Document:

LOAN AGREEMENT

 

 

AMONG

 

 

ASCENT ENERGY INC.,

 

 

FORTIS CAPITAL CORP., as Agent

 

and

 

the Lenders signatory thereto

 

 

 

 

As of July 27, 2001

 

 

$40,000,000.00

 

TABLE OF CONTENTS

 

  
  			
        Page

	

1.   
	

Definitions   
	

1

	

2.   

      	

Commitment of the Lenders   

      	

17

      
	

   

      	

(a)      Commitments to Lend; Notes   

      	

17

      
	

   

      	

(b)      Requests for New Loans   

      	

17

      
	

   

      	

(c)      Continuations and Conversions of Existing
Loans   

      	

18

      
	

   

      	

(d)      Use of Proceeds   

      	

19

      
	

3.   

      	

Optional Termination or Reduction   

      	

20

      
	

4.   

      	

Payments of Principal   

      	

20

      
	

5.   

      	

Interest   

      	

21

      
	

   

      	

(a)      Base Rate Loans   

      	

21

      
	

   

      	

(b)      Eurodollar Loans   

      	

21

      
	

   

      	

(c)      Default Rate   

      	

21

      
	

   

      	

(d)      Calculation of Interest   

      	

21

      
	

   

      	

(e)      Recapture Rate   

      	

22

      
	

6.   

      	

Payments   

      	

22

      
	

   

      	

(a)      Payments to Lenders   

      	

22

      
	

   

      	

(b)      Increased Cost and Reduced
Return   

      	

23

      
	

   

      	

(c)      Funding Losses   

      	

24

      
	

   

      	

(d)      Reimbursable Taxes   

      	

24

      
	

   

      	

(e)      Change of Applicable Lending
Office   

      	

26

      
	

   

      	

(f)       Replacement of the
Lenders   

      	

26

      
	

7.   

      	

Letters of Credit   

      	

26

      
	

   

      	

(a)      LC Commitment   

      	

26

      
	

   

      	

(b)      Requesting Letters of Credit   

      	

27

      
	

   

      	

(c)      Reimbursement and
Participations   

      	

27

      
	

   

      	

(d)      Letter of Credit Fees   

      	

28

      
	

   

      	

(e)      No Duty to Inquire   

      	

29

      
	

   

      	

(f)       LC Collateral   

      	

30

      
	

8.

      	

Collateral Security   

      	

31

      
	

   

      	

(a)      First Closing   

      	

31

      
	

   

      	

(b)      Subsequently Acquired Oil and Gas
Properties   

      	

32

      
	

   

      	

(c)      Form of Security Documents   

      	

32

      
	

   

      	

(d)      Title Work   

      	

32

      
	

   

      	

(e)      Release of Stock Collateral   

      	

33

      
	

   

      	

(f)       Release of Oil and Gas Real
Properties   

      	

33

      
	

   

      	

(g)      Security for Hedging
Contracts   

      	

33

      
	

   

      	

(h)      Additional Stock Collateral   

      	

34

      
	

   

      	

(i)       Release of Forman   

      	

34

      
	

9.   

      	

Borrowing Base   

      	

34

      
	

   

      	

(a)      Initial Borrowing Base   

      	

34

      
	

   

      	

(b)      Regularly Scheduled Redeterminations of the
Borrowing Base   

      	

34

      
	

   

      	

(c)      Unscheduled Redeterminations   

      	

34

      
	

   

      	

(d)      Notice of Redetermined Borrowing
Base   

      	

35

      
	

   

      	

(e)      Calculation of the Borrowing
Base   

      	

35

      
	

   

      	

(f)       Reduction of Borrowing Base Following
Sale   

      	

35

      
	

   

      	

(g)      Reduction of Borrowing Base For Oil and Gas
Properties

           Held by
Forman   

      	

35

      
	

10.   

      	

Fees

      	

36

      
	

   

      	

(a)      Commitment Fee   

      	

36

      
	

   

      	

(b)      Agency and Other Fees   

      	

36

      
	

11.    

      	

Representations and Warranties 

      	

 36 

      
	

   

      	

(a)      No Default   

      	

36

      
	

   

      	

(b)      Organization and Good
Standing   

      	

36

      
	

   

      	

(c)      Authorization   

      	

36

      
	

   

      	

(d)      No Conflicts or Consents   

      	

36

      
	

   

      	

(e)      Enforceable Obligations   

      	

37

      
	

   

      	

(f)       Financial Statements   

      	

37

      
	

   

      	

(g)      Other Obligations and
Restrictions   

      	

37

      
	

   

      	

(h)      Full Disclosure   

      	

38

      
	

   

      	

(i)       Litigation   

      	

38

      
	

   

      	

(j)       Labor Disputes and Acts of
God   

      	

38

      
	

   

      	

(k)      ERISA Plans and Liabilities   

      	

38

      
	

   

      	

(l)       Names and Places of
Business   

      	

39

      
	

   

      	

(m)     The Borrower's Subsidiaries   

      	

39

      
	

   

      	

(n)      Government Regulation   

      	

39

      
	

   

      	

(o)      Insider   

      	

39

      
	

   

      	

(p)      Solvency   

      	

40

      
	

   

      	

(q)      Real Property Other Than Oil and Gas
Properties   

      	

40

      
	

   

      	

(r)       Oil and Gas Properties on the Effective
Date   

      	

40

      
	

   

      	

(s)      Title to Oil and Gas Real
Properties   

      	

40

      
	

   

      	

(t)       Oil and Gas Properties of Restricted
Persons   

      	

41

      
	

   

      	

(u)      Refund   

      	

41

      
	

   

      	

(v)      Payout Balances; Gas
Balancing   

      	

41

      
	

   

      	

(w)     Operations   

      	

42

      
	

   

      	

(x)       Plugging Status   

      	

42

      
	

   

      	

(y)      Reserve Reports   

      	

42

      
	

   

      	

(z)       Financial and Commodity
Hedging   

      	

43

      
	

   

      	
(aa)     Environmental
Matters   

      	

43

      
	

   

      	

(bb)    Marketing   

      	

45

      
	

   

      	

(cc)     Net Revenue/Working Interest   

      	

46

      
	

   

      	

(dd)    Compliance with the Law   

      	

46

      
	

   

      	

(ee)     Bonds and Insurance   

      	

46

      
	

   

      	

(ff)      Leases   

      	

47

      
	

12.    

      	

Conditions to Initial Advance at First Closing    

      	

47 

      
	
    
    
        

      	
    
    
    (a)     Receipt of Documents    

      	
    
    
    47 

      
	
    
    
        

      	
    
    
    (b)     Legal Opinion   

      	
    
    
    48 

      
	
    
    
        

      	
    
    
    (c)     Pledge of Stock Interests   

      	
    
    
    48 

      
	
    
    
        

      	
    
    
    (d)     Mortgage of the Borrower's Oil and Gas
    Properties   

      	
    
    
    48 

      
	
    
       

      	
    
    (e)     Mortgage of Pontotoc Oil and Gas
    Properties   

      	
    
    48

      
	
    
    
        

      	
    
    
    (f)      Mortgage of Forman's Oil and Gas
    Properties   

      	
    
    
    48 

      
	
    
    
        

      	
    
    
    (g)     Title Work   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (h)     Closing of Acquisition   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (i)      Payoff Letter   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (j)      Payment of Expenses   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (k)     Environmental Report   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (l)      Issuance of Mandatory Redeemable Preferred
    Stock   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (m)    No Material Adverse Effect   

      	
    
    
    49 

      
	
    
    
        

      	
    
    
    (n)     Other Documents   

      	
    
    
    49 

      
	

13.    

      	

Conditions to Second Closing    

      	

49 

      
	
    
    
        

      	
    
    
    (a)     Hedging Arrangements   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (b)     Pontotoc Merger   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (c)     Title Work   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (d)     Compliance Certificate   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (e)     Other Documents   

      	
    
    
    50 

      
	

14.    

      	

Conditions to Each Advance    

      	

50 

      
	
    
    
        

      	
    
    
    (a)     No Event of Default   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (b)     Representations and Warranties   

      	
    
    
    50 

      
	
    
    
        

      	
    
    
    (c)     Notice of Advance   

      	
    
    
    50 

      
	
    
       

      	
    
    (d)     Borrowing Base   

      	
    
    51

      
	
    
       

      	
    
    (e)     Other Documents   

      	
    
    51

      
	
    
       

      	
    
    (f)      No Material Adverse
    Effect   

      	
    
    51

      
	

15.    

      	

Affirmative Covenants    

      	

51 

      
	
    
    
        

      	
    
    
    (a)     Financial Statements and
    Reports   

      	
    
    
    51 

      
	
    
    
        

      	
    
    
    (b)     Certificates of Compliance   

      	
    
    
    51 

      
	
    
       

      	
    
    (c)     Accountant's Certificate   

      	
    
    52

      
	
    
       

      	
    
    (d)     Taxes and Other Liens   

      	
    
    52

      
	
    
       

      	
    
    (e)     Compliance with Laws   

      	
    
    52

      
	
    
       

      	
    
    (f)      Further Assurances   

      	
    
    53

      
	
    
       

      	
    
    (g)     Bonds and Insurance   

      	
    
    53

      
	
    
       

      	
    
    (h)     Right of Inspection   

      	
    
    53

      
	
    
       

      	
    
    (i)      Notice of Certain Events   

      	
    
    53

      
	
    
       

      	
    
    (j)      Disclosure Reports   

      	
    
    53

      
	
    
       

      	
    
    (k)     Environmental Matters   

      	
    
    54

      
	
    
    
        

      	
    
    
    (l)      Compliance and
    Maintenance   

      	
    
    
    54 

      
	
    
    
        

      	
    
    
    (m)    Compliance with Leases and Other
    Instruments   

      	
    
    
    55 

      
	
    
    
        

      	
    
    
    (n)     Certain Additional Assurances Regarding
    Maintenance and

              Operations of
    Properties   

      	
    
    
    55 

      
	
    
    
        

      	
    
    
    (o)     Sale of Oil and Gas Properties   

      	
    
    
    55 

      
	
    
    
        

      	
    
    
    (p)     Guaranties of Borrower's Restricted
    Subsidiaries   

      	
    
    
    55 

      
	
    
    
        

      	
    
    
    (q)     Production Proceeds   

      	
    
    
    56 

      
	
    
    
        

      	
    
    
    (r)      Hedging Contracts   

      	
    
    
    56 

      
	
    
    
        

      	
    
    
    (s)     Title   

      	
    
    
    56 

      
	

16.    

      	

Negative Covenants    

      	

56 

      
	
    
    
        

      	
    
    
    (a)     Liens   

      	
    
    
    57 

      
	
    
    
        

      	
    
    
    (b)     Change of Control or Ownership   

      	
    
    
    57 

      
	
    
    
        

      	
    
    
    (c)     Indebtedness   

      	
    
    
    57 

      
	
    
    
        

      	
    
    
    (d)     Investments   

      	
    
    
    58 

      
	
    
    
        

      	
    
    
    (e)     Distributions   

      	
    
    
    58 

      
	
    
    
        

      	
    
    
    (f)      Current Ratio   

      	
    
    
    58 

      
	
    
       

      	
    
    (g)     Total Debt to EBITDA   

      	
    
    59

      
	
    
    
        

      	
    
    
    (h)     Ratio of EBITDA to Cash Interest
    Expense   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (i)      Method of Calculation   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (j)      Minimum Tangible Net
    Worth   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (k)     Amendments to Corporate
    Documents   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (l)      Nature of Business   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (m)    Transactions with Affiliates   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (n)     Hedging Transactions   

      	
    
    
    59 

      
	
    
    
        

      	
    
    
    (o)     Loans and Advances   

      	
    
    
    60 

      
	
    
    
        

      	
    
    
    (p)     New Subsidiaries   

      	
    
    
    60 

      
	
    
    
        

      	
    
    
    (q)     Limitation on Mergers, Issuances of
    Securities   

      	
    
    
    60 

      
	
    
    
        

      	
    
    
    (r)      Permitted Redemptions of Preferred
    Stock   

      	
    
    
    60 

      
	
    
    
        

      	
    
    
    (s)     Sale of Oil and Gas Properties   

      	
    
    
    60 

      
	

17.    

      	

Events of Default and Remedies    

      	

60 

      
	
    
    
        

      	
    
    
    (a)     Events of Default   

      	
    
    
    60 

      
	
    
    
        

      	
    
    
    (b)     Remedies   

      	
    
    
    63 

      
	
  
    
    18.    

      	
  
    
    The Agent    

      	
  
    
    64 

      
	
    
    
        

      	
    
    
    (a)     Appointment and Authority   

      	
    
    
    64 

      
	
    
    
        

      	
    
    
    (b)     Exculpation, the Agent's Reliance,
    Etc.   

      	
    
    
    64 

      
	
    
    
        

      	
    
    
    (c)     Credit Decisions   

      	
    
    
    65 

      
	
    
    
        

      	
    
    
    (d)     Indemnification   

      	
    
    
    65 

      
	
    
    
        

      	
    
    
    (e)     Non-Reliance on the Agent and Other
    Lenders   

      	
    
    
    65 

      
	
    
    
        

      	
    
    
    (f)      Rights as Lender   

      	
    
    
    66 

      
	
    
    
        

      	
    
    
    (g)     Sharing of Set-Offs and Other
    Payments   

      	
    
    
    66 

      
	
    
    
        

      	
    
    
    (h)     Properties   

      	
    
    
    66 

      
	
    
    
        

      	
    
    
    (i)      Benefit of Section 18   

      	
    
    
    67 

      
	
    
    
        

      	
    
    
    (j)      Resignation   

      	
    
    
    67 

      
	

19.    

      	

Miscellaneous Provisions    

      	

67 

      
	
    
    
        

      	
    
    
    (a)     Exercise of Rights   

      	
    
    
    67 

      
	
    
    
        

      	
    
    
    (b)     Notices   

      	
    
    
    68 

      
	
    
    
        

      	
    
    
    (c)     Expenses and Indemnity   

      	
    
    
    69 

      
	
    
    
        

      	
    
    
    (d)     Waivers and Amendments   

      	
    
    
    70 

      
	
    
    
        

      	
    
    
    (e)     Acknowledgments and Admissions   

      	
    
    
    71 

      
	
    
    
        

      	
    
    
    (f)      Joint and Several Liability; Parties in
    Interest; Assignments   

      	
    
    
    72 

      
	
    
    
        

      	
    
    
    (g)     Governing Law   

      	
    
    
    74 

      
	
    
    
        

      	
    
    
    (h)     Invalid Provisions   

      	
    
    
    74 

      
	
    
       

      	
    
    (i)      Maximum Rate of Interest   

      	
    
    75

      
	
    
    
        

      	
    
    
    (j)      Confidentiality   

      	
    
    
    75 

      
	
    
    
        

      	
    
    
    (k)     Amendments   

      	
    
    
    76 

      
	
    
    
        

      	
    
    
    (l)      Multiple Counterparts   

      	
    
    
    76 

      
	
    
    
        

      	
    
    
    (m)    Conflict   

      	
    
    
    76 

      
	
    
    
        

      	
    
    
    (n)     Survival   

      	
    
    
    76 

      
	
    
    
        

      	
    
    
    (o)     Parties Bound   

      	
    
    
    76 

      
	
    
    
       

      	
    
    
    (p)     Other Agreements   

      	
    
    
    76

      
	
    
    
       

      	
    
    
    (q)     Waiver of Jury Trial   

      	
    
    
    76

      
	

      

  

Schedules

1.      List of Shareholders of the Borrower

2.      Disclosure Schedule

3.      Security Schedule

4.      Oil and Gas Real Properties

Exhibits

A       Promissory Note

B       Notice of Advance

C       Continuation/Conversion Notice

D       Stock Pledge Agreement

E       Assignment and Acceptance

LOAN AGREEMENT

           
THIS LOAN AGREEMENT (the "Agreement")
dated as of July 27, 2001, by and among ASCENT ENERGY INC., a Delaware
corporation (the "Borrower"), FORTIS CAPITAL
CORP., a Connecticut corporation, individually and as agent (the "Agent")
and the lenders party hereto (each, a "Lender"
and, collectively, the "Lenders"). In
consideration of the mutual covenants and agreements herein contained, the
parties hereby formally covenant, agree and bind themselves as follows:

           
1.    Definitions. When used herein the terms
"Agent," "Agreement," "Borrower," and
"Lenders," shall have the meanings indicated above. When used herein
the following terms shall have the following meanings:

    
               
    "Acquisition" means the
    acquisition of at least sixty-six and two-thirds percent (66-2/3 %) of the
    outstanding voting securities of Pontotoc pursuant to an exchange offer by
    the Borrower followed by a merger of Pontotoc Acquisition with Pontotoc, all
    as more fully set forth in the Acquisition Documents.

    
               
    "Acquisition Documents" means
    (a) the Agreement and Plan of Merger dated as of January 19, 2001,
    among Pontotoc, Pontotoc Acquisition, and the Borrower, and (b) all
    other agreements or instruments delivered in connection therewith to
    consummate the acquisition contemplated thereby.

    
               
    "Advance" means a borrowing
    of new Loans of a single Type pursuant to Section 2(a) or a
    Continuation or Conversion of existing Loans into a single Type (and, in the
    case of Eurodollar Loans, with the same Interest Period) pursuant to Section
    2(c).

    
               
    "Adjusted LIBOR Rate" means a
    rate per annum which is the LIBOR Offered Rate (determined and fixed for the
    duration of any Interest Period) as adjusted by the Lenders for the
    Eurodollar Reserve Requirement. The determination of the Adjusted LIBOR Rate
    shall be made by the Agent in its discretion and shall be binding and
    conclusive in the absence of manifest error.

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

    

             (a)   
    to vote 20% or more of the securities (on a fully
    diluted basis) having ordinary voting power for the election of directors or
    managing general partners; or

    

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

    

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

    
               
    "Base Rate" means, for any
    day, the rate per annum equal to the higher of (a) the Federal Funds
    Rate for such day plus one-half of one percent (.5%) and (b) the Prime
    Rate for such day, plus the Base Rate Margin. Any change in the Base Rate
    due to a change in the Prime Rate or the Federal Funds Rate shall be
    effective on the effective date of such change in the Prime Rate or Federal
    Funds Rate.

    
               
    "Base Rate Loan" means a Loan
    which bears interest at the Base Rate.

            "Base Rate Margin" means, on each day:

    

             (a)   
    one-half of one percent (.50%) per annum when the
    Facility Usage on such day is less than or equal to 24% of the Borrowing
    Base on such day,

    

             (b)   
    one-half of one percent (.50%) per annum when the
    Facility Usage on such day is greater than 24% and less than or equal to 49%
    of the Borrowing Base on such day,

    

             (c)   
    three-quarters of one percent (.75%) per annum when
    the Facility Usage on such day is greater than 49% and less than or equal to
    74% of the Borrowing Base on such day, and

    

             (d)   
    one percent (1.0%) per annum when the Facility Usage
    on such day is greater than 74% of the Borrowing Base on such day.

    Provided that the Base Rate Margin for the first six
    months following the First Closing Date shall be one percent (1.0%).

    
               
    "Borrowing Base" means the
    amount determined by the Agent and the Required Lenders from time to time in
    accordance with Section 9 hereof provided that in no event shall the
    Borrowing Base ever exceed the Revolving Commitment. Until the next
    determination of the Borrowing Base pursuant to Section 9 hereof the
    Borrowing Base shall be Thirty Million Dollars ($30,000,000).

    
               
    "Borrowing Base Deficiency"
    has the meaning given such term in Section 4(b)(ii).

    
               
    "Business Day" means the
    normal banking hours during any day (other than Saturdays or Sundays or
    legal holidays) that banks are legally open for business in Dallas, Texas
    and New York City, New York.

    
               
    "Cash Interest Expense"
    means, with respect to any fiscal period, the interest expense incurred for
    such period as determined in accordance with GAAP and paid in cash,
    excluding, however, any dividends accrued or paid on the Borrower's
    Preferred Stock.

    
               
    "Cash Proceeds" means, for
    any period, the aggregate amount of revenue paid to and received by the
    Borrower or any other Restricted Person and derived from any disposition of
    hydrocarbons produced from the Oil and Gas Real Properties and other
    Collateral, less all (i) amounts attributable to production, severance,
    excise or windfall profits taxes, or any other tax, impost, or levy on
    production, (ii) payments due to the owners (other than the Borrower or any
    other Restricted Person) of any royalties, overriding royalty interests, net
    profits interests, production payments, and any other similar interests
    which are payable out of, are attributable to, or are a burden upon, any
    production of such hydrocarbons, and (iii) operating expenses and capital
    costs ordinary and necessary to recover such hydrocarbons during such
    period.

    
               
    "CERCLA" has the meaning
    provided in Section 11(aa)(vii).

    
               
    "CERCLIS" has the meaning
    provided in Section 11(aa)(vii).

    
               
    "Change of Control" means the
    occurrence of either of the following events: (a) any Person or two or
    more Persons acting as a group shall acquire beneficial ownership (within
    the meaning of Rule 13d-3 of the Securities and Exchange Commission under
    the Securities Act of 1934, as amended, and including holding proxies to
    vote for the election of directors other than proxies held by the Borrower's
    management or their designees to be voted in favor of Persons nominated by
    the Borrower's Board of Directors) of forty percent (40%) or more of the
    Borrower's outstanding voting securities, TCW and Jefferies shall, in the
    aggregate, own, directly or through their Affiliates, a lesser percentage of
    the Borrower's outstanding voting securities than such group, measured, in
    each instance, by voting power (including both common stock and any
    preferred stock or other equity securities entitling the holders thereof to
    vote with the holders of common stock in elections for directors of the
    Borrower) or (b) the majority of the directors of the Borrower shall
    consist of Persons not nominated by the Borrower's Board of Directors (not
    including as Board nominees any directors which the Board is obligated to
    nominate pursuant to shareholders agreements, voting trust arrangements or
    similar arrangements). For purposes of this definition, all Forman
    shareholders shall be treated as shareholders of the Borrower by allocating,
    on a pro forma basis, all shares of the Borrower owned by Forman to Forman's
    shareholders according to their respective ownership interests in Forman.

    
               
    "Change of Ownership" shall
    occur if the shareholders of the Borrower listed on Schedule 1
    collectively cease to own, directly or through their Affiliates, at least
    fifty percent (50%) plus one share of the outstanding voting securities of
    the Borrower, measured by voting power (including both common stock and any
    preferred stock or other equity securities entitling the holders thereof to
    vote with the holders of common stock in elections for directors of the
    Borrower). For purposes of this definition, all Forman shareholders shall be
    treated as shareholders of the Borrower by allocating, on a pro forma basis,
    all shares of the Borrower owned by Forman to Forman's shareholders
    according to their respective ownership interests in Forman.

    
               
    "C-K Report" means the
    environmental report prepared by C-K Associates, Inc. dated March 31, 2001,
    relating to the Oil and Gas Real Properties owned by Pontotoc and its
    Restricted Subsidiaries.

    
               
    "Class B Preferred Stock" means
    Borrower's Class B 8% preferred stock in an amount not to exceed $13,500,000
    that shall, under such preferred stock's certificate of designation,
    automatically be converted into shares of the Borrower's common stock if not
    redeemed by the Borrower on or before the second anniversary of its
    issuance, with any such redemption to be subject to Section 16(r).

    
               
    "Collateral" means all Stock
    Collateral, Oil and Gas Real Properties, Oil and Gas Personal Properties,
    and the Cash Proceeds therefrom which are now or hereafter subject to a Lien
    in favor of the Agent on behalf of the Lenders, pursuant to Section 8
    and the Security Documents.

                       
"Commitment Margin" means:

    

             (a)   
    .375% per annum when the Facility Usage on such day
    is less than or equal 49% of the Borrowing Base on such day,

    

             (b)   
    .50% per annum when the Facility Usage on such day is
    greater than 49% on such day.

    Provided that the Commitment Margin for the first six
    months after the Closing Date shall be .50% per annum.

    
               
    "Consolidated" means the
    consolidation of any Person, in accordance with GAAP, with its properly
    consolidated Restricted Subsidiaries. References herein to a Person's
    Consolidated financial statements, financial position, financial condition,
    liabilities, etc. refer to the consolidated financial statements, financial
    position, financial condition, liabilities, etc. of such Person and its
    properly consolidated Restricted Subsidiaries.

    
               
    "Consolidated Tangible Net Worth"
    means all Consolidated assets of the Borrower, minus intangible assets,
    minus the Borrower's Consolidated liabilities. For purposes of this
    definition, "intangible assets" shall include patents, copyrights,
    licenses, franchises, good will, trade names, and trade secrets but shall
    exclude oil, gas, or other mineral leases and shall further exclude all
    leases required to be capitalized under GAAP. Also for purposes of this
    definition, the Borrower's Consolidated liabilities shall exclude the
    Borrower's Preferred Stock.

    
               
    "Continuation" means the
    continuation pursuant to Section 2(c) hereof of a Eurodollar Loan as
    a Eurodollar Loan from one Interest Period to the next Interest Period.

    
               
    "Continuation/Conversion Notice"
    means a written or telephonic request, or a written confirmation, made by
    the Borrower which meets the requirements of Section 2(c).

    
               
    "Continuing 85% Test" has the
    meaning provided in Section 8(d).

    
               
    "Conversion" means a
    conversion pursuant to Section 2(c) or Section 6 of one Type
    of Loan into another Type of Loan.

    
               
    "Current Assets" means the
    total of the Borrower's current assets, including the unfunded portion of
    the Revolving Commitment, determined in accordance with GAAP on a
    Consolidated basis.

    
               
    "Current Liabilities" means
    the total of the Borrower's current liabilities as determined in accordance
    with GAAP on a Consolidated basis, excluding all payments on the Note(s)
    falling due within one year of the date of calculation.

    
               
    "Current Ratio" means the
    ratio of Current Assets divided by Current Liabilities.

    
               
    "Debt" means, with respect to
    any Person, as of any date of determination (without duplication)
    (a) all obligations of such Person for borrowed money, or with respect
    to deposits or advances of any kind to such Person, (b) all obligations of
    such Person evidenced by bonds, debentures, notes or similar instruments,
    (c) all obligations of such Person upon which interest charges are
    customarily paid, (d) all obligations of such Person under conditional
    sale or other title retention agreements relating to property purchased by
    such Person, (e) all obligations of such Person issued or assumed as the
    deferred purchase price of property or services, (f) all capitalized lease
    obligations, (g) all obligations of others secured by any Lien on property
    or assets owned or acquired by such Person, whether or not the obligations
    secured thereby have been assumed, and (h) all outstanding letters of credit
    issued for the account of such Person, but shall exclude current accounts
    payable arising in the ordinary course of business and, in the case of the
    Borrower and its Restricted Subsidiaries, the Borrower's Preferred Stock and
    any Permitted Hedging Debt.

    
               
    "Default Rate" means the rate of
    interest provided for in Section 5(c).

    
               
    "Determination Date" has the
    meaning provided in Section 9(d).

    
               
    "Disclosure Report" means a
    notice given by the Borrower under Section 15(j).

    
               
    "Disclosure Schedule" means Schedule
    2 hereto.

    
               
    "Dissenters' Rights Costs" means,
    in aggregate, all cash in excess of $9.00 per share paid to Pontotoc
    shareholders exercising dissenters' rights under Nevada law in connection
    with the Acquisition.

    
               
    "Distributions" has the meaning
    provided in Section 16(e).

    
               
    "Domestic Lending Office"
    means, with respect to any Lender, the office of such Lender specified as
    its "Domestic Lending Office" below its name on its signature page
    hereto; and, with respect to the Agent, the office, branch, or agency
    through which it administers this Agreement.

    
               
    "EBITDA" means with respect
    to any Person at any date of determination, the sum of (a) net income
    for such Person for the twelve (12) most recent consecutive months, plus
    (b) interest expense deducted in arriving at such net income plus
    (c) Federal, state and local income taxes deducted in arriving at such
    net income plus (d) depreciation, amortization, depletion, and
    other non-cash charges deducted in arriving at such net income as computed
    and calculated in accordance with GAAP.

    
               
    "Eligible Assignee" means (a)
    a commercial bank organized under the laws of the United States, or any
    state thereof, and having total assets in excess of $1,000,000,000 and
    having deposits rated in either of the two highest generic letter rating
    (categories (without regard to subcategories) from either Standard &
    Poor's Corporation "S&P") or Moody's
    Investors Service, Inc. ("Moody's"); (b) a
    commercial bank organized under the laws of any other country which is a
    member of the Organization for Economic Cooperation and Development ("OECD"),
    or a political subdivision of any such country, and having total assets in
    excess of $1,000,000,000, provided that such bank is acting through a branch
    or agency located in the country in which it is organized or another country
    which is also a member of the OECD; and (c) any other entity approved by the
    Agent in its sole discretion.

    
               
    "Environmental Laws" means
    the Comprehensive Environmental Response, Compensation and Liability Act of
    1980, as amended by the Super Fund Amendments and Reauthorization Act of
    1986, 42 U.S.C.A. § 9601, et seq., the Resource Conservation and
    Recovery Act, as amended by the Hazardous Solid Waste Amendment of 1984, 42
    U.S.C.A. § 6901, et seq., the Clean Air Act, 42 U.S.C.A. § 1251, et
    seq., the Toxic Substances Control Act, 15 U.S.C.A. § 2601, et
    seq., and all other Laws of any Governmental Entity relating to air
    pollution, water pollution, noise control and/or the handling, discharge,
    disposal or recovery of on-site or off-site asbestos or "hazardous
    substances" as defined by 42 U.S.C. § 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, including
    reasonable attorneys' fees and disbursements, resulting from the violation
    or alleged violation of any Environmental Law or the imposition of any
    Environmental Lien.

    
               
    "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.

    
               
    "Environmental Permits" shall
    have the meaning provided in Section 11(aa)(x).

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

    
               
    "ERISA Affiliate" has the
    meaning provided in Section 11(k).

    
               
    "ERISA Plan" has the meaning
    provided in Section 11(k).

    
               
    "Eurodollar Business Day"
    means the normal banking hours during any day (other than Saturdays or
    Sundays or legal holidays) that banks are legally open for business in
    Dallas, Texas, and New York City, New York, and on which day dealings in
    United States Dollars are conducted in the London interbank market.

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

    
               
    "Eurodollar Loan" means a
    Loan which bears interest at the LIBOR Rate.

    
    
                 "Eurodollar Reserve Requirement"
    means that percentage which is in effect on any day, as provided by the
    Board of Governors of the Federal Reserve System (or any successor
    governmental body) applied for determining the reserve requirements
    (including, without limitation, basis, supplemental, marginal and emergency
    reserves) under Regulation D (12 C.F.R. Part 24), or any successor or other
    law or regulation relating to reserve requirements applicable to each
    Lender, with respect to Eurocurrency liabilities or Eurocurrency funding.

    
               
    "Event of Default" means an
    event or circumstance described in Section 17.

    
               
    "Facility Usage" means, at
    the time in question, the aggregate amount of outstanding Loans plus the
    amount of existing LC Obligations at such time.

