Document:

ex10-20

 

Exhibit 10.20

EXECUTION COPY

OWNERS’ EQUITY PLEDGE AND SECURITY AGREEMENT

         THIS OWNERS’ EQUITY PLEDGE AND SECURITY AGREEMENT (as defined in Article 6
hereof, along with all other defined terms, this “Pledge Agreement”) is made
and effective as of May      , 2002 by STEVE FORGET (as more fully defined below,
a “Pledgor”), and COUSINEAU, DOUCET, PARENT, FORGET AUDIOPROTHÉSISTES s.e.n.c.
(as more fully defined below, “Pledged Share Issuer”), in favor of HEARx LTD.
(as more fully defined below, “Lender”).

R E C I T A L S:

         WHEREAS, Pledgor owns capital and/or voting equity ownership interests (or
rights thereto) of Pledged Share Issuer; and

         WHEREAS, Helix Hearing Care of America Corp. (“Helix”) and each of its
direct and indirect Subsidiaries (each, a “Borrower”; collectively, the
“Borrowers”) desire and have applied to Lender for a credit facility consisting
of a $9.42 million term loan; and

         WHEREAS, pursuant to that certain Credit Agreement by and among Borrowers
and Lender dated as of April 30, 2002 (as may be amended from time to time,
“Credit Agreement”), a condition precedent to Lender’s obligation to execute
and perform under the Credit Agreement is that Pledgor shall have executed and
delivered this Pledge Agreement; and

         WHEREAS, Pledgor is the President, Chief Executive Officer and Chairman of
Helix and Pledgor has determined that it is in his best interest to execute
this Pledge Agreement inasmuch as he will derive substantial direct and
indirect benefits from the funding of the Advances by Lender pursuant to the
Credit Agreement;

         NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), and intending to be legally
bound hereby, Pledgor, Pledged Share Issuer and Lender hereby agree as follows:

ARTICLE 1: PLEDGE

         1.1. Grant of Security Interest. Pledgor hereby pledges, hypothecates,
assigns, charges, mortgages, delivers, and transfers to Lender and hereby
grants to Lender a present, absolute, unconditional and continuing first
priority security interest in all of the following property (collectively,
“Collateral”):

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	 	a.	 	All issued and outstanding equity ownership
interests (whether in the form of stock, partnership interests,
membership interests or otherwise) of Pledged Share Issuer
owned by such Pledgor, as identified on Schedule 1.1 hereto;
and
	 
	 	b.	 	All other Pledged Shares issued from time to time
to such Pledgor; and
	 
	 	c.	 	All other Pledged Property (including, without
limitation, all options and warrants for Pledged Shares, as
identified on Schedule 1.1 hereto) owned by Pledgor, whether
now or hereafter delivered to Lender in connection with this
Pledge Agreement; and
	 
	 	d.	 	All Dividends, Distributions, capital accounts, and
other payments and rights with respect to any Pledged Property
received or receivable by Pledgor; and
	 
	 	e.	 	All proceeds of any of the foregoing; and

in each case, whether now existing or owned or hereafter acquired by Pledgor
and howsoever Pledgor’s interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).

         1.2. Security for Secured Obligations. This Pledge Agreement secures the
payment and performance in full of (a) all obligations (monetary or otherwise)
of each Borrower and other Obligor (including Pledgor) now or hereafter
existing under the Credit Agreement or any other Loan Document as well as under
any other agreement with Lender now or hereafter to extend credit to any such
Obligor (whether for principal, interest, costs, fees, expenses, protective
advances or otherwise), and (b) all obligations (monetary or otherwise) of
Pledgor and/or Pledged Share Issuer now or hereafter existing under this Pledge
Agreement or any other Loan Document to which he, she or it may be a party (all
such obligations under clauses “(a)” and “(b)” being referred to collectively
as the “Secured Obligations”).

         1.3. Delivery of Pledged Property. To the extent that any of the
Collateral is evidenced by a certificate or instrument, then all such
certificates or instruments (a) must be delivered to and held by or on behalf
of Lender pursuant hereto, and (b) must be in suitable form for transfer by
delivery, and (c) must be accompanied by all necessary powers, appointments and
instruments of transfer or assignment, duly executed in blank. To the extent
that any of the Collateral is not evidenced by a certificate or instrument,
then Pledgor shall cause the Pledge Share Issuer of such uncertificated
security to either (a) register the Lender as a registered owner thereof on the
books and records of such Pledge Shared Issuer, or (b) execute a control
agreement pursuant to which such Pledge Share Issuer agrees to comply with the
Lender’s instructions with respect to such uncertificated security without
further consent by the Pledgor.

         1.4. Dividends and Distributions on Pledged Shares. Except as otherwise
expressly permitted in the Credit Agreement, until the Pledge Agreement has
been terminated in accordance with Section 1.5, then Pledged Share Issuer shall
not declare, pay or deliver and Pledgor shall not receive or retain any
Dividend or Distribution.

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         1.5. Continuing Security Interest; Assignments; Termination. This Pledge
Agreement creates a continuing security interest in the Collateral and will
remain in full force and effect until terminated as described below in this
Section. This Pledge Agreement is binding upon Pledgor, and his, her or its
heirs, executors, administrators, personal representatives, successors and
assignees, and (together with the rights and remedies of Lender hereunder)
inures to the benefit of the Lender and
its successors, transferees, participants and assignees. Without limiting
the generality of the foregoing, except to the extent restricted under the
Credit Agreement, Lender may assign or otherwise transfer (in whole or in part,
and without Pledgor’s consent) any Loan Document and any indebtedness
thereunder to any other Person, and such other Person will thereupon become
vested with all the rights and benefits in respect thereof granted to Lender
under any such Loan Document (including this Pledge Agreement) or otherwise,
subject, however, to any contrary provisions in such assignment or transfer.
The pledge and security interest granted herein will terminate (and all rights
to the Collateral will revert to the Pledgor) upon the earlier to occur of (1)
satisfaction of the following conditions: (a) the payment and performance in
full of all Secured Obligations (unconditionally and indefeasibly) and (b) the
termination of the Credit Agreement (and the Facilities thereunder), or (2) the
consummation of the Plan of Arrangement contemplated by the Merger Agreement
and the execution by and between Pledged Share Issuer and any of Helix, Lender
or one or more of their subsidiaries of a definitive agreement or agreements
relating to the continued management by Helix, Lender or one or more of their
subsidiaries of certain clinics located in Quebec. Upon any such termination,
Lender (at Pledgor’s request and sole expense) (a) will execute and deliver to
Pledgor (without any representation, warranties or recourse of any kind
whatsoever) such documents as Pledgor may reasonably request to evidence such
termination and delivery, and (b) will deliver to Pledgor or to another person
that Lender reasonably believes may be entitled thereto (in either instance,
without any representation, warranties or recourse of any kind whatsoever) all
certificates and instruments representing or evidencing Collateral held by
Lender hereunder.

         1.6. Security Interest Absolute. All rights of Lender and the pledges and
security interests granted to Lender hereunder, and all obligations of Pledgor
hereunder, are absolute and unconditional, irrespective of:

	 	a.	 	Any lack of validity or enforceability of any Note
or any other Loan Document; or
	 
	 	b.	 	The failure of Lender or any holder of any Note:
	 

	 	1.	 	To assert any claim or demand or to
enforce any right or remedy under the provisions of any
Note or any other Loan Document or otherwise, or
	 
	 	2.	 	To exercise any right or remedy against
any other Obligor of, or collateral securing, any
obligations of any Borrower owing to Lender; or

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	 	c.	 	Any change in the time, manner or place of payment
of, or in any other term of, all or any of the Secured
Obligations or any other extension, compromise or renewal of
any Secured Obligation; or
	 
	 	d.	 	Any reduction, limitation, impairment or
termination of any Secured Obligation for any reason, including
any claim of waiver, release, surrender, alteration or
compromise (and each Pledgor hereby waives any right to or
claim of any defense or setoff, counterclaim, recoupment or
termination
whatsoever by reason of any invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of,
or any other event or occurrence affecting, any Secured
Obligation); or
	 
	 	e.	 	Any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any Note or
any other Loan Document; or
	 
	 	f.	 	Any addition, exchange, release, surrender or
nonperfection of any collateral (including the Collateral), or
any amendment to or waiver or release of or addition to or
consent to departure from any guaranty, for any of the Secured
Obligations; or
	 
	 	g.	 	Any other circumstances that might otherwise
constitute a defense available to, or a legal or equitable
discharge of, Pledgor, including, without limitation, any and
all suretyship defenses.

ARTICLE 2: REPRESENTATIONS AND WARRANTIES

                  As of the date hereof and each pledge and delivery of any Collateral
hereunder (including each pledge and delivery of Pledged Shares), Pledgor
hereby represents and warrants to Lender as set forth in this Article.

         2.1. Legal Capacity. Pledgor has the full power and legal capacity to
execute and deliver the Pledge Agreement and to perform his obligations
hereunder.

         2.2. Ownership; No Liens. Pledgor is the legal and beneficial owner of,
and has good and marketable title to (and has full right and authority to
pledge and assign) such Collateral, free and clear of all Liens, security
interests, options, charges, claims or other encumbrances (including, without
limitation, any dower, curtsey or other rights of third parties), except any
Lien or security interest granted pursuant hereto in favor of Lender.

         2.3. Valid Security Interest. The execution of this Pledge Agreement is
effective to create a valid and enforceable pledge of and security interest in
the Collateral and all proceeds thereof securing the payment of the Secured
Obligations. The delivery of the Collateral (to the extent certificated) to
Lender is effective to create a perfected, first priority security interest in
the Collateral and all proceeds thereof. No filing or other action will be
necessary to perfect or protect such security interest.

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         2.4. As to Pledged Shares. With respect to any Pledged Shares
constituting Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable. The Pledged Shares constitute
all of the issued and outstanding shares (and other rights) of equity ownership
of Pledged Share Issuer owned by such Pledgor.

         2.5. Non-Contravention. The execution, delivery and performance by such
Pledgor of this Pledge Agreement and each other Loan Document executed or to be
executed by such Pledgor do not:

	 	a.	 	Contravene any provision of the Organic Documents
of Pledged Share Issuer; or
	 
	 	b.	 	Contravene any contractual restriction the
violation of which individually or in the aggregate could
possibly have a Material Adverse Effect; or
	 
	 	c.	 	Contravene any law or governmental regulation or
court decree or order binding on or affecting such Pledgor; or
	 
	 	d.	 	Result in, or require the creation or imposition
of, any Lien on any of such Pledgor’s property, other than the
Lien created pursuant to this Pledge Agreement.

         2.6. Valid Obligations. This Pledge Agreement constitutes the legal,
valid and binding obligation of Pledgor and is enforceable against Pledgor in
accordance with the terms hereof.

         2.7. Pledgor Solvency. Pledgor is not “insolvent,” as such term is defined
in Section 101(32) of the Bankruptcy Code (11 U.S.C. § 101(32)) or in any other
applicable law of any jurisdiction, including without limitation, the
Bankruptcy and Insolvency Act (Canada). Pledgor, by virtue of its obligations
and actions in connection with the Loan Documents, has not engaged and is not
engaging in any transaction that constitutes a fraudulent transfer or
fraudulent conveyance under applicable federal, provincial, or state law
(including without limitation under Section 548 of the Bankruptcy Code or under
the Uniform Fraudulent Transfer Act or the Uniform Fraudulent Conveyance Act).

ARTICLE 3: COVENANTS

                  Pledgor hereby covenants and agrees that, so long as this Pledge Agreement
remains effective, Pledgor will comply with the covenants set forth in this
Article, unless Lender otherwise consents in writing.

         3.1. Protect Collateral; Negative Pledge; Further Assurances. Pledgor
will not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of Lender hereunder). Pledgor will warrant and
defend the right and title herein granted to Lender in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all persons whomsoever. At any time and from time to
time, Pledgor (at Pledgor’s expense) will promptly execute and deliver all
further instruments, and will take all further action,

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that may be necessary or
desirable, or that Lender may reasonably request, in order to perfect and
protect any pledge or security interest granted or purported to be granted
hereby or to enable Lender to exercise and endorse its rights and remedies
hereunder with respect to any Collateral.

         3.2. Powers and Appointments. Pledgor agrees that all Pledged Shares (and
all other shares of stock or equity ownership interests constituting
Collateral) delivered by Pledgor pursuant to this Pledge Agreement will be
accompanied by duly executed undated blank powers, appointments or other
equivalent instruments of transfer acceptable to Lender. From time to time at
Lender’s request, Pledgor will promptly deliver to Lender such powers,
appointments, instruments and similar documents (satisfactory in form and
substance to Lender) with respect to the Collateral. From time
to time at Lender’s request after the occurrence and during the
continuance of any Event of Default (and after any applicable grace period
under Section 7.2 of the Credit Agreement has expired), Pledgor will promptly
transfer any Pledged Shares or other shares of capital stock or ownership
interests constituting Collateral into the name of any nominee designated by
Lender.

         3.3. Continuous Pledge. At all times, Pledgor will keep pledged to Lender
pursuant hereto all Pledged Shares and all other shares of capital stock and
other ownership interests constituting Collateral, all Dividends and
Distributions with respect thereto (subject, however, to Section 1.4 hereof),
and all other Collateral and other securities, instruments, proceeds, capital
accounts, and rights from time to time received by or distributable to Pledgor
in respect of any Collateral.

         3.4. Delivery of Dividends, Distributions and Other Collateral. Promptly
upon receipt and without any request by Lender, Pledgor agrees to deliver to
Lender (properly endorsed if required hereby or requested by Lender) all
Distributions, all Dividends (except as provided in Section 1.4 and Section
5.10 of the Credit Agreement), all other non-Dividend cash payments, and all
proceeds thereof, all of which will be held by Lender as additional Collateral
separate, segregated and apart from it other property.

         3.5. Voting Rights.

                  a.  Unless and until an Event of Default has occurred and is continuing,
Pledgor will have the exclusive right to exercise all voting rights with
respect to his, her or its Pledged Shares. Upon written request from Pledgor
(and at Pledgor’s sole expense), Lender will promptly execute and deliver such
proxies and other documents, if any, as reasonably requested in writing by
Pledgor (together with a reasonably acceptable form) that are necessary to
allow Pledgor to exercise voting power with respect to any Pledged Shares owned
by Pledgor constituting Collateral; provided, however, that no vote may be cast
or other action taken by Pledgor (including, the giving of any consent, waiver,
or ratification) that could impair any Collateral or would otherwise be
inconsistent with or violate any provision of any Loan Document (including this
Pledge Agreement).

                  b.  After any Event of Default has occurred and is continuing and Lender
has notified Pledgor of Lender’s intention to exercise its voting power, unless
otherwise then expressly impermissible under applicable law, Lender may
exercise (to the exclusion of Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged Shares or other
shares of stock or ownership interests constituting Collateral. Pledgor hereby
grants Lender an irrevocable proxy, exercisable under such circumstances set
forth above, to vote the Pledged Shares and such

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other Collateral. Pledgor
hereby covenants to promptly deliver to Lender such additional proxies,
appointments and other documents as may be necessary to allow Lender to
exercise such voting power and other incidental ownership rights.

         3.6. Investment Property. Without obtaining Lender’s prior written
consent (which consent will not be unreasonably withheld), Pledgor will not
keep or maintain any of the Collateral hereunder in a “securities account” with
any “securities intermediary” (as such terms are defined in Article 8 of the
UCC), unless a control agreement acceptable in form and substance to Lender is
first executed by such “securities intermediary” securing Lender’s first
priority interest and rights in and to all “financial assets” and “security
entitlements” constituting Collateral in such “securities account”.

         3.7. Consent to Sale. If (at any time) a majority of the voting equity
interests of Pledged Share Issuer or a majority of the members of Pledged Share
Issuer’s board of directors approves a resolution recommending the sale or
liquidation of any Pledged Share Issuer (or a material portion of the assets
thereof) in a commercially reasonable transaction and (in either instance) with
Lender’s consent, then (a) Pledgor will not unreasonably withhold consent for
such disposition transaction and (b) Pledgor will not assert any claim against
any such holder of voting equity interests or any such director based upon a
breach of fiduciary duty solely as a result such vote or disposition
transaction.

         3.8. Equityholder Agreements. With respect to Lender, any Affiliate of
Lender or any subsequent acquiror or transferee of the Collateral pursuant to
any sale of or foreclosure on such Collateral, Pledgor hereby waives any and
all rights under any shareholder agreement, operating agreement, partnership
agreement or other equityholder agreement among some or all of the
equityholders of Pledged Share Issuer including (as applicable) (i) any right
to consent to the sale, assignment, pledge or other transfer of any of the
Collateral, and (ii) any right of first refusal, and (iii) any right to consent
to any transfer of the Collateral, and (iv) any right to cause any of the
Collateral to become non-voting stock, and (v) any right to demand a sale of
all or any part of any Pledged Share Issuer’s assets, and (vi) any right to
require a shareholder to vote for or against any matter that is the subject of
a shareholder vote, and (vii) any put right or right to require any Pledged
Share Issuer to purchase any shares of capital stock. Pledgor also hereby
agrees that he or she will not amend or modify any such agreement without the
prior written consent of Lender. Pledgor and Pledged Share Issuer hereby
consent to the pledge of the Collateral hereunder by Pledgor and the compliance
by Pledgor with the terms of this Pledge Agreement.

ARTICLE 4: LENDER

         4.1. Lender Appointed as Attorney-in-Fact. Pledgor and the Pledged Share
Issuer hereby irrevocably appoint Lender as his, her or its attorney-in-fact,
with full authority in the name, place and stead of Pledgor, the Pledged Share
Issuer or otherwise, from time to time in Lender’s reasonable discretion, to
take any action and to execute any instrument which Lender may deem necessary
or advisable to accomplish the purposes of this Pledge Agreement upon the
occurrence and during the continuation of an Event of Default. Pledgor and
Pledged Share Issuer each hereby acknowledges, consents and agrees that the
power of attorney granted pursuant to this Section is irrevocable and coupled
with an interest, but that it will terminate upon the termination of this
Pledge Agreement pursuant to Section 1.5 hereof.

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         4.2. Lender May Perform. From time to time, at Lender’s option, Lender
may perform (or cause the performance of) any act which Pledgor or Pledged
Share Issuer agrees hereunder to perform and which Pledgor or Pledged Share
Issuer fails to perform after being requested in writing so to perform (it
being understood that no such request need be given after the occurrence and
during the continuance of an Event of Default and after any applicable grace
period under Section 7.2 of the Credit Agreement has expired). Lender from
time to time may also take any other action which Lender reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest herein. Moreover, Pledgor hereby
authorizes, consents and instructs Lender from time to time, in the absence of
an Event of Default, not more than once a year (at Lender’s election) (a) to
obtain, review and use a credit report on Pledgor and any other information
relating to the creditworthiness of Pledgor from any third party and (b) to
share such information with Lender’s Affiliates, counsel and agents for use in
connection with the Credit
Agreement. The costs and expenses of Lender incurred in connection with
any such performance will be jointly and severally payable by Pledgor and
Pledged Share Issuer pursuant to Section 5.6 hereof.

         4.3. Lender Has No Duty. The rights and powers conferred on Lender
hereunder are solely to protect its interest in the Collateral and do not
impose any duty on Lender to exercise any such rights or powers. Except for
reasonable care of any Collateral in Lender’s possession and the accounting for
moneys actually received by it hereunder, Lender has no duty as to any
Collateral or any responsibility for:

	 	a.	 	Ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other
matters relative to any Pledged Property, whether or not Lender
has or is deemed to have knowledge of such matters; or
	 
	 	b.	 	Taking any necessary steps to preserve rights
against prior parties or any other rights pertaining to any
Collateral.

         4.4. Reasonable Care. Lender is required to exercise reasonable care in
the custody and preservation of any of the Collateral in its possession;
provided, however, Lender will be deemed to have exercised such reasonable care
in the custody and preservation of any of the Collateral if Lender takes such
action for that purpose as Pledgor reasonably requests in writing at times
other than after the occurrence or during the continuance of an Event of
Default (and after any applicable grace period under Section 7.2 of the Credit
Agreement has expired). Notwithstanding the foregoing, any failure or refusal
by Lender at any time to comply with any such request by a Pledgor will not in
itself be deemed a failure to exercise reasonable care.

ARTICLE 5: DEFAULTS AND REMEDIES

         5.1. Events of Default. The occurrence of any “Event of Default” under and
as defined in the Credit Agreement will constitute an independent Event of
Default (“Event of Default”) hereunder.

         5.2. Certain Remedies. If any Event of Default occurs and is continuing:

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                  a.  In addition to other rights and remedies provided for herein or
otherwise available to Lender, Lender may exercise in respect of the Collateral
all the rights and remedies of a secured party on default under the UCC or the
Personal Property Security Act (Ontario) (the “PPSA”)(whether or not the UCC or
PPSA applies to the affected Collateral). Upon the occurrence and during the
continuance of any Event of Default, Lender will have the immediate right to
enforce and realize upon any and all collateral security granted under the Loan
Documents (including the Collateral hereunder) in any manner or order that
Lender deems expedient without regard to any equitable principles of
marshalling or otherwise. All rights and remedies available to Lender are to
be considered cumulative in nature. Notwithstanding the foregoing, Lender
agrees that its exercise of its right to enforce or realize upon any and all
Collateral hereunder shall be subject to any grace period under Section 7.2 of
the Credit Agreement.

                  b.  Without notice except as specified below, Lender may also sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any of Lender’s offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as Lender may deem commercially
reasonable. To the extent any notice of sale is required by applicable law,
Pledgor agrees that prior notice to Pledgor of at least ten (10) calendar days
indicating the time and place of any public sale or the time after which any
private sale is to be made will constitute reasonable notification. Lender is
not and will not be obligated to make any sale of Collateral regardless of
notice of sale having been given. Lender may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and without further notice, such sale may be made at the time and place to
which it was so adjourned.

                  c.  Lender, in addition, (1) may transfer all or any part of the Collateral
into the name of Lender or its nominee, with or without disclosing that such
Collateral is subject to the Lien and security interest hereunder, and (2) may
take control of any proceeds of the Collateral, and (3) may execute (in the
name, place and stead of Pledgor) endorsements, assignments, stock powers and
other instruments of conveyance or transfer with respect to all or any of the
Collateral.

                  d.  To the extent any of the Collateral represents an interest in a
partnership, a limited liability company or other unincorporated enterprise, in
addition to any other rights and remedies available to Lender under the Loan
Documents or applicable law, Lender (at its option but with notice to the
Pledgor) may also exercise all rights and privileges of the holder of such
interest under the agreements governing such Collateral and the Organic
Documents for the related organization or may instruct Pledgor how to exercise
such rights and privileges (with which instructions Pledgor and the Pledged
Share Issuer hereby agree to comply). Pledgor and the Pledged Share Issuer, in
addition, hereby covenants and agrees (at Lender’s request) to amend (and to
use his, her or its best efforts to cause others to amend) any of the Organic
Documents for such organization in order to authorize Lender to so exercise any
such rights and privileges associated with such Collateral (including, without
limitation, voting rights and the rights to participate in management
decisions). The rights of Lender under this Subsection may be transferred to
and exercised by any subsequent acquiror or transferee of the Collateral
pursuant to any sale of or foreclosure on such Collateral. Pledgor and Pledged
Share Issuer hereby agree that the rights of Lender (or any subsequent acquiror
or transferee of the Collateral) under this Subsection may be enforced by
specific performance or otherwise.

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         5.3. Special Securities-Related Remedies. If, upon the occurrence and
during the continuance of an Event of Default (and after any applicable grace
period under Section 7.2 of the Credit Agreement has expired), Lender
determines to exercise its right to sell all or any portion of the Collateral
pursuant to Section 5.2 hereof, upon Lender’s request, Pledgor (at Pledged
Share Issuer’s expense):

	 	a.	 	Will execute and deliver, and will cause each
issuer of the Collateral contemplated to be sold (and the
directors and officers thereof) to execute and deliver, all
such instruments and documents, and will do or cause to be done
all such other acts and things as may be necessary or, in
Lender’s opinion, reasonably advisable (1) to register such
Collateral under the provisions of the Securities Act, and (2)
to cause the registration statement relating thereto to become
effective and to remain effective for such period as
prospectuses are
required by law to be furnished, and (3) to make all
amendments and supplements thereto and to the related
prospectus which, in Lender’s opinion, are necessary or
reasonably advisable, all in conformity with the requirements
of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto; and
	 
	 	b.	 	Will use his, her or its best efforts to qualify
the Collateral under the state securities or “Blue Sky” laws
and to obtain all necessary governmental approvals for the sale
of the Collateral, as requested by Lender; and
	 
	 	c.	 	Will cause each such issuer to make available to
its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11(a) of
the Securities Act; and
	 
	 	d.	 	Will do or cause to be done all such other acts and
things as may be reasonably necessary or in Lender’s opinion
advisable to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable
law.

In furtherance of the foregoing (and not in limitation of any other
obligations under the Loan Documents), Pledged Share Issuer covenants that
it will fully cooperate with Pledgor and Lender, and will comply with all
requests of Lender, in order to permit Lender to fully and timely exercise
the remedies under this Section.

         5.4. Compliance with Restrictions. Pledgor agrees that in any sale of any
of the Collateral whenever an Event of Default has occurred and is continuing,
Lender is hereby authorized to comply with any limitation or restriction in
connection with such sale as Lender may be advised by counsel is necessary or
reasonably desirable in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any Official

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Body. Pledgor further agrees that
such compliance will not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor will Lender be liable
or accountable to Pledgor for any discount allowed by reason of the fact that
such Collateral is sold at foreclosure or otherwise in compliance with any such
limitation or restriction or by reason of the fact that such Collateral may
represent a minority interest in the Pledged Share Issuer.

         5.5. Application of Proceeds. All cash proceeds received by Lender in
respect of any sale of, collection from, or other realization upon, all or any
part of the Collateral, in the discretion of Lender, may be held by Lender as
additional Collateral security for the Secured Obligations, or then or at any
time thereafter may be applied (after payment of any amounts payable to Lender
pursuant to Section 5.6 hereof) in whole or in part by Lender against all or
any part of the Secured Obligations in an order consistent with the designated
application of payments provided for in Article 1 of the Credit Agreement. Any
surplus of such cash or cash proceeds held by Lender and remaining after
payment in full of all the Secured Obligations, and the termination of the
Credit Agreement, will be
paid over to the Pledgor (on a pro-rata basis in accordance with his, her
or its relative percentage of ownership of the Pledged Share Issuer) or to
whomsoever may be lawfully entitled to receive such surplus.

