DENBURY RESOURCES INC
EXHIBIT 10(A)
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>fourthamendcreditagt.txt
<DESCRIPTION>EXHIBIT 10(A)
<TEXT>
                                 EXHIBIT 10(a)

                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT


                                      among


                              DENBURY ONSHORE, LLC,
                                  as Borrower,

                             DENBURY RESOURCES INC.,
                              as Parent Guarantor,

            The Financial Institutions Listed on Schedule 2.1 Hereto,
                                    as Banks,

                                  BANK ONE, NA,
                            as Administrative Agent,

                         CREDIT LYONNAIS NEW YORK BRANCH

                                       and

                              FORTIS CAPITAL CORP.,
                             as Syndication Agents,

                                       and

                         UNION BANK OF CALIFORNIA, N.A.

                                       and

                                 COMERICA BANK,
                             as Documentation Agents

                                  $300,000,000


                                   dated as of

                                December 30, 2003

                         BANC ONE CAPITAL MARKETS, INC.,
                     as Sole Lead Arranger and Book Manager


<PAGE>
                                TABLE OF CONTENTS
<TABLE>
<CAPTION>

                                                                                                                  Page No.


<S>                                                                                                                  <C>
Article I AMENDMENT AND RESTATEMENT...................................................................................2

Article II TERMS DEFINED..............................................................................................2
     Section 2.1      Definitions.....................................................................................2
     Section 2.2      Accounting Terms and Determinations............................................................24
     Section 2.3      Petroleum Terms................................................................................25
     Section 2.4      Money..........................................................................................25

Article III THE CREDIT...............................................................................................25
     Section 3.1      Commitments....................................................................................25
     Section 3.2      Method of Borrowing............................................................................28
     Section 3.3      Method of Requesting Letters of Credit.........................................................29
     Section 3.4      Notes..........................................................................................30
     Section 3.5      Interest Rates; Payments.......................................................................30
     Section 3.6      Mandatory Prepayments..........................................................................32
     Section 3.7      Voluntary Prepayments..........................................................................32
     Section 3.8      Voluntary Reduction of Commitments.............................................................32
     Section 3.9      Termination of Commitments; Final Maturity of Revolving Loan...................................32
     Section 3.10     Application of Payments........................................................................32
     Section 3.11     Commitment Fee.................................................................................32
     Section 3.12     Agency and other Fees..........................................................................32

Article IV GENERAL PROVISIONS........................................................................................33
     Section 4.1      Delivery and Endorsement of Notes..............................................................33
     Section 4.2      General Provisions as to Payments..............................................................33

Article V BORROWING BASE.............................................................................................34
     Section 5.1      Reserve Report; Proposed Borrowing Base and Conforming Borrowing Base..........................34
     Section 5.2      Scheduled Redeterminations of the Borrowing Base and the Conforming Borrowing Base;
                        Procedures and Standards.....................................................................34
     Section 5.3      Special Redetermination........................................................................35
     Section 5.4      Borrowing Base Deficiency......................................................................36
     Section 5.5      Initial Borrowing Base and Initial Conforming Borrowing Base...................................36

Article VI COLLATERAL AND GUARANTEES.................................................................................36
     Section 6.1      Security.......................................................................................36
     Section 6.2      Guarantees.....................................................................................38

Article VII CONDITIONS PRECEDENT.....................................................................................38
     Section 7.1      Conditions to Amendment and Restatement and Initial Borrowing and Participation in
                        Letter of Credit Exposure....................................................................38
     Section 7.2      Conditions to Each Borrowing and each Letter of Credit.........................................41
     Section 7.3      Agreements Regarding Initial Borrowing.........................................................42
     Section 7.4      Materiality of Conditions......................................................................42
</TABLE>

                                       i

<PAGE>
<TABLE>
<CAPTION>

<S>                                                                                                                 <C>
Article VIII REPRESENTATIONS AND WARRANTIES..........................................................................43
     Section 8.1      Corporate Existence and Power..................................................................43
     Section 8.2      Credit Party and Governmental Authorization; Contravention.....................................43
     Section 8.3      Binding Effect.................................................................................43
     Section 8.4      Financial Information..........................................................................44
     Section 8.5      Litigation.....................................................................................44
     Section 8.6      ERISA..........................................................................................44
     Section 8.7      Taxes and Filing of Tax Returns................................................................45
     Section 8.8      Ownership of Properties Generally..............................................................45
     Section 8.9      Mineral Interests..............................................................................45
     Section 8.10     Licenses, Permits, Etc.........................................................................46
     Section 8.11     Compliance with Law............................................................................46
     Section 8.12     Full Disclosure................................................................................46
     Section 8.13     Organizational Structure; Nature of Business...................................................46
     Section 8.14     Environmental Matters..........................................................................47
     Section 8.15     Burdensome Obligations.........................................................................47
     Section 8.16     Fiscal Year....................................................................................48
     Section 8.17     No Default.....................................................................................48
     Section 8.18     Government Regulation..........................................................................48
     Section 8.19     Insider........................................................................................48
     Section 8.20     Gas Balancing Agreements and Advance Payment Contracts.........................................48
     Section 8.21     Bond Documents.................................................................................48
     Section 8.22     Closing Documents..............................................................................49

Article IX AFFIRMATIVE COVENANTS.....................................................................................49
     Section 9.1      Information....................................................................................49
     Section 9.2      Business of Credit Parties.....................................................................51
     Section 9.3      Maintenance of Existence.......................................................................52
     Section 9.4      Title Data.....................................................................................52
     Section 9.5      Right of Inspection............................................................................52
     Section 9.6      Maintenance of Insurance.......................................................................52
     Section 9.7      Payment of Taxes and Claims....................................................................53
     Section 9.8      Compliance with Laws and Documents.............................................................53
     Section 9.9      Operation of Properties and Equipment..........................................................53
     Section 9.10     Environmental Law Compliance...................................................................54
     Section 9.11     ERISA Reporting Requirements...................................................................54
     Section 9.12     Additional Documents...........................................................................54
     Section 9.13     Environmental Review...........................................................................55
     Section 9.14     Post-Closing Transactions......................................................................55

Article X NEGATIVE COVENANTS.........................................................................................55
     Section 10.1     Incurrence of Debt.............................................................................55
     Section 10.2     Restricted Payments............................................................................56
     Section 10.3     Negative Pledge................................................................................56
     Section 10.4     Consolidations and Mergers.....................................................................56
     Section 10.5     Asset Dispositions.............................................................................56
     Section 10.6     Amendments to Organizational and Other Documents...............................................57
     Section 10.7     Use of  Proceeds...............................................................................57
     Section 10.8     Investments....................................................................................57
</TABLE>

                                       ii
<PAGE>
<TABLE>
<CAPTION>

     <S>                                                                                                             <C>
     Section 10.9     Transactions with Affiliates...................................................................57
     Section 10.10    ERISA..........................................................................................57
     Section 10.11    Hedge Transactions.............................................................................58
     Section 10.12    Fiscal Year....................................................................................59
     Section 10.13    Change in Business.............................................................................59
     Section 10.14    Qualified Purpose..............................................................................59
     Section 10.15    Obligations of Unrestricted Subsidiaries.......................................................59
     Section 10.16    Borrowings Related to Bond Offering............................................................59

Article XI FINANCIAL COVENANTS.......................................................................................60
     Section 11.1     Current Ratio of Borrower......................................................................60
     Section 11.2     Minimum Consolidated Tangible Net Worth........................................................60
     Section 11.3     Consolidated EBITDA to Consolidated Net Interest Expense.......................................60

Article XII DEFAULTS.................................................................................................60
     Section 12.1     Events of Default..............................................................................60

Article XIII AGENTS..................................................................................................62
     Section 13.1     Appointment; Nature of Relationship............................................................62
     Section 13.2     Powers.........................................................................................62
     Section 13.3     General Immunity...............................................................................63
     Section 13.4     No Responsibility for Loans, Recitals, etc.....................................................63
     Section 13.5     Action on Instructions of Banks................................................................63
     Section 13.6     Employment of Agents and Counsel...............................................................63
     Section 13.7     Reliance on Documents; Counsel.................................................................64
     Section 13.8     Administrative Agent's Reimbursement and Indemnification.......................................64
     Section 13.9     Notice of Default..............................................................................64
     Section 13.10    Rights as a Bank...............................................................................64
     Section 13.11    Bank Credit Decision...........................................................................65
     Section 13.12    Successor Administrative Agent.................................................................65
     Section 13.13    Delegation to Affiliates.......................................................................66
     Section 13.14    Execution of Collateral Documents..............................................................66
     Section 13.15    Collateral Releases............................................................................66
     Section 13.16    Agents.........................................................................................66
     Section 13.17    Bond Documents.................................................................................66

Article XIV CHANGE IN CIRCUMSTANCES..................................................................................67
     Section 14.1     Increased Cost and Reduced Return..............................................................67
     Section 14.2     Limitation on Type of Loans....................................................................68
     Section 14.3     Illegality.....................................................................................68
     Section 14.4     Treatment of Affected Loans....................................................................69
     Section 14.5     Compensation...................................................................................69
     Section 14.6     Taxes..........................................................................................70
     Section 14.7     Discretion of Banks as to Manner of Funding....................................................71

Article XV MISCELLANEOUS.............................................................................................71
     Section 15.1     Notices........................................................................................71
     Section 15.2     No Waivers.....................................................................................72
     Section 15.3     Expenses; Indemnification......................................................................72
</TABLE>

                                      iii
<PAGE>

<TABLE>
<CAPTION>
     <S>                                                                                                             <C>
     Section 15.4     Right of Set-off; Adjustments..................................................................73
     Section 15.5     Amendments and Waivers.........................................................................74
     Section 15.6     Survival.......................................................................................74
     Section 15.7     Limitation on Interest.........................................................................74
     Section 15.8     Invalid Provisions.............................................................................75
     Section 15.9     Waiver of Consumer Credit Laws.................................................................75
     Section 15.10    Assignments and Participations.................................................................75
     Section 15.11    TEXAS LAW......................................................................................78
     Section 15.12    Consent to Jurisdiction; Waiver of Immunities..................................................79
     Section 15.13    Counterparts; Effectiveness....................................................................79
     Section 15.14    No Third Party Beneficiaries...................................................................79
     Section 15.15    COMPLETE AGREEMENT.............................................................................79
     Section 15.16    WAIVER OF JURY TRIAL...........................................................................80
     Section 15.17    Confidentiality................................................................................80
</TABLE>

                                       iv

<PAGE>



                                    EXHIBITS
                                    --------

EXHIBIT A       FORM OF AMENDMENT TO MORTGAGES
EXHIBIT B       FORM OF FACILITY GUARANTY
EXHIBIT C       FORM OF PROMISSORY NOTE
EXHIBIT D       FORM OF PARENT PLEDGE AGREEMENT
EXHIBIT E       FORM OF SUBSIDIARY PLEDGE AGREEMENT
EXHIBIT F       FORM OF REQUEST FOR BORROWING
EXHIBIT G       FORM OF REQUEST FOR LETTER OF CREDIT
EXHIBIT H       FORM OF NOTICE OF CONTINUATION OR CONVERSION
EXHIBIT I       FORM OF CERTIFICATE OF OWNERSHIP INTERESTS
EXHIBIT J       FORM OF CERTIFICATE OF PRINCIPAL EXECUTIVE AND FINANCIAL OFFICER
EXHIBIT K       FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT L       FORM OF CERTIFICATE OF EFFECTIVENESS

                                    SCHEDULES
                                    ---------

SCHEDULE 2.1             FINANCIAL INSTITUTIONS
SCHEDULE 2.2             EXISTING MORTGAGES
SCHEDULE 2.3             RESTRUCTURING TRANSACTIONS/POST-CLOSING TRANSACTIONS
SCHEDULE 8.5             LITIGATION
SCHEDULE 8.10            LICENSES, PERMITS, ETC.
SCHEDULE 8.13            JURISDICTIONS, ETC.
SCHEDULE 9.10            ENVIRONMENTAL DISCLOSURE







                                       v

<PAGE>
                 FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                 --------------------------------------------

     THIS FOURTH AMENDED AND RESTATED  CREDIT  AGREEMENT  (this  "Agreement") is
entered  into  effective  as of the 30th day of December,  2003,  among  DENBURY
ONSHORE, LLC (successor by merger to Former Borrower (as hereinafter  defined)),
a Delaware limited  liability  company  ("Borrower"),  DENBURY RESOURCES INC., a
newly formed Delaware corporation ("Parent"), BANK ONE, NA, with its main office
in Chicago,  Illinois, as Administrative Agent ("Administrative  Agent"), CREDIT
LYONNAIS  NEW YORK  BRANCH and  FORTIS  CAPITAL  CORP.,  as  Syndication  Agents
("Syndication  Agents"),  UNION BANK OF  CALIFORNIA,  N.A. and COMERICA BANK, as
Documentation  Agents  ("Documentation  Agents") and the financial  institutions
listed on Schedule 2.1 hereto as Banks  (individually a "Bank" and  collectively
"Banks").

                              W I T N E S S E T H:
                              -------------------

     WHEREAS,  Borrower (as defined in the Existing Credit Agreement (as defined
below) and referred to herein as "Former Borrower"),  Administrative  Agent, and
each of the  financial  institutions  named and  defined  therein  as Banks (the
"Existing  Banks") and agents,  are parties to that  certain  Third  Amended and
Restated  Credit  Agreement  dated as of September  12, 2002,  pursuant to which
Existing  Banks  provided  certain  loans  and  extensions  of  credit to Former
Borrower (as heretofore amended, the "Existing Credit Agreement"); and

     WHEREAS,  Parent  and its  Subsidiaries  have  effected  the  Restructuring
Transactions  (as  hereinafter  defined),  including,  without  limitation,  the
Borrower Merger (as hereinafter defined); and

     WHEREAS, as soon as practical upon obtaining  regulatory  approval,  Parent
and certain of its Subsidiaries  intend to effect the Post-Closing  Transactions
(as hereinafter defined); and

     WHEREAS,  concurrently  with the  closing and  consummation  of the Closing
Transactions  (as hereinafter  defined),  the parties hereto desire to amend and
restate  the  Existing  Credit  Agreement  in its  entirety  in the form of this
Agreement,  and Borrower desires to obtain Borrowings (as herein defined) (a) to
refinance the  indebtedness  under the Existing  Credit  Agreement,  and (b) for
other purposes permitted herein; and

     WHEREAS,  after giving effect to the Closing Transactions and the amendment
and restatement of the Existing Credit  Agreement  pursuant to the terms hereof,
the Commitment  Percentage (as herein defined) of each Bank hereunder will be as
set forth on Schedule 2.1 hereto; and

     WHEREAS,  Banc One  Capital  Markets,  Inc.  has been  appointed  Sole Lead
Arranger and Book Manager for the credit facility provided herein.

     NOW,  THEREFORE,  in  consideration of the premises,  the  representations,
warranties,  covenants  and  agreements  contained  herein,  and other  good and
valuable   consideration,   the  receipt  and   adequacy  of  which  are  hereby
acknowledged, Parent, Borrower, Administrative Agent and Banks agree as follows:

                                       1
<PAGE>

                                   Article I
                            AMENDMENT AND RESTATEMENT
                            -------------------------

     Subject  to the  satisfaction  of each  condition  precedent  contained  in
Section  7.1  hereof,  the  satisfaction  of  which  shall be  evidenced  by the
execution by Parent,  Borrower and  Administrative  Agent of the  Certificate of
Effectiveness  (as herein  defined),  the  Existing  Credit  Agreement  shall be
amended and restated as of the Closing Date in the form of this Agreement. It is
the  intention  of Parent,  Borrower,  Administrative  Agent and Banks that this
Agreement supersedes and replaces the Existing Credit Agreement in its entirety;
provided that, (a) such amendment and restatement shall operate to renew,  amend
and  modify  certain  of the rights and  obligations  of the  parties  under the
Existing Credit  Agreement as provided  herein,  but shall not act as a novation
thereof,  and (b) the Liens securing the Obligations under and as defined in the
Existing  Credit  Agreement  shall not be  extinguished,  but  shall be  carried
forward and shall secure such obligations and indebtedness as renewed,  amended,
restated and modified hereby. Borrower hereby acknowledges,  agrees and confirms
that it has assumed (by operation of law or otherwise) all debt, liabilities and
obligations,  and agreed to perform,  as primary obligor,  all  obligations,  of
Former  Borrower under the Existing  Credit  Agreement and the other Loan Papers
(therein  defined  and to the  extent a party  thereto),  as  renewed,  amended,
restated and modified hereby.

                                   Article II
                                  TERMS DEFINED
                                  -------------

     Section 2.1  Definitions.  The following  terms,  as used herein,  have the
following meanings:

     "Adjusted  Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period  therefor,  the rate per annum  (rounded  upwards,  if necessary,  to the
nearest  1/100  of 1%)  determined  by  Administrative  Agent to be equal to the
quotient  obtained by dividing (a) the Eurodollar  Rate for such Eurodollar Loan
for  such  Interest  Period  by (b) 1 minus  the  Reserve  Requirement  for such
Eurodollar Loan for such Interest Period.

     "Administrative   Agent"   means  Bank  One,   NA,  in  its   capacity   as
Administrative Agent for Banks hereunder or any successor thereto.

     "Advance  Payment  Contract"  means any  contract  whereby any Credit Party
either  (a)  receives  or  becomes  entitled  to  receive  (either  directly  or
indirectly)  any payment (an "Advance  Payment") to be applied toward payment of
the  purchase  price of  Hydrocarbons  produced or to be produced  from  Mineral
Interests  owned by any Credit Party and which Advance  Payment is, or is to be,
paid in advance of actual  delivery of such  production to or for the account of
the purchaser regardless of such production, or (b) grants an option or right of
refusal to the purchaser to take delivery of such production in lieu of payment,
and, in either of the foregoing instances,  the Advance Payment is, or is to be,
applied as payment in full for such production when sold and delivered or is, or
is to be, applied as payment for a portion only of the purchase price thereof or
of a percentage  or share of such  production;  provided  that  inclusion of the
standard  "take or pay"  provision in any gas sales or purchase  contract or any
other similar contract shall not, in and of itself,  constitute such contract as
an Advance Payment Contract for the purposes hereof.

                                       2

<PAGE>

     "Affiliate"  means, as to any Person, any Subsidiary of such Person, or any
other Person which,  directly or indirectly,  controls,  is controlled by, or is
under common  control  with,  such Person and, with respect to any Credit Party,
means,  any  director,  executive  officer,  general  partner or manager of such
Credit  Party and any Person who holds ten  percent  (10%) or more of the voting
stock, partnership interests,  membership interests or other ownership interests
of such Credit Party. For the purposes of this definition, "control" (including,
with correlative  meanings,  the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession,  directly
or  indirectly,  of the power to direct or cause the direction of the management
and policies of such Person, whether through the ownership of voting securities,
membership interests or partnership interests, or by contract or otherwise.

     "Agent"  means   Administrative   Agent,   each  Syndication   Agent,  each
Documentation  Agent,  Sole Lead  Arranger or Book Manager,  and "Agents"  means
Administrative  Agent, each Syndication  Agent, each  Documentation  Agent, Sole
Lead Arranger and Book Manager, collectively.

     "Agreement"  means this Fourth Amended and Restated Credit Agreement as the
same may hereafter be modified,  amended,  restated or supplemented from time to
time.

     "Amendment  to  Mortgages"  means  an  Amendment  to  and  Ratification  of
Mortgages  to  be  entered  into  between  Borrower  and  Administrative  Agent,
substantially in the form of Exhibit A attached hereto, pursuant to which, among
other  things,   the  Existing   Mortgages  shall  be  amended  to  reflect  the
Restructuring Transactions (including,  without limitation, the Borrower Merger)
and the amendment and  restatement  of the Existing  Credit  Agreement  pursuant
hereto.

     "Applicable  Environmental  Law"  means any  federal,  state or local  law,
common law, ordinance,  regulation or policy, as well as order, decree,  permit,
judgment or injunction issued,  promulgated,  approved,  or entered  thereunder,
relating  to  the  environment,  health  and  safety,  or  Hazardous  Substances
(including, without limitation, the use, handling,  transportation,  production,
disposal,  discharge  or  storage  thereof)  or to  industrial  hygiene  or  the
environmental  conditions on, under, or about any real property owned, leased or
operated at any time by any Credit Party or any real property  owned,  leased or
operated by any other party including,  without limitation,  soil,  groundwater,
and indoor and ambient air conditions.

     "Applicable Lending Office" means, for each Bank and for each Type of Loan,
the "Lending  Office" of such Bank (or of an affiliate of such Bank)  designated
for such Type of Loan on the signature pages hereof or such other office of such
Bank (or an  affiliate  of such Bank) as such Bank may from time to time specify
to  Administrative  Agent and Borrower by written notice in accordance  with the
terms  hereof  as the  office  by which  Loans  of such  Type are to be made and
maintained.

                                       3
<PAGE>

     "Applicable  Margin" means, on any date, with respect to each Type of Loan,
an amount  determined  by  reference to the ratio of  Outstanding  Credit to the
Conforming Borrowing Base on such date in accordance with the table below:

<TABLE>
<CAPTION>
          <S>   <C>                                        <C>                            <C>
          ==================================== ============================ ==============================
            Ratio of Outstanding Credit to        Applicable Margin for         Applicable Margin for
               Conforming Borrowing Base            Eurodollar Loans               Base Rate Loans
          ------------------------------------ ---------------------------- ------------------------------
                        <= .50 to 1                        1.250%                          0%
             --------------------------------- ---------------------------- ------------------------------
                > .50 to 1 and <= .75 to 1                 1.500%                          0%
          ------------------------------------ ---------------------------- ------------------------------
                > .75 to 1 and <= .90 to 1                 1.750%                         .250%
          ------------------------------------ ---------------------------- ------------------------------
                > .90 to 1 and <= 1.0 to 1                 2.000%                         .500%
          ------------------------------------ ---------------------------- ------------------------------
                        > 1.0 to 1                         2.375%                         .750%
          ==================================== ============================ ==============================
</TABLE>

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

     "Approved  Petroleum  Engineer" means DeGolyer and MacNaughton or any other
reputable  firm of  independent  petroleum  engineers  as shall be  selected  by
Borrower and approved by Required  Banks,  such approval not to be  unreasonably
withheld.

     "Assignment  and  Acceptance  Agreement" has the meaning given such term in
Section 15.10(c)(i).

     "Authorized  Officer" means, as to any Person, its Chief Executive Officer,
its President, its Chief Financial Officer, its Chief Accounting Officer, any of
its Vice Presidents, its Treasurer or its corporate Secretary.

     "Availability"  means,  as of any date,  the remainder of (a) the Borrowing
Base in effect on such date, minus (b) the Outstanding Credit on such date.

     "Bank" means any financial  institution reflected on Schedule 2.1 hereto as
having a Commitment  and its  successors  and permitted  Assignees,  and "Banks"
shall mean all Banks.

     "Bank One" means Bank One,  NA, a national  banking  association,  with its
main office in Chicago, Illinois, in its capacity as a Bank.

     "Base Rate"  means,  for any day, the rate per annum equal to the higher of
(a) the Federal  Funds Rate for such day plus  one-half of one percent (.5%) and
(b) the Prime Rate for such day.  Any change in the Base Rate due to a change in
the Prime Rate or the Federal  Funds Rate shall be effective  automatically  and
without  notice to Borrower or any Bank on the effective  date of such change in
the Prime Rate or Federal Funds Rate.

     "Base Rate Loan" means the portion of the principal of the  Revolving  Loan
bearing interest with reference to the Base Rate.

     "BOCM" means Banc One Capital Markets, Inc.

                                       4
<PAGE>

     "Bond  Disbursement"  means an advance of proceeds of the Bonds by the Bond
Purchaser to the Bond Trustee pursuant to the Bond Documents.

     "Bond Documents" means,  collectively,  the Bonds, the Bond Loan Agreement,
the Bond Note,  the Bond Purchase  Agreement,  the Bond  Indenture and all other
agreements, documents and instruments now or hereafter executed and/or delivered
by,  between or among any Credit Party,  Bond Issuer,  Bond Trustee  and/or Bond
Purchaser  pursuant to the Bonds,  the Bond Loan  Agreement,  the Bond  Purchase
Agreement, the Bond Indenture or otherwise in connection with the Bond Offering,
each of  which  agreements,  documents  and  instruments  shall  be in form  and
substance acceptable to Administrative Agent in its sole discretion.

     "Bond Exposure"  means,  at any time,  without  duplication,  the aggregate
amount of proceeds of the Bonds which have not been advanced at such time by the
Bond  Purchaser.  The  Bond  Exposure  of any  Bank  at any  time  shall  be its
Commitment Percentage of the total Bond Exposure at such time.

     "Bond  Indenture"  means that certain  Indenture,  dated as of May 1, 2003,
between Bond Issuer and Bond Trustee.

     "Bond Issuer" means  Mississippi  Business  Finance  Corporation,  a public
corporation organized and existing under the laws of the State of Mississippi.

     "Bond Loan Agreement" means that certain Loan Agreement, dated as of May 1,
2003, by and between Bond Issuer and Borrower.

     "Bond Note" means that certain promissory note of Former Borrower, dated of
even date with the Bond Loan  Agreement,  payable  to the order of Bond  Issuer,
which  promissory  note has been  pledged and assigned to Bond Trustee to secure
the obligations of Bond Issuer under the Bond Indenture and the Bonds.

     "Bond  Offering" means the issuance and sale by Bond Issuer of the Bonds to
Bond Purchaser,  the proceeds of which are to be advanced, from time to time, by
Bond Purchaser to Bond Trustee to fund the "Project Fund" as created under,  and
defined in, the Bond  Indenture,  which Project Fund will be utilized to finance
the Cost of the Project (as defined in the Bond Loan  Agreement)  located in the
State of Mississippi. Upon the date of the issuance of the Bonds, Bond Purchaser
shall be deemed to have sold to each Bank, and each Bank shall be deemed to have
unconditionally and irrevocably  purchased from Bond Purchaser,  a participation
in the Bonds and Bond  Exposure  equal to such Bank's  Commitment  Percentage of
such Bonds and Bond Exposure.

     "Bond Purchase Agreement" means that certain Bond Purchase Agreement, dated
as of May 1, 2003, among Bond Purchaser, Bond Issuer and Former Borrower.

     "Bond  Purchaser" means  Administrative  Agent, as "Purchaser" of the Bonds
under the Bond Purchase Agreement.

     "Bond Trustee" means JPMorgan  Illinois  Trust,  successor  trustee to Bank
One, NA, in its capacity as "Trustee" under the Bond Indenture.

                                       5
<PAGE>

     "Bonds"  means,  whether  one or more,  Bond  Issuer's  Taxable  Industrial
Development Revenue Bonds,  Series 2003 (Denbury Resources Inc. Project),  which
Bonds shall (a) be in a maximum aggregate  principal amount of $20,000,000,  (b)
bear  interest  at rates  identical  to the  interest  rates  set  forth in this
Agreement, (c) have a maturity date of April 30, 2006, and (d) provide that Bond
Purchaser's obligation to make advances of the proceeds thereof shall expire two
(2) years from the date of issuance of such Bonds.

     "Book  Manager"  means BOCM, in its capacity as book manager for the credit
facility hereunder or any successor thereto.

     "Borrower"  means  Denbury  Onshore,  LLC,  a  Delaware  limited  liability
company, successor by merger to Former Borrower.

     "Borrower  Merger"  means  the  merger  of  Former  Borrower  with and into
Borrower  pursuant to, and in accordance  with, the Borrower  Merger  Documents,
with Borrower being the surviving entity of such merger.

     "Borrower Merger Agreement" means that certain Agreement and Plan of Merger
to Form Holding Company, dated as of December 22, 2003.

     "Borrower Merger  Certificate" means that certain  Certificate of Agreement
of Merger dated  December 23, 2003, to be filed on or prior to the Closing Date,
with the  Secretary  of State of  Delaware,  relating  to the  Borrower  Merger,
certified copies of which shall  subsequently be filed in such  jurisdictions as
Administrative Agent shall require.

     "Borrower  Merger  Documents"  means,  collectively,  the  Borrower  Merger
Agreement,  the Borrower Merger  Certificate  and all other material  documents,
instruments  and  agreements  executed or  delivered  by Former  Borrower or any
Credit Party pursuant to the Borrower Merger Certificate or the Borrower Merger.

     "Borrowing"  means any  disbursement  to Borrower  under, or to satisfy the
obligations  of any Credit Party under,  any of the Loan Papers.  Any  Borrowing
which will  constitute  a part of the Base Rate Loan is  referred to herein as a
"Base Rate  Borrowing,"  and any  Borrowing  which will  constitute a Eurodollar
Loan, is referred to herein as a "Eurodollar Borrowing."

     "Borrowing Base" has the meaning set forth in Section 5.1 hereof.

     "Borrowing Base Deficiency"  means, as of any date, the amount,  if any, by
which the  Outstanding  Credit on such date exceeds the Borrowing Base in effect
on such date;  provided,  that,  for purposes of  determining  the existence and
amount of any Borrowing Base  Deficiency,  Letter of Credit Exposure will not be
deemed to be  outstanding  to the  extent it is  secured  by cash in the  manner
contemplated by Section 3.1(b).

     "Borrowing Base Properties" means all Mineral Interests  evaluated by Banks
for purposes of establishing the Borrowing Base.

                                       6
<PAGE>

     "Borrowing Date" means the Eurodollar Business Day or the Domestic Business
Day,  as the case may be,  upon which the  proceeds  of any  Borrowing  are made
available to Borrower or to satisfy any obligation of any Credit Party.

     "Certificate of Effectiveness"  means a Certificate of Effectiveness in the
form of  Exhibit L  attached  hereto to be  executed  by  Parent,  Borrower  and
Administrative  Agent upon the satisfaction of each of the conditions  precedent
contained in Section 7.1 hereof.

     "Certificate  of  Ownership  Interests"  means a  Certificate  of Ownership
Interests in the form of Exhibit I attached  hereto to be executed and delivered
by an  Authorized  Officer  of  Borrower  (after  giving  effect to the  Closing
Transactions) pursuant to Section 7.1(a)(xvi) hereof.

     "Change of Control" means the  occurrence of any of the following,  whether
voluntary  or  involuntary,  including by operation of law: (a) any Credit Party
(other  than  Parent)  shall  cease  to be a wholly  owned  direct  or  indirect
Subsidiary of Parent, or (b) for any reason,  any Person or group (as defined in
Section  13(d)(3) or 14(d)(2) of the Exchange  Act) other than the Texas Pacific
Group shall  become (i) the direct or indirect  beneficial  owner (as defined in
Rule 13(d)(3) of the Exchange  Act) of greater than thirty  percent (30%) of the
total voting power of all classes of capital  stock then  outstanding  of Parent
entitled  (without  regard  to the  occurrence  of any  contingency)  to vote in
elections of directors of Parent, and (ii) the largest  shareholder of the total
voting power of all classes of capital stock then outstanding of Parent entitled
(without  regard to the occurrence of any  contingency)  to vote in elections of
directors of Parent.

     "Closing  Date" means the date upon which all of the  conditions  precedent
set  forth  in  Section  7.1 have  been  satisfied,  and  Parent,  Borrower  and
Administrative   Agent  have   executed  and  delivered   the   Certificate   of
Effectiveness;  provided,  that,  in no event  shall  such  date be  later  than
December 31, 2003.

     "Closing   Documents"  means  all  material   documents,   instruments  and
agreements  executed or  delivered by any Credit Party in  connection  with,  or
otherwise pertaining to, the Closing Transactions.

     "Closing  Transactions"  means the transactions to occur on or prior to the
Closing Date,  including,  without limitation:  (a) the completion of all of the
Restructuring Transactions, (b) the assumption by Parent, as primary obligor, of
the Permitted  Subordinate Debt, (c) the refinancing in full, with proceeds of a
Borrowing under this Agreement, of all Obligations accrued and outstanding under
the  Existing  Credit  Agreement  as of the  Closing  Date,  including,  without
limitation,  (i) the entire  outstanding  principal  balance  of the  "Revolving
Loans" made (and as defined)  thereunder,  (ii) all accrued but unpaid interest,
and (iii) all accrued but unpaid  commitment and other fees, and (d) the payment
of all fees and expenses of  Administrative  Agent in connection with the credit
facilities provided herein.

     "Code" means the Internal Revenue Code of 1986, as amended.

     "Commitment"  means,  with respect to any Bank, the commitment of such Bank
to lend its Commitment  Percentage of the Total Commitment to Borrower  pursuant
to Section 3.1 hereof, as such Commitment may be terminated or reduced from time
to time in accordance  with the  provisions  hereof.  On the Closing  Date,  the
amount of each Bank's  Commitment  is the amount set forth  opposite such Bank's

                                       7
<PAGE>

name  on  Schedule  2.1  hereto;  provided,  that  after  giving  effect  to any
Assignment  and Acceptance  Agreement,  the Commitment of each Bank shall be the
amount set forth in the Register maintained by Administrative  Agent pursuant to
Section 15.10(c)(iv) hereof.

     "Commitment Fee Percentage"  means, on any date, the percentage  determined
by reference to the ratio of Outstanding Credit to the Conforming Borrowing Base
on such date in accordance with the table below:

<TABLE>
<CAPTION>
                      ===================================== =======================================
                         Ratio of Outstanding Credit to                 Commitment Fee
                           Conforming Borrowing Base                      Percentage
                      ------------------------------------- ---------------------------------------
                      <S>  <C>                                              <C>
                                  <= .50 to 1                               .350%
                      ------------------------------------- ---------------------------------------
                           > .50 to 1 and <= .75 to 1                       .375%
                      ------------------------------------- ---------------------------------------
                           > .75 to 1 and <= .90 to 1                       .500%
                      ----------------------------------- ---------------------------------------
                           > .90 to 1 and <= 1.0 to 1                       .500%
                      ------------------------------------- ---------------------------------------
                                   > 1.0 to 1                               .500%
                      ===================================== =======================================
</TABLE>

     "Commitment  Percentage"  means,  with respect to each Bank, the Commitment
Percentage for such Bank set forth on Schedule 2.1 hereto;  provided, that after
giving  effect  to any  Assignment  and  Acceptance  Agreement,  the  Commitment
Percentage of each Bank shall be the amount set forth in the Register maintained
by Administrative Agent pursuant to Section 15.10(c)(iv) hereof.

     "Conforming  Borrowing  Base"  has the  meaning  set forth in  Section  5.1
hereof.

     "Consolidated  Current  Assets"  means,  for any  Person at any  time,  the
current assets of such Person and its  Consolidated  Subsidiaries  at such time,
plus, in the case of Borrower,  the  Availability  at such time. For purposes of
this  definition,  any non-cash gains on any Hedge Agreement  resulting from the
requirements of SFAS 133 for any period of determination  shall be excluded from
the  determination  of  current  assets  of such  Person  and  its  Consolidated
Subsidiaries.

     "Consolidated  Current  Liabilities" means, for any Person at any time, the
current  liabilities of such Person and its  Consolidated  Subsidiaries  at such
time,  but, in the case of Borrower,  excluding the current  portion (if any) of
the  outstanding  principal  balance of the Revolving Loan. For purposes of this
definition, any non-cash losses or charges on any Hedge Agreement resulting from
the requirements of SFAS 133 for any period of  determination  shall be excluded
from  the   determination  of  current   liabilities  of  such  Person  and  its
Consolidated Subsidiaries.

     "Consolidated   EBITDA"  means,   for  any  Person  for  any  period:   (a)
Consolidated  Net Income of such  Person for such  period;  plus,  to the extent
deducted in the  calculation  of  Consolidated  Net  Income,  (b) the sum of (i)
income or  franchise  Taxes paid or  accrued;  (ii)  Consolidated  Net  Interest
Expense;  (iii)  amortization,  depletion  and  depreciation  expense;  (iv) any
non-cash  losses  or  charges  on  any  Hedge   Agreement   resulting  from  the
requirements  of SFAS  133 for  that  period;  and (v)  other  non-cash  charges

                                       8
<PAGE>

(excluding  accruals for cash expenses made in the ordinary course of business);
less, to the extent included in the calculation of Consolidated Net Income,  (c)
the sum of (i) the income of any Person (other than wholly-owned Subsidiaries of
such  Person)  unless  such  income  is  received  by  such  Person  in  a  cash
distribution;  (ii) gains or losses from sales or other  dispositions  of assets
(other than Hydrocarbons  produced in the normal course of business);  (iii) any
non-cash gains on any Hedge  Agreement  resulting from the  requirements of SFAS
133 for that period; and (iv) extraordinary or non-recurring  gains, but not net
of extraordinary or non-recurring "cash" losses.

     "Consolidated  Net Income"  means,  for any Person for any period,  the net
income  (or loss) of such  Person  and its  Consolidated  Subsidiaries  for such
period.

     "Consolidated  Net Interest  Expense" means, for any Person for any period,
the remainder of the following for such Person and its Consolidated Subsidiaries
for such period: (a) interest expense, minus (b) interest income.

     "Consolidated  Subsidiary" or  "Consolidated  Subsidiaries"  means, for any
Person,  any  Subsidiary  or  other  entity  the  accounts  of  which  would  be
consolidated with those of such Person in its consolidated financial statements.

     "Consolidated  Tangible Net Worth" means, with respect to any Person at any
time,  (a) the  consolidated  shareholder's  equity of such Person at such time,
less (b) the  consolidated  Intangible  Assets of such Person at such time.  For
purposes of this  definition,  (i) any non-cash gains,  losses or charges on any
Hedge  Agreement  resulting from the  requirements of SFAS 133 for any period of
determination  shall be excluded from the  determination  of such  shareholder's
equity,  and (ii) "Intangible  Assets" means the amount (to the extent reflected
in determining such consolidated  shareholder's  equity) of all unamortized debt
discount  and  expense,   unamortized  deferred  charges,   goodwill,   patents,
trademarks,  service marks, trade names,  copyrights,  organization expenses and
other intangible items.

     "Continue,"  "Continuation" and "Continued" shall refer to the continuation
pursuant to Section 3.5 hereof  and/or  Article XIV hereof of a Eurodollar  Loan
from one Interest Period to the next Interest Period.

     "Convert,"  "Conversion"  and  "Converted"  shall  refer  to  a  conversion
pursuant  to Section  3.5 and/or  Article  XIV hereof of all or a portion of one
Type of Revolving Loan into another Type of Revolving Loan.

     "Credit Parties" means, collectively,  Parent, Borrower and each Restricted
Subsidiary, and "Credit Party" means any one of the foregoing.

     "Current  Financials"  means (a) the annual  audited  consolidated  balance
sheet of Former Borrower and the related  consolidated  statements of operations
and cash  flows  for the  Fiscal  Year  ended  December  31,  2002,  and (b) the
quarterly unaudited consolidated balance sheet of Former Borrower for the Fiscal
Quarter  ended  September  30,  2003,  and the  related  unaudited  consolidated
statements  of  operations  and cash flows for the portion of Former  Borrower's
Fiscal Year ended September 30, 2003.

                                       9

<PAGE>

     "Debt"  means,  for any Person at any time,  without  duplication,  (a) all
obligations  of such Person for  borrowed  money,  (b) all  obligations  of such
Person evidenced by bonds, debentures,  notes or other similar instruments,  (c)
all other  indebtedness  (including  capitalized lease  obligations,  other than
usual and customary oil and gas leases) of such Person on which interest charges
are  customarily  paid or accrued,  (d) all  Guarantees by such Person,  (e) the
unfunded or unreimbursed portion of all letters of credit issued for the account
of such  Person,  (f) any amount owed by such Person  representing  the deferred
purchase price of property or services other than accounts  payable  incurred in
the ordinary course of business and in accordance with customary trade terms and
which are not more than one hundred twenty (120) days past the invoice date, and
(g) all  liability  of such  Person as a general  partner of a  partnership  for
obligations  of such  partnership  of the nature  described  in (a)  through (f)
preceding.

     "Default"  means  any  condition  or event  which  constitutes  an Event of
Default or which with the giving of notice,  lapse of time or both would, unless
cured or waived, become an Event of Default.

     "Default Rate" means,  in respect of any principal of the Revolving Loan or
any other amount payable by Borrower under any Loan Paper which is not paid when
due (whether at stated  maturity,  by  acceleration,  or otherwise),  a rate per
annum during the period  commencing on the due date until such amount is paid in
full  equal to the sum of (i)  three  percent  (3%),  plus  (ii) the  Applicable
Margin, plus (iii) the Base Rate as in effect from time to time (provided,  that
if such amount in default is  principal of a  Eurodollar  Borrowing  and the due
date is a day  other  than the  last day of an  Interest  Period  therefor,  the
"Default  Rate" for such  principal  shall be, for the period from and including
the due date and to but excluding the last day of the Interest period  therefor,
the sum of (a) three percent (3%), plus (b) the Applicable Margin,  plus (c) the
Eurodollar  Rate for such  Borrowing  for such  Interest  Period as  provided in
Section  3.5  hereof,  and  thereafter,  the  rate  provided  for  above in this
definition).

     "DG&M" means Denbury Gathering & Marketing,  Inc., a Delaware  corporation,
which is a wholly owned Subsidiary of Parent.

     "Distribution" by any Person, means (a) with respect to any stock issued by
such  Person or any  partnership,  joint  venture,  limited  liability  company,
membership  or  other  interest  of such  Person,  the  retirement,  redemption,
purchase, or other acquisition for value of any such stock or partnership, joint
venture,  limited  liability  company,  membership  or other  interest,  (b) the
declaration or payment of any dividend or other  distribution on or with respect
to any stock, partnership,  joint venture, limited liability company, membership
or other  interest of any Person,  and (c) any other payment by such Person with
respect to such stock,  partnership,  joint venture,  limited liability company,
membership or other interest of such Person.

     "Documentation Agent" means Union Bank of California, N.A. or Comerica Bank
in its capacity as  Documentation  Agent for Banks  hereunder  or any  successor
thereto,  and  "Documentation  Agents" means Union Bank of California,  N.A. and
Comerica Bank,  collectively,  in their capacities as  Documentation  Agents for
Banks hereunder.

