

      

    

    

    

    $750,000,000

    

    

    April
      28,
      2006

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        TABLE
          OF
          CONTENTS

        

        
          	
                  ________________

                	
                  Page

                
	
                  ARTICLE
                    I - Definitions and References

                	
                  1

                
	
                  Section
                    1.1.

                	
                  Defined
                    Terms

                	
                  1

                
	
                  Section
                    1.2.

                	
                  Exhibits
                    and Schedules; Additional Definitions

                	
                  18

                
	
                  Section
                    1.3.

                	
                  Amendment
                    of Defined Instruments

                	
                  18

                
	
                  Section
                    1.4.

                	
                  References
                    and Titles

                	
                  18

                
	
                  Section
                    1.5.

                	
                  Calculations
                    and Determinations

                	
                  19

                
	
                  Section
                    1.6.

                	
                  Joint
                    Preparation; Construction of Indemnities and Releases

                	
                  19

                
	
                  ________________

                	 	 
	
                  ARTICLE
                    II - The Loans and Letters of Credit

                	
                  19

                
	
                  Section
                    2.1.

                	
                  Commitments
                    to Lend; Notes

                	
                  19

                
	
                  Section
                    2.2.

                	
                  Requests
                    for New Loans

                	
                  20

                
	
                  Section
                    2.3.

                	
                  Continuations
                    and Conversions of Existing Loans

                	
                  21

                
	
                  Section
                    2.4.

                	
                  Use
                    of Proceeds

                	
                  22

                
	
                  Section
                    2.5.

                	
                  Interest
                    Rates and Fees

                	
                  22

                
	
                  Section
                    2.6.

                	
                  Optional
                    Prepayments

                	
                  23

                
	
                  Section
                    2.7.

                	
                  Mandatory
                    Prepayments

                	
                  23

                
	
                  Section
                    2.8.

                	
                  Initial
                    Borrowing Base

                	
                  23

                
	
                  Section
                    2.9.

                	
                  Subsequent
                    Determinations of Borrowing Base

                	
                  23

                
	
                  Section
                    2.10.

                	
                  Changes
                    in Amount of Aggregate Commitment

                	
                  24

                
	
                  Section
                    2.11.

                	
                  Letters
                    of Credit

                	
                  24

                
	
                  Section
                    2.12.

                	
                  Requesting
                    Letters of Credit

                	
                  25

                
	
                  Section
                    2.13.

                	
                  Reimbursement
                    and Participations

                	
                  25

                
	
                  Section
                    2.14.

                	
                  Letter
                    of Credit Fees

                	
                  27

                
	
                  Section
                    2.15.

                	
                  No
                    Duty to Inquire

                	
                  27

                
	
                  Section
                    2.16.

                	
                  LC
                    Collateral

                	
                  28

                
	
                  ________________

                	 	 
	
                  ARTICLE
                    III - Payments to Lenders

                	
                  29

                
	
                  Section
                    3.1.

                	
                  General
                    Procedures

                	
                  29

                
	
                  Section
                    3.2.

                	
                  Capital
                    Reimbursement

                	
                  30

                
	
                  Section
                    3.3.

                	
                  Increased
                    Cost of Eurodollar Loans or Letters of Credit

                	
                  30

                
	
                  Section
                    3.4.

                	
                  Availability

                	
                  31

                
	
                  Section
                    3.5.

                	
                  Funding
                    Losses

                	
                  31

                
	
                  Section
                    3.6.

                	
                  Reimbursable
                    Taxes

                	
                  32

                
	
                  Section
                    3.7.

                	
                  Change
                    of Applicable Lending Office

                	
                  33

                
	
                  Section
                    3.8.

                	
                  Replacement
                    of Lenders

                	
                  33

                
	________________	 	 
	
                  ARTICLE
                    IV - Conditions Precedent to Lending

                	
                  33

                
	
                  Section
                    4.1.

                	
                  Documents
                    to be Delivered

                	
                  33

                
	
                  Section
                    4.2.

                	
                  Additional
                    Conditions Precedent

                	
                  34

                
	________________	 	 
	
                  ARTICLE
                    V - Representations and Warranties

                	
                  35

                
	
                  Section
                    5.1.

                	
                  No
                    Default

                	
                  35

                
	
                  Section
                    5.2.

                	
                  Organization
                    and Good Standing

                	
                  35

                
	
                  Section
                    5.3.

                	
                  Authorization

                	
                  36

                

        

        

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

         

        
          	
                  Section
                    5.4.

                	
                  No
                    Conflicts or Consents

                	
                  36

                
	
                  Section
                    5.5.

                	
                  Enforceable
                    Obligations

                	
                  36

                
	
                  Section
                    5.6.

                	
                  Initial
                    Financial Statements

                	
                  36

                
	
                  Section
                    5.7.

                	
                  Other
                    Obligations and Restrictions

                	
                  36

                
	
                  Section
                    5.8.

                	
                  Full
                    Disclosure

                	
                  37

                
	
                  Section
                    5.9.

                	
                  Litigation

                	
                  37

                
	
                  Section
                    5.10.

                	
                  Labor
                    Disputes and Acts of God

                	
                  37

                
	
                  Section
                    5.11.

                	
                  ERISA
                    Plans and Liabilities

                	
                  37

                
	
                  Section
                    5.12.

                	
                  Environmental
                    and Other Laws

                	
                  37

                
	
                  Section
                    5.13.

                	
                  Names
                    and Places of Business

                	
                  38

                
	
                  Section
                    5.14.

                	
                  Borrower’s
                    Subsidiaries

                	
                  38

                
	
                  Section
                    5.15.

                	
                  Government
                    Regulation

                	
                  39

                
	
                  Section
                    5.16.

                	
                  Insider

                	
                  39

                
	
                  Section
                    5.17.

                	
                  Solvency

                	
                  39

                
	
                  Section
                    5.18.

                	
                  Title
                    to Properties; Licenses

                	
                  39

                
	________________	 	 
	
                  ARTICLE
                    VI - Affirmative Covenants of Borrower

                	
                  39

                
	
                  Section
                    6.1.

                	
                  Payment
                    and Performance

                	
                  39

                
	
                  Section
                    6.2.

                	
                  Books,
                    Financial Statements and Reports

                	
                  39

                
	
                  Section
                    6.3.

                	
                  Other
                    Information and Inspections

                	
                  41

                
	
                  Section
                    6.4.

                	
                  Notice
                    of Material Events and Change of Address

                	
                  42

                
	
                  Section
                    6.5.

                	
                  Maintenance
                    of Properties

                	
                  42

                
	
                  Section
                    6.6.

                	
                  Maintenance
                    of Existence and Qualifications

                	
                  42

                
	
                  Section
                    6.7.

                	
                  Payment
                    of Trade Liabilities, Taxes, etc

                	
                  43

                
	
                  Section
                    6.8.

                	
                  Insurance

                	
                  43

                
	
                  Section
                    6.9.

                	
                  Performance
                    on Borrower’s Behalf

                	
                  43

                
	
                  Section
                    6.10.

                	
                  Interest

                	
                  43

                
	
                  Section
                    6.11.

                	
                  Compliance
                    with Agreements and Law

                	
                  43

                
	
                  Section
                    6.12.

                	
                  Environmental
                    Matters; Environmental Reviews

                	
                  43

                
	
                  Section
                    6.13.

                	
                  Evidence
                    of Compliance

                	
                  44

                
	
                  Section
                    6.14.

                	
                  Bank
                    Accounts; Offset

                	
                  44

                
	
                  Section
                    6.15.

                	
                  Guaranties
                    of Borrower’s Subsidiaries

                	
                  44

                
	
                  Section
                    6.16.

                	
                  Pledge
                    of Stock of Foreign Subsidiaries

                	
                  45

                
	________________	 	 
	
                  ARTICLE
                    VII - Negative Covenants of Borrower

                	
                  45

                
	
                  Section
                    7.1.

                	
                  Indebtedness

                	
                  45

                
	
                  Section
                    7.2.

                	
                  Limitation
                    on Liens

                	
                  46

                
	
                  Section
                    7.3.

                	
                  Hedging
                    Contracts

                	
                  46

                
	
                  Section
                    7.4.

                	
                  Limitation
                    on Mergers, Issuances of Securities

                	
                  47

                
	
                  Section
                    7.5.

                	
                  Limitation
                    on Sales of Property

                	
                  48

                
	
                  Section
                    7.6.

                	
                  Limitation
                    on Dividends and Stock Repurchases

                	
                  48

                
	
                  Section
                    7.7.

                	
                  Limitation
                    on Acquisitions, Investments; and New Businesses

                	
                  48

                
	
                  Section
                    7.8.

                	
                  Limitation
                    on Credit Extensions

                	
                  49

                
	
                  Section
                    7.9.

                	
                  Transactions
                    with Affiliates

                	
                  49

                
	
                  Section
                    7.10.

                	
                  Prohibited
                    Contracts

                	
                  49

                
	
                  Section
                    7.11.

                	
                  Current
                    Ratio

                	
                  49

                
	
                  Section
                    7.12.

                	
                  EBITDA
                    to Total Funded Debt Ratio

                	
                  49

                

        

        

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              ii

              
                

              

            

            
              
              

            

          

        

        
          	________________	 	 
	
                  ARTICLE
                    VIII - Events of Default and Remedies

                	
                  49

                
	
                  Section
                    8.1.

                	
                  Events
                    of Default

                	
                  49

                
	
                  Section
                    8.2.

                	
                  Remedies

                	
                  52

                
	________________	 	 
	
                  ARTICLE
                    IX - Administrative Agent

                	
                  52

                
	
                  Section
                    9.1.

                	
                  Appointment
                    and Authority

                	
                  52

                
	
                  Section
                    9.2.