         5.6. Indemnity and Expenses.

                  a.  Pledgor (jointly and severally with Pledged Share Issuer) hereby agrees
to indemnify and hold harmless Lender from and against any and all claims,
losses and liabilities arising out of or resulting from any or all of the
following: (1) Pledgor’s failure to perform or otherwise observe any of his,
her or its obligations hereunder, and (2) Lender’s enforcement of any of the
provisions hereof as regards Pledgor except where any such claims, losses and
liabilities result from Lender’s own gross negligence, misrepresentation, fraud
or willful misconduct, and (3) Pledgor’s gross negligence, misrepresentation,
willful misconduct or fraud.

                  b.  Upon demand, Pledgor (jointly and severally with Pledged Share Issuer)
will pay Lender the amount of all reasonable costs and expenses that Lender may
incur in connection with any of the matters described under clause “a” of this
Section. Without limitation, such obligation to reimburse Lender for such
fees, costs and expenses includes all reasonable fees and disbursements of
Lender’s counsel and any other experts and agents that Lender may retain in
connection herewith (whether or not litigation is commenced).

                  c.  If Pledgor fails or refuses to pay Lender any amount due hereunder or
to otherwise deliver to Lender any property required to be delivered hereunder,
then such amount (or, as appropriate, the fair market value of such property)
will accrue interest until paid or delivered at a per annum rate equal to the
lesser of: (i) two percent (2%) per annum in excess of the highest rate then
otherwise applicable to indebtedness under the Credit Agreement (not including
the default rate) or (ii) the maximum amount permitted by applicable law.

                  d.  If, in connection with the bankruptcy, liquidation or other disposition
of any Borrower, Pledgor or Pledged Share Issuer or the assets of any thereof,
Pledgor is retained by a bankruptcy trustee or other representative of such
estate as a consultant, witness or other advisor, Pledgor hereby agrees to
indemnify and hold harmless Lender against any and all claims, losses or

11

 

liabilities arising out of or otherwise directly or indirectly resulting from
such party’s service as consultant, witness or other advisor (including,
without limitation, any costs or losses resulting from any party’s assistance
in challenging the enforceability of the Loan Documents or any transfers of
interests thereunder) except where any such claims, losses and liabilities
result from Lender’s own gross negligence, misrepresentation, fraud or willful
misconduct. Moreover, if Pledgor votes in favor of, consents to or otherwise
participates in causing (or fails or refuses to take all reasonable actions
necessary to prevent) the occurrence of a Liquidation Event, without the prior
written consent of Lender, then Pledgor hereby agrees to indemnify and hold
harmless Lender against any and all claims, losses and liabilities arising out
of or otherwise directly or indirectly resulting from such Liquidation Event
except where any such claims, losses and liabilities result from Lender’s own
gross negligence, misrepresentation, fraud or willful misconduct.
Notwithstanding the foregoing, Pledgor is not responsible to Lender under this
clause “d” to the extent that Pledgor’s participation in the such bankruptcy
proceeding is (1) as a witness for no or nominal consideration and pursuant to
a subpoena or other compulsory process, or (2) otherwise required by applicable
laws, regulations or rules.

                  e.  Pledgor is not responsible to Lender under this Section 5.6 (other than
to the extent of Pledgor’s interest in the Collateral) for non-performance of
an obligation under this Pledge Agreement if (i) fulfillment of such obligation
would cause Pledgor to breach his, her or its fiduciary duties as an officer,
director or shareholder of Pledged Share Issuer and (ii) Pledgor provides
Lender with prior written notice of such non-performance.

         5.7. Lender’s and Lenders’ Rights Upon Occurrence of Liquidation Events.

                  a.  Right to Certain Payments and Distributions. Upon the occurrence of
any Liquidation Event, any payment or distribution of any kind or character
(whether in cash, securities or other property) that but for this Pledge
Agreement would be payable or deliverable to Pledgor must instead be paid or
delivered directly to Lender for application on the Secured Obligations,
whether or not then due or mature, until such time as the entire Secured
Obligations have been fully paid and satisfied (unconditional and
indefeasibly).

                  b.  Non-Cash Payments and Distributions. Notwithstanding the provisions of
clause “a” of this Section, if Lender receives delivery of any such payment or
distribution in connection with a Liquidation Event in a form other than cash,
then Lender may hold such property as additional Collateral for the Secured
Obligations, and neither Pledgor nor any other Obligor of the Secured
Obligations (including Pledged Share Issuer) will be entitled to a credit with
respect to the Secured Obligations, nor will the Secured Obligations otherwise
be adjusted in any respect, until such time as Lender (in its sole and absolute
discretion) has sold, discounted or otherwise liquidated such distribution (at
a price considered by Lender to be in its sole best interest) and then (subject
to the terms of Section 7.8 hereof) such credit and/or adjustment to the
Secured Obligations will be limited only to the net cash proceeds realized
therefrom after the payment of all costs and expenses associated with such sale
or liquidation.

                  c.  Collection of Payments and Distributions. Pledgor hereby irrevocably
authorizes and empowers Lender, upon the occurrence of a Liquidation Event, (1)
to demand, sue for, settle, compromise, discount, collect and receive every
such payment or distribution and give

12

 

acquittance for the payments and
distributions described in this Pledge Agreement, and (2) to file and/or vote
claims and take such other proceedings, in each instance in Lender’s own name
or in the name of Pledgor, or otherwise, all as Lender may deem reasonably
necessary or advisable for the enforcement of this Pledge Agreement. Pledgor
further agrees duly and promptly (i) to take such action as may be requested by
Lender to assist in the collection and/or compromise of any amounts owed to
Pledgor by Pledged Share Issuer (or its estate), and (ii) to file appropriate
proofs of claim in respect of such amounts, and (iii) to execute and deliver to
Lender on demand such powers of attorney, proofs of claim, assignments of claim
or other instruments as may be requested by Lender to enable Lender to enforce
any and all claims upon or with respect to such amounts, and (iv) to collect,
compromise and receive any and all payments or distributions that may be
payable or deliverable at any time upon or with respect to such amounts.

         5.8. Delivery of Payments and Distributions. If Pledgor receives any
payment, distribution or any other funds or property in contravention of the
provisions of any Loan Document, then Pledgor must immediately forthwith
deliver such payment, distribution or other funds or property (or proceeds
thereof) to Lender in precisely the form received (except for the endorsement
or assignment without recourse of Pledgor where necessary) for application on
the Secured
Obligations (or, at Lender’s option, held as additional Collateral
therefor), whether or not then due or mature. Until such funds or property are
delivered to Lender, Pledgor must hold such payment, distribution or other
funds or property (or proceeds thereof) (a) in trust for the benefit of and as
property of Lender and (b) separate from (i.e., not commingled with) its other
assets. If Pledgor fails or refuses to make any such endorsement or
assignment, then Lender (or any of its officers or employees) are hereby
irrevocably authorized by Pledgor to make the endorsement and/or assignment.

         5.9. Cooperation and Assistance. Pledgor agrees (during the existence of
an Event of Default) to take any actions that Lender may reasonably request in
order to enable Lender to receive the full rights and benefits granted to
Lender by the Loan Documents. Pledgor further agrees that, during the
existence of an Event of Default, Pledgor will assist and cooperate with Lender
(and will use its best efforts to cause others to assist and cooperate with
Lender) to ensure that each Borrower continues (a) to operate in the normal
course of business, and (b) to fulfill all of its legal, regulatory and
contractual obligations and (c) to otherwise be properly and professionally
managed. At Lender’s request and the expense of Borrowers (jointly and
severally), at any time during the existence of an Event of Default, such
assistance and cooperation may include the employment of (and, to the maximum
extent not prohibited by the rules, regulations and orders of any Official Body
with jurisdiction, the delegation of appropriate management authority to) one
or more qualified and independent consultants and professional managers
acceptable to Lender to assist in the interim operations of Borrowers; all of
which Pledgor hereby agrees not to challenge.

ARTICLE 6: DEFINITIONS

         6.1. Credit Agreement Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.

13

 

         6.2. Certain Terms. Unless otherwise defined herein, the following terms
used in this Pledge Agreement, including its preamble and recitals, have the
following meanings (such definitions to be equally applicable to the singular
and plural forms thereof):

                  a.  “Lender” means HEARx Ltd., a Delaware corporation, and any successor,
assignee, transferee, pledgee or participant thereof.

                  b.  “Borrower” or “Borrowers” are defined in the Recitals hereof.

                  c.  “Collateral” is defined in Section 1.1 hereof.

                  d.  “Credit Agreement” is defined in the Recitals hereof.

                  e.  “Distribution” means all equity dividends, liquidating dividends,
shares or interests of equity resulting from (or in connection with the
exercise of) equity splits, reclassifications, warrants, options, non-cash
dividends, mergers, consolidations, distributions of capital accounts, and all
other distributions (whether similar or dissimilar to the foregoing) on or
with respect to any Pledged Shares or other shares or interests of equity
constituting Collateral, but such term does not include Dividends.

                  f.  “Dividend” means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business, but such term shall not include a liquidating dividend.

                  g.  “Liquidation Event” means any foreclosure on or involuntary sale of all
or any part of the assets of any Pledged Share Issuer, or any liquidation,
dissolution or other winding up (partial or complete) of any Pledged Share
Issuer or Pledged Share Issuer’s business, or any sale, receivership,
insolvency or bankruptcy proceeding, any assignment for the benefit of
creditors, or any other proceeding by or against any Pledged Share Issuer or
its assets for any relief under any bankruptcy or insolvency law relating to
the relief of debtors, readjustment of indebtedness, arrangements,
reorganizations, compositions or extensions.

                  h.  “Person” means any natural person, corporation, partnership, firm
association, trust, government, governmental agency or any other entity,
whether acting in an individual, fiduciary or other capacity.

                  i.  “Pledge Agreement” means this Owner’s Equity Pledge and Security
Agreement, and all exhibits and schedules hereto, all as may be amended,
supplemented and otherwise modified from time to time.

                  j.  “Pledged Property” means all Pledged Shares and all other forms of
equity interests and rights, all other securities (including, without
limitation, all options, warrants and puts for Pledged Shares), all assignments
of any amounts due or to become due, all other instruments which are now being
delivered by Pledgor to Lender or may from time to time hereafter be delivered
by Pledgor to Lender for the purpose of pledge under the Pledge Agreement, and
all proceeds of any of the foregoing.

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                  k.  “Pledged Share Issuer” means the Pledged Share Issuer defined in the
Recitals hereof and any successor or permitted assignee thereof.

                  l.  “Pledged Shares” means all shares of capital or voting stock and all
other forms of equity or ownership rights and interests (whether in the form of
partnership interests, membership interests or otherwise) of or in the Pledged
Share Issuer beneficially owned by Pledgor.

                  m.  “Pledgor” Steve Forget, and any successor, assignee, heir, executor,
administrator or personal representative thereof.

                  n.  “Secured Obligations” is defined in Section 1.2 hereof.

                  o.  “Securities Act” means the Securities Act of 1933, as amended from time
to time, and as implemented by the Securities Exchange Commission.

                  p.  “UCC” means the Uniform Commercial Code as in effect in the State of
New York or, if the laws of some other jurisdiction otherwise dictates, then
the Uniform Commercial
Code as in effect in the jurisdiction whose laws govern the interpretation
of the relevant provisions of this Pledge Agreement.

         6.3. UCC Definitions. Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the UCC are used
in this Pledge Agreement (including in the preamble and recitals hereof) with
such meanings.

ARTICLE 7: MISCELLANEOUS PROVISIONS

         7.1. Loan Document. This Pledge Agreement is a Loan Document executed
pursuant to the Credit Agreement and (unless otherwise expressly indicated
herein) is to be construed, administered and applied in accordance with the
terms and provisions thereof.

         7.2. Amendments. No amendment to or waiver of any provision of this
Pledge Agreement, nor any consent to any departure by Pledgor herefrom, will in
any event be effective unless the same is in writing and signed by Lender. Any
such waiver or consent will be effective only in the specific instance and for
the specific purpose for which it is given.

         7.3. Addresses for Notices. Any notice, request, consent, waiver or other
communication required or permitted under or in connection with this Pledge
Agreement will be deemed satisfactorily given if it is in writing and is
delivered either personally to the addressee thereof, or by prepaid registered
or certified U.S. mail or Canadian Post (return receipt requested), or by a
nationally recognized commercial courier service with next-day delivery charges
prepaid, or by telegraph, or by facsimile (voice confirmed), or by any other
reasonable means of personal delivery to the party entitled thereto at its
respective address set forth below his, her or its signature to this Pledge
Agreement. If any party hereto fails to insert an address below, then such
failure shall constitute a designation of his, her or its last known address as
the address for all notices, including notices of default and sale. Any party
to this Pledge Agreement may change his, her or its address or facsimile number
for notice purposes by giving notice thereof to the other parties hereto in

15

 

accordance with this Section, provided that such change shall not be effective
until 2 calendar days after notice of such change. All such notices and other
communications will be deemed given and effective (a) if by mail, then upon
actual receipt or 5 calendar days after mailing as provided above (whichever is
earlier), or (b) if by facsimile, then upon successful transmittal to such
party’s designated number, or (c) if by telegraph, then upon actual receipt or
2 Business Days after delivery to the telegraph company (whichever is earlier),
or (d) if by nationally recognized commercial courier service, then upon actual
receipt or 2 Business Days after delivery to the courier service (whichever is
earlier), or (e) if otherwise delivered, then upon actual receipt.

         7.4. Headings. The various headings used in this Pledge Agreement are for
convenience of reference only, and shall not affect the meaning or
interpretation of this Pledge Agreement or any provision hereof.

         7.5. Severability. Wherever possible, each provision of this Pledge
Agreement is to be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Pledge Agreement is
prohibited by or invalid under such law, such provision is to be ineffective to
the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.

         7.6. Governing Law; Entire Agreement. This Pledge Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York, except to the extent that the validity or perfection of the security
interest hereunder (or remedies hereunder) in respect of any particular
collateral are required to be governed by the laws of a jurisdiction other than
the State of New York. This Pledge Agreement and the other Loan Documents
constitute the entire understanding among the parties hereto with respect to
the subject matter hereof and supersede any prior agreements, written or oral,
with respect thereto.

         7.7. Reinstatement. To the maximum extent not explicitly prohibited by
applicable law, this Pledge Agreement shall continue to be effective or be
reinstated if at any time any amount received by Lender in respect of the
Credit Agreement or any other Loan Document is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Borrower or Pledgor or upon the
appointment of any receiver, intervenor, conservator, trustee or similar
official for any Borrower or Pledgor or any substantial part of any Borrower’s
or Pledgor’s assets, or otherwise, all as though such payments had not been
made.

         7.8. Estoppel Certificates and Replacement Agreements. In connection with
any subsequent sale, assignment, participation or other transfer or refinancing
of the Secured Obligations (or any portion thereof) by Lender or at any other
time requested by Lender, Pledgor within 15 calendar days of receiving a
request by Lender will provide a certificate of estoppel in form and substance
satisfactory to such Lender confirming, among other items, (if and to the
extent then true) that to Pledgor’s knowledge after due inquiry (1) this Pledge
Agreement remains in full force and effect, and (2) there exists no defaults
under this Pledge Agreement or any circumstances that with the passage of time
or the giving of notice, or both, might constitute a default hereunder, and (3)
there exists no offsets, counterclaims or other adjustments in favor of Pledgor
under this Pledge Agreement. Moreover, in connection with any subsequent sale,
assignment, participation or other transfer or refinancing of the Secured
Obligations (or any portion thereof), Pledgor (if requested by

16

 

Lender) will
concurrently execute in favor of the transferee or refinancing lender a pledge
agreement substantially similar in form and substance to this Pledge Agreement.

         7.9. Conflict Provision. In the event of any irreconcilable conflict
between the terms and conditions of this Pledge Agreement and the terms and
conditions of the Credit Agreement, the terms and conditions of the Credit
Agreement shall govern.

         7.10. Successors. This Pledge Agreement, and the terms, covenants and
conditions hereof, shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, executors,
administrators and personal representatives.

         7.11. No Benefit to Third Parties. Nothing contained herein shall be
deemed to indicate that this Pledge Agreement has been entered into for the
benefit of any Borrower or any other Person other than the Pledgor and Lender.
If Pledgor or Lender shall waive or enforce his, her or its rights or remedies
in violation of the terms of this Pledge Agreement, neither any Borrower nor
any other Person shall be entitled to use such waiver or violation as a defense
to enforcement by Lender of its rights under the Credit Agreement or any other
agreement, nor assert such waiver or violation as a counterclaim or basis for
setoff or recoupment against Lender.

         7.12. Waiver of Notice. Except as set forth in the Loan Documents or as
required by applicable law, Pledgor hereby unconditionally waives notice of the
incurring of the Secured Obligations or any part thereof and reliance by Lender
upon the agreements herein.

         7.13. Lender. References in this Pledge Agreement to Lender shall mean to
Lender in such capacity. Unless otherwise indicated in this Pledge Agreement
or the other Loan Documents, all Collateral held and all payments received by
Lender are deemed to be held and received, respectively, for the benefit of
Lender.

         7.14. Waiver of Suretyship Defenses. Pledgor hereby waives any and all
defenses and rights of discharge based on suretyship or impairment of
collateral (including, without limitation, lack of attachment or perfection
with respect thereto) that it, he or she may now have or may hereafter acquire
with respect to Lender or any of Pledgor’s obligations hereunder or under any
other agreement that it, he or she may have or hereafter enter into with
Lender.

         7.15. Waiver of Subrogation. Until all of the Obligations have been
satisfied (unconditionally and indefeasibly) and the Loan Documents have been
terminated, Pledgor hereby irrevocably waives any claim or other rights which
he, she or it may now or hereafter acquire against any other Obligor that arise
from the existence, payment, performance or enforcement of Pledgor’s
obligations under this Pledge Agreement or any other Loan Document, including
any right of subrogation, reimbursement, contribution, exoneration, or
indemnification, any right to participate in any claim or remedy of Lender
against any other Obligor or any collateral which Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from
any Obligor (directly or indirectly) in cash or other property or by set-off or
in any manner, payment or security on account of such claim or other rights.

17

 

         7.16. Waiver of Notice; Waiver of Bond. Pledgor waives all rights of
notice and hearing of any kind prior to the exercise by Lender of its rights
from and after the occurrence of any Event of Default to repossess the
Collateral with judicial process or to replevy, attach or levy upon the
Collateral. Pledgor waives the posting of any bond otherwise required of
Lender in connection with any judicial process or proceeding to obtain
possession of, replevy, attach or levy upon Collateral or other security for
the Secured Obligations, to enforce any judgment or other court order entered
in favor of Lender, or to enforce by specific performance, temporary
restraining order or preliminary or permanent injunction this Pledge Agreement
or any other agreement or document between Pledgor and Lender.

         7.17. Waivers of Liability. Pledgor and Pledged Share Issuer (a) agree
that neither Lender nor any director, officer, employee or agent of Lender
shall have any liability to Pledgor or any Pledged Share Issuer (whether
sounding in tort, contract or otherwise) for losses or costs suffered or
incurred by Pledgor or any Pledged Share Issuer in connection with or in any
way related to the transactions contemplated or the relationship established by
this Pledge Agreement or any other Loan Document, or any act, omission or event
occurring in connection herewith or therewith (including, without limitation,
any actions taken by Pledgor or any Pledged Share Issuer at the direction of
Lender pursuant to the terms hereof), except for foreseeable actual losses
resulting from Lender’s own gross negligence, willful misconduct or fraud and
(b) waives, releases and agrees not to sue upon any claim against Lender (or
any
director, officer, employee or agent of Lender) whether sounding in tort,
contract or otherwise, except for claims for foreseeable actual losses
resulting from Lender’s own gross negligence, willful misconduct or fraud.
Moreover, whether or not such damages are related to a claim that is subject to
the waiver effected above and whether or not such waiver is effective, neither
Lender nor any director, officer, employee or agent of Lender shall have any
liability with respect to (and Pledgor and Pledged Share Issuer hereby waives,
releases and agrees not to sue upon any claim for) any special, indirect,
consequential, punitive or non-foreseeable damages suffered by Pledgor or any
Pledged Share Issuer in connection with or in any way related to the
transactions contemplated or the relationship established by this Pledge
Agreement or any other Loan Document, or any act, omission or event occurring
in connection herewith or therewith.

         7.18. Forum Selection and Consent to Jurisdiction. Any litigation in
connection with or in any way related to this Pledge Agreement or any other
Loan Document, or any course of conduct, course of dealing, statements (whether
verbal or written), actions or inactions of Lender, any Pledgor or Pledged
Share Issuer will be brought and maintained exclusively in the courts of the
State of New York or in the United States District Court for the Southern
District of New York; provided, however, that any suit seeking enforcement
against any Pledgor or any Collateral or other property may also be brought (at
Lender’s or such Lender’s option) in the courts of any jurisdiction where such
Collateral or other property may be found or where Lender or such Lender may
otherwise obtain personal jurisdiction over such Pledgor. Each Pledgor and
Pledged Share Issuer each hereby expressly and irrevocably submits to the
jurisdiction of the courts of the State of New York and of the United States
District Court for the Southern District of New York for the purpose of any
such litigation as set forth above and irrevocably agrees to be bound by any
final and non-appealable judgment rendered thereby in

18

 

connection with such
litigation. Pledgor and each Pledged Share Issuer further irrevocably consents
to the service of process by registered or certified mail, postage prepaid, or
by personal service within or outside the State of New York. Pledgor and each
Pledged Share Issuer hereby expressly and irrevocably waives, to the fullest
extent permitted by law, any objection which he, she or it may have or
hereafter may have to the laying of venue of any such litigation brought in any
such court referred to above and any claim that any such litigation has been
brought in an inconvenient forum. To the extent that Pledgor or any Pledged
Share Issuer has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgment, attachment in aid of execution or otherwise) with respect to
himself, herself or itself or his, her or its property, then Pledgor and each
Pledged Share Issuer hereby irrevocably waives such immunity in respect of his,
her or its obligations under this Pledge Agreement and the other Loan
Documents.

         7.19. Jury Trial Waiver. Lender, Pledgor and Pledged Share Issuer each
hereby knowingly, voluntarily and intentionally waive any rights he, she or it
may have to a trial by jury in respect of any litigation (whether as claim,
counter-claim, affirmative defense or otherwise) in connection with or in any
way related to this Pledge Agreement or any other Loan Document, or any course
of conduct, course of dealing, statements (whether oral or written), actions or
inactions of Lender, Pledgor or any Pledged Share Issuer. Pledgor and Pledged
Share Issuer acknowledge and agree (a) that he, she or it has received full
and
sufficient consideration for this provision (and each other provision of
this Pledge Agreement), and (b) that he, she or it has been advised by (or has
had ample opportunity to consult with) legal counsel in connection herewith,
and (c) that this provision is a material inducement for Lender entering into
the Loan Documents and funding Advances thereunder.

         7.20. Counterparts. This Pledge Agreement may be executed in any number
of counterparts with the same effect as if all the signatures on such
counterparts appeared on one document. Each such counterpart will be deemed to
be an original but all counterparts together will constitute one and the same
instrument.

         7.21 Judgment Currency. If for the purpose of obtaining judgment in any
court it is necessary to convert an amount due hereunder in the currency in
which it is due (the “Original Currency”) into another currency (the “Second
Currency”), the rate of exchange applied shall be that at which, in accordance
with normal banking procedures, the Lender could purchase in the Toronto
foreign exchange market, the Original Currency with the Second Currency on the
date two (2) Business Days preceding that on which judgment is given. Each
Obligor agrees that its obligation in respect of any Original Currency due from
it hereunder shall, notwithstanding any judgment or payment in such other
currency, be discharged only to the extent that, on the Business Day following
the date the Lender receives payment of any sum so adjudged to be due hereunder
in the Second Currency, the Lender may, in accordance with normal banking
procedures, purchase, in the Toronto foreign exchange market, the Original
Currency with the amount of the Second Currency so paid; and if the amount of
the Original Currency so purchased or could have been so purchased is less than
the amount originally due in the Original Currency, each Obligor agrees as a
separate obligation and notwithstanding any such payment or judgment to
indemnify the Lender against such loss. The term

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“rate of exchange” in this
Section 7.21 means the spot rate at which the Lenders, in accordance with
normal practices, is able on the relevant date to purchase the Original
Currency with the Second Currency and includes any premium and costs of
exchange payable in connection with such purchase.

         7.22 French/English Acknowledgment. It is the express wish of the parties
hereto that this Pledge Agreement and any related documents be drawn up and
executed in English. Il est la volonté expresse des parties que cette
convention et tous les documents s’y rattachant soient redigés et signés en
anglais.

[BALANCE OF PAGE INTENTIONALLY BLANK]

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         IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement
to be duly executed and delivered, as an instrument under seal (whether or not
any such seals are physically attached hereto), as of the day and year first
above written.

	 	 	 	 	 
	WITNESS:	 	STEVE FORGET, Pledgor
	 
	 
	 

	 	 

	 
	 	 	Address:	 	 

	 

	 	 

	 
	 	 	Facsimile: (      ) -            -                               
	 
	 	 	 	 	 
	 
	 	 	COUSINEAU, DOUCET, PARENT,

FORGET AUDIOPROTHÉSISTES

s.e.n.c, Pledged Share Issuer
	 
	 	 	By:	 	 

	 
	 	 	Name:	 	 

	 
	 	 	Title:	 	 

	 
	 	 	Address:	 	 

	 
	 	 	 

	 
	 	 	Facsimile: (      ) -            -                               
	 
	 	 	 	 	 
	 
	WITNESS:	 	HEARx LTD., Lender
	 
	 

	 	By:	 	 

	 
	 	 	Name:	 	Stephen J. Hansbrough
	 
	 

	 	Title:	 	President and Chief Operating Officer
	 
	 	 	Address:	 	1250 Northpoint Parkway

West Palm Beach, FL 33407<PAGE>
                                                                    EXHIBIT 10.1

                              AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                      AMONG

                           RANGE RESOURCES CORPORATION

                                  AS BORROWER,

                                       AND

                                  BANK ONE, NA

                        AND THE INSTITUTIONS NAMED HEREIN

                                   AS LENDERS,

                                  BANK ONE, NA,

                             AS ADMINISTRATIVE AGENT

                                       AND

                         BANC ONE CAPITAL MARKETS, INC.