     "Domestic  Business  Day" means any day except a Saturday,  Sunday or other
day on  which  national  banks  in  Chicago,  Illinois  or  Dallas,  Texas,  are
authorized by Law to close.

                                       9
<PAGE>

     "Domestic Lending Office" means, as to each Bank, (a) its office located at
its address  identified on Schedule 2.1 hereto as its Domestic  Lending  Office,
(b) its office located at its address identified on the Register as its Domestic
Lending Office, or (c) such other office as such Bank may hereafter designate as
its Domestic Lending Office by notice to Borrower and Administrative Agent.

     "Environmental Complaint" means any complaint,  summons,  citation, notice,
directive, order, claim, litigation, investigation, proceeding, judgment, letter
or other  communication  from any federal,  state or municipal  authority or any
other party against any Credit Party  involving (a) a Hazardous  Discharge from,
onto or about any real  property  owned,  leased or  operated at any time by any
Credit  Party,  (b) a Hazardous  Discharge  caused,  in whole or in part, by any
Credit Party or by any Person acting on behalf of or at the  instruction  of any
Credit Party,  or (c) any violation of any Applicable  Environmental  Law by any
Credit Party.

     "Equity" means shares of capital stock or a partnership,  profits, capital,
member or other  equity  interest,  or options,  warrants or any other rights to
substitute for or otherwise acquire the capital stock or a partnership, profits,
capital, member or other equity interest of any Person.

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

     "ERISA  Affiliate"  means any corporation or trade or business under common
control with any Credit Party as determined under section 4001(a)(14) of ERISA.

     "Eurodollar  Business  Day"  means  any  Domestic  Business  Day  on  which
commercial  banks are open for  international  business  (including  dealings in
dollar deposits) in the applicable Eurodollar interbank market.

     "Eurodollar Lending Office" means, as to each Bank, (a) its office,  branch
or  affiliate  located at its address  identified  on Schedule 2.1 hereto as its
Eurodollar  Lending Office,  (b) its office,  branch or affiliate located at its
address identified on the Register as its Eurodollar Lending Office, or (c) such
other office,  branch or affiliate of such Bank as it may hereafter designate as
its Eurodollar Lending Office by notice to Borrower and Administrative Agent.

     "Eurodollar  Loans" means Revolving Loans that bear interest at rates based
upon the Adjusted Eurodollar Rate.

     "Eurodollar  Rate" means,  for any Eurodollar  Loan for any Interest Period
therefor, the applicable British Bankers' Association LIBOR rate for deposits in
Dollars as reported by any generally recognized financial information service as
of 11:00 a.m. (London time) two (2) Eurodollar  Business Days prior to the first
day of such  Interest  Period,  and  having a  maturity  equal to such  Interest
Period;  provided,  that, if no such British Bankers'  Association LIBOR rate is
available  to  Administrative  Agent,  the  applicable  Eurodollar  Rate for the
relevant  Interest Period shall instead be the rate determined by Administrative
Agent to be the rate at which Bank One or one of its  Affiliate  banks offers to
place deposits in Dollars with first-class  banks in the London interbank market
at approximately 11:00 a.m. (London time) two (2) Eurodollar Business Days prior
to the first day of such  Interest  Period,  in the  appropriate  amount of Bank
One's  relevant  Eurodollar  Loan and having a maturity  equal to such  Interest
Period.

                                       10
<PAGE>

     "Events of Default" has the meaning set forth in Section 12.1.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

     "Exhibit"  refers to an exhibit attached to this Agreement and incorporated
herein by reference, unless specifically provided otherwise.

     "Existing  Banks" has the  meaning  assigned  to such term in the  recitals
hereto.

     "Existing  Credit  Agreement" has the meaning  assigned to such term in the
recitals hereto.

     "Existing  Mortgages"  means  the  mortgages,   deeds  of  trust,  security
agreements,  assignments,  pledges,  assignments  and  amendments  to mortgages,
amendments  to  mortgages  and  other  documents,   instruments  and  agreements
described  on Schedule  2.2 hereto,  which  establish  Liens on certain  Mineral
Interests to secure the Obligations  under and as defined in the Existing Credit
Agreement.

     "Existing  Reserve  Report" means,  collectively,  (i) an  engineering  and
economic  analysis of certain of the Borrowing  Base  Properties  prepared as of
December 31, 2002,  by DeGolyer and  MacNaughton,  and (ii) an  engineering  and
economic  analysis of all Borrowing  Base  Properties not covered by the Reserve
Report  described  in  clause  (i),  prepared  as of June 30,  2003,  by  Former
Borrower's in-house staff.

     "Facility Guaranty" means a Guaranty substantially in the form of Exhibit B
attached hereto to be executed by Parent and (as applicable)  each Subsidiary of
Parent (other than Borrower) in favor of Banks,  pursuant to which Parent and/or
such  Subsidiary of Parent  guarantees  payment and  performance  in full of the
Obligations.

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

     "Financial  Officer"  of any  Person  means  its Chief  Financial  Officer;
provided,  that if no Person serves in such capacity,  "Financial Officer" shall
mean the highest ranking  executive  officer of such Person with  responsibility
for accounting, financial reporting, cash management and similar functions.

     "Fiscal Quarter" means the three (3) month periods ending on March 31, June
30, September 30 and December 31 of each Fiscal Year.

                                       12
<PAGE>

     "Fiscal Year" means a twelve (12) month period ending December 31.

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

     "GAAP" means those generally accepted  accounting  principles and practices
which are  recognized as such by the  Securities  and Exchange  Commission,  the
American Institute of Certified Public Accountants acting through its Accounting
Principles Board or by the Financial Accounting Standards Board or through other
appropriate boards or committees thereof and which are consistently  applied for
all periods  after the  Closing  Date so as to  properly  reflect the  financial
condition,  and the results of operations and changes in financial position,  of
Parent and its Consolidated  Subsidiaries,  except that any accounting principle
or  practice  required  to be  changed  by  the  said  Securities  and  Exchange
Commission,  Accounting Principles Board or Financial Accounting Standards Board
(or other  appropriate  board or  committee  thereof)  in order to continue as a
generally accepted accounting principle or practice may be so changed.

     "Gas Balancing  Agreement"  means any agreement or arrangement  whereby any
Credit Party,  or any other party having an interest in any  Hydrocarbons  to be
produced from Mineral Interests in which any Credit Party owns an interest,  has
a right to take more than its proportionate share of production therefrom.

     "Genesis Energy" means Genesis Energy, Inc., a Delaware corporation,  which
is a wholly owned Subsidiary of DG&M.

     "Genesis  Transaction  Documents"  means  the  "Transaction  Documents"  as
defined in that certain letter agreement (the "Genesis Letter Agreement"), dated
as of October 28, 2003, by and among Former Borrower,  Administrative  Agent and
Existing Banks.

     "Genesis VPP  Transaction"  has the meaning set forth in the Genesis Letter
Agreement.

     "Governmental  Authority"  means  any  court  or  governmental  department,
commission,  board,  bureau,  agency, or instrumentality of any nation or of any
province, state, commonwealth, nation, territory, possession, county, parish, or
municipality, whether now or hereafter constituted or existing.

     "Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly  guaranteeing any Debt or other obligation of
any other Person and,  without  limiting the  generality of the  foregoing,  any
obligation,  direct or indirect,  contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay,  or to maintain financial statement conditions, by "comfort letter"
or other  similar  undertaking  of support or otherwise) or (b) entered into for
the purpose of  assuring  in any other  manner the obligee of such Debt or other
obligation  of the payment  thereof or to protect such  obligee  against loss in
respect thereof (in whole or in part), provided, that the term "Guarantee" shall
not include  endorsements  for  collection or deposit in the ordinary  course of
business.

                                       13
<PAGE>

     "Hazardous  Discharge"  means any releasing,  spilling,  leaking,  pumping,
pouring,  emitting,  emptying,   discharging,   injecting,  escaping,  leaching,
disposing or dumping of any Hazardous  Substance  from or onto any real property
owned,  leased or operated at any time by any Credit Party or any real  property
owned, leased or operated by any other party.

     "Hazardous  Substance"  means any  pollutant,  toxic  substance,  hazardous
waste,  compound,  element or  chemical  that is defined  as  hazardous,  toxic,
noxious, dangerous or infectious pursuant to any Applicable Environmental Law or
which is otherwise regulated by any Applicable  Environmental Law or is required
to  be  investigated   and/or  remediated  by  or  pursuant  to  any  Applicable
Environmental Law.

     "Hedge  Agreements"  means,   collectively,   any  agreement,   instrument,
arrangement or schedule or supplement thereto evidencing any Hedge Transaction.

     "Hedge  Transaction" means any commodity,  interest rate, currency or other
swap,  option,  collar,  futures contract or other contract  pursuant to which a
Person  hedges  risks  related to commodity  prices,  interest  rates,  currency
exchange  rates,  securities  prices  or  financial  market  conditions.   Hedge
Transactions expressly includes Oil and Gas Hedge Transactions.

     "Hydrocarbons"  means oil, gas,  casinghead  gas, drip  gasolines,  natural
gasoline, condensate,  distillate, and all other liquid and gaseous hydrocarbons
produced  or  to  be  produced  in  conjunction  therewith,  and  all  products,
by-products  and  all  other  substances  derived  therefrom  or the  processing
thereof, and all other minerals and substances,  including,  but not limited to,
sulphur,  lignite, coal, uranium, thorium, iron, geothermal steam, water, carbon
dioxide,  helium, and any and all other minerals,  ores, or substances of value,
and the products and proceeds therefrom,  including, without limitation, all gas
resulting from the in-situ combustion of coal or lignite.

     "Immaterial  Title  Deficiencies"  means,  with respect to  Borrowing  Base
Properties,  defects or clouds on title,  discrepancies  in reported net revenue
and  working   interest   ownership   percentages  and  other  Liens,   defects,
discrepancies  and  similar  matters  which  do  not,  individually  or  in  the
aggregate, affect Borrowing Base Properties with a Recognized Value greater than
five  percent  (5%)  of the  Recognized  Value  of all of  such  Borrowing  Base
Properties.

     "Indirect  Subsidiary" has the meaning given such term in the definition of
"Subsidiary Pledge Agreement."

     "Initial   Borrowing  Base"  means  a  Borrowing  Base  in  the  amount  of
$220,000,000,  which  shall be in effect  during  the period  commencing  on the
Closing Date and continuing  until the first  Redetermination  after the Closing
Date.

     "Initial  Conforming  Borrowing Base" means a Conforming  Borrowing Base in
the  amount  of  $220,000,000,  which  shall  be in  effect  during  the  period
commencing on the Closing Date and  continuing  until the first  Redetermination
after the Closing Date.

     "Interest Period" means, with respect to each Eurodollar Borrowing and each
Continuation of Eurodollar  Loans and each Conversion of all or part of the Base
Rate  Loan to  Eurodollar  Loans,  the  period  commencing  on the  date of such
Borrowing,  Continuation or Conversion and ending one (1), two (2), three (3) or

                                       14
<PAGE>

six (6),  and,  if  available  to all  Banks,  nine (9) or  twelve  (12)  months
thereafter,  as Borrower may elect in the  applicable  Request for  Borrowing or
Notice of Continuation or Conversion; provided, that:

          (a) any Interest  Period which would  otherwise  end on a day which is
     not a  Eurodollar  Business  Day shall be extended  to the next  succeeding
     Eurodollar  Business  Day  unless  such  Eurodollar  Business  Day falls in
     another calendar month, in which case such Interest Period shall end on the
     next preceding Eurodollar Business Day;

          (b) any Interest Period which begins on the last  Eurodollar  Business
     Day of a  calendar  month  (or on a day for which  there is no  numerically
     corresponding day in the calendar month at the end of such Interest Period)
     shall, subject to clause (c) below, end on the last Eurodollar Business Day
     of a calendar month;

          (c) if any  Interest  Period  includes a date on which any  payment of
     principal of the Eurodollar  Loans which are the subject of such Borrowing,
     Continuation or Conversion is required to be made  hereunder,  but does not
     end on such date, then (i) the principal  amount of such  Eurodollar  Loans
     required to be repaid on such date shall have an Interest  Period ending on
     such date, and (ii) the remainder of each such Eurodollar  Loans shall have
     an Interest Period determined as set forth above; and

          (d) no Interest Period shall extend past the Termination Date.

     "Investment"  means,  with  respect  to  any  Person,  any  loan,  advance,
extension of credit,  capital  contribution to, investment in or purchase of the
stock or other securities of, or interests in, any other Person; provided, that,
"Investment"  shall not include  current  customer and trade  accounts which are
payable in accordance with customary trade terms.

     "Laws"  means  all  applicable  statutes,  laws,  ordinances,  regulations,
orders,  writs,  injunctions,  or decrees of any  state,  commonwealth,  nation,
territory,  possession,  county, township, parish,  municipality or Governmental
Authority.

     "Lending  Office" means, as to any Bank, its Domestic Lending Office or its
Eurodollar Lending Office, as the context may require.

     "Letter  of  Credit  Exposure"  of any Bank  means  such  Bank's  aggregate
participation in the unfunded portion and the funded but unreimbursed portion of
Letters of Credit outstanding at any time.

     "Letter of Credit Fee" means,  with respect to any Letter of Credit  issued
hereunder,  a fee in an  amount  equal  to the  greater  of (a)  $500,  or (b) a
percentage  of the stated amount of such Letter of Credit  (calculated  on a per
annum basis based on the stated  term of such  Letter of Credit)  determined  by
reference to the ratio of the  Outstanding  Credit to the  Conforming  Borrowing
Base in effect on the date such  Letter of Credit is issued in  accordance  with
the table below:

                                       15
<PAGE>
<TABLE>
<CAPTION>
                      ===================================== =======================================
                         Ratio of Outstanding Credit to         Per Annum Letter of Credit Fee
                           Conforming Borrowing Base                      Percentage
                      ------------------------------------- ---------------------------------------

                      <S>  <C>                                              <C>
                                  <=. 50 to 1                               1.250%
                      ------------------------------------- ---------------------------------------

                           >. 50 to 1 and <= .75 to 1                       1.500%
                      ------------------------------------- ---------------------------------------

                           >. 75 to 1 and <= .90 to 1                       1.750%
                      ------------------------------------- ---------------------------------------

                           > .90 to 1 and <= 1.0 to 1                       2.000%
                      ------------------------------------- ---------------------------------------

                                   > 1.0 to 1                               2.375%
                      ===================================== =======================================
</TABLE>

     "Letter of Credit Fronting Fee" means, with respect to any Letter of Credit
issued hereunder,  a fee equal to one eighth of one percent (.125%) per annum of
the stated amount of such Letter of Credit.

     "Letter of Credit Issuer" has the meaning set forth in Section 3.1(b).

     "Letters  of  Credit"  means  letters of credit  issued for the  account of
Borrower pursuant to Section 3.1(b).

     "Lien"  means,  with  respect to any asset,  any  mortgage,  lien,  pledge,
charge,  security  interest,  financing  statement or encumbrance of any kind in
respect of such asset.  For the purposes of this  Agreement,  the Credit Parties
shall be deemed to own  subject to a Lien any asset  which is  acquired  or held
subject  to the  interest  of a vendor or  lessor  under  any  conditional  sale
agreement,  capital lease or other title  retention  agreement  relating to such
asset.

     "Loan Papers" means this Agreement, the Notes, each Facility Guaranty which
may now or hereafter be executed,  each Parent Pledge Agreement which may now or
hereafter  be  executed,  each  Subsidiary  Pledge  Agreement  which  may now or
hereafter be executed,  the Existing  Mortgages (as amended by the Amendments to
Mortgages),  all Mortgages now or at any time  hereafter  delivered  pursuant to
Section 6.1, the Amendments to Mortgages, and all other certificates,  documents
or instruments delivered in connection with this Agreement, as the foregoing may
be amended from time to time.

     "Margin Regulations" means Regulations T, U and X of the Board of Governors
of the Federal Reserve System, as in effect from time to time.

     "Margin Stock" means "margin stock" as defined in Regulation U.

     "Marine"  means  Denbury  Marine,  L.L.C.,  a Louisiana  limited  liability
company, which is a wholly owned Subsidiary of Operating.

     "Material Adverse Change" means any circumstance or event that has or would
reasonably be expected to have a Material Adverse Effect.

     "Material  Adverse  Effect"  means a  material  adverse  effect  on (a) the
assets, liabilities,  financial condition, results of operations or prospects of
any Credit  Party,  or the  Credit  Parties  taken as a whole,  (b) the right or
ability  of any  Credit  Party to  fully,  completely  and  timely  perform  its
obligations  under the Loan Papers,  (c) the validity or  enforceability  of any
Loan  Paper  against  any  Credit  Party  which is a party  thereto,  or (d) the

                                       16
<PAGE>


validity,  perfection  or priority of any material  Lien  intended to be created
under or pursuant to any Loan Paper to secure the Obligations.

     "Material   Agreement"  means  any  material  written  or  oral  agreement,
contract,  commitment,  or  understanding to which a Person is a party, by which
such  Person is  directly or  indirectly  bound,  or to which any assets of such
Person may be  subject,  which is not  cancelable  by such Person upon notice of
thirty  (30) days or less  without  liability  for  further  payment  other than
nominal penalty.

     "Material  Gas  Imbalance"   means,  with  respect  to  all  Gas  Balancing
Agreements to which any Credit Party is a party or by which any Mineral Interest
owned by any Credit Party is bound,  a net gas  imbalance to any Credit Party in
excess of $2,000,000.

     "Maximum  Lawful Rate" means,  for each Bank,  the maximum rate (or, if the
context so permits or requires,  an amount  calculated at such rate) of interest
which,  at the time in  question  would not cause the  interest  charged  on the
portion  of the  Revolving  Loan owed to such  Bank at such  time to exceed  the
maximum amount which such Bank would be allowed to contract for,  charge,  take,
reserve,  or receive under  applicable  Laws after taking into  account,  to the
extent  required by applicable  Laws,  any and all relevant  payments or charges
under  the  Loan  Papers.  To the  extent  the Laws of the  State  of Texas  are
applicable  for purposes of  determining  the "Maximum  Lawful  Rate," such term
shall  mean the  "indicated  rate  ceiling"  from time to time in  effect  under
Chapter 303 of the Texas Finance Code, as amended,  substituted for or restated,
or, if permitted by applicable  Law and effective upon the giving of the notices
required  by such  Chapter  303 (or  effective  upon any  other  date  otherwise
specified by applicable  Law), the "quarterly  ceiling" or "annualized  ceiling"
from time to time in effect  under such Chapter  303,  whichever  Administrative
Agent (with the approval of Required  Banks) shall elect to  substitute  for the
"indicated  rate ceiling," and vice versa,  each such  substitution  to have the
effect provided in such Chapter 303, and Administrative Agent (with the approval
of Required Banks) shall be entitled to make such election from time to time and
one or more times and, without notice to Borrower,  to leave any such substitute
rate in effect for subsequent periods in accordance with such Chapter 303.

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

     "Mortgages" means all mortgages,  deeds of trust,  amendments to mortgages,
security agreements,  assignments of production,  pledge agreements,  collateral
mortgages,  collateral  chattel  mortgages,  collateral  assignments,  financing
statements and other documents, instruments and agreements evidencing, creating,
perfecting or otherwise  establishing  the Liens required by Section 6.1 hereof.
All Mortgages  shall be in form and  substance  satisfactory  to  Administrative

                                       17

<PAGE>

Agent in its  sole  discretion.  The term  "Mortgages"  shall  include,  without
limitation,  the Existing  Mortgages,  as amended  pursuant to the Amendments to
Mortgages.

     "Note" means a promissory note of Borrower  payable to the order of a Bank,
in  substantially  the form of Exhibit C hereto,  in the  amount of such  Bank's
Commitment,  evidencing  the  obligation  of  Borrower to repay to such Bank its
Commitment  Percentage of the Revolving Loan,  together with all  modifications,
extensions,  renewals, and rearrangements thereof, and "Notes" means all of such
Notes collectively.

     "Notice of Continuation or Conversion" has the meaning set forth in Section
3.5(c).

     "Obligations"  means all present and future  indebtedness,  obligations and
liabilities,  and all renewals and extensions  thereof,  or any part thereof, of
each Credit Party to Administrative Agent or to any Bank or any Affiliate of any
Bank arising  pursuant to the Loan Papers or pursuant to any Hedge  Agreement or
Hedge  Transaction  entered into with any Bank or any Affiliate of any Bank, and
all interest accrued thereon and costs,  expenses,  and attorneys' fees incurred
in  the   enforcement  or  collection   thereof,   regardless  of  whether  such
indebtedness,   obligations  and  liabilities  are  direct,   indirect,   fixed,
contingent, liquidated, unliquidated, joint, several or joint and several.

     "Oil & Gas Hedge Transaction"  means a Hedge Transaction  pursuant to which
any  Person  hedges the price to be  received  by it for  future  production  of
Hydrocarbons.

     "Offshore"  means  (a)  prior  to  the  consummation  of  the  Post-Closing
Transactions  pursuant to, and in accordance  with, the terms and conditions set
forth in Section 9.14, Denbury Offshore, Inc., a Delaware corporation,  which is
a wholly owned Subsidiary of Parent,  and (b) from and after the consummation of
the Post-Closing  Transactions pursuant to, and in accordance with, the terms of
conditions set forth in Section 9.14,  Denbury  Offshore LLC, a Delaware limited
liability company, which is a wholly owned Subsidiary of Operating.

     "Operating" means Denbury Operating Company, a Delaware corporation,  which
is a wholly owned Subsidiary of Parent.

     "Outstanding  Credit"  means,  on any  date,  the sum of (a) the  aggregate
outstanding  Letter of Credit  Exposure  on such date  including  the  Letter of
Credit  Exposure  attributable  to  Letters of Credit to be issued on such date,
plus (b) the aggregate  outstanding  principal  balance of the Revolving Loan on
such date, including the amount of any Borrowing to be made on such date.

     "Parent" means Denbury  Resources  Inc., a Delaware  corporation  formed in
connection with the Restructuring Transactions.

     "Parent Pledge  Agreement"  means a Pledge  Agreement  substantially in the
form of Exhibit D attached  hereto (with  applicable  conforming  changes) to be
executed  by Parent  pursuant to which  Parent  shall  pledge to  Administrative
Agent,  for the  ratable  benefit of Banks,  all of the  issued and  outstanding
Equity owned by Parent of each Subsidiary of Parent described  therein to secure
the Obligations.

                                       18
<PAGE>

     "Participant" has the meaning given such term in Section 15.10(b).

     "PBGC"  means  the  Pension  Benefit  Guaranty  Corporation  or any  entity
succeeding to any or all of its functions under ERISA.

     "Permitted Encumbrances" means with respect to any asset:

          (a) Liens securing the Obligations;

          (b) minor  defects in title  which do not secure the  payment of money
     and otherwise have no material adverse effect on the value or the operation
     of the subject  property,  and for the purposes of this Agreement,  a minor
     defect  in  title  shall  include,   but  not  be  limited  to,  easements,
     rights-of-way, servitudes, permits, surface leases and other similar rights
     in respect of surface  operations,  and easements for  pipelines,  streets,
     alleys,  highways,   telephone  lines,  power  lines,  railways  and  other
     easements  and  rights-of-way,  on,  over  or in  respect  of  any  of  the
     properties of any Credit Party that are customarily  granted in the oil and
     gas industry;

          (c) inchoate  statutory or operators'  Liens securing  obligations for
     labor,  services,  materials  and supplies  furnished to Mineral  Interests
     which are not delinquent (except to the extent permitted by Section 9.7);

          (d)  mechanic's,  materialmen's,   warehouseman's,   journeyman's  and
     carrier's  Liens and other similar Liens arising by operation of Law in the
     ordinary course of business which are not delinquent  (except to the extent
     permitted by Section 9.7);

          (e) Liens for Taxes or assessments  not yet due or not yet delinquent,
     or, if  delinquent,  that are being  contested  in good faith in the normal
     course of business by appropriate action, as permitted by Section 9.7;

          (f) lease  burdens  payable to third parties which are deducted in the
     calculation of discounted  present value in the Reserve  Report  including,
     without limitation, any royalty,  overriding royalty, net profits interest,
     production payment, carried interest or reversionary working interest;

          (g) "Permitted  Encumbrances"  as that term is defined in the Existing
     Mortgages; and

          (h) Liens, charges and encumbrances upon Borrower's assets, other than
     Proved Mineral  Interests,  which in the aggregate,  do not have a value in
     excess of $1,000,000.

     "Permitted  Investments" means (a) readily marketable direct obligations of
the United  States of America (or  investments  in mutual funds or similar funds
which invest  solely in such  obligations),  (b) fully insured time deposits and
certificates  of deposit with  maturities of one year or less of any  commercial
bank  operating  in the United  States  having  capital and surplus in excess of

                                       19
<PAGE>

$500,000,000,  (c)  commercial  paper  of a  domestic  issuer  if at the time of
purchase  such paper is rated in one of the two highest  ratings  categories  of
Standard and Poor's Corporation or Moody's Investors Service, (d) Investments by
any Credit Party in a Subsidiary of Parent that has provided a Facility Guaranty
and the Equity of which has been pledged to  Administrative  Agent pursuant to a
Parent  Pledge  Agreement  or a  Subsidiary  Pledge  Agreement,  and  (e)  other
Investments;  provided, that, the aggregate amount of all other Investments made
pursuant to this clause (e) outstanding at any time shall not exceed  $5,000,000
(measured on a cost basis).

     "Permitted Subordinate Debt" means Debt of Borrower resulting from a single
issue of  Borrower's  7.5% Senior  Subordinated  Notes Due 2013 in an  aggregate
outstanding principal balance of not greater than $225,000,000, and which (a) is
fully subordinated to the Obligations pursuant to subordination provisions which
have been  approved by the Existing  Banks prior to the date hereof,  (b) is not
subject to negative  covenants or events of default (or other  provisions  which
have the same effect as negative  covenants or events of default) which have not
been approved by the Existing  Banks prior to the date hereof,  and (c) Debt has
been assumed by Parent as a co-obligor  with  Borrower  pursuant to that certain
First Supplemental Indenture, dated as of December 29, 2003.

     "Person" means an  individual,  a  corporation,  a  partnership,  a limited
liability company, an association,  a trust or any other entity or organization,
including a Government Authority.

     "Plan" means an employee benefit plan within the meaning of section 3(3) of
ERISA,  and  any  other  similar  plan,  policy  or  arrangement,  including  an
employment  contract,  whether formal or informal and whether legally binding or
not,  under which any Credit  Party or an ERISA  Affiliate of a Credit Party has
any  current or future  obligation  or  liability  or under which any present or
former  employee of any Credit Party or an ERISA Affiliate of a Credit Party, or
such present or former employee's  dependents or beneficiaries,  has any current
or future  right to benefits  resulting  from the  present or former  employee's
employment  relationship with any Credit Party or an ERISA Affiliate of a Credit
Party.

     "Post-Closing  Transactions"  means those  transactions  more  particularly
described on Part II of Schedule 2.3 attached hereto,  which transactions may be
consummated,  at the sole option of  Borrower,  at any time on or prior to March
31, 2004.

     "Prime Rate" means the per annum rate of interest  established from time to
time by Administrative Agent as its prime rate, which rate may not be the lowest
rate of interest charged by Administrative Agent to its customers.

     "Proved Mineral  Interests" means,  collectively,  Proved Producing Mineral
Interests, Proved Nonproducing Mineral Interests, and Proved Undeveloped Mineral
Interests.

     "Proved  Nonproducing  Mineral Interests" means all Mineral Interests which
constitute proved developed nonproducing reserves.

     "Proved  Producing  Mineral  Interests"  means all Mineral  Interests which
constitute proved developed producing reserves.

                                       20
<PAGE>

     "Proved  Undeveloped  Mineral  Interests" means all Mineral Interests which
constitute proved undeveloped reserves.

     "Purchasers" has the meaning given such term in Section 15.10(c).

     "Qualified  Purpose"  means (i) the  purchase by any Credit Party of Proved
Mineral  Interests,  or (ii)  capital  expenditures  made by any Credit Party to
maintain, enhance or develop Proved Mineral Interests owned by any Credit Party;
provided,  that,  the portion of the  aggregate  amount of all  Borrowings  made
during any period  during which Section  10.14 is in effect  hereunder  which is
utilized  to  purchase  Proved  Mineral  Interests  which  is in  excess  of the
"qualified amount" will not be deemed to be utilized for a "Qualified  Purpose."
As used  herein,  "qualified  amount"  means,  with  respect  to Proved  Mineral
Interests acquired with the proceeds of Borrowings made during any period during
which  Section  10.14 is in effect  hereunder,  an amount  equal to two  hundred
percent  (200%) of the  Recognized  Value of that portion of such Proved Mineral
Interests which constitute Proved Producing Mineral Interests.

     "Quarterly  Date" means the last day of each  March,  June,  September  and
December.

     "Recognized Value" means, with respect to Mineral Interests, the portion of
the  Borrowing  Base which Bank One  attributes  to such Mineral  Interests  for
purposes of the most recent  redetermination  of the Borrowing  Base pursuant to
Article V hereof (or for purposes of determining  the initial  Borrowing Base in
the event no such  redetermination  has  occurred),  based  upon the  discounted
present value of the estimated net cash flow to be realized from the  production
of Hydrocarbons from such Mineral Interests.

     "Redetermination"   means  any   Scheduled   Redetermination   or   Special
Redetermination.

     "Redetermination   Date"   means  (a)  with   respect   to  any   Scheduled
Redetermination,  each October 1 and April 1, commencing  April 1, 2004, and (b)
with  respect to any Special  Redetermination,  the first day of the first month
which is not less than twenty (20) Domestic  Business Days following the date of
a request for a Special Redetermination.

     "Register" has the meaning given such term in Section 15.10(c)(iv).

     "Regulation A" means  Regulation A of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 221, as in effect from time to time.

     "Regulation D" means  Regulation D of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 221, as in effect from time to time.

     "Regulation U" means  Regulation U of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Part 221, as in effect from time to time.

     "Request for Borrowing" has the meaning set forth in Section 3.2(a).

     "Request for Letter of Credit" has the meaning set forth in Section 3.3(a).

                                       21
<PAGE>

     "Required  Banks" means Banks  holding at least  sixty-six  and  two-thirds
percent (66 2/3%) of the Total Commitment.

     "Required Consolidated Tangible Net Worth" means, initially,  $325,000,000;
provided, that, the Required Consolidated Tangible Net Worth shall increase (but
not decrease) above the Required  Consolidated  Tangible Net Worth previously in
effect  pursuant  to this  definition  (i) on each  Quarterly  Date  (commencing
December  31,  2003)  by an  amount  equal to fifty  percent  (50%) of  Parent's
Consolidated  Net Income for the Fiscal Quarter then ended, and (ii) on the date
of any issuance by Parent of its equity  securities  by an amount equal to fifty
percent  (50%) of the net proceeds  received by Parent from the issuance of such
securities.

     "Required  Reserve  Value"  means  Proved  Mineral  Interests  that  have a
Recognized  Value of not less than  eighty-five  percent (85%) of the Recognized
Value of all Proved Mineral Interests held by Borrower and its Subsidiaries.

     "Reserve Report" means an unsuperseded  engineering analysis of the Mineral
Interests owned by any Credit Party, in form and substance reasonably acceptable
to Required Banks,  prepared in accordance with customary and prudent  practices
in the petroleum  engineering  industry and Financial Accounting Standards Board
Statement  69. Each  Reserve  Report  required to be delivered by February 28 of
each year  pursuant to Section 5.1 shall be prepared by the  Approved  Petroleum
Engineer. Each other Reserve Report shall be prepared by either (i) the Approved
Petroleum  Engineer,  or (ii)  Borrower's  in-house staff.  Notwithstanding  the
foregoing, in connection with any Special Redetermination requested by Borrower,
the Reserve  Report shall be in form and scope  mutually  acceptable to Borrower
and Required  Banks.  Until  superseded,  the Existing  Reserve  Report shall be
considered the Reserve Report.

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

     "Restricted   Payment"  means,   with  respect  to  any  Person,   (a)  any
Distribution by such Person,  (b) any capital  contribution,  loan or advance by
any Credit Party to any Unrestricted Subsidiary, (c) the issuance of a Guarantee
by any  Credit  Party  with  respect  to any  Debt or  other  obligation  of any
Unrestricted Subsidiary, (d) the retirement,  redemption, defeasance, repurchase
or  prepayment  prior to scheduled  maturity by such Person or any  Affiliate of
such Person of any Debt of such Person,  or (e) except as otherwise  approved by
Required Banks, the retirement, redemption or payment by Parent, Borrower or any
affiliate of Parent of any part of the  principal of the  Permitted  Subordinate
Debt at any time prior to the termination of all Commitments and the payment and
performance in full of the Obligations.

                                       22
<PAGE>

     "Restricted  Subsidiary" means, as of the date hereof,  Operating,  Marine,
Offshore,  TRF and DG&M.  "Restricted  Subsidiary" shall also refer to any other
Subsidiary or Indirect  Subsidiary of Parent which Parent and Borrower hereafter
designate as a "Restricted Subsidiary;" provided, that no Subsidiary or Indirect
Subsidiary  of Parent  will be a  Restricted  Subsidiary  unless (a) one hundred
percent  (100%)  of its  issued  and  outstanding  Equity  has been  pledged  to
Administrative  Agent to secure  the  Obligations  pursuant  to a Parent  Pledge
Agreement or a Subsidiary Pledge  Agreement,  and (b) it has executed a Facility
Guaranty.

     "Restructuring  Transactions"  means those  transactions  more particularly
described on Part I of Schedule 2.3 attached hereto, and shall include,  without
limitation, the Borrower Merger.

     "Revolving Loan" means the revolving  credit loan in an amount  outstanding
at any time not to exceed the amount of the Total Commitment then in effect less
the amount of the Letter Credit Exposure then outstanding to be made by Banks to
Borrower  in  accordance  with  Section 3.1 hereof.  The  Revolving  Loan may be
comprised of the Base Rate Loan and one or more Eurodollar Loans as Borrower may
select in a Request for Borrowing or a Notice of Continuation or Conversion.

     "Schedule"  means a "schedule"  attached to this Agreement and incorporated
herein by reference, unless specifically indicated otherwise.

     "Scheduled Redetermination" means any Redetermination of the Borrowing Base
and the Conforming Borrowing Base pursuant to Section 5.2.

     "Section"  refers to a "section" or "subsection"  of this Agreement  unless
specifically indicated otherwise.

     "Sole Lead Arranger"  means BOCM, in its capacity as sole lead arranger for
the credit facility hereunder or any successor thereto.

     "Special  Redetermination"  means any Redetermination of the Borrowing Base
pursuant to Section 5.3.

     "Subsidiary"  means,  for any Person,  any  corporation  or other entity of
which  securities or other ownership  interests  having ordinary voting power to
elect a majority of the board of directors or other persons  performing  similar
functions  (including  that of a general  partner)  are at the time  directly or
indirectly  owned,  collectively,  by such Person and any  Subsidiaries  of such
Person. The term "Subsidiary" shall include Subsidiaries of Subsidiaries (and so
on).

     "Subsidiary Pledge Agreement" means a Pledge Agreement substantially in the
form of Exhibit E attached hereto (with applicable conforming changes) which may
be executed by each existing  and/or  future  Subsidiary of Parent to the extent
such  Subsidiary  owns any  outstanding  Equity  of any  other  Subsidiary  (for
purposes of this  definition  and Section  6.1(d)  hereof,  such  Subsidiary  is
referred to herein and therein as an "Indirect  Subsidiary"),  pursuant to which
such Indirect  Subsidiary shall pledge to Administrative  Agent, for the ratable
benefit  of  Banks,  all of the  issued  and  outstanding  Equity  owned by such
Indirect  Subsidiary of each  Subsidiary of such Indirect  Subsidiary  described
therein to secure the Obligations.

                                       23
<PAGE>

     "Syndication Agent" means Credit Lyonnais New York Branch or Fortis Capital
Corp., in its capacity as Syndication Agent for Banks hereunder or any successor
thereto,  and  "Syndication  Agents"  means Credit  Lyonnais New York Branch and
Fortis Capital Corp.,  collectively,  in their capacities as Syndication  Agents
for Banks hereunder.

     "Taxes"  means  all  taxes,  assessments,  filing  or other  fees,  levies,
imposts,  duties,  deductions,  withholdings,  stamp taxes,  capital transaction
taxes,  foreign exchange taxes or other charges,  or other charges of any nature
whatsoever,  from time to time or at any time imposed by Law or any Governmental
Authority. "Tax" means any one of the foregoing.

     "Termination Date" means April 30, 2006.

     "Texas  Pacific  Group" means,  collectively,  TGP Partners,  L.P.,  T.G.P.
Parallel, L.P., and any of their Affiliates.

     "Total  Commitment"  means  the  Commitments  of all  Banks  in an  initial
aggregate  amount of  $300,000,000  as such amount shall be reduced from time to
time pursuant to Section 3.8 and Section 3.9.

     "Transferee" has the meaning given such term in Section 15.10(d).

     "TRF" means Tuscaloosa  Royalty Fund LLC, a Mississippi  limited  liability
company, which is a wholly owned Subsidiary of Operating.

     "Type" means, with reference to a Revolving Loan, the  characterization  of
such  Revolving  Loan as the Base Rate Loan or a  Eurodollar  Loan  based on the
method by which the accrual of interest on such Revolving Loan is calculated.

     "Unproved  Reserves" means Mineral Interests which do not constitute Proved
Mineral Interests.

     "Unrestricted  Subsidiary"  means any Subsidiary or Indirect  Subsidiary of
Parent  which  is  not a  Restricted  Subsidiary,  and  shall  include,  without
limitation, Genesis Energy.

     Section 2.2 Accounting Terms and Determinations. Unless otherwise specified
herein,  all accounting  terms used herein shall be interpreted,  all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered  hereunder shall be expressed in U.S. dollars and shall be prepared
in  accordance  with GAAP,  applied on a basis  consistent  with the most recent
audited  consolidated  financial  statements  of  Parent  and  its  Consolidated
Subsidiaries  delivered  to Banks  except for changes  concurred  in by Parent's
independent   certified   public   accountants   and  which  are   disclosed  to
Administrative Agent on the next date on which financial statements are required
to be delivered to Banks pursuant to Section 9.1(a) or Section 9.1(b); provided,
that,  unless Required Banks shall  otherwise  agree in writing,  no such change
shall  modify  or  affect  the  manner in which  compliance  with the  covenants
contained in Article XI are computed  such that all such  computations  shall be
conducted  utilizing  financial  information  presented  consistently with prior
periods.

                                       24
<PAGE>

     Section 2.3 Petroleum Terms. As used herein,  the terms "proved  reserves,"
"proved developed  reserves,"  "proved developed  producing  reserves,"  "proved
developed  nonproducing  reserves," and "proved  undeveloped  reserves" have the
meaning  given such terms from time to time and at the time in  question  by the
Society of Petroleum Engineers of the American Institute of Mining Engineers.

     Section 2.4 Money. Unless expressly  stipulated  otherwise,  all references
herein to "dollars,"  "money,"  "funds,"  "payments,"  "prepayments"  or similar
financial or monetary terms,  are references to currency of the United States of
America.

                                  Article III
                                   THE CREDIT

     Section 3.1 Commitments.

          (a) Each Bank severally agrees, subject to Section 3.1(c), Section 7.1
     and  Section  7.2 and the  other  terms  and  conditions  set forth in this
     Agreement,  to lend to Borrower from time to time prior to the  Termination
     Date amounts  requested  by Borrower not to exceed in the  aggregate at any
     one time outstanding,  the amount of such Bank's  Commitment  reduced by an
     amount equal to such Bank's Letter of Credit Exposure. Each Borrowing shall
     be (i)  in an  aggregate  principal  amount  of  $1,000,000  or any  larger
     integral  multiple of $100,000  (except that any Base Rate Borrowing may be
     in an amount equal to the  Availability  at such time),  and (ii) made from
     the  Banks  ratably  in  accordance   with  their   respective   Commitment
     Percentages.  Subject to the foregoing limitations and the other provisions
     of this Agreement,  prior to the Termination Date Borrower may borrow under
     this Section 3.1(a),  repay amounts  borrowed and request new Borrowings to
     be made under this Section 3.1(a).