                	
                  Exculpation,
                    Administrative Agent’s Reliance, Etc

                	
                  52

                
	
                  Section
                    9.3.

                	
                  Credit
                    Decisions

                	
                  53

                
	
                  Section
                    9.4.

                	
                  Indemnification

                	
                  53

                
	
                  Section
                    9.5.

                	
                  Rights
                    as Lender

                	
                  54

                
	
                  Section
                    9.6.

                	
                  Sharing
                    of Set-Offs and Other Payments

                	
                  54

                
	
                  Section
                    9.7.

                	
                  Investments

                	
                  54

                
	
                  Section
                    9.8.

                	
                  Benefit
                    of Article IX

                	
                  55

                
	
                  Section
                    9.9.

                	
                  Resignation

                	
                  55

                
	
                	 	 
	
                  ARTICLE
                    X - Miscellaneous

                	
                  55

                
	
                  Section
                    10.1.

                	
                  Waivers
                    and Amendments; Acknowledgments

                	
                  55

                
	
                  Section
                    10.2.

                	
                  Survival
                    of Agreements; Cumulative Nature

                	
                  57

                
	
                  Section
                    10.3.

                	
                  Notices

                	
                  57

                
	
                  Section
                    10.4.

                	
                  Payment
                    of Expenses; Indemnity

                	
                  58

                
	
                  Section
                    10.5.

                	
                  Successors
                    and Assigns; Assignments

                	
                  59

                
	
                  Section
                    10.6.

                	
                  Confidentiality

                	
                  62

                
	
                  Section
                    10.7.

                	
                  Governing
                    Law; Submission to Process

                	
                  62

                
	
                  Section
                    10.8.

                	
                  Limitation
                    on Interest

                	
                  62

                
	
                  Section
                    10.9.

                	
                  Termination;
                    Limited Survival

                	
                  63

                
	
                  Section
                    10.10.

                	
                  Severability

                	
                  63

                
	
                  Section
                    10.11.

                	
                  Counterparts;
                    Fax

                	
                  63

                
	
                  SECTION
                    10.12.

                	
                  WAIVER
                    OF JURY TRIAL, PUNITIVE DAMAGES, ETC

                	
                  63

                
	
                  Section
                    10.13.

                	
                  Ratification
                    of Agreements

                	
                  64

                

        

         

      

    

    
      Schedules
        and Exhibits:

      

      
        	
                Schedule
                  1

              	
                -

              	
                Lenders
                  Schedule

              

      

      
        	
                Schedule
                  2

              	
                -

              	
                Insurance
                  Schedule

              

      

      

      
        	
                Exhibit
                  A

              	
                -

              	
                Promissory
                  Note

              

      

      
        	
                Exhibit
                  B

              	
                -

              	
                Borrowing
                  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

              

      

      
        
          [Credit
            Agreement Berry Petroleum]

          
          

        

        
          iii

          
            

          

        

        
          
          

        

      

      

        CREDIT
          AGREEMENT

         

        THIS
          CREDIT AGREEMENT is made as of April 28, 2006, 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 the 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:

         

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

         

        “Adjusted
          EBITDA”
means,
          for any period, EBITDA for such period adjusted (a) as permitted and in
          accordance with Article 11 of Regulation S-X promulgated by the Securities
          and
          Exchange Commission, and (b) to give effect to any acquisition or divestiture
          made by the 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.

         

        
          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

        

        “Adjusted
          Eurodollar Rate”
means,
          for any Eurodollar Loan for any Interest Period therefor, the rate per
          annum
          equal to the sum of (a) the Eurodollar Margin 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 securities (on a fully diluted basis) having ordinary
          voting
          power for the election of directors or managing general partners;
          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.

        

        “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 the Administrative Agent, in substantially the form of
          Exhibit F or any other form approved by the Administrative
          Agent.

         

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

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        “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 the per annum rate of interest most recently announced within Wells
          Fargo
          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%
                    

                	
                  0.00%

                
	
                  Level
                    2

                	
                  = 50%
                    but < 75%

                	
                  0.00%

                
	
                  Level
                    3

                	
                  = 75%
                    but < 90%

                	
                  0.25%

                
	
                  Level
                    4

                	
                  = 90%

                	
                  0.50%

                

        

         

        “Borrowing”
means
          a
          borrowing of new Loans of a single Type pursuant to Section 2.2 or 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.

         

        “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
          in
          accordance with the provisions of Section 2.9; provided, however, that
          in no
          event shall the Borrowing Base ever exceed the Maximum Credit
          Amount.

         

        “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.

         

        “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.

         

        “Cash
          Equivalents”
means
          Investments in:

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        (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
          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 Securities and Exchange Commission 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).

         

        “Commitment”
means
          for each Lender, the amount set forth as its Commitment in the Lenders
          Schedule.

         

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

         

        
          	 	
                   

                  Utilization
                    Percentage

                   

                	
                   

                  Commitment
                    Fee

                
	
                  Level
                    1

                	
                  <
                    50%

                	
                  0.25%

                
	
                  Level
                    2

                	
                  = 50%
                    but < 75%

                	
                  0.30%

                
	
                  Level
                    3

                	
                  = 75%
                    but < 90%

                	
                  0.375%

                
	
                  Level
                    4

                	
                  = 90%

                	
                  0.375%

                

        

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            4

            
              

            

          

          
            
            

          

        

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

         

        “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 of SFAS 133 at such time.

         

        “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 of SFAS
          133 at
          such time 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        “Default
          Rate”
means,
          at the time in question (a) with respect to any Base Rate 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.

         

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

         

        “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).

         

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

         

        “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.

         

        “EBITDA”
means,
          for any period, the sum of (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 good will 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, minus (5) 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) the Administrative Agent, (ii) in the case of any assignment of a
          Commitment, the LC Issuer, and (iii) unless an Event of Default or 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 the
          Borrower or any of the Borrower’s Affiliates or Subsidiaries.

        

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

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        “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
          Borrower and all members of a controlled group of corporations and all
          trades or
          businesses (whether or not incorporated) under common control that, together
          with Borrower, 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%

                	
                  1.00%

                
	
                  Level
                    2

                	
                  = 50%
                    but < 75%

                	
                  1.25%

                
	
                  Level
                    3

                	
                  = 75%
                    but < 90%

                	
                  1.50%

                
	
                  Level
                    4

                	
                  = 90%

                	
                  1.75%

                

        

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        “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 rate determined by the Administrative
          Agent to
          be the offered rate that appears on the page of the Telerate Screen that
          displays an average British Bankers Association Interest Settlement Rate
          (such
          page currently being page number 3750) for deposits in U.S. dollars (for
          delivery on the first day of such Interest Period) with a term equivalent
          to
          such Interest Period, determined as of approximately 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 the Administrative Agent to be the offered rate on such other
          page
          or other service that displays an average British Bankers Association Interest
          Settlement Rate for deposits in U.S. dollars (for delivery on the first
          day of
          such Interest Period) with a term equivalent to such Interest Period, determined
          as of approximately 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 the 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 offshore U.S. dollar market
          at
          their request at approximately 11:00 a.m. (London time) two Business Days
          prior
          to the first day of such Interest Period.

         

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

         

        “Existing
          Credit Agreement”
means
          that certain Credit Agreement dated as of June 27, 2005, 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.

         

        “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 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        “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.

        

        “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.

         

        “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.

         

        “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 agreement providing for options, swaps, floors, caps, collars,
          forward
          sales or forward purchases involving interest rates, commodities or commodity
          prices, equities, currencies, bonds, or indexes based on any of the foregoing,
          (b) any option, futures or forward contract traded on an exchange, and
          (c) any
          other derivative agreement or other similar agreement or
          arrangement.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        “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.

         

        “Indebtedness”
of
          any
          Person means Liabilities in any of the following categories:

         

        (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), or

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            10

            
              

            

          

          
            
            

          

        

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

         

        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.

         

        “Initial
          Engineering Report”
means
          the engineering report concerning oil and gas properties of Restricted
          Persons
          dated February 3, 2006, prepared by DeGolyer & MacNaughton as of December
          31, 2005.

         

        “Initial
          Financial Statements”
means
          the audited annual financial statements of Borrower dated as of December
          31,
          2005.

         

        “Insurance
          Schedule”
means
          Schedule 3 attached hereto.

         

        “Interest
          Payment Date”
means
          (a) with respect to each Base Rate Loan, the last day of each Fiscal Quarter,
          and (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.

         

        “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.

         

        “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).

         

        “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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            11

            
              

            

          

          
            
            

          

        

        “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
          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
          $50,000,000.

         

        “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 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.

         

        “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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            12

            
              

            

          

          
            
            

          

        

        “Loan
          Documents”
means
          this Agreement, the Notes, 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).

         

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

         

        “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, or (d) the enforceability of the
          material
          terms of any 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 EBITDA for the
          Four-Quarter Period most recently ended that equals or exceeds five percent
          (5%)
          of Borrower’s Consolidated EBITDA 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 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
          July 1, 2011.

         

        “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
          $750,000,000.

         

        “Mineral
          Interests”
means
          rights, estates, titles, and interests in and to oil, gas, sulphur, 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            13

            
              

            

          

          
            
            

          

        

        “Money
          Market Facility”
means
          a
          credit facility which complies with all requirements of the definition
          of
”Senior Debt” (as defined in Section 1.1) except clause (b).

         

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

         

        “Net
          Income”
means,
          for any period, the net income (or loss) of the 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.

         

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

         

        “Percentage
          Share”
means,
          with respect to any Lender (a) when used in Section 2.1, Section 2.2 or
          Section
          2.5(d) in any Borrowing Notice or when no Loans are outstanding hereunder,
          the
          percentage set forth below such Lender’s name on Lenders Schedule, and (b) when
          used otherwise, 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;

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            14

            
              

            

          

          
            
            

          

        

        (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; and

         

        (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.