                   AS JOINT LEAD ARRANGER AND JOINT BOOKRUNNER

                                       AND

                       JPMORGAN CHASE BANK, AS JOINT LEAD

                          ARRANGER AND JOINT BOOKRUNNER

                                   MAY 2, 2002

                          $225,000,000 REVOLVING CREDIT

<PAGE>

                                TABLE OF CONTENTS
<Table>
<Caption>
                                                                                                           PAGE NO.
<S>                                                                                                        <C>
1.       Definitions..............................................................................................1
2.       Commitments of the Lenders..............................................................................13
         (a)      Terms of Commitment............................................................................13
         (b)      Procedure for Borrowing........................................................................13
         (c)      Letters of Credit..............................................................................14
         (d)      Procedure for Obtaining Letters of Credit......................................................15
         (e)      Voluntary Reduction of Commitment..............................................................15
         (f)      Mandatory Commitment Reductions................................................................15
         (g)      Several Obligations............................................................................15
         (h)      Type and Number of Advances....................................................................16
3.       Notes Evidencing Loans..................................................................................16
         (a)      Form of Notes..................................................................................16
         (b)      Issuance of Additional Notes...................................................................16
         (c)      Interest Rates.................................................................................16
         (d)      Payment of Interest............................................................................16
         (e)      Payment of Principal...........................................................................16
         (f)      Payment to Lenders.............................................................................17
         (g)      Sharing of Payments, Etc.......................................................................17
         (h)      Non-Receipt of Funds by the Agent..............................................................17
4.       Interest Rates..........................................................................................18
         (a)      Options........................................................................................18
         (b)      Interest Rate Determination....................................................................19
         (c)      Conversion Option..............................................................................19
         (d)      Recoupment.....................................................................................19
         (e)      Interest Rates Applicable After Default........................................................19
5.       Special Provisions Relating to Loans....................................................................20
         (a)      Unavailability of Funds or Inadequacy of Pricing...............................................20
         (b)      Change in Laws.................................................................................20
         (c)      Increased Cost or Reduced Return...............................................................20
         (d)      Discretion of Lender as to Manner of Funding...................................................22
         (e)      Breakage Fees..................................................................................23
6.       Collateral Security.....................................................................................23
7.       Borrowing Base..........................................................................................24
         (a)      Initial Hydrocarbon Borrowing Base.............................................................24
         (b)      Subsequent Determinations of Hydrocarbon Borrowing Base........................................24
         (c)      Additional Borrowing Base......................................................................26
8.       Fees....................................................................................................26
         (a)      Unused Commitment Fee..........................................................................26
9.       Prepayments.............................................................................................27
         (a)      Voluntary Prepayments..........................................................................27
         (b)      Mandatory Prepayment For Borrowing Base Deficiency.............................................27
</Table>

                                        i
<PAGE>

<Table>
<S>                                                                                                        <C>
10.      Representations and Warranties..........................................................................27
         (a)      Creation and Existence.........................................................................27
         (b)      Power and Authority............................................................................28
         (c)      Binding Obligations............................................................................28
         (d)      No Legal Bar or Resultant Lien.................................................................28
         (e)      No Consent.....................................................................................28
         (f)      Financial Condition............................................................................28
         (g)      Liabilities....................................................................................29
         (h)      Litigation.....................................................................................29
         (i)      Taxes; Governmental Charges....................................................................29
         (j)      Titles, Etc....................................................................................29
         (k)      Defaults.......................................................................................29
         (l)      Casualties; Taking of Properties...............................................................29
         (m)      Use of Proceeds; Margin Stock..................................................................30
         (n)      Location of Business and Offices...............................................................30
         (o)      Compliance with the Law........................................................................30
         (p)      No Material Misstatements......................................................................30
         (q)      Not A Utility..................................................................................31
         (r)      ERISA..........................................................................................31
         (s)      Public Utility Holding Company Act.............................................................31
         (t)      Subsidiaries...................................................................................31
         (u)      Environmental Matters..........................................................................31
         (v)      Liens..........................................................................................31
         (w)      Solvency.......................................................................................32
         (x)      Insurance......................................................................................32
11.      Conditions of Lending...................................................................................32
12.      Affirmative Covenants...................................................................................34
         (a)      Financial Statements and Reports...............................................................34
         (b)      Certificates of Compliance.....................................................................35
         (c)      Accountants' Certificate.......................................................................35
         (d)      Taxes and Other Liens..........................................................................36
         (e)      Compliance with Laws...........................................................................36
         (f)      Further Assurances.............................................................................36
         (g)      Performance of Obligations.....................................................................36
         (h)      Insurance......................................................................................36
         (i)      Accounts and Records...........................................................................37
         (j)      Right of Inspection............................................................................37
         (k)      Notice of Certain Events.......................................................................37
         (l)      ERISA Information and Compliance...............................................................38
         (m)      Environmental Reports and Notices..............................................................38
         (n)      Compliance and Maintenance.....................................................................38
         (o)      Operation of Properties........................................................................39
         (p)      Compliance with Leases and Other Instruments...................................................39
</Table>

                                       ii
<PAGE>

<Table>
<S>                                                                                                        <C>
         (q)      Certain Additional Assurances Regarding Maintenance and Operations of
                  Properties.....................................................................................39
         (r)      Sale of Certain Assets/Prepayment of Proceeds..................................................40
         (s)      Title Matters..................................................................................40
         (t)      Curative Matters...............................................................................40
         (u)      Change of Principal Place of Business..........................................................41
         (v)      Additional Collateral..........................................................................41
         (w)      Retirement of Certain Preferred Equity.........................................................41
13.      Negative Covenants......................................................................................42
         (a)      Negative Pledge................................................................................42
         (b)      Current Ratio..................................................................................42
         (c)      Senior Debt Coverage Ratio.....................................................................42
         (d)      Total Debt Coverage Ratio......................................................................42
         (e)      Senior Debt Leverage Ratio.....................................................................42
         (f)      Total Debt Leverage Ratio......................................................................43
         (g)      Consolidations and Mergers.....................................................................43
         (h)      Debts, Guaranties and Other Obligations........................................................43
         (i)      Restricted Payments............................................................................44
         (j)      Loans, Advances and Investments................................................................44
         (k)      Receivables and Payables.......................................................................45
         (l)      Nature of Business.............................................................................45
         (m)      Transactions with Affiliates...................................................................45
         (n)      Hedging Transactions...........................................................................45
         (o)      Amendment to Articles of Incorporation or Bylaws...............................................45
         (p)      Issuance of Preferred Stock....................................................................45
         (q)      Payment or Prepayment of Other Indebtedness....................................................45
14.      Events of Default.......................................................................................46
15.      The Agent and the Lenders...............................................................................48
         (a)      Appointment and Authorization..................................................................48
         (b)      Note Holders...................................................................................49
         (c)      Consultation with Counsel......................................................................49
         (d)      Documents......................................................................................49
         (e)      Resignation or Removal of Agent................................................................49
         (f)      Responsibility of Agent........................................................................50
         (g)      Independent Investigation......................................................................51
         (h)      Indemnification................................................................................51
         (i)      Benefit of Section 15..........................................................................52
         (j)      Pro Rata Treatment.............................................................................52
         (k)      Assumption as to Payments......................................................................52
         (l)      Other Financings...............................................................................53
         (m)      Interests of Lenders...........................................................................53
         (n)      Investments....................................................................................53
         (o)      Delegation to Affiliates.......................................................................53
         (p)      Execution of Collateral Documents..............................................................54
</Table>

                                       iii
<PAGE>

<Table>
<S>                                                                                                        <C>
         (q)      Collateral Releases............................................................................54
         (r)      Co-Agents, Documentation Agent, Syndication Agent, etc.........................................54
16.      Exercise of Rights......................................................................................54
17.      Notices.................................................................................................54
18.      Expenses................................................................................................55
19.      Indemnity...............................................................................................55
20.      Non-Liability of Lenders................................................................................56
21.      Governing Law...........................................................................................56
22.      Invalid Provisions......................................................................................56
23.      Maximum Interest Rate...................................................................................57
24.      Amendments..............................................................................................57
25.      Multiple Counterparts...................................................................................58
26.      Conflict................................................................................................58
27.      Survival................................................................................................58
28.      Parties Bound...........................................................................................58
29.      Assignments and Participations..........................................................................58
30.      Choice of Forum: Consent to Service of Process and Jurisdiction.........................................60
31.      Waiver of Jury Trial....................................................................................61
32.      Other Agreements........................................................................................61
33.      Financial Terms.........................................................................................61
34.      Tri-Party Loan..........................................................................................61
</Table>

EXHIBITS

Exhibit "A"       -        Form of Notice of Borrowing
Exhibit "B"       -        Form of Note
Exhibit "C"       -        Form of Guaranty
Exhibit "D"       -        Form of Certificate of Compliance
Exhibit "E"       -        Form of Assignment and Acceptance Agreement

SCHEDULES

Schedule 1        -        Liens
Schedule 2        -        Financial Condition
Schedule 3        -        Liabilities
Schedule 4        -        Litigation
Schedule 5        -        Subsidiaries
Schedule 6        -        Environmental Matters
Schedule 7        -        Title Matters
Schedule 8        -        Curative Matters
Schedule 9        -        Note Amount/Initial Commitment Amounts

                                       iv
<PAGE>

                      AMENDED AND RESTATED CREDIT AGREEMENT

         THIS AMENDED AND RESTATED CREDIT AGREEMENT (hereinafter referred to as
the "Agreement") executed as of the 2nd day of May, 2002, by and among RANGE
RESOURCES CORPORATION, a Delaware corporation ("Borrower") and BANK ONE, NA, a
national banking association ("Bank One"), and each of the financial
institutions which is a party hereto (as evidenced by the signature pages to
this Agreement) or which may from time to time become a party hereto pursuant to
the provisions of Section 29 hereof or any successor or assignee thereof
(hereinafter collectively referred to as "Lenders", and individually, "Lender")
and Bank One, as Administrative Agent ("Agent"), Fleet National Bank, as
Co-Documentation Agent, Fortis Capital Corp., as Co-Documentation Agent,
JPMorgan Chase Bank, as Co-Syndication Agent, Credit Lyonnais, New York Branch,
as Co-Syndication Agent, Banc One Capital Markets, Inc., as Joint Lead Arranger
and Joint Bookrunner and JPMorgan Chase Bank, as Joint Lead Arranger and Joint
Bookrunner.

                                   WITNESSETH:

         WHEREAS, as of February 14, 1997, Borrower, Agent and certain of the
Lenders entered into a Credit Agreement pursuant to which the Lenders made a
credit facility available to Borrower; and

         WHEREAS, as of September 30, 1999, Borrower, Agent and certain of the
Lenders entered into an Amended and Restated Credit Agreement (the "Existing
Credit Agreement"); and

         WHEREAS, Borrower has requested that the Lenders agree to make certain
changes to the Existing Credit Agreement and the Lenders have agreed to make
certain changes to the Existing Credit Agreement, restate the Existing Credit
Agreement, reallocate the Commitments of the Lenders and purchase the interests
of certain Lenders who are exiting the Facility;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereby agree as follows:

         1. DEFINITIONS. When used herein the terms "Agent", "Agreement", "Bank
One", "Borrower", "Lender", "Lenders" and "Range", shall have the meanings
indicated above. When used herein the following terms shall have the following
meanings:

         Advance means a borrowing hereunder (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same type and, in the
case of LIBOR Loans, for the same Interest Period.

         Affiliate means any Person which, directly or indirectly, controls, is
controlled by or is under common control with the relevant Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlled by" and "under common control with"), as used with respect
to any Person, shall mean a member of the board of directors, a partner or an
officer of such Person, or any other Person with possession, directly or
indirectly,

<PAGE>

of the power to direct or cause the direction of the management and policies of
such Person, through the ownership (of record, as trustee, or by proxy) of
voting shares, partnership interests or voting rights, through a management
contract or otherwise. Any Person owning or controlling directly or indirectly
ten percent or more of the voting shares, partnership interests or voting
rights, or other equity interest of another Person shall be deemed to be an
Affiliate of such Person.

         Assignment and Acceptance means a document substantially in the form of
Exhibit "E" hereto.

         Available Commitment means, at any time, the Commitment then in effect
minus the Total Outstandings.

         Base Rate shall mean, as of any date, a rate of interest per annum
equal to the higher of (A) the Prime Rate for such date, or (B) the sum of the
Federal Funds Effective Rate for such date plus one-half of one percent (.50%)
per annum.

         Base Rate Loans shall mean any loan during any period which bears
interest based upon the Base Rate or which would bear interest based upon the
Base Rate if the Maximum Rate ceiling was not in effect at that particular time.

         Base Rate Margin shall be:

                  (i) one percent (1.0%) per annum whenever the Borrowing Base
         Usage is equal to or greater than 90%; or

                  (ii) three-quarters of one percent (.75%) per annum whenever
         the Borrowing Base Usage is equal to or greater than 75%, but less than
         90%; or

                  (iii) one-half of one percent (.50%) per annum whenever the
         Borrowing Base Usage is equal to or greater than 50% but less than 75%;
         or

                  (iv) one-quarter of one percent (.25%) per annum whenever the
         Borrowing Base Usage is less than 50%.

         Borrowing Base shall mean, as of any date, the sum of (i) the
Hydrocarbon Borrowing Base plus (ii) the Increased Amount.

         Borrowing Base Deficiency is used herein as defined in Section 9(b)
hereof.

         Borrowing Base Usage shall mean, as of any date, the Total Outstandings
divided by the Borrowing Base.

                                      -2-
<PAGE>

         Borrowing Date means the date elected by Borrower pursuant to Section
2(c) hereof for an Advance on the Loan.

         Business Day shall mean (i) with respect to any borrowing, payment or
note selection of LIBOR Loans, a day (other than Saturdays or Sundays) on which
banks are legally open for business in Dallas, Texas and New York, New York and
on which dealings in United States dollars are carried on in the London
interbank market, and (ii) for all other purposes a day (other than Saturdays
and Sundays) on which banks are legally open for business in Dallas, Texas.

         Capital Lease means any lease of property, real or personal, which
would be capitalized on a balance sheet of the lessee prepared in accordance
with GAAP.

         Cash Dividends means cash dividends paid on common equity.

         Collateral is used herein as defined in Section 6 hereof.

         Commitment means (A) for all Lenders, the lesser of (i) $225,000,000 or
(ii) the Borrowing Base, as reduced or increased from time to time pursuant to
Sections 2 and 7 hereof, and (B) as to any Lender, its obligation to make
Advances hereunder in amounts not exceeding, in the aggregate, an amount equal
to such Lender's Commitment Percentage times the total Commitment as of any
date. The Commitment of each Lender hereunder shall be adjusted from time to
time to reflect assignments made by such Lender pursuant to Section 29 hereof.
Each reduction in the Commitment shall result in a Pro Rata reduction in each
Lender's Commitment.

         Commitment Percentage means for each Lender the percentage set forth
opposite the Lender's name on Schedule 9 attached hereto. The Commitment
Percentage of each Lender hereunder shall be adjusted from time to time to
reflect assignments made by such Lender pursuant to Section 29 hereof.

         Convertible Junior Debentures means the 5.75% Convertible Junior
Debentures issued pursuant to an Indenture, dated as of October 22, 1997 as
supplemented by the First Supplemental Indenture dated as of October 22, 1997
between Borrower and The Bank of New York as Trustee.

         Current Assets means the total of the Borrower's current assets
determined in accordance with GAAP, including as of any date, the Available
Commitment and excluding any accounting entries made as a result of the
application of FASB 133.

         Current Liabilities means the total of current obligations as
determined in accordance with GAAP, excluding therefrom, as of any date, (i)
current maturities due on the Loans and the Junior Securities, and (ii) any
accounting entries as a result of the application of FASB 133.

         Current Ratio means the ratio of Current Assets for the date or period
being measured to the Current Liabilities for such date or period.

                                      -3-
<PAGE>

         Debt means, without duplication, all obligations and liabilities of a
Person to any other person, including, without limitation, all debts, claims and
indebtedness, heretofore, now and/or from time to time hereafter owing, due or
payable, however evidenced, created, incurred, acquired or owing and however
arising, whether under written or oral agreement, operation of law, or
otherwise. Debt includes, without limiting the foregoing, (i) indebtedness for
borrowed money (including without duplication obligations to reimburse the
issuer of any letter of credit or any guarantor or surety), (ii) indebtedness
for the deferred purchase price of property or services, excluding trade
accounts payable within ninety (90) days and arising in the ordinary course of
business, (ii) indebtedness evidenced by bonds, debentures, notes or other
similar instruments, including, without limitation, all indebtedness evidenced
by the Junior Securities, (iv) obligations and liabilities secured by a Lien on
property owned by such Person whether or not such Person has assumed such
obligations and liabilities and the amount of which Debt shall not exceed the
fair market value of the property subject to the Lien if such Person has not
assumed such obligations and liabilities, (v) obligations or liabilities created
or arising under any capitalized lease, (vi) all net payments or amounts owing
by such Person in respect of interest rate protection agreements, foreign
currency exchange agreements, commodity swap agreements or other interests,
exchange rate or commodity hedging arrangements and (vii) liabilities in respect
of unfunded vested benefits under any Plan. Debt shall not include accounts
payable and expense accruals incurred or assumed in the ordinary course of
business.

         Dollar or $ means United States dollars.

         Default means all the events specified in Section 14 hereof, regardless
of whether there shall have occurred any passage of time or giving of notice, or
both, that would be necessary in order to constitute such event as an Event of
Default.

         Default Rate shall mean a default rate of interest determined in
accordance with Section 4(e) hereof.

         EBITDAX shall mean Net Income (excluding gains and losses from asset
sales, extraordinary and non-recurring gains and losses) plus the sum of (i)
income tax expense (but excluding income tax expense relating to the sales or
other disposition of assets, including capital stock, the gains and losses from
which are excluded in the determination of Net Income), plus (ii) Interest
Expense, plus (iii) depreciation, depletion and amortization expense, plus (iv)
any other non-cash expenses, plus (v) all non-cash losses resulting from the
application of FASB 121 and 133, minus (vi) any non-cash gains resulting from
the application of FASB 133, all as determined in accordance with GAAP and
calculated as of the end of each fiscal quarter on a trailing four-quarter
basis.

         Effective Date means the date of this Agreement.

         Eligible Assignee means any of (i) a Lender or any Affiliate of a
Lender; (ii) a commercial bank organized under the laws of the United States, or
any state thereof, and having

                                      -4-
<PAGE>

a combined capital and surplus of at least $100,000,000; (iii) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having a combined capital and surplus of at
least $100,000,000.00, provided that such bank is acting through a branch or
agency located in the United States; (iv) a Person that is primarily engaged in
the business of commercial lending and that (A) is a subsidiary of a Lender, (B)
a subsidiary of a Person of which a Lender is a subsidiary, or (C) a Person of
which a Lender is a subsidiary; (v) any other entity (other than a natural
person) which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its businesses,
including, but not limited to, insurance companies, mutual funds, investments
funds and lease financing companies; and (vi) with respect to any Lender that is
a fund that invests in loans, any other fund that invests in loans and is
managed by the same investment advisor of such Lender or by an Affiliate of such
investment advisor (and treating all such funds so managed as a single Eligible
Assignee); provided, however, that no Affiliate of Borrower shall be an Eligible
Assignee.

         Engineered Value is used herein as defined in Section 6 hereof.

         Environmental Laws means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C.A. Section 9601, et seq., the Resource
Conservation and Recovery Act, as amended by the Hazardous Solid Waste Amendment
of 1984, 42 U.S.C.A. Section 6901, et seq., the Clean Water Act, 33 U.S.C.A.
Section 1251, et seq., the Clean Air Act, 42 U.S.C.A. Section 1251, et seq., the
Toxic Substances Control Act, 15 U.S.C.A. Section 2601, et seq., The Oil
Pollution Act of 1990, 33 U.S.G. Section 2701, et seq., and all other laws,
statutes, codes, acts, ordinances, orders, judgments, decrees, injunctions,
rules, regulations, orders, permits and restrictions of any federal, state,
county, municipal and other governments, departments, commissions, boards,
agencies, courts, authorities, officials and officers, domestic or foreign,
relating to in any way the environment, preservation or reclamation of natural
resources, oil pollution, air pollution, water pollution, noise control and/or
the management, release or threatened release, handling, discharge, disposal or
recovery of on-site or off-site asbestos, radioactive materials, spilled or
leaked petroleum products, distillates or fractions and industrial solid waste
or "hazardous substances" as defined by 42 U.S.C. Section 9601, et seq., as
amended, as each of the foregoing may be amended from time to time.

         Environmental Liability means any claim, demand, obligation, cause of
action, order, violation, damage, injury, judgment, penalty or fine, cost of
enforcement, cost of remedial action or any other costs or expense whatsoever,
contingent or otherwise, including reasonable attorneys' fees and disbursements
and any liability for cleanups, costs of environmental remediation, fines or
penalties, resulting from the violation or alleged violation of any
Environmental Law or the release of any substance into the environment which is
required to be remediated by a regulatory agency or governmental authority or
the imposition of any Environmental Lien (as hereinafter defined), which could
reasonably be expected to individually or in the aggregate have a Material
Adverse Effect.

                                      -5-
<PAGE>

         Environmental Lien means a Lien in favor of any court, governmental
agency or instrumentality or any other Person (i) for any Environmental
Liability or (ii) for damages arising from or cost incurred by such court or
governmental agency or instrumentality or other person in response to a release
or threatened release of asbestos or "hazardous substance" into the environment,
the imposition of which Lien could reasonably be expected to have a Material
Adverse Effect.

         ERISA means the Employee Retirement Income Security Act of 1974, as
amended.

         Event of Default is used herein as defined in Section 14 hereof.

         Federal Funds Effective Rate shall mean, for any day, an interest rate
per annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Dallas,
Texas time) on such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.

         Financial Statements means balance sheets, income statements,
statements of cash flow, stockholder equity and appropriate footnotes and
schedules, prepared in accordance with GAAP.

         Funded Debt means, as of any date, without duplication, (i) all
obligations for borrowed money or for the purchase price of property, (ii) all
obligations evidenced by bonds, debentures, notes, or other similar instruments,
(iii) all other indebtedness (including obligations under capital leases, other
than usual and customary oil and gas leases) on which interest charges are
customarily paid or accrued, (iv) all guarantees, (v) the unfunded or
unreimbursed portion of all letters of credit, (vi) any indebtedness or other
obligation secured by a Lien on assets, whether or not assumed, and (vii) all
liability as a general partner of a partnership for obligations of that
partnership of the nature described in (i) through (vii) preceding.

         GAAP means United States generally accepted accounting principles,
consistently applied.

         GLEP means Great Lakes Energy Partners, L.L.C.

         Guaranties means the Guaranty Agreement in the form of Exhibit "C"
hereto.

         Guarantor means GulfStar Energy, Inc., Range Energy I, Inc., Range
HoldCo, Inc., Range Production Company and Range Energy Ventures Corporation.

         Hydrocarbon Borrowing Base shall mean the value assigned by the Lenders
from time to time to the Oil and Gas Properties pursuant to Section 7 hereof.

                                      -6-
<PAGE>

         Increase Limit is used herein as defined in Section 7(c) hereof.

         Increased Amount is used herein as defined in Section 7(c) hereof.

         Interest Expense shall mean the aggregate amount of interest expense of
Borrower as determined in accordance with GAAP.

         Interest Payment Date shall mean the last day of each calendar month in
the case of Base Rate Loans and, in the case of LIBOR Loans, the last day of the
applicable Interest Period, and if such Interest Period is longer than three (3)
months, at three (3) month intervals following the first day of such Interest
Periods.

         Interest Period shall mean with respect to any LIBOR Loan (i)
initially, the period commencing on the date such LIBOR Loan is made and ending
one (1), two (2), three (3), six (6), nine (9) or twelve (12) months (if, at the
date of any such election, a nine (9) or twelve (12) month placement is
available to the Agent) thereafter as selected by the Borrower pursuant to
Section 4(a)(ii), and (ii) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
LIBOR Loan and ending one (1), two (2), three (3), six (6), nine (9) or twelve
(12) months (if, at the date of any such election, a nine (9) or twelve (12)
month placement is available to the Agent) thereafter, as selected by the
Borrower pursuant to Section 4(a)(ii); provided, however, that (i) if any
Interest Period would otherwise expire on a day which is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day unless the
result of such extension would be to extend such Interest Period into the next
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day, (ii) if any Interest Period begins on the last Business
Day of 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) such
Interest Period shall end on the last Business Day of a calendar month, and
(iii) any Interest Period which would otherwise expire after the Maturity Date
shall end on such Maturity Date.

         Junior Securities shall mean collectively the 8.75% Senior Subordinated
Notes due January 15, 2007 issued pursuant to an Indenture dated as of March 14,
1997 by and between Borrower and Fleet National Bank, as Trustee, the 6%
Convertible Subordinated Debentures due 2007, issued pursuant to an Indenture by
and between Borrower and Key Corp. Shareholder Services, Inc., as Trustee and
the Trust Convertible Preferred Securities.

         Letters of Credit is used herein as defined in Section 2(c) hereof.

         LIBOR Base Rate shall mean the offered rate for the period equal to or
greater than the Interest Period for U.S. dollar deposits of not less than
$1,000,000 as of 11:00 a.m. City of London, England time two (2) Business Days
prior to the first day of the Interest Period as shown on the display designated
as "British Bankers Association Interest Settlement Rates" on Reuter's for the
purpose of displaying such rate. In the event such rate is not available on
Reuter's, then such offered rate shall be otherwise independently determined by
the Agent from

                                      -7-
<PAGE>

an alternate, substantially independent source available to Agent or shall be
calculated by Agent by substantially similar methodology as that theretofore
used to determine such offered rate.

         LIBOR Loans means any Loans during any period which bear interest at
the LIBOR Rate, or which would bear interest at such rate if the Maximum Rate
ceiling was not in effect at a particular time.

         LIBOR Margin shall be:

                  (i) two and one-quarter percent (2.25%) per annum whenever the
         Borrowing Base Usage is equal to or greater than 90%; or

                  (b) two percent (2.0%) per annum whenever the Borrowing Base
         Usage is equal to or greater than 75%, but less than 90%; or

                  (c) one and three-quarters percent (1.75%) per annum whenever
         the Borrowing Base Usage is equal to or greater than 50% but less than
         75%; or

                  (d) one and one-half percent (1.50%) per annum whenever the
         Borrowing Base Usage is less than 50%.

         LIBOR Rate means, with respect to a LIBOR Loan for the relevant
Interest Period, the sum of (i) the quotient of (A) the LIBOR Base Rate
applicable to such Interest Period, divided by (B) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
the (ii) LIBOR Margin. The LIBOR Rate shall be rounded to the next higher
multiple of 1/100th of one percent if the rate is not such a multiple.

         Lien means any mortgage, deed of trust, pledge, security interest,
assignment, encumbrance or lien (statutory or otherwise) of every kind and
character.

         Loan Documents means this Agreement, the Notes, the Guaranties, the
Security Instruments and all other documents executed by Borrower or any of its
Subsidiaries with Agent or the Lenders in connection with the transaction
described in this Agreement.

         Loans means the Revolving Loans.

         Material Adverse Effect shall mean a material adverse effect on (i) the
assets or properties, liabilities, financial condition, business, operations,
affairs or circumstances of the Borrower, (ii) the ability of the Borrower to
carry out its businesses as of the date of this Agreement or as proposed at the
date of this Agreement to be conducted, (iii) the ability of Borrower to perform
fully and on a timely basis its obligations under any of the Loan Documents,
(iv) the validity or enforceability of any of the Loan Documents or the rights
and remedies of the Agent or the Lenders thereunder or (v) the Collateral, the
Liens on the Collateral created pursuant to the Loan Documents or the priority
of any such Lien.

                                      -8-
<PAGE>

         Maturity Date shall mean July 1, 2005.

         Maximum Rate is used herein as defined in Section 23 hereof.

         Net Income shall mean Borrower's net income after income taxes
calculated in accordance with GAAP.

         Notes means the Notes, substantially in the form of Exhibit "B" hereto
issued or to be issued hereunder to each Lender, respectively, to evidence the
indebtedness to such Lender arising by reason of the Advances on the Commitment,
together with all modifications, renewals and extensions thereof or any part
thereof.