          (b)  Administrative  Agent, or such Bank designated by  Administrative
     Agent which (without  obligation to do so) consents to the same ("Letter of
     Credit Issuer") will, from time to time prior to the date which is five (5)
     Domestic  Business  Days prior to the  Termination  Date,  upon  request by
     Borrower,  issue  Letters of Credit  for the  account  of  Borrower  or any
     Restricted Subsidiary designated by Borrower, so long as (i) the sum of (A)
     the total Letter of Credit  Exposure then  existing,  and (B) the amount of
     the  requested  Letter of Credit does not exceed ten  percent  (10%) of the
     lesser of (y) the Total Commitment,  and (z) the Conforming Borrowing Base,
     and (ii) Borrower would be entitled to a Borrowing under Section 3.1(a) and
     Section  3.1(c) in the amount of the requested  Letter of Credit.  Not less
     than  three (3)  Domestic  Business  Days  prior to the  requested  date of
     issuance  of any such  Letter  of  Credit,  Borrower  (and  any  Restricted
     Subsidiary  for whose  account such Letter of Credit is being issued) shall
     execute and deliver to Letter of Credit Issuer,  Letter of Credit  Issuer's
     customary letter of credit  application.  Each Letter of Credit shall be in
     the minimum amount of $10,000 and shall be in form and substance acceptable
     to Letter of Credit  Issuer.  No Letter of Credit shall have an  expiration
     date later than the earlier of (A) one (1) year after the Termination Date,
     or (B) one (1)  year  from  the date of  issuance  (or,  in the case of any
     renewal  or  extension  thereof,   one  (1)  year  after  such  renewal  or
     extension).  Upon the date of  issuance  of a Letter of  Credit,  Letter of
     Credit  Issuer  shall be deemed to have sold to each other  Bank,  and each
     other  Bank  shall  be  deemed  to  have  unconditionally  and  irrevocably
     purchased from Letter of Credit Issuer, a non recourse participation in the

                                       25
<PAGE>

     related Letter of Credit and Letter of Credit Exposure equal to such Bank's
     Commitment  Percentage  of such  Letter  of  Credit  and  Letter  of Credit
     Exposure.  Upon  request of any Bank,  but not less  often than  quarterly,
     Administrative  Agent  shall  provide  notice  to each  Bank by  telephone,
     teletransmission  or telex  setting  forth each Letter of Credit issued and
     outstanding pursuant to the terms hereof and specifying the beneficiary and
     expiration  date of each such Letter of Credit,  each Bank's  percentage of
     each such  Letter of Credit and the  actual  dollar  amount of each  Bank's
     participation  held by Letter  of Credit  Issuer  thereof  for such  Bank's
     account  and  risk.  At the time of  issuance  of each  Letter  of  Credit,
     Borrower  shall pay to  Administrative  Agent in respect of such  Letter of
     Credit (1) the  applicable  Letter of Credit  Fee,  and (2) the  applicable
     Letter of Credit Fronting Fee.  Administrative  Agent shall  distribute the
     Letter of Credit Fee payable  upon the issuance of each Letter of Credit to
     Banks in  accordance  with their  respective  Commitment  Percentages,  and
     Administrative  Agent shall distribute the Letter of Credit Fronting Fee to
     Letter of Credit Issuer for its own account.  Any (y) material amendment or
     modification,  or (z) renewal or extension of any Letter of Credit shall be
     deemed to be the  issuance  of a new Letter of Credit for  purposes of this
     Section 3.1(b).  Notwithstanding anything to the contrary contained herein,
     Borrower shall pay to Administrative  Agent in connection with the issuance
     of each Letter of Credit and/or any amendment or modification of any nature
     to  any  existing  Letter  of  Credit,  Administrative  Agent's  usual  and
     customary  fees for the issuance of,  amendments or  modifications  to, and
     processing of, Letters of Credit.

          Immediately  upon  the  occurrence  of an  Event  of  Default  and the
     acceleration  of the Obligations  hereunder,  and also on the date which is
     five (5) Domestic  Business Days prior to the  Termination  Date,  Borrower
     shall   deposit  with   Administrative   Agent  cash  in  such  amounts  as
     Administrative  Agent  may  request,  up to a maximum  amount  equal to the
     aggregate existing Letter of Credit Exposure of all Banks; provided,  that,
     in the case of any of the Events of Default specified in Section 12.1(g) or
     Section 12.1(h), an amount equal to the aggregate existing Letter of Credit
     Exposure  of all  Banks  shall be due and  payable  without  any  notice to
     Borrower or any other act by Administrative  Agent or any Bank. Any amounts
     so deposited shall be held by Administrative  Agent for the ratable benefit
     of all Banks as security for the outstanding  Letter of Credit Exposure and
     the other Obligations,  and Borrower will, in connection therewith, execute
     and deliver (and cause each other Credit Party to execute and deliver) such
     security  agreements in form and substance  satisfactory to  Administrative
     Agent which Administrative Agent may, in its discretion, require. As drafts
     or  demands  for  payment  are  presented   under  any  Letter  of  Credit,
     Administrative  Agent  shall  apply  such cash to  satisfy  such  drafts or
     demands.  When all Letters of Credit have expired and the Obligations  have
     been  repaid  in full  (and no Bank  has any  obligation  to lend or  issue
     Letters of Credit hereunder) or such Event of Default has been cured to the
     satisfaction  of Required  Banks,  Administrative  Agent  shall  release to
     Borrower any remaining cash deposited under this Section  3.1(b).  Whenever
     Borrower is required to make deposits  under this Section  3.1(b) and fails
     to do so on the day such deposit is due,  Administrative  Agent or any Bank
     may, without notice to Borrower,  make such deposit (whether by application
     of proceeds of any collateral for the Obligations,  by transfers from other
     accounts  maintained  with any Bank or  otherwise)  using  any  funds  then
     available to any Bank of any Credit Party, any guarantor or any other party
     liable for repayment of the Obligations.

          Notwithstanding  anything to the contrary  contained herein,  Borrower
     hereby agrees to reimburse  each Letter of Credit Issuer  immediately  upon
     demand by such Letter of Credit Issuer, and in immediately available funds,
     for any payment or disbursement  made by such Letter of Credit Issuer under
     any Letter of Credit  issued by it.  Payment shall be made by Borrower with

                                       26
<PAGE>

     interest on the amount so paid or disbursed by Letter of Credit Issuer from
     and  including  the date  payment is made under any Letter of Credit to and
     including  the date of  payment,  at the lesser of (i) the  Maximum  Lawful
     Rate,  or (ii) the Default Rate.  The  obligations  of Borrower  under this
     paragraph  will  continue  until all Letters of Credit have expired and all
     reimbursement  obligations  with respect  thereto have been paid in full by
     Borrower and until all other Obligations shall have been paid in full.

          Borrower shall be obligated to reimburse  Letter of Credit Issuer upon
     demand for all  amounts  paid  under  Letters of Credit as set forth in the
     immediately preceding paragraph hereof; provided,  however, if Borrower for
     any reason fails to reimburse  Letter of Credit Issuer in full upon demand,
     Banks  shall  reimburse  Letter of Credit  Issuer in  accordance  with each
     Banks'  Commitment  Percentage  for amounts due and unpaid from Borrower as
     set forth hereinbelow;  provided,  however, that no such reimbursement made
     by Banks shall  discharge  Borrower's  obligations  to reimburse  Letter of
     Credit Issuer.  All  reimbursement  amounts  payable by any Bank under this
     Section  3.1(b) shall include  interest  thereon at the Federal Funds Rate,
     from the date of the payment of such amounts by Letter of Credit  Issuer to
     the date of  reimbursement  by such  Bank.  No Bank shall be liable for the
     performance or  nonperformance  of the  obligations of any other Bank under
     this paragraph. The reimbursement obligations of Banks under this paragraph
     shall continue after the Termination Date and shall survive  termination of
     this Agreement and the other Loan Papers.

          Borrower  shall  indemnify and hold  Administrative  Agent,  Letter of
     Credit  Issuer and each Bank,  and their  respective  officers,  directors,
     representatives  and employees harmless from loss for any claim,  demand or
     liability which may be asserted  against any or such  indemnified  party in
     connection  with  actions  taken under  Letters of Credit or in  connection
     therewith  (including  losses  resulting from the negligence of any or such
     indemnified  party),  and shall pay each  indemnified  party for reasonable
     fees of  attorneys  and legal costs paid or  incurred  by each  indemnified
     party in connection  with any matter  related to Letters of Credit,  except
     for  losses  and  liabilities  incurred  as a direct  result  of the  gross
     negligence or willful  misconduct of such  indemnified  party, IT BEING THE
     EXPRESS  INTENTION  OF THE  PARTIES  THAT EACH  INDEMNIFIED  PARTY SHALL BE
     INDEMNIFIED  FOR  THE  CONSEQUENCES  OF ITS  OWN  ORDINARY  NEGLIGENCE.  If
     Borrower for any reason fails to indemnify or pay such indemnified party as
     set forth herein in full,  Banks shall  indemnify and pay such  indemnified
     party upon demand, in accordance with each Bank's Commitment  Percentage of
     such amounts due and unpaid from Borrower; provided, however, that, no such
     payment made by Banks shall discharge Borrower's obligation to indemnify or
     pay  such  indemnified  party in  accordance  with the  terms  hereof.  The
     provisions  of  this  paragraph  shall  survive  the  termination  of  this
     Agreement.

          Neither  Administrative  Agent nor any other  Letter of Credit  Issuer
     makes any representation or warranty,  nor assumes any responsibility  with
     respect to the validity,  legality,  sufficiency or  enforceability  of any
     letter of credit application  executed and delivered in connection with any
     Letter of Credit issued  hereunder or any document  relative  thereto or to
     the collectibility  thereunder.  Neither Administrative Agent nor any other
     Letter  of Credit  Issuer  assumes  any  responsibility  for the  financial
     condition of Borrower or for the performance of any obligation of Borrower.
     Administrative  Agent and each  other  Letter of Credit  Issuer may use its
     discretion  with respect to exercising or refraining  from  exercising  any

                                       27
<PAGE>

     rights,  or taking or refraining from taking any action which may be vested
     in it or which it may be  entitled  to take or assert  with  respect to any
     Letter of Credit or any letter of credit application.  FURTHERMORE,  EXCEPT
     AS SET FORTH HEREIN,  NEITHER  ADMINISTRATIVE AGENT NOR ANY OTHER LETTER OF
     CREDIT  ISSUER SHALL BE UNDER ANY  LIABILITY  TO ANY BANK,  WITH RESPECT TO
     ANYTHING ADMINISTRATIVE AGENT OR ANY SUCH LETTER OF CREDIT ISSUER MAY DO OR
     REFRAIN FROM DOING IN THE EXERCISE OF ITS JUDGMENT,  THE SOLE LIABILITY AND
     RESPONSIBILITY  OF  ADMINISTRATIVE  AGENT AND SUCH LETTER OF CREDIT  ISSUER
     BEING TO HANDLE EACH BANK'S SHARE ON AS FAVORABLE A BASIS AS ADMINISTRATIVE
     AGENT OR SUCH  LETTER OF  CREDIT  ISSUER  HANDLES  ITS OWN  SHARE.  NEITHER
     ADMINISTRATIVE  AGENT NOR ANY OTHER LETTER OF CREDIT  ISSUER SHALL HAVE ANY
     DUTIES OR  RESPONSIBILITIES  EXCEPT  THOSE  EXPRESSLY  SET FORTH HEREIN AND
     THOSE  DUTIES  AND  LIABILITIES  SHALL BE SUBJECT  TO THE  LIMITATIONS  AND
     QUALIFICATIONS SET FORTH HEREIN. FURTHERMORE, NEITHER ADMINISTRATIVE AGENT,
     ANY  LETTER OF CREDIT  ISSUER,  NOR ANY OF THEIR  DIRECTORS,  OFFICERS,  OR
     EMPLOYEES  SHALL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED  (WHETHER OR NOT
     SUCH ACTION TAKEN OR OMITTED IS  EXPRESSLY  SET FORTH  HEREIN)  UNDER OR IN
     CONNECTION HEREWITH OR UNDER ANY OTHER INSTRUMENT OR DOCUMENT IN CONNECTION
     HEREWITH,  EXCEPT  FOR GROSS  NEGLIGENCE  OR  WILLFUL  MISCONDUCT.  Neither
     Administrative  Agent nor any other Letter of Credit Issuer shall incur any
     liability to any Bank, Borrower,  or any Affiliate of any Bank or Borrower,
     in acting upon any notice, document, order, consent,  certificate,  warrant
     or other instrument  reasonably  believed by  Administrative  Agent or such
     Letter of Credit  Issuer to be genuine or authentic and to be signed by the
     proper party.

          (c) No Bank will be obligated  to lend to Borrower  hereunder or incur
     Letter of Credit  Exposure,  and  Borrower  shall not be entitled to borrow
     hereunder or obtain Letters of Credit  hereunder,  in an amount which would
     cause the  Outstanding  Credit to exceed the Borrowing Base then in effect.
     No Bank shall be obligated to fund Borrowings  hereunder and Borrower shall
     not be entitled to Borrowings hereunder during the existence of a Borrowing
     Base  Deficiency.  Nothing in this Section  3.1(c) shall be deemed to limit
     any Bank's obligation to reimburse any Letter of Credit Issuer with respect
     to its  participation in Letters of Credit as a result of the drawing under
     any Letter of Credit pursuant to Section 3.1(b).

     Section 3.2 Method of Borrowing.

          (a) In order to request any  Borrowing  under  Section  3.1,  Borrower
     shall  hand  deliver,  telex or  telecopy  to  Administrative  Agent a duly
     completed  Request  for  Borrowing  (herein so called)  prior to 11:00 a.m.
     (Chicago,  Illinois  time),  (i)  on the  Borrowing  Date  specified  for a
     proposed  Base  Rate  Borrowing,  and (ii) at least  three  (3)  Eurodollar
     Business Days before the Borrowing Date of a proposed Eurodollar Borrowing.
     Each such  Request  for  Borrowing  shall be  substantially  in the form of
     Exhibit F attached hereto, and shall specify:

               (A) the  Borrowing  Date  of such  Borrowing,  which  shall  be a
          Domestic  Business  Day in the  case  of a Base  Rate  Borrowing  or a
          Eurodollar Business Day in the case of a Eurodollar Borrowing;

                                       28
<PAGE>

               (B) the aggregate amount of such Borrowing;

               (C) whether such  Borrowing  is to be a Base Rate  Borrowing or a
          Eurodollar Borrowing; and

               (D) in the case of a  Eurodollar  Borrowing,  the duration of the
          Interest Period applicable  thereto,  subject to the provisions of the
          definition of Interest Period.

          (b) Upon  receipt of a Request  for  Borrowing,  Administrative  Agent
     shall promptly  notify each Bank of the contents  thereof and the amount of
     the Borrowing to be loaned by such Bank pursuant thereto,  and such Request
     for Borrowing shall not thereafter be revocable by Borrower.

          (c) Not later than 12:00 noon (Chicago,  Illinois time) on the date of
     each Borrowing, each Bank shall make available its Commitment Percentage of
     such Borrowing, in Federal or other funds immediately available in Chicago,
     Illinois to  Administrative  Agent at its address set forth on Schedule 2.1
     hereto.   Unless   Administrative  Agent  determines  that  any  applicable
     condition  specified in Section 7.2 has not been satisfied,  Administrative
     Agent will make the funds so received  from Banks  available to Borrower at
     Administrative Agent's aforesaid address.

     Section 3.3 Method of Requesting Letters of Credit.

          (a) In order to request any Letter of Credit hereunder, Borrower shall
     hand deliver,  telex or telecopy to  Administrative  Agent a duly completed
     Request  for  Letter of  Credit  (herein  so  called)  prior to 12:00  noon
     (Chicago,  Illinois time) at least three (3) Domestic  Business Days before
     the date specified for issuance of such Letter of Credit.  Each Request for
     Letter of Credit shall be  substantially  in the form of Exhibit G attached
     hereto,  shall be accompanied by the applicable  Letter of Credit  Issuer's
     duly completed and executed letter of credit  application and agreement and
     shall specify:

               (i) the requested date for issuance of such Letter of Credit;

               (ii) the terms of such requested Letter of Credit,  including the
          name and address of the beneficiary, the stated amount, the expiration
          date and the conditions under which drafts under such Letter of Credit
          are to be available; and

               (iii) the purpose of such Letter of Credit.

          (b) Upon  receipt of a Request  for  Letter of Credit,  Administrative
     Agent shall  promptly  notify each Bank and the  proposed  Letter of Credit
     Issuer of the  contents  thereof,  including  the  amount of the  requested
     Letter  of  Credit,  and such  Request  for  Letter  of  Credit  shall  not
     thereafter be revocable by Borrower.

          (c) No later than 12:00 noon (Chicago, Illinois time) on the date each
     Letter  of  Credit  is  requested,   unless  Administrative  Agent  or  the
     applicable Letter of Credit Issuer determines that any applicable condition
     precedent  set  forth  in  Section  7.2  hereof  has  not  been  satisfied,

                                       29
<PAGE>

     Administrative  Agent or such other applicable Letter of Credit Issuer will
     issue and deliver  such Letter of Credit  pursuant to the  instructions  of
     Borrower.

          Section 3.4 Notes. Each Bank's Commitment  Percentage of the Revolving
     Loan shall be  evidenced by a single Note payable to the order of such Bank
     in an amount equal to such Bank's Commitment.

          Section 3.5 Interest Rates; Payments.

          (a) The principal amount of the Base Rate Loan outstanding from day to
     day shall  bear  interest  at a rate per annum  equal to the sum of (i) the
     Applicable  Margin plus (ii) the applicable Base Rate in effect from day to
     day;  provided  that in no event shall the rate charged  hereunder or under
     the Notes exceed the Maximum  Lawful  Rate.  Interest on the Base Rate Loan
     shall  be  payable  as it  accrues  on  each  Quarterly  Date,  and  on the
     Termination Date.

          (b) The principal  amount of each Eurodollar Loan outstanding from day
     to day shall bear interest for the Interest Period applicable  thereto at a
     rate per annum equal to the sum of (i) the Applicable  Margin plus (ii) the
     applicable  Adjusted  Eurodollar Rate;  provided that in no event shall the
     rate charged  hereunder or under the Notes exceed the Maximum  Lawful Rate.
     Interest on any portion of the principal of each Eurodollar Loan subject to
     an Interest Period of one (1), two (2) or three (3) months shall be payable
     on the last day of the Interest Period applicable thereto.  Interest on any
     portion of the  principal  of each  Eurodollar  Loan subject to an Interest
     Period of six (6),  nine (9), or twelve (12) months shall be payable on the
     last day of the Interest  Period  applicable  thereto and on each Quarterly
     Date.

          (c) So long as no  Default or Event of  Default  shall be  continuing,
     subject to the  provisions  of this  Section 3.5,  Borrower  shall have the
     option of having all or any portion of the principal  outstanding under the
     Revolving  Loan be a Base  Rate Loan or one (1) or more  Eurodollar  Loans,
     which shall bear interest at rates determined by reference to the Base Rate
     and  the  Adjusted  Eurodollar  Rate,  respectively;  provided,  that  each
     Eurodollar  Loan shall be in a minimum amount of $2,000,000 and shall be in
     an  amount  which  is an  integral  multiple  of  $500,000.  Prior  to  the
     termination of each Interest Period with respect to each  Eurodollar  Loan,
     Borrower  shall  give  written  notice  (a  "Notice  of   Continuation   or
     Conversion")  in the form of  Exhibit H attached  hereto to  Administrative
     Agent of the Type of Loan which shall be  applicable  to the  principal  of
     such  Eurodollar  Loan upon the  expiration of such Interest  Period.  Such
     Notice of Continuation or Conversion shall be given to Administrative Agent
     at least one (1)  Domestic  Business  Day,  in the case of a Base Rate Loan
     selection  and  three  (3)  Eurodollar  Business  Days,  in the  case  of a
     Eurodollar Loan selection,  prior to the termination of the Interest Period
     then expiring.  If Borrower shall specify a Eurodollar Loan, such Notice of
     Continuation or Conversion  shall also specify the length of the succeeding
     Interest  Period (subject to the provisions of the definition of such term)
     selected by Borrower.  Each Notice of Continuation  or Conversion  shall be
     irrevocable  and  effective  upon  notification  thereof to  Administrative
     Agent. If the required Notice of Continuation or Conversion  shall not have
     been timely received by Administrative  Agent,  Borrower shall be deemed to
     have  elected  that the  principal  of the  Eurodollar  Loan subject to the
     Interest  Period then  expiring be Converted to the Base Rate Loan upon the
     expiration  of such  Interest  Period and  Borrower  will be deemed to have
     given  Administrative  Agent  notice  of  such  election.  Subject  to  the
     limitations  set forth in this  Section  3.5(c) on the amount and number of

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<PAGE>

     Eurodollar Loans,  Borrower shall have the right to Convert all or any part
     of the Base Rate Loan to a Eurodollar Loan by giving Administrative Agent a
     Notice of  Continuation  or  Conversion of such election at least three (3)
     Eurodollar Business Days prior to the date on which Borrower elects to make
     such  Conversion (a "Conversion  Date").  The  Conversion  Date selected by
     Borrower shall be a Eurodollar  Business Day.  Notwithstanding  anything in
     this Section 3.5 to the  contrary,  no portion of the principal of the Base
     Rate Loan may be Converted to a Eurodollar  Loan and no Eurodollar Loan may
     be  Continued as such when any Default or Event of Default has occurred and
     is  continuing,  but each  such  Eurodollar  Loan  shall  be  automatically
     Converted to the Base Rate Loan on the last day of each applicable Interest
     Period.  Borrower  shall  not be  permitted  to have  more  than  seven (7)
     Eurodollar Loans in effect at any time.

          (d)  Notwithstanding  anything  to the  contrary  set forth in Section
     3.5(a)  or  Section  3.5(b)  above,  after  the  occurrence  of an Event of
     Default,  interest shall accrue on the outstanding principal balance of the
     Revolving  Loan,  and to the extent  permitted  by Law,  on the accrued but
     unpaid  interest on the Revolving Loan and all other  Obligations  from the
     period from and  including  the  occurrence of such Event of Default to but
     excluding  the date the same is  remedied  at a rate per annum equal to the
     lesser of (i) the Default Rate, and (ii) the Maximum Lawful Rate.

          (e) Administrative Agent shall determine each interest rate applicable
     to the Revolving Loan in accordance  with the terms hereof.  Administrative
     Agent shall promptly notify Borrower and Banks by telex,  telecopy or cable
     of each rate of interest so determined, and its determination thereof shall
     be conclusive in the absence of manifest error.

          (f) Notwithstanding the foregoing, if at any time the rate of interest
     calculated with reference to the Base Rate or the Eurodollar Rate hereunder
     (the "contract rate") is limited to the Maximum Lawful Rate, any subsequent
     reductions  in the  contract  rate shall not reduce the rate of interest on
     the Revolving  Loan below the Maximum Lawful Rate until the total amount of
     interest  accrued equals the amount of interest which would have accrued if
     the  contract  rate had at all times been in  effect.  In the event that at
     maturity (stated or by acceleration),  or at final payment of any Note, the
     total  amount of  interest  paid or  accrued  on such Note is less than the
     amount of interest which would have accrued if the contract rate had at all
     times been in effect with respect thereto, then at such time, to the extent
     permitted by law,  Borrower  shall pay to the holder of such Note an amount
     equal to the  difference  between  (i) the lesser of the amount of interest
     which  would  have  accrued if the  contract  rate had at all times been in
     effect and the amount of interest  which would have  accrued if the Maximum
     Lawful  Rate had at all  times  been in  effect,  and (ii)  the  amount  of
     interest actually paid on such Note.

          (g)  Interest  payable  hereunder  on each  Eurodollar  Loan  shall be
     computed  based on the number of actual  days  elapsed  assuming  that each
     calendar year consisted of 360 days. Interest payable hereunder on the Base
     Rate Loan  shall be  computed  based on the actual  number of days  elapsed
     assuming that each  calendar  year  consisted of 365 days (or 366 days in a
     leap year).

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<PAGE>

     Section 3.6  Mandatory  Prepayments.  Upon the  occurrence of any Borrowing
Base Deficiency,  Borrower shall make the mandatory prepayments of the Revolving
Loan required by Section 5.4 hereof.

     Section 3.7 Voluntary  Prepayments.  Borrower may,  subject to Section 14.5
and the  other  provisions  of  this  Agreement,  prepay  the  principal  of the
Revolving Loan in whole or in part. Any partial prepayment shall be in a minimum
amount of $500,000 and shall be in an integral multiple of $100,000.

     Section 3.8 Voluntary Reduction of Commitments.  Borrower may, by notice to
Administrative Agent five (5) Domestic Business Days prior to the effective date
of any such  reduction,  reduce the Total  Commitment  (and  thereby  reduce the
Commitment of each Bank ratably) in amounts not less than  $5,000,000  and in an
amount which is an integral multiple of $1,000,000. On the effective date of any
such  reduction,  Borrower  shall,  to the extent  required  as a result of such
reduction,  make  a  principal  payment  on  the  Revolving  Loan  in an  amount
sufficient to cause the principal balance of the Revolving Loan then outstanding
to  be  equal  to  or  less  than  the  Total  Commitment  as  thereby  reduced.
Notwithstanding  the  foregoing,  Borrower shall not be permitted to voluntarily
reduce  the Total  Commitment  to an amount  less than the  aggregate  Letter of
Credit Exposure of all Banks.

     Section 3.9 Termination of  Commitments;  Final Maturity of Revolving Loan.
The Total Commitment (and the Commitment of each Bank) shall terminate,  and the
entire outstanding principal balance of the Revolving Loan, all interest accrued
thereon,  all  accrued  but  unpaid  fees  hereunder  and all other  outstanding
Obligations shall be due and payable in full on the Termination Date.

     Section 3.10  Application of Payments.  Each repayment  pursuant to Section
3.6,  Section  3.7,  Section  3.8,  Section  3.9 and  Section  5.4 shall be made
together with accrued interest on the amount repaid to the date of payment,  and
shall be applied in accordance with Section 4.2 and the other provisions of this
Agreement.  Section

     3.11 Commitment Fee. On the Termination  Date, on each Quarterly Date prior
to the  Termination  Date,  and, in the event the  Commitments are terminated in
their entirety prior to the Termination  Date, on the date of such  termination,
Borrower shall pay to Administrative Agent, for the ratable benefit of each Bank
based on each  Bank's  Commitment  Percentage,  a  commitment  fee  equal to the
Commitment  Fee  Percentage  in effect  from day to day  (applied on a per annum
basis and computed on the basis of actual days  elapsed and as if each  calendar
year  consisted  of 365 days (or 366 days in a leap year)) of the average  daily
Availability for the Fiscal Quarter (or portion thereof) ending on the date such
payment is due.

     Section 3.12 Agency and other Fees.  Borrower  shall pay to  Administrative
Agent and its  Affiliates  such other  fees and  amounts  as  Borrower  shall be
required to pay to  Administrative  Agent and its  Affiliates  from time to time
pursuant to any separate agreement between Borrower and Administrative  Agent or
such Affiliates. Such fees and other amounts shall be retained by Administrative
Agent and its  Affiliates,  and no Bank  (other  than Bank One)  shall  have any

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<PAGE>

interest   therein.   Administrative   Agent  may  disburse  any  fees  paid  to
Administrative  Agent and its  Affiliates  pursuant to this  Section 3.12 in any
manner Administrative Agent desires in its sole discretion.

                                   Article IV
                               GENERAL PROVISIONS

     Section  4.1  Delivery  and  Endorsement  of Notes.  On the  Closing  Date,
Administrative  Agent shall  deliver to each Bank the Note payable to such Bank.
Each Bank may endorse (and prior to any  transfer of its Note shall  endorse) on
the  schedules  attached  and forming a part  thereof  appropriate  notations to
evidence the date and amount of its Commitment Percentage of each Borrowing, the
Interest Period applicable  thereto,  and the date and amount of each payment of
principal  made by Borrower with respect  thereto;  provided that the failure by
any Bank to so endorse its Note shall not affect the  liability  of Borrower for
the repayment of all amounts  outstanding under such Note together with interest
thereon.  Each Bank is hereby irrevocably  authorized by Borrower to endorse its
Note and to  attach to and make a part of any such  Note a  continuation  of any
such schedule as required.

     Section 4.2 General Provisions as to Payments.

          (a) Borrower shall make each payment of principal of, and interest on,
     the Revolving Loan, and all fees payable hereunder shall be paid, not later
     than 12:00 noon  (Chicago,  Illinois time) on the date when due, in Federal
     or  other   funds   immediately   available   in  Chicago,   Illinois,   to
     Administrative  Agent at its  address  set forth on  Schedule  2.1  hereto,
     without defense, set-off,  deduction or counterclaim.  Administrative Agent
     will promptly (and if such payment is received by  Administrative  Agent by
     10:00 a.m. (Chicago,  Illinois time), and otherwise if reasonably possible,
     on the same Domestic  Business Day)  distribute to each Bank its Commitment
     Percentage of each such payment  received by  Administrative  Agent for the
     account of Banks. Whenever any payment of principal of, or interest on, the
     Base  Rate Loan or of fees  shall be due on a day  which is not a  Domestic
     Business  Day, the date for payment  thereof  shall be extended to the next
     succeeding  Domestic Business Day. Whenever any payment of principal of, or
     interest on, any portion of any Eurodollar Loan shall be due on a day which
     is not a Eurodollar  Business  Day, the date for payment  thereof  shall be
     extended to the next  succeeding  Eurodollar  Business  Day (subject to the
     provisions  of the  definition  of  Interest  Period).  If the date for any
     payment of principal is extended by operation of Law or otherwise, interest
     thereon shall be payable for such extended time. Borrower hereby authorizes
     Administrative  Agent  to  charge  from  time  to time  against  Borrower's
     accounts with Administrative Agent any amount then due.

          (b) Prior to the  occurrence  of an Event of  Default,  all  principal
     payments  received  by Banks with  respect to the  Revolving  Loan shall be
     applied first to Eurodollar Loans  outstanding with Interest Periods ending
     on the  date of such  payment,  then to the  Base  Rate  Loan,  and then to
     Eurodollar  Loans  next  maturing  until  such  principal  payment is fully
     applied.

          (c) After the occurrence of an Event of Default, all amounts collected
     or received by  Administrative  Agent or any Bank shall be applied first to
     the  payment  of all  proper  costs  incurred  by  Administrative  Agent in
     connection with the collection thereof (including  reasonable  expenses and

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<PAGE>

     disbursements of Administrative Agent), second to the payment of all proper
     costs  incurred  by  Banks  in  connection  with  the  collection   thereof
     (including  reasonable  expenses and disbursements of Banks),  third to the
     reimbursement  of any advances made by Banks to effect  performance  of any
     unperformed  covenants  of any Credit  Party under any of the Loan  Papers,
     fourth to the payment of any unpaid fees required pursuant to Section 3.11,
     fifth to the payment of any unpaid fees required pursuant to Section 3.1(b)
     and Section 3.10, sixth, to the payment of all accrued but unpaid interest,
     seventh,  to the payment to each Bank of its  Commitment  Percentage of the
     outstanding  principal of the Revolving Loan and to satisfy all obligations
     and liabilities then due under Hedge  Agreements,  such payments to be made
     pro rata to each Bank  owed  such  Obligations  in  proportion  to all such
     payments owed to all Banks in respect of such  Obligations,  and eighth, to
     establish the deposits required in Section 3.1(b). All payments received by
     a Bank after the  occurrence of an Event of Default for  application to the
     principal of the Revolving Loan shall be applied by such Bank in the manner
     provided in Section 4.2(b).

                                   Article V
                                 BORROWING BASE

     Section  5.1  Reserve  Report;   Proposed  Borrowing  Base  and  Conforming
Borrowing Base. The aggregate  amount of credit available to Borrower under this
Agreement shall be limited by a Borrowing Base (herein so called) which shall be
determined  by Banks at the  times  and in  accordance  with the  standards  and
procedures set forth in this Article V. As soon as available and in any event by
February 28 and August 31 of each year  commencing  February 28, 2004,  Borrower
shall deliver to Administrative Agent and each Bank a Reserve Report prepared as
of  the   immediately   preceding   December   31  and  June  30   respectively.
Simultaneously  with the delivery to Administrative  Agent and each Bank of each
Reserve Report,  Borrower shall notify Administrative Agent and each Bank of the
amount of the Borrowing Base which  Borrower  requests  become  effective on the
next  Redetermination Date (or such date promptly following such Redetermination
Date as  Required  Banks  shall  elect).  Banks may,  in their sole  discretion,
establish a Borrowing  Base which is higher than the  Borrowing  Base that would
otherwise  be in effect if Banks  determined  the  Borrowing  Base based on each
Bank's  application  of the  credit  standards  and other  criteria  customarily
applied by such Bank in the  determination  of credit  limitations for companies
similar  to  Borrower  ("Conforming  Credit  Criteria").  At the  time  of  each
Redetermination,  Banks shall also determine what the Borrowing Base would be if
they applied  Conforming  Credit Criteria (the "Conforming  Borrowing Base"). If
Banks do not  determine a  Conforming  Borrowing  Base,  the  Borrowing  Base as
redetermined  shall also be the  Conforming  Borrowing Base for purposes of this
Agreement.

     Section  5.2  Scheduled  Redeterminations  of the  Borrowing  Base  and the
Conforming  Borrowing  Base;  Procedures  and  Standards.  Based  in part on the
Reserve  Reports made  available to Banks  pursuant to Section 5.1,  Banks shall
redetermine the Borrowing Base and the Conforming  Borrowing Base on or prior to
the next  Redetermination  Date (or such date promptly  thereafter as reasonably
possible based on the engineering and other information available to Banks). Any
Borrowing Base or Conforming  Borrowing Base which becomes effective as a result
of any Redetermination of the Borrowing Base or Conforming  Borrowing Base shall
be subject to the following restrictions:  (a) such Borrowing Base or Conforming

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<PAGE>

Borrowing  Base  shall not exceed  the  Borrowing  Base  requested  by  Borrower
pursuant to Section 5.1 or Section 5.3 (as applicable),  (b) such Borrowing Base
or  Conforming  Borrowing  Base shall not exceed  the Total  Commitment  then in
effect,  (c) to the extent such  Borrowing  Base or  Conforming  Borrowing  Base
represents an increase from the Borrowing Base or the Conforming  Borrowing Base
(as applicable) in effect prior to such Redetermination,  such Borrowing Base or
Conforming  Borrowing Base shall be approved by all Banks, and (d) to the extent
such  Borrowing Base or Conforming  Borrowing Base  represents a decrease in the
Borrowing Base or the Conforming  Borrowing Base (as applicable) in effect prior
to such  Redetermination,  or a  reaffirmation  of such prior  Borrowing Base or
Conforming  Borrowing  Base,  such Borrowing  Base or Conforming  Borrowing Base
shall be approved by Required Banks. Each Redetermination shall be made by Banks
in their sole discretion.  Without limiting such discretion, Parent and Borrower
acknowledge  and  agree  that  Banks  (i) may make  such  assumptions  regarding
appropriate  existing  and  projected  pricing  for  Hydrocarbons  as they  deem
appropriate in their sole discretion,  (ii) may make such assumptions  regarding
projected  rates and quantities of future  production of  Hydrocarbons  from the
Mineral  Interests  owned by  Borrower  as they deem  appropriate  in their sole
discretion,  (iii) may consider the projected  cash  requirements  of the Credit
Parties,  (iv) are not required to consider any asset other than Proved  Mineral
Interests  owned by Borrower which are subject to first and prior Liens in favor
of Administrative  Agent for the ratable benefit of Banks to the extent required
by Section 6.1 hereof, and (v) may make such other  assumptions,  considerations
and  exclusions  as  Banks  deem  appropriate  in the  exercise  of  their  sole
discretion.  It is further  acknowledged  and agreed that each Bank may consider
such other credit  factors as it deems  appropriate  in the exercise of its sole
discretion and shall have no obligation in connection  with any  Redetermination
to approve any increase from the Borrowing Base or the Conforming Borrowing Base
in effect prior to such  Redetermination.  The  Conforming  Borrowing Base shall
also be determined by Banks in their sole  discretion,  and in  determining  the
amount of the Conforming  Borrowing Base, each Bank may make the assumptions and
consider the factors and criteria  set forth in  subclauses  (a) through (d) and
(i) through (v) above;  provided,  that each Bank shall apply Conforming  Credit
Criteria.  Promptly following any  Redetermination of the Borrowing Base and the
Conforming  Borrowing  Base,  Administrative  Agent shall notify Borrower of the
amount of the Borrowing Base and the Conforming  Borrowing Base as redetermined,
which Borrowing Base and Conforming  Borrowing Base shall be effective as of the
date  specified in such  notice,  and shall remain in effect for all purposes of
this Agreement until the next Redetermination.

     Section 5.3 Special Redetermination.

          (a) In addition to Scheduled  Redeterminations,  Borrower and Required
     Banks shall each be permitted to request a Special  Redetermination  of the
     Borrowing Base and the Conforming  Borrowing Base once in each Fiscal Year.
     Any request by Required  Banks  pursuant to this  Section  5.3(a)  shall be
     submitted to  Administrative  Agent and  Borrower.  Any request by Borrower
     pursuant to this Section 5.3(a) shall be submitted to Administrative  Agent
     and each Bank and at the time of such request Borrower shall (i) deliver to
     Administrative  Agent and each Bank a Reserve Report,  and (ii) also notify
     Administrative  Agent  and each Bank of the  Borrowing  Base  requested  by
     Borrower in connection with such Special Redetermination.

          (b) Any Special  Redetermination  shall be made by Banks in accordance
     with the procedures and standards set forth in Section 5.2; provided, that,

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<PAGE>

     no Reserve Report will be required to be delivered to Administrative  Agent
     and Banks in  connection  with any  Special  Redetermination  requested  by
     Required Banks pursuant to Section 5.3(a) above.

     Section 5.4  Borrowing  Base  Deficiency.  To the extent a  Borrowing  Base
Deficiency exists after giving effect to any Redetermination,  Borrower shall be
obligated to  eliminate  such  Borrowing  Base  Deficiency  over a period not to
exceed six (6) months from the effective date of such  Redetermination by making
six (6)  mandatory,  equal,  consecutive,  monthly  payments of principal on the
Revolving  Loan,  each of which  shall be in the amount of one sixth  (1/6th) of
such Borrowing  Base  Deficiency,  or in the event that the remaining  principal
outstanding under the Revolving Loan is less than the Borrowing Base Deficiency,
then in the amount of one sixth (1/6th) of the remaining  principal  outstanding
under the Revolving Loan. The first of such six (6) payments shall be due on the
thirtieth  (30th) day following the effective date of each such  Redetermination
and  each  subsequent  payment  shall  be due  on the  same  day of  each  month
thereafter (or if there is no corresponding day of any subsequent month, then on
the  last  day of such  month)  (each  such  date is  referred  to  herein  as a
"borrowing base deficiency payment date"). If a Borrowing Base Deficiency cannot
be eliminated  pursuant to this Section 5.4 by prepayment of the Revolving  Loan
in full  (as a  result  of  outstanding  Letter  of  Credit  Exposure),  on each
borrowing base  deficiency  payment date,  Borrower shall also deposit cash with
Administrative  Agent, to be held by Administrative  Agent to secure outstanding
Letter of Credit  Exposure  in the manner  contemplated  by Section  3.1(b),  an
amount at least equal to one sixth (1/6th) of the balance of such Borrowing Base
Deficiency  (i.e.,  one-sixth  of the  difference  between  the  Borrowing  Base
Deficiency and the remaining  outstanding  principal under the Revolving Loan on
the effective date of such Redetermination).

     Section 5.5 Initial Borrowing Base and Initial  Conforming  Borrowing Base.
Notwithstanding  anything to the contrary  contained herein,  the Borrowing Base
and the Conforming  Borrowing Base in effect during the period commencing on the
Closing Date and ending on the effective date of the first Redetermination after
the Closing Date shall be the Initial Borrowing Base and the Initial  Conforming
Borrowing Base, respectively.

                                   Article VI
                            COLLATERAL AND GUARANTEES

     Section 6.1 Security.

          (a) The Obligations shall be secured by first and prior Liens (subject
     only to Permitted  Encumbrances)  covering and  encumbering (i) one hundred
     percent  (100%)  of  all  Borrowing  Base  Properties,  and  prior  to  any
     Distributions  being  permitted  to be  made to any  Restricted  Subsidiary
     pursuant  to  the  terms  of  Section  10.2(b)  and/or  the  definition  of
     "Permitted  Investments," all of the issued and outstanding Equity owned by
     Parent,  Borrower and each Restricted  Subsidiary of Borrower and each such
     Restricted  Subsidiary.  On  the  Closing  Date,  the  Credit  Parties  (as
     applicable) shall deliver to  Administrative  Agent for the ratable benefit
     of each  Bank,  the  Mortgages  and  Amendments  to  Mortgages  in form and
     substance acceptable to Administrative Agent and duly executed by each such
     Credit  Party  (as  applicable),  together  with  such  other  assignments,
     conveyances,  amendments, agreements and other writings, including, without
     limitation,  UCC-1 and UCC-3 financing statements (each duly authorized and
     executed,  as applicable) as  Administrative  Agent shall deem necessary or

                                       36
<PAGE>

     appropriate  to grant,  evidence  and perfect  first and prior Liens in all
     Borrowing Base  Properties and other interests of any Credit Party required
     by this Section 6.1(a). Parent and Borrower hereby authorize Administrative
     Agent,  and  its  agents,  successors  and  assigns,  to  file  any and all
     necessary   financing   statements  under  the  Uniform   Commercial  Code,
     assignments or  continuation  statements as necessary from time to time (in
     Administrative  Agent's  discretion) to perfect (or continue perfection of)
     the Liens granted pursuant to the Loan Papers.

          (b) On or before each  Redetermination Date after the Closing Date and
     at such  other  times as  Administrative  Agent  or  Required  Banks  shall
     request,  Parent, Borrower and each Restricted Subsidiary shall execute and
     deliver to  Administrative  Agent,  for the  ratable  benefit of each Bank,
     Mortgages in form and substance acceptable to Administrative Agent and duly
     executed  by  Parent,  Borrower  and any  such  Restricted  Subsidiary  (as
     applicable) together with such other assignments,  conveyances, amendments,
     agreements  and  other  writings,   including,  without  limitation,  UCC-1
     financing  statements (each duly authorized and executed) as Administrative
     Agent shall deem necessary or  appropriate  to grant,  evidence and perfect
     the Liens  required by Section  6.1(a)  preceding with respect to Borrowing
     Base Properties acquired by Parent, Borrower and each Restricted Subsidiary
     subsequent  to the  last  date  on  which  Parent,  Borrower  or  any  such
     Restricted  Subsidiary  was  required  to  execute  and  deliver  Mortgages
     pursuant to this Section 6.1(b), or which, for any other reason are not the
     subject of valid, enforceable, perfected first priority Liens (subject only
     to Permitted Encumbrances) in favor of Administrative Agent for the ratable
     benefit of Banks.

          (c) At any time  Parent,  Borrower  or any of their  Subsidiaries  are
     required to execute and deliver Mortgages and/or Amendments to Mortgages to
     Administrative  Agent  pursuant to this  Section 6.1,  Borrower  shall also
     deliver to Administrative Agent such opinions of counsel (including,  if so
     requested,  title  opinions,  and in each case addressed to  Administrative
     Agent)  and other  evidence  of title as  Administrative  Agent  shall deem
     necessary  or  appropriate  to  verify  (i)  Parent's,  Borrower's  or such
     Subsidiary's  title to the  Required  Reserve  Value of the Proved  Mineral
     Interests  which are  subject  to such  Mortgages,  and (ii) the  validity,
     perfection  and priority of the Liens created by such Mortgages (as amended
     by the  Amendments  to  Mortgages,  as  applicable)  and such other matters
     regarding such Mortgages as Administrative Agent shall reasonably request.