         

        “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
          covenants and events of default governing such Indebtedness are not 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 subordination agreement in form and substance acceptable
          to Administrative Agent, in its sole discretion; 

         

        (g)  such
          Indebtedness shall be governed by such other terms that are customary in
          debt
          indentures for issuers similar to Borrower; and

         

        (h)  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, Tribunal, or any other legally
          recognizable entity.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            15

            
              

            

          

          
            
            

          

        

        “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.

         

        “Proved
          Reserves”
means
          Proved Reserves as defined in Definitions for Oil and Gas Reserves (in
          this
          paragraph, the “Definitions”) promulgated by the Society of 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.

         

        “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.

         

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

         

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

        

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

         

        “Senior
          Debt”
means
          Indebtedness of Borrower (other than the Obligations) that complies with
          all of
          the following requirements:

         

        
          
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              Agreement Berry Petroleum]

            
            

          

          
            16

            
              

            

          

          
            
            

          

        

        (a)  is
          evidenced by a bond, debenture, note or similar instrument;

         

        (b)  except
          with respect to Money Market Facilities, 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; 

         

        (c)  is
          and
          shall remain unsecured at all times;

         

        (d)  has
          covenants and events of default governing such Indebtedness that are not
          more
          restrictive with respect to the Restricted Persons than the covenants and
          Events
          of Default under this Agreement; and

         

        (e)  is
          not
          subordinated to any other Indebtedness of the Restricted Persons.

         

        Indebtedness
          outstanding under Money Market Facilities shall be included in Senior Debt.
          

         

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

         

        “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.

         

        “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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            17

            
              

            

          

          
            
            

          

        

        “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.

         

        “Tribunal”
means
          any government, any arbitration panel, any court or any governmental department,
          commission, board, bureau, agency or instrumentality of the United States
          of
          America or any state, province, commonwealth, nation, territory, possession,
          county, parish, town, township, village or municipality, whether now or
          hereafter constituted or existing.

         

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

         

        “Utilization
          Percentage”
means,
          for any day, the Facility Usage for such day, divided by the Borrowing
          Base in
          effect on such day 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. 

         

        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.

         

        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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            18

            
              

            

          

          
            
            

          

        

        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

         

        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 “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 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 Loans, (i) the Facility
          Usage
          does not exceed the Aggregate Commitment or the Borrowing Base determined
          as of
          the date on which the requested Loans are to be made, and (ii) the sum
          of the
          Aggregate Commitment and the Senior Debt then outstanding does not exceed
          the
          Borrowing Base determined as of the date on which the requested Loans are
          to be
          made. The aggregate amount of all 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 under the Borrowing Base, and
          the
          aggregate amount of all 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 under the Borrowing
          Base.
          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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            19

            
              

            

          

          
            
            

          

        

        Section
          2.2.  Requests
          for New Loans.
          Borrower
          must give to Administrative Agent written or electronic notice (or telephonic
          notice promptly confirmed in writing) of any requested Borrowing of new
          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, 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 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 Loan in
          immediately available funds, and upon receipt of such funds, unless to
          its
          actual knowledge any conditions precedent to such Loans have been neither
          met
          nor waived as provided herein, Administrative Agent shall promptly make
          such
          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 Loan, Administrative Agent may in its
          discretion assume that such Lender has made such Loan available to
          Administrative Agent in accordance with this section and Administrative
          Agent
          may if it chooses, in reliance upon such assumption, make such Loan available
          to
          Borrower. If and to the extent such Lender shall not so make its new Loan
          available to Administrative Agent, such Lender and Borrower severally agree
          to
          pay or repay to Administrative Agent within three days after demand the
          amount
          of such Loan together with interest thereon, for each day from the date
          such
          amount was made available to Borrower until the date such amount is paid
          or
          repaid to Administrative Agent, with interest at (i) the Federal Funds
          Rate, if
          such Lender is making such payment and (ii) the interest rate applicable
          at the
          time to the other new Loans made on such date, if Borrower is making such
          repayment. If neither such Lender nor Borrower pays or repays to Administrative
          Agent such amount within such three-day period, Administrative Agent shall
          in
          addition to such amount be entitled to recover from such Lender and from
          Borrower, on demand, interest thereon at the Default Rate applicable to
          Base
          Rate Loans, calculated from the date such amount was made available to
          Borrower
          (provided that if such amount has been paid to Administrative Agent by
          such
          Lender, Borrower shall not be obligated to pay the same amount to Administrative
          Agent). The failure of any Lender to make any new Loan to be made by it
          hereunder shall not relieve any other Lender of its obligation hereunder,
          if
          any, to make its new Loan, but no Lender shall be responsible for the failure
          of
          any other Lender to make any new Loan to be made by such other
          Lender.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            20

            
              

            

          

          
            
            

          

        

        Section
          2.3.  Continuations
          and Conversions of Existing Loans.
          Borrower may make the following elections with respect to 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
          Loans made pursuant to separate Borrowings into one new Borrowing or divide
          existing 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 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 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 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 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

         

        (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 Loans into Eurodollar
          Loans or continue existing 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 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 Loans.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            21

            
              

            

          

          
            
            

          

        

        Section
          2.4.  Use
          of
          Proceeds.
          Borrower shall use all Loans to refinance existing indebtedness of Borrower,
          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. 

         

        (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)  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.

         

        (d)  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 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.

         

        (e)  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
          and Mandate Letter dated April 3, 2006 between Administrative Agent and
          Borrower.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            22

            
              

            

          

          
            
            

          

        

        Section
          2.6.  Optional
          Prepayments.
          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 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.

         

        Section
          2.7.  Mandatory
          Prepayments.

         

        (a)  If
          at any
          time (i) the sum of the Facility Usage and the Senior Debt then outstanding,
          is
          in excess of (ii) the Borrowing Base (such excess being herein called a
          “Borrowing Base Deficiency”), Borrower shall prepay 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)].

         

        (b)  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 3.5.
          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 $500,000,000.

         

        Section
          2.9.  Subsequent
          Determinations of Borrowing Base.

         

        (a)  Scheduled
          Determinations of Borrowing Base.
          By
          March 31 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). 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 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            23

            
              

            

          

          
            
            

          

        

        (b)  In
          addition to Scheduled Redeterminations, Required Lenders shall be permitted
          to
          make a Special Redetermination of the Borrowing Base once in each calendar
          year.
          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.

         

        (c)  In
          addition to Scheduled Redeterminations, Borrower shall be permitted to
          request a
          Special Redetermination of the Borrowing Base once in each calendar year.
          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 and (ii) notify Administrative Agent and each
          Lender of the Borrowing Base requested by Borrower in connection with such
          Special Redetermination.

         

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

         

        Section
          2.10.    Changes
          in Amount of 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 one or more Letters of Credit, provided that,
          after
          taking such Letter of Credit into account:

         

        (a)  the
          Facility Usage does not exceed the Aggregate Commitment or the Borrowing
          Base
          determined as of the date on which the requested Loans are to be made,
          and the
          sum of the Aggregate Commitment and the Senior Debt then outstanding does
          not
          exceed the Borrowing Base determined as of the date on which the requested
          Loans
          are to be made;

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            24

            
              

            

          

          
            
            

          

        

        (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 is prior to the end of the Commitment
          Period.

         

        and
          further provided that:

         

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

         

        (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
          Borrower;

         

        (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.
          Borrower must make written application for 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 2.10
          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). Two Business Days after the LC
          Conditions for a Letter of Credit have been met as described in Section
          2.10 (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 Denver, Colorado. 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            25

            
              

            

          

          
            
            

          

        

        (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 Advances.
          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 Loans to
          Borrower
          in the amount of such draft or demand, which 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 Loans shall be considered, but the amount of the Matured
          LC
          Obligation to be concurrently paid by such 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.

         

        (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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            26

            
              

            

          

          
            
            

          

        

        (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. 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 Administrative 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 Administrative 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.

         

        (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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            27

            
              

            

          

          
            
            

          

        

        (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
          outstanding LC Obligations will exceed the Borrowing Base, then in addition
          to
          prepayment of the entire principal balance of the Loans 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.

         

        (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. Borrower further agrees that LC Issuer
          shall
          have all of the rights and remedies of a secured party under the Uniform
          Commercial Code as adopted in the State of California 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            28

            
              

            

          

          
            
            

          

        

        (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 be considered past due Obligations owing
          hereunder.

         

         

        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 provided therein and, if no specific place of payment is provided,
          shall be due and payable at the place of payment of Administrative Agent’s Note.
          When Administrative Agent collects or receives money on account of the
          Obligations, Administrative Agent shall promptly distribute all money so
          collected or received in like funds, and each Lender Party shall apply
          all such
          money so distributed, as follows:

         

        (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
          Administrative Agent under Section 6.9 or Section 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            29

            
              

            

          

          
            
            

          

        

        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 Section
          2.6
          and Section 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
          9.9, 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. Unless Administrative Agent shall have received notice from Borrower
          prior to the date on which any payment is due to Administrative Agent for
          the
          account of the Lenders or LC Issuer hereunder that Borrower will not make
          such
          payment, Administrative Agent may assume that Borrower has made such payment
          on
          such date in accordance herewith and may, in reliance upon such assumption,
          distribute to the Lenders or LC Issuer, as the case may be, the amount
          due. In
          such event, if Borrower has not in fact made such payment, then each of
          the
          Lenders or LC Issuer, as the case may be, severally agrees to repay to
          Administrative Agent forthwith on demand the amount so distributed to such
          Lender or LC Issuer, with interest thereon, for each day from and including
          the
          date such amount is distributed to it to but excluding the date of payment
          to
          Administrative Agent, at the greater of the Federal Funds Rate and a rate
          determined by Administrative Agent in accordance with banking industry
          rules on
          interbank compensation.