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

    
               
    "Financial Statements" means
    the Borrower's Consolidated balance sheets, income statements, statements of
    cash flow and appropriate footnotes (except for the non-year-end financial
    statements) and schedules, prepared in accordance with GAAP; provided,
    however, that all such financial statements for the Borrower dated as of a
    date prior to the closing of the Acquisition and the Forman Contribution
    shall be pro forma financial statements.

    
               
    "First Closing" means the
    initial closing under this Agreement pursuant to which the Borrower shall
    satisfy the requirements in Section 12, and, if the Borrower
    satisfies such conditions, the Lenders shall make the initial Advance to the
    Borrower in the amount of $30,000,000.

    
               
    "First Closing Date" means
    the date on which the conditions to the initial Advance set forth in Section
    12 have been satisfied, but no later than August 15, 2001.

    
               
    "Fiscal Quarter" means the
    quarterly periods ending March 31, June 30, September 30, and
    December 31.

    
               
    "Forman" means the Borrower's
    parent corporation, Forman Petroleum Corporation, a Louisiana corporation.

    
               
    "Forman Reserve Reports"
    means the Netherland Sewell report dated as of December 31, 2000 with
    respect to Forman's oil and gas reserves.

    
               
    "GAAP" means generally
    accepted accounting principles, consistently applied; provided, however,
    that for purposes of any financial calculations under Section 16(g),
    16(h), and 16(j), the Borrower shall exclude the effect of any non-cash
    effects resulting from (i) any ceiling test or other requirement to write
    down the value of the oil and gas reserves of the Borrower and its
    Subsidiaries or (ii) the application of FASB 133.

    
               
    "General and Administrative Expenses"
    means the Borrower's reasonable general and administration expenses.

    
               
    "Good Title" has the meaning
    provided in Section 11(s).

    
               
    "Governmental Entity" means any
    Tribunal, administrative agency or commission, or other governmental
    authority or instrumentality, foreign, domestic or supranational.

    
               
    "Guarantor" means any Person
    who has guaranteed some or all of the Obligations pursuant to a guaranty
    listed on the Security Schedule or any other Person who has guaranteed some
    or all of the Obligations and who has been accepted by the Agent as a
    Guarantor or any Restricted Subsidiary of the Borrower which now or
    hereafter executes and delivers a guaranty to the Agent pursuant to Section
    15(p).

    
               
    "Hazardous Material" has the
    meaning provided in Section 11(aa)(xiii)(A).

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

    
               
    "Indebtedness" means any and
    all indebtedness for borrowed money and any and all indebtedness (actual or
    contingent) under any guarantee.

    
               
    "Interest Period" means the
    period commencing on the first effective Eurodollar Business Day of an
    Interest Period Election and ending one, two, three, or six months
    thereafter, as designated by the Borrower in its sole discretion at the time
    of making such Interest Period Election, provided that:

        
    
                 (i)   
        if any Interest Period would otherwise end on a
        day which is not a Eurodollar Business Day, then such Interest Period
        shall be extended to the next succeeding Eurodollar Business Day unless
        to do so would extend such Interest Period into a subsequent calendar
        month, in which event such Interest Period shall end on the next
        preceding Eurodollar Business Day, and

        
    
                 (ii)   
        any Interest Period that begins on the last 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, shall end on the last Eurodollar Business Day of the last
        calendar month of such Interest Period.

    Notwithstanding anything to the contrary contained
    herein, no Interest Period with respect to a Eurodollar Loan may end on a
    day which is after the Revolving Loan Maturity Date.

    
               
    "Interest Period Election"
    means an election by the Borrower, made in accordance with this Agreement,
    to have the Interest Period be for a period of one, two, three or six
    months.

    
               
    "Investment" means, with
    respect to any Person, any capital contribution to (by means of any transfer
    of cash or other property to others or any payment for property or services
    for the account or use of others), or any purchase or acquisition by such
    Person of any capital stock, bonds, notes, debentures or other securities or
    evidences of Debt issued by, any other Person, other than a loan to such
    Person even if such loan is evidenced by a Note.

    
               
    "Jefferies" means Jefferies
    & Company, Inc.

    
               
    "Law" means any law, statute,
    code, ordinance, order, judgment, decree, injunction, rule, regulation, or
    restriction of any Governmental Entity.

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

    
               
    "LC Collateral" has the
    meaning given to such term in Section 7(f).

    
               
    "LC Issuer" has the meaning
    given to such term in Section 7(a).

    
               
    "LC Obligations" means, at
    the time in question, the sum of all Matured LC Obligations plus the Maximum
    Drawing Amount.

    
               
    "Letter of Credit" means any
    documentary letter of credit issued by LC Issuer pursuant to this Agreement.

    
                "LIBOR Margin" means, on each day:

    
    
                 (a)   
    one and three quarters of one percent (1.75%) per
    annum when the Facility Usage on such day is less than or equal to 24% of
    the Borrowing Base on such day,

    
    
                 (b)   
    two percent (2.0%) per annum when the Facility Usage
    on such day is greater than 24% and less than or equal to 49% of the
    Borrowing Base on such day,

    
    
                 (c)   
    two and one quarter of one percent (2.25%) per annum
    when the Facility Usage on such day is greater than 49% and less than or
    equal to 74% of the Borrowing Base on such day, and

    
    
                 (d)   
    two and one half of one percent (2.5%) per annum when
    the Facility Usage on such day is greater than 74% of the Borrowing Base on
    such day.

    Provided that the LIBOR Margin for the first six months
    following the First Closing Date shall be two and one-half percent (2.5%).

    
               
    "LIBOR Offered Rate" means,
    with respect to each Interest Period and each Eurodollar Loan hereunder, the
    rate per annum (determined and fixed for the duration of such Interest
    Period) determined by the Agent to be the per annum rate at which dollar
    deposits (in amounts comparable to the principal amount of each Eurodollar
    Loan which will be subject to the LIBOR Rate and for a period of time equal
    or comparable to such Interest Period) in immediately available funds are
    offered (at approximately 11:00 a.m., New York City, New York time)
    three Eurodollar Business Days prior to the first day of such Interest
    Period to the Agent in the London Interbank Eurodollar market for delivery
    on the first day of such Interest Period.

    
               
    "LIBOR Rate" means the
    Adjusted LIBOR Rate plus the LIBOR Margin.

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

    
               
    "Loan" has the meaning given
    such term in Section 2.

    
               
    "Loan Documents" means this
    Agreement, the Notes, the Security Documents, LC Applications, and any and
    all other documents executed in connection with this Agreement and the
    transactions contemplated hereby.

    
               
    "Loan Value" means the
    percentage of the Borrowing Base attributable to a particular Oil and Gas
    Real Property considered in determining the Borrowing Base as determined by
    the Agent in its good faith discretion pursuant to parameters and valuation
    models applied by the Agent to its other similarly situated customers.

    
               
    "Mandatory Redeemable Preferred Stock"
    means Borrower's Class A 8% preferred stock in an amount not to exceed
    $21,100,000 which Borrower is required under such preferred stock's
    certificate of designation to redeem on or before the fifth anniversary of
    its issuance.

    
               
    "Material Adverse Effect"
    means any circumstances or events which might reasonably be expected to (i)
    have a material adverse effect on the assets or properties, liabilities,
    financial condition, business, operations, affairs or circumstances of the
    Borrower from those reflected in the Financial Statements of Pontotoc and
    Forman, each dated as of March 31, 2001, or from the facts represented
    or warranted in this Agreement or any other Loan Document (other than any
    representation or warranty related solely to a different point in time), or
    (ii) materially impair the ability of any Restricted Person to carry out its
    business as it exists on the date hereof or as proposed on the First Closing
    Date to be conducted or to meet its obligations under the Notes, this
    Agreement or the other Security Documents or Loan Documents on a timely
    basis.

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

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

    
               
    "Maximum Rate" means, at any
    particular time in question, the maximum rate of interest which under
    applicable law may then be charged on the Notes. If such maximum rate
    changes after the date hereof, the Maximum Rate shall be automatically
    increased or decreased, as the case may be, without notice to the Borrower
    from time to time as the effective date of each change in such Maximum Rate.

    
               
    "Non-Recourse Indebtedness"
    means Indebtedness of an Unrestricted Subsidiary of the Borrower owing to
    any Person other than the Borrower or its Restricted Subsidiaries where (a)
    neither the Borrower nor any of its Restricted Subsidiaries: (i) provides
    any guaranty or credit support for such Indebtedness; or (ii) is directly or
    indirectly liable for such Indebtedness and (b) no default with respect to
    such Indebtedness (including any rights which the holder thereof may have to
    take enforcement action against such Unrestricted Subsidiary) would permit
    (upon notice, lapse of time or both) any holder of any Indebtedness of the
    Borrower or any its Restricted Subsidiaries to declare a default on such
    Indebtedness or cause the payment thereof to be accelerated or payable prior
    to its stated maturity.

    
               
    "Notes" has the meaning given
    such term in Section 2(a).

    
               
    "Notice of Advance" means a
    written or telephonic request, or a written confirmation, made by the
    Borrower which meets the requirements of Section 2.

    
               
    "Obligations" means all Debt
    from time to time owing by any Restricted Person to any Lender under or
    pursuant to any of the Loan Documents. "Obligation"
    means any part of the Obligations.

    
               
    "Oil and Gas Properties" means,
    collectively, Oil and Gas Personal Properties and Oil and Gas Real
    Properties.

    
               
    "Oil and Gas Personal Properties"
    means any and all interests in fixtures, equipment and machinery (including
    well equipment and machinery and workover, completion and drilling rigs),
    oil and gas production, gathering, compression, treating, processing,
    transmission or storage facilities (including tanks, tank batteries,
    pipelines and gathering systems), pumps, water plants, electric plants,
    gasoline and gas processing plants, refineries, and other tangible personal
    property and fixtures associated with, appurtenant to or necessary for the
    operation of the Oil and Gas Real Properties.

    
               
    "Oil and Gas Real Properties"
    means any and all types of: (i) direct and indirect, current or
    reversionary, interests in and rights in respect of oil, gas and other
    minerals and hydrocarbons, including mineral leases, fee interests, surface
    interests, mineral rights or mineral servitudes, working interests,
    royalties, overriding royalties, production payments, net profits interests,
    and other non-working interests and non-operating interests and (ii)
    easements, rights of way, servitudes, and other similar interests
    appurtenant to any of the foregoing.

    
               
    "OBEC" means Pontotoc's
    wholly-owned Restricted Subsidiary, Oklahoma Basic Economy Corporation, an
    Oklahoma corporation.

    
               
    "Percentage Share" means,
    with respect to any Lender (a) when used in Section 2(a) in
    any Notice of Advance or when no Loans are outstanding hereunder, the
    percentage set forth opposite such Lender's name on its signature page
    hereto, and (b) when used otherwise, the percentage obtained by
    dividing (i) the sum of the unpaid principal balance of such Lender's
    Loans at the time in question, by (ii) the sum of the aggregate unpaid
    principal balance of all Loans at such time.

    
               
    "Permitted Hedging Debt" means
    any obligations incurred by the Borrower or one of its Restricted
    Subsidiaries pursuant to Hedging Contracts the Borrower or such Restricted
    Subsidiary enters into as required by Section 15(r) and any
    additional Hedging Contracts permitted by Section 16(n).

    
               
    "Permitted Investments" means
    Investments:

    
    
                 (a)   
    in open market commercial paper, maturing within 270
    days after acquisition thereof, which is rated at least A-1 by S & P or
    P-1 by Moody's;

    
    
                 (b)   
    in marketable obligations, maturing within 12 months
    after acquisition thereof, issued or unconditionally guaranteed by the
    United States of America or an instrumentality or agency thereof and
    entitled to the full faith and credit of the United States of America; and

    
    
                 (c)   
    in demand deposits, and time deposits (including
    certificates of deposit) maturing within 12 months from the date of deposit
    thereof, with any office of any national or state bank or trust company
    which is organized under the Laws of the United States of America or any
    state therein, which has capital, surplus and undivided profits of at least
    $500,000,000, and whose certificates of deposit are rated at least Aa3 by
    S&P or AA -- by Moody's.

    
                "Permitted Liens" means:

    
    
                 (a)   
    statutory Liens for taxes, assessments or other
    governmental charges or levies which are not yet delinquent or which are
    being contested in good faith by appropriate action;

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

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

    
    
                 (d)   
    deposits of cash or securities to secure the
    performance of bids, trade contracts, leases, statutory obligations and
    other obligations of a like nature (excluding appeal bonds) incurred in the
    ordinary course of business including any cash deposits provided to secure
    reimbursement obligations with respect to letters of credit issued by Prior
    Bank;

    
    
                 (e)   
    Liens under the Security Documents;

    
    
                 (f)   
    any servitudes, easements, rights of way, and similar
    rights affecting any Oil and Gas Real Properties which are normal and
    customary and do not render title to such Oil and Gas Real Property
    unmarketable;

    
    
                 (g)   
    Other Liens with respect to the Oil and Gas Real
    Properties that are exceptions to the title opinions issued in connection
    with existing mortgages, as expressly accepted by the Agent;

    
    
                 (h)   
    farm-out, carried working interest, joint operating,
    unitization, royalty, overriding royalty, sales and similar agreements
    relating to the exploration or development of, or production from, Oil and
    Gas Real Properties or the sale of the hydrocarbons after they are produced
    which are existing at the time of acquisition of such Oil and Gas Real
    Properties, are usual and customary for the industry;

  
    
                (i)   
  with respect only to Oil and Gas Properties subject to any
          particular Security Document, Liens burdening such Oil and Gas
          Properties which are expressly allowed by such Security Document;

  
    
                (j)   
  Liens securing the obligations of the Borrower and other Restricted
          Persons pursuant to any Hedging Contracts required by Section 15(r)
          or permitted by Section 16(n); and

    
                 (k) Liens contemplated by Section 16 (c)(vii)

  

    
    
                "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.

    
    
                "Pontotoc" means Pontotoc
    Production, Inc., a Nevada corporation.

    
    
                "Pontotoc Gathering" means
    Pontotoc Gathering LLC, a limited liability company organized under the laws
    of Oklahoma, which is a wholly-owned subsidiary of Pontotoc Holdings.

    
    
                "Pontotoc Holdings" means
    Pontotoc Holdings, Inc., an Oklahoma corporation, which is a wholly-owned
    subsidiary of Pontotoc.

    
    
                "Pontotoc Acquisition" means
    the Borrower's wholly-owned Restricted Subsidiary, Pontotoc Acquisition
    Corp., a Nevada corporation.

    
    
                "Pontotoc Reserve Reports"
    means the reserve report dated April 1, 2000 prepared by Fletcher Lewis
    Engineering Inc. relating to the Oil and Gas Properties owned by Pontotoc,
    the roll-forward reserve report dated October 27, 2000 prepared by
    Fletcher Lewis Engineering Inc., and the reserve report dated March 1, 2001
    prepared by Netherland, Sewell & Associates.

    
    
                "Pontotoc Texas" means
    Pontotoc's wholly-owned Restricted Subsidiary, Pontotoc Production Company,
    Inc., a Texas corporation.

    
    
                "Potential Event of Default"
    means an event or circumstance described in Section 17 which has not
    yet become an Event of Default but which would become an Event of Default
    with the passing of any period of time and/or the giving of notice or both.

    
    
                "Preferred Stock" means Class B
    Preferred Stock and Mandatory Redeemable Preferred Stock.

    
                "Prime Rate" means the per
    annum rate of interest announced from time to time by The Chase Manhattan
    Bank as its prime rate, which rate may not be the lowest rate of interest
    charged by such bank to its customers.

    
    
                "Prior Bank"  means Local
    Oklahoma Bank, N.A.

    
    
                "Reimbursable Taxes" has the
    meaning given such term in Section 6(d)(i).

    
    
                "Release" has the meaning
    provided in Section 11(aa)(xiii)(B).

    
    
                "Required Lenders" means (i)
    when there are two or fewer Lenders, the Agent and the Lenders whose
    aggregate Percentage Share equal one hundred percent (100%) and (ii) when
    there are three or more Lenders, the Agent and those Lenders whose aggregate
    Percentage Shares equal more than sixty-six and two-thirds percent
    (66-2/3%); provided, however, that, if there are ever more
    than four Lenders, the Agent and the Lenders will consider in good faith any
    request from the Borrower to reduce the required aggregate of Percentage
    Shares to fifty percent (50%). The Agent's Percentage Share as a Lender
    shall be included in any calculation of the Required Lenders' consent.

    
    
                "Reserve Reports" means the
    Forman Reserve Reports and the Pontotoc Reserve Reports.

    
    
                "Restricted Person" means any
    of the Borrower, each of its Restricted Subsidiaries, and Forman.

    
    
                "Restricted Subsidiary" 
    means any Subsidiary of the Borrower other than its Unrestricted
    Subsidiaries. As of the First Closing Date, it is anticipated that the
    Borrower's Restricted Subsidiaries will be: Pontotoc, Pontotoc Acquisition,
    Pontotoc Texas, OBEC, Pontotoc Holdings and Pontotoc Gathering.

    
    
                "Revolving Commitment" means
    the maximum aggregate amount which the Lenders will make available to the
    Borrower in the form of Advances under the Revolving Loan or Letters of
    Credit, subject to the limitations and restrictions contained herein. Unless
    reduced pursuant to Section 3, the Revolving Commitment shall be
    $40,000,000.

    
    
                "Revolving Loan" means all
    Advances made under the Revolving Commitment pursuant to Section 2(c)
    hereof.

    
    
                "Revolving Loan Maturity Date"
    means the third anniversary of the First Closing Date.

    
    
                "Revolving Period" means the
    period during which the Revolving Commitment is in effect, which is from the
    First Closing Date until the earlier of the Revolving Loan Maturity Date or
    a date on which this Agreement is earlier terminated.

    
    
                "Second Closing" means the
    second closing under this Agreement at or prior to which the Borrower and
    all other Restricted Persons will satisfy all conditions in Section 13
    which shall occur no later than the Second Closing Date.

    
    
                "Second Closing Date" means the
    date on which the conditions set forth in Section 13 have been
    satisfied, but no later than 60 days after the First Closing Date.

    
    
                "Security Documents" means
    this Agreement, all deeds of trust, mortgages, security agreements, pledges,
    assignments of production and financing statements, and other collateral
    documents covering certain of the Borrower's and its Restricted
    Subsidiaries' Oil and Gas Properties, and real and personal property,
    equipment, oil and gas inventory and proceeds of the foregoing, all such
    documents to be in form and substance reasonably satisfactory to the Agent
    and the Lenders.

    
    
                "Security Schedule" means Schedule
    3 hereto.

    
    
                "Stock Collateral" means the
    Collateral described in Section 8(a)(i) and 8(h).

    
    
                "Subordinated Indebtedness" has
    the meaning provided in Section 16(c)(iii).

    
    
                "Subsidiary" means, with
    respect to any Person, any corporation, association, partnership, limited
    liability company, joint venture, or other business or corporate entity,
    enterprise or organization which is directly or indirectly (through one or
    more intermediaries) controlled by or owned fifty percent (50%) or more by
    such Person.

    
    
                "TCW" means Trust Company of the
    West and TCW Asset Management Company.

    
    
                "Termination Event" has the
    meaning provided in Section 11(k).

    
    
                "Title Documents" means, in each
    instance, title opinions and other documents establishing the title and Lien
    status of any Oil and Gas Real Property.

    
    
                "Tribunal" means any court,
    arbitrator, arbitration panel, administrative board, or other similar Person
    with jurisdiction over the Borrower, any other Restricted Person, the Agent,
    any of the Lenders, or any matter relating to this Agreement for the
    business and operations of the foregoing parties.

    
    
                "Type" means, with respect to
    any Loans, the characterization of such Loans as either Base Rate Loans or
    LIBOR Loans.

    
    
                "Unrestricted Subsidiary"
    means a Subsidiary of the Borrower which (i) except for Investments by
    and loans and advances from a Restricted Person to the extent permitted by
    this Agreement, is funded solely by the proceeds of a new equity issuance
    and/or Non-Recourse Indebtedness, and (ii) does not, directly or indirectly,
    own stock or securities of, and has no Investment in, the Borrower or any of
    its Restricted Subsidiaries. As of the date hereof, the Borrower has no
    Unrestricted Subsidiaries, and Borrower will not create or acquire an
    Unrestricted Subsidiary without 20 days prior notice to Agent.

    
    
                "Unscheduled Redetermination"
    means a redetermination of the Borrowing Base made at any time other than on
    the dates set forth in Section 9(b) for the regular semi-annual
    redetermination of the Borrowing Base which is made (A) at the reasonable
    request of the Borrower, or (B) at any time it appears to the Agent and the
    Required Lenders, that either (i) there has been a material decrease in the
    value of the Oil and Gas Properties, or (ii) an event has occurred which is
    reasonably expected to have a Material Adverse Effect.

    
                 Whenever this Agreement refers to the "knowledge of the
Borrower" or the "Borrower's knowledge," such knowledge shall be
determined by the actual knowledge of the Borrower's principal officers.

    
                 Further, whenever this Agreement requires the financial
calculation for purposes of Section 16 or any of the financial
definitions in this Section 1, such calculations shall be made pursuant
to the modified definition of GAAP under this Section 1.

                2.   
Commitment of the Lenders.

  
  
    
                 (a)   
  Commitments to Lend; Notes. Subject to the terms
  and conditions hereof, each Lender agrees to make loans to the Borrower
  (herein called such Lender's "Loans") upon the
  Borrower's request from time to time during the term hereof, provided that (i) all
  Lenders are requested to make Loans of the same Type in accordance with their
  respective Percentage Shares and as part of the same Advance, and (ii) after
  giving effect to such Loans, the Facility Usage does not exceed the Borrowing
  Base most recently determined prior to the date on which the requested Loans
  are to be made. The aggregate amount of all Loans in any Advance must be
  greater than or equal to $1,000,000 or must equal the remaining
  availability under the Borrowing Base. The Borrower may have no more than
  three Advances of Eurodollar Loans outstanding at any time. The obligation of
  the Borrower to repay to each Lender the aggregate amount of all Loans made by
  such Lender, together with interest accruing in connection therewith, shall be
  evidenced by a single promissory note (herein called such Lender's "Note")
  made by the Borrower payable to the order of such Lender in the form of Exhibit
  A with appropriate insertions. The amount of principal owing on any
  Lender's Note at any given time shall be the aggregate amount of all Loans
  theretofore made by such Lender minus all payments of principal theretofore
  received by such Lender on such Note. Interest on each Note shall accrue and
  be due and payable as provided herein and therein. Each Note shall be due and
  payable as provided herein and therein, and shall be due and payable in full
  on the Revolving Loan Maturity Date. Subject to the terms and conditions
  hereof, the Borrower may borrow, repay, and reborrow hereunder.

  
    
                 (b)   
  Requests for New Loans. The Borrower must give
  the Agent written notice (or telephonic notice promptly confirmed in writing)
  of any requested Advance of new Loans to be advanced by the Lenders. Each such
  notice constitutes a "Notice of Advance"
  hereunder and must:

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

      
    
                 (ii)   
      be received by the Agent not later than 10:00
      a.m., Dallas, Texas time, on (x) the day on which any such Base Rate Loans
      are to be made, or (y) the third Business Day preceding the day on
      which any such Eurodollar Loans are to be made.

  Each such written request or confirmation must be made in
  the form and substance of the "Notice of Advance"
  attached hereto as Exhibit B, duly completed. Each such telephonic
  request shall be deemed a representation, warranty, acknowledgment and
  agreement by the Borrower as to the matters which are required to be set out
  in such written confirmation. Upon receipt of any such Notice of Advance, the
  Agent shall give each Lender prompt notice of the terms thereof. If all
  conditions precedent to such new Loans have been met, each Lender will on the
  date requested promptly remit to the Agent at the Agent's office in Dallas,
  Texas the amount of such Lender's new Loan in immediately available funds, and
  upon receipt of such funds, unless to its actual knowledge any conditions
  precedent to such Loans have been neither met nor waived as provided herein,
  the Agent shall promptly make such Loans available to the Borrower. Unless the
  Agent shall have received prompt notice from a Lender that such Lender will
  not make available to the Agent such Lender's new Loan, the Agent may in its
  discretion assume that such Lender has made such Loan available to the Agent
  in accordance with this section and the Agent may if it chooses, in reliance
  upon such assumption, make such Loan available to the Borrower. If and to the
  extent such Lender shall not so make its new Loan available to the Agent, such
  Lender and the Borrower severally agree to pay or repay to the Agent within
  three days after demand the amount of such Loan together with interest thereon
  for each day from the date such amount was made available to the Borrower
  until the date such amount is paid or repaid to the Agent at (i) the
  Federal Funds Rate, if such Lender is making such payment and (ii) the
  interest rate applicable at the time to the other new Loans made on such date,
  if the Borrower is making such repayment. If neither such Lender nor the
  Borrower pays or repays to the Agent such amount within such three-day period,
  the Agent shall in addition to such amount be entitled to recover from such
  Lender and from the Borrower, on demand, interest thereon at the rate set out
  pursuant to Section 5(c), calculated from the date such amount was made
  available to the Borrower. The failure of any Lender to make any new Loan to
  be made by it hereunder shall not relieve any other Lender of its obligation
  hereunder, if any, to make its new Loan, but no Lender shall be responsible
  for the failure of any other Lender to make any new Loan to be made by such
  other Lender.

  
    
                 (c)   
  Continuations and Conversions of Existing Loans.
  The Borrower may make the following elections with respect to Loans already
  outstanding: to convert Base Rate Loans to Eurodollar Loans, to convert
  Eurodollar Loans to Base Rate Loans on the last day of the Interest Period
  applicable thereto, and to continue Eurodollar Loans beyond the expiration of
  such Interest Period by designating a new Interest Period to take effect at
  the time of such expiration. In making such elections, the Borrower may
  combine existing Loans of different Types or Interest Periods into one new
  Type or Interest Period or divide existing Loans of a single Type or Interest
  Period into separate new Types or Interest Periods, provided that the Borrower
  may have no more than three Interest Period tranches of Eurodollar Loans
  outstanding at any time. To make any such election, the Borrower must give to
  the Agent written notice (or telephonic notice promptly confirmed in writing)
  of any such Conversion or Continuation of existing Loans, with a separate
  notice given for each new Advance. Each such notice constitutes a "Continuation/Conversion
  Notice" hereunder and must:

      
    
                 (i)   
      specify the existing Loans which are to be
      continued or converted;

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

      
    
                 (iii)   
      be received by the Agent not later than 10:00
      a.m., Dallas, Texas time, on (x) the day on which any such Continuation or
      Conversion to Base Rate Loans is to occur, or (y) the third Business Day
      preceding the day on which any such Continuation or Conversion to
      Eurodollar Loans is to occur.

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

  
    
                 (d)   
  Use of Proceeds. The proceeds of the Loans will
  be used by the Borrower (i) to provide a portion of the funds to acquire any
  and all Pontotoc stock (whether by exchange offer, voluntary purchase, or in
  payment of Persons exercising dissenters' rights in connection with any merger
  of Pontotoc and Pontotoc Acquisition) (provided, however, that,
  in aggregate, no more than $5,000,000 of the Loans' proceeds may be used to
  pay Dissenters' Rights Costs), (ii) to finance the future acquisition and
  development of Oil and Gas Properties by the Borrower or its Restricted
  Subsidiaries, (iii) to refinance the existing debt of Pontotoc to the Prior
  Bank, (iv) subject to Sections 16(d) and 16(o), Investments in or loans
  or advances to the Borrower's Unrestricted Subsidiaries, and (v) for general
  corporate purposes of the Borrower and its Restricted Subsidiaries.

                3.   
Optional Termination or Reduction. The Borrower
may, upon at least three (3) Business Days' notice to the Agent (i) terminate
the Revolving Commitment at any time if the Revolving Loan is not outstanding at
such time, or (ii) reduce from time to time by an aggregate amount of One
Hundred Thousand Dollars ($100,000), or in multiples of One Hundred Thousand
Dollars ($100,000), the aggregate amount of all or a portion of the Revolving
Commitment in excess of the aggregate outstanding principal amount of the
Revolving Loan. Any such reduction shall not affect the Percentage Shares of the
Lenders under the remaining portion of the Revolving Commitment.

                4.   
Payments of Principal.

    
    
                 (a)   
    Payment at Maturity. Except as otherwise
    provided in this Agreement, the outstanding principal amount of the Note(s)
    and all Matured LC Obligations shall be due and payable on the Revolving
    Loan Maturity Date.

  
    
                 (b)   
  Mandatory Prepayments.

    
    
                             (i)   
    If at any time the Facility Usage exceeds the
    Revolving Commitment (whether due to a reduction in the Revolving Commitment
    in accordance with this Agreement, or otherwise), the Borrower shall
    immediately upon demand prepay the principal of the Loans in an amount at
    least equal to such excess.

    
    
                             (ii)   
    If at any time the Facility Usage is less than the
    Revolving Commitment but in excess of the Borrowing Base (such excess being
    herein called a "Borrowing Base Deficiency"),
    the Borrower shall, within five Business Days after the Agent gives notice
    of such fact to the Borrower, either:

  
        
    
                             (x)   
        prepay the principal of the Loans in an aggregate
        amount at least equal to such Borrowing Base Deficiency; or

        
    
                             (y)   
        give notice to the Agent electing to prepay the
        principal of the Loans within ninety calendar days of the date of such
        notice in an aggregate amount at least equal to such Borrowing Base
        Deficiency, or

        
    
                             (z)   
        give notice to the Agent that the Borrower
        desires to provide the Agent with deeds of trust, mortgages, chattel
        mortgages, security agreements, financing statements and other Security
        Documents in form and substance satisfactory to the Agent, granting,
        confirming, and perfecting first and prior liens or security interests
        in collateral acceptable to the Agent, to the extent needed to allow the
        Agent to increase the Borrowing Base (as the Agent in its reasonable
        discretion deem consistent with prudent oil and gas banking industry
        lending standards at the time) to an amount which eliminates such
        Borrowing Base Deficiency, and then provide such Security Documents
        within thirty days after the Agent specifies such collateral to the
        Borrower. If, prior to any such specification by the Agent, the Agent
        determine that the giving of such Security Documents will not serve to
        eliminate such Borrowing Base Deficiency, then, the Borrower will elect
        to make, within five Business Days after receiving notice of such
        determination, and thereafter make, the prepayments specified in either
        of the preceding subsections (x) or (y) of this subsection (ii).

    

    
    
                             (iii)   
    Each prepayment of principal under this section
    shall be accompanied by all interest then accrued and unpaid on the
    principal so prepaid together with any additional amounts required pursuant
    to Section 6(c) herein. Any principal or interest prepaid pursuant to
    this Section shall be in addition to, and not in lieu of, all payments
    otherwise required to be paid under the Loan Documents at the time of such
    prepayment and shall be applied in the manner described in Section 6(a)
    herein.