          (d) To the extent  required  or  contemplated  by the terms of Section
     6.1(a)(ii),  Section 10.2 and the  definition of  "Permitted  Investments,"
     and, as applicable, upon the consummation of the Post-Closing Transactions,
     Parent,  Operating,  Borrower or any Indirect  Subsidiary  (as  applicable)
     shall execute and deliver to Administrative Agent a Parent Pledge Agreement
     or a Subsidiary  Pledge  Agreement  (as  applicable)  together with (i) all
     certificates  (or  other  evidence  acceptable  to  Administrative   Agent)
     evidencing the issued and outstanding Equity of Operating, Borrower and any
     such Restricted  Subsidiary of every class owned by Parent or such Indirect
     Subsidiary (as  applicable)  which shall be duly endorsed or accompanied by
     stock  powers  executed  in blank  (as  applicable),  and (ii)  such  UCC-1
     financing  statements  as  Administrative  Agent  shall deem  necessary  or
     appropriate  to grant,  evidence and perfect the Liens  required by Section
     6.1(a)(ii)  and  Section  10.2 in the  issued  and  outstanding  Equity  of
     Operating, Borrower and each such Restricted Subsidiary.

                                       37
<PAGE>

     Section 6.2 Guarantees. Payment and performance of the Obligations shall be
fully guaranteed by Parent and, prior to any Distributions being permitted to be
made to any Restricted Subsidiary pursuant to the terms of Section 10.2(b), and,
as applicable,  upon the  consummation of the  Post-Closing  Transactions,  each
Restricted  Subsidiary pursuant to a Facility Guaranty,  and Parent and Borrower
shall cause any such applicable  Restricted Subsidiary to execute and deliver to
Administrative Agent such Facility Guaranty.

                                  Article VII
                              CONDITIONS PRECEDENT

     Section 7.1 Conditions to Amendment and Restatement  and Initial  Borrowing
and Participation in Letter of Credit Exposure. The amendment and restatement of
the Existing Credit Agreement on the terms set forth herein,  and the obligation
of  each  Bank  to loan  its  Commitment  Percentage  of the  initial  Borrowing
hereunder and the obligation of Administrative  Agent to issue (or cause another
Bank to  issue)  any  Letter  of  Credit  issued  hereunder  is  subject  to the
satisfaction of each of the following conditions:

          (a) Closing Deliveries.  Administrative Agent shall have received each
     of the following documents, instruments and agreements, each of which shall
     be in form and  substance  and  executed in such  counterparts  as shall be
     acceptable to  Administrative  Agent and each Bank and each of which shall,
     unless otherwise indicated, be dated the Closing Date:

               (i) a Note payable to the order of each Bank,  each in the amount
          of such Bank's Commitment, duly executed by Borrower;

               (ii) the Mortgages and  Amendments to Mortgages to be executed on
          the  Closing  Date  pursuant  to Section  6.1(a),  duly  executed  and
          delivered  by  each  Credit  Party  (as  applicable),   together  with
          certified  copies  (in  such  number  as  Administrative  Agent  shall
          request)  of  the  Borrower   Merger   Certificate,   and  such  other
          assignments,  conveyances,  amendments, agreements and other writings,
          including,  without limitation,  UCC-1 and UCC-3 financing statements,
          in form and substance  satisfactory to Administrative  Agent, creating
          first and prior Liens in all Borrowing Base Properties;

               (iii) a Parent  Pledge  Agreement  duly executed and delivered by
          Parent,   together  with  (A)  all  certificates  (or  other  evidence
          acceptable to  Administrative  Agent)  evidencing one hundred  percent
          (100%) of the issued and outstanding Equity of Operating, Offshore and
          DG&M of every  class,  which  certificates  shall be duly  endorsed or
          accompanied by appropriate  stock powers (as  applicable)  executed in
          blank, and (B) such other agreements and writings,  including, without
          limitation,   UCC-1  financing  statements,   in  form  and  substance
          satisfactory to Administrative Agent;

               (iv) a Subsidiary Pledge Agreement duly executed and delivered by
          Operating,  together  with (A) all  certificates  (or  other  evidence
          acceptable to  Administrative  Agent)  evidencing one hundred  percent
          (100%) of the issued and  outstanding  Equity of Borrower,  Marine and
          TRF of every  class,  which  certificates  shall be duly  endorsed  or
          accompanied by appropriate  stock powers (as  applicable)  executed in

                                       38
<PAGE>

          blank, and (B) such other agreements and writings,  including, without
          limitation,   UCC-1  financing  statements,   in  form  and  substance
          satisfactory to Administrative Agent;

               (v) Facility Guarantees duly executed and delivered by Parent and
          each Restricted Subsidiary;

               (vi) such financing  statements  (including,  without limitation,
          the financing  statements  referenced in subclause (ii) above) in form
          and substance  acceptable to Administrative Agent and executed by each
          Credit Party (as applicable) as Administrative  Agent shall specify to
          fully evidence and perfect all Liens  contemplated by the Loan Papers,
          all of  which  shall  be  filed of  record  in such  jurisdictions  as
          Administrative Agent shall require in its sole discretion;

               (vii) a copy of the  articles or  certificate  of  incorporation,
          certificate of organization,  or comparable charter documents, and all
          amendments  thereto,  of each Credit Party (after giving effect to the
          Restructuring  Transactions)  accompanied  by a certificate  that such
          copy is true, correct and complete,  and dated within ten (10) days of
          the  Closing  Date (or  within  such  other  period as  acceptable  to
          Administrative   Agent),   issued  by  the  appropriate   Governmental
          Authority of the  jurisdiction  of  incorporation  of each such Credit
          Party, and accompanied by a certificate of the Secretary or comparable
          Authorized  Officer of each such Credit  Party that such copy is true,
          correct and complete on the Closing Date;

               (viii) a copy of the bylaws,  regulations  or comparable  charter
          documents,  and all  amendments  thereto,  of each Credit Party (after
          giving  effect to the  Restructuring  Transactions)  accompanied  by a
          certificate of the Secretary or comparable  Authorized Officer of each
          such Credit  Party that such copy is true,  correct and complete as of
          Closing Date;

               (ix)  certain  certificates  and  other  documents  issued by the
          appropriate   Governmental   Authorities  of  such   jurisdictions  as
          Administrative   Agent  has   requested   (or  such   other   evidence
          satisfactory  to  Administrative  Agent)  relating to the existence of
          each Credit  Party and to the effect that each such Credit Party is in
          good  standing  with respect to the payment of  franchise  and similar
          Taxes and is duly qualified to transact business in such jurisdictions
          (in each case after giving effect to the Restructuring Transactions);

               (x) a  certificate  of  incumbency of all officers of each Credit
          Party who will be  authorized  to execute or attest to any Loan Paper,
          dated the  Closing  Date,  executed  by the  Secretary  or  comparable
          Authorized Officer of each such Credit Party;

               (xi) copies of resolutions or comparable authorizations approving
          the Closing  Transactions,  Closing  Documents  and Loan  Papers,  and
          authorizing the transactions contemplated by this Agreement, the other
          Loan Papers and the Closing  Documents,  duly  adopted by the Board of
          Directors (or comparable  authority) of each Credit Party  accompanied
          by  certificates  of the Secretary or comparable  officer of each such
          Credit  Party  that  such  copies  are  true  and  correct  copies  of
          resolutions  duly  adopted  at  a  meeting  of  or  (if  permitted  by

                                       39
<PAGE>

          applicable  Law  and,  if  required  by such  Law,  by the  bylaws  or
          comparable charter documents of each such Credit Party, as applicable)
          by the  unanimous  written  consent  of the  Board  of  Directors  (or
          comparable  authority) of each such Credit Party,  as applicable,  and
          that such  resolutions  constitute  all the  resolutions  adopted with
          respect to such  transactions,  have not been  amended,  modified,  or
          revoked  in any  respect,  and are in full  force and effect as of the
          Closing Date;

               (xii) an opinion of Jenkens & Gilchrist,  P.C.,  special  counsel
          for the Credit Parties dated the Closing Date, favorably opining as to
          the  enforceability  of each of the Loan Papers and  otherwise in form
          and substance satisfactory to Administrative Agent and Banks;

               (xiii) an opinion of Casten & Pearce,  special  Louisiana counsel
          for Administrative  Agent dated the Closing Date, favorably opining as
          to the  enforceability  of the Existing  Mortgages  (as amended by the
          Amendments  to  Mortgages),   the  Mortgages  and  the  Amendments  to
          Mortgages  in   Louisiana   and   otherwise  in  form  and   substance
          satisfactory to Administrative Agent and Banks;

               (xiv) an opinion of Young, Williams,  Henderson & Fuselier, P.A.,
          special Mississippi counsel for Administrative Agent dated the Closing
          Date,  favorably  opining  as to the  enforceability  of the  Existing
          Mortgages (as amended by the Amendments to  Mortgages),  the Mortgages
          and the Amendments to Mortgages in  Mississippi  and otherwise in form
          and substance satisfactory to Administrative Agent and Banks;

               (xv) a certificate  signed by an  Authorized  Officer of Borrower
          stating that (A) the representations and warranties  contained in this
          Agreement  and the  other  Loan  Papers  are true and  correct  in all
          respects,  (B) no  Default  or Event of Default  has  occurred  and is
          continuing,  and (C) all  conditions set forth in this Section 7.1 and
          Section 7.2 have been satisfied;

               (xvi)  a  Certificate  of  Ownership   Interests   signed  by  an
          Authorized  Officer of Borrower  (after  giving  effect to the Closing
          Transactions) in the form of Exhibit I attached hereto;

               (xvii)  certificates  from  Borrower's  insurance  broker setting
          forth  the  insurance  maintained  by  Borrower,   stating  that  such
          insurance is in full force and effect, that all premiums due have been
          paid and stating that such insurance is adequate and complies with the
          requirements of Section 9.6; and

               (xviii) a copy of each Closing  Document  and all other  material
          documents, instruments and agreements executed and/or delivered by any
          Credit Party in  connection  with the Closing  Transactions,  together
          with a certificate from an Authorized  Officer of Borrower  certifying
          that such copies are accurate and complete and  represent the complete
          understanding and agreement of the parties with respect to the subject
          matter thereof.

                                       40
<PAGE>

          (b)  Closing  Transactions.  Subject  only  to  the  disbursement  and
     application of the initial Borrowing,  the Closing  Transactions shall have
     occurred (or Administrative Agent shall be satisfied that such transactions
     will occur simultaneously with the Closing Date).

          (c) No Material  Adverse Change.  In the sole discretion of each Bank,
     no Material Adverse Change shall have occurred.

          (d) No  Legal  Prohibition.  The  transactions  contemplated  by  this
     Agreement shall be permitted by applicable Law and regulation and shall not
     subject any Agent or any Bank to any material adverse change in its assets,
     liabilities,  financial  condition,  operations or prospects or subject any
     Credit Party to a Material Adverse Change.

          (e) No Litigation.  No litigation,  arbitration or similar  proceeding
     shall be pending or  threatened  which calls into  question the validity or
     enforceability of this Agreement, the other Loan Papers or the transactions
     contemplated hereby or thereby.

          (f) Closing Fees. Borrower shall have paid to Administrative Agent for
     the  ratable  benefit of each Bank,  and shall have paid to  Administrative
     Agent and its Affiliates (for its own account),  the fees to be paid on the
     Closing Date pursuant to Section 3.12.

          (g) Organizational Structure. Each Bank shall be satisfied in its sole
     judgment with the organizational,  capital,  legal and management structure
     and tax  liabilities  of each  Credit  Party both  before and after  giving
     effect to the Restructuring Transactions.

          (h) Other Matters.  All matters related to this  Agreement,  the other
     Loan Papers,  the Credit  Parties,  the Closing  Documents  and the Closing
     Transactions  shall be acceptable to each Bank in its sole discretion,  and
     each Credit  Party shall have  delivered to  Administrative  Agent and each
     Bank such  evidence  as they shall  request  to  substantiate  any  matters
     related to this Agreement,  the other Loan Papers, the Credit Parties,  the
     Closing Documents and the Closing  Transactions as Administrative  Agent or
     any Bank shall request.

          Upon  satisfaction of each of the conditions set forth in this Section
     7.1,  Parent,   Borrower  and   Administrative   Agent  shall  execute  the
     Certificate  of  Effectiveness.  Upon the  execution  and  delivery  of the
     Certificate  of   Effectiveness,   the  Existing  Credit   Agreement  shall
     automatically and completely be amended and restated on the terms set forth
     herein  without  necessity of any other action on the part of any Bank, any
     Agent, Parent or Borrower.  Until execution and delivery of the Certificate
     of Effectiveness,  the Existing Credit Agreement shall remain in full force
     and  effect in  accordance  with its  terms.  Each Bank  hereby  authorizes
     Administrative  Agent to execute the  Certificate of  Effectiveness  on its
     behalf and acknowledges and agrees that the execution of the Certificate of
     Effectiveness by Administrative Agent shall be binding on each such Bank.

     Section 7.2  Conditions to Each  Borrowing  and each Letter of Credit.  The
obligation of each Bank to loan its Commitment  Percentage of each Borrowing and
the obligation of any Letter of Credit Issuer to issue,  extend,  amend or renew
any  Letter  of Credit  on the date  such  Letter  of  Credit  is to be  issued,
extended,  amended or renewed is  subject  to the  further  satisfaction  of the
following conditions:

                                       41
<PAGE>

          (a) timely receipt by Administrative  Agent of a Request for Borrowing
     or a Request for Letter of Credit (as applicable);

          (b)  immediately  before and after giving effect to such  Borrowing or
     issuance  of such  Letter of Credit,  no Default or Event of Default  shall
     have  occurred and be continuing  and the funding of such  Borrowing or the
     issuance of the requested Letter of Credit (as applicable)  shall not cause
     a Default or Event of Default;

          (c) the  representations and warranties of each Credit Party contained
     in this  Agreement  and the other Loan Papers  shall be true and correct on
     and as of the date of such  Borrowing  or issuance of such Letter of Credit
     (as applicable);

          (d)  the  amount  of the  requested  Borrowing  or the  amount  of the
     requested   Letter  of  Credit  (as   applicable)   shall  not  exceed  the
     Availability;

          (e) no Material Adverse Change shall have occurred; and

          (f) the funding of such  Borrowing  or the  issuance of such Letter of
     Credit (as applicable) shall be permitted by applicable Law.

          The  funding of each  Borrowing  and the  issuance  of each  Letter of
     Credit  hereunder  shall be deemed to be a  representation  and warranty by
     Borrower  on the date of such  Borrowing  and the date of  issuance of each
     Letter of  Credit  as to the facts  specified  in  Section  7.2(b)  through
     Section 7.2(e).

     Section 7.3  Agreements  Regarding  Initial  Borrowing.  Parent,  Borrower,
Administrative  Agent and each Bank  acknowledge  that all the  proceeds  of the
initial  Borrowing to be made on the Closing Date are to be applied to refinance
in full all Obligations  outstanding under and as defined in the Existing Credit
Agreement  (the  "Refinancing  Borrowing").  Administrative  Agent and each Bank
hereby waive the  requirements of Section 3.2(a) and Section 7.2(a) with respect
to the  Refinancing  Borrowing  to the  extent,  but  only to the  extent,  such
Sections  require  the  delivery  of a  Request  for  Borrowing  as a  condition
precedent to the  obligation of each Bank to loan its  Commitment  Percentage of
each Borrowing.  Each Bank,  Administrative  Agent,  Parent and Borrower further
acknowledge and agree that,  notwithstanding  the contrary provisions of Section
3.2(c),  each Bank shall only be  required  to fund as part of such  Refinancing
Borrowing  the  remainder,  if any (and as  applicable),  of (a) its  Commitment
Percentage of such Refinancing Borrowing,  minus (b) the amount it is to receive
as a result of the application of the proceeds of the  Refinancing  Borrowing to
refinance  all  obligations  outstanding  under and as defined  in the  Existing
Credit Agreement.

     Section 7.4 Materiality of Conditions.  Each condition  precedent herein is
material to the transactions  contemplated herein, and time is of the essence in
respect of each thereof.

                                       42
<PAGE>

                                  Article VIII
                         REPRESENTATIONS AND WARRANTIES

     Parent  and  Borrower  jointly  and  severally  represent  and  warrant  to
Administrative Agent and each Bank that each of the following statements is true
and  correct  on the  date  hereof  (and  after  giving  effect  to the  Closing
Transactions),  and will be true and correct on the occasion of each  Borrowing,
the issuance of each Letter of Credit and the  consummation of the  Post-Closing
Transactions  (except to the extent  such  representations  and  warranties  are
expressly made as of a particular date, in which event such  representations and
warranties shall be true and correct as of such date):

     Section 8.1  Corporate  Existence  and Power.  Each  Credit  Party (a) is a
corporation,  partnership  or limited  liability  company duly  incorporated  or
organized (as applicable),  validly existing and in good standing under the Laws
of its jurisdiction of  incorporation  or  organization,  (b) has all corporate,
partnership or limited  liability company power (as applicable) and all material
governmental licenses, authorizations,  consents and approvals required to carry
on its  businesses as now conducted and as proposed to be conducted,  and (c) is
duly  qualified to transact  business as a foreign  corporation,  partnership or
limited liability  company (as applicable) in each jurisdiction  where a failure
to be so qualified could have a Material Adverse Effect.

     Section 8.2 Credit Party and Governmental Authorization; Contravention. The
execution,  delivery and performance of this Agreement and the other Loan Papers
by each  Credit  Party  (to the  extent  each  Credit  Party  is a party to this
Agreement  and such Loan  Papers)  are within  such  Credit  Party's  corporate,
partnership or limited liability  company powers (as applicable),  when executed
will be duly  authorized  by all  necessary  corporate,  partnership  or limited
liability company action (as applicable), require no action by or in respect of,
or filing with, any Governmental Authority (including,  without limitation, Bond
Issuer) and do not contravene,  or constitute a default under,  any provision of
applicable Law (including, without limitation, the Margin Regulations) or of the
articles or  certificate  of  incorporation,  bylaws,  regulations,  partnership
agreement  or  comparable  charter  documents  of  any  Credit  Party  or of any
agreement,  judgment,  injunction, order, decree or other instrument (including,
without limitation,  the Bond Documents) binding upon any Credit Party or result
in the creation or imposition of any Lien on any asset of any Credit Party other
than the Liens securing the Obligations.

     Section 8.3 Binding Effect. This Agreement  constitutes a valid and binding
agreement  of Parent and  Borrower;  the other Loan  Papers  when  executed  and
delivered in accordance with this Agreement,  will constitute  valid and binding
obligations of each Credit Party  executing the same; and each Loan Paper is, or
when  executed and  delivered,  will be,  enforceable  against each Credit Party
which  executes  the  same  in  accordance  with  its  terms  except  as (a) the
enforceability thereof may be limited by bankruptcy,  insolvency or similar Laws
affecting  creditors  rights  generally,  and (b) the  availability of equitable
remedies may be limited by equitable principles of general applicability.

                                       43
<PAGE>

     Section 8.4 Financial Information

          (a) The Current  Financials  fairly present,  in conformity with GAAP,
     the consolidated financial position of Former Borrower and its consolidated
     results of  operations  and cash flows as of the dates and for the  periods
     covered thereby.

          (b) The most  recent  annual  audited  consolidated  balance  sheet of
     Parent and the related consolidated statements of operations and cash flows
     for the Fiscal Year then ended, copies of which have been delivered to each
     Bank, fairly present,  in conformity with GAAP, the consolidated  financial
     position of Parent as of the end of such  Fiscal Year and its  consolidated
     results of operations and cash flows for such Fiscal Year.

          (c) The most recent quarterly unaudited  consolidated balance sheet of
     Parent  delivered  to  Banks,  and  the  related   unaudited   consolidated
     statements of operations and cash flows for the portion of Parent's  Fiscal
     Year then ended, fairly present, in conformity with GAAP applied on a basis
     consistent with the financial statements referred to in Section 8.4(a), the
     consolidated  financial  position  of  Parent  as  of  such  date  and  its
     consolidated  results  of  operations  and cash  flows for such  portion of
     Parent's Fiscal Year.

          (d) Except as disclosed in writing to Banks prior to the execution and
     delivery of this Agreement, since the date of Former Borrower's most recent
     annual and quarterly consolidated balance sheet and consolidated statements
     of operations and cash flow delivered to Banks,  there has been no material
     adverse change in the assets,  liabilities,  financial position, results of
     operations or prospects of any Credit Party.

     Section 8.5  Litigation.  Except for  matters  disclosed  on  Schedule  8.5
attached hereto,  there is no action,  suit or proceeding pending against, or to
the  knowledge of any Credit Party,  threatened  against or affecting any Credit
Party  before  any  Governmental  Authority  in  which  there  is  a  reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
which could in any manner draw into question the validity of the Loan Papers.

     Section 8.6 ERISA.  No Credit  Party nor any ERISA  Affiliate of any Credit
Party  maintains or has ever  maintained or been  obligated to contribute to any
Plan  covered  by Title IV of ERISA or subject to the  funding  requirements  of
section 412 of the Code or section  302 of ERISA.  Each Plan  maintained  by any
Credit Party or any ERISA  Affiliate of any Credit Party is in compliance in all
material  respects with all applicable  Laws.  Except in such instances where an
omission or failure would not have a Material  Adverse Effect,  (a) all returns,
reports and notices required to be filed with any regulatory agency with respect
to any Plan  have  been  filed  timely,  and (b) no  Credit  Party nor any ERISA
Affiliate  of any Credit  Party has failed to make any  contribution  or pay any
amount due or owing as required  by the terms of any Plan.  There are no pending
or,  to the  best  of  Parent's  or  Borrower's  knowledge,  threatened  claims,
lawsuits,  investigations  or actions (other than routine claims for benefits in
the ordinary course) asserted or instituted against, and no Credit Party nor any
ERISA  Affiliate of any Credit Party has knowledge of any threatened  litigation
or claims  against,  the assets of any Plan or its related  trust or against any
fiduciary of a Plan with  respect to the  operation of such Plan that are likely
to result in liability of any Credit  Party  having a Material  Adverse  Effect.

                                       44
<PAGE>

Except in such instances  where an omission or failure would not have a Material
Adverse Effect,  each Plan that is intended to be "qualified" within the meaning
of  section  401(a) of the Code is,  and has been  during  the  period  from its
adoption to date, so qualified,  both as to form and operation and all necessary
governmental   approvals,   including  a  favorable   determination  as  to  the
qualification under the Code of such Plan and each amendment thereto,  have been
or will be timely  obtained.  No Credit  Party  nor any ERISA  Affiliate  of any
Credit Party has engaged in any prohibited  transactions,  within the meaning of
section 406 of ERISA or section 4975 of the Code,  in  connection  with any Plan
which would result in  liability  of any Credit Party having a Material  Adverse
Effect. No Credit Party nor any ERISA Affiliate of any Credit Party maintains or
contributes to any Plan that provides a  post-employment  health benefit,  other
than a benefit  required under section 601 of ERISA, or maintains or contributes
to a Plan that  provides  health  benefits that is not fully funded except where
the failure to fully fund such Plan would not have a Material Adverse Effect. No
Credit  Party  nor any  ERISA  Affiliate  of any  Credit  Party  maintains,  has
established or has ever  participated  in a multiple  employer  welfare  benefit
arrangement within the meaning of section 3(40)(A) of ERISA.

     Section 8.7 Taxes and Filing of Tax  Returns.  Each Credit  Party has filed
all tax  returns  required to have been filed and has paid all Taxes shown to be
due and payable on such returns, including interest and penalties, and all other
Taxes which are  payable by such  party,  to the extent the same have become due
and  payable,  other than Taxes with respect to which a failure to pay would not
have a Material Adverse Effect.  No Credit Party knows of any proposed  material
Tax  assessment  against it and all Tax  liabilities  of each  Credit  Party are
adequately  provided  for.  Except as disclosed in writing to Banks prior to the
date  hereof,  no income tax  liability in excess of $50,000 of any Credit Party
has  been  asserted  by the  Internal  Revenue  Service  or  other  Governmental
Authority for Taxes in excess of those already paid.

     Section 8.8 Ownership of Properties  Generally.  Each Credit Party has good
and valid fee simple or leasehold  title to all material  properties  and assets
purported to be owned by it, including, without limitation, all assets reflected
in the balance sheets referred to in Section 8.4(a),  Section 8.4(b) and Section
8.4(c) and all assets which are used by the Credit  Parties in the  operation of
their respective businesses, and none of such properties or assets is subject to
any Lien other than Permitted Encumbrances.

     Section 8.9 Mineral  Interests.  Each Credit Party (as applicable) has good
and defensible title to all Mineral  Interests  described in the Reserve Report,
including,  without limitation, all Borrowing Base Properties, free and clear of
all Liens except Permitted Encumbrances and Immaterial Title Deficiencies.  With
the exception of Immaterial Title  Deficiencies,  all such Mineral Interests are
valid, subsisting, and in full force and effect, and all rentals, royalties, and
other  amounts due and payable in respect  thereof have been duly paid.  Without
regard to any consent or non-consent provisions of any joint operating agreement
covering  any of such Credit  Party's  Proved  Mineral  Interests,  and with the
exception of Immaterial Title Deficiencies,  each Credit Party's (as applicable)
share of (a) the costs for each Proved Mineral Interest described in the Reserve
Report is not greater than the decimal fraction set forth in the Reserve Report,
before  and after  payout,  as the case may be,  and  described  therein  by the
respective  designations  "working  interests," "WI," "gross working  interest,"
"GWI," or similar terms, and (b) production from, allocated to, or attributed to
each such Proved  Mineral  Interest is not less than the  decimal  fraction  set
forth in the Reserve  Report,  before and after payout,  as the case may be, and

                                       45

<PAGE>

described therein by the designations "net revenue  interest," "NRI," or similar
terms. Except in the case of wells which, in the aggregate,  represent less than
two percent (2%) of the production from the Proved Producing  Mineral  Interests
described  in the Reserve  Report,  each well  drilled in respect of each Proved
Producing  Mineral  Interest  described in the Reserve Report (y) is capable of,
and is presently,  producing hydrocarbons in commercially profitable quantities,
and each Credit Party (as  applicable) is currently  receiving  payments for its
share of  production,  with no funds in respect of any thereof  being  presently
held in  suspense,  other than any such funds  being  held in  suspense  pending
delivery of appropriate  division  orders,  and (z) has been drilled,  bottomed,
completed,  and operated in compliance with all applicable Laws and no such well
which  is  currently  producing  Hydrocarbons  is  subject  to  any  penalty  in
production  by reason of such well having  produced  in excess of its  allowable
production.

     Section 8.10 Licenses,  Permits,  Etc. Except as disclosed on Schedule 8.10
attached hereto, each Credit Party possesses such valid franchises, certificates
of convenience and necessity,  operating rights,  licenses,  permits,  consents,
authorizations,  exemptions  and  orders  of  Governmental  Authorities,  as are
necessary  to carry on its  business  as now  conducted  and as  proposed  to be
conducted, except to the extent a failure to obtain any such item would not have
a Material Adverse Effect.

     Section 8.11  Compliance  with Law. The  business  and  operations  of each
Credit Party have been and are being conducted in accordance with all applicable
Laws  other  than  violations  of Laws  which  do not  (either  individually  or
collectively) have a Material Adverse Effect.

     Section 8.12 Full Disclosure.  All information heretofore furnished by each
Credit  Party  to  Administrative  Agent  or  any  Bank  for  purposes  of or in
connection with this  Agreement,  any Loan Paper,  any transaction  contemplated
hereby or thereby, or the Closing Transactions or the Post-Closing  Transactions
is, and all such information  hereafter  furnished by or on behalf of any Credit
Party to Administrative  Agent or any Bank will be, true,  complete and accurate
in every material  respect.  The Credit Parties have disclosed or have caused to
be  disclosed to Banks in writing any and all facts (other than facts of general
public  knowledge)  which might  reasonably  be expected to result in a Material
Adverse Change.

     Section 8.13  Organizational  Structure;  Nature of  Business.  Parent is a
holding  company owning one hundred percent (100%) of the issued and outstanding
Equity in Offshore (prior to the consummation of the Post-Closing Transactions),
Operating and DG&M. Parent has no direct,  wholly-owned  Subsidiaries other than
Offshore (prior to the consummation of the Post-Closing Transactions), Operating
and DG&M. Marine, Offshore, Borrower and TRF have no Subsidiaries.  Operating is
a holding  company  owning one hundred  percent  (100%) of the Equity in Marine,
Borrower  and  TRF  (and,  from  and  after  consummation  of  the  Post-Closing
Transactions,  Offshore).  Operating  has no direct,  wholly-owned  Subsidiaries
other than Marine,  Borrower and TRF (and,  from and after  consummation  of the
Post-Closing Transactions,  Offshore). Borrower and Offshore are engaged only in
the business of acquiring, exploring, developing and operating Mineral Interests
and the production and marketing of  hydrocarbons  therefrom.  Marine is engaged
only in the  business of marine oil field  services.  DG&M is a holding  company

                                       46
<PAGE>

owning  one  hundred  percent  (100%) of the issued  and  outstanding  Equity in
Genesis Energy.  TRF temporarily  holds unproved Mineral Interests which will be
transferred  and  conveyed to Borrower  after the Closing  Date.  Schedule  8.13
attached hereto  accurately  reflects (a) the  jurisdiction of  incorporation or
organization  of each Credit Party,  (b) each  jurisdiction in which each Credit
Party is  qualified  to  transact  business  as a foreign  corporation,  foreign
partnership or foreign limited liability company, (c) the authorized, issued and
outstanding  Equity of each  Credit  Party,  and (d) all  outstanding  warrants,
options, subscription rights, convertible securities or other rights to purchase
Equity of each Credit Party.

     Section  8.14  Environmental  Matters.  Except  for  matters  disclosed  on
Schedule 9.10 attached hereto, no operation conducted by any Credit Party and no
real or personal  property now or previously owned or leased by any Credit Party
(including,  without  limitation,  any Credit Party's Mineral  Interests) and no
operations  conducted  thereon,  and  to  any  Credit  Parties'  knowledge,   no
operations of any prior owner, lessee or operator of any such properties,  is or
has been in violation of any Applicable  Environmental Law other than violations
which neither  individually  nor in the aggregate  will have a Material  Adverse
Effect. Except for matters disclosed on Schedule 9.10 attached hereto, no Credit
Party,  nor any such  property  nor  operation  is the subject of any  existing,
pending or, to any Credit Parties' knowledge, threatened Environmental Complaint
which could,  individually or in the aggregate,  have a Material Adverse Effect.
All  notices,  permits,  licenses,  and similar  authorizations,  required to be
obtained  or  filed  in  connection  with the  ownership  of each  tract of real
property or  operations  of any Credit  Party  thereon and each item of personal
property  owned,  leased or operated  by any Credit  Party,  including,  without
limitation, notices, licenses, permits and authorizations required in connection
with any past or present treatment,  storage,  disposal, or release of Hazardous
Substances into the environment,  have been duly obtained or filed except to the
extent  the  failure  to obtain  or file such  notices,  licenses,  permits  and
authorizations   would  not  have  a  Material  Adverse  Effect.  All  Hazardous
Substances,  generated  at each  tract  of  real  property  and by each  item of
personal  property  owned,  leased or  operated  by any  Credit  Party have been
transported, treated, and disposed of only by carriers or facilities maintaining
valid  permits  under RCRA (as  hereinafter  defined)  and all other  Applicable
Environmental Laws for the conduct of such activities except in such cases where
the failure to obtain such permits would not,  individually or in the aggregate,
have a Material  Adverse Effect.  Except for matters  disclosed on Schedule 9.10
attached  hereto,  there  have been no  Hazardous  Discharges  which were not in
compliance with  Applicable  Environmental  Laws other than Hazardous  Discharge
which  would not,  individually  or in the  aggregate,  have a Material  Adverse
Effect. Except for matters disclosed on Schedule 9.10 attached hereto, no Credit
Party has any contingent  liability in connection  with any Hazardous  Discharge
which could reasonably be expected to have a Material Adverse Effect. As used in
this Section  8.14,  the term "RCRA" shall mean the  Resource  Conservation  and
Recovery  Act of 1976,  as amended by the Used Oil  Recycling  Act of 1980,  the
Solid Waste  Recovery Act of 1976, as amended by the Solid Waste Disposal Act of
1980,  and the Hazardous and Solid Waste  Amendments of 1984, as the same may be
further amended and in effect from time to time.

     Section  8.15  Burdensome  Obligations.  No  Credit  Party,  nor any of the
properties  of any  Credit  Party,  is  subject  to any  Law or any  pending  or
threatened  change of Law or subject to any  restriction  under its articles (or
certificate) of incorporation,  bylaws,  regulations,  partnership  agreement or
comparable  charter  documents or under any agreement or instrument to which any
Credit  Party or by which any  Credit  Party or any of their  properties  may be
subject  or bound,  which is so  unusual  or  burdensome  as to be likely in the
foreseeable  future to have a Material  Adverse  Effect.  Without  limiting  the

                                       47
<PAGE>

foregoing,  no Credit Party is a party to or bound by any agreement  (other than
the Loan  Papers) or subject to any order of any  Governmental  Authority  which
prohibits  or  restricts  in any  way the  right  of such  Credit  Party  or any
Restricted Subsidiary of any Credit Party to make Distributions.

     Section 8.16 Fiscal Year.  Each of Parent's and  Borrower's  Fiscal Year is
January 1 through December 31.

     Section  8.17 No  Default.  Neither a Default  nor an Event of Default  has
occurred or will exist after giving effect to the  transactions  contemplated by
this  Agreement,  the  other  Loan  Papers,  the  Closing  Transactions  or  the
Post-Closing Transactions.

     Section  8.18  Government  Regulation.   No  Credit  Party  is  subject  to
regulation  under the Public  Utility  Holding  Company Act of 1935, the Federal
Power Act, the  Interstate  Commerce Act (as any of the preceding acts have been
amended),  the Investment  Company Act of 1940 or any other Law which  regulates
the incurring by such Credit Party of Debt,  including,  but not limited to Laws
relating to common  contract  carriers or the sale of  electricity,  gas, steam,
water or other public utility services.

     Section 8.19 Insider.  No Credit Party is, and no Person  having  "control"
(as that term is defined in 12 U.S.C. section 375(b) or regulations  promulgated
thereunder)  of any  Credit  Party  is an  "executive  officer,"  "director"  or
"shareholder"  of any Bank or any bank  holding  company  of which any Bank is a
Subsidiary or of any Subsidiary of such bank holding company.

     Section 8.20 Gas Balancing Agreements and Advance Payment Contracts. On the
date of this  Agreement,  (a) there is no Material  Gas  Imbalance,  and (b) the
aggregate  amount of all Advance  Payments  received  by any Credit  Party under
Advance  Payment  Contracts  (excluding  the advance  payment of carbon  dioxide
pursuant to the  Genesis  VPP  Transactions)  which have not been  satisfied  by
delivery of production does not exceed $2,000,000.

     Section 8.21 Bond Documents.  Borrower (or Former Borrower) has provided to
Administrative  Agent a true and  correct  copy of each of the  Bond  Documents,
including all amendments and modifications thereto (whether  characterized as an
amendment,  modification,  waiver,  consent or similar  document).  No  material
rights or obligations of any party to any of the Bond Documents have been waived
and no party to any of the Bond Documents is in default of its obligations or in
breach of any  representations  or warranties made thereunder.  Each of the Bond
Documents is a valid,  binding and  enforceable  obligation of Borrower and each
other  party  thereto  in  accordance  with its terms  and is in full  force and
effect. As used in this Agreement, the term "Obligations" shall include, without
limitation,  any and  all  obligations,  indebtedness  and  liabilities  owed by
Borrower or any other Credit  Party to Bond  Purchaser  (whether  directly or as
assignee  of  Bond  Issuer)  under  the  Bond  Documents,   which   obligations,
indebtedness and liabilities shall be secured by Liens on all property described
as collateral  security for the  Obligations in accordance  with and pursuant to
the Mortgages and the other Loan Papers.  Each  representation and warranty made
by Borrower and each other party in the Bond  Documents will be true and correct
on the date of each Borrowing or issuance of a Letter of Credit. Borrower hereby
acknowledges,  agrees and confirms  that it has assumed (by  operation of law or
otherwise) all debt, liabilities and obligations, and agreed to perform, as sole
and  primary  obligor,  all  obligations,  of  Former  Borrower  under  the Bond
Documents.

                                       48
<PAGE>

     Section 8.22  Closing  Documents.  Borrower has provided to  Administrative
Agent a true and correct copy of each of the Closing  Documents,  including  all
amendments and  modifications  thereto  (whether  characterized as an amendment,
modification,  waiver,  consent  or similar  document).  No  material  rights or
obligations of any party to any of the Closing Documents have been waived and no
party to any of the Closing  Documents  is in default of its  obligations  or in
breach of any representations or warranties made thereunder. Each of the Closing
Documents is a valid,  binding and enforceable  obligation of each party thereto
in accordance with its terms and is in full force and effect.

                                   Article IX
                              AFFIRMATIVE COVENANTS

     Parent and Borrower jointly and severally  covenant and agree that, so long
as any Bank has any  commitment  to lend or  participate  in  Letter  of  Credit
Exposure  hereunder or any amount  payable under any Note remains  unpaid or any
Letter of Credit remains outstanding:

     Section 9.1 Information.  Parent will deliver, or cause to be delivered, to
each Bank:

          (a) as soon as available and in any event within (i) seventy-five (75)
     days after the end of the Fiscal Year ending  December 31,  2003,  and (ii)
     sixty (60) days after the end of each Fiscal Year thereafter,  consolidated
     balance  sheets of Parent as of the end of such Fiscal Year and the related
     consolidated  statements  of income  and  statements  of cash flow for such
     Fiscal Year, setting forth in each case in comparative form the figures for
     the previous  Fiscal Year,  all reported by Parent in accordance  with GAAP
     and  audited by a firm of  independent  public  accountants  of  nationally
     recognized  standing and acceptable to Administrative  Agent; to the extent
     Parent's Form of 10-K filed with the Securities and Exchange Commission for
     each Fiscal Year contains all information  required by this Section 9.1(a),
     Parent may  satisfy  its  obligations  under this  Section  9.1(a) for each
     Fiscal Year by delivering to Banks a copy of such Form 10-K for such Fiscal
     Year;

          (b) as soon as  available  and in any event within (i) forty (40) days
     after the end of each of the first three (3) Fiscal  Quarters of the Fiscal
     Year ending December 31, 2004, and (ii) thirty-five (35) days after the end
     of each of the  first  three  (3)  Fiscal  Quarters  of  each  Fiscal  Year
     thereafter,  consolidated  balance  sheets  of Parent as of the end of such
     Fiscal  Quarter  and the  related  consolidated  statements  of income  and
     statements  of cash flow for such  quarter  and for the portion of Parent's
     Fiscal Year ended at the end of such Fiscal Quarter,  setting forth in each
     case in comparative form the figures for the corresponding  quarter and the
     corresponding  portion of  Parent's  previous  Fiscal  Year;  to the extent
     Parent's Form 10-Q filed with the  Securities  and Exchange  Commission for
     each Fiscal  Quarter  contains  all  information  required by this  Section
     9.1(b),  Parent may satisfy its  obligations  under this Section 9.1(b) for
     each  Fiscal  Quarter by  delivering  to Banks a copy of such Form 10-Q for
     such Fiscal Quarter.  All financial  statements  delivered pursuant to this
     Section 9.1(b) shall be certified as to fairness of presentation,  GAAP and
     consistency by a Financial Officer of Parent;

          (c)  simultaneously  with  the  delivery  of  each  set  of  financial
     statements  referred to in Section  9.1(a) and Section 9.1(b) a certificate

                                       49
<PAGE>

     of the principal  executive and Financial  Officer of Parent in the form of
     Exhibit J attached  hereto,  (i)  setting  forth in  reasonable  detail the
     calculations  required to establish  whether Parent was in compliance  with
     the  requirements  of Article XI on the date of such financial  statements,
     (ii)  stating  whether  there  exists on the date of such  certificate  any
     Default and, if any Default then exists,  setting forth the details thereof
     and the action  which Parent or Borrower is taking or proposes to take with
     respect  thereto,  (iii) stating  whether or not such financial  statements
     fairly  reflect in all  material  respects  the results of  operations  and
     financial  condition  of  Parent  as of the  date of the  delivery  of such
     financial statements and for the period covered thereby, (iv) setting forth
     (A) whether as of such date there is a Material Gas  Imbalance  and, if so,
     setting  forth  the  amount  of net  gas  imbalances  under  Gas  Balancing
     Agreements  to which any  Credit  Party is a party or by which any  Mineral
     Interests owned by any Credit Party is bound,  and (B) the aggregate amount
     of all Advance Payments  received under Advance Payment  Contracts to which
     any Credit Party is a party or by which any Mineral  Interests owned by any
     Credit  Party  is  bound  which  have not been  satisfied  by  delivery  of
     production,  if any, (v) setting forth a summary of the Hedge  Transactions
     to which any Credit Party is a party on such date,  and (vi) setting  forth
     the other information described in Exhibit J attached hereto;

          (d)  promptly  upon the  mailing  thereof to the  stockholders  of any
     Credit Party  generally,  copies of all financial  statements,  reports and
     proxy statements so mailed;

          (e) promptly upon the filing thereof, copies of all final registration
     statements,  post  effective  amendments  thereto and annual,  quarterly or
     special reports which any Credit Party shall have filed with the Securities
     and Exchange Commission; provided, that Parent must deliver, or cause to be
     delivered,  (i) any annual  reports which any Credit Party shall have filed
     with the Securities and Exchange  Commission,  within (A) seventy-five (75)
     days after the end of the Fiscal Year of such Credit Party ending  December
     31, 2003, and (B) sixty (60) days after the end of each Fiscal Year of each
     Credit Party  thereafter,  and (ii) any quarterly  reports which any Credit
     Party shall have filed with the Securities and Exchange Commission,  within
     (A) forty  (40) days  after the end of each of the first  three (3)  Fiscal
     Quarters of the Fiscal Year of such Credit Party ending  December 31, 2004,
     and (B)  thirty-five  (35) days after the end of the first three (3) Fiscal
     Quarters of each Fiscal Year of such Credit Party thereafter;

          (f)  promptly  upon receipt of same,  any notice or other  information
     received  by any  Credit  Party  indicating  (i) any  potential,  actual or
     alleged  non-compliance  with  or  violation  of  the  requirements  of any
     Applicable  Environmental Law which could result in liability to any Credit
     Party for fines, clean up or any other remediation obligations or any other
     liability in excess of $1,000,000  in the  aggregate;  (ii) any  threatened
     Hazardous  Discharge which  Hazardous  Discharge would impose on any Credit
     Party a duty to report to a Governmental  Authority or to pay cleanup costs
     or to take remedial  action under any  Applicable  Environmental  Law which
     could result in liability to any Credit Party for fines, clean up and other
     remediation  obligations or any other  liability in excess of $1,000,000 in
     the  aggregate;  or (iii)  the  existence  of any Lien  arising  under  any
     Applicable Environmental Law securing any obligation to pay fines, clean up
     or other  remediation  costs or any other liability in excess of $1,000,000
     in the aggregate.  Without limiting the foregoing,  each Credit Party shall
     provide to Banks  promptly  upon receipt of same by any Credit Party copies
     of all  environmental  consultants  or  engineers  reports  received by any
     Credit Party which would render the  representation  and warranty contained
     in Section 8.14 untrue or inaccurate in any respect;

                                       50
<PAGE>

          (g)  in the  event  any  notification  is  provided  to  any  Bank  or
     Administrative  Agent pursuant to Section  9.1(f) hereof or  Administrative
     Agent or any Bank  otherwise  learns of any event or condition  under which
     any such notice would be required,  then,  upon request of Required  Banks,
     Borrower  shall  within  thirty  (30)  days of such  request,  cause  to be
     furnished   to   Administrative   Agent  and  each  Bank  a  report  by  an
     environmental  consulting  firm  acceptable  to  Administrative  Agent  and
     Required  Banks,  stating  that  a  review  of  such  event,  condition  or
     circumstance has been undertaken (the scope of which shall be acceptable to
     Administrative  Agent and  Required  Banks)  and  detailing  the  findings,
     conclusions and recommendations of such consultant. Borrower shall bear all
     expenses and costs associated with such review and updates thereof;

          (h)  immediately  upon any  Authorized  Officer  of any  Credit  Party
     becoming  aware of the  occurrence  of any  Default,  a  certificate  of an
     Authorized  Officer of Borrower  setting forth the details  thereof and the
     action which Borrower is taking or proposes to take with respect thereto;

          (i) no later than  February 28 and August 31 of each year,  commencing
     February 28, 2004,  reports of production  volumes,  revenue,  expenses and
     product  prices for all oil and gas  properties  owned by any Credit  Party
     with a  Recognized  Value of  $500,000  or more for the  periods of six (6)
     months ending the  preceding  December 31 and June 30,  respectively.  Such
     reports  shall be prepared  on an accrual  basis and shall be reported on a
     field by field basis;

          (j) promptly notify Banks of any Material Adverse Change;

          (k) promptly  notify Banks of any material  litigation  involving  any
     Credit Party; and

          (l)  from  time to time  such  additional  information  regarding  the
     financial position or business of any Credit Party as Administrative Agent,
     at the request of any Bank, may reasonably request.