         

        Section
          3.2.  Capital
          Reimbursement.
          If
          either (a) the introduction or implementation of or the compliance with
          or any
          change in or in the interpretation of any Law, or (b) the introduction
          or
          implementation of or the compliance with any request, directive or guideline
          from any central bank or other governmental authority (whether or not having
          the
          force of Law) affects or would affect the amount of capital required or
          expected
          to be maintained by any Lender Party or any corporation controlling any
          Lender
          Party, then, upon demand by such Lender Party, Borrower will pay to
          Administrative Agent for the benefit of such Lender Party, from time to
          time as
          specified by such Lender Party, such additional amount or amounts which
          such
          Lender Party shall determine to be appropriate to compensate such Lender
          Party
          or any corporation controlling such Lender Party in light of such circumstances,
          to the extent that such Lender Party reasonably determines that the amount
          of
          any such capital would be increased or the rate of return on any such capital
          would be reduced by or in whole or in part based on the existence of the
          face
          amount of such Lender Party’s Loans, Letters of Credit, participations in
          Letters of Credit or commitments under this Agreement.

         

        Section
          3.3.  Increased
          Cost of Eurodollar Loans or Letters of Credit.
          If any
          applicable Law (whether now in effect or hereinafter enacted or promulgated,
          including Regulation D) or any interpretation or administration thereof
          by any
          governmental authority charged with the interpretation or administration
          thereof
          (whether or not having the force of Law):

         

        (a)  shall
          change the methodology of taxation of payments to any Lender Party of any
          principal, interest, or other amounts attributable to any Eurodollar Loan
          or
          Letter of Credit or otherwise due under this Agreement in respect of any
          Eurodollar Loan or Letter of Credit (other than taxes imposed on the overall
          net
          income of such Lender Party or any Applicable Lending Office of such Lender
          Party by any jurisdiction in which such Lender Party or any such Applicable
          Lending Office is located); or

         

        (b)  shall
          change, impose, modify, apply or deem applicable any reserve, special deposit,
          compulsory loan, insurance charge, or similar requirements in respect of
          any
          Eurodollar Loan or any Letter of Credit (excluding those for which such
          Lender
          Party is fully compensated pursuant to adjustments made in the definition
          of
          Eurodollar Rate) or against assets of, deposits with or for the account
          of, or
          credit extended by, such Lender Party; or

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            30

            
              

            

          

          
            
            

          

        

        (c)  shall
          impose on any Lender Party or the interbank eurocurrency deposit market
          any
          other condition affecting any Eurodollar Loan or Letter of Credit, the
          result of
          which is to increase the cost to any Lender Party of funding or maintaining
          any
          Eurodollar Loan or of issuing any Letter of Credit or to reduce the amount
          of
          any sum receivable by any Lender Party in respect of any Eurodollar Loan
          or
          Letter of Credit by an amount deemed by such Lender Party to be
          material,

         

        then
          such
          Lender Party shall promptly notify Administrative Agent and Borrower in
          writing
          of the happening of such event and of the amount required to compensate
          such
          Lender Party for such event (on an after-tax basis, taking into account
          any
          taxes on such compensation), whereupon (i) Borrower shall pay such amount
          to
          Administrative Agent for the account of such Lender Party and (ii) Borrower
          may
          elect, by giving to Administrative Agent and such Lender Party not less
          than
          three Business Days’ notice, to convert any such Eurodollar Loans into Base Rate
          Loans.

         

        Section
          3.4.  Availability.
          If (a)
          any change in applicable Laws, or in the interpretation or administration
          thereof of or in any jurisdiction whatsoever, domestic or foreign, shall
          make it
          unlawful or impracticable for any Lender Party to fund or maintain Eurodollar
          Loans or to issue or participate in Letters of Credit, or shall materially
          restrict the authority of any Lender Party to purchase or take offshore
          deposits
          of dollars (i.e., “eurodollars”), or (b) any Lender Party determines that
          matching deposits appropriate to fund or maintain any Eurodollar Loan are
          not
          available to it, or (c) any Lender Party determines that the formula for
          calculating the Eurodollar Rate does not fairly reflect the cost to such
          Lender
          Party of making or maintaining loans based on such rate, then, upon notice
          by
          such Lender Party to Borrower and Administrative Agent, Borrower’s right to
          elect Eurodollar Loans from such Lender Party (or, if applicable, to obtain
          Letters of Credit) shall be suspended to the extent and for the duration
          of such
          illegality, impracticability or restriction and all Eurodollar Loans of
          such
          Lender Party which are then outstanding or are then the subject of any
          Borrowing
          Notice and which cannot lawfully or practicably be maintained or funded
          shall
          immediately become or remain, or shall be funded as, Base Rate Loans of
          such
          Lender Party. Borrower agrees to indemnify each Lender Party and hold it
          harmless against all costs, expenses, claims, penalties, liabilities and
          damages
          which may result from any such change in Law, interpretation or administration.
          Such indemnification shall be on an after-tax basis, taking into account
          any
          taxes imposed on the amounts paid as indemnity.

         

        Section
          3.5.  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,
          if
          such payment or prepayment prevents such Continuation/Conversion Notice
          from
          becoming fully effective, (c) the failure of any Loan to be made or of
          any
          Continuation/Conversion Notice to become effective due to any condition
          precedent not being satisfied or due to any other action or inaction of
          any
          Restricted Person, or (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. Such indemnification shall be
          on an
          after-tax basis, taking into account any taxes imposed on the amounts paid
          as
          indemnity.

         

        
          
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              Agreement Berry Petroleum]

            
            

          

          
            31

            
              

            

          

          
            
            

          

        

        Section
          3.6.  Reimbursable
          Taxes.
          Borrower covenants and agrees that:

         

        (a)  Borrower
          will indemnify each Lender Party against and reimburse each Lender Party
          for all
          present and future income, stamp and other taxes, levies, costs and charges
          whatsoever imposed, assessed, levied or collected on or in respect of this
          Agreement or any Eurodollar Loans or Letters of Credit (whether or not
          legally
          or correctly imposed, assessed, levied or collected), excluding, however,
          any
          taxes imposed on or measured by the overall net income of Administrative
          Agent
          or such Lender Party or any Applicable Lending Office of such Lender Party
          by
          any jurisdiction in which such Lender Party or any such Applicable Lending
          Office is located (all such non-excluded taxes, levies, costs and charges
          being
          collectively called “Reimbursable Taxes” in this section). Such indemnification
          shall be on an after-tax basis, taking into account any taxes imposed on
          the
          amounts paid as indemnity.

         

        (b)  All
          payments on account of the principal of, and interest on, each Lender Party’s
          Loans and Note, and all other amounts payable by Borrower to any Lender
          Party
          hereunder, shall be made in full without set-off or counterclaim and shall
          be
          made free and clear of and without deductions or withholdings of any nature
          by
          reason of any Reimbursable Taxes, all of which will be for the account
          of
          Borrower. In the event of Borrower’s being compelled by Law to make any such
          deduction or withholding from any payment to any Lender Party, Borrower
          shall
          pay on the due date of such payment, by way of additional interest, such
          additional amounts as are needed to cause the amount receivable by such
          Lender
          Party after such deduction or withholding to equal the amount which would
          have
          been receivable in the absence of such deduction or withholding. If Borrower
          should make any deduction or withholding as aforesaid, Borrower shall within
          60
          days thereafter forward to such Lender Party an official receipt or other
          official document evidencing payment of such deduction or
          withholding.

         

        (c)  If
          Borrower is ever required to pay any Reimbursable Tax with respect to any
          Eurodollar Loan, Borrower may elect, by giving to Administrative Agent
          and such
          Lender Party not less than three Business Days’ notice, to convert any such
          Eurodollar Loan into a Base Rate Loan, but such election shall not diminish
          Borrower’s obligation to pay all Reimbursable Taxes.

         

        (d)  Notwithstanding
          the foregoing provisions of this section, Borrower shall be entitled, to
          the
          extent it is required to do so by Law, to deduct or withhold (and not to
          make
          any indemnification or reimbursement for) income or other similar taxes
          imposed
          by the United States of America from interest, fees or other amounts payable
          hereunder for the account of any Lender Party, other than a Lender Party
          (i) who
          is a U.S. person for Federal income tax purposes or (ii) who has the Prescribed
          Forms on file with Agent (with copies provided to Borrower) for the applicable
          year to the extent deduction or withholding of such taxes is not required
          as a
          result of the filing of such Prescribed Forms, provided that if Borrower
          shall
          so deduct or withhold any such taxes, it shall provide a statement to Agent
          and
          such Lender Party, setting forth the amount of such taxes so deducted or
          withheld, the applicable rate and any other information or documentation
          which
          such Lender Party may reasonably request for assisting such Lender Party
          to
          obtain any allowable credits or deductions for the taxes so deducted or
          withheld
          in the jurisdiction or jurisdictions in which such Lender Party is subject
          to
          tax.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
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        Section
          3.7.  Change
          of Applicable Lending Office.
          Each
          Lender Party agrees that, upon the occurrence of any event giving rise
          to the
          operation of Section 3.2 through Section 3.6 with respect to such Lender
          Party,
          it will, if requested by Borrower, use reasonable efforts (subject to overall
          policy considerations of such Lender Party) to designate another Applicable
          Lending Office, provided that such designation is made on such terms that
          such
          Lender Party and its Applicable Lending Office suffer no economic, legal
          or
          regulatory disadvantage, with the object of avoiding the consequence of
          the
          event giving rise to the operation of any such section. Nothing in this
          section
          shall affect or postpone any of the obligations of Borrower or the rights
          of any
          Lender Party provided in Section 3.2 through Section 3.6.