    

    
  
                5.   
  Interest.

  
    
    
    
                 (a)   
    Base Rate Loans. Each Base Rate Loan shall
    bear interest at the rate per annum equal to the lesser of (i) the Base Rate
    or (ii) the Maximum Rate, subject to the terms and conditions of this
    Agreement. Such interest shall be payable in arrears on the last day of each
    Fiscal Quarter commencing September 30, 2001.

    
    
                 (b)   
    Eurodollar Loans. Each Eurodollar Loan shall
    bear interest at the rate per annum equal to the lesser of (i) the
    applicable LIBOR Rate or (ii) the Maximum Rate, subject to the terms and
    provisions of this Agreement. Such interest shall be payable in arrears on
    the last day of each Fiscal Quarter commencing September 30, 2001.

    
    
                 (c)   
    Default Rate. If all or a part of the
    principal amount of any Loan is not paid when due or upon the occurrence and
    during the continuance of an Event of Default, the unpaid principal balance
    of such Loan shall bear interest until paid at an annual rate equal to the
    lesser of (i) the rate that would otherwise be applicable thereto pursuant
    to this Section 5 plus three percent (3%), or (ii) the Maximum Rate.

    
    
                 (d)   
    Calculation of Interest. Interest shall be
    calculated on the basis of actual days elapsed (including the first day but
    excluding the last day) in the year consisting of three hundred sixty (360)
    days.

    
    
                 (e)   
    Recapture Rate. Notwithstanding the foregoing,
    if at any time the rate specified in Section 5(a)(i) or Section
    5(b)(i) exceeds the Maximum Rate, and, therefore, the rate of interest
    on the Note(s) is limited to the Maximum Rate, then any subsequent
    reductions in the Base Rate or the LIBOR Rate, as applicable, shall not
    reduce the rate of interest on the Note(s) below the Maximum Rate until the
    total amount of interest accrued on the Note(s) equals the amount of
    interest which would have accrued thereon if the rate specified in Section
    5(a)(i) or Section 5(b)(i) had at all times been in effect.

                6.   
Payments.

  
  
    
                 (a)   
  Payments to the Lenders. Payment of interest,
  principal and fees to the Lenders shall be directed by wire transfer to the
  Agent at Chase Manhattan Bank, ABA #021000021, Account #001-1-624418,
  Reference: Ascent Energy, Inc., no later than 12:00 noon, New York City, New
  York, time on the day such payments or prepayments are due. If any payment of
  principal or interest on the Note(s) or any payment of fees shall become due
  on a day other than a Business Day, such payment shall be made on the next
  succeeding Business Day, and such extension of time in such case shall be
  included in computing interest in connection with such payment. Any payment or
  prepayment received by the Agent at any time after 12:00 noon New York City,
  New York, 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 the Agent. When the
  Agent collects or receives money on account of the Obligations, the Agent
  shall distribute all money so collected or received, and each Lender shall
  apply all such money so distributed, as follows:

  
      
    
                 (i)   
      first, for the payment of all Obligations which are
      then due (and if such money is insufficient to pay all such Obligations,
      first to any reimbursements due the Agent under Section 6(c) or Section
      19(c) and then to the partial payment of all other Obligations then
      due in proportion to the amounts thereof, or as the Agent shall otherwise
      designate);

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

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

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

  All payments applied to principal or interest on any Note
  shall be applied first to any interest then due and payable, then to principal
  then due and payable, and last to any prepayment of principal and interest in
  compliance with Section 4(b). All distributions of amounts described in
  any of subsections (ii), (iii) or (iv) above shall be made by the Agent pro
  rata to each Lender then owed Obligations described in such subsection in
  proportion to all amounts owed to all the Lenders which are described in such
  subsection; provided that if any Lender then owes payments to the Agent under Section
  18, any amounts otherwise distributable under this section to such Lender
  shall be deemed to belong to the Agent, to the extent of such unpaid payments,
  and the Agent shall apply such amounts to make such unpaid payments rather
  than distribute such amounts to such Lender.

  
    
                 (b)   
  Increased Cost and Reduced Return.

  
      
    
                 (i)   
      If at any time after the date hereof, and from time
      to time, 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 authority,
      central bank or comparable agency shall impose, modify or deem applicable
      any reserve, special deposit, insurance assessment or similar requirement
      (including, without limitation, any such requirement imposed by the Board
      of Governors of the Federal Reserve System but excluding any such
      requirement included in an applicable Eurodollar Reserve Requirement)
      against assets of, deposits with or for the account of, or credit extended
      by, any Lender or shall impose on any Lender or the London interbank
      market any other condition which would have the effect of (aa) increasing
      any Lender's costs relating to the obligations evidenced by the Loan
      Documents, or (bb) reducing the yield or rate of return of such Lender on
      the obligations incurred under the Loan Documents to a level below that
      which such Lender could have achieved but for the adoption or modification
      of any such requirements by an amount deemed by such Lender to be material
      in its sole but reasonable discretion, then, within fifteen (15) days
      after demand by such Lender, the Borrower shall pay to such Lender such
      additional amount or amounts as will compensate such Lender for such
      increased cost or reduction; provided that the Lender shall not be
      entitled to compensation under this section for any such increased cost or
      reduction that is the result of the withholding or payment of any taxes.

      
    
                 (ii)   
      If any Lender shall have determined, in its sole
      but reasonable discretion, that, on or after the date hereof, the adoption
      of any applicable law, rule or regulation regarding capital adequacy, or
      any change in any such 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 any request or directive regarding capital
      adequacy (whether or not having the force of law) of any such authority,
      central bank or comparable agency, has or would have the effect of
      reducing the rate of return on capital of such Lender (or its parent) as a
      consequence of such Lender's obligations hereunder to a level below that
      which such Lender (or its parent) could have achieved but for such
      adoption, change, request or directive (taking into consideration its
      policies with respect to capital adequacy) by an amount deemed by such
      Lender to be material in its sole but reasonable discretion, then from
      time to time, within fifteen (15) days after demand by such Lender, the
      Borrower shall pay to such Lender such additional amount or amounts as
      will compensate such Lender (or its parent) for such reduction.

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

  
    
                 (c)   
  Funding Losses. In addition to its other
  obligations hereunder, the Borrower will indemnify each Lender against, and
  reimburse each Lender on demand for, any loss or expense incurred or sustained
  by such Lender (including any loss or expense incurred by reason of the
  liquidation or reemployment of deposits or other funds acquired by a Lender to
  fund or maintain Eurodollar Loans), as a result of (i) any payment or
  prepayment (whether authorized or required hereunder or otherwise) of all or a
  portion of a Eurodollar Loan on a day other than the day on which the
  applicable Interest Period ends, (ii) any payment or prepayment, whether
  required hereunder or otherwise, of a Loan made after the delivery, but before
  the effective date, of a Continuation/Conversion Notice, if such payment or
  prepayment prevents such Continuation/Conversion Notice from becoming fully
  effective, (iii) the failure of any Loan to be made or of any
  Continuation/Conversion Notice to become effective due to any condition
  precedent not being satisfied or due to any other action or inaction of any
  Restricted Person or due to the Borrower's failure to borrow on the day
  specified in a Notice of Advance, or (iv) any Conversion (whether
  authorized or required hereunder or otherwise) of all or any portion of any
  Eurodollar Loan into a Base Rate Loan or into a different Eurodollar Loan on a
  day other than the day on which the applicable Interest Period ends. Such
  indemnification shall be on an after-tax basis, taking into account any taxes
  imposed on the amounts paid as indemnity.

  
    
                 (d)   
  Reimbursable Taxes.

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

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

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

      
    
                 (iv)   
      Notwithstanding the foregoing provisions of this
      section, the Borrower shall be entitled, to the extent it is required to
      do so by Law, to deduct or withhold (and not to make any indemnification
      or reimbursement for) income or other similar taxes imposed by the United
      States of America (other than any portion thereof attributable to a change
      in federal income tax Laws effected after the date hereof) from interest,
      fees or other amounts payable hereunder for the account of any Lender,
      other than a Lender (i) who is a U.S. person for Federal income tax
      purposes or (ii) who has the Prescribed Forms on file with Agent (with
      copies provided to the Borrower) for the applicable year to the extent
      deduction or withholding of such taxes is not required as a result of the
      filing of such Prescribed Forms, provided that if Borrower shall so deduct
      or withhold any such taxes, it shall provide a statement to Agent and such
      Lender, setting forth the amount of such taxes so deducted or withheld,
      the applicable rate and any other information or documentation which such
      Lender may reasonably request for assisting such Lender to obtain any
      allowable credits or deductions for the taxes so deducted or withheld in
      the jurisdiction or jurisdictions in which such Lender is subject to tax.
      As used in this section, "Prescribed Forms" means such
      duly executed forms or statements, and in such number of copies, which
      may, from time to time, be prescribed by Law and which, pursuant to
      applicable provisions of (x) an income tax treaty between the United
      States and the country of residence of the Lender providing the forms or
      statements, or (y) the Internal Revenue Code, permit the Borrower to make
      payments hereunder for the account of such Lender free of such deduction
      or withholding of income or similar taxes.

  
    
                 (e)   
  Change of Applicable Lending Office. Each Lender
  agrees that, upon the occurrence of any event giving rise to the operation of Sections
  6(b) through (d) with respect to such Lender, it will, if requested
  by the Borrower, use reasonable efforts (subject to overall policy
  considerations of such Lender) to designate another Applicable Lending Office,
  provided that such designation is made on such terms that such Lender and its
  Applicable Lending Office suffer no economic, legal or regulatory
  disadvantage, with the object of avoiding the consequence of the event giving
  rise to the operation of any such section. Nothing in this section shall
  affect or postpone any of the obligations of the Borrower or the rights of any
  Lender provided in Sections 6(b) through (d).

  
    
                 (f)   
  Replacement of the Lenders. If any Lender seeks
  reimbursement for increased costs under Sections 6(b) through 6(d),
  then within ninety days thereafter --provided no Event of Default then exists
  -- the Borrower shall have the right (unless such Lender withdraws its request
  for additional compensation) to replace such Lender by requiring such Lender
  to assign its Loans and Notes and its commitments hereunder to an Eligible
  Assignee reasonably acceptable to the Agent and to the Borrower, provided
  that: (i) all Obligations of the Borrower owing to such Lender being
  replaced (including such increased costs, but excluding principal and accrued
  interest on the Notes being assigned) shall be paid in full to such Lender
  concurrently with such assignment, and (ii) the replacement Eligible
  Assignee shall purchase the Note being assigned by paying to such Lender a
  price equal to the principal amount thereof plus accrued and unpaid interest
  thereon. In connection with any such assignment the Borrower, the Agent, such
  Lender and the replacement Eligible Assignee shall otherwise comply with Section 19(f)(iii).
  Notwithstanding the foregoing rights of the Borrower under this section,
  however, the Borrower may not replace any Lender which seeks reimbursement for
  increased costs under Section 6(b) through (d) unless the
  Borrower is at the same time replacing all the Lenders which are then seeking
  compensation for the same costs.

                7.   
Letters of Credit.

  
  
    
                 (a)   
  LC Commitment. Subject to the terms and
  conditions hereof, the Borrower may until the Revolving Loan Maturity Date
  request the Agent to arrange for the issuance by Fortis or an Affiliate of
  Fortis acceptable to the Borrower (the "LC Issuer") of one or
  more Letters of Credit, provided that, after taking such Letter of Credit into
  account:

  
      
    
                 (i)   
      the Facility Usage does not exceed the Borrowing
      Base at such time; and

      
    
                 (ii)   
      the aggregate amount of LC Obligations at such
      time does not exceed $5,000,000.00;

      
    
                 (iii)   
      the expiration date of such Letter of Credit is
      prior to the Revolving Loan Maturity Date;

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

      
    
                 (v)   
      each of the conditions set forth in Section 14
      hereof have been satisfied.

  
    
                 LC Issuer will honor any such request if the foregoing
  conditions (i) through (v) (in the following Subsection (b) called the "LC
  Conditions") have been met as of the date of issuance of such Letter
  of Credit. LC Issuer may choose to honor any such request for Letter of Credit
  that does not meet the LC Conditions, but has no obligation to do so.

  
    
                 (b)   
  Requesting Letters of Credit. The Borrower must
  make written application for any Letter of Credit ("LC Application")
  at least three Business Days before the date on which the Borrower desires
  such Letter of Credit to be issued, by delivering such LC Application to the
  Agent. The Agent shall promptly deliver such LC Application to LC Issuer. By
  making any such LC Application the Borrower shall be deemed to have
  represented and warranted to each Lender and LC Issuer that the LC Conditions
  described in Subsection (a) will be met as of the date of issuance of
  such Letter of Credit. Each such LC Application for a Letter of Credit must be
  made in writing in the form and substance acceptable to LC Issuer, the terms
  and provisions of which are hereby incorporated herein by reference, provided
  that no such LC Application may impose any fee or requirement for additional
  Collateral above and beyond those fees and collateral requirements imposed by
  this Agreement. Two Business Days after the LC Conditions for a Letter of
  Credit have been met as described in Subsection (a) (or if an LC Issuer
  otherwise desires to issue such Letter of Credit), LC Issuer will issue such
  Letter of Credit at LC Issuer's office, and will provide the Agent with a
  specimen copy of the Letter of Credit so issued. If any provisions of any LC
  Application conflict with any provisions of this Agreement, the provisions of
  this Agreement shall govern and control.

  
    
                 (c) Reimbursement and Participations.

      
    
                 (i)   
      Each Matured LC Obligation shall constitute an
      Advance by the Agent to the Borrower. The Borrower promises to pay to the
      Agent, or to the Agent's order, on demand, the full amount of each Matured
      LC Obligation, together with interest thereon at the rate applicable to
      Base Rate Loans, accruing commencing the day after the date on which such
      reimbursement payment was due.

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

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

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

  
    
                 (d)   
  Letter of Credit Fees. In consideration of LC
  Issuer's issuance of any Letter of Credit, the Borrower agrees to pay to the
  Agent, for the account of all Lenders in accordance with their respective
  Percentage Shares, a letter of credit fee at a rate equal to one and one-half
  percent (1.50%) per annum of the amount of all Letters of Credit. Each such
  fee will be calculated on a daily basis, on the face amount of Letters of
  Credit outstanding on each day at the above applicable rate and will be
  payable quarterly in arrears. In addition, the Borrower will pay to LC Issuer
  an administrative issuance fee of $500.00 for each Letter of Credit issued by
  LC Issuer and an amendment fee of $500.00 for each Letter of Credit, each such
  fee to be payable upon issuance or amendment, respectively, of a Letter of
  Credit.

  
    
                 (e)   
  No Duty to Inquire.

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

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

      
    
                 (iii)   
      If any Letter of Credit provides that it is
      transferable, LC Issuer shall have no duty to determine the proper
      identity of anyone appearing as transferee of such Letter of Credit, not
      shall LC Issuer be charged with responsibility of any nature or character
      for the validity or correctness of any transfer or successive transfers,
      and payment by LC Issuer to any purported transferee or transferees as
      determined by LC Issuer is hereby authorized and approved, and the
      Borrower further agrees to hold LC Issuer and each other Lender harmless
      and indemnified against any liability or claim in connection with or
      arising out of the foregoing, which indemnity shall apply whether or
      not any such liability or claim is in any way or to any extent caused, in
      whole or in part, by any negligent act or omission of any kind by any
      Lender, provided only that no Lender shall be entitled to
      indemnification for that portion, if any, of any liability or claim which
      is proximately caused by its own individual gross negligence or willful
      misconduct, as determined in a final judgment.

  
    
                 (f)   
  LC Collateral.

      
    
                 (i)   
      If, after the making of all mandatory prepayments
      required under Section 4(b), the outstanding LC Obligations will
      exceed the Borrowing Base, then in addition to prepayment of the Borrowing
      Base Deficiency the Borrower will immediately pay to LC Issuer an amount
      equal to such excess. LC Issuer will hold such amount as security for the
      remaining LC Obligations (all such amounts held as security for LC
      Obligations being herein collectively called "LC Collateral")
      until such LC Obligations become Matured LC Obligations, at which time
      such LC Collateral may be applied to such Matured LC Obligations. Neither
      this subsection nor the following subsection shall, however, limit or
      impair any rights which LC Issuer may have under any other document or
      agreement relating to any Letter of Credit or LC Obligation, including any
      LC Application, or any rights which any Lender may have to otherwise apply
      any payments by the Borrower and any LC Collateral under Section 6 (a).

      
    
                 (ii)   
      If the Obligations or any part thereof become
      immediately due and payable pursuant to Section 17 then, unless
      Required Lenders otherwise specifically elect to the contrary (which
      election may thereafter be retracted by Required Lenders at any time), all
      LC Obligations shall become immediately due and payable without regard to
      whether or not actual drawings or payments on the Letters of Credit have
      occurred, and the Borrower shall be obligated to pay to LC Issuer
      immediately an amount equal to the aggregate LC Obligations which are then
      outstanding. All amounts so paid shall first be applied to Matured LC
      Obligations and then held by LC Issuer as LC Collateral until such LC
      Obligations become Matured LC Obligations, at which time such LC
      Collateral shall be applied to such Matured LC Obligations.

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

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

                8.   
Collateral Security.

  

  
    
                 (a)   
  First Closing. To secure the performance by the
  Borrower of the Obligations hereunder, and under the Notes and Security
  Documents, whether now or hereafter incurred, matured or unmatured, direct or
  contingent, including extensions, modifications, renewals and increases
  thereof, and substitutions therefor, the Borrower shall, at the First Closing,

  
      
    
                 (i)   
      cause Pontotoc Acquisition to grant and assign to
      the Agent, on behalf of the Lenders, a first priority Lien on all of its
      shares of stock in Pontotoc and the Cash Proceeds therefrom;

      
    
                 (ii)   
      cause Pontotoc and each of its Restricted
      Subsidiaries to guaranty the Borrower's obligations under this Agreement
      and the other Loan Documents (such guaranty to be in form and substance
      satisfactory to Agent) and to grant and to assign to the Agent, on behalf
      of the Lenders, a first priority Lien subject only to Permitted Liens on
      all of such Person's Oil and Gas Properties and the Cash Proceeds
      therefrom;

      
    
                 (iii)   
      cause Forman to grant and assign to the Agent, on
      behalf of the Lenders, a first priority Lien subject only to Permitted
      Liens on all of its Oil and Gas Properties and the Cash Proceeds therefrom;

      
    
                 (iv)    
      cause Forman to guaranty the Borrower's
      Obligations under this Agreement and the other Loan Documents (such
      guaranty to be in form and substance satisfactory to Agent);

      
    
                 (v)   
      grant and assign to the Agent, on behalf of the
      Lenders, a first priority Lien subject only to Permitted Liens on all of
      the Borrower's Oil and Gas Properties and the Cash Proceeds therefrom; and

      
    
                 (vi)   
      cause Pontotoc Gathering to grant and assign to
      the Agent, on behalf of the Lenders, a first Priority Lien subject only to
      Permitted Liens on the lease of its gas gathering system.

  
    
                 (b)   
  Subsequently Acquired Oil and Gas Properties.
  The Borrower and its Restricted Subsidiaries shall grant security interests
  and mortgage Liens to the Agent, on behalf of the Lenders, in and on any
  subsequently acquired (either directly or through the acquisition of a Person
  who thereby becomes a Restricted Person) Oil and Gas Properties and the Cash
  Proceeds therefrom within thirty (30) days of the acquisition of such Oil and
  Gas Properties by the Person in question. If the Borrower subsequently forms
  or acquires any Unrestricted Subsidiaries, such Unrestricted Subsidiaries are
  not required to grant the Agent or any of the Lenders security interests in or
  mortgage Liens on their Oil and Gas Properties or the Cash Proceeds therefrom.

  
    
                 (c)   
  Form of Security Documents The granting and
  assigning of such security interests and Liens by the Borrower and each other
  Restricted Person shall be pursuant to the Security Documents in form and
  substance reasonably satisfactory to the Agent.

  
    
                 (d)   
  Title Work. At the First Closing, the Borrower
  shall furnish to the Agent Title Documents reasonably satisfactory to the
  Agent with respect to the title and Lien status of at least 89% of the
  Borrower's and Forman's Oil and Gas Real Properties, with such percentage to
  be calculated by the Loan Values of the Borrower's and Forman's Oil and Gas
  Real Properties as of the First Closing. As soon as possible following the
  First Closing Date, and in no event later than sixty (60) days following the
  First Closing Date, the Borrower shall furnish to the Agent Title Documents
  reasonably satisfactory to the Agent with respect to the title and Lien status
  of a sufficient number of the Oil and Gas Real Properties of Pontotoc and its
  Subsidiaries to cause the Agent to have Title Documents reasonably
  satisfactory to the Agent with respect to the title and Lien status of at
  least 85% of all Oil and Gas Real Properties of the Borrower, Forman,
  Pontotoc, and Pontotoc's Subsidiaries that are included in the Borrowing Base,
  considered on an aggregate basis for all such Persons and calculated according
  to the Loan Values established for such Oil and Gas Real Properties by the
  Agent as of the Second Closing Date. At or prior to the addition of any
  subsequently acquired Oil and Gas Real Properties to the Collateral pursuant
  to Section 8(b) above, the Borrower shall furnish to the Agent Title
  Documents reasonably satisfactory to the Agent with respect to the title and
  Lien status of a sufficient number of such subsequently acquired Oil and Gas
  Real Properties so that the Agent shall at all times have Title Documents
  reasonably satisfactory to the Agent with respect to at least 85% of all Oil
  and Gas Real Properties of the Borrower and the other Restricted Persons that
  are included in the Borrowing Base, considered on an aggregate basis for all
  such Persons and calculated according to the Loan Values established for such
  Oil and Gas Real Properties by the Agent as of the effective date of the
  addition of the subsequently acquired Oil and Gas Real Properties to the
  Collateral pursuant to Section 8(b) above (the "Continuing 85%
  Test"). If, at any time after the Second Closing Date, the Borrower
  fails to provide Title Documents reasonably satisfactory to the Agent for a
  sufficient number of Oil and Gas Real Properties to meet the Continuing 85%
  Test, the Agent shall reduce the Borrowing Base by written notice to the
  Borrower as required to bring the Borrower into compliance with the Continuing
  85% Test.

  
    
                 Without regard to whether the Borrower or any of other
  Restricted Person provides satisfactory Title Documents with respect to a
  particular Oil and Gas Real Property owned by such Person, such Oil and Gas
  Real Property shall, nevertheless, be encumbered by a mortgage in favor of the
  Agent, on behalf of the Lenders, and shall be included in the Collateral.

  
    
                 (e)   
  Release of Stock Collateral. Upon receipt of the
  Title Documents required by Section 8(d) above by the Agent at or prior
  to the Second Closing, and provided that (i) such Title Documents are
  satisfactory in form and substance to the Agent in its sole but reasonable
  discretion, (ii) no Event of Default shall have occurred and be continuing,
  and (iii) there is no Borrowing Base Deficiency at such time, the Agent shall
  release its security interest and Lien in the Stock Collateral described in Section 8(a)(i)
  on or prior to the Second Closing Date.

  
    
                 (f)   
  Release of Oil and Gas Real Properties. Upon the
  Borrower's request, the Agent shall release any Oil and Gas Real Property and
  associated Oil and Gas Personal Property from all mortgages, security
  interests and other Liens in favor of the Agent on behalf of the Lenders in
  order to permit the Restricted Person who owns such Oil and Gas Property (i)
  to assign an interest pursuant to a farm-out of such Oil and Gas Property in
  the ordinary course of business or (ii) to sell such Oil and Gas Property to
  another Person as permitted by Section 15(o).

  
    
                 (g)   
  Security for Hedging Contracts. The Agent and
  the Lenders acknowledge that the counterparties to the Hedging Contracts
  required by Section 15(r) or permitted by Section 16(n) will
  require a pari passu Lien upon all or a portion of the production of the Oil
  and Gas Real Properties subject to such Hedging Contracts and the Cash
  Proceeds therefrom as security for the obligations of the Borrower and the
  other Restricted Persons under the Hedging Contracts. Upon the Borrower's
  request, the Agent will, if necessary, on behalf of the Lenders, enter into
  intercreditor agreements with the counterparties to the Hedging Contracts
  establishing that the Lender's Liens upon such production from the Oil and Gas
  Real Properties and the Cash Proceeds therefrom rank pari passu with any Liens
  in favor of the counterparties to the Hedging Contracts required by Section
  15(r) or permitted by Section 16(n), with any such intercreditor
  agreement to be on terms and conditions acceptable to the Agent and the
  counterparties.

  
    
                 (h)   
  Additional Stock Collateral.
  If Pontotoc Acquisition and Pontotoc merge prior to the Second Closing Date,
  Agent shall release its security interest and Lien in the Stock Collateral
  described in Section 8(a)(i) to permit such merger on the condition
  that, simultaneously with such release, Borrower execute and deliver to Agent
  a stock pledge agreement on substantially the same terms as set forth in
  Exhibit D, encumbering all issued and outstanding shares of the merger
  survivor.

  
    
                 (i)   
  Release of Forman. When 95% of the Loan Value of
  Forman's Oil and Gas Real Properties as of the First Closing Date have been
  transferred and assigned to the Borrower, the Agent shall execute such
  instruments and agreements in order to release Forman from its Guaranty and
  terminate the Lien referred to in Subsection 8 (a)(iii) above. Further,
  following such transfer and assignment, Forman shall no longer be considered a
  "Restricted Person" for purposes of this Agreement.

                9.   
Borrowing Base.

  
  
    
                 (a)   
  Initial Borrowing Base. During the period from
  the date hereof to the first Determination Date, the Borrowing Base shall be
  Thirty Million Dollars ($30,000,000). Subsequent determinations of the
  Borrowing Base shall be made by the Agent semiannually on the dates set forth
  hereinbelow or as Unscheduled Redeterminations.

  
    
                 (b)   
  Regularly Scheduled Redeterminations of the
  Borrowing Base. On or before each August 31 commencing August 31, 2002,
  the Borrower shall furnish the Agent an engineering report in form and
  substance satisfactory to the Agent in its reasonable discretion prepared by a
  representative of the Borrower covering all of the Borrower's and the other
  Restricted Persons' Oil and Gas Real Properties. On or before each March 31
  commencing March 31, 2002, the Borrower shall furnish the Agent an engineering
  report in form and substance satisfactory to the Agent in its reasonable
  discretion prepared by a representative of the Borrower but audited by an
  independent third party engineer selected by the Borrower and approved by the
  Agent covering all of the Borrower's and the other Restricted Persons' Oil and
  Gas Real Properties. All such engineering reports shall employ economic and
  pricing parameters used by the Agent as established from time to time but
  consistently applied to all similarly situated customers of the Agent, and all
  such engineering reports shall include such other information concerning the
  value of the Oil and Gas Real Properties in question as the Agent may deem
  necessary to determine the value of such Oil and Gas Real Properties. The
  engineering reports furnished August 31 and March 31 pursuant to this section
  shall be prepared as of the preceding June 30 and December 31, respectively.

  
    
                 (c)   
  Unscheduled Redeterminations. Within thirty (30)
  days after either (i) receipt of notice from the Agent that the Agent requires
  an Unscheduled Redetermination, or (ii) the Borrower giving notice to the
  Agent of the Borrower's desire to have an Unscheduled Redetermination
  performed, the Borrower shall furnish to the Lenders an engineering report
  prepared by a representative of the Borrower in form and substance
  satisfactory to the Agent valuing the Borrower's and the other Restricted
  Persons' Oil and Gas Real Properties using the same methodology used by the
  Borrower's representative under Section 9(b) and shall include such
  other information concerning the value of the Oil and Gas Real Properties in
  question as the Agent shall deem reasonably necessary to determine the value
  of such Oil and Gas Real Properties. The Agent and the Borrower may each
  request no more than one Unscheduled Redetermination between regularly
  scheduled determinations under Section 9(b).

  
    
                 (d)   
  Notice of Redetermined Borrowing Base. Within
  twenty-five (25) days of the Agent's receipt of any engineering report
  required under Section 9(b) or (c) above, the Agent shall notify the
  Borrower of the new Borrowing Base determined by the Agent to be applicable to
  the Borrower during the period beginning on the date of such notice (each, a
  "Determination Date") and continuing until, but
  not including, the next Determination Date. If the Borrower does not furnish
  all such information, reports and data by the dates specified in this section,
  unless such failure is of no fault of the Borrower, the Agent may nonetheless
  designate the Borrowing Base at any amount which the Agent determines in its
  reasonable discretion and may redesignate the Borrowing Base from time to time
  thereafter until the Agent receives all such information, reports and data,
  whereupon the Agent shall designate a new Borrowing Base as described above.

  
    
                 (e)   
  Calculation of the Borrowing Base. The Agent
  shall determine the amount of the Borrowing Base based upon the loan
  collateral value which the Agent in its discretion (using such methodology,
  assumptions and discounts rates as the Agent customarily uses in assigning
  collateral value to oil and gas properties for similarly situated customers of
  the Agent) assigns to the Oil and Gas Real Properties of the Borrower and the
  other Restricted Persons at the time in question and based upon such other
  credit factors consistently applied (including, without limitation, the
  assets, liabilities, cash flow, business, properties, and prospects of the
  Borrower and its Recourse Subsidiaries) as the Agent customarily considers in
  evaluating similar oil and gas credits.

  
    
                 (f)   
  Reduction of Borrowing Base Following Sale. If
  at any time any of the Borrower's or the other Restricted Persons' Oil and Gas
  Properties are sold, the Borrowing Base then in effect shall be reduced as
  provided in Section 15(o) by an amount equal to the Loan Value formerly
  attributable to such Oil and Gas Properties.

  
    
                 (g)   
  Reduction of Borrowing Base For Oil and Gas
  Properties Held by Forman If ninety (90) days following the First Closing
  Date Forman has not transferred and assigned 95% of the Loan Value of its Oil
  and Gas Properties as of the First Closing Date to the Borrower, the Borrowing
  Base then in effect may be reduced, at the election of Agent, by an amount
  equal to the Loan Value attributable to such Oil and Gas Properties then held
  by Forman.

                10.   
Fees.

  
  
    
                 (a)   
  Commitment Fee. In consideration of each
  Lender's commitment to make Loans and the Agent's commitment to arrange for
  the issuance of Letters of Credit, the Borrower will pay to the Agent for the
  account of each Lender a commitment fee determined on a daily basis following
  the First Closing Date by applying a rate equal to the Commitment Margin per
  annum to such Lender's Percentage Share of the unused portion of the Borrowing
  Base on each day, determined for each such day by deducting from the amount of
  the Borrowing Base at the end of such day the Facility Usage. This commitment
  fee shall be due and payable in arrears on the last day of each Fiscal Quarter
  (beginning September 30, 2001) and at the Revolving Loan Maturity Date.

  
    
                 (b)   
  Agency and Other Fees. The Borrower agrees to
  pay to the Agent the fees as set forth in the fee letter dated as of the date
  hereof between the Agent and the Borrower.

                11.   
Representations and Warranties. In order to induce
each Lender to enter into this Agreement, the Borrower hereby represents and
warrants to each Lender:

    
    
                 (a)   
    No Default. No event has occurred and is
    continuing which constitutes an Event of Default.