     Section 9.2 Business of Credit  Parties.  The sole  business of Parent will
continue to be (a) the  issuance of equity and debt  securities  not  prohibited
pursuant to the provisions of this  Agreement,  (b) the ownership of one hundred
percent (100%) of the issued and  outstanding  Equity of Offshore  (prior to the
consummation  of the  Post-Closing  Transactions),  Operating and DG&M,  and (c)
activities  reasonably  related to the  businesses  of Parent  described  in the
foregoing  clauses  (a)  and  (b),  including,  without  limitation,  activities
necessary to comply with the  reporting  requirements  of the Exchange  Act, and
with rules and  regulations  of  applicable  securities  exchanges  or which are
otherwise  incident to being a publicly  traded  company.  The sole  business of
Operating will continue to be the ownership of one hundred percent (100%) of the

                                       51
<PAGE>

issued and outstanding  Equity of Marine,  Borrower and TRF (and, from and after
the consummation of the  Post-Closing  Transactions,  Offshore),  and activities
reasonably  related  thereto.  The sole  business of Borrower and Offshore  will
continue  to be the  acquisition,  exploration,  development  and  operation  of
offshore  Mineral  Interests,  the  production  and  marketing  of  Hydrocarbons
therefrom,  and  activities  reasonably  related  thereto.  The sole business of
Marine will continue to be marine oil field services. DG&M will remain a holding
company owning one hundred percent (100%) of the issued and  outstanding  Equity
in Genesis Energy.  TRF will temporarily  hold unproved Mineral  Interests which
will be transferred and conveyed to Borrower after the Closing Date.

     Section 9.3 Maintenance of Existence.  Parent and Borrower shall, and shall
cause each other Credit Party to, at all times (a) except in connection with the
consummation  of  the   Post-Closing   Transactions,   maintain  its  corporate,
partnership or limited liability company existence in its state of incorporation
or  organization,  and (b)  maintain  its good  standing  and  qualification  to
transact  business  in all  jurisdictions  where the  failure to  maintain  good
standing or  qualification  to transact  business could have a Material  Adverse
Effect; provided, that, TRF may dissolve at any time.

     Section 9.4 Title Data.  In addition to the title  information  required by
Section 6.1(c) hereof, Borrower shall, upon the request of Required Banks, cause
to  be  delivered  to  Administrative   Agent  such  title  opinions  and  other
information  regarding  title to Mineral  Interests owned by any Credit Party as
are appropriate to determine the status thereof; provided,  however, that, Banks
may not require the Credit Parties to furnish title opinions (except pursuant to
Section  6.1(c))  unless (a) an Event of  Default  shall  have  occurred  and be
continuing,  or (b) Required Banks have reason to believe that there is a defect
in or encumbrance  upon any such Credit Party's title to such Mineral  Interests
that is not a Permitted Encumbrance.

     Section 9.5 Right of Inspection.  Parent and Borrower will permit, and will
cause each other  Credit  Party to permit,  any  officer,  employee  or agent of
Administrative  Agent or of any Bank to visit and  inspect  any of the assets of
any Credit Party, examine each Credit Party's books of record and accounts, take
copies and extracts therefrom, and discuss the affairs, finances and accounts of
each Credit Party with such Credit Party's  officers,  accountants and auditors,
all at such reasonable  times and as often as  Administrative  Agent or any Bank
may desire, all at the expense of Borrower.

     Section 9.6  Maintenance  of Insurance.  Parent and Borrower will, and will
cause  each  other  Credit  Party  to,  at all  times  maintain  or  cause to be
maintained   insurance  covering  such  risks  as  are  customarily  carried  by
businesses similarly situated, including, without limitation, the following: (a)
workmen's  compensation  insurance;  (b)  employer's  liability  insurance;  (c)
comprehensive  general  public  liability  and property  damage  insurance;  (d)
insurance  against  (other than losses or damage to property owned by any Credit
Party which is self insured) losses  customarily  insured against as a result of
damage by fire, lightning,  hail, tornado, explosion and other similar risk; and
(e) comprehensive  automobile liability  insurance.  All loss payable clauses or
provisions in all policies of insurance  maintained by any Credit Party pursuant
to this  Section  9.6  shall  be  endorsed  in  favor  of and  made  payable  to
Administrative  Agent for the ratable  benefit of Banks,  as their interests may
appear.  Administrative  Agent shall have the right,  for the ratable benefit of
Banks, to collect, and Parent and Borrower hereby assign to Administrative Agent
for the ratable  benefit of Banks (and hereby  agrees to cause each other Credit
Party to  assign),  any and all monies  that may become  payable  under any such
policies  of  insurance  by  reason of  damage,  loss or  destruction  of any of
property which stands as security for the  Obligations or any part thereof,  and
Administrative Agent may, at its election,  either apply for the ratable benefit
of  Banks  all or any  part  of the  sums so  collected  toward  payment  of the
Obligations,  whether or not such Obligations are then due and payable,  in such
manner  as  Administrative  Agent may elect or  release  same to the  applicable
Credit Party.

                                       52
<PAGE>

     Section 9.7 Payment of Taxes and Claims. Parent and Borrower will, and will
cause each other  Credit  Party to, pay (a) all Taxes  imposed upon it or any of
its assets or with respect to any of its franchises, business, income or profits
before any material penalty or interest  accrues  thereon,  and (b) all material
claims (including, without limitation, claims for labor, services, materials and
supplies)  for sums which have  become due and  payable and which by Law have or
might become a Lien (other than a Permitted  Encumbrance)  on any of its assets;
provided,  however,  no payment of Taxes or claims  shall be required if (i) the
amount,  applicability  or validity thereof is currently being contested in good
faith by  appropriate  action  promptly  initiated and  diligently  conducted in
accordance with good business  practices and no material part of the property or
assets of  Parent  or  Borrower,  and no part of the  assets  of any  Restricted
Subsidiary  which  would be material  to Parent or  Borrower,  is subject to any
pending levy or execution, (ii) Parent, Borrower, and any Restricted Subsidiary,
as and to the extent required in accordance  with GAAP,  shall have set aside on
their books reserves  (segregated to the extent required by GAAP) deemed by them
to be adequate with respect thereto, and (iii) Parent and Borrower have notified
Administrative   Agent  of  such   circumstances,   in  detail  satisfactory  to
Administrative Agent.

     Section 9.8 Compliance  with Laws and Documents.  Parent and Borrower will,
and will cause each  other  Credit  Party to,  comply  with (a) all Laws,  their
respective certificates (or articles) of incorporation,  bylaws, regulations and
similar organizational documents and all Material Agreements to which any Credit
Party is a party,  if a violation,  alone or when  combined  with all other such
violations,  could have a Material Adverse Effect, and (b) all Bond Documents to
which any Credit Party is a party.

     Section 9.9 Operation of Properties and Equipment.

          (a) Parent and Borrower  will,  and will cause each other Credit Party
     to,  maintain,  develop and operate  its  Mineral  Interests  in a good and
     workmanlike  manner,  and  observe  and  comply  with all of the  terms and
     provisions,  express or implied, of all oil and gas leases relating to such
     Mineral  Interests  so  long as  such  Mineral  Interests  are  capable  of
     producing  Hydrocarbons  and  accompanying  elements in paying  quantities,
     except  where  such  failure to comply  would not have a  Material  Adverse
     Effect.

          (b) Parent and Borrower  will,  and will cause each other Credit Party
     to, comply in all respects with all contracts and agreements  applicable to
     or  relating  to  its  Mineral  Interest  or the  production  and  sale  of
     Hydrocarbons and accompanying  elements  therefrom,  except to the extent a
     failure to so comply would not have a Material Adverse Effect.

          (c) Parent and Borrower  will,  and will cause each other Credit Party
     to, at all times maintain,  preserve and keep all operating  equipment used
     with respect to its Mineral  Interests in proper repair,  working order and
     condition,  and  make  all  necessary  or  appropriate  repairs,  renewals,
     replacements,  additions and improvements thereto so that the efficiency of
     such  operating  equipment  shall at all times be  properly  preserved  and
     maintained,  except  where such failure to comply would not have a Material
     Adverse Effect; provided, further that, no item of operating equipment need
     be so repaired,  renewed, replaced, added to or improved, if Borrower shall
     in good faith  determine that such action is not necessary or desirable for
     the continued  efficient and  profitable  operation of the business of such
     Credit Party.

                                       53
<PAGE>

     Section 9.10  Environmental Law Compliance.  Except to the extent a failure
to comply would not have a Material  Adverse  Effect,  Parent and Borrower will,
and  will  cause  each  other  Credit  Party  to,  comply  with  all  Applicable
Environmental  Laws,   including,   without   limitation,   (a)  all  licensing,
permitting,  notification and similar  requirements of Applicable  Environmental
Laws,  and (b) all  provisions of all  Applicable  Environmental  Laws regarding
storage, discharge, release, transportation, treatment and disposal of Hazardous
Substances. Parent and Borrower will, and will cause each other Credit Party to,
promptly pay and discharge  when due all legal debts,  claims,  liabilities  and
obligations  with respect to any clean-up or remediation  measures  necessary to
comply with Applicable Environmental Laws.

     Section  9.11  ERISA  Reporting  Requirements.  Parent and  Borrower  shall
furnish, or cause to be furnished, to Administrative Agent:

          (a)  promptly  and in any  event (i)  within  thirty  (30) days  after
     Parent, Borrower or any ERISA Affiliate receives notice from any regulatory
     agency of the commencement of an audit, investigation or similar proceeding
     with  respect  to a Plan,  and (ii)  within  ten (10)  days  after  Parent,
     Borrower or any ERISA Affiliate  contacts the Internal  Revenue Service for
     the  purpose  of  participation  in a closing  agreement  or any  voluntary
     resolution  program  with  respect  to a Plan  which  could have a Material
     Adverse  Effect or knows or has reason to know that any event with  respect
     to any Plan of Parent, Borrower or any ERISA Affiliate has occurred that is
     reasonably  believed by Parent or Borrower to  potentially  have a Material
     Adverse Effect, a written notice  describing such event and describing what
     action is being  taken or is  proposed  to be taken with  respect  thereto,
     together with a copy of any notice of such event that is given to the PBGC;

          (b)  promptly  and in any event  within  thirty  (30)  days  after the
     receipt by Borrower of a request  therefor by a Bank,  copies of any annual
     and other  report  (including  Schedule B thereto)  with  respect to a Plan
     filed by Parent,  Borrower or any ERISA  Affiliate  with the United  States
     Department of Labor, the Internal Revenue Service or the PBGC;

          (c) notification within thirty (30) days of the effective date thereof
     of any  material  increases  in the  benefits,  or  material  change in the
     funding method, of any existing Plan which is not a multiemployer  plan (as
     defined  in  section  4001(a)(3)  of ERISA),  or the  establishment  of any
     material new Plans,  or the  commencement of  contributions  to any Plan to
     which  Parent,   Borrower  or  any  ERISA   Affiliate  was  not  previously
     contributing; and

          (d) promptly after receipt of written notice of commencement  thereof,
     notice of all (i) claims made by participants or beneficiaries with respect
     to any Plan, and (ii) actions,  suits and  proceedings  before any court or
     governmental   department,    commission,    board,   bureau,   agency   or
     instrumentality,  domestic or foreign,  affecting  Parent,  Borrower or any
     ERISA  Affiliate  with  respect to any Plan,  except  those  which,  in the
     aggregate,  if  adversely  determined  could  not have a  Material  Adverse
     Effect.

     Section 9.12 Additional Documents. Parent and Borrower will, and will cause
each other  Credit  Party to,  cure  promptly  any defects in the  creation  and
issuance of each Note,  and the execution and delivery of this Agreement and the
other Loan Papers and, at Borrower's expense, Parent and Borrower shall promptly
and duly execute and deliver to each Bank,  and cause each other Credit Party to

                                       54
<PAGE>

promptly and duly execute and deliver to each Bank, upon reasonable request, all
such other and further documents,  agreements and instruments in compliance with
or  accomplishment of the covenants and agreements of the Credit Parties in this
Agreement  and  the  other  Loan  Papers  as  may  be  reasonably  necessary  or
appropriate in connection therewith.

     Section 9.13  Environmental  Review.  Parent and Borrower  shall deliver to
Administrative Agent prior to the completion by any Credit Party of any material
acquisition of Mineral Interests or related assets, other than an acquisition of
additional  interests in Mineral  Interests  in which a Credit Party  previously
held an  interest,  a report or reports  obtained  by Parent or  Borrower in the
course of such acquisition,  which report or reports shall set forth the results
of a Phase I environmental  review of such Mineral Interests and related assets.
Additionally,  if requested by Administrative Agent or Required Banks in writing
in  connection  with any such  material  acquisition,  Parent or Borrower  shall
deliver to Administrative  Agent,  within forty-five (45) days of Administrative
Agent's or Required Banks' written  request,  a report or reports related to any
such material acquisition which shall be in form, scope and detail acceptable to
Administrative   Agent  from  environmental   engineering  firms  acceptable  to
Administrative  Agent,  and  which  shall set  forth  the  results  of a Phase I
environmental  review of the Mineral Interests and related assets the subject of
such material acquisition.  All of the reports delivered to Administrative Agent
pursuant  to this  Section  9.13 shall not  reflect  the  existence  of facts or
circumstances  which would  constitute a material  violation  of any  Applicable
Environmental  Law or which are likely to result in a material  liability to any
Credit Party.

     Section 9.14 Post-Closing Transactions.  Upon obtaining regulatory approval
and consummating the  Post-Closing  Transactions,  Parent and Borrower shall (a)
immediately  notify  Administrative  Agent  of  such  occurrence,  (b)  promptly
thereafter  deliver  to  Administrative  Agent  all  agreements,  documents  and
instruments  evidencing  such  Post-Closing  Transactions,   including,  without
limitation,   such   organizational,   existence,   good   standing   and  other
certificates,  together with such resolutions,  consents and authorizations,  as
Administrative  Agent or any Bank may  request,  and (c) comply,  and cause each
other  Credit  Party to comply,  with the  applicable  terms and  provisions  of
Article VI hereof.

                                   Article X
                               NEGATIVE COVENANTS

     Parent and Borrower  jointly and severally  agree that, so long as any Bank
has any commitment to lend or participate in Letter of Credit Exposure hereunder
or any  amount  payable  under any Note  remains  unpaid or any Letter of Credit
remains outstanding:

     Section 10.1  Incurrence  of Debt.  Parent and Borrower  will not, nor will
Parent and/or Borrower permit any other Credit Party to, incur, become or remain
liable for any Debt;  provided,  that (a) Borrower  may incur,  become or remain
liable for (i) the Obligations,  (ii) without duplication, Debt evidenced by the
Bond Loan Agreement,  (iii) Permitted  Subordinate Debt and (iv) other unsecured
Debt in an aggregate amount  outstanding at any time not to exceed  $10,000,000,
(b) Parent may assume and remain liable for Permitted  Subordinate Debt, and (c)
any  Restricted  Subsidiary  may incur,  become and remain  liable for Permitted
Subordinate Debt as a guarantor; provided, that (i) such Guarantees of Permitted

                                       55
<PAGE>

Subordinate   Debt  shall  be  subordinated  to  the  Obligations   pursuant  to
subordination  provisions  approved by Required  Banks,  such approval to not be
unreasonably  withheld,  and (ii) prior to the  execution  and  delivery  by any
Restricted  Subsidiary  of any  Guaranty of  Permitted  Subordinate  Debt,  such
Restricted  Subsidiary shall have executed and delivered to Administrative Agent
for the ratable benefit of Banks a Facility Guaranty, and all the Equity of such
Restricted  Subsidiary  owned by any Credit  Party  shall  have been  pledged to
Administrative  Agent  pursuant to a Parent  Pledge  Agreement  or a  Subsidiary
Pledge Agreement.

     Section 10.2  Restricted  Payments.  Parent and Borrower will not, nor will
Parent and/or Borrower permit any other Credit Party to, directly or indirectly,
declare  or pay,  or incur any  liability  to  declare  or pay,  any  Restricted
Payment;  provided,  that (a) any Subsidiary of Parent may make Distributions to
Borrower, any Credit Party may make Distributions to any other Credit Party that
has provided a Facility Guaranty, and all of the Equity of which owned by Parent
or any Indirect Subsidiary which is a Restricted  Subsidiary (as applicable) has
been pledged to Administrative  Agent pursuant to a Parent Pledge Agreement or a
Subsidiary  Pledge Agreement (as  applicable),  (c) so long as (i) no Default or
Borrowing Base Deficiency  exists on the date any such  Distribution is declared
or paid and no Default or Event of Default would result therefrom,  and (ii) the
Borrowing  Base does not exceed the  Conforming  Borrowing Base on the date such
Restricted Payments are declared or paid, in addition to Distributions permitted
under the preceding clauses (a) and (b),  Borrower may make Restricted  Payments
up to $5,000,000 in the aggregate in any Fiscal Year,  and (d) Borrower may make
payments  under and  pursuant  to the Bond Loan  Agreement  and the Bond Note in
accordance with the terms thereof.

     Section 10.3 Negative Pledge. Parent and Borrower will not, nor will Parent
and/or  Borrower  permit any other Credit Party to, create,  assume or suffer to
exist  any  Lien  on  any of  their  respective  assets,  other  than  Permitted
Encumbrances.  Parent and  Borrower  will not, nor will Parent  and/or  Borrower
permit any other Credit  Party to,  enter into or become bound by any  agreement
(other than this Agreement)  that prohibits or otherwise  restricts the right of
Parent,  Borrower or any other Credit Party to create, assume or suffer to exist
any Lien on any of their respective assets in favor of Administrative  Agent for
the ratable benefit of Banks.

     Section 10.4 Consolidations and Mergers.  Parent and Borrower will not, nor
will Parent and/or  Borrower  permit any other Credit Party to,  consolidate  or
merge with or into any other  Person;  provided,  that, so long as no Default or
Event of Default exists or will result,  any Restricted  Subsidiary may merge or
consolidate  with any other Person so long as such Restricted  Subsidiary is the
surviving Person and a wholly owned direct or indirect Subsidiary of Parent.

     Section 10.5 Asset  Dispositions.  Parent and  Borrower  will not, nor will
Parent and/or Borrower permit any other Credit Party to, sell, lease,  transfer,
abandon  or  otherwise  dispose  of any  asset  other  than  (a) the sale in the
ordinary  course of business of Hydrocarbons  produced from  Borrower's  Mineral
Interests,  (b) the  sale,  lease,  transfer,  abandonment,  exchange  or  other
disposition of other assets,  provided,  that the aggregate value (which, in the
case of assets consisting of Mineral Interests, shall be the Recognized Value of
such Mineral  Interests and in the case of any exchange,  shall be the net value
or net Recognized  Value realized or resulting from such exchange) of all assets
sold,  leased,  transferred  or  disposed  of pursuant to this clause (b) in any
period between Scheduled  Redeterminations shall not exceed five percent (5%) of

                                       56
<PAGE>

the  Conforming  Borrowing  Base then in effect (for purposes of this clause (b)
the Closing Date will be deemed to be a Scheduled Redetermination),  and (c) the
sale, lease,  transfer,  abandonment or disposition of Unproved Reserves.  In no
event will Parent,  Borrower or any other Credit Party sell, transfer or dispose
of any Equity in any Restricted Subsidiary nor will any Credit Party (other than
Parent)  issue or sell any  Equity  or any  option,  warrant  or other  right to
acquire such Equity or security convertible into such Equity to any Person other
than the Credit  Party which is the direct  parent of such issuer on the Closing
Date.

     Section 10.6 Amendments to Organizational  and Other Documents.  Parent and
Borrower will not, nor will Parent and/or Borrower permit any other Credit Party
to, enter into or permit any modification or amendment of, or waive any material
right or  obligation  of any Person  under (a) its  certificate  or  articles of
incorporation,    bylaws,   partnership   agreement,    regulations   or   other
organizational documents other than amendments,  modifications and waivers which
will not,  individually  or in the aggregate,  have a Material  Adverse  Effect,
and/or (b) any Bond Document.

     Section 10.7 Use of Proceeds.  The proceeds of Borrowings  will not be used
for any purpose other than (a) working capital,  (b) to finance the acquisition,
exploration  and  development of Mineral  Interests,  (c) for general  corporate
purposes, (d) to refinance the obligations outstanding under the Existing Credit
Agreement,  and (e) with respect to any Borrowings made or deemed made hereunder
through  advances to Borrower  pursuant  to the Bond  Documents,  solely for the
purposes  set forth in the Bond  Documents.  None of such  proceeds  (including,
without  limitation,  proceeds of Letters of Credit  issued  hereunder)  will be
used, directly or indirectly, for the purpose, whether immediate,  incidental or
ultimate,  of purchasing or carrying any Margin Stock, and none of such proceeds
will be used in violation of applicable Law (including,  without limitation, the
Margin  Regulations).  Letters of Credit will be issued  hereunder  only for the
purpose of  securing  bids,  tenders,  bonds,  contracts  and other  obligations
entered into in the ordinary course of Borrower's business. Without limiting the
foregoing,  no Letters of Credit will be issued  hereunder for the purpose of or
providing credit  enhancement with respect to any Debt or equity security of any
Credit Party or to secure any Credit Party's  obligations  with respect to Hedge
Transactions  other than Hedge  Transactions with a Bank or an Affiliate of such
Bank.

     Section 10.8  Investments.  Parent and  Borrower  will not, nor will Parent
and/or Borrower  permit any other Credit Party to, directly or indirectly,  make
or have outstanding any Investment other than Permitted Investments.

     Section 10.9  Transactions  with Affiliates.  Parent and Borrower will not,
nor will Parent and/or Borrower permit any of their  Subsidiaries  to, engage in
any  transaction  with an Affiliate  unless such  transaction is as favorable to
such  party  as  could  be  obtained  in an  arm's  length  transaction  with an
unaffiliated   Person  in  accordance  with  prevailing   industry  customs  and
practices.

     Section 10.10 ERISA.  Except in such instances where an omission or failure
would not have a Material Adverse Effect, Parent and Borrower will not, nor will
Parent and/or  Borrower  permit any other Credit Party to (a) take any action or
fail to take any action which would result in a violation of ERISA,  the Code or
other Laws  applicable to the Plans  maintained or  contributed  to by it or any
ERISA  Affiliate,  or (b)  modify  the term of, or the  funding  obligations  or

                                       57
<PAGE>

contribution  requirements  under any existing  Plan,  establish a new Plan,  or
become  obligated or incur any liability  under a Plan that is not maintained or
contributed  to by Parent,  Borrower  or any ERISA  Affiliate  as of the Closing
Date.

     Section 10.11 Hedge Transactions.

          (a) Parent and  Borrower  will not,  nor will Parent  and/or  Borrower
     permit any other  Credit  Party to,  hedge  (which  hedges shall not have a
     tenor of greater four (4) years) more than the following percentages of its
     "forecasted  production  from Proved Mineral  Interests" (as defined below)
     during any applicable calendar year (a "measurement  period"),  as measured
     from the current date (a "measurement date"):

<TABLE>
<CAPTION>

                              Calendar Year Hedged                Percentage Limitation
                              --------------------                ---------------------
                         (relative to measurement date)
                                                                   Oil            Gas
                    <S>                                            <C>            <C>
                    ----------------------------------------- -------------- ---------------
                                  Current Year                     85%            85%
                    ----------------------------------------- -------------- ---------------
                             First Subsequent Year                 70%            70%
                    ----------------------------------------- -------------- ---------------
                             Second Subsequent Year                55%            55%
                    ----------------------------------------- -------------- ---------------
                             Third Subsequent Year                 40%            40%
                    ----------------------------------------- -------------- ---------------
</TABLE>

               provided,  that,  and  notwithstanding  anything to the  contrary
          contained herein,  with respect to, but only with respect to, the last
          Fiscal  Quarter of the Fiscal  Year  ending  December  31,  2003,  the
          percentage  limitation  with respect to oil shall be deemed to be 90%;
          provided,  further,  that, if any measurement date occurs in the final
          two Fiscal  Quarters  of any  measurement  period,  for the purpose of
          determining the appropriate percentage limitation from the table above
          (which  determination shall be made without giving effect to the first
          proviso  above (i.e.  the  current  year  limitation  for oil shall be
          deemed to be 85%)), the limitations of the current year shall apply to
          both  the  remaining  portion  of that  current  year  and the  entire
          subsequent  year,  and the  limitations of the first  subsequent  year
          shall apply to the second subsequent year (as an example only, and for
          the avoidance of doubt,  for any measurement date occurring during the
          first two Fiscal  Quarters of 2004,  an Oil and Gas Hedge  Transaction
          for 2005  would  have a 70%  limitation;  provided,  however,  for any
          measurement  date  occurring  during the last two Fiscal  Quarters  of
          2004,  an Oil and Gas Hedge  Transaction  for 2005  would  have an 85%
          limitation);  provided,  further,  that, Borrower may enter into Hedge
          Transactions  consisting  solely of a floor price (i.e.  floor, put or
          option) so long as the amount of Hydrocarbons which are the subject of
          any such Hedge Transaction in existence at any such time do not exceed
          one-hundred percent (100%) of Borrower's  anticipated  production from
          Proved  Mineral  Interests  during the term of any such existing Hedge
          Transaction; and

               (b) Borrower will not permit its (i) production of oil during any
          Fiscal  Quarter to be less than the  aggregate  amount of oil which is
          the  subject  of Oil and Gas Hedge  Transactions  during  such  Fiscal
          Quarter,  or (ii)  production  of gas during any Fiscal  Quarter to be
          less than the aggregate  amount of gas which is the subject of Oil and
          Gas Hedge Transactions during such Fiscal Quarter.

                                       58
<PAGE>

               As used in Section  10.11(a) above,  "forecasted  production from
          Proved Mineral Interests" shall mean the forecasted production for oil
          and gas, each taken individually,  for the applicable calendar year as
          reflected   in  the  most   recent   Reserve   Report   delivered   to
          Administrative  Agent  pursuant to Section 5.1  hereof,  after  giving
          effect  to any  pro  forma  adjustments  for the  consummation  of any
          "material  acquisitions or dispositions" between the effective date of
          such Reserve Report and the measurement date.  "Material  acquisitions
          or  dispositions"  means any  acquisition  or disposition of any asset
          with a Recognized  Value in excess of  $10,000,000,  or any cumulative
          total of all  immaterial  acquisitions  or  dispositions  which in the
          aggregate have a Recognized Value in excess of $10,000,000.

     Section  10.12 Fiscal Year.  Parent and Borrower  will not, nor will Parent
and/or Borrower permit any other Credit Party to, change its Fiscal Year.

     Section  10.13 Change in Business.  Parent and Borrower  will not, nor will
Parent and/or  Borrower permit any other Credit Party to, engage in any business
other  than the  businesses  engaged in by such  parties  on the date  hereof as
described in Section 8.13 hereof.

     Section 10.14 Qualified  Purpose.  Borrower will not request or receive any
Borrowing  hereunder if, after giving effect thereto and the use of the proceeds
thereof,  that portion of the principal  balance of the Revolving  Loan which is
outstanding at such time and was utilized for any purpose other than a Qualified
Purpose  exceeds twenty five percent (25%) of the  Conforming  Borrowing Base in
effect at such time.  Borrower  agrees  that each  Request  for  Borrowing  will
include in  addition to the  information  described  in Section  3.2  hereof,  a
certification  from an  Authorized  Officer of  Borrower  as to the  purpose and
utilization  of the proceeds of such  Borrowing.  Additionally,  notwithstanding
anything to the contrary contained in Section 4.2 hereof, all principal payments
received by Banks with respect to the  Revolving  Loan shall be applied first to
that portion of the outstanding principal balance of the Revolving Loan utilized
for purposes  other than  Qualified  Purposes.  Notwithstanding  the  foregoing,
Borrower  shall not be required to comply  with this  Section  10.14 at any time
that the Borrowing Base is equal to the Conforming Borrowing Base.

     Section  10.15   Obligations  of  Unrestricted   Subsidiaries.   Except  in
connection  with the  Genesis  VPP  Transaction,  and to the extent  approved in
writing by Administrative  Agent and Existing Banks pursuant to the terms of the
Genesis Letter  Agreement,  Parent and Borrower will not, nor will Parent and/or
Borrower  permit  any other  Credit  Party  to,  incur  any  liability,  Debt or
obligation to any Unrestricted  Subsidiary of any nature,  or have any liability
(whether by operation of law or otherwise) for any liability, Debt or obligation
of any Unrestricted Subsidiary.

     Section  10.16  Borrowings  Related  to Bond  Offering.  Borrower  will not
request or receive any Borrowing hereunder, the proceeds of which are to be used
to fund advances under the Bonds,  except in accordance  and in compliance  with
the  terms  of the  Bond  Documents.  Borrower  agrees  that  each  Request  for
Borrowing,  the  proceeds  of which  are to be used to fund  advances  under the
Bonds,  will include,  in addition to the  information  described in Section 3.2
hereof,  a  certification  from an  Authorized  Officer  as to the  purpose  and
utilization  of the proceeds of such  Borrowing.  Additionally,  notwithstanding

                                       59
<PAGE>

anything to the contrary  contained in the Loan Papers or Bond  Documents,  each
payment of principal and interest  received by Bond Purchaser on the Bonds shall
be deemed to be and considered as, without  duplication,  a payment of principal
and interest on the Revolving Loan, and any borrowing by Borrower under the Bond
Loan Agreement or on any Bond Note shall also be deemed to be and considered as,
without duplication,  a Borrowing of a Revolving Loan hereunder (the outstanding
principal  of which  shall be and be deemed to be  included  in the  Outstanding
Credit for all purposes hereunder).

                                   Article XI
                               FINANCIAL COVENANTS

     Parent and Borrower  agree that so long as any Bank has any  commitment  to
lend or participate in Letter of Credit Exposure hereunder or any amount payable
under any Note remains unpaid or any Letter of Credit remains outstanding:

     Section 11.1 Current Ratio of Borrower. Parent will not permit its ratio of
Consolidated  Current Assets to its Consolidated  Current  Liabilities as of the
end of any Fiscal Quarter to be less than 1.0 to 1.0.

     Section  11.2  Minimum  Consolidated  Tangible  Net Worth.  Parent will not
permit  its  Consolidated  Tangible  Net  Worth  to be less  than  the  Required
Consolidated Tangible Net Worth on any Quarterly Date.

     Section 11.3  Consolidated  EBITDA to  Consolidated  Net Interest  Expense.
Parent  will not permit its ratio of  Consolidated  EBITDA to  Consolidated  Net
Interest  Expense  to be  less  than  2.50 to 1.0 for  any  period  of four  (4)
consecutive Fiscal Quarters.

                                  Article XII
                                    DEFAULTS

     Section  12.1 Events of  Default.  If one or more of the  following  events
(collectively  "Events of Default" and individually an "Event of Default") shall
have occurred and be continuing:

          (a) Borrower shall fail to pay when due any principal on any Note;

          (b) Borrower  shall fail to pay when due accrued  interest on any Note
     or any fees or any other amount  payable  hereunder  and such failure shall
     continue for a period of three (3) days following the due date;

          (c) Parent or Borrower  shall fail to observe or perform any  covenant
     or agreement contained in Section 5.4, Section 9.3, Article X or Article XI
     of this Agreement;

          (d) any Credit  Party shall fail to observe or perform any covenant or
     agreement  contained in this Agreement or the other Loan Papers (other than
     those referenced in Section  12.1(a),  Section 12.1(b) and Section 12.1(c))
     and such  failure  continues  for a period  of thirty  (30) days  after the
     earlier of (i) the date any Authorized Officer of any Credit Party acquires
     knowledge of such failure,  or (ii) written notice of such failure has been
     given to any Credit Party by Administrative Agent or any Bank;

                                       60
<PAGE>

          (e) any representation,  warranty,  certification or statement made or
     deemed to have been made by any Credit Party in any certificate,  financial
     statement or other  document  delivered  pursuant to this  Agreement  shall
     prove to have been incorrect in any material respect when made;

          (f) any Credit  Party shall fail to make any  payment  when due on any
     Debt  of such  Person  in a  principal  amount  equal  to or  greater  than
     $500,000,  or any other event or condition shall occur which (i) results in
     the  acceleration  of the maturity of any such Debt,  or (ii)  entitles the
     holder of such Debt to accelerate the maturity thereof;

          (g) any  Credit  Party  shall  commence  a  voluntary  case  or  other
     proceeding seeking liquidation, reorganization or other relief with respect
     to itself or its debts under any  bankruptcy,  insolvency  or other similar
     Law now or  hereafter  in effect or seeking the  appointment  of a trustee,
     receiver,  liquidator,  custodian  or other  similar  official of it or any
     substantial part of its property, or shall consent to any such relief or to
     the  appointment  of or  taking  possession  by  any  such  official  in an
     involuntary case or other proceeding  commenced against it, or shall make a
     general assignment for the benefit of creditors, or shall fail generally to
     pay its debts as they become due, or shall take any corporate,  partnership
     or limited liability company action to authorize any of the foregoing;

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

          (i) one (1) or more final judgments or orders for the payment of money
     aggregating  in excess of  $500,000  shall be  rendered  against any Credit
     Party and such judgment or order shall  continue  unsatisfied  and unstayed
     for thirty (30) days;

          (j) (i) any event occurs with respect to any Plan or Plans pursuant to
     which any Credit Party and/or any ERISA Affiliate incur a liability due and
     owing at the time of such event,  without  existing funding  therefor,  for
     benefit  payments  under such Plan or Plans in excess of $500,000;  or (ii)
     any Credit Party, any ERISA Affiliate, or any other  "party-in-interest" or
     "disqualified  person," as such terms are defined in section 3(14) of ERISA
     and section  4975(e)(2) of the Code, shall engage in transactions  which in
     the aggregate results in a direct or indirect liability to any Credit Party
     or any ERISA  Affiliate in excess of $500,000  under  section 409 or 502 of
     ERISA or section 4975 of the Code which either (A) results in a Lien on any
     Credit  Party's  assets  which  is  not a  Permitted  Encumbrance,  or  (B)
     continues unsatisfied for a period of thirty (30) days after any Authorized
     Officer of any Credit Party first acquires knowledge of such liability;

          (k) a Change of Control shall occur;

                                       61
<PAGE>

          (l) this  Agreement  or any other Loan Paper shall cease to be in full
     force and  effect or shall be  declared  null and void or the  validity  or
     enforceability  thereof  shall be  contested  or  challenged  by any Credit
     Party, or any Credit Party shall deny that it has any further  liability or
     obligation  under any of the Loan  Papers,  or any Lien created by the Loan
     Papers shall for any reason  (other than the release  thereof in accordance
     with the Loan Papers) cease to be a valid,  first priority,  perfected Lien
     upon any of the Proved Mineral  Interests  purported to be covered thereby;
     or

          (m) any Credit  Party or Bond Issuer  shall fail to observe or perform
     any  covenant  or  agreement  contained  in any  Bond  Document  after  any
     applicable cure period;

          then,  and in every such event,  Administrative  Agent  shall  without
     presentment, notice or demand (unless expressly provided for herein) of any
     kind (including,  without limitation, notice of intention to accelerate and
     acceleration), all of which are hereby waived, (a) if requested by Required
     Banks,  terminate the Commitments and they shall thereupon  terminate,  and
     (b) if  requested  by  Required  Banks,  take such other  actions as may be
     permitted by the Loan Papers including,  declaring the Notes (together with
     accrued  interest  thereon)  to be, and the Notes shall  thereupon  become,
     immediately  due and  payable;  provided  that,  in the  case of any of the
     Events of Default specified in Section 12.1(g) or Section 12.1(h),  without
     any notice to any Credit Party or any other act by Administrative  Agent or
     Banks,  the Commitments  shall thereupon  terminate and the Notes (together
     with accrued interest thereon) shall become immediately due and payable.

                                  Article XIII
                                     AGENTS

     Section 13.1  Appointment;  Nature of Relationship.  Bank One, NA is hereby
appointed  by  each  of  the  Banks  as  its  contractual   representative   and
Administrative  Agent  hereunder and under each other Loan Paper,  and each Bank
irrevocably   authorizes   Administrative   Agent  to  act  as  the  contractual
representative  of such Bank with the  rights  and  duties  expressly  set forth
herein and in the other Loan Papers.  Administrative Agent agrees to act as such
contractual  representative and Administrative Agent upon the express conditions
contained  in this  Article  XIII.  Notwithstanding  the use of the defined term
"Administrative   Agent,"  it  is   expressly   understood   and   agreed   that
Administrative  Agent shall not have any fiduciary  responsibilities to any Bank
by reason of this  Agreement  or any other  Loan  Paper and that  Administrative
Agent is merely acting as the contractual  representative of the Banks with only
those duties as are  expressly  set forth in this  Agreement  and the other Loan
Papers. In its capacity as the Banks' contractual representative, Administrative
Agent (i) does not hereby assume any fiduciary duties to any of the Banks,  (ii)
is a  "representative"  of the Banks  within the  meaning  of the term  "secured
party" as defined in the Illinois  Uniform  Commercial Code, and (iii) is acting
as an  independent  contractor,  the rights  and duties of which are  limited to
those  expressly set forth in this Agreement and the other Loan Papers.  Each of
the Banks hereby agrees to assert no claim against  Administrative  Agent on any
theory of liability  for breach of fiduciary  duty,  any and all of which claims
each Bank hereby waives.

     Section 13.2 Powers.  Administrative Agent shall have and may exercise such
powers under the Loan Papers as are  specifically  delegated  to  Administrative

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Agent by the terms of each thereof,  together with such powers as are reasonably
incidental  thereto.  Administrative  Agent shall have no implied  duties to the
Banks, or any obligation to the Banks to take any action  thereunder  except any
action  specifically  provided by the Loan Papers to be taken by  Administrative
Agent.

     Section 13.3 General Immunity.  Neither Administrative Agent nor any of its
directors,  officers, agents or employees shall be liable to Parent, Borrower or
any Bank for any action taken or omitted to be taken by it or them  hereunder or
under any other Loan Paper or in connection  herewith or therewith except to the
extent such action or inaction is determined in a final non-appealable  judgment
by a court of competent jurisdiction to have arisen from the gross negligence or
willful misconduct of such Person.