         Oil and Gas Properties means all oil, gas and mineral properties and
interests and related personal properties, in which Borrower or any Guarantor
owns an interest.

         Other Financing is used herein as defined in Section 15(l) hereof.

         Payor is used herein as defined in Section 3(h)hereof.

         Permitted Liens shall mean (i) royalties, overriding royalties,
reversionary interests, production payments and similar burdens; (ii) sales
contracts or other arrangements for the sale of production of oil, gas or
associated liquid or gaseous hydrocarbons which would not (when considered
cumulatively with the matters discussed in clause (i) above) deprive Borrower of
any material right in respect of Borrower's assets or properties (except for
rights customarily granted with respect to such contracts and arrangements);
(iii) statutory Liens for taxes or other assessments that are not yet delinquent
(or that, if delinquent, are being contested in good faith by appropriate
proceedings, levy and execution thereon having been stayed and continue to be
stayed and for which Borrower has set aside on its books adequate reserves in
accordance with GAAP); (iv) easements, rights of way, servitudes, permits,
surface leases and other rights in respect to surface operations, pipelines,
grazing, logging, canals, ditches, reservoirs or the like, conditions, covenants
and other restrictions, and easements of streets, alleys, highways, pipelines,
telephone lines, power lines, railways and other easements and rights of way on,
over or in respect of Borrower's assets or properties and that do not
individually or in the aggregate cause a Material Adverse Effect; (v)
materialmen's, mechanic's, repairman's, employee's, vendor's laborer's
warehousemen's, landlord's, carrier's, pipeline's, contractor's,
sub-contractor's, operator's, non-operator's (arising under operating or joint
operating agreements), and other Liens (including any financing statements filed
in respect thereof) incidental to obligations incurred by Borrower in connection
with the construction, maintenance, development, transportation, processing,
storage or operation of Borrower's assets or properties to the extent not
delinquent (or which, if delinquent, are being contested in good faith by
appropriate proceedings and for which Borrower has set aside on its books
adequate reserves in accordance with GAAP); (vi) all contracts, agreements and
instruments, and all defects and irregularities and other matters affecting
Borrower's assets and properties which were in existence at the time Borrower's
assets and properties were originally acquired by Borrower and

                                      -9-
<PAGE>

all routine operational agreements entered into in the ordinary course of
business, which contracts, agreements, instruments, defects, irregularities and
other matters and routine operational agreements are not such as to,
individually or in the aggregate, interfere materially with the operation, value
or use of Borrower's assets and properties, considered in the aggregate; (vii)
liens in connection with workmen's compensation, unemployment insurance or other
social security, old age pension or public liability obligations; (viii) legal
or equitable encumbrances deemed to exist by reason of the existence of any
litigation or other legal proceeding or arising out of a judgment or award with
respect to which an appeal is being prosecuted in good faith and levy and
execution thereon have been stayed and continue to be stayed; (ix) rights
reserved to or vested in any municipality, governmental, statutory or other
public authority to control or regulate Borrower's assets and properties in any
manner, and all applicable laws, rules and orders from any governmental
authority; (x) landlord's liens; (xi) Liens incurred pursuant to the Security
Instruments and Liens (other than Liens on Collateral) that secure obligations
under Rate Management Transactions permitted pursuant to Section 13(n) hereof;
and (xii) Liens existing at the date of this Agreement which are identified in
Schedule "1" hereto.

         Person means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.

         Plan means any plan subject to Title IV of ERISA and maintained by
Borrower, or any such plan to which Borrower is required to contribute on behalf
of its employees.

         Pre-Approved Contracts as used herein shall mean any contracts or
agreements entered into in connection with any Rate Management Transaction which
are (i) designed to hedge, provide a price floor for, or swap crude oil or
natural gas or otherwise sell up to (A) 90% of Borrower's anticipated production
from proved, developed producing reserves of crude oil, and/or (B) 90% of
Borrower's anticipated production from proved, developed producing reserves of
natural gas, during the period from the immediately preceding settlement date
(or the commencement of the term of such hedge transactions if there is no prior
settlement date) to such settlement date, (ii) interest rate hedges in an
aggregate notional amount of not more than eighty percent (80%) of the total
Funded Debt of Borrower projected to be outstanding for any period covered by
such hedges, and (iii) with a maturity of thirty-six (36) months or less.

         Prime Rate means the rate per annum equal to the Prime Rate announced
from time to time by Agent or its parent (which is not necessarily the lowest
rate charged to any customer), changing when and as said Prime Rate changes.

         Pro Rata or Pro Rata Part means for each Lender, (i) for all purposes
where no Loan is outstanding, such Lender's Commitment Percentage and (ii)
otherwise, the proportion which the portion of the outstanding Loans owed to
such Lender bears to the aggregate outstanding Loans owed to all Lenders at the
time in question.

                                      -10-
<PAGE>

         Rate Management Transaction means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by
Borrower or any of its Subsidiaries which is a rate swap, basis swap, forward
rate transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, forward
exchange transaction, cap transaction, floor transaction, collar transaction,
forward transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof,
whether linked to one or more interest rates, foreign currencies, commodity
prices, equity prices or other financial measures.

         REFC means Range Energy Finance Corporation.

         Regulation D shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
and other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.

         Reimbursement Obligations means, at any time, the obligations of the
Borrower in respect of all Letters of Credit then outstanding to reimburse
amounts paid by any Lender in respect of any drawing or drawings under a Letter
of Credit.

         Release Price is used herein as defined in Section 12(r) hereof.

         Required Lenders means Lenders holding 75% or more of the Commitments
or if one or more of the Commitments have been terminated, Lenders holding 75%
of the outstanding Loans.

         Required Payment is used herein as defined in Section 3(h) hereof.

         Reserve Requirement means, with respect to any Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.

         Revolving Loan or Loans means an Advance or Advances made pursuant to
Section 2(a) hereof.

         Security Instruments is used collectively herein to mean this
Agreement, all Deeds of Trust, Mortgages, Security Agreements, Assignments of
Production and Financing Statements and other collateral documents covering
certain of the Oil and Gas Properties and related personal property, equipment,
oil and gas inventory and proceeds of the foregoing, the Guaranties, all pledge
agreements and all collateral assignments of notes and liens, all such documents
to be in form and substance reasonably satisfactory to Agent.

         Senior Debt means, as of any date, the Total Outstandings.

                                      -11-
<PAGE>

         Subsidiary means any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by Borrower or another Subsidiary.

         Super Majority Lenders means Lenders holding 66-2/3% or more of the
Commitments or if one or more of the Commitments have been terminated, Lenders
holding 66-2/3% of the outstanding Loans.

         Total Outstandings means the total principal balance outstanding on the
Notes at any time plus (ii) the total face amount of all outstanding Letters of
Credit, plus (iii) the total amount of all unpaid Reimbursement Obligations.

         Tranche means a set of LIBOR Loans made by the Lenders at the same time
and for the same Interest Period.

         Trust Convertible Preferred Securities the 5.75% Trust Convertible
Preferred Securities issued pursuant to a Declaration of Trust, dated as of
October 8, 1997, as amended by the Amended and Restated Declaration of Trust
dated as of October 22, 1997 between Borrower and The Bank of New York

         Unscheduled Redeterminations means a redetermination of the Borrowing
Base made at any time other than on the dates set for the regular semi-annual
redetermination of the Borrowing Base which are made (A) at the request of
Borrower (but only one between Borrowing Base redeterminations) (B) at the
request of Super Majority Lenders (but only twice between Borrowing Base
redeterminations), provided, however, that (i) Super Majority Lenders may
require an Unscheduled Redetermination at any time it appears to Administrative
Agent or Super Majority Lenders, in the exercise of their reasonable discretion,
that either (a) there has been a material decrease in the value of the Oil and
Gas Properties, or (b) an event has occurred which is reasonably expected to
have a Material Adverse Effect, or (ii) Super Majority Lenders may require an
Unscheduled Redetermination if Borrower terminates any material agreements
entered into in connection with a Rate Management Transaction used by Lenders in
determining the Hydrocarbon Borrowing Base or if the counterparty to any such
material agreement commences, or has commenced against it any proceeding under
any bankruptcy, insolvency or similar law now or hereafter in effect.

         Unused Commitment Fee Rate shall be:

                  (i) one-half of one percent per annum (.50%) whenever the
         Borrowing Base Usage is equal to or greater than 90%; or

                  (ii) three-eighths of one percent per annum (.375%) whenever
         the Borrowing Base Usage is less than 90%.

                                      -12-
<PAGE>

         2. COMMITMENTS OF THE LENDERS.

                  (a) Terms of Commitment. On the terms and conditions
         hereinafter set forth, each Lender agrees severally to make Advances to
         the Borrower from time to time during the period beginning on the
         Effective Date and ending on the Maturity Date in such amounts as the
         Borrower may request up to an amount not to exceed, in the aggregate
         principal amount advanced at any time, its Pro Rata Part of the
         Available Commitment. Subject to the terms of this Agreement, the
         Borrower may borrow, repay and reborrow at any time prior to the
         Maturity Date. The obligation of the Borrower hereunder shall be
         evidenced by this Agreement and the Notes issued in connection
         herewith, said Notes to be as described in Section 3 hereof.
         Notwithstanding any other provision of this Agreement, no Advance shall
         be required to be made hereunder if any Default or Event of Default (as
         hereinafter defined) has occurred and is continuing. Each Advance under
         the Commitment shall be an aggregate amount of at least $1,000,000 or
         any whole multiples of $100,000 in excess thereof. Irrespective of the
         face amount of the Note or Notes, the Lenders shall never have the
         obligation to Advance any amount or amounts in excess of the
         Commitment.

                  (b) Procedure for Borrowing. Whenever the Borrower desires an
         Advance under the Commitment, it shall give Agent telegraphic, telex,
         facsimile or telephonic notice ("Notice of Borrowing") of such
         requested Advance, which in the case of telephonic notice, shall be
         promptly confirmed in writing. Each Notice of Borrowing shall be in the
         form of Exhibit "A" attached hereto and shall be received by Agent not
         later than 11:00 a.m. Dallas, Texas time, on (i) the Borrowing Date in
         the case of the Base Rate Loan, or (ii) three Business Days prior to
         any proposed Borrowing Date in the case of LIBOR Loans. Each Notice of
         Borrowing shall specify (i) the Borrowing Date (which shall be a
         Business Day), (ii) the principal amount to be borrowed, (iii) the
         portion of the Advance constituting Base Rate Loans and/or LIBOR Loans
         and (iv) if any portion of the proposed Advance is to constitute LIBOR
         Loans, the initial Interest Period selected by Borrower pursuant to
         Section 4 hereof to be applicable thereto. Upon receipt of such Notice,
         Agent shall advise each Lender thereof; provided, that if the Lenders
         have received at least one (1) day's notice of such Advance prior to
         funding of a Base Rate Loan , or at least three (3) days' notice of
         each Advance prior to funding in the case of a LIBOR Loan, each Lender
         shall provide Agent at its office at 1717 Main Street, Dallas, Texas
         75201, not later than 1:00 p.m., Dallas, Texas time, on the Borrowing
         Date, in immediately available funds, its pro rata share of the
         requested Advance, but the aggregate of all such fundings by each
         Lender shall never exceed such Lender's Commitment. Not later than 2:00
         p.m., Dallas, Texas time, on the Borrowing Date, Agent shall make
         available to the Borrower at the same office, in like funds, the
         aggregate amount of such requested Advance. Neither Agent nor any
         Lender shall incur any liability to the Borrower in acting upon any
         Notice of Borrowing referred to above which Agent or such Lender
         believes in good faith to have been given by a duly authorized officer
         or other person authorized to borrow on behalf of Borrower or for

                                      -13-
<PAGE>

         otherwise acting in good faith under this Section 2(b). Upon funding of
         Advances by Lenders and such funds being made available to Borrower in
         accordance with this Agreement, pursuant to any such Notice, the
         Borrower shall have effected Advances hereunder.

                  (c) Letters of Credit. On the terms and conditions hereinafter
         set forth, the Agent shall from time to time during the period
         beginning on the Effective Date and ending on the Maturity Date upon
         request of Borrower issue standby and/or commercial Letters of Credit
         for the account of Borrower (the "Letters of Credit") in such face
         amounts as Borrower may request, but not to exceed in the aggregate
         face amount at any time outstanding the sum of Ten Million Dollars
         ($10,000,000.00). The face amount of all Letters of Credit issued and
         outstanding hereunder shall be considered as Advances on the Commitment
         for Borrowing Base purposes and all payments made by the Agent on such
         Letters of Credit shall be considered as Advances under the Notes. Each
         Letter of Credit issued for the account of Borrower hereunder shall (i)
         be in favor of such beneficiaries as specifically requested by
         Borrower, (ii) have an expiration date not exceeding the earlier of (a)
         one year or (b) the Maturity Date, and (iii) contain such other terms
         and provisions as may be required by issuing Lender. Each Lender (other
         than Agent) agrees that, upon issuance of any Letter of Credit
         hereunder, it shall automatically acquire a participation in the
         Agent's liability under such Letter of Credit in an amount equal to
         such Lender's Commitment Percentage of such liability, and each Lender
         (other than Agent) thereby shall absolutely, unconditionally and
         irrevocably assume, as primary obligor and not as surety, and shall be
         unconditionally obligated to Agent to pay and discharge when due, its
         Commitment Percentage of Agent's liability under such Letter of Credit.
         The Borrower hereby unconditionally agrees to pay and reimburse the
         Agent for the amount of each demand for payment under any Letter of
         Credit that is in substantial compliance with the provisions of any
         such Letter of Credit at or prior to the date on which payment is to be
         made by the Agent to the beneficiary thereunder, without presentment,
         demand, protest or other formalities of any kind. Upon receipt from any
         beneficiary of any Letter of Credit of any demand for payment under
         such Letter of Credit, the Agent shall promptly notify the Borrower of
         the demand and the date upon which such payment is to be made by the
         Agent to such beneficiary in respect of such demand. Forthwith upon
         receipt of such notice from the Agent, Borrower shall advise the Agent
         whether or not it intends to borrow hereunder to finance its
         obligations to reimburse the Agent, and if so, submit a Notice of
         Borrowing as provided in Section 2(b) hereof. If Borrower fails to so
         advise Agent and thereafter fails to reimburse Agent, the Agent shall
         notify each Lender of the demand and the failure of the Borrower to
         reimburse the Agent, and each Lender shall reimburse the Agent for its
         Commitment Percentage of each such draw paid by the Agent and
         unreimbursed by the Borrower. All such amounts paid by Agent and/or
         reimbursed by the Lenders shall be treated as an Advance or Advances
         under the Commitment, which Advances shall be immediately due and
         payable and shall bear interest at the Maximum Rate.

                                      -14-
<PAGE>

                  (d) Procedure for Obtaining Letters of Credit. The amount and
         date of issuance, renewal, extension or reissuance of a Letter of
         Credit pursuant to the Commitments shall be designated by Borrower's
         written request delivered to Agent at least three (3) Business Days
         prior to the date of such issuance, renewal, extension or reissuance.
         Concurrently with or promptly following the delivery of the request for
         a Letter of Credit, Borrower shall execute and deliver to the Agent an
         application and agreement with respect to the Letters of Credit, said
         application and agreement to be in the form used by the Agent. The
         Agent shall not be obligated to issue, renew, extend or reissue such
         Letters of Credit if (A) the amount thereon when added to the face
         amount of the outstanding Letters of Credit plus any Reimbursement
         Obligations exceeds Ten Million Dollars ($10,000,000.00) or (B) the
         amount thereof when added to the Total Outstandings would exceed the
         Commitment. Borrower agrees to pay the Agent for the benefit of the
         Lenders commissions for issuing the Letters of Credit (calculated
         separately for each Letter of Credit) in an amount equal to the
         Eurodollar Margin multiplied by the maximum face amount of the Letter
         of Credit. Borrower further agrees to pay Agent for its own account an
         additional fronting fee equal to one-eighth of one percent (.125%) per
         annum multiplied times the maximum face amount of each Letter of
         Credit. Such commissions shall be payable prior to the issuance of each
         Letter of Credit and thereafter on each anniversary date of such
         issuance while such Letter of Credit is outstanding. Such commissions
         and fronting fee will be calculated based on the basis of a year
         consisting of 360 days.

                  (e) Voluntary Reduction of Commitment. Subject to the
         provisions of Section 5(e) hereof, the Borrower may at any time, or
         from time to time, upon not less than three (3) Business Days' prior
         written notice to Agent, reduce or terminate the Commitment; provided,
         however, that (i) each reduction in the Commitment must be in the
         amount of $1,000,000 or more, in increments of $1,000,000 and (ii) each
         reduction must be accompanied by a prepayment of the Notes in the
         amount by which the outstanding principal balance of the Notes exceeds
         the Commitment as reduced pursuant to this Section 2(e).

                  (f) Mandatory Commitment Reductions. The Commitment shall be
         reduced from time to time by an amount of any prepayment required by
         Section 12(r) hereof upon the sale of assets. If, as a result of any
         such reduction in the Borrowing Base, the Total Outstandings ever
         exceed the Borrowing Base then in effect, the Borrower shall make the
         mandatory prepayment of principal required pursuant to Section 9(b)
         hereof.

                  (g) Several Obligations. The obligations of the Lenders under
         the Commitments are several and not joint. The failure of any Lender to
         make an Advance required to be made by it shall not relieve any other
         Lender of its obligation to make its Advance, and no Lender shall be
         responsible for the failure of any other Lender to make the Advance to
         be made by such other Lender. No Lender shall be required to lend
         hereunder any amount in excess of its legal lending limit.

                                      -15-
<PAGE>

                  (h) Type and Number of Advances. Any Advance on the Commitment
         may be a Base Rate Loan or a LIBOR Loan, or a combination thereof, as
         selected by the Borrower pursuant to Section 4 hereof. The total number
         of Tranches which may be outstanding at any time shall never exceed ten
         (10).

         3. NOTES EVIDENCING LOANS. The loans described above in Section 2 shall
be evidenced by promissory notes of Borrower as follows:

                  (a) Form of Notes. The Loans shall be evidenced by a Note or
         Notes in the aggregate face amount of $225,000,000, and shall be in the
         form of Exhibit "B" hereto with appropriate insertions. Notwithstanding
         the face amount of the Notes, the actual principal amount due from the
         Borrower to Lenders on account of the Notes, as of any date of
         computation, shall be the sum of Advances then and theretofore made on
         account thereof, less all principal payments actually received by
         Lenders in collected funds with respect thereto. Although the Notes may
         be dated as of the Effective Date, interest in respect thereof shall be
         payable only for the period during which the loans evidenced thereby
         are outstanding and, although the stated amount of the Notes may be
         higher, the Notes shall be enforceable, with respect to Borrower's
         obligation to pay the principal amount thereof, only to the extent of
         the unpaid principal amount of the Loans. Irrespective of the face
         amount of the Notes, no Lender shall ever be obligated to advance on
         the Commitment any amount in excess of its Commitment then in effect.

                  (b) Issuance of Additional Notes. At the Effective Date there
         shall be outstanding Notes in the aggregate face amount of $225,000,000
         payable to the order of Lenders. From time to time new Notes may be
         issued to other Lenders as such Lenders become parties to this
         Agreement. Upon request from Agent, the Borrower shall execute and
         deliver to Agent any such new or additional Notes. From time to time as
         new Notes are issued the Agent shall require that each Lender exchange
         its Note(s) for newly issued Note(s) to better reflect the extent of
         each Lender's Commitments hereunder.

                  (c) Interest Rates. The unpaid principal balance of the Notes
         shall bear interest from time to time as set forth in Section 4 hereof.

                  (d) Payment of Interest. Interest on the Notes shall be
         payable on each Interest Payment Date unless earlier due in whole or in
         part as a result of an acceleration of the amount due as a result of an
         Event of Default or pursuant to the mandatory prepayment provisions of
         Section 9(b) hereof.

                  (e) Payment of Principal. Principal of the Loans shall be due
         and payable to the Agent for the ratable benefit of the Lenders on the
         Maturity Date unless earlier due in whole or in part as a result of an
         acceleration of the amount due or pursuant to the mandatory prepayment
         provisions of Section 9(b) hereof.

                                      -16-
<PAGE>

                  (f) Payment to Lenders. Each Lender's Pro Rata Part of payment
         or prepayment of the Loans shall be directed by wire transfer to such
         Lender by the Agent at the address provided to the Agent for such
         Lender for payments no later than 2:00 p.m., Dallas, Texas, time on the
         Business Day such payments or prepayments are deemed hereunder to have
         been received by Agent; provided, however, in the event that any Lender
         shall have failed to make an Advance as contemplated under Section 2
         hereof (a "Defaulting Lender") and the Agent or another Lender or
         Lenders shall have made such Advance, payment received by Agent for the
         account of such Defaulting Lender or Lenders shall not be distributed
         to such Defaulting Lender or Lenders until such Advance or Advances
         shall have been repaid in full to the Lender or Lenders who funded such
         Advance or Advances. Any payment or prepayment received by Agent at any
         time after 12:00 noon, Dallas, Texas, time on a Business Day shall be
         deemed to have been received on the next Business Day. Interest shall
         cease to accrue on any principal as of the end of the day preceding the
         Business Day on which any such payment or prepayment is deemed
         hereunder to have been received by Agent. If Agent fails to transfer
         any principal amount to any Lender as provided above, then Agent shall
         promptly direct such principal amount by wire transfer to such Lender.

                  (g) Sharing of Payments, Etc. If any Lender shall obtain any
         payment (whether voluntary, involuntary, or otherwise) on account of
         the Loans, (including, without limitation, any set-off) which is in
         excess of its Pro Rata Part of payments on either of the Loans, as the
         case may be, obtained by all Lenders, such Lender shall purchase from
         the other Lenders such participation as shall be necessary to cause
         such purchasing Lender to share the excess payment pro rata with each
         of them; provided that, if all or any portion of such excess payment is
         thereafter recovered from such purchasing Lender, the purchase shall be
         rescinded and the purchase price restored to the extent of the
         recovery. The Borrower agrees that any Lender so purchasing a
         participation from another Lender pursuant to this Section may, to the
         fullest extent permitted by law, exercise all of its rights of payment
         (including the right of offset) with respect to such participation as
         fully as if such Lender were the direct creditor of the Borrower in the
         amount of such participation.

                  (h) Non-Receipt of Funds by the Agent. Unless the Agent shall
         have been notified by a Lender or the Borrower (the "Payor") prior to
         the date on which such Lender is to make payment to the Agent of the
         proceeds of a Loan to be made by it hereunder or the Borrower is to
         make a payment to the Agent for the account of one or more of the
         Lenders, as the case may be (such payment being herein called the
         "Required Payment"), which notice shall be effective upon receipt, that
         the Payor does not intend to make the Required Payment to the Agent,
         the Agent may assume that the Required Payment has been made and may,
         in reliance upon such assumption (but shall not be required to), make
         the amount thereof available to the intended recipient on such date
         and, if the Payor has not in fact made the Required Payment to the
         Agent, the recipient of such payment shall, on demand, pay to the Agent
         the amount made available to it

                                      -17-
<PAGE>

         together with interest thereon in respect of the period commencing on
         the date such amount was made available by the Agent until the date the
         Agent recovers such amount at the rate applicable to such portion of
         the applicable Loan.

         4. INTEREST RATES.

                  (a) Options.

                           (i) Base Rate Loans. On all Base Rate Loans the
                  Borrower agrees to pay interest on the Notes calculated on the
                  basis of the actual days elapsed in a year consisting of 365
                  days, or if appropriate, 366 days with respect to the unpaid
                  principal amount of each Base Rate Loan from the date the
                  proceeds thereof are made available to Borrower until maturity
                  (whether by acceleration or otherwise), at a varying rate per
                  annum equal to the lesser of (i) the Maximum Rate (defined
                  herein), or (ii) the Base Rate plus the Base Rate Margin.
                  Subject to the provisions of this Agreement as to prepayment,
                  the principal of the Notes representing Base Rate Loans shall
                  be payable as specified in Section 3(e) hereof and the
                  interest in respect of each Base Rate Loan shall be payable on
                  each Interest Payment Date applicable thereto. Past due
                  principal and, to the extent permitted by law, past due
                  interest in respect to each Base Rate Loan, shall bear
                  interest, payable on demand, at a rate per annum equal to the
                  Default Rate.

                           (ii) LIBOR Loans. On all LIBOR Loans the Borrower
                  agrees to pay interest calculated on the basis of a year
                  consisting of 360 days with respect to the unpaid principal
                  amount of each LIBOR Loan from the date the proceeds thereof
                  are made available to Borrower until maturity (whether by
                  acceleration or otherwise), at a varying rate per annum equal
                  to the lesser of (i) the Maximum Rate, or (ii) the LIBOR Rate.
                  Subject to the provisions of this Agreement with respect to
                  prepayment, the principal of the Notes shall be payable as
                  specified in Section 3(e) hereof and the interest with respect
                  to each LIBOR Loan shall be payable on each Interest Payment
                  Date applicable thereto. Past due principal and, to the extent
                  permitted by law, past due interest shall bear interest,
                  payable on demand, at a rate per annum equal to the Default
                  Rate. Upon three (3) Business Days' written notice prior to
                  the making by the Lenders of any LIBOR Loan (in the case of
                  the initial Interest Period therefor) or the expiration date
                  of each succeeding Interest Period (in the case of subsequent
                  Interest Periods therefor), Borrower shall have the option,
                  subject to compliance by Borrower with all of the provisions
                  of this Agreement, as long as no Event of Default exists, to
                  specify whether the Interest Period commencing on any such
                  date shall be a one (1), two (2), three (3), six (6),

                                      -18-
<PAGE>

                  nine (9) or twelve (12) month period, subject to availability.
                  If Agent shall not have received timely notice of a
                  designation of such Interest Period as herein provided,
                  Borrower shall be deemed to have elected to convert all
                  maturing LIBOR Loans to Base Rate Loans.

                  (b) Interest Rate Determination. The Agent shall determine
         each interest rate applicable to the Loans hereunder. The Agent shall
         give prompt notice to the Borrower and the Lenders of each rate of
         interest so determined and its determination thereof shall be
         conclusive absent error.

                  (c) Conversion Option. Borrower may elect from time to time
         (i) to convert all or any part of its LIBOR Loans to Base Rate Loans by
         giving Agent irrevocable notice of such election in writing prior to
         10:00 a.m. (Dallas, Texas time) on the conversion date and such
         conversion shall be made on the requested conversion date, provided
         that any such conversion of LIBOR Loan shall only be made on the last
         day of the Interest Period with respect thereof, (ii) to convert all or
         any part of its Base Rate Loans to LIBOR Loans by giving the Agent
         irrevocable written notice of such election no later than three (3)
         Business Days prior to the proposed conversion and such conversion
         shall be made on the requested conversion date or, if such requested
         conversion date is not a Business Day, on the next succeeding Business
         Day. Any such conversion shall not be deemed to be a prepayment of any
         of the loans for purposes of this Agreement or the Notes.