         

        Section
          3.8.  Replacement
          of Lenders.
          If any
          Lender Party seeks reimbursement for increased costs under Section 3.2
          through
          Section 3.6, then within ninety days thereafter -- provided no Event of
          Default
          then exists -- Borrower shall have the right (unless such Lender Party
          withdraws
          its request for additional compensation) to replace such Lender Party by
          requiring such Lender Party to assign its Loans and Notes and its commitments
          hereunder to an Eligible Assignee reasonably acceptable to Administrative
          Agent
          and to Borrower, provided that: (a) all Obligations of Borrower owing to
          such
          Lender Party being replaced (including such increased costs, but excluding
          principal and accrued interest on the Notes being assigned) shall be paid
          in
          full to such Lender Party concurrently with such assignment, and (b) the
          replacement Eligible Assignee shall purchase the Note being assigned by
          paying
          to such Lender Party a price equal to the principal amount thereof plus
          accrued
          and unpaid interest thereon. In connection with any such assignment Borrower,
          Administrative Agent, such Lender Party and the replacement Eligible Assignee
          shall otherwise comply with Section 10.5. Notwithstanding the foregoing
          rights
          of Borrower under this section, however, Borrower may not replace any Lender
          Party which seeks reimbursement for increased costs under Section 3.2 through
          Section 3.6 unless Borrower is at the same time replacing all Lender Parties
          which are then seeking such compensation. In connection with the replacement
          of
          a Lender Party, Borrower shall pay all costs that would have been due to
          such
          Lender Party pursuant to Section 3.5 if such Lender Party’s Loans had been
          prepaid at the time of such replacement.

         

         

        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:

         

        
          
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              Agreement Berry Petroleum]

            
            

          

          
            33

            
              

            

          

          
            
            

          

        

        (a)  This
          Agreement.

         

        (b)  Each
          Note.

         

        (c)  Certain
          certificates of Borrower including:

         

        (i)  An
          “Omnibus Certificate” of the Secretary and of the Chairman of the Board or
          President of Borrower, which shall contain the names and signatures of
          the
          officers of Borrower authorized to execute Loan Documents and which shall
          certify to the truth, correctness and completeness of the following exhibits
          attached thereto: (1) a copy of resolutions duly adopted by the Board of
          Directors of Borrower and in full force and effect at the time this Agreement
          is
          entered into, authorizing the execution of this Agreement and the other
          Loan
          Documents delivered or to be delivered in connection herewith and the
          consummation of the transactions contemplated herein and therein, (2) a
          copy of
          the charter documents of Borrower and all amendments thereto, certified
          by the
          appropriate official of Borrower’s state of organization, and (3) a copy of any
          bylaws of Borrower; and

         

        (ii)  A
          “Compliance Certificate” of the Chairman of the Board or President and of the
          Chief Financial Officer of Borrower, of even date with such Loan or such
          Letter
          of Credit, in which such officers certify to the satisfaction of the conditions
          set out in subsections (a), (b), (c) and (d) of Section 4.2.

         

        (d)  Certificate
          (or certificates) of the due formation, valid existence and good standing
          of
          Borrower in its state of organization, issued by the appropriate authorities
          of
          such jurisdiction.

         

        (e)  A
          favorable opinion of Musick, Peeler & Garrett LLP, counsel for Restricted
          Persons, substantially in the form set forth in Exhibit E.

         

        (f)  The
          Initial Financial Statements.

         

        (g)  Certificates
          or binders evidencing Restricted Persons’ insurance in effect on the date
          hereof.

         

        (h)  Initial
          Engineering Report.

         

        (i)
  Payment
          of all commitment, facility, agency and other fees required to be paid
          to any
          Lender pursuant to any Loan Documents or any commitment agreement heretofore
          entered into.

         

        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:

         

        (a)  All
          representations and warranties made by any Restricted Person in any Loan
          Document shall be true on and as of the date of such Loan or the date of
          issuance of such Letter of Credit (except to the extent that the facts
          upon
          which such representations are based have been changed by the extension
          of
          credit hereunder) 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            34

            
              

            

          

          
            
            

          

        

        (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 since the date of the most
          recent
          financial statements of Borrower delivered pursuant to Section
          6.2(a).

         

        (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 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 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.

         

        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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            35

            
              

            

          

          
            
            

          

        

        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, (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 Tribunal 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 cause a Material Adverse Change.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            36

            
              

            

          

          
            
            

          

        

        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 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. 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 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 before any
          Tribunal
          which could cause a Material Adverse Change, and (b) there are no outstanding
          judgments, injunctions, writs, rulings or orders by any such Tribunal against
          any Restricted Person or any Restricted Person’s stockholders, partners,
          directors or officers which could cause a Material Adverse Change.

         

        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
          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.

         

        
          
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        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 and permits 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.

         

        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. 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.

         

        
          
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        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.    Insider.
          No
          Restricted Person, nor any Person having “control” (as that term is defined in
          12 U.S.C. § 375b(9) or in regulations promulgated pursuant thereto) of any
          Restricted Person, is a “director” or an “executive officer” or “principal
          shareholder” (as those terms are defined in 12 U.S.C. § 375b(8) or (9) or in
          regulations promulgated pursuant thereto) of any Lender, of a bank holding
          company of which any Lender is a Subsidiary or of any Subsidiary of a bank
          holding company of which any Lender is a Subsidiary.

         

        Section
          5.17.    Solvency.
          Upon
          giving effect to the issuance of the Notes, the execution of the Loan Documents
          by Borrower and the consummation of the transactions contemplated hereby,
          Borrower will be solvent (as such term is used in applicable bankruptcy,
          liquidation, receivership, insolvency or similar Laws).

         

        Section
          5.18.    Title
          to Properties; Licenses.
          Each
          Restricted Person has good and defensible title to all of its material
          properties and assets, free and clear of all Liens, encumbrances, or adverse
          claims other than Permitted Liens and free and clear of all impediments
          to the
          use of such properties and assets in such Restricted Person’s business. Each
          Restricted Person possesses all licenses, permits, franchises, 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.

         

         

        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:

         

        
          
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        (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.

         

        (c)  Promptly
          upon their becoming available, 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
          Securities and Exchange Commission 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 the Borrower posts such documents,
          or provides a link thereto, on the Borrower’s website on the Internet at the
          website address listed in the Disclosure Letter; or (ii) on which such
          documents
          are posted on the 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 the Administrative Agent have access (whether
          a
          commercial, third-party website or whether sponsored by the Administrative
          Agent); provided
          that:
          (x) the Borrower shall deliver paper copies of such documents to the
          Administrative Agent or any Lender that requests the Borrower to deliver
          such
          paper copies until a written request to cease delivering paper copies is
          given
          by the Administrative Agent or such Lender and (y) the Borrower shall notify
          (which may be by facsimile or electronic mail) the Administrative Agent
          and each
          Lender of the posting of any such documents and provide to the Administrative
          Agent by electronic mail electronic versions (i.e.,
          soft
          copies) of such documents. Notwithstanding anything contained herein, in
          every
          instance the Borrower shall be required to provide paper copies of the
          Compliance Certificates required by Section 6.2(b) to the Administrative
          Agent
          and each of the Lenders. Except for such Compliance Certificates, the
          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 the 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.

         

        
          
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        (d)  By
          March
          31 of each year, an Engineering Report prepared by DeGolyer & MacNaughton,
          or other independent petroleum engineers chosen by Borrower and acceptable
          to
          Majority Lenders, 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 oil or gas 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 Securities
          and
          Exchange Commission and shall contain information and analysis comparable
          in
          scope to that contained in the Initial Engineering Report.

         

        (e)  As
          soon
          as available, and in any event within sixty (60) days after the end of
          each
          Fiscal Quarter, a report describing by field the gross volume of production
          and
          sales prices attributable to production during each calendar month during
          such
          Fiscal Quarter from the properties described in the most recent Engineering
          Report.

         

        (f)
  When
          required under Section 2.9(b)
          or
          Section 2.9(c), the Engineering Reports described therein and together
          with each
          Engineering Report required under Section 2.9(b), lease operating statements
          for
          the preceding Fiscal Year, which include monthly lease operating statements,
          for
          properties covered by such Engineering Report.

         

        (g)  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
          EBITDA 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.

         

        (h)  Concurrently
          with the reports referred to in Section 6.2(d), 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 request concerning any provision
          of
          the Loan Documents 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.

         

        
          
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        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:

         

        (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 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 property
          used
          or useful in the conduct of its business in good condition and in compliance
          with all applicable Laws, 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.

         

        
          
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        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 it is in good faith contesting
          the
          validity thereof by appropriate proceedings and has set aside on its books
          adequate reserves therefor.

         

        Section
          6.8.  Insurance.
          Each
          Restricted Person shall at all times maintain (at its own expense) insurance
          for
          its property and its liability for injury to persons or property in accordance
          with the Insurance Schedule, which insurance shall be by financially sound
          and
          reputable insurers. 

         

        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.

         

        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. 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.

         

        
          
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        (a)  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. 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 approved
          by
          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.

         

        Section
          6.14.    Bank
          Accounts; Offset.
          To
          secure the repayment of the Obligations Borrower hereby grants to each
          Lender 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 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,
          and (c) any other credits and claims of Borrower at any time existing against
          any Lender, including claims under certificates of deposit. At any time
          and from
          time to time after the occurrence of any Default, each Lender 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.

         

        
          
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        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.

         

         

        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.