     Section  13.4  No  Responsibility   for  Loans,   Recitals,   etc.  Neither
Administrative  Agent nor any of its  directors,  officers,  agents or employees
shall be responsible for or have any duty to ascertain,  inquire into, or verify
(a) any statement,  warranty or representation  made in connection with any Loan
Paper or any Borrowing  hereunder;  (b) the  performance or observance of any of
the  covenants or  agreements  of any obligor  under any Loan Paper,  including,
without limitation,  any agreement by an obligor to furnish information directly
to each Bank; (c) the  satisfaction  of any condition  specified in Article VII,
except receipt of items required to be delivered solely to Administrative Agent;
(d) the existence or possible existence of any Default or Event of Default;  (e)
the validity, enforceability,  effectiveness,  sufficiency or genuineness of any
Loan Paper or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency,  creation, perfection or priority of any Lien in any
collateral security;  or (g) the financial condition of Parent,  Borrower or any
guarantor of any of the  Obligations  or of any of Parent's,  Borrower's  or any
such guarantor's  respective  Subsidiaries.  Administrative  Agent shall have no
duty to disclose to the Banks  information  that is not required to be furnished
by Parent or Borrower to  Administrative  Agent at such time, but is voluntarily
furnished  by  Parent  or  Borrower  to Bank  One  (either  in its  capacity  as
Administrative Agent or in its individual capacity).

     Section 13.5 Action on Instructions of Banks. Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting,  hereunder
and under any other Loan Paper in accordance with written instructions signed by
the Required Banks, and such instructions and any action taken or failure to act
pursuant  thereto  shall  be  binding  on all of the  Banks.  The  Banks  hereby
acknowledge  that  Administrative  Agent  shall  be  under  no duty to take  any
discretionary  action  permitted to be taken by it pursuant to the provisions of
this  Agreement  or any other Loan Paper unless it shall be requested in writing
to do so by Required  Banks.  Administrative  Agent shall be fully  justified in
failing or refusing to take any action  hereunder and under any other Loan Paper
unless it shall first be indemnified to its  satisfaction  by the Banks pro rata
against any and all  liability,  cost and expense that it may incur by reason of
taking or continuing to take any such action.

     Section 13.6  Employment  of Agents and Counsel.  Administrative  Agent may
execute any of its duties as Administrative  Agent hereunder and under any other
Loan Paper by or through employees,  agents, and attorneys-in-fact and shall not
be answerable to the Banks,  except as to money or securities  received by it or

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its  authorized  agents,  for the  default or  misconduct  of any such agents or
attorneys-in-fact  selected by it with  reasonable  care.  Administrative  Agent
shall be entitled to advice of counsel  concerning the  contractual  arrangement
between  Administrative  Agent  and the  Banks  and all  matters  pertaining  to
Administrative Agent's duties hereunder and under any other Loan Paper.

     Section 13.7 Reliance on Documents; Counsel.  Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram,  statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and, in respect
to legal matters,  upon the opinion of counsel selected by Administrative Agent,
which counsel may be employees of Administrative Agent.

     Section 13.8  Administrative  Agent's  Reimbursement  and  Indemnification.
Banks  agree  to  reimburse  and  indemnify   Administrative  Agent  ratably  in
proportion to their  respective  Commitments  (or, if the Commitments  have been
terminated,  in  proportion  to  their  Commitments  immediately  prior  to such
termination)  (i) for any amounts not reimbursed by Parent or Borrower for which
Administrative  Agent is entitled to  reimbursement  by Parent or Borrower under
the Loan Papers, (ii) for any other expenses incurred by Administrative Agent on
behalf of the Banks, in connection with the  preparation,  execution,  delivery,
administration   and  enforcement  of  the  Loan  Papers   (including,   without
limitation, for any expenses incurred by Administrative Agent in connection with
any dispute between  Administrative Agent and any Bank or between two or more of
the  Banks)  and  (iii)  for  any  liabilities,  obligations,  losses,  damages,
penalties,  actions,  judgments,  suits, costs, expenses or disbursements of any
kind and nature  whatsoever  which may be imposed  on,  incurred  by or asserted
against  Administrative  Agent in any way relating to or arising out of the Loan
Papers  or  any  other  document  delivered  in  connection   therewith  or  the
transactions contemplated thereby (including,  without limitation,  for any such
amounts incurred by or asserted against  Administrative Agent in connection with
any dispute between  Administrative Agent and any Bank or between two or more of
the Banks),  or the enforcement of any of the terms of the Loan Papers or of any
such  other  documents;  provided  that no Bank  shall be liable  for any of the
foregoing to the extent any of the foregoing is found in a final  non-appealable
judgment by a court of competent  jurisdiction  to have  resulted from the gross
negligence or willful misconduct of Administrative Agent. The obligations of the
Banks under this  Section  13.8 shall  survive  payment of the  Obligations  and
termination of this Agreement.

     Section 13.9 Notice of Default. Administrative Agent shall not be deemed to
have  knowledge or notice of the  occurrence  of any Default or Event of Default
hereunder unless  Administrative  Agent has received written notice from a Bank,
Parent or Borrower referring to this Agreement  describing such Default or Event
of Default and stating that such notice is a "notice of  default".  In the event
that  Administrative  Agent receives such a notice,  Administrative  Agent shall
give prompt notice thereof to the Banks.

     Section  13.10  Rights as a Bank.  In the event  Administrative  Agent is a
Bank,  Administrative  Agent shall have the same rights and powers hereunder and
under any other Loan Paper with  respect  to its  Commitment  and its  Revolving
Loans as any Bank and may exercise the same as though it were not Administrative
Agent,  and the term "Bank" or "Banks"  shall,  at any time when  Administrative
Agent  is a  Bank,  unless  the  context  otherwise  indicates,  include  in its
individual capacity. Administrative Agent and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of trust,  debt, equity or

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other  transaction,  in addition to those  contemplated by this Agreement or any
other Loan Paper,  with Parent,  Borrower or any of their  Subsidiaries in which
Parent,  Borrower or such Subsidiary is not restricted hereby from engaging with
any other Person.

     Section 13.11 Bank Credit  Decision.  Each Bank  acknowledges  that it has,
independently  and  without  reliance  upon  Administrative   Agent,  Sole  Lead
Arranger,  Book  Manager or any other  Agent or Bank and based on the  financial
statements  prepared by Parent  and/or  Borrower  and such other  documents  and
information  as it has  deemed  appropriate,  made its own credit  analysis  and
decision to enter into this Agreement and the other Loan Papers.  Each Bank also
acknowledges   that  it  will,   independently   and   without   reliance   upon
Administrative  Agent,  Sole Lead  Arranger,  Book Manager or any other Agent or
Bank 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 this Agreement and the other Loan Papers.

     Section 13.12  Successor  Administrative  Agent.  Administrative  Agent may
resign at any time by giving written notice thereof to Banks and Borrower,  such
resignation to be effective upon the  appointment of a successor  Administrative
Agent or, if no successor  Administrative  Agent has been appointed,  forty-five
(45) days after the retiring  Administrative Agent gives notice of its intention
to resign. Administrative Agent may be removed at any time with or without cause
by written notice received by  Administrative  Agent from Required  Banks,  such
removal to be effective on the date specified by Required  Banks.  Upon any such
resignation  or removal,  Required  Banks  shall have the right to  appoint,  on
behalf of Parent,  Borrower  and the Banks,  a successor  Administrative  Agent,
which  shall be  approved  by  Parent  and  Borrower,  such  approval  not to be
unreasonably  withheld;  provided,  that, Parent and Borrower shall not have the
right to  approve  any  successor  Administrative  Agent  appointed  during  the
continuance of any Default. If no successor Administrative Agent shall have been
so  appointed  by Required  Banks  within  thirty (30) days after the  resigning
Administrative  Agent's  giving  notice of its  intention  to  resign,  then the
resigning  Administrative  Agent may appoint, on behalf of Parent,  Borrower and
Banks,  a successor  Administrative  Agent which shall be approved by Parent and
Borrower, such approval not to be unreasonably withheld;  provided, that, Parent
and Borrower  shall not have the right to approve any  successor  Administrative
Agent appointed during the continuance of any Default.  If Administrative  Agent
has  resigned or been  removed and no  successor  Administrative  Agent has been
appointed,  Banks may perform all the duties of  Administrative  Agent hereunder
and  Borrower  shall make all  payments  in respect  of the  Obligations  to the
applicable  Bank and for all other  purposes  Parent  and  Borrower  shall  deal
directly with the Banks. No successor Administrative Agent shall be deemed to be
appointed hereunder until such successor  Administrative  Agent has accepted the
appointment.  Any such successor Administrative Agent shall be a commercial bank
having  capital  and  retained  earnings  of at  least  $100,000,000.  Upon  the
acceptance of any appointment as  Administrative  Agent hereunder by a successor
Administrative  Agent,  such  successor  Administrative  Agent  shall  thereupon
succeed to and become vested with all the rights, powers,  privileges and duties
of the resigning or removed  Administrative Agent. Upon the effectiveness of the
resignation  or  removal  of  Administrative  Agent,  the  resigning  or removed
Administrative  Agent  shall be  discharged  from  its  duties  and  obligations
hereunder and under the Loan Papers.  After the effectiveness of the resignation
or removal of an Administrative Agent, the provisions of this Article XIII shall

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continue  in effect for the benefit of such  Administrative  Agent in respect of
any  actions  taken  or  omitted  to be  taken  by it  while  it was  acting  as
Administrative  Agent  hereunder  and under the other Loan Papers.  In the event
that there is a successor to  Administrative  Agent by merger, or Administrative
Agent  assigns  its duties and  obligations  to an  Affiliate  pursuant  to this
Section 13.12,  then the term "Prime Rate" as used in this Agreement  shall mean
the prime  rate,  base rate or other  analogous  rate of the new  Administrative
Agent.

     Section 13.13  Delegation to Affiliates.  Parent,  Borrower and Banks agree
that Administrative Agent may delegate any of its duties under this Agreement to
any of its  Affiliates.  Any such  Affiliate  (and such  Affiliate's  directors,
officers,  agents and employees)  which performs  duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification,  waiver
and other protective  provisions to which Administrative Agent is entitled under
Article XIII and Article XIV.

     Section  13.14  Execution of  Collateral  Documents.  Without  limiting the
powers and authority of Administrative  Agent described herein, the Banks hereby
empower and authorize  Administrative Agent to execute and deliver to Parent and
Borrower  (as  applicable)  on their behalf the  Mortgages,  the  Amendments  to
Mortgages,  the Parent Pledge  Agreements,  the Subsidiary Pledge Agreements and
all related financing statements and any other financing statements, agreements,
documents or  instruments  as shall be necessary  or  appropriate  to effect the
purposes of the foregoing instruments.

     Section  13.15  Collateral  Releases.  Banks hereby  empower and  authorize
Administrative  Agent  to  execute  and  deliver  to  Parent  and  Borrower  (as
applicable) on their behalf any agreements, documents or instruments as shall be
necessary or  appropriate  to effect any releases of  collateral  which shall be
permitted  by the  terms  hereof  or of any  other  Loan  Paper or  which  shall
otherwise  have been approved by Required Banks (or, if required by the terms of
Section 15.5, all of the Banks) in writing.

     Section 13.16 Agents.  None of the Banks  identified in this Agreement as a
"Documentation  Agent" and/or a "Syndication Agent" shall have any right, power,
obligation,  liability,  responsibility  or duty under this Agreement other than
those applicable to all Banks as such.  Without limiting the foregoing,  none of
such Documentation  Agents or Syndication Agents shall have or be deemed to have
a  fiduciary  relationship  with any  Bank.  Each  Bank  hereby  makes  the same
acknowledgments with respect to such Documentation Agents and Syndication Agents
as it makes with respect to Administrative Agent in Section 13.11.

     Section 13.17 Bond Documents.  Without  limiting the power and authority of
Administrative Agent described herein, Banks hereby:

          (a)  appoint   Administrative   Agent,  as  Bond  Purchaser,   as  its
     contractual   representative  under  the  Bond  Documents  and  irrevocably
     authorize Administrative Agent to act as the contractual  representative of
     each Bank under the Bond Documents with the rights and duties expressly set
     forth  therein,  and to hold the  Bonds on behalf  of the  Banks,  it being
     expressly understood and agreed,  however,  that Administrative Agent shall
     not have any fiduciary  responsibilities  to any Bank by reason of the Bond
     Documents;

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          (b) empower and authorize  Administrative Agent to execute and deliver
     the Bond Documents to which it is a party; and

          (c) agree that all  references in this Article XIII to "Loan  Papers,"
     shall be deemed to include, without limitation, the Bond Documents.

                                  Article XIV
                             CHANGE IN CIRCUMSTANCES

     Section 14.1 Increased Cost and Reduced Return.

          (a) If, after the date hereof,  the  adoption of any  applicable  law,
     rule,  or  regulation,  or any  change  in any  applicable  law,  rule,  or
     regulation,  or any change in the interpretation or administration  thereof
     by any Governmental  Authority,  central bank, or comparable agency charged
     with the  interpretation  or administration  thereof,  or compliance by any
     Bank (or its  Applicable  Lending  Office)  with any  request or  directive
     (whether  or  not  having  the  force  of  law)  of any  such  Governmental
     Authority, central bank, or comparable agency:

               (i) shall subject such Bank (or its Applicable Lending Office) to
          any tax, duty, or other charge with respect to any  Eurodollar  Loans,
          its Note, or its obligation to make  Eurodollar  Loans,  or change the
          basis  of  taxation  of any  amounts  payable  to  such  Bank  (or its
          Applicable Lending Office) under this Agreement or its Note in respect
          of any  Eurodollar  Loans (other than taxes imposed on the overall net
          income of such Bank or such Applicable Lending Office);

               (ii)  shall  impose,  modify,  or deem  applicable  any  reserve,
          special deposit,  assessment,  compulsory loan, or similar requirement
          (other than the Reserve  Requirement  utilized in the determination of
          the Adjusted  Eurodollar Rate) relating to any extensions of credit or
          other  assets  of,  or any  deposits  with  or  other  liabilities  or
          commitments  of,  such  Bank  (or  its  Applicable   Lending  Office),
          including the Commitment of such Bank hereunder; or

               (iii)  shall  impose  on such  Bank  (or its  Applicable  Lending
          Office)  or  on  the  London  interbank  market  any  other  condition
          affecting  this  Agreement  or its Note or any of such  extensions  of
          credit or liabilities or commitments;

and the result of any of the  foregoing is to increase the cost to such Bank (or
its  Applicable  Lending  Office) of making,  Converting  into,  Continuing,  or
maintaining any Eurodollar  Loans or to reduce any sum received or receivable by
such Bank (or its  Applicable  Lending  Office) under this Agreement or its Note
with respect to any Eurodollar  Loans,  then the Borrower shall pay to such Bank
on demand such amount or amounts as will compensate such Bank for such increased
cost or reduction.  If any Bank  requests  compensation  by Borrower  under this
Section  14.1(a),  the  Borrower  may,  by notice  to such Bank  (with a copy to
Administrative  Agent),  suspend the obligation of such Bank to make or Continue
Eurodollar  Loans or to Convert  all or part of the Base Rate Loan owing to such
Bank into  Eurodollar  Loans,  until the event or condition  giving rise to such
request  ceases to be in effect (in which case the  provisions  of Section  14.4
shall be applicable);  provided, that such suspension shall not affect the right
of such Bank to receive the compensation so requested.

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          (b) If, after the date hereof, any Bank shall have determined that the
     adoption of any  applicable  law,  rule,  or regulation  regarding  capital
     adequacy or any change therein or in the  interpretation  or administration
     thereof by any Governmental  Authority,  central bank, or comparable agency
     charged with the interpretation or administration  thereof,  or any request
     or directive regarding capital adequacy (whether or not having the force of
     law) of any  such  Governmental  Authority,  central  bank,  or  comparable
     agency,  has or would have the effect of reducing the rate of return on the
     capital  of  such  Bank  or any  corporation  controlling  such  Bank  as a
     consequence  of such  Bank's  obligations  hereunder  to a level below that
     which  such  Bank or such  corporation  could  have  achieved  but for such
     adoption,  change,  request,  or directive  (taking into  consideration its
     policies with respect to capital  adequacy),  then,  from time to time upon
     demand,  Borrower shall pay to such Bank such additional  amount or amounts
     as will compensate such Bank for such reduction.

          (c) Each Bank shall promptly notify Borrower and Administrative  Agent
     of any event of which it has  knowledge,  occurring  after the date hereof,
     which will entitle such Bank to compensation  pursuant to this Section 14.1
     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 such Bank,  be  otherwise
     disadvantageous  to it. Any Bank claiming  compensation  under this Section
     14.1 shall furnish to Borrower and Administrative Agent a statement setting
     forth the  additional  amount or amounts to be paid to it  hereunder  which
     shall be conclusive in the absence of manifest error.  In determining  such
     amount, such Bank may use any reasonable averaging and attribution methods.

     Section 14.2  Limitation on Type of Loans.  If on or prior to the first day
of any Interest Period for any Eurodollar Loan:

          (a)  Administrative  Agent determines  (which  determination  shall be
     conclusive) that by reason of circumstances  affecting the relevant market,
     adequate and reasonable  means do not exist for ascertaining the Eurodollar
     Rate for such Interest Period; or

          (b) Required Banks determine (which determination shall be conclusive)
     and notify  Administrative Agent that the Adjusted Eurodollar Rate will not
     adequately and fairly reflect the cost to Banks of funding Eurodollar Loans
     for such Interest Period;

then  Administrative  Agent shall give Borrower prompt notice thereof specifying
the relevant Type of Revolving Loans and the relevant amounts or periods, and so
long as such condition remains in effect,  Banks shall be under no obligation to
make additional  Revolving Loans of such Type,  Continue Revolving Loans of such
Type, or to Convert  Revolving  Loans of any other Type into Revolving  Loans of
such Type, and Borrower shall,  on the last day(s) of the then current  Interest
Period(s)  for the  outstanding  Revolving  Loans of the affected  Type,  either
prepay such Revolving Loans or Convert such Revolving Loans into another Type of
Revolving Loan in accordance with the terms of this Agreement.

     Section  14.3  Illegality.  Notwithstanding  any  other  provision  of this
Agreement,  in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to make, maintain, or fund Eurodollar Loans hereunder,  then such

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Bank shall promptly notify Borrower  thereof and such Bank's  obligation to make
or Continue  Eurodollar Loans and to Convert other Types of Revolving Loans into
Eurodollar Loans shall be suspended until such time as such Bank may again make,
maintain,  and fund  Eurodollar  Loans (in which case the  provisions of Section
14.4 shall be applicable).

     Section 14.4 Treatment of Affected  Loans. If the obligation of any Bank to
make particular  Eurodollar Loans or to Continue  Revolving Loans, or to Convert
Revolving  Loans of another Type into Revolving Loans of a particular Type shall
be suspended pursuant to Section 14.1 or Section 14.3 hereof (Revolving Loans of
such Type being herein called "Affected Loans" and such Type being herein called
the  "Affected  Type"),  such  Bank's  Affected  Loans  shall  be  automatically
Converted  into  the  Base  Rate  Loan on the last  day(s)  of the then  current
Interest Period(s) for Affected Loans (or, in the case of a Conversion  required
by  Section  14.3  hereof,  on such  earlier  date as such Bank may  specify  to
Borrower with a copy to  Administrative  Agent) and,  unless and until such Bank
gives notice as provided below that the circumstances  specified in Section 14.1
or Section 14.3 hereof that gave rise to such Conversion no longer exist:

          (a) to the  extent  that  such  Bank's  Affected  Loans  have  been so
     Converted,  all payments and  prepayments of principal that would otherwise
     be applied to such Bank's  Affected  Loans shall be applied  instead to the
     Base Rate Loan; and

          (b) all Revolving  Loans that would  otherwise be made or Continued by
     such  Bank  as  Revolving  Loans  of the  Affected  Type  shall  be made or
     Continued instead as part of the Base Rate Loan, and all Revolving Loans of
     such Bank that would  otherwise be Converted  into  Revolving  Loans of the
     Affected Type shall be Converted  instead into (or shall remain) as part of
     the Base Rate Loan.

If such Bank gives notice to Borrower (with a copy to Administrative Agent) that
the  circumstances  specified  in Section  14.1 or Section 14.3 hereof that gave
rise to the  Conversion of such Bank's  Affected  Loans pursuant to this Section
14.4  no  longer  exist  (which  such  Bank  agrees  to do  promptly  upon  such
circumstances  ceasing to exist) at a time when Revolving  Loans of the Affected
Type made by other Banks are  outstanding,  such Bank's portion of the Base Rate
Loan  shall  be  automatically  Converted,  on the  first  day(s)  of  the  next
succeeding  Interest  Period(s)  for  such  outstanding  Revolving  Loans of the
Affected Type, to the extent necessary so that, after giving effect thereto, all
Revolving  Loans held by Banks holding  Revolving Loans of the Affected Type and
by such Bank are held pro rata (as to  principal  amounts,  Types  and  Interest
Periods) in accordance with their respective Commitments.

     Section 14.5 Compensation. Upon the request of any Bank, Borrower shall pay
to such Bank such amount or amounts as shall be  sufficient  (in the  reasonable
opinion of such Bank) to compensate it for any loss, cost, or expense (including
loss of anticipated profits) incurred by it as a result of:

          (a) any payment,  prepayment,  or Conversion of a Eurodollar  Loan for
     any  reason  (including,   without  limitation,  the  acceleration  of  the
     Revolving  Loan) on a date other than the last day of the  Interest  Period
     for such Loan; or

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          (b) any failure by the  Borrower  for any reason  (including,  without
     limitation, the failure of any condition precedent specified in Article VII
     to be satisfied) to borrow, Convert,  Continue, or prepay a Eurodollar Loan
     on the date for such  Borrowing,  Conversion,  Continuation,  or prepayment
     specified in the relevant Request for Borrowing,  Notice of Continuation or
     Conversion,  or other notice of  Borrowing,  prepayment,  Continuation,  or
     Conversion under this Agreement.

     Section 14.6 Taxes.

          (a) Any and all payments by Borrower to or for the account of any Bank
     or  Administrative  Agent  hereunder or under any other Loan Paper shall be
     made free and clear of and  without  deduction  for any and all  present or
     future Taxes, duties, levies, imposts, deductions, charges or withholdings,
     and all liabilities  with respect thereto,  excluding,  in the case of each
     Bank and  Administrative  Agent, Taxes imposed on its income, and franchise
     Taxes imposed on it, by the jurisdiction  under the Laws of which such Bank
     (or its Applicable Lending Office) or Administrative Agent (as the case may
     be)  is  organized  or  any   political   subdivision   thereof  (all  such
     non-excluded  Taxes,  duties,   levies,   imposts,   deductions,   charges,
     withholdings, and liabilities being hereinafter referred to in this Section
     14.6 as  "Non-Excluded  Taxes").  If  Borrower  shall be required by Law to
     deduct any  Non-Excluded  Taxes from or in respect of any sum payable under
     this Agreement or any other Loan Paper to any Bank or Administrative Agent,
     (i) the sum payable  shall be  increased  as necessary so that after making
     all required deductions (including deductions applicable to additional sums
     payable under this Section 14.6) such Bank or Administrative Agent receives
     an amount equal to the sum it would have  received  had no such  deductions
     been made, (ii) Borrower shall make such  deductions,  (iii) Borrower shall
     pay the full amount  deducted to the relevant  taxation  authority or other
     authority  in  accordance  with  applicable  Law, and (iv)  Borrower  shall
     furnish to  Administrative  Agent, at its address set forth on Schedule 2.1
     hereto,  the original or a certified copy of a receipt  evidencing  payment
     thereof.

          (b) In addition,  Borrower agrees to pay any and all present or future
     stamp or  documentary  Taxes and any  other  excise  or  property  Taxes or
     charges or similar  levies  which  arise from any  payment  made under this
     Agreement or any other Loan Paper or from the  execution or delivery of, or
     otherwise  with  respect  to,  this  Agreement  or  any  other  Loan  Paper
     (hereinafter referred to as "Other Taxes").

          (c) Borrower  agrees to indemnify each Bank and  Administrative  Agent
     for  the  full  amount  of  Taxes  and  Other  Taxes  (including,   without
     limitation,  any  Non-Excluded  Taxes or Other Taxes imposed or asserted by
     any  jurisdiction  on amounts payable under this Section 14.6) paid by such
     Bank or  Administrative  Agent  (as  the  case  may  be) and any  liability
     (including  penalties,  interest,  and expenses)  arising therefrom or with
     respect thereto.

          (d) Each Bank organized  under the Laws of a jurisdiction  outside the
     United  States,  on or prior to the date of its  execution  and delivery of
     this  Agreement  in the case of each Bank listed on Schedule 2.1 hereto and
     on or prior to the  date on  which  it  becomes  a Bank in the case of each
     other Bank,  and from time to time  thereafter  if  requested in writing by
     Borrower  or  Administrative  Agent (but only so long as such Bank  remains
     lawfully able to do so), shall provide Borrower and  Administrative  Agent,

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     at the time or times  prescribed  by  applicable  Law,  with such  properly
     completed  and executed  documentation  prescribed  by  applicable  Law (or
     reasonably  requested by Borrower) certifying that such Bank is entitled to
     benefits  under an income tax treaty to which the United  States is a party
     which  reduces  the rate of  withholding  tax on  payments  of  interest or
     certifying  that  the  income  receivable  pursuant  to this  Agreement  is
     effectively connected with the conduct of a trade or business in the United
     States, and certifying that such Bank is entitled to an exemption from or a
     reduced  rate of tax on payments  pursuant to this  Agreement or any of the
     other Loan Papers.

          (e) For any period with  respect to which a Bank has failed to provide
     Borrower and  Administrative  Agent with the  appropriate  form pursuant to
     Section 14.6(d) (unless such failure is due to a change in treaty,  law, or
     regulation  occurring subsequent to the date on which a form originally was
     required   to  be   provided),   such  Bank  shall  not  be   entitled   to
     indemnification  under Section  14.6(a) or Section  14.6(b) with respect to
     Non-Excluded Taxes imposed by the United States;  provided,  however,  that
     should a Bank,  which is otherwise exempt from or subject to a reduced rate
     of withholding  Tax,  become subject to  Non-Excluded  Taxes because of its
     failure  to deliver a form  required  hereunder,  Borrower  shall take such
     steps as such Bank shall reasonably  request to assist such Bank to recover
     such Non-Excluded Taxes.

          (f) If Borrower is  required to pay  additional  amounts to or for the
     account of any Bank  pursuant  to this  Section  14.6,  then such Bank will
     agree  to  use  reasonable  efforts  to  change  the  jurisdiction  of  its
     Applicable  Lending Office so as to eliminate or reduce any such additional
     payment which may thereafter accrue if such change, in the judgment of such
     Bank, is not otherwise disadvantageous to such Bank.

          (g)  Within  thirty  (30)  days  after  the  date  of any  payment  of
     Non-Excluded  Taxes,  Borrower  shall furnish to  Administrative  Agent the
     original or a certified copy of a receipt evidencing such payment.

          (h)  Without  prejudice  to the  survival  of any other  agreement  of
     Borrower hereunder, the agreements and obligations of Borrower contained in
     this Section 14.6 shall survive the  termination of the Commitments and the
     payment in full of the Notes.

     Section 14.7  Discretion of Banks as to Manner of Funding.  Notwithstanding
any provisions of this Agreement to the contrary, each Bank shall be entitled to
fund and maintain its funding of all or any part of its Commitment in any manner
it sees  fit,  it  being  understood,  however,  that for the  purposes  of this
Agreement  all  determinations  hereunder  shall  be made as if  such  Bank  had
actually  funded and maintained  each Eurodollar Loan during the Interest Period
for such  Eurodollar  Loan  through the  purchase of deposits  having a maturity
corresponding  to the last day of such  Interest  Period and bearing an interest
rate equal to the Adjusted Eurodollar Rate for such Interest Period.

                                   Article XV
                                  MISCELLANEOUS

     Section 15.1 Notices. All notices, requests and other communications to any
party  hereunder shall be in writing  (including bank wire,  telecopy or similar
writing)  and shall be given,  if to  Administrative  Agent or any Bank,  at its
address or telecopier  number set forth on Schedule 2.1 hereto,  and if given to

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Parent or Borrower, at its address or telecopy number set forth on the signature
pages hereof (or in either  case,  at such other  address or telecopy  number as
such party may hereafter  specify for the purpose by notice to the other parties
hereto). Each such notice, request or other communication shall be effective (a)
if given by telecopy,  when such telecopy is transmitted to the telecopy  number
specified  in this Section 15.1 and the  appropriate  answerback  is received or
receipt  is  otherwise  confirmed,  (b) if  given by mail,  three  (3)  Domestic
Business  Days after  deposit in the mails with  first  class  postage  prepaid,
addressed as aforesaid,  or (c) if given by any other means,  when  delivered at
the  address   specified  in  this  Section  15.1;   provided  that  notices  to
Administrative  Agent  under  Article  III or Article IV shall not be  effective
until received.

     Section 15.2 No Waivers. No failure or delay by Administrative Agent or any
Bank in exercising any right, power or privilege  hereunder or under any Note or
other  Loan Paper  shall  operate  as a waiver  thereof  nor shall any single or
partial  exercise  thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  The rights and remedies herein
provided  shall be  cumulative  and not  exclusive  of any  rights  or  remedies
provided by Law or in any of the other Loan Papers.

     Section 15.3 Expenses; Indemnification.

          (a) Parent and Borrower  jointly and severally  agree to pay on demand
     all   reasonable   costs  and  expenses  of  each  Agent  (other  than  any
     Documentation   Agent  or  Syndication   Agent)  in  connection   with  the
     syndication,  preparation, execution, delivery, modification, and amendment
     of this  Agreement,  the other Loan Papers,  and the other  documents to be
     delivered hereunder, including, without limitation, the reasonable fees and
     expenses of counsel for Administrative  Agent with respect thereto and with
     respect   to   advising   Administrative   Agent  as  to  its   rights  and
     responsibilities under the Loan Papers. Parent and Borrower further jointly
     and   severally   agree  to  pay  on  demand  all  costs  and  expenses  of
     Administrative  Agent and Banks,  if any  (including,  without  limitation,
     reasonable   attorneys'   fees  and  expenses),   in  connection  with  the
     enforcement (whether through negotiations, legal proceedings, or otherwise)
     of the Loan Papers and the other documents to be delivered hereunder.

          (b) PARENT AND BORROWER  JOINTLY AND SEVERALLY  AGREE TO INDEMNIFY AND
     HOLD  HARMLESS  EACH AGENT AND EACH BANK AND EACH OF THEIR  AFFILIATES  AND
     THEIR  RESPECTIVE  OFFICERS,  DIRECTORS,  EMPLOYEES,  AGENTS,  AND ADVISORS
     (EACH,  AN  "INDEMNIFIED  PARTY")  FROM  AND  AGAINST  ANY AND ALL  CLAIMS,
     DAMAGES,  LOSSES,  LIABILITIES,  COSTS,  AND EXPENSES  (INCLUDING,  WITHOUT
     LIMITATION, REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED
     OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN
     CONNECTION  WITH  OR  BY  REASON  OF  (INCLUDING,  WITHOUT  LIMITATION,  IN
     CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION
     OF  DEFENSE  IN  CONNECTION   THEREWITH)  THE  LOAN  PAPERS,   ANY  OF  THE
     TRANSACTIONS  CONTEMPLATED  HEREIN  OR THE  ACTUAL OR  PROPOSED  USE OF THE

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     PROCEEDS OF THE REVOLVING LOAN (INCLUDING ANY OF THE FOREGOING ARISING FROM
     THE NEGLIGENCE OF THE INDEMNIFIED PARTY),  EXCEPT TO THE EXTENT SUCH CLAIM,
     DAMAGE,   LOSS,   LIABILITY,   COST,  OR  EXPENSE  IS  FOUND  IN  A  FINAL,
     NON-APPEALABLE  JUDGMENT  BY A  COURT  OF  COMPETENT  JURISDICTION  TO HAVE
     RESULTED  FROM  SUCH  INDEMNIFIED   PARTY'S  GROSS  NEGLIGENCE  OR  WILLFUL
     MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING
     TO WHICH THE INDEMNITY IN THIS SECTION 15.3 APPLIES,  SUCH INDEMNITY  SHALL
     BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS
     BROUGHT BY CREDIT PARTIES,  ITS DIRECTORS,  SHAREHOLDERS OR CREDITORS OR AN
     INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE
     A PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
     CONSUMMATED.  PARENT AND BORROWER JOINTLY AND SEVERALLY AGREE NOT TO ASSERT
     ANY CLAIM AGAINST ANY AGENT, ANY BANK, ANY OF THEIR  AFFILIATES,  OR ANY OF
     THEIR RESPECTIVE DIRECTORS,  OFFICERS,  EMPLOYEES,  ATTORNEYS,  AGENTS, AND
     ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL,
     OR  PUNITIVE  DAMAGES  ARISING  OUT OF OR  OTHERWISE  RELATING  TO THE LOAN
     PAPERS,  ANY OF THE  TRANSACTIONS  CONTEMPLATED  HEREIN  OR THE  ACTUAL  OR
     PROPOSED USE OF THE PROCEEDS OF THE REVOLVING LOAN.

          (c) Without prejudice to the survival of any other agreement of Parent
     or  Borrower  hereunder,  the  agreements  and  obligations  of Parent  and
     Borrower  contained in this Section 15.3 shall  survive the payment in full
     of the Revolving Loan and all other amounts payable under this Agreement.

     Section 15.4 Right of Set-off; Adjustments.

          (a) Upon the  occurrence  and during the  continuance  of any Event of
     Default, each Bank (and each of its Affiliates) is hereby authorized at any
     time and from time to time, to the fullest extent  permitted by Law, to set
     off and apply any and all  deposits  (general or  special,  time or demand,
     provisional or final) at any time held and other  indebtedness  at any time
     owing by such Bank (or any of its  Affiliates)  to or for the credit or the
     account  of any  Credit  Party  against  any  and  all of the  Obligations,
     irrespective  of whether  such Bank  shall have made any demand  under this
     Agreement  or Note  held by  such  and  although  such  obligations  may be
     unmatured.  Each Bank agrees  promptly to notify the affected  Credit Party
     after  any  such  set-off  and  application  made by such  Bank;  provided,
     however, that the failure to give such notice shall not affect the validity
     of such set-off and application. The rights of each Bank under this Section
     15.4 are in  addition  to other  rights and  remedies  (including,  without
     limitation, other rights of set-off) that such Bank may have.

          (b) If any Bank (a  "benefitted  Bank")  shall at any time receive any
     payment of all or part of the amounts owing to it, or interest thereon,  or
     receive  any  collateral  in  respect  thereof   (whether   voluntarily  or
     involuntarily,  by set-off, or otherwise), in a greater proportion than any
     such  payment to or  collateral  received  by any other  Bank,  if any,  in
     respect of such other Bank's amounts owing to it, or interest thereon, such

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     benefitted   Bank  shall   purchase   for  cash  from  the  other  Banks  a
     participating  interest in such portion of each such other  Bank's  amounts
     owing to it, or shall  provide  such other  Banks with the  benefits of any
     such collateral,  or the proceeds  thereof,  as shall be necessary to cause
     such  benefitted  Bank to share the  excess  payment  or  benefits  of such
     collateral  or proceeds  ratably with each other Bank;  provided,  however,
     that if all or any portion of such excess payment or benefits is thereafter
     recovered from such benefitted Bank, such purchase shall be rescinded,  and
     the purchase price and benefits  returned,  to the extent of such recovery,
     but  without  interest.  Borrower  agrees  that  any Bank so  purchasing  a
     participation from a Bank pursuant to this Section 15.4 may, to the fullest
     extent permitted by Law,  exercise all of its rights of payment  (including
     the right of set-off)  with  respect to such  participation  as fully as if
     such  Person  were the direct  creditor  of  Borrower in the amount of such
     participation.

     Section 15.5 Amendments and Waivers.  Any provision of this Agreement,  the
Notes or any other Loan  Paper may be  amended  or waived if, but only if,  such
amendment or waiver is in writing and is signed by Parent, Borrower and Required
Banks (and, if the rights or duties of any Agent are affected  thereby,  by such
Agent);  provided that no such  amendment or waiver shall,  unless signed by all
Banks,  (a) increase the  Commitment of any Bank, (b) reduce the principal of or
rate of  interest on any  Revolving  Loan or any fees or other  amounts  payable
hereunder or for termination of any Commitment, (c) change the percentage of the
Total  Commitment,  or the number of Banks which shall be required  for Banks or
any of them to take any action under this Section 15.5 or any other provision of
this Agreement, (d) extend the due date for, or forgive any principal, interest,
fees or  reimbursement  obligations  due  hereunder,  (e) release  any  material
guarantor or other material party liable for all or any part of the  Obligations
or release any material part of the collateral  for the  Obligations or any part
thereof other than releases  required  pursuant to sales of collateral which are
expressly  permitted by Section  10.5 hereof,  or (f) amend or modify any of the
provisions of Article V hereof or the definitions of any terms defined therein.

     Section 15.6 Survival.  All representations,  warranties and covenants made
by any Credit Party herein or in any certificate or other  instrument  delivered
by it or in its behalf  under the Loan Papers shall be  considered  to have been
relied upon by Banks and shall survive the delivery to Banks of such Loan Papers
or the extension of the Revolving Loan (or any part thereof),  regardless of any
investigation  made by or on behalf of Banks. The indemnity  provided in Section
15.3(b)  herein shall  survive the  repayment of all credit  advances  hereunder
and/or the  discharge or release of any Lien  granted  hereunder or in any other
Loan Paper, contract or agreement between Borrower or any other Credit Party and
any Agent or any Bank.

     Section 15.7 Limitation on Interest.  Regardless of any provision contained
in the Loan Papers, Banks shall never be entitled to receive, collect, or apply,
as interest on the Revolving  Loan,  any amount in excess of the Maximum  Lawful
Rate, and in the event any Bank ever  receives,  collects or applies as interest
any such excess,  such amount which would be deemed excessive  interest shall be
deemed a partial  prepayment of principal and treated  hereunder as such; and if
the Revolving Loan is paid in full, any remaining  excess shall promptly be paid
to Borrower.  In  determining  whether or not the interest paid or payable under
any specific  contingency exceeds the Maximum Lawful Rate, Parent,  Borrower and
Banks shall, to the extent  permitted under applicable Law, (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof and (c) amortize, prorate,

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allocate and spread, in equal parts, the total amount of the interest throughout
the entire  contemplated  term of the Notes,  so that the  interest  rate is the
Maximum Lawful Rate throughout the entire term of the Notes; provided,  however,
that if the unpaid principal balance thereof is paid and performed in full prior
to the end of the full contemplated  term thereof,  and if the interest received
for the actual  period of  existence  thereof  exceeds the Maximum  Lawful Rate,
Banks  shall  refund to  Borrower  the amount of such excess and, in such event,
Banks shall not be subject to any penalties provided by any Laws for contracting
for, charging,  taking, reserving or receiving interest in excess of the Maximum
Lawful Rate.

     Section 15.8  Invalid  Provisions.  If any  provision of the Loan Papers is
held to be  illegal,  invalid,  or  unenforceable  under  present or future Laws
effective during the term thereof, such provision shall be fully severable,  the
Loan Papers shall be  construed  and enforced as if such  illegal,  invalid,  or
unenforceable  provision had never  comprised a part thereof,  and the remaining
provisions  thereof  shall  remain  in full  force and  effect  and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom.  Furthermore,  in lieu of such  illegal,  invalid,  or  unenforceable
provision  there  shall be added  automatically  as a part of the Loan  Papers a
provision  as  similar  in  terms to such  illegal,  invalid,  or  unenforceable
provision as may be possible and be legal, valid and enforceable.

     Section 15.9 Waiver of Consumer Credit Laws. Pursuant to Chapter 346 of the
Texas Finance Code, as amended,  Parent and Borrower agree that such Chapter 346
shall not govern or in any manner apply to the Revolving Loan.

     Section 15.10 Assignments and Participations.

          (a)  Successors  and  Assigns.  The terms and  provisions  of the Loan
     Papers shall be binding  upon and inure to the benefit of Parent,  Borrower
     and Banks and their  respective  successors and assigns  permitted  hereby,
     except that (i) neither  Parent nor Borrower shall have the right to assign
     its rights or  obligations  under the Loan Papers without the prior written
     consent  of each  Bank,  (ii) any  assignment  by any Bank  must be made in
     compliance with Section  15.10(c),  and (iii) any transfer by participation
     must be made in compliance with Section 15.10(b).  Any attempted assignment
     or transfer by any party not made in compliance with this Section  15.10(a)
     shall be null and void,  unless such  attempted  assignment  or transfer is
     treated as a participation in accordance with Section 15.10(b). The parties
     to this  Agreement  acknowledge  that clause (ii) of this Section  15.10(a)
     relates only to absolute  assignments  and this Section  15.10(a)  does not
     prohibit  assignments  creating  security  interests,   including,  without
     limitation,  (x) any pledge or assignment by any Bank of all or any portion
     of its rights under this  Agreement and any Note to a Federal  Reserve Bank
     or (y) in the case of a Bank which is a Fund,  any pledge or  assignment of
     all or any portion of its rights under this  Agreement  and any Note to its
     trustee in support of its  obligations to its trustee;  provided,  however,
     that no such  pledge or  assignment  creating  a  security  interest  shall
     release the transferor Bank from its obligations hereunder unless and until
     the parties thereto have complied with the provisions of Section  15.10(c).
     Administrative  Agent may treat the Person which made any Revolving Loan or
     which holds any Note as the owner  thereof for all purposes  hereof  unless
     and until such Person complies with Section  15.10(c);  provided,  however,
     that Administrative  Agent may in its discretion (but shall not be required

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     to) follow  instructions  from the Person which made any Revolving  Loan or
     which holds any Note to direct payments  relating to such Revolving Loan or
     Note to another Person. Any assignee of the rights to any Revolving Loan or
     any Note agrees by  acceptance  of such  assignment  to be bound by all the
     terms and provisions of the Loan Papers. Any request,  authority or consent
     of any  Person,  who at the time of making  such  request  or  giving  such
     authority  or  consent  is the owner of the  rights to any  Revolving  Loan
     (whether  or not a Note has been  issued  in  evidence  thereof),  shall be
     conclusive and binding on any  subsequent  holder or assignee of the rights
     to such Revolving Loan.