                  (d) Recoupment. If at any time the applicable rate of interest
         selected pursuant to Sections 4(a)(i) or 4(a)(ii) above shall exceed
         the Maximum Rate, thereby causing the interest on the Notes to be
         limited to the Maximum Rate, then any subsequent reduction in the
         interest rate so selected or subsequently selected shall not reduce the
         rate of interest on the Notes below the Maximum Rate until the total
         amount of interest accrued on the Note equals the amount of interest
         which would have accrued on the Notes if the rate or rates selected
         pursuant to Sections 4(a)(i) or (ii), as the case may be, had at all
         times been in effect.

                  (e) Interest Rates Applicable After Default. Notwithstanding
         anything to the contrary contained in this Section 4, during the
         continuance of a Default or an Event of Default the Super Majority
         Lenders may, at their option, by notice from Agent to the Borrower
         (which notice may be revoked at the option of the Super Majority
         Lenders notwithstanding the provisions of Section 15 hereof, which
         requires all Lenders to consent to changes in interest rates) declare
         that no Advance may be made as, converted into, or continued as a LIBOR
         Loan. During the continuance of an Event of Default, the Super Majority
         Lenders, may, at their option, by notice from Agent to the Borrower
         (which notice may be revoked at the option of Super Majority Lenders
         notwithstanding the provisions of Section 15 hereof, which requires all
         Lenders to consent to changes in interest rates) declare that (i) each
         LIBOR Loan shall bear interest for the remainder of the applicable
         Interest Period at the rate otherwise applicable to such Interest
         Period plus

                                      -19-
<PAGE>

         two percent (2%) per annum and (ii) each Base Rate Loan shall bear
         interest at the rate otherwise applicable to such Interest Period plus
         two percent (2%), provided that, during the continuance of an Event of
         Default under Section 14(f) or 14(g), the interest rate set forth in
         clauses (i) and (ii) above shall be applicable to all outstanding Loans
         without any election or action on the part of the Agent or any Lender.

         5. SPECIAL PROVISIONS RELATING TO LOANS.

                  (a) Unavailability of Funds or Inadequacy of Pricing. In the
         event that, in connection with any proposed LIBOR Loan, the Agent
         reasonably determines, which determination shall, absent manifest
         error, be final, conclusive and binding upon all parties, due to
         changes in circumstances since the date hereof, adequate and fair means
         do not exist for determining the LIBOR Rate or such rate will not
         accurately reflect the costs to the Lenders of funding LIBOR Loan for
         such Interest Period, the Agent shall give notice of such determination
         to the Borrower and the Lenders, whereupon, until the Agent notifies
         the Borrower and the Lenders that the circumstances giving rise to such
         suspension no longer exist, the obligations of the Lenders to make,
         continue or convert Loans into LIBOR Loan shall be suspended, and all
         Loans to Borrower shall be Base Rate Loans during the period of
         suspension.

                  (b) Change in Laws. If at any time any new law or any change
         in existing laws or in the interpretation of any new or existing laws
         shall make it unlawful for any Lender to make or continue to maintain
         or fund LIBOR Loans hereunder, then such Lender shall promptly notify
         Borrower in writing and such Lender's obligation to make, continue or
         convert Loans into LIBOR Loans under this Agreement shall be suspended
         until it is no longer unlawful for such Lender to make or maintain
         LIBOR Loans. Upon receipt of such notice, Borrower shall either repay
         the outstanding LIBOR Loans owed to such Lender, without penalty, on
         the last day of the current Interest Periods (or, if any Lender may not
         lawfully continue to maintain and fund such LIBOR Loans, immediately),
         or Borrower may convert such LIBOR Loans at such appropriate time to
         Base Rate Loans.

                  (c) Increased Cost or Reduced Return.

                           (i) If, after the date hereof, the adoption of any
                  applicable law, rule, or regulation, or any change in any
                  applicable law, rule, or regulation, or any change in the
                  interpretation or administration thereof by any governmental
                  authority, central bank, or comparable agency charged with the
                  interpretation or administration thereof, or compliance by any
                  Lender with any request or directive (whether or not having
                  the force of law) of any such governmental authority, central
                  bank, or comparable agency:

                                      -20-
<PAGE>

                                    (A) shall subject such Lender to any tax,
                           duty, or other charge with respect to any LIBOR
                           Loans, its Notes, or its obligation to make LIBOR
                           Loans, or change the basis of taxation of any amounts
                           payable to such Lender under this Agreement or its
                           Notes in respect of any LIBOR Loan (other than
                           franchise taxes and taxes imposed on or measured by
                           the overall net income of such Lender);

                                    (B) shall impose, modify, or deem applicable
                           any reserve, special deposit, assessment, or similar
                           requirement (other than reserve requirements, if any,
                           taken into account in the determination of the LIBOR
                           Rate) relating to any extensions of credit or other
                           assets of, or any deposits with or other liabilities
                           or commitments of, such Lender, including the
                           Commitment of such Lender hereunder; or

                                    (C) shall impose on such Lender or on the
                           London interbank market any other condition affecting
                           this Agreement or its Notes or any of such extensions
                           of credit or liabilities or commitments;

                  and the result of any of the foregoing is to increase the cost
                  to such Lender of making, converting into, continuing, or
                  maintaining any LIBOR Loan or to reduce any sum received or
                  receivable by such Lender under this Agreement or its Notes
                  with respect to any LIBOR Loan, then Borrower shall pay to
                  such Lender on demand such amount or amounts as will
                  reasonably compensate such Lender for such increased cost or
                  reduction. If any Lender requests compensation by Borrower
                  under this Section 5(c), Borrower may, by notice to such
                  Lender (with a copy to Agent), suspend the obligation of such
                  Lender to make or continue LIBOR Loans, or to convert all or
                  part of the Base Rate Loans owing to such Lender to LIBOR
                  Loans, until the event or condition giving rise to such
                  request ceases to be in effect (in which case the provisions
                  of Section 5(c) shall be applicable); provided that such
                  suspension shall not affect the right of such Lender to
                  receive the compensation so requested.

                           (ii) If, after the date hereof, any Lender shall have
                  reasonably determined that the adoption of any applicable law,
                  rule, or regulation regarding capital adequacy or any change
                  therein or in the interpretation or administration thereof by
                  any governmental authority, central bank, or comparable agency
                  charged with the interpretation or administration thereof, or
                  any request or directive regarding capital adequacy (whether
                  or

                                      -21-
<PAGE>

                  not having the force of law) of any such governmental
                  authority, central bank, or comparable agency, has or would
                  have the effect of reducing the rate of return on the capital
                  of such Lender or any corporation controlling such Lender as a
                  consequence of such Lender's obligations hereunder to a level
                  below that which such Lender or such corporation could have
                  achieved but for such adoption, change, request, or directive
                  (taking into consideration its policies with respect to
                  capital adequacy), then from time to time upon demand Borrower
                  shall pay to such Lender such additional amount or amounts as
                  will reasonably compensate such Lender for such reduction.

                           (iii) Each Lender shall promptly notify Borrower and
                  Agent of any event of which it has knowledge, occurring after
                  the date hereof, which will entitle such Lender to
                  compensation pursuant to this Section 5(c) and will designate
                  a separate lending office, if applicable, if such designation
                  will avoid the need for, or reduce the amount of, such
                  compensation and will not, in the judgment of such Lender, be
                  otherwise disadvantageous to it. Any Lender claiming
                  compensation under this Section 5(c) shall furnish to Borrower
                  and Agent a statement setting forth the additional amount or
                  amounts to be paid to it hereunder which shall be conclusive
                  in the absence of manifest error. In determining such amount,
                  such Lender may use any reasonable averaging and attribution
                  methods.

                           (iv) Any Lender giving notice to the Borrower through
                  the Agent pursuant to Section 5(c) shall give to the Borrower
                  a statement signed by an officer of such Lender setting forth
                  in reasonable detail the basis for, and the calculation of
                  such additional cost, reduced payments or capital
                  requirements, as the case may be, and the additional amounts
                  required to compensate such Lender therefor.

                           (v) Within five (5) Business Days after receipt by
                  the Borrower of any notice referred to in Section 5(c), the
                  Borrower shall pay to the Agent for the account of the Lender
                  issuing such notice such additional amounts as are required to
                  compensate such Lender for the increased cost, reduced
                  payments or increased capital requirements identified therein,
                  as the case may be.

                           (vi) Failure or delay on the part of any Lender to
                  demand compensation pursuant to this Section shall not
                  constitute a waiver of any such Lender's right to demand such
                  compensation.

                  (d) Discretion of Lender as to Manner of Funding.
         Notwithstanding any provisions of this Agreement to the contrary, each
         Lender shall be entitled to fund and

                                      -22-
<PAGE>

         maintain its funding of all or any part of its Loan in any manner it
         sees fit, it being understood, however, that for the purposes of this
         Agreement all determinations hereunder shall be made as if each Lender
         had actually funded and maintained each LIBOR Loan through the purchase
         of deposits having a maturity corresponding to the last day of the
         Interest Period applicable to such LIBOR Loan and bearing an interest
         rate at the applicable interest rate for such Interest Period.

                  (e) Breakage Fees. Without duplication under any other
         provision hereof, if any Lender incurs any loss, cost or expense
         including, without limitation, any loss of profit and loss, cost,
         expense or premium reasonably incurred by reason of the liquidation or
         re-employment of deposits or other funds acquired by such Lender to
         fund or maintain any LIBOR Loan or the relending or reinvesting of such
         deposits or amounts paid or prepaid to the Lenders as a result of any
         of the following events other than any such occurrence as a result in
         the change of circumstances described in Sections 5(a) and (b):

                           (i) any payment, prepayment or conversion of a LIBOR
                  Loan on a date other than the last day of its Interest Period
                  (whether by acceleration, prepayment or otherwise);

                           (ii) any failure to make a principal payment of a
                  LIBOR Loan on the due date thereof; or

                           (iii) any failure by the Borrower to borrow,
                  continue, prepay or convert to a LIBOR Loan on the dates
                  specified in a notice given pursuant to Section 2(b) or 4(c)
                  hereof;

         then the Borrower shall pay to such Lender such amount as will
         reimburse such Lender for such loss, cost or expense. If any Lender
         makes such a claim for compensation, it shall furnish to Borrower and
         Agent a statement setting forth the amount of such loss, cost or
         expense in reasonable detail (including an explanation of the basis for
         and the computation of such loss, cost or expense) and the amounts
         shown on such statement shall be conclusive and binding absent manifest
         error.

         6. COLLATERAL SECURITY. To secure the performance by Borrower and the
Guarantors of their obligations hereunder, and under the Notes and Security
Instruments, whether now or hereafter incurred, matured or unmatured, direct or
contingent, joint or several, or joint and several, including extensions,
modifications, renewals and increases thereof, and substitutions therefor,
Borrower and certain of the Guarantors have heretofore granted and shall
herewith or hereafter grant and assign to Agent for the ratable benefit of the
Lenders a first and prior Lien or Liens on certain of their Oil and Gas
Properties, certain related equipment, oil and gas inventory and proceeds of the
foregoing. The Oil and Gas Properties herewith assigned and mortgaged to the
Agent by the Borrower and certain of the Guarantors shall represent not less
than 80% of the Engineered Value (as hereinafter defined) of Borrower's and such
Guarantor's Oil and Gas

                                      -23-
<PAGE>

Properties as of the Effective Date. In addition to the mortgaging of the Oil
and Gas Properties, Borrower shall pledge to the Agent for the benefit of the
Lenders, (i) 100% of the stock of each of Borrower's wholly-owned Subsidiaries,
(ii) all of its membership interest in GLEP and (iii) shall cause each Guarantor
to provide the Lenders with the Guaranty. Range Energy Ventures Corporation, a
Guarantor, shall secure its Guaranty with a pledge of all of the issued and
outstanding shares of the common stock of REFC. Obligations arising from
agreements arising from Rate Management Transactions between Borrower, any
Guarantor, and one or more of the Lenders or an Affiliate of any of the Lenders
shall be secured by the Collateral (as hereinafter defined) on a pari passu
basis with the indebtedness and obligations of the Borrower under the Loan
Documents. Once agreements arising from Rate Management Transactions involving
one or more of the Lenders, or an Affiliate of any of the Lenders, is entered
into, and pursuant to this provision becomes secured by the Collateral on a pari
passu basis, said Collateral shall continue to secure such obligations until
such agreements are no longer in force and effect, irrespective of whether the
Lender involved in such agreement ceases to be a Lender under this Agreement.
All Oil and Gas Properties, stock, membership interest and other collateral in
which Borrower and certain of the Guarantors herewith grants or hereafter grants
to Agent for the ratable benefit of the Lenders a first and prior Lien (to the
satisfaction of the Agent) in accordance with this Section 6, as such properties
and interests are from time to time constituted, are hereinafter collectively
called the "Collateral".

         The granting and assigning of such security interests and Liens by
Borrower and certain of the Guarantors shall be pursuant to Security Instruments
in form and substance reasonably satisfactory to the Agent. Concurrently with
the delivery of each of the Security Instruments or within a reasonable time
thereafter, Borrower shall have furnished or caused to be furnished to the Agent
mortgage and title opinions and other title information reasonably satisfactory
to Agent with respect to the title and Lien status of Borrower's and certain of
the Guarantor's interests in not less than 80% of the Engineered Value of the
Borrower's and certain of the Guarantor's mortgaged Oil and Gas Properties .
"Engineered Value" for this purpose shall mean future net revenues discounted at
the discount rate being used by the Agent as of the date of any such
determination utilizing the pricing parameters used in the engineering report
furnished to the Agent pursuant to Sections 7 and 12 hereof. Borrower will cause
to be executed and delivered to the Agent, in the future, additional Security
Instruments if the Agent reasonably deems such are necessary to insure
perfection or maintenance of Lenders' security interests and Liens in not less
than 80% of the Engineered Value of the Oil and Gas Properties or any part
thereof.

         7. BORROWING BASE.

                  (a) Initial Hydrocarbon Borrowing Base. At the Effective Date,
         the Hydrocarbon Borrowing Base shall be $135,000,000.

                  (b) Subsequent Determinations of Hydrocarbon Borrowing Base.
         Subsequent determinations of the Hydrocarbon Borrowing Base shall be
         made by the Lenders

                                      -24-
<PAGE>

         semi-annually on April 1 and October 1 of each year beginning October
         1, 2002 or as Unscheduled Redeterminations. By March 1 each year,
         beginning March 1, 2003, Borrower shall furnish to the Lenders an
         engineering report in form and substance reasonably satisfactory to
         Agent prepared by an independent petroleum engineering firm acceptable
         to Agent, said engineering report to utilize economic and pricing
         parameters used by the Agent as established from time to time, together
         with such other information, reports and data concerning the value of
         the Oil and Gas Properties as Agent shall deem reasonably necessary to
         determine the value of such Oil and Gas Properties. By September 1 of
         each year beginning September 1, 2002, or within thirty (30) days after
         either (i) receipt of notice from Agent that the Lenders require an
         Unscheduled Redetermination, or (ii) the Borrower gives notice to Agent
         of its desire to have an Unscheduled Redetermination performed, in each
         case the Borrower shall furnish to the Lenders an engineering report in
         form and substance reasonably satisfactory to Agent, said engineering
         report to utilize economic and pricing parameters used by the Agent as
         established from to time, together with such other information, reports
         and data concerning the value of such Oil and Gas Properties. Agent
         shall by written notice to the Borrower no later than April 1 and
         October 1 of each year, or within a reasonable time thereafter (herein
         called the "Determination Date"), notify the Borrower of the
         designation by the Lenders of the new Hydrocarbon Borrowing Base for
         the period beginning on such Determination Date and continuing until,
         but not including, the next Determination Date. If an Unscheduled
         Redetermination is to be made by the Lenders, the Agent shall notify
         the Borrower within a reasonable time after receipt of all requested
         information of the new Hydrocarbon Borrowing Base, and such new
         Hydrocarbon Borrowing Base shall continue until the next Determination
         Date. If the Borrower does not furnish all such information, reports
         and data by any date specified in this Section 7(b), unless such
         failure is reasonably determined by the Agent to be of no fault of the
         Borrower, the Lenders nonetheless designate the Hydrocarbon Borrowing
         Base at any amounts which the Lenders in their reasonable discretion
         determine and redesignate the Hydrocarbon Borrowing Base from time to
         time thereafter until the Lenders receive all such information, reports
         and data, whereupon the Lenders shall designate a new Hydrocarbon
         Borrowing Base as described above. The procedure for determining the
         Hydrocarbon Borrowing Base at each redetermination shall be that the
         Agent shall determine the Hydrocarbon Borrowing Base and submit the
         same to the Lenders. Increases in the Hydrocarbon Borrowing Base will
         require approval of all Lenders, but other reaffirmation or changes in
         the Hydrocarbon Borrowing Base will be subject to the approval of
         Required Lenders. If any redetermined Hydrocarbon Borrowing Base is not
         approved by Required Lenders within twenty (20) days after submission
         to the Lenders by the Agent, the Agent shall notify each of the Lenders
         that the proposed Hydrocarbon Borrowing Base has not been approved and
         each Lender will submit within ten (10) days thereafter its proposed
         Hydrocarbon Borrowing Base. The redetermined Hydrocarbon Borrowing Base
         shall be then determined (in all cases except those involving an
         increase of the Borrowing Base which requires approval of all Lenders)
         based upon the weighted arithmetic average of the proposed amounts
         submitted by each Lender, said proposals to

                                      -25-
<PAGE>

         be weighted according to each Lender's Commitment. Each Lender shall
         determine the amount of the Hydrocarbon Borrowing Base based upon the
         loan collateral value which such Lender in its sole discretion (using
         such methodology, assumptions and discount rates as such Lender
         customarily uses in assigning collateral value to oil and gas
         properties, oil and gas gathering systems, gas processing and plant
         operations) assigns to such Oil and Gas Properties of the Borrower at
         the time in question and based upon such other credit factors
         consistently applied (including, without limitation, the assets,
         liabilities, cash flow, business, properties, prospects, management and
         ownership of the Borrower and its affiliates) as such Lender
         customarily considers in evaluating similar oil and gas credits. If at
         any time any of the Oil and Gas Properties are sold, the Hydrocarbon
         Borrowing Base then in effect shall automatically be reduced by a sum
         equal to the amount of prepayment, if any, required to be made pursuant
         to Section 12(r) hereof. It is expressly understood that the Lenders
         have no obligation to designate the Hydrocarbon Borrowing Base at any
         particular amounts, except in the exercise of their discretion, whether
         in relation to the Commitments or otherwise. Provided, however, that
         the Lenders shall not have the obligation to designate a Hydrocarbon
         Borrowing Base in an amount in excess of the Commitment.

                  (c) Additional Borrowing Base. The Borrowing Base will
         increase, in increments of not less than $1,000,000 (the "Increased
         Amount") from time to time between Determination Dates by an amount
         equal to 35% of the face amount of all Junior Securities acquired by
         the Borrower during such period; provided, however, that such Increased
         Amount may not exceed $10,000,000 during any six (6) month period
         between Determination Dates (the "Increase Limit") and, provided
         further, that the first such period shall include the period of time
         from January 1, 2002 to October 1, 2002. Borrower shall give the Agent
         notice of any such acquisition of Junior Securities by Borrower and
         upon receipt of such notice by Agent, the Borrowing Base (if requested
         by Borrower in writing during the same Borrowing Base period) shall be
         increased by the Increased Amount covered by such notice. Provided,
         further, that at no time may the Borrowing Base exceed the Commitment.

         8. FEES.

                  (a) Unused Commitment Fee. The Borrower shall pay to Agent for
         the ratable benefit of the Lenders an unused commitment fee (the
         "Unused Commitment Fee") equivalent to the Unused Commitment Fee Rate
         times the daily average of the sum of the (i) Hydrocarbon Borrowing
         Base, plus (ii) the Increase Limit minus Total Outstandings. Such
         Unused Commitment Fee shall be calculated on the basis of a year
         consisting of 360 days. The Unused Commitment Fee shall be payable in
         arrears on the last day of each calendar quarter beginning June 30,
         2002 with the final fee payment due on the Maturity Date for any period
         then ending for which the Unused Commitment Fee shall not have been
         theretofore paid. In the event the Commitment terminates on any date
         prior to the end of any such quarterly period, the Borrower shall pay
         to the Agent for

                                      -26-
<PAGE>

         the ratable benefit of the Lenders, on the date of such termination,
         the total Unused Commitment Fee due for the period in which such
         termination occurs. If a date for payment of the Unused Commitment Fee
         shall be other than a Business Day such payment shall be made on the
         next succeeding Business Day.

         9. PREPAYMENTS.

                  (a) Voluntary Prepayments. Subject to the provisions of
         Section 5(e) hereof, the Borrower may at any time and from time to
         time, without penalty or premium, prepay the Notes, in whole or in
         part. Each such prepayment shall be made on at least three (3) Business
         Days' notice to Agent in the case of LIBOR Loan Tranches and without
         notice in the case of Base Rate Loans and shall be in a minimum amount
         of (i) $100,000 or any whole multiple of $100,000 in excess thereof (or
         the unpaid balance of the Notes, whichever is less), for Base Rate
         Loans, plus accrued interest thereon and (ii) $1,000,000 or any
         integral multiple thereof (or the unpaid balance on the Notes,
         whichever is less) for LIBOR Loans, plus accrued interest thereon to
         the date of prepayment.

                  (b) Mandatory Prepayment For Borrowing Base Deficiency. In the
         event the Total Outstandings ever exceed the Borrowing Base as
         determined by Lenders pursuant to Section 7(b) and 7(c) hereof (a
         "Borrowing Base Deficiency"), the Borrower shall, within ninety (90)
         days after written notification from the Agent, either (A) by
         instruments reasonably satisfactory in form and substance to the
         Lender, provide the Agent with collateral with value and quality in
         amounts satisfactory to all of the Lenders in their discretion in order
         to increase the Borrowing Base by an amount at least equal to such
         excess, or (B) prepay, without premium or penalty, the principal amount
         of the Notes in an amount at least equal to such excess plus accrued
         interest thereon to the date of prepayment, or (C) prepay, without
         premium or penalty, the principal amount of such excess in not more
         than two (2) equal installments to be applied to principal plus accrued
         interest thereon with the first such monthly payment being due upon the
         90th day after receipt of notice of such deficiency with the remaining
         payment being due in one hundred eighty (180) days of receipt of notice
         of such deficiency.

         10. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to
enter into this Agreement, Borrower represents and warrants to the Lenders
(which representations and warranties will survive the delivery of the Notes)
that:

                  (a) Creation and Existence. Borrower is a corporation duly
         organized, validly existing and in good standing under the laws of the
         of the State of Delaware and is duly qualified in all jurisdictions
         wherein failure to qualify may result in a Material Adverse Effect. The
         Guarantors are each a corporation duly organized, validly existing and
         in good standing under the laws of the jurisdiction in which they were
         formed and is duly qualified to do business in all jurisdictions
         wherein failure to qualify may result in a Material Adverse Effect.
         Borrower and each Guarantor have all corporate power and

                                      -27-
<PAGE>

         authority to own their respective properties and assets and to transact
         the business in which they are engaged.

                  (b) Power and Authority. Borrower is duly authorized and
         empowered to create and issue the Notes; and Borrower and each
         Guarantor is duly authorized and empowered to execute, deliver and
         perform their respective Loan Documents, including this Agreement; and
         all corporate action on Borrower's and each Guarantor's part requisite
         for the due creation and issuance of the Notes and for the due
         execution, delivery and performance of the Loan Documents, including
         this Agreement, has been duly and effectively taken.

                  (c) Binding Obligations. This Agreement does, and the Notes
         and other Loan Documents upon their creation, issuance, execution and
         delivery will, constitute valid and binding obligations of Borrower and
         each Guarantor, respectively, enforceable in accordance with its
         respective terms (except that enforcement may be subject to general
         principles of equity and any applicable bankruptcy, insolvency, or
         similar debtor relief laws now or hereafter in effect and relating to
         or affecting the enforcement of creditors' rights generally).

                  (d) No Legal Bar or Resultant Lien. The Notes and the Loan
         Documents, including this Agreement, do not and will not, to the best
         of Borrower's or each Guarantor's knowledge violate or conflict with or
         result in a default under any provisions of Borrower's or any
         Guarantor's charter, bylaws or other organizational documents or any
         contract, agreement, law, regulation, order, injunction, judgment,
         decree or writ to which Borrower or either Guarantor is subject, or
         result in the creation or imposition of any lien or other encumbrance
         upon any assets or properties of Borrower or any Guarantor, other than
         those contemplated by this Agreement.

                  (e) No Consent. The execution, delivery and performance by
         Borrower of the Notes and the execution, delivery and performance by
         Borrower and each Guarantor of the other Loan Documents, including this
         Agreement, does not require the consent or approval of any other person
         or entity, including without limitation any regulatory authority or
         governmental body of the United States or any state thereof or any
         political subdivision of the United States or any state thereof except
         for consents required for federal, state and, in some instances,
         private leases, right of ways and other conveyances or encumbrances of
         oil and gas leases all of which shall have been obtained.

                  (f) Financial Condition. The audited consolidated Financial
         Statements of Borrower dated as of December 31, 2001 which have been
         delivered to Lenders by Borrower are complete and correct in all
         material respects and fully and accurately reflect in all material
         respects the financial conditions and the results of the operations of
         Borrower as of such date and for the period stated and no change has
         occurred between such date and the Effective Date in the condition,
         financial or otherwise of Borrower or

                                      -28-
<PAGE>

         any Guarantor which is reasonably expected to have a Material Adverse
         Effect, except as disclosed to Lenders in Schedule "2" attached hereto.

                  (g) Liabilities. Neither Borrower nor any Guarantor has any
         material liability, direct or contingent on the Effective Date, except
         as disclosed to the Lenders in the Financial Statements or on Schedule
         "3" attached hereto. No unusual or unduly burdensome restrictions,
         restraint, or hazard exists by contract, law or governmental regulation
         or otherwise relative to the business, assets or properties of Borrower
         or either Guarantor which is reasonably expected to have a Material
         Adverse Effect or which involve any of the Loan Documents.

                  (h) Litigation. Except as described in the Financial
         Statements, or as otherwise disclosed to the Lenders in Schedule "4"
         attached hereto, on the Effective Date there is no litigation, legal or
         administrative proceeding, investigation or other action of any nature
         pending or, to the knowledge of any directors or the officers of
         Borrower or any Guarantor, threatened against or affecting Borrower or
         any Guarantor which involves the possibility of any judgment or
         liability not fully covered by insurance, and which is reasonably
         expected to have a Material Adverse Effect.

                  (i) Taxes; Governmental Charges. Borrower and each Guarantor
         has filed all tax returns and reports required to be filed and has paid
         all taxes, assessments, fees and other governmental charges levied upon
         it or its assets, properties or income which are due and payable,
         including interest and penalties, the failure of which to pay could
         reasonably be expected to have a Material Adverse Effect, except such
         as are being contested in good faith by appropriate proceedings and for
         which adequate reserves for the payment thereof as required by GAAP has
         been provided and levy and execution thereon have been stayed and
         continue to be stayed.