         

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

         

        (e)  Permitted
          Subordinated Debt.

         

        (f)
  Senior
          Debt (including without limitation, Money Market Facilities) which does
          not in
          the aggregate exceed, at any one time outstanding, the
          amount equal to the Borrowing Base minus the Facility Usage.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            45

            
              

            

          

          
            
            

          

        

        (g)  miscellaneous
          items of Indebtedness not described in subsections (a) through (f) which
          do 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)  Contracts
          entered into with the purpose and effect of fixing prices on oil or 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 (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 having terms of up to 60 months (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 and Gas
          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 and Gas Production from the Midway-Sunset Field anticipated
          to be
          sold in the ordinary course of such Persons’ business for such month, (iii) no
          such contract requires any Restricted Person to put up money, assets, letters
          of
          credit 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 section, the term “Projected
          Oil and Gas Production”
means
          the projected production of oil or gas (measured by volume unit or 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),
          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
          reports meeting the requirements of such Section 6.2(d) above and otherwise
          are
          satisfactory to Administrative Agent.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            46

            
              

            

          

          
            
            

          

        

        (b)  Contracts
          entered into by a Restricted Person with the purpose and effect of fixing
          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 swap 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 and (iii) 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.

         

        (c)  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) no such
          contract requires any Restricted Person to put up money, assets, letters
          of
          credit 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.

         

        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. No Subsidiary of Borrower which is a partnership
          will
          allow any diminution of Borrower’s interest (direct or indirect)
          therein. 

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            47

            
              

            

          

          
            
            

          

        

        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:

         

        (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 

         

        (f)  other
          property which is sold for fair consideration; provided that the aggregate
          sales
          price for all such property sold during any period of twelve (12) consecutive
          calendar months shall not exceed seven and one-half percent (7.5%) of Borrower’s
          Consolidated Net Worth.

         

        Borrower’s
          Montalvo property located in Ventura County, California was not and will
          not be
          considered in determining the Borrowing Base and therefore such property
          is not
          subject to the limitations of this Section 7.5.

        

        Section
          7.6.  Limitation
          on Dividends and Stock Repurchases.
          No
          Restricted Person will declare or make any Dividends or Stock Repurchases
          other
          than (i) Dividends payable to 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, and (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.

         

        Section
          7.7.  Limitation
          on Acquisitions, Investments; and New Businesses.
          Except
          as
          expressly permitted by this section, no Restricted Person will (a) make
          any
          expenditure or commitment or incur any obligation or enter into or engage
          in any
          transaction, or (b) 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. 

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            48

            
              

            

          

          
            
            

          

        

        Section
          7.8.  Limitation
          on Credit Extensions.
          Except
          for Permitted Investments, no Restricted Person will extend credit, make
          advances or make loans other than (a) 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 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.
          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 (a) the ability of any
          Subsidiary of Borrower to (i) pay dividends or make other distributions
          to
          Borrower, (ii) to redeem equity interests held in it by Borrower, (iii)
          to repay
          loans and other indebtedness owing by it to Borrower, or (iv) to transfer
          any of
          its assets to Borrower or (b) the ability of any Restricted Person to grant
          to Agent and Lenders Liens on its assets. No ERISA Affiliate will incur
          any
          obligation to contribute to any “multiemployer plan” as defined in Section 4001
          of ERISA.

         

        Section
          7.11.    Current
          Ratio.
          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.    EBITDA
          to Total Funded Debt Ratio.
          At the
          end of any Fiscal Quarter, the ratio of (a) Total Funded Debt to
          (b) Adjusted EBITDA for the Four-Quarter Period then ended, will not be
          greater than 3.5 to 1.0.

         

         

        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;

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            49

            
              

            

          

          
            
            

          

        

        (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;

         

        (g)  Any
          Restricted Person fails to duly observe, perform or comply with any agreement
          with any Person or any term or condition of any instrument, if such agreement
          or
          instrument is materially significant to Borrower or to Borrower and its
          Subsidiaries on a Consolidated basis, and such failure is not remedied
          within
          the applicable period of grace (if any) provided in such agreement or
          instrument;

         

        (h)  Any
          Restricted Person (i) fails to pay any portion, when such portion is due,
          of any
          of its Indebtedness in excess of $25,000,000, or (ii) breaches or defaults
          in
          the performance of any agreement or instrument by which any such Indebtedness
          is
          issued, evidenced, governed, or secured, and any such failure, breach or
          default
          continues beyond any applicable period of grace provided therefor;

         

        (i)
  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);

         

        (j)
  Any
          Restricted Person:

         

        (i)  suffers
          the entry against it of a judgment, decree or order for relief by a Tribunal
          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 thirty 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

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            50

            
              

            

          

          
            
            

          

        

        (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 thirty 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 thirty 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

         

        (v)    
          suffers
          a
          writ or warrant of attachment or any similar process to be issued by any
          Tribunal 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
          thirty days after the entry or levy thereof or after any stay is vacated
          or set
          aside;

         

        (k)  Any
          Change of Control occurs; and

         

        (l)
  Any
          Material Adverse Change occurs.

         

        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 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            51

            
              

            

          

          
            
            

          

        

        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.

         

         

        ARTICLE
          IX -
          Administrative Agent

         

        Section
          9.1.  Appointment
          and Authority.
          Each
          Lender Party hereby irrevocably authorizes Administrative Agent, and
          Administrative Agent hereby undertakes, to receive payments of principal,
          interest and other amounts due hereunder as specified herein and to take
          all
          other actions and to exercise such powers under the Loan Documents as are
          specifically delegated to Administrative Agent by the terms hereof or thereof,
          together with all other powers reasonably incidental thereto. The relationship
          of Administrative Agent to the other Lender Parties is only that of one
          commercial lender acting as Administrative Agent for others, and nothing
          in the
          Loan Documents shall be construed to constitute Administrative Agent a
          trustee
          or other fiduciary for any Lender Party or any holder of any participation
          in a
          Note nor to impose on Administrative Agent duties and obligations other
          than
          those expressly provided for in the Loan Documents. With respect to any
          matters
          not expressly provided for in the Loan Documents and any matters which
          the Loan
          Documents place within the discretion of Administrative Agent, Administrative
          Agent shall not be required to exercise any discretion or take any action,
          and
          it may request instructions from Lenders with respect to any such matter,
          in
          which case it shall be required to act or to refrain from acting (and shall
          be
          fully protected and free from liability to all Lender Parties in so acting
          or
          refraining from acting) upon the instructions of Majority Lenders (including
          itself), provided, however, that Administrative Agent shall not be required
          to
          take any action which exposes it to a risk of personal liability that it
          considers unreasonable or which is contrary to the Loan Documents or to
          applicable Law. Upon receipt by Administrative Agent from Borrower of any
          communication calling for action on the part of Lenders or upon notice
          from any
          other Lender to Administrative Agent of a Default, Administrative Agent
          shall
          promptly notify each other Lender thereof.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            52

            
              

            

          

          
            
            

          

        

        Section
          9.2.  Exculpation,
          Administrative Agent’s Reliance, Etc.
          Neither
          Administrative Agent nor any of its directors, officers, Administrative
          Agents,
          attorneys, or employees shall be liable for any action taken or omitted
          to be
          taken by any of them under or in connection with the Loan Documents, including
          their negligence of any kind, except that each shall be liable for its
          own gross
          negligence or willful misconduct. Without limiting the generality of the
          foregoing, Administrative Agent (a) may treat the payee of any Note as
          the
          holder thereof until Administrative Agent receives written notice of the
          assignment or transfer thereof in accordance with this Agreement, signed
          by such
          payee and in form satisfactory to Administrative Agent; (b) may consult
          with
          legal counsel (including counsel for Borrower), independent public accountants
          and other experts selected by it and shall not be liable for any action
          taken or
          omitted to be taken in good faith by it in accordance with the advice of
          such
          counsel, accountants or experts; (c) makes no warranty or representation
          to any
          other Lender and shall not be responsible to any other Lender Party for
          any
          statements, warranties or representations made in or in connection with
          the Loan
          Documents; (d) shall not have any duty to ascertain or to inquire as to
          the
          performance or observance of any of the terms, covenants or conditions
          of the
          Loan Documents on the part of any Restricted Person or to inspect the property
          (including the books and records) of any Restricted Person; (e) shall not
          be
          deemed to have knowledge of the occurrence of a Default unless it shall
          have
          received notice thereof specifying that it is a “Notice of Default,” (f) shall
          not be responsible to any other Lender for the due execution, legality,
          validity, enforceability, genuineness, sufficiency or value of any Loan
          Document
          or any instrument or document furnished in connection therewith; (g) may
          rely
          upon the representations and warranties of each Restricted Person or Lender
          Party in exercising its powers hereunder; and (h) shall incur no liability
          under
          or in respect of the Loan Documents by acting upon any notice, consent,
          certificate or other instrument or writing (including any facsimile, telegram,
          cable or telex) believed by it to be genuine and signed or sent by the
          proper
          Person or Persons.

         

        Section
          9.3.  Credit
          Decisions.
          Each
          Lender Party acknowledges that it has, independently and without reliance
          upon
          any other Lender Party, made its own analysis of Borrower and the transactions
          contemplated hereby and its own independent decision to enter into this
          Agreement and the other Loan Documents. Each Lender Party also acknowledges
          that
          it will, independently and without reliance upon any other Lender Party
          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.