          (b) Participations.

               (i) Any Bank may at any time  sell to one or more  banks or other
          entities  ("Participants")  participating  interests in any  Revolving
          Loan owing to such Bank, any Note held by such Bank, any Commitment of
          such Bank or any other interest of such Bank under the Loan Papers. In
          the event of any such sale by a Bank of  participating  interests to a
          Participant,  such  Bank's  obligations  under the Loan  Papers  shall
          remain  unchanged,  such Bank shall remain solely  responsible  to the
          other parties  hereto for the  performance of such  obligations,  such
          Bank shall remain the owner of its  Revolving  Loans and the holder of
          any Note issued to it in evidence  thereof for all purposes  under the
          Loan  Papers,  all amounts  payable by Borrower  under this  Agreement
          shall be  determined  as if such Bank had not sold such  participating
          interests,   and  Parent,  Borrower  and  Administrative  Agent  shall
          continue to deal solely and directly with such Bank in connection with
          such Bank's rights and obligations under the Loan Papers.

               (ii) Each Bank shall  retain the sole right to  approve,  without
          the consent of any Participant, any amendment,  modification or waiver
          of  any  provision  of the  Loan  Papers  other  than  any  amendment,
          modification   or  waiver  with  respect  to  any  Revolving  Loan  or
          Commitment  in which such  Participant  has an  interest  which  would
          require  consent of all of the Banks  pursuant to the terms of Section
          15.5 or of any other Loan Paper.

               (iii) Parent and Borrower  agree that each  Participant  shall be
          deemed to have the right of setoff provided in Section 15.4 in respect
          of its  participating  interest in amounts owing under the Loan Papers
          to the same extent as if the amount of its participating interest were
          owing directly to it as a Bank under the Loan Papers;  provided,  that
          each Bank shall  retain the right of setoff  provided in Section  15.4
          with  respect to the amount of  participating  interests  sold to each
          Participant.  Banks  agree to share  with each  Participant,  and each
          Participant,  by  exercising  the right of setoff  provided in Section
          15.4,  agrees to share with each Bank, any amount received pursuant to
          the  exercise  of its right of  setoff,  such  amounts to be shared in
          accordance  with  Section  15.4  as if each  Participant  were a Bank.
          Parent  and  Borrower  further  agree that each  Participant  shall be
          entitled to the yield protection  provisions  contained in Article XIV
          to the same extent as if it were a Bank and had  acquired its interest
          by  assignment  pursuant  to Section  15.10(c);  provided,  that (A) a
          Participant shall not be entitled to receive any greater payment under
          Article XIV than the Bank who sold the participating  interest to such
          Participant  would have received had it retained such interest for its
          own account,  unless the sale of such interest to such  Participant is
          made with the prior written  consent of Parent and  Borrower,  and (B)

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          any Participant not  incorporated  under the laws of the United States
          of America or any State thereof  agrees to comply with the  provisions
          of Section 14.6 to the same extent as if it were a Bank.

          (c) Assignments.

               (i) Any Bank may at any time assign to one or more banks or other
          entities  ("Purchasers") all or any part of its rights and obligations
          under the Loan Papers.  The parties to such  assignment  shall execute
          and deliver an Assignment and Acceptance  Agreement (herein so called)
          which shall be substantially in the form of Exhibit K or in such other
          form as may be agreed to by the parties thereto.  Each such assignment
          with  respect to a Purchaser  which is not a Bank or an Affiliate of a
          Bank or an  Approved  Fund shall  either be in an amount  equal to the
          entire applicable Commitment and Revolving Loans of the assigning Bank
          or (unless each of Parent, Borrower and Administrative Agent otherwise
          consents)  be in an  aggregate  amount not less than  $5,000,000.  The
          amount  of  the  assignment  shall  be  based  on  the  Commitment  or
          outstanding  Revolving  Loans (if the Commitment has been  terminated)
          subject  to  the  assignment,  determined  as  of  the  date  of  such
          assignment or as of the "Effective  Date," if the "Effective  Date" is
          specified in the Assignment and Acceptance Agreement.

               (ii) The consent of Parent and Borrower  shall be required  prior
          to an assignment  becoming  effective  unless  Purchaser is a Bank, an
          Affiliate  of a Bank or an Approved  Fund,  provided  that neither the
          consent of Parent nor  Borrower  shall be  required  if a Default  has
          occurred and is continuing.  The consent of Administrative Agent shall
          be  required  prior to an  assignment  becoming  effective  unless the
          Purchaser is a Bank, an Affiliate of a Bank or an Approved  Fund.  The
          consent  of Letter  of Credit  Issuer  shall be  required  prior to an
          assignment of a Commitment  becoming  effective  unless Purchaser is a
          Bank, an Affiliate of a Bank or an Approved Fund. Any consent required
          under this Section 15.10(c)(ii) shall not be unreasonably  withheld or
          delayed.

               (iii) Upon (A) delivery to Administrative  Agent of an Assignment
          and  Acceptance  Agreement,  together  with any  consents  required by
          Section  15.10(c)(i)  and (ii),  and (B)  payment  of a $3,500  fee to
          Administrative  Agent for processing such assignment  (unless such fee
          is waived by  Administrative  Agent),  such  assignment  shall  become
          effective  on the  effective  date  specified in such  Assignment  and
          Acceptance  Agreement.  On  and  after  the  effective  date  of  such
          assignment,  such Purchaser  shall for all purposes be a Bank party to
          this  Agreement  and any other Loan Paper  executed by or on behalf of
          Banks and shall have all the rights  and  obligations  of a Bank under
          the Loan  Papers,  to the same extent as if it were an original  party
          thereto, and the transferor Bank shall be released with respect to the
          Commitment and Revolving Loans assigned to such Purchaser  without any
          further consent or action by Parent, Borrower, Banks or Administrative
          Agent.  In the case of an  assignment  covering  all of the  assigning
          Bank's rights and obligations  under this  Agreement,  such Bank shall
          cease to be a Bank  hereunder but shall continue to be entitled to the
          benefits of, and subject to, those  provisions  of this  Agreement and
          the other Loan Papers which  survive  payment of the  Obligations  and
          termination of the applicable agreement. Any assignment or transfer by
          a Bank of rights or  obligations  under this  Agreement  that does not
          comply with this  Section  15.10(c)  shall be treated for  purposes of
          this  Agreement  as a sale by such  Bank  of a  participation  in such

                                       77
<PAGE>

          rights and obligations in accordance with Section  15.10(b).  Upon the
          consummation of any assignment to a Purchaser pursuant to this Section
          15.10(c), the transferor Bank, Administrative Agent and Borrower shall
          make  appropriate  arrangements  so that new Notes or, as appropriate,
          replacement Notes are issued to such transferor Bank and new Notes or,
          as appropriate,  replacement  Notes, are issued to such Purchaser,  in
          each  case  in   principal   amounts   reflecting   their   respective
          Commitments, as adjusted pursuant to such assignment.

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

          (d) Dissemination of Information.  Parent and Borrower  authorize each
     Bank to  disclose  to any  Participant  or  Purchaser  or any other  Person
     acquiring  an  interest  in the Loan  Papers  by  operation  of law (each a
     "Transferee")  and any  prospective  Transferee any and all  information in
     such Bank's possession concerning the creditworthiness of Parent,  Borrower
     and their  Subsidiaries,  including,  without  limitation,  any information
     contained in any financial  reports;  provided,  that,  each Transferee and
     prospective  Transferee  agrees  to be  bound  by  Section  15.17  of  this
     Agreement.

          (e) Tax Treatment. If any interest in any Loan Paper is transferred to
     any  Transferee  which is not  incorporated  under  the laws of the  United
     States  or  any  State  thereof,  the  transferor  Bank  shall  cause  such
     Transferee, concurrently with the effectiveness of such transfer, to comply
     with the provisions of Section 14.6(d).

     Section  15.11  TEXAS  LAW.  THIS  AGREEMENT,  EACH NOTE AND THE OTHER LOAN
PAPERS  HAVE  BEEN  EXECUTED  AND  DELIVERED  IN THE STATE OF TEXAS AND SHALL BE
CONSTRUED IN ACCORDANCE  WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND
THE LAWS OF THE UNITED STATES OF AMERICA,  EXCEPT TO THE EXTENT THAT THE LAWS OF
ANY STATE IN WHICH ANY  PROPERTY  INTENDED AS SECURITY  FOR THE  OBLIGATIONS  IS
LOCATED NECESSARILY GOVERN (A) THE PERFECTION AND PRIORITY OF THE LIENS IN FAVOR
OF  ADMINISTRATIVE  AGENT AND BANKS WITH RESPECT TO SUCH  PROPERTY,  AND (B) THE
EXERCISE OF ANY REMEDIES (INCLUDING FORECLOSURE) WITH RESPECT TO SUCH PROPERTY.

                                       78
<PAGE>

     Section 15.12 Consent to Jurisdiction; Waiver of Immunities.

          (a) Parent and Borrower hereby  irrevocably submit to the jurisdiction
     of any Texas State or Federal  court  sitting in the  Northern  District of
     Texas over any action or  proceeding  arising  out of or  relating  to this
     Agreement  or any  other  Loan  Papers,  and  Parent  and  Borrower  hereby
     irrevocably  agree that all claims in respect of such action or  proceeding
     may be heard and  determined  in such Texas State or Federal  court.  As an
     alternative,  Parent and Borrower irrevocably consent to the service of any
     and all process in any such  action or  proceeding  by the  mailing  (which
     shall be by  registered  mail) of copies of such  process to such Person at
     its address  specified in Section  15.1.  Parent and Borrower  agree that a
     final judgment on any such action or proceeding shall be conclusive and may
     be enforced in other  jurisdictions by suit on the judgment or in any other
     manner provided by Law.

          (b) Nothing in this  Section  15.12 shall affect any right of Banks to
     serve  legal  process in any other  manner  permitted  by Law or affect the
     right of any Bank to bring any  action or  proceeding  against  any  Credit
     Party or their properties in the courts of any other jurisdictions.

          (c) To the extent that Parent or Borrower has or hereafter may acquire
     any  immunity  from  jurisdiction  of any court or from any  legal  process
     (whether   through  service  or  notice,   attachment  prior  to  judgment,
     attachment  in aid of execution,  execution or  otherwise)  with respect to
     itself or its property, such Person hereby irrevocably waives such immunity
     in  respect of its  obligations  under  this  Agreement  and the other Loan
     Papers.

     Section 15.13 Counterparts;  Effectiveness. This Agreement may be signed in
any number of  counterparts,  each of which shall be an original,  with the same
effect as if the  signatures  thereto and hereto were upon the same  instrument.
Subject  to the terms  and  conditions  herein  set  forth  (including,  without
limitation,  the execution and delivery of the  Certificate  of  Effectiveness),
this  Agreement  shall become  effective  when  Administrative  Agent shall have
received counterparts hereof signed by all of the parties hereto or, in the case
of any Bank as to which an executed  counterpart  shall not have been  received,
Administrative   Agent  shall  have  received   telegraphic   or  other  written
confirmation from such Bank of execution of a counterpart hereof by such Bank.

     Section  15.14 No Third  Party  Beneficiaries.  Except  for the  provisions
hereof  inuring to the  benefit of Agents not a party to this  Agreement,  it is
expressly  intended  that there  shall be no third  party  beneficiaries  of the
covenants, agreements, representations or warranties herein contained other than
third party beneficiaries permitted pursuant to Section 15.10.

     Section 15.15 COMPLETE AGREEMENT.  THIS AGREEMENT AND THE OTHER LOAN PAPERS
COLLECTIVELY  REPRESENT THE FINAL  AGREEMENT BY AND AMONG BANKS,  AGENTS AND THE
CREDIT   PARTIES   AND  MAY  NOT  BE   CONTRADICTED   BY   EVIDENCE   OF  PRIOR,
CONTEMPORANEOUS,  OR SUBSEQUENT ORAL AGREEMENTS OF BANKS, AGENTS, AND THE CREDIT
PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS  AMONG BANKS,  AGENTS,  AND THE
CREDIT PARTIES.

                                       79
<PAGE>

Section 15.16 WAIVER OF JURY TRIAL. PARENT, BORROWER, ADMINISTRATIVE AGENT AND
BANKS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN PAPERS
AND FOR ANY COUNTERCLAIM THEREIN.

     Section 15.17 Confidentiality.  Administrative Agent and each Bank (each, a
"Lending Party") agrees to keep  confidential any information  furnished or made
available to it by any Credit Party  pursuant to this  Agreement  that is marked
confidential; provided, that nothing herein shall prevent any Lending Party from
disclosing  such  information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director,  employee, agent, or advisor of any
Lending Party or any Affiliate of any Lending Party,  (b) to any other Person if
reasonably  incidental to the  administration  of the credit  facility  provided
herein,  (c) as required by any Law, rule or  regulation,  (d) upon the order of
any  court or  administrative  agency,  (e) upon the  request  or  demand of any
regulatory  agency or authority,  (f) that is or becomes available to the public
or that is or becomes available to any Lending Party other than as a result of a
disclosure by any Lending Party prohibited by this Agreement,  (g) in connection
with any  litigation to which such Lending Party or any of its affiliates may be
a party,  (h) to the extent  necessary  in  connection  with the exercise of any
remedy  under  this  Agreement  or any other  Loan  Paper,  and (i)  subject  to
provisions  substantially  similar to those  contained in this Section 15.17, to
any actual or proposed participant or assignee.  Notwithstanding anything herein
to the contrary,  confidential  information shall not include, and each party to
any of the Loan  Papers  and their  respective  Affiliates  (and the  respective
partners, directors,  officers, employees,  advisors,  representatives and other
agents of each of the  foregoing and their  Affiliates)  may disclose to any and
all Persons,  without limitation of any kind (i) any information with respect to
the U.S. federal and state income tax treatment of the transactions contemplated
hereby and any facts that may be relevant to  understanding  such tax treatment,
which facts  shall not include for this  purpose the names of the parties or any
other Person named herein,  or information that would permit  identification  of
the  parties or such other  Persons,  or any  pricing  terms or other  nonpublic
business or financial  information  that is  unrelated to such tax  treatment or
facts,  and (ii) all  materials  of any kind  (including  opinions  or other tax
analyses)  relating to such tax  treatment  or facts that are provided to any of
the  Persons  referred  to above,  and it is hereby  confirmed  that each of the
Persons referred to above has been authorized to make such disclosures since the
commencement of discussions regarding the transactions contemplated hereby.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
duly executed by their respective  Authorized Officers on the day and year first
above written.

                           [signature pages to follow]


                                       80
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS


                                                   Signature Page

BORROWER:

DENBURY ONSHORE, LLC,
a Delaware limited liability company

By:
         -----------------------------------------------------------------------
         Phil Rykhoek,
         Senior Vice President and Chief Financial Officer


Address for Notice:

5100 Tennyson Parkway
Suite 3000
Plano, Texas  75024
Fax No. (972) 673-2150


PARENT:

DENBURY RESOURCES INC.,
a Delaware corporation

By:
         -----------------------------------------------------------------------
         Phil Rykhoek,
         Senior Vice President and Chief Financial Officer

Address for Notice:

5100 Tennyson Parkway
Suite 3000
Plano, Texas  75024
Fax No. (972) 673-2150



                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



ADMINISTRATIVE AGENT:
--------------------

BANK ONE, NA,
as Administrative Agent


By:
         --------------------------------------------
         J. Scott Fowler,
         Director, Capital Markets



BANKS:

BANK ONE, NA


By:
         --------------------------------------------
         J. Scott Fowler,
         Director, Capital Markets




                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



SYNDICATION AGENT:
-----------------

CREDIT LYONNAIS NEW YORK BRANCH,
as Syndication Agent


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



BANKS:

CREDIT LYONNAIS NEW YORK BRANCH


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






                                 Signature Page

<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



SYNDICATION AGENT:
-----------------

FORTIS CAPITAL CORP.,
as Syndication Agent


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



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



BANKS:

FORTIS CAPITAL CORP.


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



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



                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



DOCUMENTATION AGENT:
-------------------

UNION BANK OF CALIFORNIA, N.A.,
as Documentation Agent


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



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



BANKS:

UNION BANK OF CALIFORNIA, N.A.


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



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


                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



DOCUMENTATION AGENT:
-------------------

COMERICA BANK,
as Documentation Agent


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



BANKS:

COMERICA BANK


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



                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



BANKS:

FLEET NATIONAL BANK


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











                                 Signature Page

<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



BANKS:

WELLS FARGO BANK, N.A.


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










                                 Signature Page

<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



BANKS:

BANK OF SCOTLAND


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














                                 Signature Page
<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



BANKS:

COMPASS BANK


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









                                 Signature Page

<PAGE>
                                SIGNATURE PAGE TO
                  FOURTH AMENDED AND RESTATED CREDIT AGREEMENT
                                  BY AND AMONG
                  DENBURY RESOURCES INC., AS PARENT GUARANTOR,
                       DENBURY ONSHORE, LLC, AS BORROWER,
                     BANK ONE, NA, AS ADMINISTRATIVE AGENT,
                      THE OTHER AGENTS A PARTY THERETO, AND
                        THE FINANCIAL INSTITUTIONS LISTED
                        ON SCHEDULE 2.1 THERETO, AS BANKS



BANKS:

BANK OF AMERICA, N.A.


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









                                 Signature Page

<PAGE>
                                  SCHEDULE 2.1


<TABLE>
                             Financial Institutions

======================================== ========================= ===========================
<S>                                           <C>                        <C>
Banks                                       Commitment Amount        Commitment Percentage
---------------------------------------- ------------------------- ---------------------------
Bank One, NA                                  $35,454,545.45             11.8181818182%
---------------------------------------- ------------------------- ---------------------------
Credit Lyonnais New York Branch               $35,454,545.45             11.8181818182%
---------------------------------------- ------------------------- ---------------------------
Fortis Capital Corp.                          $35,454,545.45             11.8181818182%
---------------------------------------- ------------------------- ---------------------------
Union Bank of California, N.A.                $35,454,545.45             11.8181818182%
---------------------------------------- ------------------------- ---------------------------
Comerica Bank                                 $35,454,545.45             11.8181818182%
---------------------------------------- ------------------------- ---------------------------
Fleet National Bank                           $28,636,363.64             9.5454545454%
---------------------------------------- ------------------------- ---------------------------
Wells Fargo Bank, N.A.                        $28,636,363.64             9.5454545454%
---------------------------------------- ------------------------- ---------------------------
Bank of Scotland                              $28,636,363.64             9.5454545454%
---------------------------------------- ------------------------- ---------------------------
Bank of America, N.A.                         $18,409,090.91             6.1363636364%
---------------------------------------- ------------------------- ---------------------------
Compass Bank                                  $18,409,090.91             6.1363636364%
---------------------------------------- ------------------------- ---------------------------
Totals:                                      $300,000,000.00                100.00%
======================================== ========================= ===========================
</TABLE>
<TABLE>
<CAPTION>

=============================== ============================== =============================== ================================
Banks                              Domestic Lending Office       Eurodollar Lending Office           Address for Notice
-----                              -----------------------                                           ------------------
------------------------------- ------------------------------ ------------------------------- --------------------------------
<S>                             <C>                            <C>                             <C>
Bank One, NA                    One Bank One Plaza             One Bank One Plaza              1717 Main Street
                                Mail Code IL1-0634             Mail Code IL1-0634              4th Floor
                                Chicago, Illinois  60670       Chicago, Illinois  60670        Mail Code TX1-2448
                                Attn:  Ken Fecko               Attn:  Ken Fecko                Dallas, Texas 75201
                                Tel. No. (312) 732-4616        Tel. No. (312) 732-4616         Attn:  J. Scott Fowler
                                Fax No. (312) 732-4840         Fax No. (312) 732-4840          Tel. No. (214) 290-2162
                                                                                               Fax No. (214) 290-2332
------------------------------- ------------------------------ ------------------------------- --------------------------------
Credit Lyonnais New York        1301 Avenue of the Americas    1301 Avenue of the Americas     1000 Louisiana, Suite 5360
Branch                          New York, New York 10019       New York, New York 10019        Houston, Texas 77002
                                Attn:  Gener David             Attn:  Gener David              Attn:  John Grandstaff
                                Tel. No. (212) 261-7747        Tel. No. (212) 261-7747         Tel. No.  (713) 890-8617
                                Fax No. (917) 849-5440         Fax No. (917) 849-5440          Fax No.  (713) 890-8668
------------------------------- ------------------------------ ------------------------------- --------------------------------
Fortis Capital Corp.            Three Stamford Plaza           Three Stamford Plaza            15455 North Dallas Parkway
                                301 Tressa Blvd.               301 Tressa Blvd.                Suite 1400
                                Stamford, CT  06901            Stamford, CT  06901             Addison, Texas  75001
                                Attn:  Tony Lopez              Attn:  Tony Lopez               Attn:  David Montgomery
                                Tel. No. (203) 705-5864        Tel. No. (203) 705-5864         Tel. No. (214) 953-9311
                                Fax No. (203) 795-5888         Fax No. (203) 795-5888          Fax No. (214) 754-5982
------------------------------- ------------------------------ ------------------------------- --------------------------------
Union Bank of California, N.A.  1980 Saturn Street, V03-251    1980 Saturn Street, V03-251     500 North Akard, Suite 4200
                                Monterey Park, CA  91755       Monterey Park, CA  91755        Dallas, TX  75201
                                Attn:  Shirley Davis           Attn:  Shirley Davis            Attn:  Ali Ahmed
                                Tel. No. (323) 720-2870        Tel. No. (323) 720-2870         Tel. No.  (214) 922-4207
                                Fax No. (323) 720-2252 / 51    Fax No. (323) 720-2252 / 51     Fax No.  (214) 922-4209
------------------------------- ------------------------------ ------------------------------- --------------------------------
Comerica Bank                   39200 West 6 Mile Road         39200 West 6 Mile Road          1601 Elm Street, 2nd Floor,
                                Lavonia, MI  48152             Lavonia, MI  48152              MC6593
                                Attn:  Debralyn Brown          Attn:  Debralyn Brown           Dallas, TX  75201
                                Tel. No.  (734) 632-7021       Tel. No.  (734) 632-7021        Attn:  Michele L. Jones
                                Fax No.  (734) 632-7021        Fax No.  (734) 632-7021         Tel. No.  (214) 969-6563
                                                                                               Fax No.  (214) 969-6561
------------------------------- ------------------------------ ------------------------------- --------------------------------
Fleet National Bank             100 Federal Street             100 Federal Street              100 Federal Street
                                MA DE 10008A                   MA DE 10008A                    MA DE 10008A
                                Boston, MA 02110               Boston, MA 02110                Boston, MA 02110
                                Attn:  Cassandra Roberson      Attn:  Cassandra Roberson       Attn:  Cassandra Roberson
                                Tel. No. (617) 434-3936        Tel. No. (617) 434-3936         Tel. No. (617) 434-3936
                                Fax No.  (617) 434-0201        Fax No.  (617) 434-0201         Fax No.  (617) 434-0201
------------------------------- ------------------------------ ------------------------------- --------------------------------
</TABLE>

                                 Schedule 2.1-1
<PAGE>
<TABLE>
<CAPTION>
<S>                             <C>                            <C>                             <C>

Wells Fargo Bank, N.A.          1740 Broadway                  1740 Broadway                   1445 Ross Avenue, Suite 2360
                                MAC# C7300-034                 MAC# C7300-034                  MAC# T5303-233
                                Denver, CO 80274               Denver, CO 80274                Dallas, Texas 75202
                                Attn:  Tanya Ivie              Attn:  Tanya Ivie               Attn:  J. Alan Alexander, Jr.
                                Tel. No. (303) 863-6102        Tel. No. (303) 863-6102         Tel. No. (214) 661-1237
                                Fax No.  (303) 863-2729        Fax No.  (303) 863-2729         Fax No.  (214) 661-1242
------------------------------- ------------------------------ ------------------------------- --------------------------------
Bank of Scotland                565 Fifth Avenue, 5th Floor    565 Fifth Avenue, 5th Floor     565 Fifth Avenue, 5th Floor
                                New York, NY  10017            New York, NY  10017             New York, NY  10017
                                Attn.  Karen Workman           Attn.  Karen Workman            Attn.  Karen Workman
                                Tel. No.  (212) 450-0877       Tel. No.  (212) 450-0877        Tel. No.  (212) 450-0877
                                Fax No.  (212) 687-4412        Fax No.  (212) 687-4412         Fax No.  (212) 687-4412
------------------------------- ------------------------------ ------------------------------- --------------------------------
Bank of America, N.A.           901 Main Street, 67th Floor    901 Main Street, 67th Floor     901 Main Street, 67th Floor
                                Dallas, Texas  75202           Dallas, Texas  75202            Dallas, Texas  75202
                                Attn:  Sharlette Wright        Attn:  Sharlette Wright         Attn:  Steven Mackenzie
                                Tel. No.  (214) 209-1150       Tel. No.  (214) 209-1150        Tel. No.  (214) 209-3680
                                Fax No.  (214) 209-3140        Fax No.  (214) 209-3140         Fax No.  (214) 209-3140
------------------------------- ------------------------------ ------------------------------- --------------------------------
Compass Bank                    24 Greeway Plaza, Suite 1400A  24 Greeway Plaza, Suite 1400A   24 Greeway Plaza, Suite 1400A
                                Houston, TX  77046             Houston, TX  77046              Houston, TX  77046
                                Attn:  Stacey R. Box           Attn:  Stacey R. Box            Attn:  Dorothy Marchand
                                Tel. No.  (713) 993-8580       Tel. No.  (713) 993-8580        Tel. No.  (713) 968-8272
                                Fax No.  (713) 968-8292        Fax No.  (713) 968-8292         Fax No.  (713) 968-8292
------------------------------- ------------------------------ ------------------------------- --------------------------------
</TABLE>

Administrative Agent - Address:
1717 Main Street, 4th Floor
Mail Code TX1-2448
Dallas, Texas 75202
Tel. No. (214) 290-2162
Fax No. (214) 290-2332
















                                 Schedule 2.2-2


<PAGE>
                                  SCHEDULE 2.2

                               Existing Mortgages

MINERALS MANAGEMENT SERVICE

1.   Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
     Financing  Statement  dated March 24,  2000,  executed by Matrix Oil & Gas,
     Inc. in favor of Union Bank of  California,  filed on March 30, 2000,  with
     the Minerals Management Service, as amended by that certain

     First  Supplement  and  Amendment to Deed of Trust,  Mortgage,  Assignment,
     Security Agreement,  Fixture Filing and Financing Statement dated March 28,
     2000,  executed  by Matrix Oil & Gas,  Inc.  and Union Bank of  California,
     filed on April 4, 2000, as File Number 00691, with the Minerals  Management
     Service, as amended by that certain

     Second  Supplement  and Amendment to Deed of Trust,  Mortgage,  Assignment,
     Security  Agreement,  Fixture  Filing and Financing  Statement  dated as of
     September  25, 2000,  executed by Matrix Oil & Gas,  Inc. and Union Bank of
     California,  filed on  September  28, 2000,  with the  Minerals  Management
     Service and assigned by that certain

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on October 9,  2001,  as File  Number  OCS-00190,  with the  Minerals
     Management Service, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed in the office of the Minerals  Management  Service
     Adjudication Unit, on January 21, 2003, as Filing Number G22269.

2.   Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed in the  office of the  Minerals
     Management Service Adjudication Unit, on January 21, 2003, as Filing Number
     G22269.

3.   UCC Assignment by Bank of America,  N.A., as administrative agent, in favor
     of  Administrative  Agent,  filed in the office of the Minerals  Management
     Service Adjudication Unit, on January 21, 2003, in connection with original
     File Number OCS-0787.

     UCC Assignment in connection with original File Number  OCS-0787,  executed
     by  Union  Bank  of  California  in  favor  of Bank of  America,  N.A.,  as
     administrative agent, filed with the Minerals Management Service.

4.   UCC Assignment by Bank of America,  N.A., as administrative agent, in favor
     of  Administrative  Agent,  filed in the office of the Minerals  Management
     Service Adjudication Unit, on January 21, 2003, in connection with original
     File Number OCS-00691.

                                 Schedule 2.2-1
<PAGE>

     UCC Assignment in connection with original File Number OCS-00691,  executed
     by  Union  Bank  of  California  in  favor  of Bank of  America,  N.A.,  as
     administrative agent, filed with the Minerals Management Service.

5.   UCC Assignment by Bank of America,  N.A., as administrative agent, in favor
     of  Administrative  Agent,  filed in the office of the Minerals  Management
     Service Adjudication Unit, on January 21, 2003, in connection with original
     File Number G03386.

6.   UCC Assignment in connection with original File Number G03386,  executed by
     Union  Bank  of  California   in  favor  of  Bank  of  America,   N.A.,  as
     administrative agent, filed with the Minerals Management Service.

LOUISIANA

Acadia Parish, Louisiana

7.   Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production from Denbury  Management,  Inc. ("DMI") to Bank of
     America,  N.A., as administrative agent, recorded on July 15, 1996, as File
     Number  625353,  in Mortgage Book 520,  Folio 442, with the Parish Clerk of
     Acadia Parish, Louisiana, as amended by that certain

     Amendment to Mortgages  dated  December 29, 1997,  executed DMI and Bank of
     America,  N.A., as administrative agent, filed on January 12, 1998, as File
     Number  643480,  with the Parish  Clerk of Acadia  Parish,  Louisiana.,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the Parish Clerk of Acadia Parish, Louisiana,
     on October 10, 2002, as File Number 704964.

8.   Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America,  N.A., as administrative agent, recorded on March 12, 1999
     as Document  Number  658835 in MOB 562,  Page 36 and COB N56, Page 91, with
     the Parish Clerk of Acadia Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument Number 680055, in Mortgage Book 593, Page 744, with the
     Parish Clerk of Acadia Parish,  Louisiana,  as assigned and amended by that
     certain

                                 Schedule 2.2-2
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the Parish Clerk of Acadia Parish, Louisiana,
     on October 10, 2002, as File Number 704964.

9.   UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 658835, with the Parish Clerk of Acadia Parish, Louisiana.

Ascension Parish, Louisiana

10.  Mortgage,  Assignment,  Security  Agreement,  Fixture  Filing and Financing
     Statement  executed  by DMI to Bank of  America,  N.A.,  as  administrative
     agent,  filed on November 27, 1995,  as File Number  361787,  in Conveyance
     Book 549 and Mortgage Book 643, with the Parish Clerk of Ascension  Parish,
     Louisiana, as assigned and amended by that certain

     Assignment  and  Amendment to Mortgage  filed June 12, 1996, as File Number
     372807,  in MOB Book  667,  with the  Parish  Clerk  of  Ascension  Parish,
     Louisiana, as amended by that certain

     Amendment  to  Mortgages  executed  by DMI and Bank of  America,  N.A.,  as
     administrative agent, filed January 12 ,1998, as File Number 405042, in MOB
     Book 746, with the Parish Clerk of Ascension Parish, Louisiana, as assigned
     and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Ascension  Parish,
     Louisiana, on October 10, 2002, as File Number 526769.

11.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower, to Administrative Agent, filed with the Parish Clerk of Ascension
     Parish, Louisiana, on October 10, 2002, as Document Number 526770.

Avoyelles Parish, Louisiana

12.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 15,  1996,  as File Number  96-6252,  in
     Mortgage Book 424, with the Parish Clerk of Avoyelles Parish, Louisiana; as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, as File
     Number 9800208, in MOB Book 438, with the Parish Clerk of Avoyelles Parish,
     Louisiana, as assigned and amended by that certain

                                 Schedule 2.2-3
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Avoyelles  Parish,
     Louisiana, on October 11, 2002, as File Number 02008095, in Book 483.

13.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     as Clerk's  File  Number  9901907,  MOB Book Number 450 and MIN Book Number
     194, with the Parish Clerk of Avoyelles  Parish,  Louisiana,  as amended by
     that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument Number 00008196,  in Mortgage Book 465, with the Parish
     Clerk of  Avoyelles  Parish,  Louisiana,  as amended  and  assigned by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Avoyelles  Parish,
     Louisiana, on October 11, 2002, as File Number 02008095, in Book 483.

14.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 990581, with the Parish Clerk of Avoyelles Parish, Louisiana.

Cameron Parish, Louisiana

15.  Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed  May 12,  1995,  as File  Number  240755,  in
     Conveyance Book 815 and Mortgage Book 209, with the Parish Clerk of Cameron
     Parish, Louisiana; as assigned and amended by that certain

     Assignment  and  Amendment to Mortgage  filed June 11, 1996, as File Number
     245936, in Conveyance Book 836 and Mortgage Book 218, with the Parish Clerk
     of Cameron Parish, Louisiana, and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number  253512,  in  Conveyance  Book 869 and Mortgage  Book 230,  with the
     Parish Clerk of Cameron Parish,  Louisiana, as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Cameron Parish,  Louisiana,
     on October 15, 2002, as File Number 277920, in Book 956, Page 273.

                                 Schedule 2.2-4
<PAGE>

16.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File  Number  246389,  in
     Mortgage Book 219, with the Parish Clerk of Cameron Parish,  Louisiana,  as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number  253512,  in  Conveyance  Book 869 and Mortgage  Book 230,  with the
     Parish Clerk of Cameron Parish,  Louisiana, as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Cameron Parish,  Louisiana,
     on October 15, 2002, as File Number 277920, in Book 956, Page 273.

17.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     as Clerk File's Number 259143 and  Conveyance  Book Number 892 and Mortgage
     Book Number 239,  with the Parish Clerk of Cameron  Parish,  Louisiana,  as
     amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 13,
     2000, as Instrument  Number  267490,  in Mortgage Book 255, with the Parish
     Clerk of Cameron Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Cameron Parish,  Louisiana,
     on October 15, 2002, as File Number 277920, in Book 956, Page 273.

18.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 259144, with the Parish Clerk of Cameron Parish, Louisiana.

19.  Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
     Financing  Statement  dated March 24,  2000,  executed by Matrix Oil & Gas,
     Inc. in favor of Union Bank of  California,  recorded on March 30, 2000, as
     File Number 264321, in M.O.B. 250, with the Parish Clerk of Cameron Parish,
     Louisiana, as assigned by that certain

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on July 20, 2001, as File Number  271336,  in Mortgage Book 261, with
     the Parish Clerk of Cameron Parish,  Louisiana,  as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Cameron Parish,  Louisiana,
     on October 15, 2002, as File Number 277920, in Book 956, Page 273.

                                 Schedule 2.2-5
<PAGE>

20.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  January  12,  2001,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on February 6, 2001, as MOB Number 257, COB Number 923, File Number 268674,
     with the Parish Clerk of Cameron Parish, Louisiana, as assigned and amended
     by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Cameron Parish,  Louisiana,
     on October 15, 2002, as File Number 277920, in Book 956, Page 273.

21.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative  agent, filed on February 6, 2001 as File
     Number 268675, with the Parish Clerk of Cameron Parish, Louisiana.

22.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the Parish Clerk of Cameron
     Parish, Louisiana, on October 15, 2002, as File Number 277921, in Book 273.

Concordia Parish, Louisiana

23.  Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative agent, filed May 12, 1995, as Document Number 208248, in COB
     347,  Folio 595 and MOB 270,  Folio 436, with the Parish Clerk of Concordia
     Parish, Louisiana; as assigned and amended by that certain

     Assignment  and  Amendment to Mortgage  filed June 10, 1996, as File Number
     212988,  in MOB Book 280,  Folio 147,  with the Parish  Clerk of  Concordia
     Parish, Louisiana; and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, as File
     Number 220142,  in MOB Book 293, with the Parish Clerk of Concordia Parish,
     Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Concordia  Parish,
     Louisiana, on October 10, 2002, in Book 398, Page 344, Folio 344.

24.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in COB Book  Number 377,  Folio 508 and MOB Book  Number 305,  Folio 679 as
     Document  Number  225538,  with  the  Parish  Clerk  of  Concordia  Parish,
     Louisiana, as amended by that certain

                                 Schedule 2.2-6
<PAGE>

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number  233325,  in Mortgage Book 322, Folio 716, with
     the Parish Clerk of Concordia Parish, Louisiana, as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Concordia  Parish,
     Louisiana, on October 10, 2002, in Book 398, Page 344, Folio 344.

25.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number  15-177729,  UCC Book 1, Page 1, with the Parish  Clerk of Concordia
     Parish, Louisiana.

Desoto Parish, Louisiana

26.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent, filed July 11, 1996, as File Number 551694, with the
     Parish Clerk of Desoto Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, as File
     Number  562934,  with the  Parish  Clerk of Desoto  Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on  October  10,  2002,  in  Mortgage  Book  A915,  Entry  Number  0214624,
     Conveyance Book 1250.

27.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     as Clerk's  File Number  571636,  with the Parish  Clerk of Desoto  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 10,
     2000, as Instrument  Number 583500 with the Parish Clerk of Desoto  Parish,
     Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on  October  10,  2002,  in  Mortgage  Book  A915,  Entry  Number  0214624,
     Conveyance Book 1250.

                                 Schedule 2.2-7
<PAGE>

28.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 57163, with the Parish Clerk of Desoto Parish, Louisiana.

Iberia Parish, Louisiana

29.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File Number  96-6664,  in
     Mortgage Book A682, with the Parish Clerk of Iberia Parish,  Louisiana,  as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number  98-241,  in  Mortgage  Book A717,  with the Parish  Clerk of Iberia
     Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on November 5, 2002, File Number 596212.

30.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 16, 1999,
     in Mortgage Book Number A753,  Entry Number 99-3310,  with the Parish Clerk
     of Iberia Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument Number 00-13589, in Mortgage Book A816, with the Parish
     Clerk of Iberia Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on November 5, 2002, File Number 596212.

31.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 16, 1999, as File
     Number 99-649, with the Parish Clerk of Iberia Parish, Louisiana.

32.  Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
     Financing  Statement  dated March 24,  2000,  executed by Matrix Oil & Gas,
     Inc. in favor of Union Bank of  California,  recorded on March 30, 2000, in
     Book A793,  Entry Number  00-3894,  with the Parish Clerk of Iberia Parish,
     Louisiana, as amended by that certain

     Second  Supplement  and Amendment to Deed of Trust,  Mortgage,  Assignment,
     Security Agreement,  Fixture Filing and Financing Statement dated September
     25, 2000,  executed by Matrix Oil & Gas, Inc. and Union Bank of California,
     recorded on  September  28,  2000,  in  Mortgage  Book A812,  Entry  Number
     00-11990,  with  the  Parish  Clerk of  Iberia  Parish,  Louisiana,  and as
     assigned by that certain

                                 Schedule 2.2-8
<PAGE>

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on July 20, 2001,  as entry number  01-8622,  in Mortgage  Book A846,
     with the Parish Clerk of Iberia Parish,  Louisiana, as assigned and amended
     by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on November 5, 2002, File Number 596212.

33.  UCC  Financing  Statement  executed  by Matrix Oil & Gas,  Inc. in favor of
     Union Bank of  California,  filed on  September  28,  2000,  as File Number
     002566, with the Parish Clerk of Iberia Parish,  Louisiana,  as assigned by
     that certain

     UCC-3 Financing  Statement  Assignment executed by Union Bank of California
     in favor of Bank of America,  N.A., as administrative  agent, filed on July
     20, 2001, as File Number  01-2243,  with the Parish Clerk of Iberia Parish,
     Louisiana.

34.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  January  12,  2001,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on February 13, 2001, as MOB Number A825, COB Number 1212, and Entry Number
     01-1705, with the Parish Clerk of Iberia Parish, Louisiana, as assigned and
     amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the Parish Clerk of Iberia Parish,  Louisiana,
     on November 5, 2002, File Number 596212.

35.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative  agent, filed on February 6, 2001 as File
     Number 01 354, with the Parish Clerk of Iberia Parish, Louisiana.

Jackson Parish, Louisiana

36.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 15,  1996,  as File  Number  318867,  in
     Mortgage  Book 170,  Folio 694,  with the Parish  Clerk of Jackson  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, as File
     Number  324795,  in Mortgage  Book 177,  Page 834, with the Parish Clerk of
     Jackson Parish, Louisiana, as assigned and amended by that certain

                                 Schedule 2.2-9
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Jackson Parish,  Louisiana,
     on October 10, 2002, as File Number 346209, in Book 212, Page 169.

37.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     as Clerk's File Number  328899 in  Conveyance  Book Number 306, Page 71 and
     Mortgage  Book  Number  184,  Page 721,  with the  Parish  Clerk of Jackson
     Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 13,
     2000, as Instrument Number 335841, in Mortgage Book 195, Page 613, with the
     Parish Clerk of Jackson Parish,  Louisiana, as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Jackson Parish,  Louisiana,
     on October 10, 2002, as File Number 346209, in Book 212, Page 169.

38.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 25023906, with the Parish Clerk of Jackson Parish, Louisiana.

Jefferson Davis Parish, Louisiana

39.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 16,  1996,  as File  Number  535475,  in
     Mortgage  Book 378,  Folio 403,  with the Parish Clerk of  Jefferson  Davis
     Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 26, 1998, as File
     Number  550009,  in Mortgage  Book 397,  Page 759, with the Parish Clerk of
     Jefferson Davis Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the Parish Clerk of Jefferson  Davis  Parish,
     Louisiana,  on October 18, 2002, as File Number  591374,  in Book 768, Page
     290.

40.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 15, 1999,
     as Clerk's File Number  560349 in MOB Book Number 413,  Page 299,  with the
     Parish  Clerk of  Jefferson  Davis  Parish,  Louisiana,  as amended by that
     certain

                                Schedule 2.2-10
<PAGE>

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument Number 575430, in Mortgage Book 435, Page 410, with the
     Parish Clerk of Jefferson Davis Parish,  Louisiana, as assigned and amended
     by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the Parish Clerk of Jefferson  Davis  Parish,
     Louisiana,  on October 18, 2002, as File Number  591374,  in Book 768, Page
     290.

41.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 15, 1999, as File
     Number  279900330,  with  the  Parish  Clerk  of  Jefferson  Davis  Parish,
     Louisiana.