                  (j) Titles, Etc. Borrower and each Guarantor has good and
         defensible title to all of their material assets, including without
         limitation, the Oil and Gas Properties, free and clear of all Liens
         except Permitted Liens.

                  (k) Defaults. Neither Borrower nor any Guarantor is in default
         and no event or circumstance has occurred which, but for the passage of
         time or the giving of notice, or both, would constitute a default under
         any loan or credit agreement, indenture, mortgage, deed of trust,
         security agreement or other agreement or instrument to which Borrower
         or any Guarantor is a party in any respect that would be reasonably
         expected to have a Material Adverse Effect. No Default or Event of
         Default hereunder has occurred and is continuing.

                  (l) Casualties; Taking of Properties. Since the dates of the
         latest Financial Statements of the Borrower or any Guarantor delivered
         to Lenders, neither the business nor the assets or properties of
         Borrower has been affected (to the extent it is reasonably

                                      -29-
<PAGE>

         expected to cause a Material Adverse Effect), as a result of any fire,
         explosion, earthquake, flood, drought, windstorm, accident, strike or
         other labor disturbance, embargo, requisition or taking of property or
         cancellation of contracts, permits or concessions by any domestic or
         foreign government or any agency thereof, riot, activities of armed
         forces or acts of God or of any public enemy.

                  (m) Use of Proceeds; Margin Stock. The proceeds of the
         Commitment may be used by the Borrower solely for the purposes of (i)
         acquisition, exploration and development of oil and gas properties, and
         (ii) working capital and letters of credit, and (iii) other general
         corporate purposes including the purchase of Junior Securities.
         Borrower is not engaged principally or as one of its important
         activities in the business of extending credit for the purpose of
         purchasing or carrying any "margin stock " as defined in Regulation U
         of the Board of Governors of the Federal Reserve System (12 C.F.R. Part
         221), or for the purpose of reducing or retiring any indebtedness which
         was originally incurred to purchase or carry a margin stock or for any
         other purpose which might constitute this transaction a "purpose
         credit" within the meaning of said Regulation U.

                  Neither Borrower nor any person or entity acting on behalf of
         Borrower has taken or will take any action which might cause the loans
         hereunder or any of the Loan Documents, including this Agreement, to
         violate Regulation U or any other regulation of the Board of Governors
         of the Federal Reserve System or to violate the Securities Exchange Act
         of 1934 or any rule or regulation thereunder, in each case as now in
         effect or as the same may hereafter be in effect.

                  (n) Location of Business and Offices. The principal place of
         business and chief executive offices of the Borrower is located at the
         address as stated in Section 17 hereof.

                  (o) Compliance with the Law. To the best of Borrower's
         knowledge, neither Borrower nor any Guarantor:

                           (i) is in violation of any law, judgment, decree,
                  order, ordinance, or governmental rule or regulation to which
                  Borrower, or any of its assets or properties are subject; or

                           (ii) has failed to obtain any license, permit,
                  franchise or other governmental authorization necessary to the
                  ownership of any of its assets or properties or the conduct of
                  its business;

         which violation or failure is reasonably expected to have a Material
         Adverse Effect.

                  (p) No Material Misstatements. No information, exhibit or
         report furnished by Borrower or any Guarantor to the Lenders in
         connection with the negotiation of this

                                      -30-
<PAGE>

         Agreement contained any material misstatement of fact or omitted to
         state a material fact or any fact necessary to make the statements
         contained therein not materially misleading.

                  (q) Not A Utility. Borrower is not a utility subject to
         regulation under the laws of in the State of Texas as a result of being
         engaged in the (i) generation, transmission, or distribution and sale
         of electric power; (ii) transportation, distribution and sale through a
         local distribution system of natural or other gas for domestic,
         commercial, industrial, or other use; (iii) provision of telephone or
         telegraph service to others; (iv) production, transmission, or
         distribution and sale of steam or water; (v) operation of a railroad;
         or (vii) provision of sewer service to others.

                  (r) ERISA. Borrower is in compliance in all material respects
         with the applicable provisions of ERISA, and no "reportable event", as
         such term is defined in Section 403 of ERISA, has occurred with respect
         to any Plan of Borrower.

                  (s) Public Utility Holding Company Act. Borrower is not a
         "holding company", or "subsidiary company" of a "holding company", or
         an "affiliate" of a "holding company" or of a "subsidiary company" of a
         "holding company", or a "public utility" within the meaning of the
         Public Utility Holding Company Act of 1935, as amended.

                  (t) Subsidiaries. Borrower's Subsidiaries are listed on
         Schedule "5" hereto.

                  (u) Environmental Matters. Except as disclosed on Schedule
         "6", as of the Effective Date neither the Borrower nor any Guarantor
         (i) has received notice or otherwise learned or is otherwise aware of
         any Environmental Liability which would be reasonably expected to
         individually or in the aggregate have a Material Adverse Effect arising
         in connection with (A) any non-compliance with or violation of the
         requirements of any Environmental Law or (B) the release or threatened
         release of any toxic or hazardous waste into the environment, (ii) has
         received notice or otherwise is aware of any threatened or actual
         liability in connection with the release or notice of any threatened
         release of any toxic or hazardous waste into the environment which
         would be reasonably expected to individually or in the aggregate have a
         Material Adverse Effect or (iii) has received notice or otherwise
         learned of or is otherwise aware of any federal or state investigation
         evaluating whether any remedial action is needed to respond to a
         release or threatened release of any toxic or hazardous waste into the
         environment for which Borrower or any Guarantor is or may be liable
         which would reasonably be expected to result in a Material Adverse
         Effect.

                  (v) Liens. Except (i) as disclosed on Schedule "1" hereto and
         (ii) for Permitted Liens, the assets and properties of Borrower and
         each Guarantor are free and clear of all liens and encumbrances.

                                      -31-
<PAGE>

                  (w) Solvency. Immediately after the consummation of the
         transactions to occur on the Effective Date and immediately following
         the making of each Loan made on the Effective Date and after giving
         effect to the application of the proceeds of such Loans, (a) the fair
         value of the assets of Borrower and each Guarantor, at a fair
         valuation, will exceed their respective debts and liabilities,
         subordinated, contingent or otherwise; (b) the present fair saleable
         value of the property of Borrower and each Guarantor will be greater
         than the amount that will be required to pay the probable liability of
         their respective debts and other liabilities, subordinated, contingent
         or otherwise, as such debts and liabilities become absolute and
         matured; (c) Borrower and each Guarantor will be able to pay their
         respective debts and liabilities, subordinated, contingent or
         otherwise, as such debts and liabilities become absolute and matured;
         and (d) Borrower and each Guarantor will not have unreasonably small
         capital with which to conduct the business in which they are engaged as
         such business is now conducted and is proposed to be conducted
         following the Effective Date.

                  (x) Insurance. All insurance reasonably necessary in the
         ordinary course of the Borrower's and any Guarantor's business is
         maintained by or on behalf of the Borrower and any such Guarantor and
         all premiums in respect of such insurance have been paid.

         11. CONDITIONS OF LENDING.

         (a) The effectiveness of this Agreement, and the obligation to make the
initial Advance under the Commitment shall be subject to satisfaction of the
following conditions precedent:

                  (i) Borrower's Execution and Delivery. Borrower shall have
         executed and delivered the Agreement, the Notes and other required Loan
         Documents, all in form and substance satisfactory to the Agent;

                  (ii) Guarantor's Execution and Delivery. Each Guarantor shall
         have executed and delivered its Guaranty in the form of Exhibit "C";

                  (iii) Legal Opinions. The Agent shall have received from
         Borrower's and each Guarantor's legal counsel one or more favorable
         legal opinions in form and substance reasonably satisfactory to the
         Agent;

                  (iv) Corporate Resolutions. The Agent shall have received
         appropriate certified corporate resolutions of Borrower and each
         Guarantor;

                  (v) Good Standing. The Agent shall have received evidence of
         existence and good standing for Borrower and each Guarantor;

                                      -32-
<PAGE>

                  (vi) Incumbency. The Agent shall have received a signed
         certificate of Borrower and each Guarantor, certifying the names of the
         officers of Borrower and each Guarantor authorized to sign loan
         documents on behalf of Borrower and each Guarantor, together with the
         true signatures of each such officer. The Agent may conclusively rely
         on such certificate until the Agent receives a further certificate of
         Borrower and any Guarantor canceling or amending the prior certificate
         and submitting signatures of the officers named in such further
         certificate;

                  (vii) Certificates of Incorporation and Bylaws. The Agent
         shall have received copies of Certificates of Incorporation for
         Borrower and each Guarantor together with all amendments thereto,
         appropriately certified by governmental authority in the jurisdiction
         of incorporation of Borrower and each Guarantor, and a copy of the
         Bylaws of Borrower and each Guarantor, and all amendments thereto,
         certified by one or more officers of Borrower or each Guarantor, as the
         case may be, as being true, correct and complete;

                  (viii) Payment of Fees. The Agent shall have received for the
         benefit of Lenders the Fees required pursuant to any Fee Letter among
         Borrower and Agent, and any Arranger;

                  (ix) Representation and Warranties. The representations and
         warranties of Borrower and each Guarantor under this Agreement and the
         other Loan Documents shall be true and correct in all material respects
         as of such date, as if then made (except to the extent that such
         representations and warranties related solely to an earlier date);

                  (x) Mortgage and Title. The Agent shall have received the
         mortgage and title information required to be delivered by Borrower
         pursuant to Section 6 of this Agreement; provided, however, that for
         the purposes of satisfying this closing condition, the Borrower shall
         only be required to have mortgaged Oil and Gas Properties representing
         not less than 65% of the Engineered Value of its Oil and Gas Properties
         as of the Effective Date. Within thirty (30) days of the date hereof,
         the Borrower shall have increased the percentage of properties
         mortgaged from 65% to 80%;

                  (xi) No Event of Default. No Default or Event of Default shall
         have occurred and be continuing;

                  (xii) Other Documents. Agent shall have received such other
         instruments and documents incidental and appropriate to the transaction
         provided for herein as Agent or its counsel may reasonably request, and
         all such documents shall be in form and substance reasonably
         satisfactory to the Agent; and

                                      -33-
<PAGE>

                  (xiii) Legal Matters Satisfactory. All legal matters incident
         to the consummation of the transactions contemplated hereby shall be
         reasonably satisfactory to special counsel for Agent retained at the
         expense of Borrower.

         (b) The obligation of the Lenders to make any Advance under the
Commitment (other than the initial Advance) shall be subject to the following
additional conditions precedent that, at the date of making each such Advance
and after giving effect thereto:

                  (i) Representations and Warranties. The representations and
         warranties of Borrower and each Guarantor under this Agreement and the
         other Loan Documents are true and correct in all material respects as
         of such date, as if then made (except to the extent that such
         representations and warranties related solely to an earlier date); and

                  (ii) No Event of Default. No Default or Event of Default shall
         have occurred and be continuing;

                  (iii) Legal Matters Satisfactory. All legal matters incident
         to the consummation of the transactions contemplated hereby shall be
         reasonably satisfactory to special counsel for Agent retained at the
         expense of Borrower

Each Borrowing Notice shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 11(b)(i) and (ii) have been
satisfied.

         12. AFFIRMATIVE COVENANTS. A deviation from the provisions of this
Section 12 shall not constitute a Default or an Event of Default under this
Agreement if such deviation is expressly consented to in writing by Super
Majority Lenders prior to the date of deviation. Borrower will at all times
comply, and will cause each Guarantor to comply, with the covenants contained in
this Section 12 from the date hereof and for so long as the Commitments are in
existence or any amount is owed to the Agent or the Lenders under this Agreement
or the other Loan Documents.

                  (a) Financial Statements and Reports. Borrower shall promptly
         furnish to the Agent from time to time upon request such information
         regarding the business and affairs and financial condition of Borrower
         and each Guarantor, as the Agent may reasonably request, and will
         furnish to the Agent:

                           (i) Annual Audited Financial Statements. As soon as
                  available, and in any event within ninety (90) days after the
                  close of each fiscal year, the annual audited consolidated and
                  unaudited consolidating Financial Statements of Borrower,
                  prepared in accordance with GAAP accompanied by an unqualified
                  opinion on such consolidated statements rendered by an
                  independent accounting firm reasonably acceptable to the
                  Agent;

                                      -34-
<PAGE>

                           (ii) Quarterly Financial Statements. As soon as
                  available, and in any event within forty-five (45) days after
                  the end of each fiscal quarter of each year, the quarterly
                  unaudited, (i) consolidated and consolidating Financial
                  Statements of Borrower and each Guarantor, and (ii) the
                  unconsolidated quarterly Financial Statements of Borrower, all
                  such Financial Statements to be prepared in accordance with
                  GAAP;

                           (iii) Report on Properties. As soon as available and
                  in any event on or before March 1 and September 1 of each
                  calendar year, and at such other times as any Lender, in
                  accordance with Section 7 hereof, may request, the engineering
                  reports required to be furnished to the Agent under such
                  Section 7 on the Oil and Gas Properties;

                           (iv) Additional Information. Promptly upon request of
                  the Agent from time to time any additional financial
                  information or other information that the Agent may reasonably
                  request.

         All such reports, information, balance sheets and Financial Statements
         referred to in Subsection 12(a) above shall be in such detail as the
         Agent may reasonably request and shall be prepared in a manner
         consistent with the Financial Statements.

                  (b) Certificates of Compliance. Concurrently with the
         furnishing of the annual audited Financial Statements pursuant to
         Subsection 12(a)(i) hereof and the quarterly unaudited Financial
         Statements pursuant to Subsection 12(a)(ii) hereof for the months
         coinciding with the end of each calendar quarter, Borrower will furnish
         or cause to be furnished to the Agent a certificate in the form of
         Exhibit "D" attached hereto, signed by the President or Chief Financial
         Officer of Borrower and each Guarantor, (i) stating that Borrower and
         each Guarantor have fulfilled in all material respects their respective
         obligations under the Notes and the Loan Documents, including this
         Agreement, and that all representations and warranties made herein and
         therein continue (except to the extent they relate solely to an earlier
         date) to be true and correct in all material respects (or specifying
         the nature of any change), or if a Default has occurred, specifying the
         Default and the nature and status thereof; (ii) to the extent requested
         from time to time by the Agent, specifically affirming compliance of
         Borrower in all material respects with any of its representations
         (except to the extent they relate solely to an earlier date) or
         obligations under said instruments; (iii) setting forth the
         computation, in reasonable detail as of the end of each period covered
         by such certificate, of compliance with Sections 13(b), (c), (d), (e)
         and (f); and (iv) containing or accompanied by such financial or other
         details, information and material as the Agent may reasonably request
         to evidence such compliance.

                  (c) Accountants' Certificate. Concurrently with the furnishing
         of the annual audited Financial Statement pursuant to Section 12(a)(i)
         hereof, Borrower will furnish a

                                      -35-
<PAGE>

         statement from the firm of independent public accountants which audited
         such Financial Statement to the effect that nothing has come to their
         attention to cause them to believe that there existed on the date of
         such statements any Event of Default and specifically calculating
         Borrower's compliance with Sections 13(b), (c), (d), (e) and (f) of
         this Agreement.

                  (d) Taxes and Other Liens. Borrower will pay, and will cause
         each Guarantor to pay, and discharge promptly all taxes, assessments
         and governmental charges or levies imposed upon Borrower, or upon the
         income or any assets or property of Borrower or any Guarantor, as well
         as all claims of any kind (including claims for labor, materials,
         supplies and rent) which, if unpaid, might become a Lien or other
         encumbrance upon any or all of the assets or property of Borrower or
         any Guarantor and which could reasonably be expected to result in a
         Material Adverse Effect; provided, however, that neither the Borrower
         nor any Guarantor shall be required to pay any such tax, assessment,
         charge, levy or claim if the amount, applicability or validity thereof
         shall currently be contested in good faith by appropriate proceedings
         diligently conducted, levy and execution thereon have been stayed and
         continue to be stayed and if Borrower shall have set up adequate
         reserves therefor, if required, under GAAP.

                  (e) Compliance with Laws. Borrower will observe and comply,
         and will cause each Guarantor to observe and comply, in all material
         respects, with all applicable laws, statutes, codes, acts, ordinances,
         orders, judgments, decrees, injunctions, rules, regulations, orders and
         restrictions relating to environmental standards or controls or to
         energy regulations of all federal, state, county, municipal and other
         governments, departments, commissions, boards, agencies, courts,
         authorities, officials and officers, domestic or foreign.

                  (f) Further Assurances. Borrower will cure promptly any
         defects in the creation and issuance of the Notes and the execution and
         delivery of the Notes and the Loan Documents, including this Agreement.
         Borrower at its sole expense will, and will cause each Guarantor to,
         promptly execute and deliver to Agent upon its reasonable request all
         such other and further documents, agreements and instruments in
         compliance with or accomplishment of the covenants and agreements in
         this Agreement, or to correct any omissions in the Notes or more fully
         to state the obligations set out herein.

                  (g) Performance of Obligations. Borrower will pay the Notes
         and other obligations incurred by it hereunder according to the
         reading, tenor and effect thereof and hereof; and Borrower will do and
         perform every act and discharge all of the obligations provided to be
         performed and discharged by the Borrower under the Loan Documents,
         including this Agreement, at the time or times and in the manner
         specified.

                  (h) Insurance. Borrower now maintains and will continue to
         maintain, and will cause each Guarantor to maintain, insurance with
         financially sound and reputable

                                      -36-
<PAGE>

         insurers with respect to its assets against such liabilities, fires,
         casualties, risks and contingencies and in such types and amounts as is
         customary in the case of persons engaged in the same or similar
         businesses and similarly situated. Upon request of the Agent, Borrower
         will furnish or cause to be furnished to the Agent from time to time a
         summary of the respective insurance coverage of Borrower and each
         Guarantor in form and substance reasonably satisfactory to the Agent,
         and, if requested, will furnish the Agent copies of the applicable
         policies. Upon demand by Agent any insurance policies covering any such
         property shall be endorsed (i) to provide that such policies may not be
         canceled, reduced or affected in any manner for any reason without
         fifteen (15) days prior notice to Agent, (ii) to provide for insurance
         against fire, casualty and other hazards normally insured against, in
         the amount of the full value (less a reasonable deductible not to
         exceed amounts customary in the industry for similarly situated
         business and properties) of the property insured, and (iii) to provide
         for such other matters as the Agent may reasonably require. Borrower
         shall, and shall cause each Guarantor to, at all times maintain
         adequate insurance with respect to all of its other assets and wells in
         accordance with prudent business practices.

                  (i) Accounts and Records. Borrower will, and will cause each
         Guarantor to, keep proper books, records and accounts in which full,
         true and correct entries will be made of all dealings or transactions
         in relation to its business and activities, prepared in a manner
         consistent with prior years, subject to changes suggested by Borrower's
         auditors.

                  (j) Right of Inspection. Borrower will permit, and will cause
         each Guarantor to permit, any officer, employee or agent of the Lenders
         to examine Borrower's books, records and accounts, and take copies and
         extracts therefrom, all at such reasonable times during normal business
         hours and as often as the Lenders may reasonably request. The Lenders
         will use best efforts to keep all Confidential Information (as herein
         defined) confidential and will not disclose or reveal the Confidential
         Information or any part thereof other than (i) as required by law, and
         (ii) to the Lenders', and the Lenders' subsidiaries', Affiliates,
         officers, employees, legal counsel and regulatory authorities or
         advisors to whom it is necessary to reveal such information for the
         purpose of effectuating the agreements and undertakings specified
         herein or as otherwise required in connection with the enforcement of
         the Lenders' and the Agent's rights and remedies under the Notes, this
         Agreement and the other Loan Documents. As used herein, "Confidential
         Information" means information about Borrower or any Guarantor
         furnished by Borrower to the Lenders, but does not include information
         (i) which was publicly known, or otherwise known to the Lenders, at the
         time of the disclosure, (ii) which subsequently becomes publicly known
         through no act or omission by the Lenders, or (iii) which otherwise
         becomes known to the Lenders, other than through disclosure by Borrower
         or any Guarantor.

                  (k) Notice of Certain Events. Borrower shall promptly notify
         the Agent if Borrower learns of the occurrence of (i) any event which
         constitutes a Default or Event of

                                      -37-
<PAGE>

         Default together with a detailed statement by Borrower of the steps
         being taken to cure such Default or Event of Default; (ii) any legal,
         judicial or regulatory proceedings affecting Borrower or any of the
         assets or properties of Borrower or any Guarantor which, if adversely
         determined, could reasonably be expected to have a Material Adverse
         Effect; (iii) any dispute between Borrower or any Guarantor and any
         governmental or regulatory body or any other Person or entity which, if
         adversely determined, would reasonably be expected to cause a Material
         Adverse Effect; (iv) any other matter which in Borrower's reasonable
         opinion could have a Material Adverse Effect.

                  (l) ERISA Information and Compliance. Borrower will, and will
         cause each Guarantor to, promptly furnish to the Agent upon becoming
         aware of the occurrence of any "reportable event", as such term is
         defined in Section 4043 of ERISA, or of any "prohibited transaction",
         as such term is defined in Section 4975 of the Internal Revenue Code of
         1954, as amended, in connection with any Plan or any trust created
         thereunder, a written notice signed by the chief financial officer of
         the Borrower specifying the nature thereof, what action such party is
         taking or proposes to take with respect thereto, and, when known, any
         action taken by the Internal Revenue Service with respect thereto.

                  (m) Environmental Reports and Notices. Borrower will, and will
         cause each Guarantor to, deliver to the Agent (i) promptly upon its
         becoming available, one copy of each report (other than routine
         informational filings) sent by Borrower or any Guarantor to any court,
         governmental agency or instrumentality pursuant to any Environmental
         Law, (ii) notice, in writing, promptly upon Borrower's or any
         Guarantor's receipt of notice or otherwise learning of any claim,
         demand, action, event, condition, report or investigation indicating
         any potential or actual liability arising in connection with (x) the
         non-compliance with or violation of the requirements of any
         Environmental Law which reasonably could be expected to have a Material
         Adverse Effect; (y) the release or threatened release of any hazardous
         substance, toxic or hazardous waste into the environment which
         reasonably could be expected to have a Material Adverse Effect or which
         release Borrower or any Guarantor would have a duty to report to any
         court or government agency or instrumentality, or (iii) the existence
         of any Environmental Lien on any properties or assets of Borrower or
         any Guarantor and Borrower shall promptly deliver a copy of any such
         notice to Agent.

                  (n) Compliance and Maintenance. Borrower will, and will cause
         each Guarantor to, (i) observe and comply in all material respects with
         all Environmental Laws; (ii) except as provided in Subsections 12(p)
         and 12(q) below, maintain the Oil and Gas Properties and other assets
         and properties in good and workable condition at all times and make all
         repairs, replacements, additions, betterments and improvements to the
         Oil and Gas Properties and other assets and properties as are needed
         and proper so that the business carried on in connection therewith may
         be conducted properly and efficiently at all times in the opinion of
         the Borrower, or any Guarantor, exercised in good faith; (iii) take or
         cause to be taken whatever actions are necessary or desirable to
         prevent an event

                                      -38-
<PAGE>

         or condition of default by Borrower or any Guarantor under the
         provisions of any gas purchase or sales contract or any other contract,
         agreement or lease comprising a part of the Oil and Gas Properties or
         other collateral security hereunder which default could reasonably be
         expected to result in a Material Adverse Effect; and (iv) furnish Agent
         upon request evidence reasonably satisfactory to Agent that there are
         no Liens, claims or encumbrances on the Oil and Gas Properties, except
         Permitted Liens.

                  (o) Operation of Properties. Except as provided in Subsections
         12(p) and (q) below, Borrower will, and will cause each Guarantor to,
         operate, or use reasonable efforts to cause to be operated, all Oil and
         Gas Properties in a careful and efficient manner in accordance with the
         practice of the industry and in compliance in all material respects
         with all applicable laws, rules, and regulations, and in compliance in
         all material respects with all applicable proration and conservation
         laws of the jurisdiction in which the properties are situated, and all
         applicable laws, rules, and regulations, of every other agency and
         authority from time to time constituted to regulate the development and
         operation of the properties and the production and sale of hydrocarbons
         and other minerals therefrom; provided, however, that Borrower or any
         such Guarantor shall have the right to contest in good faith by
         appropriate proceedings, the applicability or lawfulness of any such
         law, rule or regulation and pending such contest may defer compliance
         therewith, as long as such deferment shall not subject the properties
         or any part thereof to foreclosure or loss.

                  (p) Compliance with Leases and Other Instruments. Borrower
         will, and will cause each Guarantor to, pay or cause to be paid and
         discharge all rentals, delay rentals, royalties, production payment,
         and indebtedness required to be paid by such party (or required to keep
         unimpaired in all material respects the rights of such party in Oil and
         Gas Properties) accruing under, and perform or cause to be performed in
         all material respects each and every act, matter, or thing required of
         such party by each and all of the assignments, deeds, leases,
         subleases, contracts, and agreements in any way relating to such party
         or any of the Oil and Gas Properties and do all other things necessary
         of such party to keep unimpaired in all material respects the rights of
         such party thereunder and to prevent the forfeiture thereof or default
         thereunder; provided, however, that nothing in this Agreement shall be
         deemed to require Borrower or any Guarantor to perpetuate or renew any
         oil and gas lease or other lease by payment of rental or delay rental
         or by commencement or continuation of operations nor to prevent
         Borrower or any Guarantor from abandoning or releasing any oil and gas
         lease or other lease or well thereon when, in any of such events, in
         the opinion of the affected Borrower or Guarantor exercised in good
         faith, it is not in the best interest of the Borrower to perpetuate the
         same.

                  (q) Certain Additional Assurances Regarding Maintenance and
         Operations of Properties. With respect to those Oil and Gas Properties
         which are being operated by operators other than the Borrower or a
         Guarantor, neither Borrower nor any Guarantor shall be obligated to
         perform any undertakings contemplated by the covenants and

                                      -39-
<PAGE>

         agreement contained in Subsections 12(n) or 12(o) hereof which are
         performable only by such operators and are beyond the control of
         Borrower or such Guarantor; however, Borrower agrees to promptly take,
         or cause to be taken, all reasonable actions available under any
         operating agreements or otherwise to bring about the performance of any
         such material undertakings required to be performed thereunder.