         

        Section
          9.4.  Indemnification.
          Each Lender agrees to indemnify Administrative Agent (to the extent not
          reimbursed by Borrower within ten (10) days after demand) from and against
          such
          Lender’s Percentage Share of any and all liabilities, obligations, 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
          Administrative Agent growing out of, resulting from or in any other way
          associated with the Loan Documents and the transactions and events (including
          the enforcement thereof) at any time associated therewith or contemplated
          therein (whether arising in contract or in tort and otherwise and including
          any
          violation or noncompliance with any Environmental Laws by any Person or
          any
          liabilities or duties of any 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 ARE CAUSED, IN WHOLE OR IN PART, BY ANY
          NEGLIGENT
          ACT OR OMISSION OF ANY KIND BY ADMINISTRATIVE AGENT,

         

        
          
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        provided
          only that no Lender shall be obligated under this section to indemnify
          Administrative Agent for that portion, if any, of any liabilities and costs
          which is proximately caused by Administrative Agent’s own individual gross
          negligence or willful misconduct, as determined in a final judgment. Cumulative
          of the foregoing, each Lender agrees to reimburse Administrative Agent
          promptly
          upon demand for such Lender’s Percentage Share of any costs and expenses to be
          paid to Administrative Agent by Borrower under Section 10.4(a) to the extent
          that Administrative Agent is not timely reimbursed for such expenses by
          Borrower
          as provided in such section. As used in this section the term “Administrative
          Agent” shall refer not only to the Person designated as such in Section 1.1 but
          also to each director, officer, Administrative Agent, agent, advisor, attorney,
          employee, representative and Affiliate of such Person.

         

        Section
          9.5.  Rights
          as Lender.
          In its
          capacity as a Lender, Administrative Agent shall have the same rights and
          obligations as any Lender and may exercise such rights as though it were
          not
          Administrative Agent. Administrative Agent may accept deposits from, lend
          money
          to, act as trustee under indentures of, and generally engage in any kind
          of
          business with any Restricted Person or their Affiliates, all as if it were
          not
          Administrative Agent hereunder and without any duty to account therefor
          to any
          other Lender.

         

        Section
          9.6.  Sharing
          of Set-Offs and Other Payments.
          Each
          Lender Party agrees that if it shall, whether through the exercise of 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 which, taking
          into
          account all distributions made by Administrative Agent under Section
          3.1,
          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 Tribunal order to be paid on account of the possession of such funds
          prior to
          such recovery.

         

        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.

         

        
          
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        Section
          9.8.  Benefit
          of Article IX.
          The
          provisions of this Article (other than the following Section 9.9) are intended
          solely for the benefit of Lender Parties, and no Restricted Person shall
          be
          entitled to rely on any such provision or assert any such provision in
          a claim
          or defense against any Lender. Lender Parties may waive or amend such provisions
          as they desire without any notice to or consent of Borrower or any Restricted
          Person.

         

        Section
          9.9.  Resignation.
          Administrative Agent may resign at any time by giving written notice thereof
          to
          Lenders and Borrower. Each such notice shall set forth the date of such
          resignation. Upon any such resignation Majority Lenders shall have the
          right to
          appoint a successor Administrative Agent. A successor must be appointed
          for any
          retiring Administrative Agent, and such Administrative Agent’s resignation shall
          become effective when such successor accepts such appointment. If, within
          thirty
          days after the date of the retiring Administrative Agent’s resignation, no
          successor Administrative Agent has been appointed and has accepted such
          appointment, then the retiring Administrative Agent may appoint a successor
          Administrative Agent, which shall be a commercial bank organized or licensed
          to
          conduct a banking or trust business under the Laws of the United States
          of
          America or of any state thereof. Upon the acceptance of any appointment
          as
          Administrative Agent hereunder by a successor Administrative Agent, the
          retiring
          Administrative Agent shall be discharged from its duties and obligations
          under
          this Agreement and the other Loan Documents. After any retiring Administrative
          Agent’s resignation hereunder the provisions of this ARTICLE IX shall continue
          to inure to its benefit as to any actions taken or omitted to be taken
          by it
          while it was Administrative Agent under the Loan Documents.

         

         

        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 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 4.2(f), (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
          $750,000,000, (7) release Borrower from its obligation to pay such Lender’s Note
          or (8) amend this Section 10.1(a).

         

        
          
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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.

         

        
          
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        (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.

         

        Section
          10.3.    Notices.
          

         

        (a)  Notices
          Generally.
          All
          notices, requests, consents, demands and other communications required
          or
          permitted under any Loan Document shall be in writing, unless otherwise
          specifically provided in such Loan Document (provided that Administrative
          Agent
          may give telephonic notices to the other Lender Parties), and shall be
          deemed
          sufficiently given or furnished if delivered by personal delivery, by facsimile
          or other electronic transmission, by delivery service with proof of delivery,
          or
          by registered or certified United States mail, postage prepaid, to Borrower
          and
          Restricted Persons at the address of Borrower specified on the signature
          pages
          hereto and to each Lender Party at its address specified on the Lenders
          Schedule
          (unless changed by similar notice in writing given by the particular Person
          whose address is to be changed). Any such notice or communication shall
          be
          deemed to have been given (a) in the case of personal delivery or delivery
          service, as of the date of first attempted delivery during normal business
          hours
          at the address provided herein, (b) in the case of facsimile, upon receipt,
          (c)
          in the case of other electronic transmission, upon acknowledgment of receipt
          by
          the recipient within twenty-four (24) hours of first attempted delivery,
          or (d)
          in the case of registered or certified United States mail, within three
          days
          after deposit in the mail; provided, however, that no Borrowing Notice
          shall
          become effective until actually received by Administrative Agent.

         

        
          
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        (b)  Electronic
          Communications.
          Notices
          and other communications to the Lenders and 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.

         

        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.

         

        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)  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.

         

        Section
          10.5.    Successors
          and Assigns; Assignments.

         

        
          
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        (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 the 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 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 the
          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 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 the 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
          the Administrative Agent an Administrative Questionnaire.

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            60

            
              

            

          

          
            
            

          

        

        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 the
          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, the Borrower
          or
          the 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 last sentence of Section 10.1(a) that affects such Participant.
          Subject to paragraph (e) of this Section, the 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            61

            
              

            

          

          
            
            

          

        

        (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 3.6 unless
          Borrower is notified of the participation sold to such Participant and
          such
          Participant agrees, for the benefit of Borrower, to comply with Section
          3.6(d) 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 Tribunal, (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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            62

            
              

            

          

          
            
            

          

        

        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. 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 Section 3.2 through Section 3.6, and any
          obligations which any Person may have to indemnify or compensate any Lender
          Party 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            63

            
              

            

          

          
            
            

          

        

        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 SECTION 9.4 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.

         

        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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            64

            
              

            

          

          
            
            

          

        

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

         

        
          
            	 	
                    BERRY
                      PETROLEUM COMPANY,

                  
	 	
                    Borrower

                  
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                    By:

                  	 
	  
	
                         

                  	
                         

                  
	 	 	
                    Ralph
                      J. Goehring

                  
	 	 	
                    Executive
                      Vice President and

                  
	 	 	
                    Chief
                      Financial Officer

                  
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                    Address:

                  
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                    5201
                      Truxtun Avenue, Suite 300

                  
	 	
                    Bakersfield,
                      California 93309-0640

                  
	 	
                    Attention:

                  	
                    Shawn
                      Canaday

                  
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	
                    Telephone:   
                      

                  	
                    661.616.3809

                  
	 	
                    Fax:

                  	
                    661.616.3881

                  
	 	
                    Email:

                  	
                    smc@bry.com

                  

          

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  WELLS
                    FARGO BANK, NATIONAL

                
	 	
                  ASSOCIATION,
                    Administrative Agent,

                
	 	
                  LC
                    Issuer and Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Guy
                    C. Evangelista

                
	 	 	
                  Vice
                    President

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  JPMORGAN
                    CHASE, N.A., Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  BNP
                    PARIBAS, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  CITIBANK
                    (WEST), FSB, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  SOCIETE
                    GENERALE, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  COMERICA
                    BANK, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                        

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  UNION
                    BANK OF CALIFORNIA, N.A., Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  MIDFIRST
                    BANK, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	
                  BANK
                    OF SCOTLAND, Lender

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Karen
                    Weich

                
	 	 	
                  Assistant
                    Vice President

                

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	
                  U.S.
                    BANK NATIONAL ASSOCIATION, Lender 

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

         

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          1

         

        LENDERS
          SCHEDULE

         

        

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  WELLS
                    FARGO BANK, NATIONAL ASSOCIATION

                	
                  17.0%

                	
                  $127,500,000

                
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 
	
                  1700
                    Lincoln St.

                	 	 
	
                  Denver,
                    Colorado  80203

                	 	 
	
                  Attention:

                	
                  Guy
                    C. Evangelista

                	 	 
	 	 	 	 
	
                  Tel:

                	
                  303.863.5793

                	 	 
	
                  Fax:

                	
                  303.863.5196

                	 	 
	
                  Email:

                	
                  guy.c.evangelista@wellsfargo.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 
	
                  JPMORGAN
                    CHASE, N.A.

                	
                  12.0%

                	
                  $90,000,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  JPMorgan
                    Chase, N.A.