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

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

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

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

    
    
                 (f)   
    Financial Statements. The Borrower has
    heretofore delivered to each Lender true, correct and complete copies of its
    pro forma Financial Statements dated as of March 31, 2001 and the audited
    Financial Statements of Forman and Pontotoc respectively dated as of
    December 31, 2000 and March 31, 2001. Such Financial Statements fairly
    present each such Person's Consolidated financial position at the respective
    date thereof and the Consolidated results of such Person's operations and
    Consolidated cash flows for the respective period thereof (in the Borrower's
    case only, on a pro forma basis). Since the date of such Financial
    Statements, the business of the Borrower and its Restricted Subsidiaries has
    been conducted in the ordinary course consistent with past practices (other
    than the transactions contemplated by the Acquisition Documents) and there
    has not been (i) any event, occurrence, development or state of
    circumstances or facts that has had or would reasonably be expected to have,
    individually or in the aggregate, a Material Adverse Effect on the
    Restricted Persons, except as disclosed to the Lenders in the Disclosure
    Schedule or a Disclosure Report, (ii) any material change by the Borrower in
    its accounting methods, principles or practices, except as required by
    changes in GAAP, or (iii) any revaluation by any Restricted Persons of any
    of its material assets, other than in the ordinary course of business. All
    Financial Statements were prepared in accordance with GAAP (in the
    Borrower's case only, on a pro forma basis).

    
    
                 (g)   
    Other Obligations and Restrictions. No
    Restricted Person has any outstanding Debt of any kind (including contingent
    obligations, tax assessments, and unusual forward or long-term commitments)
    which are, in the aggregate, material to the Borrower or material with
    respect to the Borrower's Consolidated financial condition and not shown in
    the Financial Statements or disclosed in the Disclosure Schedule or a
    Disclosure Report. Except as shown in the Financial Statements or disclosed
    in the Disclosure Schedule or a Disclosure Report, no Restricted Person is
    subject to or restricted by any franchise, contract, deed, charter
    restriction, or other instrument or restriction which could reasonably be
    expected to have a material adverse impact on such Restricted Person.

    
    
                 (h)   
    Full Disclosure. No certificate, written
    statement or other written information delivered herewith or heretofore by
    any Restricted Person to any Lender in connection with the negotiation of
    this Agreement or in connection with any transaction contemplated hereby
    contains any untrue statement of a material fact or omits to state any
    material fact known to the Borrower (other than industry-wide risks normally
    associated with the types of businesses conducted by Restricted Persons)
    necessary to make the statements contained herein or therein not misleading
    as of the date made or deemed made. There is no fact known to the Borrower
    that has not been disclosed to the Agent in writing which could reasonably
    be expected to have a Material Adverse Effect on such Restricted Person. To
    the Borrower's knowledge, there are no statements or conclusions in any
    engineering report furnished to the Agent with respect to the Oil and Gas
    Real Properties which are based upon or include materially misleading
    information or fail to take into account material information regarding the
    matters reported therein, it being understood that each engineering report
    furnished to the Agent with respect to the Oil and Gas Real Properties is
    necessarily based upon professional opinions, estimates and projections and
    that the Borrower does not warrant that such opinions, estimates and
    projections will ultimately prove to have been accurate.

    
    
                 (i)   
    Litigation. Except as disclosed in the
    Financial Statements or in the Disclosure Schedule or in a Disclosure
    Report: (a) there are no actions, suits or legal, equitable,
    arbitration or administrative proceedings pending, or to the Borrower's
    knowledge, threatened, against any Restricted Person before any court,
    agency or arbitral Tribunal which could reasonably be expected to have a
    material adverse impact on such Restricted Person, and (b) there are no
    outstanding judgments, injunctions, writs, rulings or orders by any such
    court, agency or arbitral Tribunal against any Restricted Person or, to the
    Borrower's knowledge, any Restricted Person's stockholders, partners,
    directors or officers which could reasonably be expected to have a material
    adverse impact on such Restricted Person.

    
    
                 (j)   
    Labor Disputes and Acts of God. Except as
    disclosed in the Disclosure Schedule or a Disclosure Report, neither the
    business nor the properties of any Restricted Person has been affected by
    any fire, explosion, accident, strike, lockout or other labor dispute,
    drought, storm, hail, earthquake, embargo, act of God or of the public enemy
    or other casualty, which could reasonably be expected to have a material
    adverse impact on such Restricted Person, taking into account any available
    insurance proceeds.

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

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

    
    
                 (m)   
    The Borrower's Subsidiaries. The Borrower does
    not presently have any Subsidiary or own any stock in any other corporation
    or association except those listed in the Disclosure Schedule or a
    Disclosure Report. Neither the Borrower nor any Restricted Person is a
    member of any general or limited partnership, joint venture or association
    of any type whatsoever except those listed in the Disclosure Schedule or a
    Disclosure Report. Except as otherwise listed in a Disclosure Report, the
    Borrower owns, directly or indirectly, the equity interest in each of its
    Subsidiaries which is indicated in the Disclosure Schedule.

    
    
                 (n)   
    Government Regulation. Neither the Borrower
    nor any other Restricted Person owing Obligations is subject to regulation
    under the Public Utility Holding Company Act of 1935, the Federal Power Act,
    the Property Company Act of 1940 (as any of the preceding acts have been
    amended) or any other Law which regulates the incurring by such Person of
    Indebtedness, including Laws relating to common contract carriers or the
    sale of electricity, gas, steam, water or other public utility services.

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

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

    
    
                 (q)   
    Real Property Other Than Oil and Gas Real
    Properties.

  
        
    
                 (i)   
        Except as set forth in the Disclosure Schedule or
        a Disclosure Report, each of the Borrower and its Restricted
        Subsidiaries does not own, has never owned, does not have, nor has it
        ever had any interest in any real property, other than Oil and Gas Real
        Properties or other than pursuant to a valid lease.

        
    
                 (ii)   
        Except as supplemented in a subsequent
        Disclosure Report, the Disclosure Schedule lists and describes briefly
        all real property leased or subleased to each of the Borrower and its
        Restricted Subsidiaries, other than Oil and Gas Real Properties. Except
        as supplemented in a subsequent Disclosure Report, with respect to each
        material lease and sublease listed in the Disclosure Schedule, all such
        leases and subleases are in full force and effect, are valid and
        effective in accordance with their respective terms, and there is not,
        under any of such leases or subleases, any existing default or event of
        default (or event which with notice or lapse of time, or both, would
        constitute a default) that would give rise to a material claim against
        the Borrower.

  

    
    
                 (r)   
    Oil and Gas Real Properties.. As of the date
    hereof, the Oil and Gas Real Properties (including the types and amounts of
    working interests and net revenue interests) which are owned by each
    Restricted Person are listed on Schedule 4. Each material oil or gas
    well included in such Oil and Gas Real Properties on the date hereof is
    listed in the Reserve Reports, and, unless otherwise noted on the Disclosure
    Schedule or a Disclosure Report, capable of producing in paying quantities.
    Except as set forth in the Disclosure Schedule, on the date hereof, all oil
    and gas wells included in the Oil and Gas Real Properties owned by the
    Borrower, Pontotoc, or any of Pontotoc's Restricted Subsidiaries will be
    located on, or pooled or unitized with, an oil and gas lease described in
    the legal description contained in a mortgage or other Security Documents
    which will be duly executed and delivered to the Agent at the First Closing.

    
    
                 (s)   
    Title to Oil and Gas Real Properties. Except
    as set forth in Disclosure Schedule or a Disclosure Report, Borrower and the
    other Restricted Persons have and will maintain Good Title (as defined
    below) to sufficient Oil and Gas Real Properties to comply with the
    Continuing 85% Test, considered on an aggregate basis for all such Persons,
    and calculated according to the Loan Values established for such Oil and Gas
    Real Properties established by the Agent. For purposes of this Agreement, "Good
    Title" shall mean good and defensible title which is (i)
    evidenced by an instrument or instruments filed of record in accordance with
    the conveyance and recording laws of the applicable jurisdiction and is
    sufficient against competing claims of bona fide purchasers for value
    without notice and (ii) free and clear of all encumbrances, other than
    Permitted Liens and such encumbrances that a reasonably prudent purchaser of
    oil and gas properties and a prudent lender that is lending against such Oil
    and Gas Real Properties as collateral would accept in light of the value of
    the property affected, the improbability of assertion of the defect or
    irregularity, or the cost of performing curative work.

    
    
                 (t)   
    Oil and Gas Real Properties of Restricted Persons.
    Except as set forth in the Disclosure Schedule or in a Disclosure Report: (i)
    there are no preferential purchase rights, first refusal rights, consent
    requirements, or other similar contractual rights granted to any third
    parties applicable to any Restricted Person's Oil and Gas Real Properties;
    (ii) no Restricted Person has been advised by any operator, lessor or any
    other party of any default under any such Oil and Gas Real Properties which
    default has not heretofore been cured in all respects and which default
    could reasonably be expected to have a material adverse impact on the
    Restricted Person; (iii) except with respect to leases or other non-fee
    ownership Oil and Gas Real Properties which the Restricted Person does not
    wish to maintain, all proper and timely payments (including royalties, delay
    rentals and shut-in royalties) due with respect to any Restricted Person's
    Oil and Gas Real Properties have been timely made and paid by such
    Restricted Person if such Restricted Person is the operator of any such
    lease or other non-fee ownership Oil and Gas Real Properties; and (iv) the
    Restricted Persons are entitled to be paid, and are being paid, in all
    material respects, their percentage of net revenue interests included in
    such Restricted Person's Oil and Gas Properties without suspense.

    
    
                 (u)   
    Refund. Except as included or reflected on the
    Financial Statements or as set forth in the Disclosure Schedule or a
    Disclosure Report: (i) no Restricted Person is obligated by virtue of a
    prepayment arrangement under any gas contract containing a "take or
    pay" or similar provision, a production payment or any other
    arrangement to deliver any material amount of gas or oil attributable to
    such Restricted Person's Oil and Gas Properties at some future time without
    then or thereafter receiving full payment therefor; and (ii) no Restricted
    Person has received any funds or payments from purchasers of production of
    gas under gas contracts which are subject to a potential refund, the payment
    of which could reasonably be expected to have a Material Adverse Effect.

    
    
                 (v)   
    Payout Balances; Gas Balancing. The Disclosure
    Schedule contains a reasonably complete and accurate list of the status, as
    of December 31, 2000, with respect to wells operated by the Restricted
    Persons, and as of December 31, 2000, with respect to third party operated
    wells, of: (a) the "payout" balance for each Oil and Gas Real
    Property of any Restricted Person that is subject to a reversion or other
    adjustment at some level of cost recovery or payout (or passage of time or
    other event, other than cessation of production); and (b) all gas balancing
    obligations and rights for each of the Oil and Gas Real Property of any
    Restricted Person which is subject to a gas balancing overage or underage.

    
    
                 (w)   
    Operations. Except as set forth in the
    Disclosure Schedule or a Disclosure Report or where the failure to so comply
    could not reasonably be expected to have a material adverse impact on the
    Restricted Person affected:

  
        
    
                 (i)   
        All of the wells operated by the Restricted
        Persons included in the Oil and Gas Real Properties of such Restricted
        Person and which are described in Disclosure Schedule have been drilled
        within the boundaries of such Oil and Gas Real Properties or within the
        limits otherwise permitted by contract, pooling or unit agreement, lease
        instrument, and by law and in accordance with generally prevailing
        standards of the oil and gas industry.

        
    
                 (ii)   
        All drilling and completion of the wells
        operated by the Restricted Persons in such Oil and Gas Real Properties
        and all development and operations on such Oil and Gas Real Properties
        have been conducted in compliance in all material respects with all
        applicable laws, ordinances, rules, regulations and permits, and
        judgments, orders, and decrees of any court or governmental body or
        agency.

        
    
                 (iii)   
        With respect to wells operated by the
        Restricted Persons, all equipment constituting part of the Oil and Gas
        Personal Properties of each Restricted Person has been installed,
        maintained, and operated by such Restricted Person as a prudent operator
        in accordance with generally prevailing standards of the oil and gas
        industry, and is currently in a state of repair so as to be adequate for
        normal operations by such Restricted Person or its Recourse
        Subsidiaries.

        
    
                 (iv)   
        No well operated by any Restricted Person which
        is included in the Borrowing Base is subject to penalties on allowables
        because of any overproduction (legal or illegal) which would prevent the
        full legal and regular allowable (including maximum permissible
        tolerance) as prescribed by any court or federal, state or local
        governmental body or agency to be assigned to any such well.

  

    
    
                 (x)   
    Plugging Status. All wells operated by each
    Restricted Person that have been permanently plugged and abandoned have been
    so plugged and abandoned in accordance with all applicable laws, ordinances,
    rules, regulations and permits, and judgments, orders, and decrees of any
    court or governmental body or agency, except where the failure to so comply
    could not reasonably be expected to have a material adverse impact on such
    Restricted Person.

    
    
                 (y)   
    Reserve Reports.

  
        
    
                 (i)   
        All of the Oil and Gas Real Properties owned by
        the Borrower or any other Restricted Persons which will be encumbered by
        the Security Documents at the First Closing are included in the Reserve
        Reports.

        
    
                 (ii)   
        To the Borrower's knowledge, the information
        contained in the Reserve Reports regarding the Oil and Gas Real
        Properties was reasonable on the date each such Reserve Report was
        prepared and did not contain materially untrue statements of fact or
        omit to state material facts which if completely and accurately stated
        would have had a net effect upon the estimated net recoverable
        quantities of oil and gas reflected in the Reserve Reports. To the
        Borrower's knowledge, all lease operating expenses outlined in the
        Reserve Reports were based upon good faith estimates of such expenses
        and are not materially inconsistent with currently existing related
        contractual obligations and currently existing legal requirements.

        
    
                 (iii)   
        Since later of (x) the date of the Reserve
        Reports or (y) the most recent engineering report provided under Section
        9, there has not been any change in the reserves described therein,
        other than reserve reductions due to normal production at or near the
        production rates set forth in the Reserve Reports or in the subsequent
        engineering report provided under Section 9, as the case may be.

  

    
    
                 (z)   
    Financial and Commodity Hedging. The
    Disclosure Schedule accurately summarizes the outstanding hydrocarbon and
    financial hedging positions of the Borrower, Pontotoc, Forman, and their
    respective Restricted Subsidiaries (including fixed price controls, collars,
    swaps, caps, hedges and puts) as of the date reflected on the Disclosure
    Schedule.

  
    
                 (aa)  
  Environmental Matters. Except as disclosed in
    the Disclosure Schedule or in any subsequent Disclosure Report:

  
    
    
                (i)   
    there are no material claims, investigations or inquiries
              pending or threatened against any Restricted Person (or naming any
              Restricted Person as a potentially responsible party) based on
              noncompliance with any Environmental Laws at any of the properties
              or facilities currently or formerly owned, leased or operated by
              such Restricted Person;

  

  
        
    
                 (ii)   
        all activities of the Restricted Persons in the
        conduct of the business of each Restricted Person have been conducted in
        compliance in all material respects with all applicable Environmental
        Laws except where the failure to comply could not reasonably be expected
        to have a material adverse impact on such Restricted Person;

        
    
                 (iii)   
        no Restricted Person has, with respect to such
        Restricted Person's business, filed any notice under any Environmental
        Laws reporting past or present treatment, storage or disposal of a
        Hazardous Material or reporting a Release of a Hazardous Material, which
        treatment, storage, disposal, or Release could reasonably be expected to
        have a material adverse impact on such Restricted Person;

        
    
                 (iv)   
        no encumbrance in favor of any Governmental
        Entity for (A) any liability under Environmental Laws or (B) damages
        arising from or costs incurred by such Governmental Entity in response
        to a Release of a Hazardous Material or other substance into the
        environment has been filed or is attached to any property or assets of
        any Restricted Person;

        
    
                 (v)   
        no Restricted Person has any material contingent
        liability in connection with (A) the Release or threatened Release into
        the environment at, beneath or on any property or facility now or
        previously owned, leased or operated by such Restricted Person or (B)
        the storage or disposal of any Hazardous Material;

        
    
                 (vi)   
        no Restricted Person has received any claim,
        complaint, notice, letter of violation, inquiry or request for
        information involving any material matter which remains unresolved as of
        the date hereof with respect to any alleged material violation of any
        Environmental Laws or regarding potential material liability under any
        Environmental Laws relating to operations or conditions of any facility
        or property (including off-site storage or disposal of any Hazardous
        Material from such facility or property) currently or formerly owned,
        leased or operated by such Restricted Person;

        
    
                 (vii)   
        to the Borrower's knowledge, no property now or
        previously owned, leased or operated by any Restricted Person is listed
        on the National Priorities List pursuant to the Comprehensive
        Environmental Response, Compensation and Liability Act of 1980, as
        amended ("CERCLA"), or on the
        Comprehensive Environmental Response, Compensation and Liability
        Information System List ("CERCLIS") or on
        any other federal or state list as a site requiring investigation or
        cleanup;

        
    
                 (viii)   
        no Restricted Person is transporting, has
        transported or is arranging for the transportation of any Hazardous
        Material to any location which is listed on the National Priorities List
        pursuant to CERCLA, on the CERCLIS, or on any similar federal or state
        list or, to Borrower's knowledge, which is the subject of federal, state
        or local enforcement actions or other investigations that would
        reasonably be expected to lead to material claims against such
        Restricted Person for removal or remedial work, contribution for removal
        or remedial work, damage to natural resources or personal injury,
        including claims under CERCLA;

        
    
                 (ix)   
        except for routine cleanup of drilling and
        production sites, there are no sites, locations or operations at which
        any Restricted Person is currently undertaking, or has completed, any
        removal, remedial or response action relating to any disposal of
        Hazardous Materials or Release, as required by Environmental Laws;

        
    
                 (x)   
        each Restricted Person has obtained all material
        permits, licenses, franchises, variances, authorizations, consents,
        certificates, exemptions, orders and approvals from all Governmental
        Entities ("Environmental Permits") that
        are required in respect of its business or operations under any
        applicable Environmental Laws, and each of such Environmental Permits is
        in full force and effect; each Restricted Person has complied with all
        such Environmental Permits in all material respects, and there is no
        action, investigation or proceeding pending or, to the Borrower's
        knowledge, threatened regarding any Environmental Permit;

    
                 (xi)   
    no Restricted Person owns or operates any underground storage
              tanks, treatment, storage or disposal facilities under the
              Resource Conservation and Recovery Act, as amended, or any
              successor statutes or regulations promulgated thereunder, or solid
              waste disposal facilities; and
    
    
                (xii)   
    each Restricted Person has provided the Agent all environmental
              audits, tests, results of investigations and analyses that have
              been performed within twelve (12) months of the date hereof with
              respect to any property or facility currently or formerly owned,
              leased or operated by such Restricted Person.
  

  
        
    
                 (xiii)   
        As used herein:

    
            
    
                 (A)   
            "Hazardous Material"
            means (A) any chemicals or other materials or substances that are
            defined as or included in the definition of "hazardous
            substances," "hazardous wastes," "hazardous
            materials," "extremely hazardous wastes,"
            "restricted hazardous wastes," "toxic
            substances," "pollutants," "contaminants,"
            or words of similar import under any Environmental Law, but
            excluding petroleum and petroleum products and byproducts and
            naturally occurring radioactive materials associated without
            production; and (B) any other chemical, material or substance, the
            presence of or exposure to which is prohibited, limited or regulated
            by any Governmental or Regulatory Authority under any Environmental
            Law but excluding petroleum and petroleum products and by-products
            and naturally occurring radioactive material associated without
            production.

            
    
                 (B)   
            "Release"
            means any actual or threatened (as defined under CERCLA) release,
            spill, effluent, emission, leaking, pumping, injection, deposit,
            disposal, discharge, dispersal, leaching or migration into the
            environment or any structure.

    

  

    
    
                 (bb)   
    Marketing. Each of the Borrower's and
    Restricted Person's marketing arrangements with respect to that portion of
    the Oil and Gas Real Properties which are capable of producing in commercial
    quantities are valid, enforceable and in full force and effect.

    
    
                 (cc)   
    Net Revenue/Working Interest. After giving
    full effect to the Permitted Liens, each Restricted Person owns the net
    revenue interests in production attributable to the Oil and Gas Real
    Properties as disclosed in the Disclosure Schedule and covered by the
    mortgages and other Security Documents as is reflected in the Reserve
    Reports or most recently delivered engineering report under Section 9
    and the ownership of such Oil and Gas Real Properties will not in any
    material respect obligate such Restricted Person to bear the costs and
    expenses relating to the maintenance, development and operations of any such
    Oil and Gas Real Property in an amount in excess of the working interest of
    each such property set forth in the Disclosure Schedule or in a subsequent
    Disclosure Report.

    
    
                 (dd)   
    Compliance with the Law. No Restricted Person
    has violated any material legal requirement or failed to obtain any material
    license, permit, franchise or other governmental authorization necessary for
    the ownership of its Oil and Gas Real Properties or the conduct of its
    business. Each Restricted Person's Oil and Gas Real Properties have been
    maintained, operated and developed in good and workmanlike manner and in
    material conformity with all material applicable laws and all rules,
    regulations and orders of duly constituted authorities having jurisdiction
    and in conformity in all material respects with the provisions of all
    leases, subleases or other contracts forming a part of such Oil and Gas Real
    Properties.

    
    
                 (ee)   
    Bonds and Insurance.

  
        
    
                 (i)   
        The Disclosure Schedule as supplemented from time
        to time by Disclosure Reports contains an accurate and complete
        description of all performance bonds related to operations on or
        pertaining to the Oil and Gas Real Properties, and all material policies
        of insurance owned or held by the Borrower and each Restricted Person.
        All such policies are in full force and effect for the coverage periods
        specified on the Disclosure Schedule or Disclosure Report, all premiums
        with respect thereto covering all periods up to and including the date
        hereof have been paid, and no notice of cancellation or termination has
        been received with respect to any such policy (except where such policy
        has been replaced by a substitute policy providing similar coverage).

        
    
                 (ii)   
        Such bonds and policies are sufficient for
        compliance with all requirements of law and of all agreements to which
        the Borrower or any Restricted Person is a party; are valid, outstanding
        and enforceable policies; provide adequate coverage in at least such
        amounts and against at least such risks (but including in any event
        public liability) as are required by law and/or usually insured or
        bonded against in the same general area by companies engaged in the same
        or a similar business for the assets and operations of the Borrower and
        each of Restricted Person; and will not in any way be affected by, or
        terminate or lapse by reason of, the transactions contemplated by this
        Agreement.

        
    
                 (iii)   
        Neither the Borrower nor any Restricted Person
        has been refused any bonds or insurance with respect to its assets or
        operations, nor has its coverage been limited below usual and customary
        bond or policy limits, by any bonding company or insurance carrier to
        which it has applied for any such bond or insurance or with which it has
        carried insurance during the last three years except where the Borrower
        or other Restricted Person has been able to obtain substitute bonds or
        insurance providing similar coverage.

    
  

    
    
                 (ff)   
    Leases. As of the date of any determination
    of the Borrowing Base, the oil and gas leases associated with the Oil and
    Gas Real Properties in the Borrowing Base will be in full force and effect
    in accordance with their respective terms, and there will exist no material
    defaults in the performance of any obligations thereunder or, to the
    Borrower's knowledge, any event that with notice or lapse of time, or both,
    would constitute a default under any such oil and gas leases.

                12.   
Conditions to Initial Advance at First Closing.
The obligation of the Lenders to make the initial Advance to the Borrower and
the Agent's obligation to arrange for the issuance of the initial Letter of
Credit on behalf of the Borrower shall be subject to the following conditions
precedent:

    
    
                 (a)   
    Receipt of Documents. The Agent shall have
    received fully executed copies of the following:

  
      
      
    
                 (i)   
      This Agreement and any other documents that the
      Lenders are to execute in connection herewith at the First Closing.

    
    
                 (ii)   
    The Notes.

        
    
                 (iii)   
        Each Security Document listed for the First
        Closing on the Security Schedule.

        
    
                 (iv)   
        Certain certificates of the Borrower, Pontotoc
        Acquisition, Pontotoc Texas, OBEC, Pontotoc Holdings, Pontotoc
        Gathering, Pontotoc and Forman including:

    
            
    
                 (A)   
            An "Omnibus Certificate" of the
            Secretary and of the Chairman of the Board or President of each such
            Person which shall contain the names and signatures of the officers
            of each such Person authorized to execute Loan Documents and which
            shall certify to the truth, correctness and completeness of the
            following exhibits attached thereto: (1) a copy of resolutions
            duly adopted by the Board of Directors of each such Person and in
            full force and effect at the time this Agreement is entered into,
            authorizing the execution of the Loan Documents delivered or to be
            delivered by such Person in connection herewith at the First Closing
            and the consummation of the transactions contemplated herein and
            therein for the First Closing, (2) a copy of each such Person's
            charter documents and all amendments thereto, certified by the
            appropriate official of the each such Person's state of
            organization, (3) a copy of any bylaws of each such Person, and
            (4) in the case of Pontotoc Gathering, the comparable document for a
            limited liability company; and

            
    
                 (B)   
            A "Compliance Certificate" of the
            Chairman of the Board or President and of the chief financial
            officer of the Borrower, dated as of the First Closing Date, in
            which such officers certify to the satisfaction of the conditions
            set out in subsections (a), (b) and (d) of Section 14.

            
    
                 (C)   
            Certificate (or certificates) of the due
            formation, valid existence and good standing of each such Person in
            its state of organization, issued by the appropriate authorities of
            such jurisdiction, and certificates of such Person's good standing
            and due qualification to do business, issued by appropriate
            officials in any states in which such Person owns property subject
            to Security Documents.

    

  

    
    
                 (b)   
    Legal Opinion. The Agent shall have received
    from the Borrower's legal counsel a legal opinion in form and substance
    satisfactory to the Agent.

  
    
                 (c)   
  Pledge of Stock Interests. The Borrower shall
    deliver to the Agent a Stock Pledge Agreement executed by Pontotoc
    Acquisition substantially in the form of Exhibit D relating to its
    stock interests in Pontotoc, together with completed stock powers in favor
    of the Agent and, within thirty (30) days from the First Closing Date, stock
    certificates representing the stock of Pontotoc acquired on the First
    Closing Date.

    
    
                 (d)   
    Mortgage of the Borrower's Oil and Gas Properties.
    The Borrower shall deliver to the Agent the Security Documents executed by
    the Borrower encumbering the Borrower's Oil and Gas Properties.

    
    
    
    
                 (e)   
    Mortgage of Pontotoc Oil and Gas Properties.
    The Borrower shall cause Pontotoc, Pontotoc Texas, and OBEC to deliver to
    the Agent the Security Documents executed by each such Person encumbering
    its Oil and Gas Properties.

    
    
                 (f)   
    Mortgage of Forman's Oil and Gas Properties.
    The Borrower shall cause Forman to deliver to the Agent the Security
    Documents executed by Forman encumbering its Oil and Gas Properties.

    
    
                 (g)   
    Title Work. The Agent shall have received all
    title work with respect to the Borrower's Oil and Gas Real Properties as
    required by Section 8(d) .

    
    
                 (h)   
    Closing of Acquisition. The Agent shall have
    received satisfactory evidence that the exchange offer described in the
    Acquisition Documents has closed, with Pontotoc Acquisition acquiring at
    least sixty-six and two-thirds percent (66-2/3%) of Pontotoc's outstanding
    voting capital stock.

    
    
                 (i)    
    Payoff Letter. A payoff letter from the Prior
    Bank setting forth the amount of Indebtedness owing to the Prior Bank as of
    the First Closing Date, the agreement by the Prior Bank to terminate all
    Liens in favor of the Prior Bank securing such Indebtedness to the Prior
    Bank and the obligation to deliver UCC-3 termination statements and such
    other instruments, in form and substance satisfactory to the Lender, as
    shall be necessary to terminate and satisfy all Liens in favor of the Prior
    Bank promptly after receipt of an amount sufficient to pay the amount of the
    Indebtedness to the Prior Bank set forth in such payoff letter.

    
    
                 (j)    
    Payment of Expenses. The Borrower shall have
    paid all fees and expenses due the Agent hereunder.

    
    
                 (k)    
    Environmental Report. The Agent shall have
    received (i) the C-K Report and (ii) a satisfactory description of the
    current status of the Louisiana Department of Environmental Quality ("DEQ")
    site inspection at the Boutte Field, the responses by Forman, any deadlines
    or schedules related to the site inspection and actions taken by Forman with
    respect to the problems identified by the DEQ.

    
    
                 (l)    
    Issuance of Mandatory Redeemable Preferred Stock.
    The Borrower shall have issued at least $21,000,000 of the Mandatory
    Redeemable Preferred Stock and received the net cash proceeds thereof.

    
    
                 (m)    
    No Material Adverse Effect. No event shall
    have occurred or been disclosed to the Agent which could have a Material
    Adverse Effect on any Restricted Person.

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

                13.   
Conditions to Second Closing. At or prior to the
Second Closing, the Borrower shall satisfy each of the following conditions:

    
    
                 (a)    
    Hedging Arrangements. The Borrower shall have
    entered, or shall have caused one or more of the other Restricted Persons to
    have entered, into one or more Hedging Contracts satisfactory to the Agent,
    in order to satisfy its obligations under Section 15(r).

    
    
                 (b)    
    Pontotoc Merger. Pontotoc Acquisition and
    Pontotoc shall have merged, and the survivor shall have become a
    wholly-owned Restricted Subsidiary of the Borrower.

    
    
                 (c)    
    Title Work. The Agent shall have received all
    title work with respect to the Oil and Gas Real Properties of Pontotoc and
    its Subsidiaries as required by Section 8(d).

    
    
                 (d)    
    Compliance Certificate. The Agent shall have
    received a "Compliance Certificate" of the Chairman of the Board
    or President and of the chief financial officer of each Restricted Person,
    dated as of the Second Closing Date, in which such officers certify to the
    satisfaction of the conditions set out in subsections (a), (b) and (d) of Section
    14.

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

                14.   
Conditions to Each Advance. The obligation of
the Lenders to make each Advance to the Borrower and the obligation of the Agent
to arrange for the issuance of each Letter of Credit shall be subject to the
following conditions precedent:

    
    
                 (a)   
    No Event of Default. No Event of Default shall
    have occurred and be continuing on the date of such Advance or Letter of
    Credit or would result from the making of the Advance or the issuance of
    such Letter of Credit;

    
    
                 (b)    
    Representations and Warranties. The
    representations and warranties contained in Section 11 of this
    Agreement and each certificate or other writing delivered to the Agent
    pursuant hereto shall be correct on and as of the date of such Advance or
    Letter of Credit as though made on and as of such date (except to the extent
    that such representations and warranties related solely to an earlier date);

    
    
                 (c)    
    Notice of Advance. The Agent shall have
    received a Notice of Advance pursuant to Section 2(b) hereof with
    respect to such Advance or an LC Application pursuant to Section 7(b)
    hereof with respect to such Letter of Credit;

    
    
                 (d)    
    Borrowing Base. Following such Advance, the
    total amount of outstanding Advances and LC Obligations will not exceed the
    Borrowing Base;

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

    
    
                 (f)    
    No Material Adverse Effect. No event shall
    have occurred or been disclosed to the Agent which could reasonably be
    expected to have a Material Adverse Effect on any Restricted Person.