                  (r) Sale of Certain Assets/Prepayment of Proceeds. Borrower
         will immediately pay over to the Agent for the ratable benefit of the
         Lenders as a prepayment of principal on the Notes and a reduction of
         the Commitments, an amount equal to 100% of the "Release Price" from
         the sale of Oil and Gas Properties by Borrower or any Guarantor in
         excess of $10,000,000 in the aggregate received from such sales between
         Borrowing Base Redetermination, which sale has been either (i) made in
         compliance with the provisions of Section 13(a)(ii) hereof, or (ii)
         approved in advance by Required Lenders. Provided, however, that in
         lieu of making any such payment the Borrower may elect to provide, or
         cause to be provided by a Guarantor, additional Oil and Gas Properties
         with value and quality satisfactory to all Lenders in their discretion
         in substitution for the Oil and Gas Properties sold pursuant to the
         provisions of this Section 12(r). The term "Release Price" means the
         price determined by the Required Lenders in their discretion based on
         the loan value of the Oil and Gas Properties being sold by the Borrower
         or a Guarantor that the Required Lenders in their discretion (using
         such methodology, assumptions and discount rates as such Lenders
         customarily use in assigning loan value to oil and gas properties)
         assigned to such Oil and Gas Properties as of the date of such
         determination by the Lenders. Any such prepayment of principal on the
         Notes required by this Section 12(r), shall not be in lieu of, but
         shall be in addition to, any mandatory prepayment of principal required
         to be paid pursuant to Section 9(b) hereof.

                  (s) Title Matters. Within sixty (60) days after the Effective
         Date with respect to the Oil and Gas Properties listed on Schedule "7"
         hereto, Borrower shall furnish Agent with title information reasonably
         satisfactory to Agent showing good and defensible title of Borrower or
         a Guarantor to such Oil and Gas Properties subject only to the
         Permitted Liens. As to any Oil and Gas Properties hereafter mortgaged
         to Agent, Borrower will promptly (but in no event more than sixty (60)
         days following such mortgaging), furnish, or cause to be furnished, if
         requested, Agent with title information reasonably satisfactory to
         Agent showing good and defensible title of Borrower or a Guarantor to
         such Oil and Gas Properties subject only to Permitted Liens.

                  (t) Curative Matters. Within sixty (60) days after the
         Effective Date with respect to matters listed on Schedule "8" and,
         thereafter, within sixty (60) days after receipt by Borrower from Agent
         or its counsel of written notice of title defects the Agent reasonably
         requires to be cured, Borrower shall, or shall cause a Guarantor to,
         either (i) provide such curative information, in form and substance
         satisfactory to Agent, or (ii) substitute Oil and Gas Properties of
         value and quality satisfactory to the Agent for all

                                      -40-
<PAGE>

         of Oil and Gas Properties for which such title curative was requested
         but upon which Borrower elected not to provide such title curative
         information, and, within sixty (60) days of such substitution, provide
         title information satisfactory to the Agent covering the Oil and Gas
         Properties so substituted. If the Borrower fails to satisfy (i) or (ii)
         above within the time specified, the loan collateral value assigned by
         the Lenders to the Oil and Gas Properties for which such curative
         information was requested shall be deducted from the Borrowing Base
         resulting in a reduction thereof.

                  (u) Change of Principal Place of Business. Borrower shall give
         Agent at least thirty (30) days prior written notice of its intention
         to move its principal place of business from the address set forth in
         Section 17 hereof.

                  (v) Additional Collateral. Borrower agrees to regularly
         monitor engineering data covering all producing oil and gas properties
         and interests owned or acquired by Borrower and the Guarantors on or
         after the date hereof and to mortgage or cause to be mortgaged such of
         the same to Agent for the ratable benefit of the Lenders in
         substantially the form of the Security Instruments, as applicable, to
         the extent that the Lenders shall at all times during the existence of
         the Commitment be secured by perfected Liens and security interests
         covering not less than eighty percent (80%) of the Engineered Value of
         all producing Oil and Gas Properties of Borrower or the Guarantors. In
         addition, the Borrower agrees that in connection with the mortgaging of
         such additional Oil and Gas Properties, it shall within a reasonable
         time thereafter, deliver or cause to be delivered to the Agent such
         mortgage and title opinions and other title information with respect to
         the title and Lien status of such Oil and Gas Properties as may be
         necessary to maintain at all times a level of such title information
         (showing good and defensible title) of not less than eighty percent
         (80%) of the Engineered Value of all Oil and Gas Properties mortgaged
         to the Agent for the ratable benefit of the Lenders. In order to assist
         Borrower in monitoring its mortgage coverage, Agent agrees to notify
         Borrower if the Lenders determine that the coverage required by this
         paragraph ever falls below 80%. Failure of the Agent to notify the
         Borrower of any such deficiency shall in no way affect Borrower's
         obligations under this Section 12(v) to monitor and pledge, or cause to
         be pledged, additional Oil and Gas Properties from time to time. Upon
         receipt of any such notice from the Agent, the Borrower shall, within
         thirty (30) days of receipt of such notice, execute and deliver, or
         cause to be executed and delivered, Security Instruments in form and
         substance satisfactory to the Agent covering sufficient additional Oil
         and Gas Properties to bring the coverage to at least 80%.

                  (w) Retirement of Certain Preferred Equity. Upon the purchase
         by Borrower of any of its Convertible Junior Debentures, Borrower will
         retire or cause to be retired an equivalent dollar amount of the Trust
         Convertible Preferred Securities and will provide notice thereof to
         Agent.

                                      -41-
<PAGE>

         13. NEGATIVE COVENANTS. A deviation from the provisions of this Section
13 shall not constitute an Event of Default under this Agreement if such
deviation is consented to in writing by Super Majority Lenders prior to the date
of deviation. Borrower will at all times comply with the covenants contained in
this Section 13 from the date hereof and for so long as the Commitment is in
existence or any amount is owed to the Agent or the Lenders under this Agreement
or the other Loan Documents.

                  (a) Negative Pledge. Neither Borrower nor any Guarantor shall
         without the prior written consent of Super Majority Lenders:

                           (i) create, incur, assume or permit to exist any
                  Lien, security interest or other encumbrance on any of its
                  assets or properties except Permitted Liens; or

                           (ii) sell, lease, transfer or otherwise dispose of,
                  in any fiscal year, any of its assets including any equity
                  interests owned by it except for (A) sales, leases, transfers
                  or other dispositions made in the ordinary course of
                  Borrower's oil and gas businesses, (B) sales, leases,
                  transfers or other dispositions of Oil and Gas Properties
                  which do not exceed $10,000,000 in the aggregate between
                  Borrowing Base redeterminations (C) sales or other
                  dispositions of Borrower's interests in GLEP or REFC; and (D)
                  other sales, leases, transfers or other dispositions made with
                  the consent of Required Lenders;

                  (b) Current Ratio. Borrower shall not allow its Current Ratio
         to be less than 1.0 to 1.0 as of the end of any fiscal quarter
         beginning with the fiscal quarter ending March 31, 2002.

                  (c) Senior Debt Coverage Ratio. Borrower will not allow its
         ratio of EBITDAX to Interest Expense on the Senior Debt calculated on a
         rolling four quarter basis to be less than 3.0 to 1.0 as of the end of
         any fiscal quarter beginning with the fiscal quarter ending March 31,
         2002.

                  (d) Total Debt Coverage Ratio. Borrower will not allow its
         ratio of EBITDAX to the sum of (i) Borrower's total Interest Expense
         plus (ii) Cash Dividends, plus (iii) interest on the Convertible Junior
         Debentures, calculated as of the end of each fiscal quarter on a
         rolling four-quarter basis, to be less than 2.5 to 1.0 as of the end of
         any fiscal quarter beginning with the fiscal quarter ending March 31,
         2002.

                  (e) Senior Debt Leverage Ratio. The Borrower will not allow
         its ratio of Senior Debt to EBITDAX to be greater than 3.0 to 1.0 as of
         the end of any fiscal quarter beginning with the fiscal quarter ending
         March 31, 2002.

                                      -42-
<PAGE>

                  (f) Total Debt Leverage Ratio. Borrower will not allow its
         ratio of Debt to EBITDAX to be greater than 4.0 to 1.0 as of the end of
         any fiscal quarter beginning with the fiscal quarter ending March 31,
         2002.

                  (g) Consolidations and Mergers. Neither Borrower nor any
         Guarantor will consolidate or merge with or into any other Person,
         except that Borrower or any Guarantor may merge with another Person if
         Borrower or such Guarantor is the surviving entity in such merger or
         if, after giving effect thereto, no Default or Event of Default shall
         have occurred and be continuing.

                  (h) Debts, Guaranties and Other Obligations. Neither Borrower
         nor any Subsidiary will incur, create, assume or in any manner become
         or be liable in respect of any indebtedness, nor will Borrower
         guarantee or otherwise in any manner become or be liable in respect of
         any indebtedness, liabilities or other obligations of any other person
         or entity, whether by agreement to purchase the indebtedness of any
         other person or entity or agreement for the furnishing of funds to any
         other person or entity through the purchase or lease of goods, supplies
         or services (or by way of stock purchase, capital contribution, advance
         or loan) for the purpose of paying or discharging the indebtedness of
         any other person or entity, or otherwise, except that the foregoing
         restrictions shall not apply to:

                           (i) the Notes and Letters of Credit, and any renewal
                  or increase thereof, or other indebtedness of the Borrower
                  outstanding at the Effective Date which has heretofore
                  disclosed to Lenders in the Borrower's Financial Statements or
                  on Schedule "4" hereto; or

                           (ii) taxes, assessments or other government charges
                  which are not yet due or are being contested in good faith by
                  appropriate action promptly initiated and diligently
                  conducted, if such reserve as shall be required by GAAP shall
                  have been made therefor and levy and execution thereon have
                  been stayed and continue to be stayed; or

                           (iii) indebtedness (other than in connection with a
                  loan or lending transaction) incurred in the ordinary course
                  of business, including, but not limited to indebtedness for
                  drilling, completing, leasing and reworking oil and gas wells;
                  or

                           (iv) obligations under Rate Management Transactions
                  permitted pursuant to Section 13(n) hereof; or

                           (v) indebtedness on Capital Leases not to exceed
                  $10,000,000 in the aggregate; or

                                      -43-
<PAGE>

                           (vi) indebtedness of REFC or GLEP with respect to
                  which there is no recourse to Borrower or any other
                  Subsidiary;

                           (vii) other indebtedness of any nature not in excess
                  of $10,000,000 in outstanding principal amount in the
                  aggregate; or

                           (viii) any renewals or extensions of (but, other than
                  in the case of the Notes, not increases in) any of the
                  foregoing.

                  (i) Restricted Payments. The Borrower will not declare or pay
         any cash dividend, or distribution (whether in cash, securities or
         other property) purchase, redeem or otherwise acquire for value any of
         its stock now or hereafter outstanding, return any capital to its
         stockholders or make any distribution of its assets to its stockholders
         and such, except that the foregoing shall not apply to:

                           (i) subject to the inclusion of any dividend or
                  interest payment permitted by this Subsection 13(i)(i) in the
                  basket provided in subsection (ii) below, dividends with
                  respect to common equity, and preferred stock and interest on
                  its Convertible Junior Debentures if, and only if, immediately
                  before and after giving effect to such payment of dividends or
                  interest no Default or Event of Default shall exist under the
                  provision of Section 13(d) hereof; further provided, that no
                  cash dividends may be paid on Borrower's common stock during
                  fiscal 2002 without the consent of Super Majority Lenders; or

                           (ii) total distributions, Cash Dividends, purchases
                  and payments (including purchases or redemptions of Junior
                  Securities) in aggregate amounts of up to $20,000,000 plus (a)
                  50% of cumulative Net Income after December 31, 2001 (which
                  Net Income shall exclude (i) Net Income attributable to REFC
                  and GLEP and (ii) any non-cash gains or losses associated with
                  the application of FASB 121 or 133) plus (b) 66-2/3% of net
                  cash proceeds from the issuance of Borrower's common stock,
                  plus (c) 66-23/% of any distributions, dividends, payments of
                  debt from, or sales or equity interests of, GLEP or REFC;
                  provided, however, that immediately before and after giving
                  effect to any such distribution, dividend, purchase or payment
                  no Default or Event of Default shall exist;

                  (j) Loans, Advances and Investments. Borrower shall not make
         or permit to remain outstanding any loans or advances to, or
         investments in, any person or entity, except that the foregoing
         restriction shall not apply to:

                           (i) loans or advances to any person, the material
                  details of which have been set forth in the Financial
                  Statements of the Borrower and each Guarantor heretofore
                  furnished to Lenders; or

                                      -44-
<PAGE>

                           (ii) loans or advances to a Guarantor; or

                           (iii) other loans, advances or investments up to
                  $5,000,000 in the aggregate.

                  (k) Receivables and Payables. Borrower will not discount or
         sell with recourse, or sell for less than the market value thereof, any
         of its notes receivable or accounts receivable.

                  (l) Nature of Business. Neither Borrower nor any Guarantor
         will permit any material change to be made in the character of its
         businesses as carried on at the date hereof.

                  (m) Transactions with Affiliates. Borrower will not enter into
         any transaction with any Affiliate, except transactions upon terms that
         are no less favorable to it than would be obtained in a transaction
         negotiated at arm's length with an unrelated third party.

                  (n) Hedging Transactions. Neither Borrower nor any Guarantor
         will enter into any Rate Management Transactions, except the foregoing
         prohibitions shall not apply to (x) transactions consented to in
         writing by the Super Majority Lenders which are on terms acceptable to
         the Super Majority Lenders, or (y) Pre-Approved Contracts. Once
         Borrower or any Guarantor enters into a Rate Management Transaction,
         the terms and conditions of such Rate Management Transaction may not be
         materially amended or modified, nor may such Rate Management
         Transaction be cancelled without the Borrower having given the Agent
         written notice of such amendment, modification or cancellation on the
         date not later than three (3) Business Days after the date such action
         takes place. Borrower further agrees to give the Agent written notice
         of any bankruptcy, insolvency or similar proceeding commenced by or
         against any counterparty to any agreement entered into any such Rate
         Management Transaction.

                  (o) Amendment to Articles of Incorporation or Bylaws. Neither
         Borrower nor any Guarantor will permit any material amendment to, or
         any alteration of, its Articles of Incorporation or its Bylaws.

                  (p) Issuance of Preferred Stock. Borrower shall not issue any
         preferred stock after the Effective Date except Borrower may issue PIK
         preferred stock on terms acceptable to Super Majority Lenders.

                  (q) Payment or Prepayment of Other Indebtedness. Except for
         purchase or redemptions of Junior Securities and payments permitted
         pursuant to Section 13(i)(ii) hereof, Borrower shall not make any
         interest or principal payment, redeem any indebtedness (other than
         indebtedness owed the Lenders hereunder), or redeem any of its equity
         if immediately before and after giving effect to any payment, purchase
         or

                                      -45-
<PAGE>

         redemption a Default or Event of Default shall exist or shall result
         from such payment, purchase or redemption.

         14. EVENTS OF DEFAULT. Any one or more of the following events shall be
considered an "Event of Default" as that term is used herein:

                  (a) The Borrower shall fail to pay when due or declared due
         the principal of, and the interest on, the Notes or any fee or any
         other indebtedness of the Borrower secured pursuant to this Agreement
         or any of the other Loan Documents; or

                  (b) Any representation or warranty made by Borrower under this
         Agreement, or in any certificate or statement furnished or made to the
         Lenders pursuant hereto, or in connection herewith, or in connection
         with any document furnished hereunder, shall prove to be untrue in any
         material respect as of the date on which such representation or
         warranty is made (or deemed made), or any representation, statement
         (including financial statements), certificate, report or other data
         furnished or to be furnished or made by Borrower or any Guarantor under
         any Loan Document, including this Agreement, proves to have been untrue
         in any material respect, as of the date as of which the facts therein
         set forth were stated or certified; or

                  (c) Default shall be made in the due observance or performance
         of any of the covenants or agreements of the Borrower or any Guarantor
         contained in the Loan Documents, including this Agreement (excluding
         covenants contained in Section 13 of the Agreement for which there is
         no cure period), and such default shall continue for more than thirty
         (30) days after written notice from Agent is received by Borrower; or

                  (d) Default shall be made in the due observance or performance
         of the covenants of Borrower contained in Section 13 of this Agreement;
         or

                  (e) Default shall be made in respect of any obligation for
         borrowed money other than the Notes, for which Borrower is liable
         (directly, by assumption, as guarantor or otherwise), or any
         obligations secured by any mortgage, pledge or other consensual
         security interest with respect thereto, on any asset or property of
         Borrower or in respect of any agreement relating to any such
         obligations, and if such default shall continue beyond the applicable
         grace period, if any; or

                  (f) Borrower or any Guarantor shall commence a voluntary case
         or other proceeding seeking liquidation, reorganization or other relief
         with respect to itself or its debts under any bankruptcy, insolvency or
         other similar law now or hereafter in effect or seeking an appointment
         of a trustee, receiver, liquidator, custodian or other similar official
         of it or any substantial part of its property, or shall consent to any
         such relief or to the appointment of or taking possession by any such
         official in an involuntary case or other proceeding commenced against
         it, or shall make a general assignment for the

                                      -46-
<PAGE>

         benefit of creditors, or shall fail generally to pay its debts as they
         become due, or shall take any corporate action authorizing the
         foregoing; or

                  (g) An involuntary case or other proceeding, shall be
         commenced against Borrower or any Guarantor seeking liquidation,
         reorganization or other relief with respect to it or its debts under
         any bankruptcy, insolvency or similar law now or hereafter in effect or
         seeking the appointment of a trustee, receiver, liquidator, custodian
         or other similar official of it or any substantial part of its
         property, and such involuntary case or other proceeding shall remain
         undismissed and unstayed for a period of sixty (60) days; or an order
         for relief shall be entered against Borrower or any Guarantor under the
         federal bankruptcy laws as now or hereinafter in effect;

                  (h) A final judgment or order for the payment of money in
         excess of $1,000,000 (or judgments or orders aggregating in excess of
         $1,000,000) shall be rendered against Borrower or any Guarantor and
         such judgments or orders shall continue unsatisfied and unstayed for a
         period of thirty (30) days; or

                  (i) In the event the Total Outstandings shall at any time
         exceed the Borrowing Base established for the Notes, and the Borrower
         shall fail to comply with the provisions of Section 9(b) hereof; or

                  (j) An Event of Default (as defined therein) shall occur as a
         result of action of the Borrower under any agreement entered into in
         connection with any Rate Management Transaction; or

                  (k) The Liens securing the Loans cease to be in place and/or
         effective.

         Upon occurrence of any Event of Default specified in Subsections 14(f)
and (g) hereof, the entire principal amount due under the Notes and all interest
then accrued thereon, and any other liabilities of the Borrower hereunder, shall
become automatically and immediately due and payable all without notice and
without presentment, demand, protest, notice of protest or dishonor or any other
notice of default of any kind, all of which are hereby expressly waived by the
Borrower. Upon the occurrence of any other Event of Default, the Agent, upon
request of Super Majority Lenders, shall by written notice to the Borrower
declare the principal of, and all interest then accrued on, the Notes and any
other liabilities hereunder to be forthwith due and payable, whereupon the same
shall forthwith become due and payable without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other notice of any
kind, all of which the Borrower hereby expressly waives, anything contained
herein or in the Note to the contrary notwithstanding.

         Upon the occurrence and during the continuance of any Event of Default,
the Lenders are hereby authorized at any time and from time to time, without
notice to the Borrower or any Guarantor (any such notice being expressly waived
by the Borrower and the Guarantors), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final) at

                                      -47-
<PAGE>

any time held and other indebtedness at any time owing by any of the Lenders to
or for the credit or the account of the Borrower or any Guarantor against any
and all of the indebtedness of the Borrower under the Notes and the Loan
Documents, including this Agreement, irrespective of whether or not the Lenders
shall have made any demand under the Loan Documents, including this Agreement or
the Notes and although such indebtedness may be unmatured. Any amount set-off by
any of the Lenders shall be applied against the indebtedness owed the Lenders by
the Borrower pursuant to this Agreement and the Notes. The Lenders agree
promptly to notify the Borrower and the affected Guarantor after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such set-off and application. The rights of the Lender under
this Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which the Lenders may have.

         15. THE AGENT AND THE LENDERS.

                  (a) Appointment and Authorization. Each Lender hereby appoints
         Agent as its nominee and agent, in its name and on its behalf: (i) to
         act as nominee for and on behalf of such Lender in and under all Loan
         Documents; (ii) to arrange the means whereby the funds of Lenders are
         to be made available to the Borrower under the Loan Documents; (iii) to
         take such action as may be requested by any Lender under the Loan
         Documents (when such Lender is entitled to make such request under the
         Loan Documents); (iv) to receive all documents and items to be
         furnished to Lenders under the Loan Documents; (v) to be the secured
         party, mortgagee, beneficiary, and similar party in respect of, and to
         receive, as the case may be, any collateral for the benefit of Lenders;
         (vi) to promptly distribute to each Lender all material information,
         requests, documents and items received from the Borrower under the Loan
         Documents; (vii) to promptly distribute to each Lender such Lender's
         Pro Rata Part of each payment or prepayment (whether voluntary, as
         proceeds of insurance thereon, or otherwise) in accordance with the
         terms of the Loan Documents and (viii) to deliver to the appropriate
         Persons requests, demands, approvals and consents received from
         Lenders. Each Lender hereby authorizes Agent to take all actions and to
         exercise such powers under the Loan Documents as are specifically
         delegated to Agent by the terms hereof or thereof, together with all
         other powers reasonably incidental thereto. With respect to its
         Commitment hereunder and the Notes issued to it, Agent and any
         successor Agent shall have the same rights under the Loan Documents as
         any other Lender and may exercise the same as though it were not the
         Agent; and the term "Lender" or "Lenders" shall, unless otherwise
         expressly indicated, include Agent and any successor Agent in its
         capacity as a Lender. Agent and any successor Agent and its Affiliates
         may accept deposits from, lend money to, act as trustee under
         indentures of and generally engage in any kind of business with the
         Borrower, and any person which may do business with the Borrower, all
         as if Agent and any successor Agent was not Agent hereunder and without
         any duty to account therefor to the Lenders; provided that, if any
         payments in respect of any property (or the proceeds thereof) now or
         hereafter in the possession or control of Agent which may be or become
         security for the obligations of the Borrower arising under the Loan
         Documents by reason

                                      -48-
<PAGE>

         of the general description of indebtedness secured or of property
         contained in any other agreements, documents or instruments related to
         any such other business shall be applied to reduction of the
         obligations of the Borrower arising under the Loan Documents, then each
         Lender shall be entitled to share in such application according to its
         pro rata part thereof. Each Lender, upon request of any other Lender,
         shall disclose to all other Lenders all indebtedness and liabilities,
         direct and contingent, of the Borrower to such Lender as of the time of
         such request.

                  (b) Note Holders. From time to time as other Lenders become a
         party to this Agreement, Agent shall obtain execution by Borrower of
         additional Notes in amounts representing the Commitments of each such
         new Lender, up to an aggregate face amount of all Notes not exceeding
         $225,000,000. The obligation of such Lender shall be governed by the
         provisions of this Agreement, including but not limited to, the
         obligations specified in Section 2 hereof. From time to time, Agent may
         require that the Lenders exchange their Notes for newly issued Notes to
         better reflect the Commitments of the Lenders. Agent may treat the
         payee of any Note as the holder thereof until written notice of
         transfer has been filed with it, signed by such payee and in form
         satisfactory to Agent.

                  (c) Consultation with Counsel. Lenders agree that Agent may
         consult with legal counsel selected by Agent and shall not be liable
         for any action taken or suffered in good faith by it in accordance with
         the advice of such counsel. LENDERS ACKNOWLEDGE THAT GARDERE WYNNE
         SEWELL LLP IS COUNSEL FOR BANK ONE, BOTH AS AGENT AND AS A LENDER, AND
         THAT SUCH FIRM DOES NOT REPRESENT ANY OF THE OTHER LENDERS IN
         CONNECTION WITH THIS TRANSACTION.

                  (d) Documents. Agent shall not be under a duty to examine or
         pass upon the validity, effectiveness, enforceability, genuineness or
         value of any of the Loan Documents or any other instrument or document
         furnished pursuant thereto or in connection therewith, and Agent shall
         be entitled to assume that the same are valid, effective, enforceable
         and genuine and what they purport to be.

                  (e) Resignation or Removal of Agent. Subject to the
         appointment and acceptance of a successor Agent as provided below,
         Agent may resign at any time by giving written notice thereof to
         Lenders and the Borrower, and Agent may be removed at any time with or
         without cause by Super Majority Lenders (excluding the Agent). If no
         successor Agent has been so appointed by Super Majority Lenders (and
         approved by the Borrower) and has accepted such appointment within
         thirty (30) days after the retiring Agent's giving of notice of
         resignation or removal of the retiring Agent, then the retiring Agent
         may, on behalf of Lenders, appoint a successor Agent. Any successor
         Agent must be approved by Borrower, which approval will not be
         unreasonably withheld. Upon the acceptance of any appointment as Agent
         hereunder by a successor Agent, such successor

                                      -49-
<PAGE>

         Agent shall thereupon succeed to and become vested with all the rights
         and duties of the retiring Agent, and the retiring Agent, as the case
         may be, shall be discharged from its duties and obligations hereunder.
         After any retiring Agent's resignation or removal hereunder as Agent,
         the provisions of this Section 15 shall continue in effect for its
         benefit in respect to any actions taken or omitted to be taken by it
         while it was acting as Agent. To be eligible to be an Agent hereunder
         the party serving, or to serve, in such capacity must own a Pro Rata
         Part of the Commitments equal to the level of Commitment required to be
         held by any Lender pursuant to Section 29 hereof.

                  (f) Responsibility of Agent. It is expressly understood and
         agreed that the obligations of Agent under the Loan Documents are only
         those expressly set forth in the Loan Documents as to each and that
         Agent, shall be entitled to assume that no Default or Event of Default
         has occurred and is continuing, unless Agent has actual knowledge of
         such fact or has received notice from a Lender or the Borrower that
         such Lender or the Borrower considers that a Default or an Event of
         Default has occurred and is continuing and specifying the nature
         thereof. Neither Agent nor any of its directors, officers, attorneys or
         employees shall be liable for any action taken or omitted to be taken
         by them under or in connection with the Loan Documents, except for its
         or their own gross negligence or willful misconduct. Agent shall not
         incur liability under or in respect of any of the Loan Documents by
         acting upon any notice, consent, certificate, warranty or other paper
         or instrument believed by it to be genuine or authentic or to be signed
         by the proper party or parties, or with respect to anything which it
         may do or refrain from doing in the reasonable exercise of its
         judgment, or which may seem to it to be necessary or desirable. The
         Syndication Agents, the Documentation Agents and the Arrangers shall
         have no responsibilities as an agent hereunder.

                  Agent shall not be responsible to Lenders for any of the
         Borrower's recitals, statements, representations or warranties
         contained in any of the Loan Documents, or in any certificate or other
         document referred to or provided for in, or received by any Lender
         under, the Loan Documents, or for the value, validity, effectiveness,
         genuineness, enforceability or sufficiency of or any of the Loan
         Documents or for any failure by the Borrower to perform any of its
         obligations hereunder or thereunder. Agent may employ agents and
         attorneys-in-fact and shall not be answerable, except as to money or
         securities received by it or its authorized agents, for the negligence
         or misconduct of any such agents or attorneys-in-fact selected by it
         with reasonable care.