                	 	 
	
                  600
                    Travis St., 20th
                    Floor

                	 	 
	
                  Houston,
                    Texas 77002

                	 	 
	
                  Attention:

                	
                  Jo
                    Linda Papadakis

                	 	 
	 	 	 	 
	
                  Tel:

                	
                  713-216-7743

                	 	 
	
                  Fax:

                	
                  713-216-7770

                	 	 
	
                  Email:

                	
                  jo.l.papadakis@chase.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 
	
                  BNP
                    PARIBAS

                	
                  12.0%

                	
                  $90,000,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  1200
                    Smith Street

                	 	 
	
                  Suite
                    3100

                	 	 
	
                  Houston,
                    Texas 77002

                	 	 
	
                  Attention:

                	
                  Polly
                    Schott

                	 	 
	 	 	 	 
	
                  Tel:

                	
                  713.982.1150

                	 	 
	
                  Fax:

                	
                  713.659.6915

                	 	 
	
                  Email:

                	
                  polly.schott@americas.bnpparibas.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

         

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 
	 	 	 
	
                  CITIBANK
                    (WEST), FSB

                	
                  12.0%

                	
                  $90,000,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  5554
                    California Avenue

                	 	 
	
                  Bakersfield,
                    California 93309

                	 	 
	
                  Attention:

                	
                  Gai
                    Sherman

                	 	 
	 	 	 	 
	
                  Tel:

                	
                  661.863.0366

                	 	 
	
                  Fax:

                	
                  661.324.0996

                	 	 
	
                  Email:

                	
                  gsherman@calfed.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  SOCIETE
                    GENERALE

                	
                  12.0%

                	
                  $90,000,000

                
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  1111
                    Bagby, Suite 2020

                	 	 
	
                  Houston,
                    Texas 77002

                	 	 
	
                  Attention:

                	
                  Josh
                    Rogers

                	 	 
	
                  Tel:

                	
                  713.759.6315

                	 	 
	
                  Fax:

                	
                  713.650.0824

                	 	 
	
                  Email:

                	
                  josh.rogers@us.socgen.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	 	 	 
	
                  COMERICA
                    BANK

                	
                  8.5%

                	
                  $63,750,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  910
                    Louisiana, #410

                	 	 
	
                  Houston,
                    Texas 77002

                	 	 
	
                  Attention:

                	
                  Juli
                    Bieser

                	 	 
	
                  Tel:

                	
                  214.969.6538

                	 	 
	
                  Fax:

                	
                  214.969.6561

                	 	 
	
                  Email:

                	
                  juli_m_bieser@comerica.com

                	 	 
	 	 	 
	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  UNION
                    BANK OF CALIFORNIA, N.A.

                	
                  8.5%

                	
                  $63,750,000

                
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  500
                    N. Akard, Suite 4200

                	 	 
	
                  Dallas,
                    Texas 75201

                	 	 
	
                  Attention:

                	
                  Dustin
                    Gaspari

                	 	 
	
                  Tel:

                	
                  214.922.4200

                	 	 
	
                  Fax:

                	
                  214.922.4209

                	 	 
	
                  dustin.gaspari@uboc.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same
                    

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  BANK
                    OF SCOTLAND

                	
                  6.0%

                	
                  $45,000,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  565
                    Fifth Avenue

                	 	 
	
                  New
                    York, New York 10017

                	 	 
	
                  Attention:

                	
                  Victoria
                    McFadden

                	 	 
	
                  Tel:

                	
                  212.450.0876

                	 	 
	
                  Fax:

                	
                  212.479.2807

                	 	 
	
                  Email:

                	
                  victoriamcfadden@bankofscotlandusa.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  MIDFIRST
                    BANK

                	
                  6.0%

                	
                  $45,000,000

                
	 	 	 	 
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  501
                    NW Grand Blvd.

                	 	 
	
                  Oklahoma
                    City, Oklahoma 73118

                	 	 
	
                  Attention:

                	
                  Shawn
                    D. Brewer

                	 	 
	 	 	 	 
	
                  Tel:

                	
                  405.767.7524

                	 	 
	
                  Fax:

                	
                  405.767.7120

                	 	 
	
                  Email:

                	
                  shawn.brewer@midfirst.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	 	 	
                  Percentage

                  Share

                	
                  Commitment

                  Amount

                
	 	 	 	 
	
                  U.S.
                    BANK NATIONAL ASSOCIATION

                	
                  6.0%

                	
                  $45,000,000

                
	 	 	 	 
	
                  Domestic
                    Lending Office:

                	 	 
	 	 	 	 
	
                  918
                    17th
                    Street, 3rd
                    Floor

                	 	 
	
                  Denver,
                    CO 80202

                	 	 
	
                  Attention:

                	
                  Justin
                    Alexander

                	 	 
	
                  Telephone:

                	
                  303.585.4201

                	 	 
	
                  Fax:

                	
                  303.585.4362

                	 	 
	
                  Email:
                    

                	
                  Justin.alexander@usbank.com

                	 	 
	 	 	 	 
	 	 	 	 
	
                  Eurodollar
                    Lending Office:

                	 	 
	 	 	 	 
	
                  Same

                	 	 

        

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        SCHEDULE
          2

         

        INSURANCE
          SCHEDULE

         

        
          
            [Signature
              Page to Credit Agreement Berry Petroleum]

            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        EXHIBIT
          A

         

        PROMISSORY
          NOTE

         

        _______________,
          2006

         

        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, and (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. 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.

         

        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.

        
           

          
            
              [Credit
                Agreement Berry Petroleum]

            

            
              
              

              
                

              

            

            
              
              

            

          

        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:

                

        

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            Exhibit
              A - Page
              2

            
              

            

          

          
            
            

          

        

        EXHIBIT
          B

         

        BORROWING
          NOTICE

         

        Reference
          is made to that certain Credit Agreement dated as of _______________, 2006
          (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 on and as of the date hereof
          (except
          to the extent that the facts on which such representations and warranties
          are
          based have been changed by the extension of credit under the Agreement),
          with
          the same effect as though such representations and warranties had been
          made on
          and as of the date hereof.

         

        (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 Advances requested hereby. Borrower will use the Advances
          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 Advances contained
          in
          the Agreement remains satisfied.

        
           

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
                

              

            

            
              
              

            

          

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

         

        (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:

                

        

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            Exhibit
              B - Page
              2

            
              

            

          

          
            
            

          

        

        EXHIBIT
          C

         

        CONTINUATION/CONVERSION
          NOTICE

         

        Reference
          is made to that certain Credit Agreement dated as of _________________,
          2006 (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.

        
           

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
                

              

            

            
              
              

            

          

        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:

                

        

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            Exhibit
              C - Page
              2

            
              

            

          

          
            
            

          

        

        EXHIBIT
          D

         

        CERTIFICATE
          ACCOMPANYING

        FINANCIAL
          STATEMENTS

         

        Reference
          is made to that certain Credit Agreement dated as of __________________,
          2006
          (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 6.1(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 on and as of the date hereof (except to the extent
          that the
          facts on which such representations and warranties are based have been
          changed
          by the extension of credit under the Agreement), with the same effect as
          though
          such representations and warranties had been made on and as of the date
          hereof.

         

        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.

        
           

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
                

              

            

            
              
              

            

          

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

         

        
          	 	
                  BERRY
                    PETROLEUM COMPANY

                
	 	 	 
	 	 	 
	 	
                  By:
                    

                	
                       

                
	 	 	
                  Name:

                
	 	 	
                  Title:

                

        

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            Exhibit
              D - Page
              2

            
              

            

          

          
            
            

          

        

        EXHIBIT
          E

         

        OPINION
          OF COUNSEL FOR RESTRICTED PERSONS

        
           

           

          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
                

              

            

            
              
              

            

          

        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
          and the Credit Agreement, as of the Effective Date inserted by the
          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]1]

                

        

        

        
          	
                  3.

                	
                  Borrower:

                	
                  Berry
                    Petroleum Company

                

        

        

        
          	
                  4.

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

                

        

         

        ____________________

        
          	 	
                  1

                	
                  Select
                    as applicable.

                

        

         

        
          
            
              [Credit
                Agreement Berry Petroleum]

              
              

            

            
              
                

              

            

            
              
              

            

          

        

         

        
          	5.	
                  Credit
                    Agreement:   
                      Credit
                    Agreement dated as of ______________, 2006, 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

                    Assigned2

                  	
                     

                    Percentage

                    Assigned
                      of

                    Commitment/Loans3

                  
	 	 	 
	
                    $________________

                  	
                    $________________

                  	
                    ______________%

                  
	
                    $________________

                  	
                    $________________

                  	
                    ______________%

                  
	
                    $________________

                  	
                    $________________

                  	
                    ______________%

                  

          

        

         

        
          	
                  [7.

                	
                  Trade
                    Date:

                	
                  __________________]4

                

        

         

        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:

                

        

        

        ____________________

        2 Amount
          to
          be adjusted by the counterparties to take into account any payments or
          prepayments made between the Trade Date and the Effective Date.

        3 Set
          forth, to at least 9 decimals, as a percentage of the Commitment/Loans
          of all
          Lenders thereunder.

        4 To
          be
          completed if the Assignor and the Assignee intend that the minimum assignment
          amount is to be determined as of the Trade Date.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            
              

            

          

          
            
            

          

        

        

        
          	
                  [Consented
                    to and]5
                    Accepted:

                
	 	 	 
	
                  WELLS
                    FARGO BANK, NATIONAL ASSOCIATION, 

                
	
                  as
                    Administrative Agent

                
	 	 	 
	
                  By:
                    

                	
                       

                	 
	 	
                  Name:

                	 
	 	
                  Title:

                	 
	 	 	 
	
                  [Consented
                    to:]6

                
	 	 	 
	
                  By:
                    

                	
                       

                	 
	 	
                  Name:

                	 
	 	
                  Title:

                	 

        

        

        ____________________

        5 To
          be
          added only if the consent of the Administrative Agent is required by the
          terms
          of the Credit Agreement.

        6 To
          be
          added only if the consent of the Borrower and/or other parties (e.g. LC
          Issuer)
          is required by the terms of the Credit Agreement.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            
              

            

          

          
            
            

          

        

        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 the 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 the 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 the 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
          the
          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, the 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.

         

        
          
            [Credit
              Agreement Berry Petroleum]

            
            

          

          
            
              

            

          

          
            
            

          

        

        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.

         

        [Credit
          Agreement Berry Petroleum]

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