    
                15.   
Affirmative Covenants. Without the prior
written consent of the Required Lenders, each Restricted Person shall at all
times comply with the covenants contained in this section from the First Closing
Date and for so long as any part of this Agreement is in effect.

    
    
                 (a)    
    Financial Statements and Reports. The Borrower
    shall promptly furnish to the Agent from time to time upon request such
    information regarding the business and affairs and financial condition of
    the Borrower, 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 one hundred twenty (120) days
        after the close of each fiscal year, the annual audited Consolidated
        Financial Statements of the Borrower, prepared by the Borrower in
        accordance with GAAP and audited by an independent accounting firm
        reasonably acceptable to the Agent;

        
    
                 (ii)    
        Quarterly Financial Statements. As soon
        as available, and in any event within sixty (60) days after the end of
        each Fiscal Quarter of each year, except for the last Fiscal Quarter,
        for which the time period shall be ninety (90) days, the quarterly
        unaudited Consolidated Financial Statements of the Borrower prepared in
        accordance with GAAP;

        
    
                 (iii)    
        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 Section 15(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 Section
    15(a)(i) hereof and each of the quarterly unaudited Financial Statements
    pursuant to Section 15(a)(ii) hereof, the Borrower will furnish
    or cause to be furnished to the Agent a certificate signed by its Chief
    Executive or Financial Officer (i) stating that the Borrower has fulfilled
    in all material respects its obligations under the Note(s) and the Security
    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 Potential Event
    of Default or an Event of Default has occurred, specifying the Potential
    Event of Default or Event of Default and the nature and status thereof; (ii)
    to the extent requested from time to time by the Agent, specifically
    affirming compliance of the 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 16(c), (d), (e), (f), (g),
    (h) and (j); 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)    
    Accountant's Certificate. Concurrently with
    the furnishing of the annual audited Financial Statements pursuant to Section
    15(a)(i) hereof, the Borrower will furnish a statement from the firm of
    independent public accountants which audited such Financial Statements 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 the Borrower's compliance with Sections 16(c),
    (d), (e), (f), (g), (h) and (j) of this Agreement.

    
    
                 (d)    
    Taxes and Other Liens. Each Restricted Person
    will pay and discharge promptly all taxes, assessments and governmental
    charges or levies imposed upon it which it is required to pay, or upon the
    income or any assets or property of the Restricted Person 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 the Restricted Person and which, in each
    instance or in aggregate, could reasonably be expected to result in a
    Material Adverse Effect; provided, however, that the Restricted Person shall
    not 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.

    
    
                 (e)    
    Compliance with Laws. Each Restricted Person
    will 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 Governmental Entities,
    except where the failure to so comply could not reasonably be expected to
    have a Material Adverse Effect.

    
    
                 (f)    
    Further Assurances. Each Restricted Person
    will cure promptly any defects in the creation, issuance, execution and
    delivery of the Note(s) and the Security Documents, including this
    Agreement. Each Restricted Person, at its sole expense, will promptly
    execute and deliver to the 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 Note(s) or more fully to state the obligations
    set out herein.

    
    
                 (g)    
    Bonds and Insurance. Each Restricted Person
    now maintains and will continue to maintain all surface disturbance and
    performance bonds, and plugging bonds, as required by Law, as well as any
    necessary insurance with financially sound and reputable insurers. All
    insurance carried by each Restricted Person shall insure against such risks,
    have such coverage amounts, deductibles, and other terms, and be issued by
    such insurers as a similarly situated Person in the same industry would deem
    reasonable. Upon request of the Agent, each Restricted Person will furnish
    to the Agent a summary of its insurance coverage in form and substance
    satisfactory to the Agent, and, if requested, will furnish the Agent copies
    of the applicable policies.

    
    
                 (h)    
    Right of Inspection. Each Restricted Person
    will permit any officer, employee or agent of the Agent to examine the
    Borrower's books, records and accounts, and take copies and extracts
    therefrom, all at such reasonable times following reasonable notices and as
    often as the Agent may reasonably request. The Agent will keep all such
    information confidential and will not without prior written consent disclose
    or reveal the information to any person other than the Agent's officers,
    employees, legal counsel, 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 by law
    or in connection with the enforcement of the Agent's rights and remedies
    under the Notes, this Agreement and the other Security Documents.

    
    
                 (i)    
    Notice of Certain Events. The Borrower shall
    promptly notify the Agent in writing if the Borrower learns of the
    occurrence of (i) any event which constitutes an Event of Default
    together with a detailed statement by the Borrower of the steps being taken
    to cure the Event of Default; or (ii) any material legal, judicial or
    regulatory proceedings affecting the Borrower, of any of the assets or
    properties of the Borrower; or (iii) any material dispute between the
    Borrower and any Person or Governmental Entity; or (iv) any other
    matter which in the Borrower's reasonable opinion could reasonably be
    expected to have a Material Adverse Effect. The Borrower shall promptly send
    all correspondence and documentation relating to these events to the Agent.

    
    
                 (j)    
    Disclosure Reports. In addition to the notices
    required under Section 15(i) above, the Borrower shall promptly
    notify the Agent in writing (each, a "Disclosure Report")
    if the Borrower learns of any event, circumstance, or occurrence that
    renders the Disclosure Schedule or the representations and warranties under Section
    11 inaccurate in any material respect.

    
    
                 (k)    
    Environmental Matters.

  
    
    
                 (i)    
    Each Restricted Person will deliver to the Agent
    (1) promptly upon its becoming available, one copy of each report sent
    by the Borrower to any Governmental Entity pursuant to any Environmental Law
    relating to any matter which could reasonably be expected to have a Material
    Adverse Effect, (2) notice, in writing, promptly upon the Borrower's
    receipt of such notice, of 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; or (y) the release or threatened
    release of any toxic or hazardous waste into the environment which
    reasonably could be expected to have a Material Adverse Effect, or
    (3) written notice of the existence of any Environmental Lien on any
    properties or assets of the Borrower, and the Borrower shall immediately
    deliver a copy of any such notice to the Agent.

    
    
                 (ii)    
    Borrower will deliver to Agent (1) within 120 days
    following the First Closing Date an Environmental Site Assessment relating
    to the Oil and Gas Real Properties located in Louisiana owned by Forman and
    the Borrower, (2) within 30 days following the First Closing Date, if
    necessary, verification that the Oil and Gas Real Properties located in
    Oklahoma owned by Pontotoc and its Restricted Subsidiaries have been
    surveyed for Naturally Occurring Radioactive Material and that, if
    necessary, Pontotoc and/or its Restricted Subsidiaries have a general
    license with respect thereto, (3) within 60 days following the First Closing
    Date, a report on the actions taken by Pontotoc and/or its Restricted
    Subsidiaries with respect to the problems identified in the C-K Report, and
    (4) on or before December 31, 2001, a report describing the status of the
    problems identified in the C-K Report and the actions taken with respect
    thereto.

  

    
    
                 (l)    
    Compliance and Maintenance. Each Restricted
    Person will (i) except with respect to Oil and Gas Properties relating to
    wells such Restricted Person wishes to plug and abandon or to transfer a
    third party, maintain the Oil and Gas Properties in good and workable
    condition at all times and make all repairs, replacements, and improvements
    to the Oil and Gas Properties and other 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
    exercised in good faith; and (ii) take or cause to be taken whatever actions
    are necessary to prevent an event or condition of default by such Restricted
    Person under the provisions of any gas purchase or sales contract or any
    lease comprising a part of the Oil and Gas Real Properties or other
    Collateral security hereunder which default could reasonably be expected to
    result in a Material Adverse Effect. The Borrower shall, however, have the
    right to contest in good faith by appropriate proceedings, the applicability
    or lawfulness of any such default, 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.

    
    
                 (m)    
    Compliance with Leases and Other Instruments.
    Each Restricted Person will pay or cause to be paid and discharge all
    rentals, delay rentals, royalties, production payments, and indebtedness
    required to be paid by such Restricted Person, and do all things necessary
    to keep unimpaired the rights of the Borrower thereunder and to prevent the
    forfeiture thereof or default thereunder; provided, however, that nothing in
    this Agreement shall be deemed to require the Borrower to perpetuate or
    renew any oil and gas lease or other lease or to prevent the Borrower from
    abandoning or releasing any oil and gas lease or other lease or well when,
    in the opinion of the Borrower exercised in good faith, it is not in the
    best interest of the Borrower to perpetuate the same.

    
    
                 (n)    
    Certain Additional Assurances Regarding
    Maintenance and Operations of Properties. With respect to those Oil and
    Gas Real Properties which are being operated by operators other than the
    Borrower, the Borrower shall not be obligated to perform any undertakings
    contemplated by the covenants and agreements contained in Subsections
    15(g), 15(k) or 15(1) hereof which are performable only by such
    operators and are beyond the control of the Borrower; provided, however, the
    Borrower agrees to promptly take all commercially reasonable actions
    available under any operating agreements or otherwise to bring about the
    performance of any such undertakings required to be performed thereunder.

    
    
                 (o)    
    Sale of Oil and Gas Properties. Between
    redeterminations of the Borrowing Base under Section 9, the Borrower
    and the other Restricted Persons may sell up to 10% of their Oil and Gas
    Properties, calculated on an aggregate basis for all such Persons and
    pursuant to the Loan Values most recently established by the Agent as of the
    calculation date. Provided that no Borrowing Base Deficiency then exists,
    the Borrower and the Restricted Persons in question may retain all proceeds
    of any such sale, and the Agent may not reduce the Borrowing Base to reflect
    any such sale until the Agent's next redetermination of the Borrowing Base
    under Section 9. Upon the Borrower's request, the Agent will inform
    the Borrower of the Loan Value assigned to any Oil and Gas Property the
    Borrower wishes to sell.

    
    
                 (p)    
    Guaranties of the Borrower's Restricted
    Subsidiaries. Each Restricted Subsidiary of the Borrower now existing or
    created, acquired or coming into existence after the date hereof shall,
    promptly upon request by the Agent, execute and deliver to the Agent an
    absolute and unconditional guaranty of the timely repayment of the
    Obligations and the due and punctual performance of the obligations of the
    Borrower hereunder, which guaranty shall be satisfactory to the Agent in
    form and substance. Pontotoc, Pontotoc Texas, and OBEC shall duly execute
    and deliver such a guaranty at the First Closing. The Borrower will cause
    each of its Restricted Subsidiaries to deliver to the Agent, simultaneously
    with its delivery of such a guaranty, written evidence satisfactory to the
    Agent and its counsel that such Restricted Subsidiary has taken all
    corporate or partnership action necessary to duly approve and authorize its
    execution, delivery and performance of such guaranty and any other documents
    which it is required to execute.

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

    
    
                 (r)    
    Hedging Contracts. Prior to the Second
    Closing, the Borrower and the Restricted Persons shall enter into one or
    more Hedging Contracts covering at least 50% of anticipated production from
    the proved, developed, producing reserves of the Borrower and other
    Restricted Persons as of the date hereof through December 31, 2002 (with
    appropriate reductions in the volume of oil and gas production hedged to
    reflect the anticipated depletion of such reserves over time).

    
    
                 (s)    
    Title. To the extent necessary to remain in
    compliance with the Continuing 85% Test, the Borrower and each other
    Restricted Person shall, following completion of the initial title work
    under Section 8(d), cure all title defects or exceptions (except for
    Permitted Liens) affecting such Person's Oil and Gas Real Properties which
    are in the Borrowing Base or substitute acceptable Collateral with no title
    defects or exceptions except for Permitted Liens covering Collateral of an
    equivalent value, within thirty (30) days after a request by the Agent to
    cure such defects or exceptions. If the Borrower is unable to cure any such
    title defect requested by the Agent to be cured within the thirty (30) day
    period, such failure to cure shall not be an Event of Default, but, only if
    necessary to cause the Borrower to remain in compliance with the Continuing
    85% Test, the Agent shall exclude the affected Oil and Gas Real Property
    from the Borrowing Base until such time as title is satisfactory to the
    Agent. Upon each redetermination of the Borrowing Base, the Agent shall
    inform the Borrower of the aggregate percentage, calculated by Loan Value,
    of the Restricted Persons' Oil and Gas Real Properties with respect to which
    the Agent has satisfactory Title Documents.

    
                16.    
Negative Covenants. Without the prior
written consent of the Required Lenders, each Restricted Person will at all
times comply with the covenants contained in this section from the First Closing
Date and for so long as any part of this Agreement is in effect.

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

    
    
                 (b)    
    Change of Control or Ownership. The Borrower
    will not permit a Change of Control or a Change of Ownership.

    
    
                 (c)    
    Indebtedness. No Restricted Person will in any
    manner owe or be liable for Indebtedness except:

  
        
    
                 (i)   
        the Obligations;

        
    
                 (ii)   
        any Indebtedness owed by a Restricted Person
        (other than Forman or the Borrower) to another Restricted Person;

        
    
                 (iii)    
        Indebtedness owed by Forman or the Borrower to
        another Restricted Person or by any Restricted Person to a third party
        which Indebtedness is subordinated to the Obligations upon terms and
        conditions satisfactory to the Agent in its sole and absolute discretion
        (herein called "Subordinated Indebtedness");

    
    
                 (iv)   
    the Mandatory Redeemable Preferred Stock;

  

  
        
    
                 (v)    
        the Class B Redeemable Preferred Stock;

        
    
                 (vi)    
        Indebtedness outstanding under the instruments
        and agreements described on the Disclosure Schedule, including any
        renewals or extensions of such Indebtedness which do not increase the
        principal thereof;

        
    
                 (vii)    
        purchase money Indebtedness in an aggregate
        principal amount not to exceed the greater of (x) $3,000,000 or (y) 10%
        of the aggregate Loans outstanding under this Agreement at the time the
        purchase money Indebtedness is incurred, provided that the original
        principal amount of any such Indebtedness shall not be in excess of the
        purchase price of the asset acquired thereby and such Indebtedness shall
        be secured only by the acquired asset;

        
    
                 (viii)    
        Indebtedness arising under Hedging Contracts
        required under Section 15(r) and permitted under Section 16(n);

        
    
                 (ix)    
        Indebtedness owed by a Restricted Subsidiary
        subsequently acquired by the Borrower, directly or through one of the
        Borrower's then existing Restricted Subsidiaries, which Indebtedness was
        not incurred in contemplation of the Borrower's acquisition of such
        Person and which Indebtedness is either unsecured or secured only by the
        assets of the acquired Person; and

        
    
                 (x)    
        Miscellaneous items of Indebtedness not described
        in subsections (i) through (v) which do not in the aggregate (taking
        into account all such Indebtedness of all Restricted Persons) exceed
        $1,000,000 at any one time outstanding.

  

    
    
                 (d)    
    Investments. No Restricted Person will make
    any Investment other than:

  
        
    
                 (i)    
        Permitted Investments;

        
    
                 (ii)    
        Investments by any Restricted Person in any
        other Restricted Person (other than Forman), and

        
    
                 (iii)    
        Investments by the Borrower in Unrestricted
        Subsidiaries up to an aggregate amount of $500,000.00. The Borrower may
        make Investments in Unrestricted Subsidiaries in excess of $500,000.00
        provided: (y) the Agent consents to such additional Investment,
        such consent not to be unreasonably withheld, and (z) at the time
        of such Investment an Event of Default shall not have occurred and be
        continuing.

  

    
    
                 (e)    
    Distributions. Except for permitted
    redemptions of the Borrower's Preferred Stock pursuant to Section 16(r)
    and payments by a Restricted Person to another Restricted Person (other than
    Forman), no Restricted Person may pay any cash dividends, cash redemptions,
    or make any other cash distributions (collectively "Distributions")
    to its shareholders unless each of the following requirements is satisfied:
    (i) the Distributions are made with respect to the Borrower's outstanding
    Preferred Stock; (ii) aggregate Distributions for the Borrower's fiscal year
    may not exceed $3,000,000; and (iii) no Event of Default shall have occurred
    and be continuing on the date such Distribution is declared or paid, or
    would result from the making of such Distribution. The term
    "Distribution" shall exclude (v) any payments made to shareholders
    of Pontotoc or Forman upon their exercise of their dissenters' rights or
    made in connection with the transactions contemplated by this Agreement (provided,
    however, that the aggregate of all Dissenters' Rights Costs may not
    exceed $5,000,000), (w) any reasonable salary, bonuses, or other similar
    compensation paid in the ordinary course of business to shareholders who are
    also employees of the Borrower or one of its Subsidiaries, (x) any success
    fees paid to Mr. Jeff Clarke in cash or Preferred Stock upon closing of the
    transactions contemplated by this Agreement, with the aggregate of such fees
    not to exceed $375,000, (y) any advisory, success, or other fees payable to
    Jefferies or TCW as a result of Acquisition in an amount previously
    disclosed to and approved by the Agent, and (z) any subsequent advisory,
    success, or other fees payable to Jefferies or TCW for further transactions
    involving the Borrower or any of its Subsidiaries that comply with Section
    16(m) and are disclosed to the Agent in writing.

    
    
                 (f)    
    Current Ratio. The Borrower shall not, on a
    Consolidated basis, allow its ratio of Current Assets to Current Liabilities
    to ever be less than 1.0 to 1.0.

    
    
                 (g)    
    Total Debt to EBITDA. The Borrower shall not,
    on a Consolidated basis, allow its ratio of Debt to EBITDA to ever exceed
    3.0 to 1.0 (provided, however, that, if the Borrower or one of its
    Restricted Subsidiaries acquires another Restricted Subsidiary, such
    calculation shall be made on a pro forma basis as if the acquiree had been
    owned by the Borrower or its Restricted Subsidiary throughout the
    measurement period in question).

    
    
                 (h)    
    Ratio of EBITDA to Cash Interest Expense. The
    Borrower shall not, on a Consolidated basis, allow its ratio of EBITDA to
    Cash Interest Expense to ever be less than 3.5 to 1.0.

    
    
                 (i)    
    Method of Calculation. Up to and including the
    end of the fourth Fiscal Quarter following the First Closing Date, the
    financial ratio set forth in Subsections 16 (g) and 16(h) above shall
    be calculated for each Fiscal Quarter by annualizing the Borrower's
    Consolidated EBITDA through the Fiscal Quarter in question. Thereafter, such
    financial ratios shall be calculated for the last four consecutive Fiscal
    Quarters then most recently ended.

    
    
                 (j)    
    Minimum Tangible Net Worth. Permit the
    Consolidated Tangible Net Worth of the Borrower and its Restricted
    Subsidiaries as of the end of any Fiscal Quarter to be less than
    $40,000,000.

    
    
                 (k)    
    Amendments to Corporate Documents. No
    Restricted Person will amend or modify any material provision of its
    articles of incorporation (including any preferred stock certificate of
    designation) or bylaws (except to authorize additional shares of common or
    preferred stock).

    
    
                 (l)    
    Nature of Business. No Restricted Person will
    permit any material change to be made in the character of its business as
    carried on at the First Closing Date or, if the Person becomes a Restricted
    Person after the First Closing Date, at the date on which such Person
    becomes a Restricted Person.

    
    
                 (m)    
    Transactions with Affiliates. No Restricted
    Person will 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. No Restricted Person
    will enter into hedging transactions involving more than 85% of the
    Borrower's and the other Restricted Persons' monthly production forecast for
    all of the Borrower's and the other Restricted Persons' proved and producing
    oil and gas properties pursuant to the Borrower's most recent engineering
    evaluation.

    
    
                 (o)    
    Loans and Advances. Neither the Borrower nor
    any Restricted Person shall make or permit to remain outstanding any loans
    or advances to any Person other than (i) loans to employees made in the
    ordinary course of business and not exceeding $10,000 to any single
    employee, (ii) loans or advances to Unrestricted Subsidiaries in an
    aggregate amount outstanding at any time of up to $1,000,000.00, and (iii)
    loans or advances to another Restricted Person as permitted under Section
    16(c)(ii) and (iii).

    
    
                 (p)    
    New Subsidiaries. No Restricted Person will
    create, or invest in, any new Restricted Subsidiaries, unless at the time of
    such creation or acquisition the new Restricted Subsidiary becomes a
    Guarantor and grants a first priority Lien in its Oil and Gas Properties in
    favor of the Agent on behalf of the Lenders.

    
    
                 (q)    
    Limitation on Mergers, Issuances of Securities.
    No Restricted Person will merge or consolidate with or into any other Person
    except that (i) any Restricted Subsidiary of the Borrower may be merged into
    or consolidated with another Restricted Subsidiary of the Borrower, so long
    as a Guarantor is the surviving business entity, (ii) any Restricted
    Subsidiary of the Borrower may be merged into or consolidated with the
    Borrower, so long as the Borrower is the surviving business entity, or (iii)
    any Restricted Subsidiary of the Borrower may be merged into or consolidated
    with another Person so long as the Restricted Subsidiary is the surviving
    business entity and immediately following such merger or consolidation no
    Event of Default exists, and provided further that the Agent receives prior
    written notice of any such merger or consolidation.

    
    
                 (r)    
    Permitted Redemptions of Preferred Stock. The
    Borrower may not redeem all or any part of its Preferred Stock unless (i)
    the Borrower provides the Agent with thirty (30) days' advance written
    notice of the redemption, (ii) on the effective date of the redemption, no
    Event of Default exists, and (iii) the redemption is funded exclusively with
    the proceeds of a new equity issuance or the Agent grants its prior written
    consent to the Borrower to effect the redemption, such consent not to be
    unreasonably withheld.

    
    
                 (s)    
    Sale of Oil and Gas Properties. No Restricted
    Person may sell any of its Oil and Gas Properties except (i) obsolete Oil
    and Gas Personal Property no longer required for such Restricted Person's
    business operations, (ii) in compliance with Section 15(o), (iii)
    pursuant to a farm-out agreement in the ordinary course of business, or (iv)
    as otherwise permitted by the Agent in writing.

                17.    
Events of Default and Remedies.

  

  
    
                 (a)    
  Events of Default. Each of the following events
  constitutes an Event of Default under this Agreement:

  
      
    
                 (i)    
      The Borrower fails to pay any principal or interest
      component of any Note when due and payable, whether at a date for the
      payment of a fixed installment or as a contingent or other payment becomes
      due and payable or as a result of acceleration or otherwise, and, in the
      case of interest payments only, three (3) Business Days have elapsed since
      such payment was due;

      
    
                 (ii) Any Restricted Person fails to pay any Obligation
      (other than the Obligations in subsection (i) above) when due and payable,
      whether at a date for the payment of a fixed installment or as a
      contingent or other payment becomes due and payable or as a result of
      acceleration or otherwise, and five (5) days have elapsed since such
      payment was due;

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

      
    
                 (iv)    
      Any Restricted Person fails to duly observe,
      perform or comply with any covenant, agreement or provision of Section
      16 (other than involuntary Liens created in violation of Section
      16(a));

      
    
                 (v)    
      the Second Closing does not occur on or before the
      Second Closing Date;

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

      
    
                 (vii)    
      Any representation or warranty previously,
      presently or hereafter made in writing by or on behalf of any Restricted
      Person in connection with any Loan Document shall prove to have been false
      or incorrect in any material respect on any date on or as of which made;

      
    
                 (viii)    
      Any Loan Document at any time ceases to be
      valid, binding and enforceable as warranted in Section 11 for any
      reason and the Restricted Persons who are parties to such Loan Document do
      not cause such Loan Document to be reinstated as a valid, binding, and
      enforceable agreement within ten (10) days of notice from the Agent
      requesting such action;

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

      
    
                 (x)    
      Any Restricted Person (i) fails to pay any
      portion, when such portion is due, of any of its Indebtedness in excess of
      $1,000,000, or (ii) breaches or defaults in the performance of any
      covenant or obligation (other than for the payment of money) in any
      agreement or instrument by which any such Indebtedness is issued,
      evidenced, governed, or secured, and any such failure, breach or default
      continues beyond any applicable period of grace provided therefor and such
      nonpayment breach or default results in the acceleration of the
      Indebtedness in question;

      
    
                 (xi)    
      Either (i) any "accumulated funding
      deficiency" (as defined in Section 412(a) of the Internal Revenue
      Code) in excess of $100,000 exists with respect to any ERISA Plan, whether
      or not waived by the Secretary of the Treasury or his delegate, or
      (ii) any Termination Event occurs with respect to any ERISA Plan and
      the then current value of such ERISA Plan's benefit liabilities exceeds
      the then current value of such ERISA Plan's assets available for the
      payment of such benefit liabilities by more than $100,000 (or in the case
      of a Termination Event involving the withdrawal of a substantial employer,
      the withdrawing employer's proportionate share of such excess exceeds such
      amount);

      
    
                 (xii)    
      Any Restricted Person:

  
          
    
                 (A)    
          suffers the entry against it of a judgment,
          decree or order for relief by a Tribunal of competent jurisdiction in
          an involuntary proceeding commenced under any applicable bankruptcy,
          insolvency or other similar Law of any jurisdiction now or hereafter
          in effect, including the federal Bankruptcy Code, as from time to time
          amended, or has any such proceeding commenced against it which remains
          undismissed for a period of sixty (60) days; or

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

          
    
                 (C)    
          suffers the appointment of or taking possession
          by a receiver, liquidator, assignee, custodian, trustee, sequestrator
          or similar official of all or a substantial part of its assets or of
          any part of the Collateral in a proceeding brought against or
          initiated by it, and such appointment or taking possession is neither
          made ineffective nor discharged within sixty (60) days after the
          making thereof, or such appointment or taking possession is at any
          time consented to, requested by, or acquiesced to by it; or

          
    
                 (D)    
          suffers the entry against it of a final
          judgment for the payment of money in excess of $1,000,000 (not covered
          by insurance satisfactory to the Agent in its reasonable discretion),
          unless the same is discharged within sixty (60) days after the date of
          entry thereof or an appeal or appropriate proceeding for review
          thereof is taken within such period and a stay of execution pending
          such appeal is obtained; or

          
    
                 (E)    
          suffers a writ or warrant of attachment or any
          similar process to be issued by any Tribunal against all or any
          substantial part of its assets or any part of the Collateral, and such
          writ or warrant of attachment or any similar process is not stayed or
          released within sixty (60) days after the entry or levy thereof or
          after any stay is vacated or set aside; and

  

      
    
                 (xiii)    
      Any Change of Control or Change of Ownership
      occurs.

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

  
    
                 (b)    
  Remedies. If any Event of Default shall occur
  and be continuing, the Agent may protect and enforce the Agent's or the
  Lenders' rights under the Loan Documents by any appropriate proceedings,
  including proceedings for specific performance of any covenant or agreement
  contained in any Loan Document, and the Agent may enforce the payment of any
  Obligations due to the Agent or the Lenders or enforce any other legal or
  equitable right which it may have. All rights, remedies and powers conferred
  upon the Agent under the Loan Documents shall be deemed cumulative and not
  exclusive of any other rights, remedies or powers available under the Loan
  Documents or at Law or in equity.

                18.    
The Agent.

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

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

    
    
                 (c)    
    Credit Decisions. Each Lender acknowledges
    that it has, independently and without reliance upon any other Lender, made
    its own analysis of the Borrower and the transactions contemplated hereby
    and its own independent decision to enter into this Agreement and the other
    Loan Documents. Each Lender also acknowledges that it will, independently
    and without reliance upon any other Lender and based on such documents and
    information as it shall deem appropriate at the time, continue to make its
    own credit decisions in taking or not taking action under the Loan
    Documents.

    
    
                 (d)    
    Indemnification. The Lenders agree
    to indemnify the Agent (to the extent not reimbursed under Section 19(c)
    hereof, but without limiting the obligations of the Borrower under such
    section) ratably in accordance with their respective Percentage Shares, for
    any and all liabilities, obligations, losses, damages, penalties, actions,
    judgments, suits, costs, expenses (including attorneys' fees), or
    disbursements of any kind and nature whatsoever that may be imposed on,
    incurred by or asserted against the Agent (including by any Lender) in any
    way relating to or arising out of any Loan Document or the transactions
    contemplated thereby or any action taken or omitted by the Agent under any
    Loan Document (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF
    THE AGENT); provided that no Lender shall be liable for any of
    the foregoing to the extent they arise from the gross negligence or willful
    misconduct of the Person to be indemnified. Without limitation of the
    foregoing, each Lender agrees to reimburse the Agent promptly upon demand
    for its ratable share of any costs or expenses payable by the Borrower under
    Section 19(c), to the extent that the Agent is not promptly
    reimbursed for such costs and expenses by the Borrower. The agreements
    contained in this section shall survive payment in full of the Loans and all
    other amounts payable under this Agreement.

    
    
                 (e)    
    Non-Reliance on the Agent and Other Lenders.
    Each Lender agrees that it has, independently and without reliance on the
    Agent or any other Lender, and based on such documents and information as it
    has deemed appropriate, made its own credit analysis of the Borrower and its
    Subsidiaries and decision to enter into this Agreement and that it will,
    independently and without reliance upon the Agent or any other Lender, and
    based on such documents and information as it shall deem appropriate at the
    time, continue to make its own analysis and decisions in taking or not
    taking action under the Loan Documents. Except for notices, reports, and
    other documents and information expressly required to be furnished to the
    Lenders by the Agent hereunder, the Agent shall not have any duty or
    responsibility to provide any Lender with any credit or other information
    concerning the affairs, financial condition, or business of any Restricted
    Person or any of its Subsidiaries or Affiliates that may come into the
    possession of the Agent or any of its Affiliates.

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

    
    
                 (g)    
    Sharing of Set-Offs and Other Payments. Each
    Lender agrees that if it shall, whether through the exercise of rights under
    Security Documents or rights of banker's lien, set off, or counterclaim
    against the Borrower or otherwise, obtain payment of a portion of the
    aggregate Obligations owed to it which, taking into account all
    distributions made by the Agent under Section 6(a), causes such
    Lender to have received more than it would have received had such payment
    been received by the Agent and distributed pursuant to Section 6(a),
    then (a) it shall be deemed to have simultaneously purchased and shall
    be obligated to purchase interests in the Obligations as necessary to cause
    all the Lenders to share all payments as provided for in Section 6(a),
    and (b) such other adjustments shall be made from time to time as shall
    be equitable to ensure that the Agent and all the Lenders share all payments
    of Obligations as provided in Section 6(a); provided, however,
    that nothing herein contained shall in any way affect the right of any
    Lender to obtain payment (whether by exercise of rights of banker's lien,
    set-off or counterclaim or otherwise) of indebtedness other than the
    Obligations. The Borrower expressly consents to the foregoing arrangements
    and agrees that any holder of any such interest or other participation in
    the Obligations, whether or not acquired pursuant to the foregoing
    arrangements, may to the fullest extent permitted by Law exercise any and
    all rights of banker's lien, set-off, or counterclaim as fully as if such
    holder were a holder of the Obligations in the amount of such interest or
    other participation. If all or any part of any funds transferred pursuant to
    this section is thereafter recovered from the seller under this section
    which received the same, the purchase provided for in this section shall be
    deemed to have been rescinded to the extent of such recovery, together with
    interest, if any, if interest is required pursuant to the order of a
    Tribunal order to be paid on account of the possession of such funds prior
    to such recovery.