                  The relationship between Agent and each Lender is only that of
         agent and principal and has no fiduciary aspects. Nothing in the Loan
         Documents or elsewhere shall be construed to impose on Agent any duties
         or responsibilities other than those for which express provision is
         therein made. In performing its duties and functions hereunder, Agent
         does not assume and shall not be deemed to have assumed, and hereby
         expressly disclaims, any obligation or responsibility toward or any
         relationship of agency or trust with or for the Borrower or any of its
         beneficiaries or other creditors. As to any

                                      -50-
<PAGE>

         matters not expressly provided for by the Loan Documents, Agent shall
         not be required to exercise any discretion or take any action, but
         shall be required to act or to refrain from acting (and shall be fully
         protected in so acting or refraining from acting) upon the instructions
         of all Lenders and such instructions shall be binding upon all Lenders
         and all holders of the Notes; provided, however, that Agent shall not
         be required to take any action which is contrary to the Loan Documents
         or applicable law.

                  Agent shall have the right to exercise or refrain from
         exercising, without notice or liability to the Lenders, any and all
         rights afforded to Agent by the Loan Documents or which Agent may have
         as a matter of law; provided, however, Agent shall not (i) except as
         provided herein and in Section 7(b) hereof, without the consent of
         Required Lenders designate the amount of the Borrowing Base, or approve
         the sale, release or substitution of Collateral other than the sale of
         Collateral permitted pursuant to Section 13(a)(ii) hereof, or (ii)
         without the consent of Super Majority Lenders, take any other action
         with regard to amending the Loan Documents, waiving any default under
         the Loan Documents, or taking any other action with respect to the Loan
         Documents. Agent shall not have liability to Lenders for failure or
         delay in exercising any right or power possessed by Agent pursuant to
         the Loan Documents or otherwise unless such failure or delay is caused
         by the gross negligence of the Agent, in which case only the Agent
         responsible for such gross negligence shall have liability therefor to
         the Lenders.

                  (g) Independent Investigation. Each Lender severally
         represents and warrants to Agent that it has made its own independent
         investigation and assessment of the financial condition and affairs of
         the Borrower in connection with the making and continuation of its
         participation hereunder and has not relied exclusively on any
         information provided to such Lender by Agent in connection herewith,
         and each Lender represents, warrants and undertakes to Agent that it
         shall continue to make its own independent appraisal of the credit
         worthiness of the Borrower while the Notes are outstanding or its
         commitments hereunder are in force. Agent shall not be required to keep
         itself informed as to the performance or observance by the Borrower of
         this Agreement or any other document referred to or provided for herein
         or to inspect the properties or books of the Borrower. Other than as
         provided in this Agreement, Agent shall not have any duty,
         responsibility or liability to provide any Lender with any credit or
         other information concerning the affairs, financial condition or
         business of the Borrower which may come into the possession of Agent.

                  (h) Indemnification. Lenders agree to indemnify Agent, the
         Syndication Agents and the Documentation Agents (the "Indemnified
         Agents") ratably according to their respective Commitments on a Pro
         Rata basis, from and against any and all liabilities, obligations,
         losses, damages, penalties, actions, judgments, suits, costs, expenses
         or disbursements of any proper and reasonable kind or nature whatsoever
         which may be imposed on, incurred by or asserted against Agent in any
         way relating to or arising out of the Loan Documents or any action
         taken or omitted by any Indemnified

                                      -51-
<PAGE>

         Agent under the Loan Documents, provided that no Lender shall be liable
         for any portion of such liabilities, obligations, losses, damages,
         penalties, actions, judgments, suits, costs, expenses or disbursements
         resulting from any Indemnified Agent's gross negligence or willful
         misconduct. Each Lender shall be entitled to be reimbursed by any such
         Indemnified Agent for any amount such Lender paid to such Indemnified
         Agent under this Section 15(h) to the extent the such Indemnified Agent
         has been reimbursed for such payments by the Borrower or any other
         Person. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY
         TO AND PROTECT THE AGENT FROM THE CONSEQUENCES OF ANY LIABILITY
         INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON ANY
         INDEMNIFIED AGENT AS WELL AS FROM THE CONSEQUENCES OF ITS OWN
         NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR
         CONCURRING CAUSE OF ANY SUCH LIABILITY.

                  (i) Benefit of Section 15. The agreements contained in this
         Section 15 are solely for the benefit of Agent and the Lenders and are
         not for the benefit of, or to be relied upon by, the Borrower, any
         affiliate of the Borrower or any other person.

                  (j) Pro Rata Treatment. Subject to the provisions of this
         Agreement, each payment (including each prepayment) by the Borrower and
         each collection by Lenders (including offsets) on account of the
         principal of and interest on the Notes and fees provided for in this
         Agreement, that are payable by the Borrower, shall be made Pro Rata;
         provided, however, in the event that any Defaulting Lender shall have
         failed to make an Advance as contemplated under Section 2 hereof and
         Agent or another Lender or Lenders shall have made such Advance,
         payment received by Agent for the account of such Defaulting Lender or
         Lenders shall not be distributed to such Defaulting Lender or Lenders
         until such Advance or Advances shall have been repaid in full to the
         Lender or Lenders who funded such Advance or Advances.

                  (k) Assumption as to Payments. Except as specifically provided
         herein, unless Agent shall have received notice from the Borrower prior
         to the date on which any payment is due to Lenders hereunder that the
         Borrower will not make such payment in full, Agent may, but shall not
         be required to, assume that the Borrower has made such payment in full
         to Agent on such date and Agent may, in reliance upon such assumption,
         cause to be distributed to each Lender on such due date an amount equal
         to the amount then due such Lender. If and to the extent the Borrower
         shall not have so made such payment in full to Agent, each Lender shall
         repay to Agent forthwith on demand such amount distributed to such
         Lender together with interest thereon, for each day from the date such
         amount is distributed to such Lender until the date such Lender repays
         such amount to Agent, at the interest rate applicable to such portion
         of the Loan.

                                      -52-
<PAGE>

                  (l) Other Financings. Without limiting the rights to which any
         Lender otherwise is or may become entitled, such Lender shall have no
         interest, by virtue of this Agreement or the Loan Documents, in (a) any
         present or future loans from, letters of credit issued by, or leasing
         or other financial transactions by, any other Lender to, on behalf of,
         or with the Borrower (collectively referred to herein as "Other
         Financings") other than the obligations hereunder; (b) any present or
         future guarantees by or for the account of the Borrower which are not
         contemplated by the Loan Documents; (c) any present or future property
         taken as security for any such Other Financings; or (d) any property
         now or hereafter in the possession or control of any other Lender which
         may be or become security for the obligations of the Borrower arising
         under any loan document by reason of the general description of
         indebtedness secured or property contained in any other agreements,
         documents or instruments relating to any such Other Financings.

                  (m) Interests of Lenders. Nothing in this Agreement shall be
         construed to create a partnership or joint venture between Lenders for
         any purpose. Agent, Lenders and the Borrower recognize that the
         respective obligations of Lenders under the Commitments shall be
         several and not joint and that neither Agent nor any of Lenders shall
         be responsible or liable to perform any of the obligations of the other
         under this Agreement. Each Lender is deemed to be the owner of an
         undivided interest in and to all rights, titles, benefits and interests
         belonging and accruing to Agent under the Security Instruments,
         including, without limitation, liens and security interests in any
         collateral, fees and payments of principal and interest by the Borrower
         under the Commitments on a Pro Rata basis. Each Lender shall perform
         all duties and obligations of Lenders under this Agreement in the same
         proportion as its ownership interest in the Loans outstanding at the
         date of determination thereof.

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

                  (o) Delegation to Affiliates. The Borrower and the Lenders
         agree that the Agent may delegate any of its duties under this
         Agreement to any of its Affiliates. Any such Affiliate (and such
         Affiliate's directors, officers, agents and employees) which

                                      -53-
<PAGE>

         perform duties in connection with this Agreement shall be entitled to
         the same benefits of the indemnification, waiver and other protective
         provisions to which the Agent is entitled under Sections 15 and 18.

                  (p) Execution of Collateral Documents. The Lenders hereby
         empower and authorize the Agent to execute and deliver the Security
         Instruments and all related financing statements and other financing
         statements, agreements, documents or instruments that shall be
         necessary or appropriate to effect the purposes of the Security
         Instruments.

                  (q) Collateral Releases. The Lenders hereby empower and
         authorize the Agent to execute and deliver to the Borrower on its
         behalf any agreements, documents, or instruments as shall be necessary
         or appropriate to reflect any releases of Collateral which shall be
         permitted by the terms hereof (including, without limitation, the
         release of Collateral that Borrower is permitted to sell pursuant to
         Section 13(a)(ii) hereof) or of any other Loan Document or which shall
         otherwise have been approved by the Required Lenders pursuant to
         Section 15 hereof.

                  (r) Co-Agents, Documentation Agent, Syndication Agent, etc.
         Neither any of the Lenders identified in this Agreement as the
         Co-Documentation Agents or Co-Syndication Agents shall have any right,
         power, obligation, liability, responsibility or duty under this
         Agreement other than those applicable to all Lenders as such. Without
         limiting the foregoing, none of such Lenders shall have or be deemed to
         have a fiduciary relationship with any Lender. Each Lender hereby makes
         the same acknowledgments with respect to such Lenders as it makes with
         respect to the Agent in such Section 15(g).

         16. EXERCISE OF RIGHTS. No failure to exercise, and no delay in
exercising, on the part of the Agent or the Lenders, any right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right. The rights of the Agent and the Lenders hereunder shall be in addition to
all other rights provided by law.

         17. NOTICES. Any notices or other communications required or permitted
to be given by this Agreement or any other documents or instruments referred to
herein must be given in writing (which may be by bank wire, telecopy or similar
writing) and shall be given to the party to whom such notice or communication is
directed at the address or telecopy number of such party as follows: (a)
BORROWER AND GUARANTOR: c/o RANGE RESOURCES CORPORATION, 777 Main Street, Suite
800, Fort Worth, Texas 76102, Attention: Eddie LeBlanc, Chief Financial Officer,
(b) AGENT and LENDERS: c/o BANK ONE, NA, 1717 Main Street, TX1-2448, Dallas,
Texas 75201, Facsimile No. (214) 290-2332, Attention: Wm. Mark Cranmer, Director
Capital Markets. Any such notice or other communication shall be effective (a)
if given by telecopy, when such telecopy is transmitted to the telecopy number
specified in this Section 17 and the appropriate answerback is received or
receipt is otherwise confirmed,

                                      -54-
<PAGE>

(b) if given by mail, three (3) days after deposit in the mails with first-class
postage, prepaid, as addressed as aforesaid or (c) if given by any other method,
when delivered at the address specified in this Section 17; provided, however,
that notices to the Agent under Sections 2, 3, 4 or 5 hereof shall not be
effective until received. Any notice required to be given to the Lenders shall
be given to the Agent and distributed to all Lenders by the Agent.

         18. EXPENSES. The Borrower shall pay (i) all reasonable and necessary
out-of-pocket expenses of the Agent, including reasonable fees and disbursements
of special counsel for the Agent, in connection with the preparation of this
Agreement, any waiver or consent hereunder or any amendment hereof or any
Default or Event of Default or alleged Default or Event of Default hereunder,
(ii) all reasonable and necessary out-of-pocket expenses of the Agent, including
reasonable fees and disbursements of special counsel for the Agent in connection
with the preparation of any participation agreement for a participant or
participants requested by the Borrower or any amendment thereof and (iii) if a
Default or an Event of Default occurs, all reasonable and necessary
out-of-pocket expenses incurred by the Lenders, including reasonable fees and
disbursements of counsel, in connection with such Default and Event of Default
and collection and other enforcement proceedings resulting therefrom. THE
BORROWER HEREBY ACKNOWLEDGES THAT GARDERE WYNNE SEWELL LLP IS SPECIAL COUNSEL TO
BANK ONE, AS AGENT AND AS A LENDER, UNDER THIS AGREEMENT AND THAT IT IS NOT
COUNSEL TO, NOR DOES IT REPRESENT THE BORROWER IN CONNECTION WITH THE
TRANSACTIONS DESCRIBED IN THIS AGREEMENT. The Borrower is relying on separate
counsel in the transaction described herein. The Borrower shall indemnify the
Lenders against any transfer taxes, document taxes, assessments or charges made
by any governmental authority by reason of the execution, delivery and filing of
the Loan Documents. The obligations of this Section 18 shall survive any
termination of this Agreement, the expiration of the Loans and the payment of
all indebtedness of the Borrower to the Lenders hereunder and under the Notes.

         19. INDEMNITY. The Borrower hereby agrees to indemnify the Agent, the
Documentation Agents, the Syndication Agents, the Arrangers, each Lender, their
respective Affiliates, and each of their directors, officers, and employees (the
"Indemnified Parties") against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor of any Indemnified Party, the Agent, the
Arranger, any Lender or any Affiliate that is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any loan hereunder even
if any of the foregoing arises out of the ordinary negligence of the party
seeking indemnification except to the extent that they are determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
indemnification. The indemnity set forth herein shall be in addition to any
other obligations or liabilities of the Borrower to any Indemnified Party, the
Agent, the Arranger and each of the Lenders hereunder or at common law or
otherwise, and shall survive any termination of this Agreement, the expiration
of the Loans

                                      -55-
<PAGE>

and the payment of all indebtedness of the Borrower to the Lenders hereunder and
under the Notes. THE PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION TO APPLY
TO AND PROTECT EACH INDEMNIFIED PARTY FROM THE CONSEQUENCES OF ANY LIABILITY
INCLUDING STRICT LIABILITY IMPOSED OR THREATENED TO BE IMPOSED ON AGENT AS WELL
AS FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE
IS THE SOLE, CONTRIBUTING, OR CONCURRING CAUSE OF ANY CLAIM.

         20. Non-Liability of Lenders. The relationship between the Borrower on
the one hand and the Lenders and the Agent on the other hand shall be solely
that of borrower and lender. Neither the Agent, the Arranger nor any Lender
shall have any fiduciary responsibility to the Borrower. Neither the Agent, the
Arranger nor any Lender undertakes any responsibility to the Borrower to review
or inform the Borrower of any matter in connection with any phase of the
Borrower's businesses or operations. The Borrower agrees that neither the Agent,
the Arranger nor any Lender shall have any liability to the Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by this Agreement and the other
Loan Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final non-appealable judgment by a court of
competent jurisdiction that such loss resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Agent, the Arranger nor any Lender shall have any liability with respect to, and
the Borrower hereby waive, release and agree not to sue for, any special,
indirect, consequential or punitive damages suffered by the Borrower in
connection with, arising out of, or in any way related to this Agreement, the
Loan Documents or any transaction contemplated thereby.

         21. GOVERNING LAW. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND
IS INTENDED TO BE PERFORMED, IN DALLAS, DALLAS COUNTY, TEXAS, AND THE
SUBSTANTIVE LAWS OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT
AND INTERPRETATION OF THIS AGREEMENT AND ALL OTHER DOCUMENTS AND INSTRUMENTS
REFERRED TO HEREIN, UNLESS OTHERWISE SPECIFIED THEREIN.

         22. INVALID PROVISIONS. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws effective
during the term of this Agreement, such provisions shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement, and the
remaining provisions of the Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement.

                                      -56-
<PAGE>

         23. MAXIMUM INTEREST RATE. Regardless of any provisions contained in
this Agreement or in any other documents and instruments referred to herein, the
Lenders shall never be deemed to have contracted for or be entitled to receive,
collect or apply as interest on the Notes any amount in excess of the Maximum
Rate, and in the event any Lender ever receives, collects or applies as interest
any such excess, or if an acceleration of the maturities of any Notes or if any
prepayment by the Borrower results in the Borrower having paid any interest in
excess of the Maximum Rate, such amount which would be excessive interest shall
be applied to the reduction of the unpaid principal balance of the Notes for
which such excess was received, collected or applied, and, if the principal
balance of such Note is paid in full, any remaining excess shall forthwith be
paid to the Borrower. All sums paid or agreed to be paid to the Lenders for the
use, forbearance or detention of the indebtedness evidenced by the Notes and/or
this Agreement shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of such indebtedness
until payment in full so that the rate or amount of interest on account of such
indebtedness does not exceed the Maximum Rate. In determining whether or not the
interest paid or payable under any specific contingency exceeds the Maximum Rate
of interest permitted by law, the Borrower and the Lenders shall, to the maximum
extent permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium, rather than as interest; and (ii) exclude
voluntary prepayments and the effect thereof; and (iii) compare the total amount
of interest contracted for, charged or received with the total amount of
interest which could be contracted for, charged or received throughout the
entire contemplated term of the Note at the Maximum Rate.

         For purposes of Section 303 of the Texas Finance Code, to the extent
applicable to any Lender or Agent, Borrower agrees that the Maximum Rate shall
be the "weekly ceiling" as defined in said Chapter, provided that such Lender or
Agent, as applicable, may also rely, to the extent permitted by applicable laws
of the State of Texas and the United States of America, on alternative maximum
rates of interest under the Texas Finance Code or other laws applicable to such
Lender or Agent from time to time if greater (the "Maximum Rate").

         24. AMENDMENTS. This Agreement may be amended only by an instrument in
writing executed by an authorized officer of the party against whom such
amendment is sought to be enforced. No modification or waiver of any provision
of the Loan Documents, including this Agreement, or the Notes nor consent to
departure therefrom, shall be effective unless in writing signed by Borrower and
Super Majority Lenders; provided, however, that no amendment, waiver, or other
action shall be effected pursuant to this Section 24 (ii) without the consent of
all Lenders which: (a) would increase the Hydrocarbon Borrowing Base, (b) would
reduce any fees hereunder, or the principal of, or the interest on, any Lender's
Note or Notes, (c) would postpone any date fixed for any payment of any fees
hereunder, or any principal or interest of any Lender's Note or Notes, (d) would
increase the aggregate Commitments or any Lender's individual Commitment
hereunder or would materially alter Agent's obligations to any Lender hereunder,
(e) would release Borrower from its obligation to pay any Lender's Note or
Notes, (f) would release any Guarantor from its obligations under any Guaranty,
(g) would change the definition of Super Majority Lenders or Required Lenders,
or (h) would amend this

                                      -57-
<PAGE>

sentence. No such consent or waiver shall extend beyond the particular case and
purpose involved. No notice or demand given in any case shall constitute a
waiver of the right to take other action in the same, similar or other
circumstances without such notice or demand. No amendment of any provision of
this Agreement relating to the Agent shall be effective without the written
consent of the Agent.

         25. MULTIPLE COUNTERPARTS. This Agreement may be executed in a number
of identical separate counterparts, each of which for all purposes is to be
deemed an original, but all of which shall constitute, collectively, one
agreement. No party to this Agreement shall be bound hereby until a counterpart
of this Agreement has been executed by all parties hereto. Delivery of an
executed counterpart of a signature page of the Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.

         26. CONFLICT. In the event any term or provision hereof is inconsistent
with or conflicts with any provision of the Loan Documents, the terms or
provisions contained in this Agreement shall be controlling.

         27. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made in the Loan Documents, including this Agreement, the Notes
or other documents and instruments referred to herein shall survive all closings
hereunder and shall not be affected by any investigation made by any party.

         28. PARTIES BOUND. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs, legal representatives and estates, provided, however, that the Borrower
may not, without the prior written consent of all of the Lenders, assign any
rights, powers, duties or obligations hereunder.

         29. ASSIGNMENTS AND PARTICIPATIONS.

                  (a) Each Lender shall have the right to sell, assign or
         transfer all or any part of its Note or Notes, its Commitment and its
         rights and obligations hereunder to one or more Affiliates, Lenders,
         financial institutions, pension plans, insurance companies, investment
         funds, or similar Persons who are Eligible Assignees or to a Federal
         Reserve Bank; provided, that each sale, assignment or transfer (other
         than to an Affiliate or a Federal Reserve Bank) shall require the
         consent of Agent and the Borrower, which consents will not be
         unreasonably withheld; provided, however, that if an Event of Default
         has occurred and is continuing, the consent of the Borrower shall not
         be required. Any such assignee, transferee or recipient shall have, to
         the extent of such sale, assignment, or transfer, the same rights,
         benefits and obligations as it would if it were such Lender and a
         holder of such Note, Commitment and rights and obligations, including,
         without limitation, the right to vote on decisions requiring consent or
         approval of all Lenders or Super Majority Lenders and the obligation to
         fund its Commitment; provided, that (1) each such sale, assignment, or
         transfer (other than to an Affiliate or a Federal Reserve

                                      -58-
<PAGE>

         Bank) shall be in an aggregate principal amount not less than
         $5,000,000, (2) each remaining Lender shall at all times maintain
         Commitment then outstanding in an aggregate principal amount at least
         equal to $5,000,000; (3) each such sale, assignment or transfer shall
         be of a Pro Rata portion of such Lender's Commitment, (4) no Lender may
         offer to sell its Note or Notes, Commitment, rights and obligations or
         interests therein in violation of any securities laws; and (5) no such
         assignments (other than to a Federal Reserve Bank) shall become
         effective until the assigning Lender and its assignee delivers to Agent
         and Borrower an Assignment and Acceptance and the Note or Notes subject
         to such assignment and other documents evidencing any such assignment.
         An assignment fee in the amount of $3,500 for each such assignment
         (other than to an Affiliate, a Lender or the Federal Reserve Bank) will
         be payable to Agent by assignor or assignee. Within five (5) Business
         Days after its receipt of copies of the Assignment and Acceptance and
         the other documents relating thereto and the Note or Notes, the
         Borrower shall execute and deliver to Agent (for delivery to the
         relevant assignee) a new Note or Notes evidencing such assignee's
         assigned Commitment and if the assignor Lender has retained a portion
         of its Commitment, a replacement Note in the principal amount of the
         Commitment retained by the assignor (except as provided in the last
         sentence of this paragraph (a) such Note or Notes to be in exchange
         for, but not in payment of, the Note or Notes held by such Lender). On
         and after the effective date of an assignment hereunder, the assignee
         shall for all purposes be a Lender, party to this Agreement and any
         other Loan Document executed by the Lenders and shall have all the
         rights and obligations of a Lender under the Loan Documents, to the
         same extent as if it were an original party thereto, and no further
         consent or action by Borrower, Lenders or the Agent shall be required
         to release the transferor Lender with respect to its Commitment
         assigned to such assignee and the transferor Lender shall henceforth be
         so released.

                  (b) Each Lender shall have the right to grant participations
         in all or any part of such Lender's Notes and Commitment hereunder to
         one or more pension plans, investment funds, insurance companies,
         financial institutions or other Persons, provided, that:

                           (i) each Lender granting a participation shall retain
                  the right to vote hereunder, and no participant shall be
                  entitled to vote hereunder on decisions requiring consent or
                  approval of Lender or Super Majority Lenders (except as set
                  forth in (iii) below);

                           (ii) in the event any Lender grants a participation
                  hereunder, such Lender's obligations under the Loan Documents
                  shall remain unchanged, such Lender shall remain solely
                  responsible to the other parties hereto for the performance of
                  such obligations, such Lender shall remain the holder of any
                  such Note or Notes for all purposes under the Loan Documents,
                  and Agent, each Lender and Borrower shall be entitled

                                      -59-
<PAGE>

                  to deal with the Lender granting a participation in the same
                  manner as if no participation had been granted; and

                           (iii) no participant shall ever have any right by
                  reason of its participation to exercise any of the rights of
                  Lenders hereunder, except that any Lender may agree with any
                  participant that such Lender will not, without the consent of
                  such participant (which consent may not be unreasonably
                  withheld) consent to any amendment or waiver requiring
                  approval of all Lenders.

                  (c) It is understood and agreed that any Lender may provide to
         assignees and participants and prospective assignees and participants
         financial information and reports and data concerning Borrower's
         properties and operations which was provided to such Lender pursuant to
         this Agreement, provided, that each recipient thereto has first agreed,
         for the benefit of Borrower, to hold such information, reports and data
         in confidence on the terms set out in Section 12(j) hereof.

                  (d) Upon the reasonable request of either Agent or Borrower,
         each Lender will identify those to whom it has assigned or participated
         any part of its Notes and Commitment, and provide the amounts so
         assigned or participated.

         30. CHOICE OF FORUM: CONSENT TO SERVICE OF PROCESS AND JURISDICTION.
THE OBLIGATIONS OF BORROWER UNDER THE LOAN DOCUMENTS ARE PERFORMABLE IN DALLAS
COUNTY, TEXAS. ANY SUIT, ACTION OR PROCEEDING AGAINST THE BORROWER WITH RESPECT
TO THE LOAN DOCUMENTS OR ANY JUDGMENT ENTERED BY ANY COURT IN RESPECT THEREOF,
MAY BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS, COUNTY OF DALLAS, OR IN THE
UNITED STATES COURTS LOCATED IN DALLAS COUNTY, TEXAS AND THE BORROWER HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF ANY
SUCH SUIT, ACTION OR PROCEEDING. THE BORROWER HEREBY IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN ANY SUIT, ACTION OR PROCEEDING IN SAID COURT BY THE
MAILING THEREOF BY LENDER BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO
THE BORROWER, AT THE ADDRESS FOR NOTICES AS PROVIDED IN SECTION 17. THE BORROWER
HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENT BROUGHT IN THE COURTS LOCATED IN THE STATE OF TEXAS, COUNTY
OF DALLAS, AND HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.

                                      -60-
<PAGE>

         31. WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS
HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL
RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         32. OTHER AGREEMENTS. THIS WRITTEN CREDIT 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.

         33. FINANCIAL TERMS. All accounting terms used in this Agreement which
are not specifically defined herein shall be construed in accordance with GAAP.

         34. TRI-PARTY LOAN. Texas Finance Code, Section 346 shall not apply to
loans evidenced by this Agreement or the Notes.

                                      -61-
<PAGE>

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

                                       BORROWER:

                                       RANGE RESOURCES CORPORATION
                                       a Delaware corporation

                                       By:
                                          --------------------------------------
                                          Eddie LeBlanc, Chief Financial Officer

                                      -62-
<PAGE>

                                       LENDERS:

                                       BANK ONE, NA, a national
                                       banking association (Main Office Chicago)
                                       as a Lender and Administrative Agent

                                       By:
                                          --------------------------------------
                                          Wm. Mark Cranmer
                                          Director, Capital Markets

                                      -63-
<PAGE>

                                       BANK OF SCOTLAND

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -64-
<PAGE>

                                       JPMORGAN CHASE BANK

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -65-
<PAGE>

                                       COMPASS BANK

                                       By:
                                          --------------------------------------
                                          Kathleen J. Bowen, Vice President

                                      -66-
<PAGE>

                                       CREDIT LYONNAIS, NEW YORK BRANCH

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -67-
<PAGE>

                                       FLEET NATIONAL BANK

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -68-
<PAGE>

                                       FORTIS CAPITAL CORP.

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -69-
<PAGE>

                                       NATEXIS BANQUES POPULAIRES

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                       By:
                                          --------------------------------------
                                       Name:
                                            ------------------------------------
                                       Title:
                                             -----------------------------------

                                      -70-

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