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

    
    
                 (i)    
    Benefit of Section 18. The provisions of this
    section (other than Section 18(j)) are intended solely for the
    benefit of the Lenders, and no Restricted Person shall be entitled to rely
    on any such provision or assert any such provision in a claim or defense
    against any Lender. The Lenders may waive or amend such provisions as they
    desire without any notice to or consent of the Borrower or any Restricted
    Person.

    
    
                 (j)    
    Resignation. The Agent may resign at any time
    by giving written notice thereof to the Lenders and the Borrower. Each such
    notice shall set forth the date of such resignation. Upon any such
    resignation and after consultation with the Borrower, the Required Lenders
    shall have the right to appoint a successor to the Agent. If the successor
    Agent is already a Lender, the Borrower's prior approval shall not be
    required for the appointment of the successor Agent, but, if the successor
    Agent is not already a Lender, the Borrower's approval shall be required
    pursuant to Section 19(f) below. A successor must be appointed for
    the retiring Agent, and the Agent's resignation shall become effective when
    such successor accepts such appointment. If, within thirty days after the
    date of the retiring Agent's resignation, no successor has been appointed
    and has accepted such appointment, then the retiring Agent may appoint a
    successor Agent, which shall be a commercial bank organized or licensed to
    conduct a banking or trust business under the Laws of the United States of
    America or of any state thereof. Upon the acceptance of any appointment as
    the Agent hereunder by a successor Agent, the retiring Agent shall be
    discharged from its duties and obligations under this Agreement and the
    other Loan Documents. After any retiring Agent's resignation hereunder the
    provisions of this Section 18 shall continue to inure to its benefit
    as to any actions taken or omitted to be taken by it while it was the Agent
    under the Loan Documents.

    
                19.    
Miscellaneous Provisions.

    
    
                 (a)    
    Exercise of Rights. The rights, powers and
    remedies of the Agent and the Lenders hereunder are cumulative and in
    addition to all rights, powers and remedies provided under any and all
    agreements between the Borrower and the Agent and the Lenders relating
    hereto, at law, in equity or otherwise. Neither any delay nor any omission
    by the Agent and the Lenders to exercise any right, power or remedy shall
    operate as a waiver thereof, nor shall a single or partial exercise thereof
    preclude any other or further exercise thereof or any exercise of any other
    right, power or remedy.

    
    
                 (b)    
    Notices. Any notices or other communications
    required or permitted to be given by this Agreement or any other documents
    and instruments referred to herein must be given in writing (which may be by
    facsimile transmission) and must be delivered to the party to whom such
    notice or communication is directed at the address of such party as follows:

  
    
    
                 (i)    
    The Borrower:     Ascent Energy Inc.

                                                   
    650 Poydras Street

                                                   
    Suite 2200

                                                   
    New Orleans, LA 70130

                                                   
    Attention: Jeff Clarke

                                                   
    Telephone: 504-586-8888

                                                   
    Facsimile: 504-522-1796

                       
    with a copy to:     c/o Jones, Walker, Waechter,

                                                   
    Poitevent, Carrere & Denegre, L.L.P.

                                                   
    201 St. Charles Avenue

                                                   
    Suite 5100

                                                   
    New Orleans, Louisiana 70170-5100

                                                   
    Attention: William B. Masters

                                                   
    Facsimile: (504) 582-8380

    
    
                 (ii)    
    The Agent:           Fortis Capital Corp.

                                                   
    100 Crescent Court

                                                   
    Suite 1777

                                                   
    Dallas, Texas 75201

                                                   
    Attention: Darrell Holley

                                                                   
    Managing Director

                                                   
    Telephone No.: (214) 953-9307

                                                   
    Facsimile No.: (214) 754-5982

                                                   
    and

                        
                                                   
                        Michiel de Haan, Associate

                                                   
                        Telephone No.: (214) 953-9319

                                                   
                        Facsimile No.: (214) 759-5982

                        

                   
with a copy to:      Patton Boggs LLP

                   
                           
2001 Ross Avenue

                   
                           
Suite 3000

                   
                           
Dallas, TX 75201

                   
                           
Attention: Robert S. Rendell

                   
                           
Telephone: 214-758-1514

                   
                           
Facsimile: 214-758-1550

    

    
    
                 Any such notice or other communication shall be deemed to
    have been given (whether actually received or not) on the day it is
    personally delivered or delivered by facsimile as aforesaid or, if mailed,
    on the third day after it is mailed by certified U.S. mail, return receipt
    requested addressed as aforesaid. Any party may change its address for
    purposes of this Agreement by giving notice of such change to the other
    party pursuant to this section.

    
    
                 (c) Expenses and Indemnity.

        
    
                 (i)    
        Payment of Expenses. Whether or not the
        transactions contemplated by this Agreement are consummated, the
        Borrower will promptly (and in any event, within thirty (30) days after
        any invoice or other statement or notice) pay: (i) all transfer,
        stamp, mortgage, documentary or other similar taxes, assessments or
        charges levied by any governmental or revenue authority in respect of
        this Agreement or any of the other Loan Documents or any other document
        referred to herein or therein, (ii) all reasonable costs and
        expenses incurred by or on behalf of the Agent (including without
        limitation reasonable attorneys' fees, consultants' fees and engineering
        fees, travel costs and miscellaneous expenses) in connection with
        (1) the negotiation, preparation, execution and delivery of the
        Loan Documents, and any and all consents, waivers or other documents or
        instruments relating thereto, (2) the filing, recording, refiling
        and re-recording of any Loan Documents and any other documents or
        instruments or further assurances required to be filed or recorded or
        refiled or re-recorded by the terms of any Loan Document, (3) the
        borrowings hereunder and other action reasonably required in the course
        of administration hereof, (4) monitoring or confirming (or
        preparation or negotiation of any document related to) the Borrower's
        compliance with any covenants or conditions contained in this Agreement
        or in any Loan Document, and (iii) all reasonable costs and
        expenses incurred by or on behalf of any Lender (including without
        limitation reasonable attorneys' fees, consultants' fees and accounting
        fees) in connection with the defense or enforcement of any of the Loan
        Documents (including this section) or the defense of any Lender's
        exercise of its rights thereunder. In addition to the foregoing, until
        all Obligations have been paid in full, the Borrower will also pay or
        reimburse the Agent for all reasonable out-of-pocket costs and expenses
        of the Agent or its agents or employees in connection with the
        continuing administration of the Loans and the related due diligence of
        the Agent, including travel and miscellaneous expenses and fees and
        expenses of the Agent's outside counsel, reserve engineers and
        consultants engaged in connection with the Loan Documents.

        
    
                 (ii)    
        Indemnity. The Borrower agrees
        to indemnify each Lender, upon demand, from and against any and all
        liabilities, obligations, claims, losses, damages, penalties, fines,
        actions, judgments, suits, settlements, costs, expenses or disbursements
        (including reasonable fees of attorneys, accountants, experts and
        advisors) of any kind or nature whatsoever (in this section collectively
        called "liabilities and costs") which to any extent (in whole
        or in part) may be imposed on, incurred by, or asserted against such
        Lender growing out of, resulting from or in any other way associated
        with any of the Collateral, the Loan Documents and the transactions and
        events (including the enforcement or defense thereof) at any time
        associated therewith or contemplated therein (whether arising in
        contract or in tort or otherwise and including any violation or
        noncompliance with any Environmental Laws by any Lender or any other
        Person or any liabilities or duties of any Lender or any other Person
        with respect to Hazardous Materials found in or released into the
        environment).

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

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

    
    
                 (d)    
    Waivers and Amendments. No failure or delay
    (whether by course of conduct or otherwise) by any Lender in exercising any
    right, power or remedy which such Lender may have under any of the Loan
    Documents shall operate as a waiver thereof or of any other right, power or
    remedy, nor shall any single or partial exercise by any Lender of any such
    right, power or remedy preclude any other or further exercise thereof or of
    any other right, power or remedy. No waiver of any provision of any Loan
    Document and no consent to any departure therefrom shall ever be effective
    unless it is in writing and signed as provided below in this section, and
    then such waiver or consent shall be effective only in the specific
    instances and for the purposes for which given and to the extent specified
    in such writing. No notice to or demand on any Restricted Person shall in
    any case of itself entitle any Restricted Person to any other or further
    notice or demand in similar or other circumstances. This Agreement and the
    other Loan Documents set forth the entire understanding between the parties
    hereto with respect to the transactions contemplated herein and therein and
    supersede all prior discussions and understandings with respect to the
    subject matter hereof and thereof, and no waiver, consent, release,
    modification or amendment of or supplement to this Agreement or the other
    Loan Documents shall be valid or effective against any party hereto unless
    the same is in writing and signed by (i) if such party is the Borrower,
    by the Borrower, (ii) if such party is the Agent by the Agent, and
    (iii) if such party is a Lender, by such Lender or by the Agent on
    behalf of the Lenders with the written consent of the Required Lenders
    (which consent has already been given as to the termination of the Loan
    Documents as provided herein and the releases of Liens under Section 8).
    Notwithstanding the foregoing or anything to the contrary herein, the Agent
    shall not, without the prior consent of each individual Lender, execute and
    deliver on behalf of such Lender any waiver or amendment which would:
    (1) waive any of the conditions specified in Sections 12 or 13
    (provided that the Agent may in its discretion withdraw any request it has
    made under Section 12(k) or 13(e)), (2) increase the maximum
    amount which such Lender is committed hereunder to lend, (3) reduce any
    fees payable to such Lender hereunder, or the principal of, or interest on,
    such Lender's Note, (4) postpone any date fixed for any payment of any
    such fees, principal or interest, (5) amend the definition herein of
    "Required Lenders" or otherwise change the aggregate amount of
    Percentage Shares which is required for the Agent, the Lenders or any of
    them to take any particular action under the Loan Documents,
    (6) release the Borrower from its obligation to pay such Lender's Note
    or any Guarantor from its guaranty of such payment or (7) amend this
    section.

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

    
    
                 (f)    
    Joint and Several Liability; Parties in Interest;
    Assignments.

        
    
                 (i)    
        All Obligations which are incurred by two or more
        Restricted Persons shall be their joint and several obligations and
        liabilities. All grants, covenants and agreements contained in the Loan
        Documents shall bind and inure to the benefit of the parties thereto and
        their respective successors and assigns; provided, however, that no
        Restricted Person may assign or transfer any of its rights or delegate
        any of its duties or obligations under any Loan Document without the
        prior consent of the Required Lenders. Neither the Borrower nor any
        Affiliates of the Borrower shall directly or indirectly purchase or
        otherwise retire any Obligations owed to any Lender nor will any Lender
        accept any offer to do so, unless each Lender shall have received
        substantially the same offer with respect to the same Percentage Share
        of the Obligations owed to it. If the Borrower or any Affiliate of the
        Borrower at any time purchases some but less than all of the Obligations
        owed to all the Lenders, such purchaser shall not be entitled to any
        rights of any Lender under the Loan Documents unless and until the
        Borrower or its Affiliates have purchased all of the Obligations.

        
    
                 (ii)    
        No Lender shall sell any participation interest
        in its commitment hereunder or any of its rights under its Loans or
        under the Loan Documents to any Person unless the agreement between such
        Lender and such participant at all times provides: (i) that such
        participation exists only as a result of the agreement between such
        participant and such Lender and that such transfer does not give such
        participant any right to vote as a Lender or any other direct claims or
        rights against any Person other than such Lender, (ii) that such
        participant is not entitled to payment from any Restricted Person under Section
        6 or Section 19(c) of amounts in excess of those payable to
        such Lender under such sections (determined without regard to the sale
        of such participation), and (iii) unless such participant is an
        Affiliate of such Lender, that such participant shall not be entitled to
        require such Lender to take any action under any Loan Document or to
        obtain the consent of such participant prior to taking any action under
        any Loan Document, except for actions which would require the consent of
        all the Lenders under Section 19(d). No Lender selling such a
        participation shall, as between the other parties hereto and such
        Lender, be relieved of any of its obligations hereunder as a result of
        the sale of such participation. Each Lender which sells any such
        participation to any Person (other than an Affiliate of such Lender)
        shall give prompt notice thereof to the Agent and the Borrower, and,
        unless such sale is to an Affiliate of the selling Lender, such sale
        shall require the Borrower's prior approval which shall not be
        unreasonably withheld or delayed.

        
    
                 (iii)    
        Except for sales of participations under the
        immediately preceding subsection, no Lender shall make any assignment or
        transfer of any kind of its commitments or any of its rights under its
        Loans or under the Loan Documents, except for assignments to an Eligible
        Assignee, and then only if such assignment is made in accordance with
        the following requirements:

  
            
    
                 (A)    
            Unless the Assignee is an Affiliate of the
            assigning Lender, the Borrower shall have given its written approval
            of the assignment, which approval shall not be unreasonably withheld
            or delayed.

            
    
                 (B)    
            Each such assignment shall apply to all
            Obligations owing to the assignor Lender hereunder and to the unused
            portion of the assignor Lender's commitments, so that after such
            assignment is made the assignor Lender shall have a fixed (and not a
            varying) Percentage Share in its Loans and Note and be committed to
            make that Percentage Share of all future Loans, the assignee shall
            have a fixed Percentage Share in such Loans and Note and be
            committed to make that Percentage Share of all future Loans, and the
            Percentage Share of the Revolving Commitment of both the assignor
            and assignee shall equal or exceed $5,000,000.

            
    
                 (C)    
            The parties to each such assignment shall
            execute and deliver to the Agent, for its acceptance and recording
            in the "Register" (as defined below in this section), an
            Assignment and Acceptance in the form of Exhibit E,
            appropriately completed, together with the Note subject to such
            assignment and a processing fee payable to the Agent of $2,500. Upon
            such execution, delivery, and payment and upon the satisfaction of
            the conditions set out in such Assignment and Acceptance, then
            (1) the Borrower shall issue new Notes to such assignor and
            assignee upon return of the old Notes to the Borrower, and
            (2) as of the "Settlement Date" specified in such
            Assignment and Acceptance the assignee thereunder shall be a party
            hereto and a Lender hereunder and the Agent shall thereupon deliver
            to the Borrower and each Lender a schedule showing the revised
            Percentage Shares of such assignor Lender and such assignee Lender
            and the Percentage Shares of all other the Lenders.

            
    
                 (D)    
            Each assignee Lender which is not a United
            States person (as such term is defined in Section 7701(a)(30) of the
            Internal Revenue Code) for Federal income tax purposes, shall (to
            the extent it has not already done so) provide the Agent and the
            Borrower with the "Prescribed Forms" referred to in Section
            6(d)(iv).

    

        
    
                 (iv)    
        Nothing contained in this section shall prevent
        or prohibit any Lender from assigning or pledging all or any portion of
        its Loans and Note to any Federal Reserve Bank as collateral security
        pursuant to Regulation A of the Board of Governors of the Federal
        Reserve System and any Operating Circular issued by such Federal Reserve
        Bank; provided that no such assignment or pledge shall relieve such
        Lender from its obligations hereunder.

        
    
                 (v)    
        By executing and delivering an Assignment and
        Acceptance, each assignee Lender thereunder will be confirming to and
        agreeing with the Borrower, the Agent and each other Lender that such
        assignee understands and agrees to the terms hereof, including Section
        18 hereof.

        
    
                 (vi)    
        The Agent shall maintain a copy of each
        Assignment and Acceptance and a register for the recordation of the
        names and addresses of the Lenders and the Percentage Shares of, and
        principal amount of the Loans owing to, each Lender from time to time
        (in this section called the "Register"). The entries in
        the Register shall be conclusive, in the absence of manifest error, and
        the Borrower and each Lender may treat each Person whose name is
        recorded in the Register as a Lender hereunder for all purposes. The
        Register shall be available for inspection by the Borrower or any Lender
        at any reasonable time and from time to time upon reasonable prior
        notice.

    
    
                 (g)    
    Governing Law. Except to the extent that the
    law of another jurisdiction is expressly elected in a Loan Document, the
    Loan Documents shall be deemed contracts and instruments made under the laws
    of the State of Texas and shall be construed and enforced in accordance with
    and governed by the laws of the State of Texas and the laws of the United
    States of America, without regard to principles of conflicts of law. Chapter
    346 of the Texas Finance Code (which regulates certain revolving credit loan
    accounts and revolving tri-party accounts) does not apply to this Agreement
    or to the Notes. The Borrower hereby irrevocably submits itself and each
    other Restricted Person to the jurisdiction of the state and federal courts
    sitting in the State of Texas and agrees and consents that service of
    process may be made upon it or any Restricted Person in any legal proceeding
    relating to the Loan Documents or the Obligations by any means allowed under
    Texas or federal law. Any legal proceeding arising out of or in any way
    related to any of the Loan Documents shall be brought and litigated
    exclusively in the United States District Court for the Northern District of
    Texas, Dallas Division to the extent it has subject matter jurisdiction, and
    otherwise in the Texas District Courts sitting in Dallas County, Texas. The
    parties hereto hereby waive and agree not to assert, by way of motion, as a
    defense or otherwise, that any such proceeding is brought in an inconvenient
    forum or that the venue thereof is improper, and further agree to a transfer
    of any such proceeding to a federal court sitting in the State of Texas to
    the extent that it has subject matter jurisdiction, and otherwise to a state
    court in Dallas, Texas. In furtherance thereof, the Borrower and Lenders
    each hereby acknowledge and agree that it was not inconvenient for them to
    negotiate and receive funding of the transactions contemplated by this
    Agreement in such county and that it will be neither inconvenient nor unfair
    to litigate or otherwise resolve any disputes or claims in a court sitting
    in such county.

    
    
                 (h)    
    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.

    
    
                 (i)    
    Maximum Rate of Interest. 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 Note(s) any amount of interest in excess of the Maximum Rate of interest
    permitted to be charged by applicable law, and in the event the Lenders ever
    receive, collect or apply as interest any such excess, or if an acceleration
    of the maturities of any Note(s) 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 Note(s) for which such
    excess was received, collected or applied. If the principal balance of such
    Notes is paid in full, any remaining excess shall be paid immediately to the
    Borrower. In determining whether or not the interest paid or payable under
    any specific contingency exceeds the Maximum Rate, 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) amortize, prorate, allocate and spread, in equal
    parts, the total amount of interest throughout the entire contemplated term
    of the Note(s) so that the interest rate is uniform throughout the term of
    the Notes; provided that if the Notes are paid and performed in full prior
    to the end of the full contemplated term thereof, and if the interest
    received during the actual period of existence thereof exceeds the Maximum
    Rate, the holders of the Notes shall refund to the Borrower the amount of
    such excess or credit the amount of such excess against the principal amount
    due thereunder. In such event, no holder of the Notes will be subject to any
    penalties provided by any laws for contracting for, charging for or
    receiving interest in excess of the Maximum Rate.

    
    
                 (j)    
    Confidentiality. Each Lender shall use all
    reasonable efforts to keep confidential, in accordance with its customary
    procedures for handling confidential information and safe and sound lending
    practices, any non-public information supplied to it by or on behalf of the
    Borrower and its Subsidiaries pursuant to this Agreement, provided, that,
    nothing contained herein shall limit the disclosure of any such information:
    (i) to the extent required by statute, rule, regulation, subpoena or court
    order, (ii) to bank examiners and other regulators, auditors and/or
    accountants, (iii) in connection with any litigation to which a Lender is a
    party, (iv) to any assignee or participant permitted by this Agreement so
    long as such assignee or participant (or prospective assignee or
    participant) shall have first agreed in writing to treat such information as
    confidential in accordance with this Section, or (v) to counsel for to any
    Lender or any participant or assignee (or prospective participant or
    assignee) permitted by this Agreement.

    
    
                 (k)    
    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.

    
    
                 (l)    
    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.

    
    
                 (m)    
    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.

    
    
                 (n)    
    Survival. All covenants, agreements,
    undertakings, representations and warranties made in the Loan Documents,
    including this Agreement, the Note(s) 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.

    
    
                 (o)    
    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 the
    Lenders, assign any rights, powers, duties or obligations hereunder.

    
                 (p)    
Other Agreements.

  
        
    
                 (i)    
        THIS WRITTEN LOAN AGREEMENT REPRESENTS 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.

        
    
                 (ii)    
        BORROWER ACKNOWLEDGES AND AGREES THAT THE
        STATEMENT SET FORTH IN THIS SECTION SATISFIES THE REQUIREMENTS OF SECTION
        26.02 OF THE BUSINESS AND COMMERCE CODE OF THE STATE OF TEXAS AND
        SHALL BE DEEMED INCORPORATED INTO THIS AGREEMENT AND ALL OTHER LOAN
        DOCUMENTS BY BORROWER WITH, TO OR IN FAVOR OF BANK.

    

    
                (q)    
    Waiver of Jury Trial. To the extent permitted
    by Law, the Lenders and the Borrower hereby knowingly, voluntarily, and
    intentionally waive any rights they may have to a trial by jury in respect
    of any litigation based hereon, or directly or indirectly arising out of,
    under, or in connection with, this Agreement or any other Loan Document, or
    any course of conduct, course of dealing, statements (whether verbal or
    written) or actions of such Persons or the Borrower. This provision is a
    material inducement for the Lenders entering into this Agreement and the
    other Loan Documents.

    
  
[The remainder of this page is intentionally left blank.]

    

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

  		ASCENT ENERGY INC.

        

      
		
                        By:                                                       

                        Name:                                                  

                        Title:                                                     

      
		
		FORTIS CAPITAL CORP.

        

      
		By:                                                       

        Name:                                                  

        Title:                                                     
		
		By:                                                       

        Name:                                                  

        Title:                                                     
		
		
                        Domestic Lending Office:

                        100 Crescent Court

                        Suite 1777

                        Dallas, Texas 75201

      
		
		
                        Eurodollar Lending Office:

                        100 Crescent Court

                        Suite 1777

                        Dallas, Texas 75201

      

SCHEDULE 1

 

LOAN AGREEMENT

Jefferies/TCW Shareholders

 

  	

TCW Funds --

      	
        

 17.6%

      

TCW Leveraged Income Trust, IV, L.P.

TCW Shared Opportunity Fund, III, L.P.

Shared Opportunity Fund IIB, L.L.C.

TCW/Crescent Mezzanine Partners, L.P.

TCW/Crescent Mezzanine Trust

TCW/Crescent Mezzanine Investment Partners, L.P.

 

  	

Jefferies Funds -- 

      	
        

 77.1%

      

Jefferies & Company, Inc.

Jefferies Partners Opportunity Fund, L.L.C.

Jefferies Partners Opportunity Fund II, L.L.C.

Jefferies Partners Opportunity Fund, L.L.C.

ING Furman Selz Investors III L.P.

ING Barings U.S. Leveraged Equity Plan LLC

ING Barings Global Leveraged Equity Plan Ltd.

 

 

SCHEDULE 2

Disclosure Schedule

 

SCHEDULE 3

 

Security Schedule

 

 

1.         Deed of Trust of Pontotoc and its Restricted Subsidiaries

2.         Forman Deed of Trust

3.         Ascent Deed of Trust

4.         UCC Financing Statements

5.         Stock Pledge Agreement

6.         Forman Guaranty

7.         Guaranty of Pontotoc and its Restricted Subsidiaries

8.         Pontotoc Gathering Deed of Trust

SCHEDULE 4

Oil and Gas Real Properties

 

                      
                      EXHIBIT A

                      
PROMISSORY NOTE

                      

  
	
      $ 40,000,000.00
	
       July 27, 2001

  

           
FOR VALUE RECEIVED, the undersigned, ASCENT ENERGY INC., a
Delaware corporation (herein called the "Borrower"), hereby
promises to pay to the order of FORTIS CAPITAL CORP. a corporation organized
under the laws of the state of Connecticut, (herein called "Lender"),
the principal sum of Forty Million Dollars ($40,000,000.00), or, if greater
or less, the aggregate unpaid principal amount of the Loans made under this Note
by Lender to the Borrower pursuant to the terms of the Loan Agreement (as
hereinafter defined), together with interest on the unpaid principal balance
thereof as hereinafter set forth, both principal and interest payable as herein
provided in lawful money of the United States of America at the offices of the
Agent under the Loan Agreement, 100 Crescent Court, Suite 1777, Dallas, Texas or
at such other place as from time to time may be designated by the Agent.

           
This Note (a) is issued and delivered under that certain Loan
Agreement dated as of July 27, 2001 among the Borrower, Fortis Capital Corp., as
Agent, and the lenders (including Lender) referred to therein (herein, as from
time to time supplemented, amended or restated, called the "Loan
Agreement"), and is a "Note" as
defined therein, (b) is subject to the terms and provisions of the Loan
Agreement, which contains provisions for payments and prepayments hereunder and
acceleration of the maturity hereof upon the happening of certain stated events,
and (c) is secured by and entitled to the benefits of certain Security Documents
(as identified and defined in the Loan Agreement). Payments on this Note shall
be made and applied as provided herein and in the Loan Agreement. Reference is
hereby made to the Loan Agreement for a description of certain rights,
limitations of rights, obligations and duties of the parties hereto and for the
meanings assigned to terms used and not defined herein and to the Security
Documents for a description of the nature and extent of the security thereby
provided and the rights of the parties thereto.

            The principal amount of this Note, together with all interest accrued hereon,
shall be due and payable in full on July 30, 2004.

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

           
Notwithstanding the foregoing paragraph and all other
provisions of this Note, in no event shall the interest payable hereon, whether
before or after maturity, exceed the maximum amount of interest which, under
applicable law, may be charged on this Note, and this Note is expressly made
subject to the provisions of the Loan Agreement which more fully set out the
limitations on how interest accrues hereon. In the event applicable law provides
for an interest ceiling under Chapter 303 of the Texas Finance Code (the "Texas
Finance Code") as amended, for that day, the ceiling shall
be the "weekly ceiling" as defined in the Texas Finance Code and shall
be used in this Note for calculating the Maximum Rate and for all other
purposes. The term "applicable law" as used in this Note shall mean
the laws of the State of Texas or the laws of the United States, whichever laws
allow the greater interest, as such laws now exist or may be changed or amended
or come into effect in the future.

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

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

           
This Note will be governed by and construed in accordance
with the laws of the State of Texas and applicable federal law, except that
Chapter 346 of the Texas Finance Code (which regulates certain revolving credit
loan accounts and revolving tri-party accounts) shall not apply to this Note. This
Note is performable in Dallas County, Texas, and the Borrower and every
Guarantor, if any, on this Note, jointly and severally, waive the right to be
sued hereon elsewhere. Courts within the State of Texas will have jurisdiction
over any and all disputes between Lender, the Borrower and every Guarantor, if
any, whether at law or in equity, including, but not limited to, any and all
disputes arising out of or relating to this Note; and venue in any such dispute,
whether in federal or state court, will be in Dallas County, Texas.

            The indebtedness represented by this Note is for business purposes only and
not for any personal, family or household purposes.

           
THIS NOTE, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT OF THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT WRITTEN OR ORAL AGREEMENTS OF
THE PARTIES. THE RIGHTS AND OBLIGATIONS OF THE PARTIES SHALL BE DETERMINED
SOLELY FROM THIS NOTE, THE LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS. THIS
NOTE CAN BE VARIED OR MODIFIED ONLY BY WRITTEN INSTRUMENT SIGNED BY ALL THE
PARTIES.

            
            [The Remainder of This Page is Intentionally Blank]

  
    
      
        
          
            
             

             

          

        

      

    

  

           
IN WITNESS WHEREOF, the Borrower has duly executed this Note
as of the day and year above first written.

		ASCENT ENERGY INC.

      

    
		
                        By:                                                       

                        Name:                                                  

                        Title:                                                     

    

EXHIBIT B

NOTICE OF ADVANCE

           
Reference is made to that certain Loan Agreement dated as of
July ___, 2001 (as from time to time amended, the "Loan Agreement"),
by and among Ascent Energy Inc., as Borrower, Fortis Capital Corp., as Agent,
and certain financial institutions, as Lenders. Terms which are defined in the
Loan Agreement are used herein with the meanings given them in the Loan
Agreement.

           
Borrower hereby requests an Advance of new Loans to be
advanced pursuant to Section 2(b) of the Loan Agreement as follows:

                      Aggregate amount of Advance:
                      $___________________

                        Type of Loans in Advance:
                        ___________________

                  Date on which Loans are to be advanced:
                  ___________________

    Length of Interest Period for Eurodollar Loans (1, 2, 3,
    or 6 months): ________________

  
     

  

           
Borrower hereby represents, warrants, acknowledges, and
agrees to and with each Lender that:

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

               
    (b)     There does not exist on the date hereof any condition
    or event which constitutes an Event of Default which has not been waived by
    Agent in writing as provided in the Loan Agreement; nor will any such Event
    of Default exist upon Borrower's receipt and application of the Loans
    requested hereby. Borrower will use the Loans hereby requested in compliance
    with Section 2(d) of the Loan Agreement.

               
    (c)     The representations and warranties of Borrower set
    forth in the Loan Agreement and the other Loan Documents are true and
    correct on and as of the date hereof (except to the extent that the facts on
    which such representations and warranties are based have been changed by the
    extension of credit under the Loan Agreement and except for representations
    and warranties that are expressly limited to an earlier date), with the same
    effect as though such representations and warranties had been made on and as
    of the date hereof.

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

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

           
The officer of Borrower signing this instrument hereby
certifies in his capacity as an officer of Borrower and in the name and on
behalf of Borrower, that to the best of his knowledge after due inquiry, the
above representations, warranties, acknowledgements, and agreements of Borrower
are true, correct and complete.

               
    IN WITNESS WHEREOF, this instrument is executed as of
    ________________, 200_.

		ASCENT ENERGY INC.

      

    
		
                        By:                                                       

                        Name:                                                  

                        Title:                                                     

    

EXHIBIT C

CONTINUATION/CONVERSION NOTICE

             
  Reference is made to that certain Loan Agreement dated as
  of July ___, 2001 (as from time to time amended, the "Loan
  Agreement"), by and among Ascent Energy Inc., as Borrower, Fortis
  Capital Corp., as Agent, and certain financial institutions, as Lenders. Terms
  which are defined in the Loan Agreement are used herein with the meanings
  given them in the Loan Agreement.

             
  Borrower hereby requests a conversion or continuation of
  existing Loans into a new Borrowing pursuant to Section 2(c) of the
  Loan Agreement as follows:

             
  Existing Advance(s) to be continued or converted:

                     
          $________________ of Eurodollar Loans with Interest
          Period ending

                      __________

                     
          $________________ of Base Rate Loans

                    Aggregate amount of new Advance:
                    $_________________

                    Type of Loans in new Advance:
                    _________________

                    Date of continuation or conversion:
                    _______________

  Length of Interest Period for Eurodollar Loans (1, 2, 3, or
  6 months): ________________

             
  Borrower hereby represents, warrants, acknowledges, and
  agrees to and with each Lender that:

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

                 
      (b)     There does not exist on the date hereof any
      condition or event which constitutes an Event of Default which has not
      been waived by Agent in writing as provided in the Loan Agreement; nor
      will any such Event of Default exist upon Borrower's receipt and
      application of the Loans requested hereby.

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

           
The officer of Borrower signing this instrument hereby
certifies in his capacity as an officer of Borrower and in the name and on
behalf of Borrower, that to the best of his knowledge after due inquiry, the
above representations, warranties, acknowledgements, and agreements of Borrower
are true, correct and complete.

             
  IN WITNESS WHEREOF, this instrument is executed as of
  __________________, 200__.

		ASCENT ENERGY INC.

      

    
		
                        By:                                                       

                        Name:                                                  

                        Title:                                                     

    

EXHIBIT D

STOCK PLEDGE AGREEMENT

           
THIS STOCK PLEDGE AGREEMENT made as of this 27th
day of July, 2001 (this "Agreement"), between PONTOTOC
ACQUISITION CORPORATION, a Nevada corporation ("Pledgor"),
having its principal place of business and chief executive office at 650 Poydras
Street, Suite 2200, New Orleans, Louisiana, 70130 and FORTIS CAPITAL CORP., a
Connecticut corporation ("Pledgee"), having an office at 100
Crescent Court, Suite 1777, Dallas, Texas, 75201, as a Lender and as Agent on
behalf of the Lenders party to the Loan Agreement described below.

RECITALS:

           
A.     Pledgor is the legal and beneficial owner of ____ percent
(__%) of the issued and outstanding capital stock of Pontotoc Production, Inc.,
a Nevada corporation ("Production"), as more fully described on
Exhibit A attached hereto.

           
B.      Pledgor is a wholly owned subsidiary of Ascent Energy, Inc., a Delaware
      corporation ("Borrower").
           
C.     Borrower has entered into a certain Loan Agreement with
Pledgee dated as of the date hereof (as the same may be amended, supplemented or
otherwise modified from time to time, the "Loan Agreement").

           
D.     In order to secure the obligations of Borrower under the
Loan Agreement, Pledgor has agreed to pledge to Pledgee, for the benefit of
Pledgee and the Lenders, all of the capital stock of Production now or hereafter
owned by Pledgor.

           
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to extend credit and make other financial accommodations
to Borrower under the Loan Agreement and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Pledgor hereby agrees with Pledgee, on behalf of and for the benefit of Pledgee
and the Lenders, as follows:

           
1.     Defined Terms. Unless otherwise defined herein, all
capitalized terms used herein shall have the meanings given them in the Loan
Agreement.

           
2.     Pledge. Pledgor hereby pledges, assigns,
hypothecates, transfers, delivers and grants to Pledgee, for the benefit of
Pledgee and the Lenders, a first lien on and first priority perfected security
interest in (a) all of the capital stock of Production now or at any time
hereafter owned by Pledgor and all options, warrants and other rights to
purchase shares of capital stock of Production held by Pledgor together with the
shares of capital stock of Production underlying such options, warrants and
other rights (collectively, the "Pledged Shares"), (b) all
other property hereafter delivered to Pledgor in substitution for or in addition
to the Pledged Shares, (c) any other property of Pledgor described in Section 4
below now or hereafter delivered to, or in the possession or custody of, Pledgee
and (d) any and all proceeds of any of the foregoing, as collateral security for
(i) the prompt and complete payment when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations (as defined in the Loan Agreement)
and (ii) the due and punctual payment and performance by Pledgor of its
obligations and liabilities under, arising out of or in connection with this
Agreement (all of the foregoing being hereinafter referred to collectively as
the "Liabilities"). Within thirty (30) days of the First
Closing Date, all certificates or instruments representing or evidencing the
Pledged Shares shall be delivered to and held by or on behalf of Pledgee
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed undated instruments of transfer or assignment in
blank, all in form and substance satisfactory to Pledgee, which instruments or
assignments shall have been delivered to Pledgee at First Closing Date. Pledgee
shall maintain possession, control and custody of the certificates representing
the Pledged Shares in accordance with the provisions of this Agreement and shall
return the Pledged Shares in accordance with Section 14.

           
3. Representations and Warranties of Pledgor. Pledgor
represents and warrants to Pledgee, for the benefit of the Lenders, that:

               
    (a)     Exhibit A and the Pledge Amendments (as
    defined below), if any, set forth (i) the authorized capital stock of
    Production, (ii) the number of shares of capital stock of Production that
    are issued and outstanding as of the date hereof, (iii) the number of shares
    of capital stock of Production that are held in its treasury as of the date
    hereof and (iv) the percentage of the issued and outstanding shares of
    capital stock of Production held by Pledgor as of the date hereof. Pledgor
    hereby represents that it owns ____ percent (_____%) of the issued and
    outstanding shares of capital stock of Production as of the date hereof,
    such shares being acquired pursuant to that certain Agreement and Plan of
    Merger among Borrower, Pledgor and Production dated as of January 19, 2001
    (the "Merger Agreement"). Pledgor is the record and beneficial
    owner of, and has good and marketable title to, the Pledged Shares, and such
    shares are and will remain free and clear of all pledges, liens, security
    interests and other encumbrances and restrictions whatsoever, except the
    liens and security interests created by this Agreement;

               
    (b)     there are no outstanding options, warrants or other
    agreements with respect to the Pledged Shares;

               
    (c)     this Agreement is the legal, valid and binding
    obligation of Pledgor, enforceable against Pledgor in accordance with its
    terms, except as limited by applicable bankruptcy, moratorium,
    reorganization and other similar laws affecting the enforcement of
    creditors' rights generally;

               
    (d)     the Pledged Shares have been duly and validly
    authorized and issued, are fully paid and non-assessable, and represent ___
    percent (___%) of the issued and outstanding shares of capital stock of
    Production as of the date hereof;

               
    (e)     no consent, approval or authorization of or
    designation or filing with any governmental or regulatory authority on the
    part of Pledgor is required in connection with the pledge and security
    interest granted under this Agreement;

               
    (f)     the execution, delivery and performance of this
    Agreement will not violate any provision of any applicable law or regulation
    or of any order, judgment, writ, award or decree of any court, arbitrator or
    governmental authority, domestic or foreign, or of the charter or by-laws of
    Pledgor or Production or of any securities issued by Pledgor or Production
    or of any mortgage, indenture, lease, contract, or other agreement,
    instrument or undertaking to which Pledgor or Production is a party or which
    purports to be binding upon Pledgor or Production or upon any of their
    respective assets, and will not result in the creation or imposition of any
    lien, charge or encumbrance on or security interest in any of the assets of
    Pledgor or any Subsidiary except as contemplated by this Agreement; and

               
    (g)     provided that Pledgee remains in continuous
    possession of the Pledged Shares, the pledge, assignment and delivery of the
    Pledged Shares pursuant to this Agreement creates a valid first lien on and
    perfected first priority security interest in such Pledged Shares and the
    proceeds thereof in favor of Pledgee, for the benefit of Pledgee and the
    Lenders, subject to no prior pledge, lien, mortgage, hypothecation, security
    interest, charge, option or encumbrance or to any agreement purporting to
    grant to any third party a security interest in the property or assets of
    Pledgor which would include the Pledged Shares. Pledgor covenants and agrees
    that it will defend, for the benefit of Pledgee and the Lenders, Pledgee's
    right, title and security interest in and to the Pledged Shares and the
    proceeds thereof against the claims and demands of all other Persons.

           
4.     Additional Stock Certificates, Distributions, Etc.

             
  (a)     If, while this Agreement is in effect, Pledgor shall
  become entitled to receive or shall receive (i) any stock certificate
  (including, without limitation, any certificate representing a stock dividend
  or a stock distribution in connection with any reclassification, increase or
  reduction of capital, or issued in connection with any reorganization), or any
  options or rights, whether as an addition to, in substitution for, or in
  exchange for any of the Pledged Shares, including without limitation any
  additional shares of Production issued to or hereafter acquired by Pledgor, or
  (ii) any stock certificate in connection with the purchase or acquisition by
  Pledgor of a new company, Pledgor agrees, in each case, to accept the same as
  Pledgee's agent and to hold the same in trust for Pledgee, and to deliver the
  same forthwith to Pledgee in the exact form received, with the endorsement of
  Pledgor when necessary and/or with appropriate undated stock powers duly
  executed in blank, to be held by Pledgee subject to the terms hereof, as
  additional collateral security for the Liabilities. Pledgor shall promptly
  deliver to Pledgee (i) a pledge amendment, duly executed by Pledgor, in
  substantially the form of Exhibit B hereto (a "Pledge Amendment")
  with respect to such additional stock certificates, and (ii) any financing
  statements or amendments to financing statements as requested by Pledgee.
  Pledgor hereby authorizes Pledgee to attach each Pledge Amendment to this
  Agreement.

             
  (b)     In case any distribution of capital stock shall be made
  on or in respect of the Pledged Shares or any property shall be distributed
  upon or with respect to the Pledged Shares pursuant to the recapitalization or
  reclassification of the capital stock of the issuer thereof or pursuant to the
  reorganization thereof, the property so distributed shall be promptly
  delivered to Pledgee to be held by it as additional collateral security for
  the Liabilities. All sums of money and property so paid or distributed in
  respect of the Pledged Shares which are received by Pledgor shall, until paid
  or delivered to Pledgee, be held by Pledgor in trust for the benefit of
  Pledgee as additional collateral security for the Liabilities.

           
5.     Voting Rights; Dividends.

               
    (a)     So long as no Event of Default has occurred and is
    continuing, Pledgor shall be entitled (subject to the other provisions
    hereof, including, without limitation, Section 8 below) to (i) exercise its
    voting and other consensual rights with respect to the Pledged Shares and
    otherwise exercise the incidents of ownership thereof in any manner not
    inconsistent with this Agreement, the Loan Agreement or any other Loan
    Document and (ii) to receive cash dividends or other distributions in the
    ordinary course made in respect of the Pledged Shares to the extent
    permitted under the Loan Agreement. Pledgor hereby grants to Pledgee or its
    nominee, for the benefit of Pledgee and the Lenders, an irrevocable proxy to
    exercise all voting and corporate rights relating to the Pledged Shares in
    any instance, including, without limitation, to approve any merger involving
    Production as a constituent corporation, which proxy shall be effective, at
    the discretion of Pledgee, upon the occurrence and during the continuance of
    an Event of Default. After the occurrence and during the continuance
    of an Event of Default and upon request of Pledgee, Pledgor agrees to
    deliver to Pledgee such further evidence of such irrevocable proxy or such
    further irrevocable proxies to vote the Pledged Shares as Pledgee may
    request.

               
    (b)     In the event that Pledgor, as record and beneficial
    owner of the Pledged Shares, shall have received or shall have become
    entitled to receive, any cash dividends or other distributions in the
    ordinary course after the occurrence and during the continuance of an Event
    of Default, Pledgor shall deliver to Pledgee and Pledgee shall be entitled
    to receive and retain, for the benefit of Pledgee and the Lenders, all such
    cash or other distributions as additional security for the Liabilities.

               
    (c)     Subject to any sale or other disposition by Pledgee
    of the Pledged Shares or other property pursuant to this Agreement, upon
    termination pursuant to Section 14 hereof of the liens and security
    interests hereby granted, the Pledged Shares and any other property then
    held as part of the Pledged Shares in accordance with the provisions of this
    Agreement shall be returned to Pledgor or to such other Person as shall be
    legally entitled thereto.

           
6.     Rights of Pledgee. Neither Pledgee nor any
Lender shall be liable for failure to collect or realize upon the Obligations or
any collateral security or guaranty therefor, or any part thereof, or for any
delay in so doing, nor shall Pledgee or any Lender be under any obligation to
take any action whatsoever with regard thereto. Any or all of the Pledged Shares
held by Pledgee hereunder may, if an Event of Default has occurred and is
continuing, without notice, be registered in the name of Pledgee or its nominee,
and Pledgee or its nominee may thereafter without notice exercise all voting and
corporate rights at any meeting with respect to Production and exercise any and
all rights of conversion, exchange, subscription or any other rights, privileges
or options pertaining to any of the Pledged Shares as if it were the absolute
owner thereof, including, without limitation, the right to vote in favor of, and
to exchange at its discretion any and all of the Pledged Shares upon, the
merger, consolidation, reorganization, recapitalization or other readjustment
with respect to Production or upon the exercise by Production or Pledgee of any
right, privilege or option pertaining to any of the Pledged Shares, and in
connection therewith, to deposit and deliver any and all of the Pledged Shares
with any committee, depository, transfer agent, registrar or other designated
agency upon such terms and conditions as Pledgee may determine, all without
liability except to account for property actually received by Pledgee (and, as
more particularly described in Section 7 below, to account for the surplus, if
any, to Pledgor), but Pledgee shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.

           
7.     Remedies. Upon the occurrence and during the
continuance of an Event of Default, Pledgee may exercise in respect of the
Pledged Shares, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party under
the Uniform Commercial Code ("UCC") in effect in the State of
Texas from time to time, whether or not the UCC applies to the affected Pledged
Shares. Pledgee also, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon Pledgor or any other Person (all
and each of which demands, advertisements and/or notices are hereby expressly
waived), may forthwith collect, receive, appropriate and realize upon the
Pledged Shares, or any part thereof, and/or may forthwith sell, assign, give an
option or options to purchase, contract to sell or otherwise dispose of
(including the disposition by merger) and deliver said Pledged Shares, or any
part thereof, in one or more portions at one or more public or private sales or
dispositions, at any exchange or broker's board or at any of Pledgee's offices
or elsewhere upon such terms and conditions as Pledgee may deem advisable and at
such prices as it may deem best, for any combination of cash and/or securities
or other property or on credit or for future delivery without assumption of any
credit risk, with the right to Pledgee upon any such sale, public or private, to
purchase the whole or any part of said Pledged Shares so sold, free of any right
or equity of redemption in Pledgor, which right or equity is hereby expressly
waived or released. Pledgee shall apply the net proceeds of any such collection,
recovery, receipt, appropriation, realization, sale or disposition, after
deducting all reasonable costs and expenses of every kind incurred therein or
incidental to the safekeeping of any and all of the Pledged Shares or in any way
relating to the rights of Pledgee or the Lenders hereunder, including reasonable
attorneys' fees and legal expenses, first to the payment, in whole or in part,
of the Obligations incurred under or pursuant to the Loan Agreement in
such order (unless a court of competent jurisdiction shall otherwise direct) as
is specified in the Loan Agreement or, if no such order is specified, in such
order as Pledgee may elect. Pledgor shall remain liable for any deficiency
remaining unpaid after such application. Only after so paying over such net
proceeds and after the payment by Pledgee of any other amount required by any
provision of law need Pledgee account for the surplus, if any, to Pledgor.
Pledgor agrees that Pledgee need not give more than ten days' notice of the time
and place of any public sale or of the time after which a private sale or other
intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to Pledgor if it has
signed after default a statement renouncing or modifying any right to
notification of sale or other intended disposition.

           
8.     No Disposition, Etc. Pledgor agrees that it
will not sell, assign, transfer, exchange, or otherwise dispose of, or grant any
option with respect to, the Pledged Shares, nor will Pledgor create, incur or
permit to exist any pledge, lien, mortgage, hypothecation, security interest,
charge, option or any other encumbrance with respect to any of the Pledged
Shares, or any interest therein, or any proceeds thereof, except for the lien
and security interest provided for by this Agreement. Pledgor agrees that it
will not vote to enable, and will not otherwise permit, Production to (a) issue
any stock or other securities of any nature in addition to or in exchange or
substitution for the Pledged Shares, or (b) dissolve, liquidate, retire any of
its capital stock, reduce its capital or merge or consolidate with any other
Person; provided that Production may merge with Pledgor as contemplated by
Section 8(h) of the Loan Agreement.

           
9.     Sale of Pledged Shares.

               
    (a)     Pledgor recognizes that Pledgee may be unable to
    effect a public sale or disposition (including, without limitation, any
    disposition in connection with a merger of Production) of any or all the
    Pledged Shares by reason of certain prohibitions contained in the Securities
    Act of 1933, as amended (the "Act"), and applicable state
    securities laws, but may be compelled to resort to one or more private sales
    or dispositions thereof to a restricted group of purchasers who will be
    obliged to agree, among other things, to acquire such securities for their
    own account for investment and not with a view to the distribution or resale
    thereof. Pledgor acknowledges and agrees that any such private sale or
    disposition may result in prices and other terms (including the terms of any
    securities or other property received in connection therewith) less
    favorable to the seller than if such sale or disposition were a public sale
    or disposition and, notwithstanding such circumstances, agrees that any such
    private sale or disposition shall be deemed to be reasonable and affected in
    a commercially reasonable manner. Pledgee shall be under no obligation to
    delay a sale or disposition of any of the Pledged Shares in order to permit
    Pledgor or Production to register such securities for public sale under the
    Act, or under applicable state securities laws, even if Pledgor or
    Production would agree to do so.

               
    (b)     Pledgor further agrees to do or cause to be done all
    such other acts and things as may be necessary to make such sales or
    dispositions of the Pledged Shares valid and binding and in compliance with
    any and all applicable laws, regulations, orders, writs, injunctions,
    decrees or awards of any and all courts, arbitrators or governmental
    instrumentalities, domestic or foreign, having jurisdiction over any such
    sales or dispositions, all at Pledgor's expense. Pledgor further agrees that
    a breach of any of the covenants contained in Sections 4, 5(a), 5(b), 8, 9
    and 10 will cause irreparable injury to Pledgee and the Lenders and that
    Pledgee and the Lenders have no adequate remedy at law in respect of such
    breach and, as a consequence, agrees, without limiting the right of Pledgee
    to seek and obtain specific performance of other obligations of Pledgor
    contained in this Agreement, that each and every covenant referenced above
    shall be specifically enforceable against Pledgor, and Pledgor hereby waives
    and agrees not to assert any defenses against an action for specific
    performance of such covenants.

               
    (c)     Pledgor further agrees to indemnify and hold harmless
    Pledgee and each Lender, their respective successors and assigns, their
    respective officers, directors, employees and agents, and any Person in
    control of any thereof, from and against any loss, liability, claim, damage
    and expense, including, without limitation, legal fees and expenses (in this
    paragraph collectively called the "Indemnified Liabilities"),
    under federal and state securities laws or otherwise insofar as such
    Indemnified Liability (i) arises out of or is based upon any untrue
    statement or alleged untrue statement of a material fact contained in any
    registration statement, prospectus or offering memorandum or in any
    preliminary prospectus or preliminary offering memorandum or in any
    amendment or supplement to any thereof or in any other writing prepared in
    connection with the offer, sale or resale of all or any portion of the
    Pledged Shares or other Collateral unless such untrue statement of material
    fact was provided by Pledgee or such Lender specifically for inclusion
    therein, or (ii) arises out of or is based upon any omission or alleged
    omission to state therein a material fact required to be stated or necessary
    to make the statements therein not misleading, such indemnification to
    remain operative regardless of any investigation made by or on behalf of
    Pledgee or any successor thereof, or any Person in control of any thereof.
    In connection with a public sale or other distribution, Pledgor will provide
    customary indemnification to any underwriters, their successors and assigns,
    officers and directors and each Person who controls any such underwriter
    (within the meaning of the Act). If and to the extent that the foregoing
    undertakings in this paragraph may be unenforceable for any reason, Pledgor
    agrees to make the maximum contribution to the payment and satisfaction of
    each of the Indemnified Liabilities which is permissible under applicable
    law. The obligations of Pledgor under this paragraph (c) shall survive any
    termination of this Agreement.

               
    (d)     Pledgor further agrees to waive any and all rights of
    subrogation it may have against Production upon the sale or disposition of
    all or any portion of the Pledged Shares by Pledgee pursuant to the terms of
    this Agreement until all of the Liabilities have been indefeasibly paid in
    full.

           
10.     Further Assurances. Pledgor agrees that at
any time and from time to time upon the written request of Pledgee, Pledgor will
execute and deliver all stock powers, financing statements and such further
documents and do such further acts and things as Pledgee may reasonably request
consistent with the provisions hereof in order to effect the purposes of this
Agreement.

           
11.     Severability. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

           
12.     No Waiver; Cumulative Remedies. Pledgee shall not
by any act, delay, omission or otherwise be deemed to have waived any of its
remedies hereunder, and no waiver by Pledgee shall be valid unless in writing
and signed by Pledgee, and then only to the extent therein set forth. A waiver
by Pledgee of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which Pledgee would otherwise have on
any further occasion. No course of dealing between Pledgor and Pledgee or any
Lender and no failure to exercise, nor any delay in exercising on the part of
Pledgee, any right, power or privilege hereunder or under the Loan Documents
shall impair such right or remedy or operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege. The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.

           
13.     Successors; Applicable Law. This Agreement
and all obligations of Pledgor hereunder shall be binding upon the successors
and assigns of Pledgor, and shall, together with the rights and remedies of
Pledgee and the Lenders hereunder, inure to the benefit of Pledgee and the
Lenders and their respective successors and assigns, except that Pledgor shall
not have any right to assign its rights or obligations under this Agreement or
any interest herein without the prior written consent of Pledgee. THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

           
14.     Termination. This Agreement and the liens
and security interests granted hereunder shall terminate and Pledgee shall
return the Pledged Shares to Pledgor upon the earlier of (a) release of the
Pledged Shares pursuant to Sections 8(e) and 8(h) of the Loan Agreement, or (b)
(i) indefeasible payment in full of the Liabilities and (ii) termination of all
commitments under the Loan Agreement.

           
15.     Possession of Collateral. Beyond the
exercise of reasonable care to assure the safe custody of the Pledged Shares in
the physical possession of Pledgee pursuant hereto, neither Pledgee nor any
Lender, nor any nominee of any of them shall have any duty or liability to
collect any sums due in respect thereof or to protect, preserve or exercise any
rights pertaining thereto (including any duty to ascertain or take action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to the Pledged Shares and any duty to take any necessary steps to
preserve rights against any parties with respect to the Pledged Shares), and
shall be relieved of all responsibility for the Pledged Shares upon surrendering
them to Pledgor. Pledgor assumes the responsibility for being and keeping itself
informed of the financial condition of Production and of all other circumstances
bearing upon the risk of non-payment of the Liabilities, and Pledgee shall have
no duty to advise Pledgor of information known to Pledgee regarding such
condition or any such circumstance. Pledgee shall have no duty to inquire into
the powers of Production or their respective officers, directors or agents
thereof acting or purporting to act on their behalf.

           
16.     Survival of Representations. All representations
and warranties of Pledgor contained in this Agreement shall survive the
execution and delivery of this Agreement.

           
17.     Taxes and Expenses. Pledgor will upon demand pay
to Pledgee, for the benefit of the Lenders, (a) any taxes (excluding income
taxes, franchise taxes or other taxes levied on gross earnings, profits or the
like of Pledgee or any of the Lenders) payable or ruled payable by any federal
or state authority in respect of this Agreement, together with interest and
penalties, if any, and (b) all reasonable expenses, including the reasonable
fees and expenses of counsel for Pledgee and each Lender and of any experts and
agents that Pledgee or the Lenders may incur in connection with (i) the
administration of this Agreement, (ii) the custody or preservation of, or the
sale of, collection from, or other realization upon, any of the Pledged Shares,
(iii) the exercise or enforcement of any of the rights of Pledgee or the Lenders
hereunder, or (iv) the failure of Pledgor to perform or observe any of the
provisions hereof.

           
18.     Pledgee Appointed Attorney-In-Fact. Pledgor hereby
irrevocably appoints Pledgee as Pledgor's attorney-in-fact, with full authority
in the place and stead of Pledgor and in the name of Pledgor or otherwise, from
time to time in Pledgee's discretion, to take any action and to execute any
instrument that Pledgee deems reasonably necessary or advisable to accomplish
the purposes of this Agreement, including, without limitation, to receive,
endorse and collect all instruments made payable to Pledgor representing any
dividend, interest payment or other distribution in respect of the Pledged
Shares or any part thereof and to give full discharge for the same, when and to
the extent permitted by this Agreement.

           
19.     Notices. Unless otherwise specifically provided
herein, any notice or other communication required or permitted to be given
shall be in writing addressed to the respective party as set forth below and may
be personally served, telecopied or sent by overnight courier service or United
States mail and shall be deemed to have been given (a) if delivered in person,
when delivered; (b) if delivered by telecopy, at the time and on the date of
transmission if transmitted on a Business Day before 4:00 p.m. (Dallas, Texas
time) or, if not, at 9:00 a.m. (Dallas, Texas time) on the next succeeding
Business Day; (c) if delivered by overnight courier, two days after delivery to
such courier properly addressed; or (d) if by United States mail, four Business
Days after depositing in the United States mail, with postage prepaid and
properly addressed.

           
Notices shall be addressed as follows:

           
(a)     If to Pledgor:

  
    
Pontotoc Acquisition Corporation

c/o Ascent Energy, Inc.

650 Poydras Street, Suite 2200

New Orleans, Louisiana 70130

Attn: Mr. Jeffrey Clarke

Fax No.: ____________________

    

  

                       
With a copy to:

  
    
        Jones, Walker, Waechter, Poitevent, Carrere &
        Denegre, L.L.P.

201 St. Charles Avenue, Suite 5100

New Orleans, Louisiana 70170-5100

Attn: William B. Masters, Esq.

        Fax No.: (504) 582-8380

 

    

  

           
(b)     If to Pledgee:

  
    
Fortis Capital Corp.

100 Crescent Court, Suite 1777

Dallas, Texas 75201

Attn: Darrell H. Holley  

            Fax: (214) 754-5982

    

   With a copy to:

    
                                        Patton Boggs LLP

                                        2001 Ross Avenue, Suite 3000

                                        Dallas, Texas 75201

                                        Attn: Robert S. Rendell, Esq.

                                        Fax: (214) 758-1550

    

  

or in any case, to such other address as the party addressed
shall have previously designated by written notice to the serving party, given
in accordance with this Section 19. A notice not given as provided above shall,
if it is in writing, be deemed given if and when actually received by the party
to whom given. The serving party shall use good faith efforts to notify the
recipient by telephone of any notice or other communication delivered by telex
or telecopy.

           
20.     Changes in Writing. No amendment, modification,
termination or waiver of any provision of this Agreement or consent to any
departure by Pledgor therefrom shall in any event be effective without the
written concurrence of Pledgee and Pledgor, and then only to the extent
specifically set forth in such writing.

           
21.     Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.

           
22.     Counterparts. This Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one and
the same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.

           
23.     Entire Agreement. This Agreement, the Loan
Agreement and the other Loan Documents embody the entire agreement among the
parties hereto and supersede all prior commitments, agreements, representations
and understandings, whether written or oral, relating to the subject matter
hereof, and may not be contradicted or varied by evidence of prior,
contemporaneous or subsequent oral agreements or discussions of the parties
hereto.

           
24.     CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
PLEDGOR HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN THE COUNTY OF DALLAS, STATE OF TEXAS AND IRREVOCABLY AGREES THAT,
SUBJECT TO PLEDGEE'S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. PLEDGOR EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON
PLEDGOR BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
PLEDGOR, AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE
COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN  POSTED.

           
25.     WAIVER OF JURY TRIAL. PLEDGOR AND
PLEDGEE HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS. PLEDGOR AND PLEDGEE ACKNOWLEDGE THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE
WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THAT
EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED FUTURE DEALINGS.
PLEDGOR AND PLEDGEE WARRANT AND REPRESENT THAT EACH HAS HAD THE OPPORTUNITY OF
REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

           
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their duly authorized officers on
the date first above written.

  		PONTOTOC ACQUISITION CORPORATION

        

      
		
By:________________________

Name:______________________

Title:_______________________

      
		
		
                    FORTIS CAPITAL CORP.,

                    as a Lender and as Agent for the Lenders

                    

        

      
		By:________________________

        Name:______________________

        Title:_______________________
		
		By:________________________

        Name:______________________

        Title:_______________________

ACKNOWLEDGEMENT

           
The undersigned hereby (i) acknowledges receipt of a copy of
the foregoing Stock Pledge Agreement, (ii) waives any rights or requirement at
any time hereafter to receive a copy of such Stock Pledge Agreement in
connection with the registration of any Pledged Shares (as defined therein) in
the name of Pledgee or its nominee or the exercise of voting rights by Pledgee
and (iii) agrees promptly to note on its books and records the grant of the
security interest in the stock of the undersigned as provided in such Stock
Pledge Agreement, and (iv) agrees to comply with instructions originated by
Pledgee pursuant to the Stock Pledge Agreement without further consent by
Pledgor.

Dated: July ____, 2001

  		
                        PONTOTOC PRODUCTION, INC.

                        

        

      
		By:________________________

        Name:______________________

        Title:_______________________

  EXHIBIT A

DESCRIPTION OF CAPITAL STOCK OF PRODUCTION

	
      Stock Issuer
	
      Class of Stock
	
      Stock

      Certificate

      No.

      	
      Authorized No. of

      Shares

      	
      Outstanding Shares
	
      Shares Issued and Held in Treasury
	
      Owned by Pontotoc Acquisition Corporation

	
      Pontotoc Production, Inc.
	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

EXHIBIT B

PLEDGE AMENDMENT

           
This Pledge Amendment, dated ___________________ is delivered
pursuant to Section 4 of the Stock Pledge Agreement referred to below. The
undersigned hereby agrees that this Pledge Amendment may be attached to the
Stock Pledge Agreement, dated as of July 27, 2001, between the undersigned and
Fortis Capital Corp. (the "Stock Pledge Agreement"; capitalized
terms defined therein being used herein as therein defined) and that the shares
listed on this Pledge Amendment shall be deemed to be part of the Pledged Shares
and shall secure all Liabilities.

	
      Stock Issuer
	
      Class of Stock
	
      Stock

      Certificate

      No.
	
      Authorized No. of

      Shares
	
      Outstanding Shares
	
      Shares Issued and Held in Treasury
	
      Owned by Pontotoc Acquisition Corporation

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

 

    		PONTOTOC ACQUISITION CORPORATION

          

        
		
By:________________________

Name:______________________

Title:_______________________

        

  
    
    
     

    

    

  
   

  EXHIBIT E

  
  ASSIGNMENT AND ASSUMPTION AGREEMENT

  
                                    Date ________________,
                                    200_

           
Reference is made to that certain Loan Agreement dated as of
July ___, 2001 (as from time to time amended, the "Loan Agreement"),
by and among Ascent Energy Inc., as Borrower, Fortis Capital Corp., as Agent,
and certain financial institutions, as Lenders, which Loan Agreement is in full
force and effect on the date hereof. Terms which are defined in the Loan
Agreement are used herein with the meanings given them in the Loan Agreement.

           
_____________________ ("Assignor")
and _______________________("Assignee") hereby agree as
follows:

           
1.     Assignor hereby sells and assigns to Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and Assignee hereby purchases and assumes from Assignor, that
interest in and to all of Assignor's rights and duties under the Loan Agreement
as of the date hereof which represents the percentage interest specified in Item
3 of Annex I hereto (the "Assigned Share") of all of the
outstanding rights and obligations of all Lenders under the Loan Agreement,
including, without limitation, all rights and obligations with respect to the
Assigned Share in Assignor's Loans and Note. After giving effect to such sale
and assignment, Assignee's Percentage Share (and Assignor's remaining Percentage
Share) will be as set forth in Item 3 of Annex I hereto.

           
2.     Assignor: (i) represents and warrants that it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Agreement, the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Agreement, the
other Loan Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower, any other
Restricted Person or the performance or observance by any of them of any of
their respective obligations under the Loan Agreement, the other Loan Documents,
or any other instrument or document furnished pursuant thereto.

           
3.     Assignee: (i) confirms that it has received a copy of the
Loan Agreement, together with copies of the financial statements most recently
delivered thereunder and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own analysis of Borrower
and the transactions contemplated by the Loan Agreement and its own independent
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon Assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Agreement; (iii) confirms that it is a an Eligible
Assignee under the Loan Agreement; (iv) appoints and authorizes Agent to take
such action as Agent on its behalf and to exercise such powers under the Loan
Agreement and the other Loan Documents as are specifically delegated to them,
together with all other powers reasonably incidental thereto; and (v) agrees
that it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Agreement are required to be performed by it as a
Lender (including the obligation to make future Loans).

           
4.     Following the execution of this Assignment and Assumption
Agreement by Assignor and Assignee, an executed original hereof (together with
all attachments) will be delivered to Agent. The effective date of this
Assignment and Assumption Agreement (the "Settlement Date")
shall be the date specified in Item 4 of Annex I hereto; provided that this
Assignment and Assumption Agreement shall not be deemed to have taken effect
unless (i) the consent hereto of Agent and Borrower has been obtained (to the
extent required in the Loan Agreement), (ii) Agent has received a fully executed
original hereof, and (iii) Agent has received the processing fee referred to in Section
19(f)(iii)(C) of the Loan Agreement.

           
5.     Upon the satisfaction of the foregoing conditions, then as
of the Settlement Date: (i) Assignee shall be a party to the Loan Agreement and,
to the extent provided in this Assignment and Assumption Agreement, have the
rights and obligations of a Lender thereunder and under the other Loan Documents
and (ii) Assignor shall, to the extent provided in this Assignment and
Assumption Agreement, relinquish its rights and be released from its duties
under the Loan Agreement and the other Loan Documents.

           
6.     All interest, fees and other amounts that would otherwise
accrue pursuant to the Loan Agreement and Assignor's Note for the account of
Assignor from and after the Settlement Date shall, instead accrue for the
account of, and be payable to, Assignor and Assignee, as the case may be, in
accordance with their respective interests as reflected in Item 3 to Annex I
hereto. All payments of principal that would otherwise be payable from and after
the Settlement Date to or for the account of Assignor pursuant to the Loan
Agreement and Assignor's Note shall, instead, be payable to or for the account
of Assignor and Assignee, as the case may be, in accordance with their
respective interests as reflected in Item 3 to Annex I hereto. On the Settlement
Date, Assignee shall pay to Assignor an amount specified by Assignor in writing
which represents the portion of Assignor's Loans which is being assigned and
which is outstanding on the Settlement Date, net of any closing costs. Assignor
and Assignee shall make all appropriate adjustments in payments under the Loan
Agreement for periods prior to the Settlement Date directly between themselves
on the Settlement Date.

           
7.     Each of the parties to this Assignment and Assumption
Agreement agrees that at any time and from time to time upon the written request
of any other party, it will execute and deliver such further documents and do
such further acts and things as such other party may reasonably request in order
to effect the purposes of this Assignment and Assumption Agreement.

           
8.     This Assignment and Assumption Agreement shall be governed
by, and construed in accordance with, the Laws of the State of Texas.

           
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.

    
      		[NAME OF ASSIGNOR]

            as Assignor

            

          
		
  By: ______________________

  Title: ______________________

            

          
		
                            [NAME OF ASSIGNEE]

                            

            

          
		By: ______________________

            Title: ______________________

          

    

CONSENTED TO AND ACKNOWLEDGED:

FORTIS CAPITAL CORP.

as Agent

 

By: _______________________________

Title: __________________________

 

By: _______________________________

Title: __________________________

 

If Required:

 

ASCENT ENERGY INC.,

Borrower

By: _______________________________

Title: __________________________

 

        ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT

                        ANNEX I

1.     Borrower: Ascent Energy Inc.

2.     Date of Assignment Agreement:

3.     Amounts (as of date of item #2 above):

 

 
	 	
      Assignor

      (as Revised)

    	
      Assignee

      New

    
	 	 	 
	
      
          a. Percentage Share

      

    	
      __________%
	
      __________%

	
      
          b. Percentage Share of

              Borrowing Base:

        

    	
      $ _________
	
      $ _________

4.     Settlement Date:

5.     Notices:

        ASSIGNEE:

            ___________________________

            ___________________________

            ___________________________

            Attention: ___________________

            Telephone: __________________

            Telecopy: ___________________

6.     Wiring Instructions:

            ___________________________

            ___________________________

            ___________________________

_____________________________

(1)        Percentage taken to 12 decimal
placesASSET CONTRIBUTION AGREEMENT

by and between

Forman Petroleum Corporation

and

Ascent Energy Inc.

 

 

July 26, 2001

 

 

ASSET CONTRIBUTION AGREEMENT

 

           
This Asset Contribution Agreement (this "Agreement"), is made and
entered into on this 26th day of July, 2001, by and between Forman
Petroleum Corporation, a Louisiana corporation ("Forman"), and Ascent
Energy Inc., a Delaware corporation ("Ascent").

WITNESSETH:

           
WHEREAS, Ascent is a wholly-owned subsidiary of Forman;

           
WHEREAS, Ascent will acquire Pontotoc Production, Inc., a Nevada corporation
("Pontotoc"), pursuant to that certain Agreement and Plan of Merger
dated January 19, 2001, as amended (the "Merger Agreement");

           
WHEREAS, in connection with and immediately prior to Pontotoc's acquisition,
Forman desires to contribute, as part of a plan of recorganization, all of its
assets to Ascent, and that Ascent assume certain liabilities of Forman, and that
Ascent in exchange therefor issue 4,949,000 shares (the "Shares") of
Ascent's common stock, $.001 par value per share (the "Common Stock"),
to Forman;

           
WHEREAS, in connection with and concurrently with the consummation of the
transactions contemplated by this Agreement, Ascent proposes to issue shares of
its 8% Series A Redeemable Preferred Stock and warrants to purchase shares of
Common Stock entitling the holders thereof to purchase 4,050,000 shares of
Common Stock (the "Warrants") so that, before giving effect to the
transactions contemplated by the Merger Agreement, Forman will own 55% of the
Common Stock on a fully diluted basis and the holders of the Warrants will own
45% of the Common Stock on a fully diluted basis; and

           
WHEREAS, after giving effect to the transactions contemplated by the Merger
Agreement, the former shareholders of Pontotoc will hold shares of Ascent's 8%
Series B Convertible Preferred Stock (the "Series B Preferred Stock")
that are convertible into 10% of the Common Stock on a fully diluted basis.

           
NOW, THEREFORE, in consideration of the premises and of the representations,
warranties, covenants and agreements contained herein, the parties do hereby
represent, warrant, covenant and agree as follows:

 

ARTICLE I

Contribution of Assets

           
Section 1.1     Contribution of Assets. At the
Closing, upon the terms and subject to the conditions set forth in this
Agreement and in reliance upon the representations and warranties and agreements
of Forman contained herein, Forman shall assign, convey, transfer, deliver and
contribute to Ascent, and Ascent shall accept from Forman all of Forman's right,
title and interest in, to and under all of its existing assets (other than the
Excluded Assets) (all of the right, title and interest of Forman to such assets
are hereinafter collectively referred to as the "Contributed Assets").
The Contributed Assets to be so assigned, conveyed, transferred, delivered and
contributed shall include, without limiting the generality of the foregoing, the
following:

           
(a)     All right, title and interest of Forman in, to and
under any contract, agreement, option, lease, right to acquire, preferential
purchase right, pre-emptive right, lease, franchise, license, purchase order,
bid, commitment or any other legally binding agreement (collectively, the
"Contracts") providing Forman with or the right (or the right to
acquire the right) to real property (or the mineral or other rights arising from
or related thereto) and any and all working interests, net revenue interests,
farmout interests, royalty rights or overriding interests in real property (or
the mineral or other rights arising from or related thereto) (collectively, the
"Oil and Gas Assets");

           
(b)     All right, title and interest of Forman in and to
seismic, geological, geophysical and similar data, lease files, land files,
legal files, abstracts, title opinions and land surveys;

           
(c)     All right, title and interest of Forman in and to
all furniture, fixtures, furnishings, machinery, equipment, including office
equipment and furniture, computer hardware, printers and software,
telecommunications equipment and facsimile machines, appliances and all other
tangible personal property of every kind and description and any interest
therein owned or leased by Forman, whether or not reflected as capital assets on
the accounting records of Forman;

           
(d)     All right, title of Forman in, to and under all
agreements, licenses, permits, consents, authorizations and other certificates
of any court or tribunal in any jurisdiction or any public, governmental or
regulatory body, agency, department, commission, board, bureau or other
authority or instrumentality (each, a "Governmental Entity") issued to
or held by Forman;

            
(e)      All cash, cash equivalents and marketable
securities;

            
(f)      All accounts receivable, trades receivable,
notes receivable and other receivables;

            
(g)     All insurance policies and contracts;

         
(h)     Subject to Section 1.4(b), all written employment
agreements with members of Forman's management (collectively, the
"Employment Agreements");

            
(i)     All rights, claims, causes of action under such
insurance policies and Contracts;

            
(j)     All employee benefit plans and any assets of such
plans; and

           
(k)     All right, title and interest in and to any
benefits, rights, privileges and appurtenances pertaining to any of the
foregoing.

           
Section 1.2     Excluded Assets. Notwithstanding any
other provision of this Agreement to the contrary, the Contributed Assets shall
not include (and Forman shall not contribute to Ascent), any of Forman's rights
or interests (collectively, the "Excluded Assets") in or to:

           
(a)     $100,000 to retain as working capital;

           
(b)     Any Common Stock;

           
(c)     Any rights or obligations of Forman as of the
Closing Date under any agreement concerning the equity securities of, or other
ownership interests in, Forman, including, without limitation, rights or
warrants to purchase equity securities of Forman, registration rights agreements
concerning securities issued by Forman, stockholders agreements among Forman and
the holders of securities issued by Forman, and similar agreements or
obligations;

           
(d)     All corporate records, including the seal and minute
book of Forman;

           
(e)     All rights or claims to tax refunds and all tax
benefits;

           
(f)     All of Forman's good will, franchise and other
rights in and to any benefits, rights and privileges pertaining to Forman's
organization and existence as a Louisiana business corporation;

           
(g)     All bank accounts, bank checks, safety deposit
boxes, lock boxes and other agreements with banks and other financial
institutions; and

           
(h)     All of Forman's rights under this Agreement and any
other agreement or instrument delivered by Forman in connection herewith.

           
Section 1.3     Non-Assignable Assets. Anything in
this Agreement to the contrary notwithstanding, this Agreement shall not
constitute an assignment or agreement to assign any Contributed Asset or any
claim or right, or any benefit arising thereunder or resulting therefrom, if an
attempted assignment thereof, without the consent of a third party thereto,
would constitute a breach thereof, or in any way adversely affect the rights of
Forman or Ascent thereunder. If such consent is not obtained, or if an attempted
assignment thereof would be ineffective or would materially adversely affect the
rights of Forman thereunder such that Ascent would not in fact receive all such
rights, Forman and Ascent will cooperate in a mutually agreeable arrangement
under which Ascent would obtain substantially the same economic benefits that
would be obtained under an assignment thereof and assume the obligations
thereunder in accordance with this Agreement, including subcontracting,
sublicensing, subleasing or other arrangement, with Ascent assuming Forman's
obligations, and any and all rights of Forman against a third party thereto. In
consideration of the covenants of Forman contained in this Section 1.3, Ascent
agrees to take such action as may be reasonably requested by Forman to enable
Forman to perform its obligations related to such asset.

           
Section 1.4     Nonassumption of Agreements.

           
(a)     Except for the obligations under any Contracts and
Employment Agreements that are included in the Contributed Assets and
obligations with respect to the Assumed Liabilities, Ascent shall not assume any
agreements or obligations, whether express or implied, that exist between Forman
and any third party, including, but not limited to, any of Forman's current or
former employees (to the extent not reflected in a Contract), and nothing in
this Agreement is intended to be or shall be construed as an assumption by
Ascent of any rights, obligations or liabilities of any kind under any such
agreements.

           
(b)     Notwithstanding anything to the contrary in this
Agreement, Ascent will not assume any obligation to (i) pay any incentive bonus
under the Employment Agreements that are determined by reference to any proved
oil and gas reserves other than those that are attributable to the Oil and Gas
Assets, and (ii) employ any members of Forman's management in the capacity that
such members have rendered services to Forman under the Employment Agreements.

ARTICLE II

Assumption of Liabilities

           
Section 2.1     Assumption of Certain Liabilities.
At the Closing, Ascent hereby agrees to assume, satisfy or perform, in
accordance with and subject to their respective terms, the liabilities reflected
on Forman's balance sheet attached as Exhibit "A" hereto and, subject
to the provisions of this Agreement, any executory obligations under the
Contracts and Employment Agreements, plus any costs and expenses incurred by
Forman in the ordinary course of business after the date of such balance sheet
and prior to the Closing (all of such liabilities of Forman are hereinafter
collectively referred to as the "Assumed Liabilities").

           
Section 2.2     Excluded Liabilities. Other than the
Assumed Liabilities, Ascent shall not assume, nor shall Ascent or any of its
Affiliates be deemed to have assumed or guaranteed, any other liability or
obligation of any nature of Forman, or claims of such liability or obligation,
whether accrued, matured or unmatured, liquidated or unliquidated, fixed or
contingent or known or unknown.

ARTICLE III

Closing

           
Section 3.1     Closing. The closing of the
transactions contemplated hereby (the "Closing") shall take place at
the offices of Forman at 650 Poydras Street, Suite 2200, New Orleans, LA 70130,
or such other place as the parties mutually agree, on July 27, 2001 (the
"Closing Date").

           
Section 3.2     Deliveries by Forman. At the Closing,
Forman shall deliver to Ascent the following:

          
(a)     an executed and acknowledged General Conveyance,
Assignment, Bill of Sale, Transfer and Assumption Agreement (the "General
Conveyance"), in substantially the form attached hereto as Exhibit
"B" attached hereto and dated as of the Closing Date, effectuating the
conveyance, assignment, transfer and delivery of the Contributed Assets to
Ascent as provided for herein; and

           
(b)     such other deeds, bills of sale, transfer
agreements, endorsements, assignments or other instruments of transfer and
conveyance (collectively, including the General Conveyance, the "Conveyance
Documents") duly executed by Forman as Ascent shall reasonably deem
necessary to vest in Ascent at Closing title to the Contributed Assets in the
manner provided for herein.

           
Section 3.3     Deliveries by Ascent. Promptly
following the Closing, Ascent shall deliver to Forman a certificate or
certificates representing the Shares.

           
Section 3.4     Title, Possession and Risk of Loss.
Title, possession and risk of loss or destruction or damage to the Contributed
Assets shall pass to Ascent at and upon Closing. Ascent shall take all steps and
actions as may be required to take actual possession, operation and control and
responsibility for the Contributed Assets at the Closing.

ARTICLE IV

Representations and Warranties of Forman

           
Forman represents and warrants to Ascent as follows:

           
Section 4.1     Organization and Good Standing.
Forman is a corporation duly organized, validly existing and in good standing
under the laws of the State of Louisiana and has the requisite power and
authority to own its properties and carry on its business as it is now being
conducted.

           
Section 4.2     Authority and Enforceability. Forman
has the full legal right, power and authority, and no further action or approval
on the part of Forman is required for Forman, to execute, deliver and perform
this Agreement, the Conveyance Documents and the other documents, certificates
and instruments contemplated hereby and thereby and to consummate the
transactions contemplated hereby and thereby. This Agreement and the Conveyance
Documents have been duly executed and delivered by Forman and constitutes valid
and legally binding obligations of Forman, enforceable in accordance with their
respective, except as such may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights
generally and equitable principles which may limit the availability of certain
equitable remedies in certain instances.

           
Section 4.3     No Conflict. Neither the execution
and delivery of this Agreement or the Conveyance Documents by Forman, nor the
consummation of any of the transactions contemplated hereby or thereby, nor
compliance with any of the terms hereof or thereof, do or will (a) conflict with
or result in any breach of the articles of incorporation or bylaws of Forman,
(b) result in the violation or breach of, or constitute (with or without notice
or the lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, or any license, Contract,
Employment Agreement or obligation to which Forman is a party or by which any of
the foregoing or their respective assets may be bound, or (c) violate any order,
writ injunction, decree, statute, rule or regulation applicable to Forman or any
of its respective properties and assets.

           
Section 4.4     Consent. No consent, approval, order
or authorization of, or declaration, filing or registration with, any
Governmental Entity or other person is required to be obtained or made by Forman
in connection with the execution, delivery or performance by Forman of this
Agreement or the Conveyance Documents or the consummation by Forman of the
transactions contemplated hereby and thereby.

           
Section 4.5     Title to Contributed Assets. Forman
has good, valid and marketable title to all of the Contributed Assets. The
Conveyance Documents will transfer good, valid and marketable title to all of
the Contributed Assets (other than the Non-Assignable Assets) to Ascent, free
and clear of any liens, security interests, chattel mortgages, mortgages or
deeds of trust, of any kind or nature whatsoever.

           
Section 4.6     Compliance With Laws. The business of
Forman has been and is being conducted and its assets have been and are being
operated, in all material respects, in compliance with all statutes, laws, rules
or regulations or any judgment, order, writ, injunction or decree of any
Governmental Entity to which a specified Person or its property is subject (the
"Applicable Laws"), and Forman has not received notice of any
violations or deficiencies by it or investigations or other inquiries with
respect to it or its assets, in each case, from, nor is Forman in default with
respect to any order, writ, judgment, award, injunction or other decree of, any
Governmental Entity employee or third party under any Applicable Law, and no
such investigation or inquiry is planned or threatened.

ARTICLE V

Representations and Warranties of Ascent

           
Ascent represents and warrants to Forman as follows:

           
Section 5.1     Organization. Ascent is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the requisite power and authority to own its
properties and carry on its business as now being conducted.

           
Section 5.2     Authority and Enforceability. Ascent
has the full legal right, power, and authority to, and no further action or
approval on the part of Ascent or its stockholders is required for Ascent to
execute, deliver and perform this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Ascent and constitutes the valid and legally binding obligation of Ascent,
enforceable in accordance with its terms, except as such may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affective creditors' rights generally and equitable principles which may limit
the availability of certain equitable remedies in certain instances.

           
Section 5.3     No Conflict. Neither the execution
and delivery of this Agreement by Ascent, nor the consummation of any of the
transactions contemplated hereby, nor compliance with any of the terms hereof,
do or will (a) conflict with or result in any breach of the certificate of
incorporation or by-laws of Ascent, (b) result in the violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
license, Contract or other instrument or obligation to which Ascent is a party
or by which Ascent or its assets may be bound, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Ascent or any of
its properties and assets.

           
Section 5.4     Consent. No consent, approval, order
or authorization of, or declaration, filing or registration with, any
Governmental Entity or other person is required to be obtained or made by Ascent
in connection with the execution, delivery or performance by it of this
Agreement or the consummation by Ascent of the transactions contemplated hereby.

ARTICLE VI

Miscellaneous

           
Section 6.1     Further Assurances. Each party
hereto, at the request of any other party hereto, shall take such further
actions as are reasonably requested and execute any additional documents,
instruments or convey access of any kind which may be reasonably necessary to
further effect the transfer of the Contributed Assets to Ascent as provided for
herein.

           
Section 6.2     Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors, by way of merger or operation of law, but the rights hereunder may
not be assigned without the prior written consent of all the parties hereto.

         
Section 6.3     Governing Law. This Agreement shall
be construed and interpreted and the rights of the parties governed by the laws
of the State of Louisiana.

           
Section 6.4     Entire Agreement. This Agreement,
together with the Conveyance Documents and all Exhibits hereto, constitutes the
entire agreement among the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether oral or written, of the parties and there
are no other warranties, representations or other agreements among the parties
in connection with the subject matter hereof.

[signatures appear on the following page]

 

           
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the first
date written above.

  			
        FORMAN PETROLEUM CORPORATION

				
				
			
        By:
	                                                         
        
				
        Jeffrey Clarke

				
        President

				
				
				
			
        ASCENT ENERGY INC.

				
				
			
        By:
	                                                         
        
				
        Jeffrey Clarke

				
        President

				

 

 

EXHIBIT "A"

 

  
  	
        FORMAN PETROLEUM CORPORATION

	
        CONSOLIDATED BALANCE SHEET

	
        (UNAUDITED)

	
        

      	
        

      	
        

      	
        

      	
        

      
	
        

      	
        

      	
        

      	
        

      	
        June 30, 2001

				
        

      
	
      ASSETS

    	
      

    	
      

    	
      

    
	
        CURRENT ASSETS:
	
        

      	
        

      
	
        

      	
        Cash & cash equivalents
	
        

      	
        $ 6,390,975  

	
        

      	
        Accounts receivable
	
        

      	
        146,343  

	
        

      	
        Oil & gas revenue receivable
	
        

      	
        1,058,006  

	
        

      	
        Deferred Taxes
	
        

      	
        371,778  

	
        

      	
        Unbilled well cost
	
        

      	
        134,241  

	
        

      	
        Prepaid expenses and taxes
	
        

      	
        52,620  

					
        

      
	
        

      	
        

      	
        Total Current Assets
	
        

      	
        8,153,963  

	
        

      	
        

      	
        

      	
        

      	
        

      
	
        PROPERTY AND EQUIPMENT, at cost:
	
        

      	
        

      
	
        

      	
        Oil & gas property
	
        

      	
        30,795,877  

	
        

      	
        Unevaluated oil & gas property
	
        

      	
        5,058,074  

	
        

      	
        Other property & equipment
	
        

      	
        378,758  

					
        

      
	
        

      	
        

      	
        

      	
        

      	
        36,232,709  

	
        

      	
        Less - accumulated depreciation, depletion and amortization
	
        (6,390,891)

					
        

      
	
        

      	
        

      	
        Net property & equipment
	
        

      	
        29,841,818  

	
        

      	
        

      	
        

      	
        

      	
        

      
	
        OTHER ASSETS:
	
        

      	
        

      
	
        

      	
        Deferred acquisition costs
	
        

      	
        640,272  

	
        

      	
        Recapitalization costs
	
        

      	
        153,690  

	
        

      	
        Funds on deposit
	
        

      	
        498,478  

	
        

      	
        

      	
        

      	
        

      	
        

      
			
	
        TOTAL ASSETS
	
        

      	
        $ 39,288,221  

	
        

      	
        

      	
        
	
        

      	
        

      
	
      LIABILITIES & STOCKHOLDERS' EQUITY

    	
      

    	
      

    
	
        CURRENT LIABILITIES:
	
        

      	
        

      
	
        

      	
        Accounts payable & accrued liabilities
	
        

      	
        $ 858,655  

	
        

      	
        Unidistributed oil and gas revenues
	
        

      	
        373,809  

	
        

      	
        Current portion of notes payable
	
        

      	
        1,260,950  

					
        

      
	
        

      	
        

      	
        Total Current Liabilities
	
        

      	
      2,493,414  

  	
      

    	
      

    	
      

    	
      

    	
      

    
	
      

    	
      Note payable (long term)
	
      

    	
      668,301  

	
      

    	
      Deferred tax liability
	
      

    	
      11,486,390

					
      

    
	
      

    	
      

    	
      Total liabilities
	
      

    	
      14,648,105  

	
      

    	
      

    	
      

    	
      

    	
      

    
	
      STOCKHOLDERS' EQUITY:
	
      

    	
      

    
	
      

    	
      Common stock
	
      

    	
      20,685,007  

	
      

    	
      Retained earnings
	
      

    	
      3,955,109  

					
      

    
	
      

    	
      

    	
      Total stockholders' equity
	
      

    	
      24,640,116  

	
      

    	
      

    	
      

    	
      

    	
      

    
	
      TOTAL LIABILITIES & EQUITY
	
      

    	
      $ 39,288,221  

	
      

    	
      

    	
      

    	
      

    	
      

    
	
      

    	
      

    	
      

    	
      

    	
      

    

  

EXHIBIT "B"

 

 

GENERAL CONVEYANCE, ASSIGNMENT, BILL OF SALE

AND TRANSFER AGREEMENT

 

           
This General Conveyance, Assignment, Bill of Sale, Transfer and Assumption
Agreement (this "Assignment"), dated and effective as of this 26th day
of July 2001, is entered into by and between Forman Petroleum Corporation, a
Louisiana corporation ("Grantor"), and Ascent Energy Inc., a Delaware
corporation ("Grantee").

W I T N E S S E T H:

           
WHEREAS, in connection with the transactions contemplated by that certain
Agreement and Plan of Merger, dated January 19, 2001, as amended, by and among
Grantee, Pontotoc Acquisition Corp. and Pontotoc Production, Inc., Grantor and
Grantee have entered into that certain Asset Contribution Agreement, dated July
24, 2001 (the "Contribution Agreement"), pursuant to which Grantor has
agreed to contribute to Grantee, as part of a plan of reorganization, Grantor's
entire right, title and interest in, to and under all of the assets owned by
Grantor on the date hereof (except the Excluded Assets (as defined below));

           
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Grantor and Grantee agree as
follows:

           
1.     Transfer of Assets. Except for and expressly
excluding those properties, assets and rights listed on Schedule A hereto
(the "Excluded Assets") and subject to the provisions of Section 2 of
this Assignment, Grantor hereby grants, sells, conveys, delivers, transfers and
assigns to Grantee all right, title and interest of Grantor in and to all of
Grantor's properties, assets and rights, including, without limitation, the
following (collectively, the "Acquired Assets"):

                       
(a)     All right, title and interest of Grantor in, to and
under any contract, agreement, option, lease, right to acquire, preferential
purchase right, pre-emptive right, lease, franchise, license, purchase order,
bid, commitment or any other legally binding agreement (collectively, the
"Contracts") providing Grantor with or the right (or the right to
acquire the right) to real property (or the mineral or other rights arising from
or related thereto) and any and all working interests, net revenue interests,
farmout interests, royalty rights or overriding interests in real property (or
the mineral or other rights arising from or related thereto);

                       
(b)     All right, title and interest of Grantor in and to
seismic, geological, geophysical and similar data, lease files, land files,
legal files, abstracts, title opinions and land surveys;

                       
(c)     All right, title and interest of Grantor in and to
all furniture, fixtures, furnishings, machinery, equipment, including office
equipment and furniture, computer hardware, printers and software,
telecommunications equipment and facsimile machines, appliances and all other
tangible personal property of every kind and description and any interest
therein owned or leased by Grantor, whether or not reflected as capital assets
on the accounting records of Grantor;

                       
(d)     All right, title of Grantor in, to and under all
agreements, licenses, permits, consents, authorizations and other certificates
of any court or tribunal in any jurisdiction or any public, governmental or
regulatory body, agency, department, commission, board, bureau or other
authority or instrumentality issued to or held by Grantor;

                       
(e)     All cash, cash equivalents and marketable
securities;

                       
(f)      All accounts receivable, trades receivable,
notes receivable and other receivables;

                       
(g)     All insurance policies and contracts;

                     
(h)    All written employment agreements with members of
Grantor's management (the "Employment Agreements");

                       
(i)      All rights, claims, causes of action under
such insurance policies and Contracts;

                       
(j)      All employee benefit plans and any assets of
such plans; and

                       
(k)     All right, title and interest in and to any
benefits, rights, privileges and appurtenances pertaining to any of the
foregoing.

           
2.     Consents. Anything in this Assignment to the
contrary notwithstanding, this Assignment shall not constitute an assignment or
agreement to assign any Acquired Asset or any claim or right, or any benefit
arising thereunder or resulting therefrom, if an attempted assignment thereof,
without the consent of a third party thereto, would constitute a breach thereof,
or in any way adversely affect the rights of Grantor or Grantee thereunder. If
such consent is not obtained, or if an attempted assignment thereof would be
ineffective or would materially adversely affect the rights of Grantor
thereunder such that Grantee would not in fact receive all such rights, Grantor
and Grantee will cooperate in a mutually agreeable arrangement under which
Grantee would obtain substantially the same economic benefits that would be
obtained under an assignment thereof and assume the obligations thereunder in
accordance with this Assignment, including subcontracting, sublicensing,
subleasing or other arrangement, with Grantee assuming Grantor's obligations,
and any and all rights of Grantor against a third party thereto. In
consideration of the covenants of Grantor contained in this Section, Grantee
agrees to take such action as may be reasonably requested by Grantor to enable
Grantor to perform its obligations related to such asset.

           
3.     Limitation on Assignment. Notwithstanding
anything to the contrary in this Assignment, the transfer of the Acquired Assets
to Grantee is expressly subject to all of the terms and provisions of the
Contribution Agreement, including, but not limited to, Sections 1.3 and 1.4
thereof.

           
4.     Assignment for the Benefit of the Parties.
Nothing in this Assignment is intended to confer upon any person, other than the
parties hereto and their respective successors and assigns, any right or remedy.

           
5.     Governing Law. This Assignment shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Louisiana, without regard to conflicts of laws principles.

[signatures appear on the following page]

           

           
IN WITNESS WHEREOF, Grantor and Grantee each have caused this Assignment to be
duly executed as of the date set forth above.

  		GRANTOR:

        
		FORMAN PETROLEUM CORPORATION

        

      
		
        By:                                                             
        

                                 
        Jeffrey Clarke

                                    
        President

		
		
        GRANTEE:

        

		
        ASCENT ENERGY INC.

        

      

		By:                                                             
        

                                 
        Jeffrey Clarke

                                    
        President

 

Schedule A

Excluded Assets

1.        $100,000 to
retain as working capital;

2.        Any common
stock, par value $0.001, of Grantee held by Grantor on the date of this
Assignment;

3.        Any rights or
obligations of Grantor as of the date of this Assignment under any agreement
concerning the equity securities of, or other ownership interests in, Grantor,
including, without limitation, rights or warrants to purchase equity securities
of Grantor, registration rights agreements concerning securities issued by
Grantor, stockholders agreements among Grantor and the holders of securities
issued by Grantor, and similar agreements or obligations;

4.        All corporate
records, including the seal and minute book of Grantor;

5.        All rights or
claims to tax refunds and all tax benefits;

6.        All of Forman's
good will, franchise and other rights in and to any benefits, rights and
privileges pertaining to Forman's organization and existence as a Louisiana
business corporation;

7.        All bank
accounts, bank checks, safety deposit boxes, lock boxes and other agreements
with banks and other financial institutions; and

8.        All of Grantor's
rights under the Contribution Agreement and any other agreement or instrument
delivered by Grantor in connection herewith.

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