42.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  January  12,  2001,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on February 9, 2001, as MOB Number 438,  Page 609, and File Number  577381,
     with the Parish Clerk of Jefferson Davis Parish, Louisiana, as assigned and
     amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the Parish Clerk of Jefferson  Davis  Parish,
     Louisiana,  on October 18, 2002, as File Number  591374,  in Book 768, Page
     290.

43.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 9, 2001, as File
     Number  01-00146,   with  the  Parish  Clerk  of  Jefferson  Davis  Parish,
     Louisiana.

44.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to Administrative  Agent, filed with the Parish Clerk of Jefferson
     Davis Parish,  Louisiana,  on October 18, 2002, as File Number  591373,  in
     Book M-468/C-934, Page M-258/C-254.

LaFourche Parish, Louisiana

45.  Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12,  1995,  as Entry  Number  781497,  in
     Conveyance Book 1242,  Folio 612 and Mortgage Book 691, Folio 648, with the
     Parish Clerk of  LaFourche  Parish,  Louisiana;  as assigned and amended by
     that certain

     Assignment  and Amendment to Mortgages  filed July 1, 1996, as Entry Number
     799606, in Conveyance Book 1277, Folio 736 and Miscellaneous Book 77, Folio
     861, with the Parish Clerk of LaFourche Parish,  Louisiana,  and as amended
     by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative  agent,  filed February 27, 1998, as File
     Number  828742,  in Mortgage  Book 767,  Page 330, with the Parish Clerk of
     LaFourche Parish, Louisiana, as assigned and amended by that certain

                                Schedule 2.2-11
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  LaFourche  Parish,
     Louisiana, on October 21, 2002, as File Number 924507.

46.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File  Number  800203,  in
     Mortgage Book 719,  Folio 211,  with the Parish Clerk of LaFourche  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI in favor of
     Bank of America, N.A., as administrative agent, filed February 27, 1998, as
     File Number  828742,  in Mortgage Book 767, Page 330, with the Parish Clerk
     of LaFourche Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  LaFourche  Parish,
     Louisiana, on October 21, 2002, as File Number 924507.

47.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 17, 1999,
     in Mortgage  Book Number 806,  Folio Number 30, as Entry Number 849538 with
     the office of the Parish Clerk of LaFourche Parish, Louisiana as amended by
     that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on December 1,
     2000, as Instrument  Number 884017, in Mortgage Book 869, Folio 49 with the
     office of the Parish Clerk of LaFourche Parish,  Louisiana, as assigned and
     amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  LaFourche  Parish,
     Louisiana, on October 21, 2002, as File Number 924507.

48.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 17, 1999, as File
     Number 29-849539, with the Parish Clerk of LaFourche Parish, Louisiana.

Livingston Parish, Louisiana

49.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower,   to  Administrative  Agent,  filed  with  the  Parish  Clerk  of
     Livingston  Parish,  Louisiana,  on  October  10,  2002,  as  Entry  Number
     00504867, in Book 826, Page 68.

                                Schedule 2.2-12
<PAGE>

Plaquemines Parish, Louisiana

50.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  October  13,  2000,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on November  13,  2000,  as MOB Number  310,  Folio 204 and COB Number 988,
     Folio 44,  with the  Parish  Clerk of  Plaquemines  Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk of  Plaquamines  Parish,
     Louisiana, on October 21, 2002, as File Number 02006357, in Book 1033, Page
     572.

51.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on November 13, 2000, as File
     Number 38-001663, with the Parish Clerk of Plaquemines Parish, Louisiana.

52.  Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
     Financing  Statement  dated March 24,  2000,  executed by Matrix Oil & Gas,
     Inc. in favor of Union Bank of  California,  recorded on March 30, 2000, in
     M.O.B.  302,  Folio  580,  with the  Parish  Clerk of  Plaquemines  Parish,
     Louisiana, as amended by that certain

     First  Supplement  and  Amendment to Deed of Trust,  Mortgage,  Assignment,
     Security Agreement,  Fixture Filing and Financing Statement dated March 28,
     2000,  executed  by Matrix Oil & Gas,  Inc.  and Union Bank of  California,
     recorded on March 30, 2000, in M.O.B. 302, Folio 649, with the Parish Clerk
     of Plaquemines Parish, Louisiana, and as assigned by that certain

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on July 24, 2001, in M.O.B.  319,  Folio 885, with the Clerk of Court
     of Plaquemines Parish,  Louisiana,  as further assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk of  Plaquamines  Parish,
     Louisiana, on October 21, 2002, as File Number 02006357, in Book 1033, Page
     572.

Pointe Coupee Parish, Louisiana

53.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12, 1996,  as File MB245,  Number 70, in
     Mortgage  Book 415,  Folio  132,  with the  Parish  Clerk of Pointe  Coupee
     Parish, Louisiana, as amended by that certain

                                Schedule 2.2-13
<PAGE>

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 9, 1998, in Mortgage
     Book 257,  Number 140 and Conveyance  Book 440, Number 106, with the Parish
     Clerk of Pointe Coupee Parish,  Louisiana,  as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the  Parish  Clerk of Pointe  Coupee  Parish,
     Louisiana, on October 10, 2002, in Book 318, Page 112.

54.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in MB Book 269 as Clerk's Number 82, with the Parish Clerk of Pointe Coupee
     Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Mortgage  Book 287,  Number 43,  with the Parish  Clerk of Pointe
     Coupee Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the  Parish  Clerk of Pointe  Coupee  Parish,
     Louisiana, on October 10, 2002, in Book 318, Page 112.

55.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 10401, in CM Book 26, with the Parish Clerk of Pointe Coupee Parish,
     Louisiana.

Rapides Parish, Louisiana

56.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File Number  1028847,  in
     Mortgage  Book 1416,  Folio 519,  with the Parish Clerk of Rapides  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 9, 1998, in Mortgage
     Book 1483, Number 915, with the Parish Clerk of Rapides Parish,  Louisiana,
     as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Rapides Parish,  Louisiana,
     on October 10, 2002.

                                Schedule 2.2-14
<PAGE>

57.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in Mortgage Book 1556,  Page 153, and Conveyance Book 1553, Page 897 and as
     Clerk's  File  Number  1097748,  with the Parish  Clerk of Rapides  Parish,
     Louisiana as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number 1144063,  in Mortgage Book 1658, Page 406, with
     the Parish Clerk of Rapides Parish,  Louisiana,  as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Rapides Parish,  Louisiana,
     on October 10, 2002.

58.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 40-043994, with the Parish Clerk of Rapides Parish, Louisiana.

Red River Parish, Louisiana

59.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 11,  1996,  as File  Number  186073,  in
     Mortgage  Book 142,  Folio 149,  with the Parish Clerk of Red River Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 13, 1998, as File
     Number  189198,  with the Parish Clerk of Red River Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Red  River  Parish,
     Louisiana, on October 10, 2002, as Instrument Number 198,394.

60.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 15, 1999,
     as Instrument  Number  191,356,  with the Parish Clerk of Red River Parish,
     Louisiana as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Mortgage  Book 152,  with the Parish  Clerk of Red River  Parish,
     Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Red  River  Parish,
     Louisiana, on October 10, 2002, as Instrument Number 198,394.

                                Schedule 2.2-15
<PAGE>

61.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 15, 1999, as File
     Number 191357, with the Parish Clerk of Red River Parish, Louisiana.

Richland Parish, Louisiana

62.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File  Number  296206,  in
     Mortgage Book 306, with the Parish Clerk of Richland Parish,  Louisiana, as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 20, 1998, as File
     Number  301316,  with the Parish Clerk of Richland  Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Richland Parish, Louisiana,
     on October 10, 2002, as File Number 319726, in Book 354.

St. Bernard Parish, Louisiana

63.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  October  13,  2000,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on November 13,  2000,  as File Number MOB 995,  Page 281,  with the Parish
     Clerk of St.  Bernard  Parish,  Louisiana,  as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk of St.  Bernard  Parish,
     Louisiana,  on October 18, 2002, as File Number 403762, in Book 1107, Folio
     4.

64.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on November 13, 2000, as File
     Number 4435330, with the Parish Clerk of St. Bernard Parish, Louisiana.

St. Charles Parish, Louisiana

65.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File  Number  203836,  in
     Mortgage Book 614, Folio 372, with the Parish Clerk of St. Charles  Parish,
     Louisiana, as amended by that certain

                                Schedule 2.2-16
<PAGE>

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, as File
     Number 216906,  in Book 653, Page 608, with the Parish Clerk of St. Charles
     Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk of St.  Charles  Parish,
     Louisiana, on October 10, 2002, as File Number 45077079A.

66.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in  Mortgage  Book  Number  703,  Folio  Number 20, as Clerk's  File Number
     230509, with the Parish Clerk of St. Charles Parish, Louisiana.

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number 248717, in Book 771, Folio 255, with the Parish
     Clerk of St.  Charles  Parish,  Louisiana,  as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk of St.  Charles  Parish,
     Louisiana, on October 10, 2002, as File Number 45077079A.

67.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 45-074384, with the Parish Clerk of St. Charles Parish, Louisiana.

St. Helena Parish, Louisiana

68.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to Administrative Agent, filed with the Parish Clerk of St. Helena
     Parish, Louisiana, on October 10, 2002, as File Number 085385.

St. Landry Parish, Louisiana

69.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  January  12,  2001,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on  February  5, 2001,  as MOB Number  1051,  Page 58, and as Entry  Number
     865415, with the Parish Clerk of St. Landry Parish,  Louisiana, as assigned
     and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of St.  Landry  Parish,
     Louisiana,  on October 14, 2002, as File Number 895249,  in Book 1123, Page
     133.

                                Schedule 2.2-17
<PAGE>

70.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 5, 2001, as File
     Number 49-255460, with the Parish Clerk of St. Landry Parish, Louisiana.

St. Martin Parish, Louisiana

71.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 17,  1996,  as File  Number  155143,  in
     Mortgage Book 730,  Folio 229, with the Parish Clerk of St. Martin  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America, N.A., as administrative agent, filed January 12, 1998, File Number
     289325,  in Book 781, Page 468, with the Parish Clerk of St. Martin Parish,
     Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of St.  Martin  Parish,
     Louisiana,  on October 15, 2002, as File Number 344322,  in Book 918, Folio
     336.

72.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in Mortgage  Book Number 809,  Folio Number 423, and as Clerk's File Number
     001623 with the Parish Clerk of St. Martin Parish,  Louisiana as amended by
     that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number 321176,  in Book 853, Page 524, with the Parish
     Clerk of St.  Martin  Parish,  Louisiana,  as assigned  and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of St.  Martin  Parish,
     Louisiana,  on October 15, 2002, as File Number 344322,  in Book 918, Folio
     336.

73.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 99-323, with the Parish Clerk of St. Martin Parish, Louisiana.

St. Mary Parish, Louisiana

74.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File  Number  218194,  in
     Mortgage  Book 734,  Folio 35, with the Parish  Clerk of St.  Mary  Parish,
     Louisiana, as amended by that certain

                                Schedule 2.2-18
<PAGE>

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number  226303,  in Mortgage Book 774, Page 1, with the Parish Clerk of St.
     Mary Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of St. Mary Parish, Louisiana,
     on October 15, 2002, as Entry Number 253364, in Book 927, Page 266.

75.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in Mortgage Book Number 807,  Entry Number  232,984,  Page Number 477, with
     the Parish Clerk of St. Mary Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number  242451,  in Mortgage Book 856, Folio 325, with
     the Parish Clerk of St. Mary Parish,  Louisiana, as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of St. Mary Parish, Louisiana,
     on October 15, 2002, as Entry Number 253364, in Book 927, Page 266.

76.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 51-15324, with the Parish Clerk of St. Mary Parish, Louisiana.

77.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 5, 2001,
     as MOB Number 862, Page Number 473, and as Entry Number  243,683,  with the
     Parish Clerk of St. Mary Parish, Louisiana, as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of St. Mary Parish, Louisiana,
     on October 15, 2002, as Entry Number 253364, in Book 927, Page 266.

78.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 5, 2001, as Entry
     Number 51-20884, with the Parish Clerk of St. Mary Parish, Louisiana.

79.  Second  Supplement  and Amendment to Deed of Trust,  Mortgage,  Assignment,
     Security Agreement,  Fixture Filing and Financing Statement dated September
     25, 2000,  executed by Matrix Oil & Gas, Inc. and Union Bank of California,
     recorded on September  28, 2000,  in M.O.B.  853, Page 258, as Entry Number
     241833, with the Parish Clerk of St. Mary Parish, Louisiana, as assigned by
     that certain

                                Schedule 2.2-19
<PAGE>

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on July 20, 2001, as Entry Number 246324,  in Mortgage Book 879, Page
     193, with the Parish Clerk of St. Mary Parish,  Louisiana,  as assigned and
     amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of St. Mary Parish, Louisiana,
     on October 15, 2002, as Entry Number 253364, in Book 927, Page 266.

Terrebonne Parish, Louisiana

80.  Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 16,  1995,  as Entry  Number  955603,  in
     Mortgage  Book  1016 and COB  1461,  with the  Parish  Clerk of  Terrebonne
     Parish, Louisiana, as assigned and amended by that certain

     Assignment  and Amendment to Mortgage  filed June 10, 1996, as Entry Number
     977283,  in  Mortgage  Book  1061,  and on June 12 ,1996,  as Entry  Number
     977426, in Mortgage Book 1061, with the Parish Clerk of Terrebonne  Parish,
     Louisiana, and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, as File
     Number 1013268, with the Parish Clerk of Terrebonne Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Terrebonne  Parish,
     Louisiana, on October 14, 2002, as File Number 1130499.

81.  Mortgage,  Assignment,  Security  Agreement,  Fixture  Filing and Financing
     Statement filed November 22, 1995, as Entry Number 966504, in Mortgage Book
     1038 and COB 1486, with the Parish Clerk of Terrebonne  Parish,  Louisiana,
     as assigned and amended by that certain

     Assignment  and Amendment to Mortgage  filed June 10, 1996, as Entry Number
     977283,  in  Mortgage  Book  1061,  and on June 12 ,1996,  as Entry  Number
     977426, in Mortgage Book 1061, with the Parish Clerk of Terrebonne  Parish,
     Louisiana, and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, as File
     Number 1013268, with the Parish Clerk of Terrebonne Parish,  Louisiana,  as
     assigned and amended by that certain

                                Schedule 2.2-20
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Terrebonne  Parish,
     Louisiana, on October 14, 2002, as File Number 1130499.

82.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 17,  1996,  as File  Number  979550,  in
     Mortgage Book 1065, with the Parish Clerk of Terrebonne Parish,  Louisiana,
     as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, as File
     Number 1013268, with the Parish Clerk of Terrebonne Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Terrebonne  Parish,
     Louisiana, on October 14, 2002, as File Number 1130499.

83.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     as Clerk's File Number 1041400, with the Parish Clerk of Terrebonne Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument Number 1083164,  in Mortgage Book 1323, with the Parish
     Clerk of  Terrebonne  Parish,  Louisiana,  as assigned  and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Terrebonne  Parish,
     Louisiana, on October 14, 2002, as File Number 1130499.

84.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 55-1041401, with the Parish Clerk of Terrebonne Parish, Louisiana.

85.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as MOB  Number  1338,  Entry  Number  1088528,  with  the  Parish  Clerk of
     Terrebonne Parish, Louisiana, as assigned and amended by that certain

                                Schedule 2.2-21
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed  with  the  Parish  Clerk  of  Terrebonne  Parish,
     Louisiana, on October 14, 2002, as File Number 1130499.

86.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 7, 2001, as Entry
     Number 55-1088529, with the Parish Clerk of Terrebonne Parish, Louisiana.

87.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to Administrative Agent, filed with the Parish Clerk of Terrebonne
     Parish, Louisiana, on October 14, 2002, as File Number 1130498.

Vermilion Parish, Louisiana

88.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative agent, filed July 12, 1996, as File Number 9608707, with the
     Parish Clerk of Vermilion Parish, Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 14, 1998, as File
     Number 9800407,  with the Parish Clerk of Vermilion Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Vermilion  Parish,
     Louisiana, on October 25, 2002, as File Number 20212559.

89.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 16, 1999,
     as Clerk's File Number 9902951,  with the Parish Clerk of Vermilion Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as  Instrument  Number  20011619,  with the Parish Clerk of Vermilion
     Parish, Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Vermilion  Parish,
     Louisiana, on October 25, 2002, as File Number 20212559.

                                Schedule 2.2-22
<PAGE>

90.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 16, 1999, as File
     Number 57-990505, with the Parish Clerk of Vermilion Parish, Louisiana.

91.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 9, 2001,
     as Entry  Number  20101575,  with the  Parish  Clerk of  Vermilion  Parish,
     Louisiana, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,   filed  with  the  Parish  Clerk  of  Vermilion  Parish,
     Louisiana, on October 25, 2002, as File Number 20212559.

92.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 9, 2001, as Entry
     Number 57 2010196, with the Parish Clerk of Vermilion Parish, Louisiana.

Webster Parish, Louisiana

93.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 18,  1996,  as File  Number  404112,  in
     Mortgage  Book 426,  Folio 369,  with the Parish  Clerk of Webster  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 20, 1998, as File
     Number  416774,  with the Parish  Clerk of Webster  Parish,  Louisiana,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Webster Parish,  Louisiana,
     on October 10, 2002, as File Number 456360.

94.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 16, 1999,
     as  Registry  Number  427114,  with the  Parish  Clerk of  Webster  Parish,
     Louisiana, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 13,
     2000, as Instrument Number 441186, in Mortgage Book 488, Page 780, with the
     Parish Clerk of Webster Parish,  Louisiana, as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the Parish Clerk of Webster Parish,  Louisiana,
     on October 10, 2002, as File Number 456360.

                                Schedule 2.2-23
<PAGE>

95.  UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 16, 1999, as File
     Number 307204, with the Parish Clerk of Webster Parish, Louisiana.

MISSISSIPPI

Amite County, Mississippi

96.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as MOB Number 271, Page 618, Entry Number 0100303, with the Parish Clerk of
     Amite County, Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Amite County,  Mississippi,
     on October 10, 2002, as File Number 0202942, in Book 288, Page 92.

97.  UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 7, 2001, as Entry
     Number 23522, with the Parish Clerk of Amite County, Mississippi.

Clarke County, Mississippi

98.  Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12, 1995,  in Deed of Trust  Records Book
     184,  Page 318,  with the County Clerk of Clarke  County,  Mississippi,  as
     assigned and amended by that certain

     Assignment  and Amendment to Mortgage filed June 10, 1996, in Deed of Trust
     Records  Book  193,  Page 523,  with the  County  Clerk of  Clarke  County,
     Mississippi, and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, as File
     Number 9450,  in Deed of Trust  Records Book 208, Page 338, with the County
     Clerk of Clarke  County,  Mississippi,  and as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Clarke County, Mississippi,
     on October 21, 2002, in Book DT254, Page 568-608.

                                Schedule 2.2-24
<PAGE>

99.  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 11, 1996,  in Deed of Trust Records Book
     194,  Page 359,  with the County Clerk of Clarke  County,  Mississippi,  as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, as File
     Number 9450,  in Deed of Trust  Records Book 208, Page 338, with the County
     Clerk of Clarke  County,  Mississippi,  as  assigned  and  amended  by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Clarke County, Mississippi,
     on October 21, 2002, in Book DT254, Page 568-608.

100. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America,  N.A., as administrative  agent, filed on April 8, 1999 at
     Book DT220,  Page(s)  732-810,  in the office of the County Clerk of Clarke
     County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Deed of Trust Book 234, Page 790, with the County Clerk of Clarke
     County, Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Clarke County, Mississippi,
     on October 21, 2002, in Book DT254, Page 568-608.

101. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A.,  as  administrative  agent,  filed on April 6 1999, as File
     Number 1208B, with the County Clerk of Clarke County, Mississippi.

Franklin County, Mississippi

102. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 11,  1996,  as File  Number  017594,  in
     Mortgage  Book 202,  Page 636,  with the County  Clerk of Franklin  County,
     Mississippi, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 13, 1998, as File
     Number  021021,  in Book 208,  Page 29,  with the County  Clerk of Franklin
     County, Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Franklin  County,
     Mississippi, on November 18, 2002, as File Number 032045, in Book 233, Page
     304.

                                Schedule 2.2-25
<PAGE>

103. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 12, 1999, as
     File Number 024152 in Book 214, Page(s)  231-263,  with the County Clerk of
     Franklin County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, as Instrument  Number 027963,  in Book 223, Page 115, with the County
     Clerk of Franklin County, Mississippi,  and as assigned and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Franklin  County,
     Mississippi, on November 18, 2002, as File Number 032045, in Book 233, Page
     304.

104. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 098-03-99, with the County Clerk of Franklin County, Mississippi.

Hinds County, Mississippi

105. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed  July 12,  1996,  as File  Number  87931,  in
     Mortgage  Book  295,  Page  686,  with the  County  Clerk of Hinds  County,
     Mississippi, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number 97849,  in Book 316, Page 85, with the County Clerk of Hinds County,
     Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Hinds County,  Mississippi,
     on November 15, 2002, as File Number 133714, in Book 404, Page 228.

106. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 18, 1999, as
     File Number  106313 in Book 334,  Page 525,  with the County Clerk of Hinds
     County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 10,
     2000, as Instrument  Number  118484,  in Book 360, Page 67, with the County
     Clerk of Hinds  County,  Mississippi,  and as assigned  and amended by that
     certain

                                Schedule 2.2-26
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Hinds County,  Mississippi,
     on November 15, 2002, as File Number 133714, in Book 404, Page 228.

107. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 18, 1999, as File
     Number 033238, with the County Clerk of Hinds County, Mississippi.

Jasper County, Mississippi, 1st Judicial District

108. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative agent, filed May 12, 1995, in Deed of Trust Records Book 92,
     Page 175, with the County Clerk of Jasper County,  Mississippi,  as amended
     by that certain Amendment to Mortgages dated December 29, 1997, executed by
     DMI and Bank of America,  N.A., as administrative  agent, filed January 16,
     1998, in Deed of Trust Records Book 102, Page 247, with the County Clerk of
     Jasper County, Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Jasper County, Mississippi,
     on October 14, 2002, in Book 121, Page 358-397.

109. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 15, 1999,
     in Book 106,  Page(s)  586-663,  with the  County  Clerk of Jasper  County,
     Mississippi First Judicial District, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Deed of Trust Book 112, Page 249, with the County Clerk of Jasper
     County, Mississippi First Judicial District, and as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Jasper County, Mississippi,
     on October 14, 2002, in Book 121, Page 358-397.

110. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 15, 1999, in Book
     20, Page 612,  with the County Clerk of Jasper  County,  Mississippi  First
     Judicial District.

                                Schedule 2.2-27
<PAGE>

111. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12 ,2001,  from Former  Borrower to
     Bank of America, N.A., as administrative agent, filed on February 12, 2001,
     as DTB  Number  113,  Page 76,  with the  County  Clerk of  Jasper  County,
     Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Jasper County, Mississippi,
     on October 14, 2002, in Book 121, Page 358-397.

112. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 12, 2001, as File
     Number  64078,  in Book  24-1,  with the  County  Clerk of  Jasper  County,
     Mississippi.

113. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the County  Clerk of Jasper
     County, Mississippi, on October 14, 2002, in Book 121, Page 239-357.

Jefferson Davis County, Mississippi

114. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 12,  1996,  as File Number  9601950,  in
     Mortgage  Book 431,  Page 465,  with the County  Clerk of  Jefferson  Davis
     County, Mississippi, as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, as File
     Number  9800082,  in Book 441, Page 484, with the County Clerk of Jefferson
     Davis County, Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County Clerk of Jefferson  Davis  County,
     Mississippi,  on November 4, 2002, as File Number 0204280 in Book 478, Page
     666.

115. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 18, 1999,
     in Book 450, Page 296 as Document Number 9900823,  with the County Clerk of
     Jefferson Davis County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 14,
     2000, as Instrument Number 0003787,  in Book 462, Page 511, with the County
     Clerk of Jefferson Davis County,  Mississippi,  and as assigned and amended
     by that certain

                                Schedule 2.2-28
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County Clerk of Jefferson  Davis  County,
     Mississippi,  on November 4, 2002, as File Number 0204280 in Book 478, Page
     666.

116. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 18, 1999, as File
     Number   99-0373,   with  the  County  Clerk  of  Jefferson  Davis  County,
     Mississippi.

Jones County, Mississippi, 1st Judicial District

117. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent, filed July 18, 1996, in Mortgage Book 436, Page 434,
     with the  County  Clerk of Jones  County,  Mississippi,  as amended by that
     certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 12, 1998, Deed of
     Trust  Records Book 464,  Page 608,  with the County Clerk of Jones County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Jones County,  Mississippi,
     on October 11, 2002, in Book 560, Page 562.

118. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as DTB  Number  525,  Page  195,  with the  County  Clerk of Jones  County,
     Mississippi  First  Judicial  District,  as  assigned  and  amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Jones County,  Mississippi,
     on October 11, 2002, in Book 560, Page 562.

119. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number  10,693,  with the County Clerk of Jones County,  Mississippi  First
     Judicial District.

Jones County, Mississippi, 2nd Judicial District

120. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12, 1995,  in Deed of Trust  Records Book
     1044, Page 538, with the County Clerk of Jones County,  Mississippi  Second
     Judicial District, as assigned and amended by that certain

                                Schedule 2.2-29
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the County Clerk of Jones County,  Mississippi
     Second Judicial District, on November 1, 2002 in Book 1367, Page 59.

121. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 19, 1999,
     in Book 1192, Page 521, with the County Clerk of Jones County,  Mississippi
     Second Judicial District as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, in Deed of Trust Book 1260,  Page 676, with the County Clerk of Jones
     County,  Mississippi Second Judicial District,  and as assigned and amended
     by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the County Clerk of Jones County,  Mississippi
     Second Judicial District, on November 1, 2002 in Book 1367, Page 59.

122. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 19, 1999, in Book
     1192, Page 521, with the County Clerk of Jones County,  Mississippi  Second
     Judicial District.

123. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as DTB  Number  1269,  Page 334,  with the  County  Clerk of Jones  County,
     Mississippi  Second  Judicial  District,  as  assigned  and amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the County Clerk of Jones County,  Mississippi
     Second Judicial District, on November 1, 2002 in Book 1367, Page 59.

124. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 111,382,  with the County Clerk of Jones County,  Mississippi Second
     Judicial District.

Lincoln County, Mississippi

125. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Administrative  Agent, filed on February 13, 2001, as MOB Number 1086, Page
     439, with the County Clerk of Lincoln County,  Mississippi, as assigned and
     amended by that certain

                                Schedule 2.2-30
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Lincoln   County,
     Mississippi,  on October 16, 2002, as File Number  20028441,  in Book 1137,
     Page 0681.

126. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A.,  as  administrative  agent,  filed on February 13, 2001, as
     Entry Number 035001, with the County Clerk of Lincoln County, Mississippi.

127. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower,  to Administrative  Agent, filed with the County Clerk of Lincoln
     County,  Mississippi, on October 16, 2002, as File Number 20028440, in Book
     1137, Page 0542.

Lowndes County, Mississippi

128. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative agent, filed July 16, 1996, in Mortgage Book 1165, Page 310,
     with the County Clerk of Lowndes  County,  Mississippi,  as amended by that
     certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 12, 1998, in Deed of
     Trust Records Book 1219, Page 419, with the County Clerk of Lowndes County,
     Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Lowndes   County,
     Mississippi, on October 15, 2002, in Book 2002, on Page 25860.

129. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 15, 1999, as
     Trust Deed Number 1270,  Page(s) 417-449,  with the County Clerk of Lowndes
     County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 14,
     2000,  Trust Deed Book  1345,  Page 344,  with the County  Clerk of Lowndes
     County, Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Lowndes   County,
     Mississippi, on October 15, 2002, in Book 2002, on Page 25860.

                                Schedule 2.2-31
<PAGE>

130. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 15, 1999, as File
     Number 123697,  Trust Deed Number 1270,  Page 450, with the County Clerk of
     Lowndes County, Mississippi.

Madison County, Mississippi

131. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 17, 1996, as File Number 197658, in Book
     991, Page 386,  with the County Clerk of Madison  County,  Mississippi,  as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A.,  as  administrative  agent,  filed January 9, 1998, in Book
     1074,  Page 535, with the County Clerk of Madison County,  Mississippi,  as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Madison   County,
     Mississippi, on October 11, 2002, in Book 1456, Page 397.

132. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, recorded on March 12, 1999,
     in Book 1159, Page 738, as Document Number 276499, with the County Clerk of
     Madison County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent, filed on November 13,
     2000, as Instrument  Number 323455, in Book 1265, Page 406, with the County
     Clerk of Madison  County,  Mississippi,  as  assigned  and  amended by that
     certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Madison   County,
     Mississippi,  on October  11,  2002,  in Book 1456,  Page 397.

133. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 998292, with the County Clerk of Madison County, Mississippi.

Monroe County, Mississippi

134. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the County  Clerk of Monroe
     County, Mississippi, on November 7, 2002, as File Number 20027483.

                                Schedule 2.2-32
<PAGE>

Perry County, Mississippi

135. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  October  13,  2000,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on November 13, 2000, in Book 158, Page 488, with the County Clerk of Perry
     County, Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Perry County,  Mississippi,
     on October 11, 2002, in Book 172, Page 54.

136. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on November 13, 2000, as File
     Number 00-11-1,050, with the County Clerk of Perry County, Mississippi.

137. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as DTB  Number  160,  Page 1,  with  the  County  Clerk  of  Perry  County,
     Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Perry County,  Mississippi,
     on October 11, 2002, in Book 172, Page 54.

138. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 7, 2001, as Entry
     Number 01-02-1,298, with the County Clerk of Perry County, Mississippi.

139. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed with the County  Clerk of Perry
     County, Mississippi, on October 10, 2002, in Book 172, Page 94.

Pike County, Mississippi

140. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated  October  13,  2000,  executed  by Former
     Borrower in favor of Bank of America,  N.A., as administrative agent, filed
     on November 14, 2000, as Instrument  Number 134782,  Book 0599,  Page 0121,
     with the County Clerk of Pike County,  Mississippi, as assigned and amended
     by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Perry County,  Mississippi,
     on October 11, 2002, as File Number 153291, in Book 064, on Page 0739.

                                Schedule 2.2-33
<PAGE>

141. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on November 14, 2000, as File
     Number 5607, with the County Clerk of Pike County, Mississippi.

142. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as DTB Number  0602,  Page  0914,  with the  County  Clerk of Pike  County,
     Mississippi, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Perry County,  Mississippi,
     on October 11, 2002, as File Number 153291, in Book 064, on Page 0739.

143. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 7060, with the County Clerk of Pike County, Mississippi.

144. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower,  to  Administrative  Agent,  filed with the County Clerk of Perry
     County,  Mississippi,  on October 11, 2002, as File Number 153292,  in Book
     064, Page 0779.

Rankin County, Mississippi

145. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent, filed May 22, 1995, in Book 1043, Page 498, with the
     County Clerk of Rankin County, Mississippi, as assigned and amended by that
     certain

     Assignment  and  Amendment to Mortgage  filed June 11, 1996,  in Book 1125,
     Page 662,  with the  County  Clerk of Rankin  County,  Mississippi,  and as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as  administrative  agent,  filed January 15, 1998, in Book
     1262, Page 513, with the County Clerk of Rankin County, Mississippi, and as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Rankin County, Mississippi,
     on October 14, 2002, in Book 1891, Page 321.

146. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 12, 1999, in
     Book 1394,  Page 560, with the County Clerk of Rankin County,  Mississippi,
     as amended by that certain

                                Schedule 2.2-34
<PAGE>

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Book  1566,  Page 416,  with the County  Clerk of Rankin  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Rankin County, Mississippi,
     on October 14, 2002, in Book 1891, Page 321.

147. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 16, 1999, as File
     Number 99-000-1082, with the County Clerk of Rankin County, Mississippi.

148. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the County  Clerk of Rankin
     County, Mississippi, on October 14, 2002, in Book 1891, Page 98.

149. Supplement  to  Mortgage,  Deed of  Trust,  Security  Agreement,  Financing
     Statement and  Assignment of Production  dated  effective as of October 22,
     2003, between Former Borrower and Administrative Agent filed on October 28,
     2003,  in Book  2170,  Page 476,  with the County  Clerk of Rankin  County,
     Mississippi.

Scott County, Mississippi

150. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed with the County  Clerk of Scott
     County, Mississippi, on October 11, 2002, in Book 65, Page 624.

Smith County, Mississippi

151. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12, 1995,  in Deed of Trust  Records Book
     404,  Page 556,  with the County  Clerk of Smith  County,  Mississippi,  as
     assigned and amended by that certain

     Assignment  and Amendment to Mortgage filed June 12, 1996, in Deed of Trust
     Records  Book  415,  Page  166,  with the  County  Clerk  of Smith  County,
     Mississippi, and as amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative  agent,  filed January 12, 1998, LDT Book
     431,  Page 1, with the County Clerk of Smith  County,  Mississippi,  and as
     assigned and amended by that certain

                                Schedule 2.2-35
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Smith County,  Mississippi,
     on October 11, 2002 in Book 477, on Page 471-510.

152. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent,  filed July 11, 1996,  as File Number 3022,  in Book
     416,  Page 85,  with the  County  Clerk of Smith  County,  Mississippi,  as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America, N.A., as administrative agent, filed January 12, 1998, in LDT Book
     431,  Page 1, with the County Clerk of Smith  County,  Mississippi,  and as
     assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Smith County,  Mississippi,
     on October 11, 2002 in Book 477, on Page 471-510.

153. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 12, 1999, in
     OGL Book 404,  Page(s)  405-439,  with the  County  Clerk of Smith  County,
     Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in O&G Book 410,  Page 400,  with the County Clerk of Smith  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Smith County,  Mississippi,
     on October 11, 2002 in Book 477, on Page 471-510.

154. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 16, 1999, as File
     Number 39665, with the County Clerk of Smith County, Mississippi.

Walthall County, Mississippi

155. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12, 1995, in Book 231, Page 568, with the
     County Clerk of Walthall  County,  Mississippi,  as assigned and amended by
     that certain

     Assignment and Amendment to Mortgage filed June 10, 1996, in Book 239, Page
     14, with the County Clerk of Walthall County,  Mississippi,  and as amended
     by that certain

                                Schedule 2.2-36
<PAGE>

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 12, 1998, in Deed of
     Trust  Book 248,  Page  768,  with the  County  Clerk of  Walthall  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 15, 2002, in Book 0284, Page 714.

156. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent, filed July 12, 1996, in Mortgage Book 239, Page 467,
     with the County Clerk of Walthall County,  Mississippi,  as amended by that
     certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 12, 1998, in Deed of
     Trust  Book 248,  Page  768,  with the  County  Clerk of  Walthall  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 15, 2002, in Book 0284, Page 714.

157. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 12, 1999, in
     Land Deed  Trust Book 258,  Page 224,  with the  County  Clerk of  Walthall
     County, Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000,  in Book 268,  Page 814,  with the County  Clerk of Walthall  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 15, 2002, in Book 0284, Page 714.

158. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number  210-3-99,  Book 8,  with  the  County  Clerk  of  Walthall  County,
     Mississippi.

Wayne County, Mississippi

159. Deed of Trust,  Mortgage,  Assignment,  Security  Agreement  and  Financing
     Statement  executed  by  DMI  in  favor  of  Bank  of  America,   N.A.,  as
     administrative  agent,  filed May 12, 1995,  in Deed of Trust  Records Book
     860,  Page 531,  with the County  Clerk of Wayne  County,  Mississippi,  as
     assigned and amended by that certain

                                Schedule 2.2-37
<PAGE>

     Assignment  and Amendment to Mortgage  filed June 10, 1996, in OT Deed Book
     890, Page 448, with the County Clerk of Wayne County,  Mississippi,  and as
     amended by that certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 12, 1998, in Deed of
     Trust  Book  932,  Page  179,  with  the  County  Clerk  of  Wayne  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 11, 2002 in Book 1093, Page 243.

160. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment   of  Production   from  DMI  to  Bank  of  America,   N.A.,  as
     administrative  agent, filed July 11, 1996, in Mortgage Book 892, Page 321,
     with the  County  Clerk of Wayne  County,  Mississippi,  as amended by that
     certain

     Amendment to Mortgages dated December 29, 1997, executed by DMI and Bank of
     America,  N.A., as administrative agent, filed January 12, 1998, in Deed of
     Trust  Book  932,  Page  179,  with  the  County  Clerk  of  Wayne  County,
     Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 11, 2002 in Book 1093, Page 243.

161. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production dated as of March 1, 1999, from Former Borrower to
     Bank of America, N.A., as administrative agent, filed on March 12, 1999, in
     Deed  Book  975,   Page  365,  with  the  County  Clerk  of  Wayne  County,
     Mississippi, as amended by that certain

     Amendment to Mortgages dated October 13, 2000,  executed by Former Borrower
     and Bank of America,  N.A., as administrative  agent,  filed on November 9,
     2000, in Deed of Trust Book 1032,  Page 481, with the County Clerk of Wayne
     County, Mississippi, and as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 11, 2002 in Book 1093, Page 243.

                                Schedule 2.2-38
<PAGE>

162. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative  agent,  filed on March 12, 1999, as File
     Number 99-322, with the County Clerk of Wayne County, Mississippi.

163. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as DTB  Number  1038,  Page 390,  with the  County  Clerk of Wayne  County,
     Mississippi, as assigned and amended by that certain

164. Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former   Borrower,   filed  with  the  County  Clerk  of  Walthall  County,
     Mississippi, on October 11, 2002 in Book 1093, Page 243.

165. UCC-1 Financing  Statement  executed by Former Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 01-186, with the County Clerk of Wayne County, Mississippi.

166. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed with the County  Clerk of Wayne
     County,  Mississippi,  on Ocotber 11, 2002, as File Number 000283,  in Book
     1093, Page 283.

TEXAS

Archer County, Texas

167. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as File Number  100533,  Volume  0602,  Page 664,  with the County Clerk of
     Archer County, Texas, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County Clerk of Archer County,  Texas, on
     October 10, 2002, as File Number 104822, in Volume 916, Page 620.

168. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 9283, with the County Clerk of Archer County, Texas.

Brazoria County, Texas

169. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as File Number 01-005055,  with the County Clerk of Brazoria County, Texas,
     as assigned and amended by that certain

                                Schedule 2.2-39
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the County Clerk of Brazoria County, Texas, on
     October 10, 2002, as File Number 02052534.

170. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 00112, with the County Clerk of Brazoria County, Texas.

Ector County, Texas

171. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America, N.A., as administrative agent, filed on February 13, 2001,
     as File Number 1728, Volume 1572, Page 0312, with the County Clerk of Ector
     County, Texas, as amended and assigned by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County Clerk of Ector County,  Texas,  on
     October 10, 2002, as File Number 13682, in Volume 1692, Page 0513.

172. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America, N.A., as administrative agent, filed on February 13, 2001, as File
     Number 416, with the County Clerk of Ector County, Texas.

Jack County, Texas

173. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed with the  County  Clerk of Jack
     County, Texas, on October 10, 2002, in Book 0695, Page 0041.

Jefferson County, Texas

174. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to Administrative  Agent, filed with the County Clerk of Jefferson
     County, Texas, on October 10, 2002, as File Number 2002037955.

Johnson County, Texas

175. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower,  to Administrative  Agent, filed with the County Clerk of Johnson
     County,  Texas,  on October 9, 2002, as File Number  029189,  in Book 2908,
     Page 0203.

                                Schedule 2.2-40
<PAGE>

Kenedy County, Texas

176. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower,  to Administrative  Agent,  filed with the County Clerk of Kenedy
     County, Texas, on October 23, 2002, in Volume 25, Page 206.

Marion County, Texas

177. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as File Number 249,  Volume 629,  Page 159, with the County Clerk of Marion
     County, Texas, as amended and assigned by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County Clerk of Marion County,  Texas, on
     October 10, 2002, as File Number 3249, in Volume 654, Page 173.

178. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 6, with the County Clerk of Marion County, Texas.

Matagorda County, Texas

179. Deed of Trust, Mortgage, Assignment, Security Agreement, Fixture Filing and
     Financing  Statement  dated March 24,  2000,  executed by Matrix Oil & Gas,
     Inc. in favor of Union Bank of  California,  recorded on March 31, 2000, as
     File Number  002022,  in Volume  575,  Page 957,  with the County  Clerk of
     Matagorda County, Texas, as assigned by that certain

     Assignment of Note and Liens dated July 10, 2001, executed by Union Bank of
     California  in favor of Bank of America,  N.A.,  as  administrative  agent,
     filed on July 19, 2001, as Entry Number 014959, in Book 625, Page 906, with
     the County Clerk of Matagorda County, Texas, and as assigned and amended by
     that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower, filed with the County Clerk of Matagorda County, Texas, on
     October 10, 2002, as File Number 026889.

Midland County, Texas

180. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as File Number 2014, Volume 1839, Page 67, with the County Clerk of Midland
     County, Texas, as assigned and amended by that certain

                                Schedule 2.2-41
<PAGE>

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former Borrower,  filed with the County Clerk of Midland County,  Texas, on
     October 10, 2002, as Document Number 20584, in Volume 2057, Page 470.

181. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 386, with the County Clerk of Midland County, Texas.

Parker County, Texas

182. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the County  Clerk of Parker
     County,  Texas, on October 10, 2002, as Document Number 00459669, in Volume
     2047, Page 1903.

Tarrant County, Texas

183. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower to  Administrative  Agent,  filed with the County Clerk of Tarrant
     County, Texas, on October 10, 2002, as Document Number 16048, In Book 0498,
     Page 001.

Wise County, Texas

184. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment  of  Production  dated as of  September  12,  2002,  from Former
     Borrower  to  Administrative  Agent,  filed with the  County  Clerk of Wise
     County,  Texas,  on October 8, 2002, as Document No. 316009,  in Book 1210,
     Page 622.

Wood County, Texas

185. Mortgage,  Deed of  Trust,  Security  Agreement,  Financing  Statement  and
     Assignment of Production  dated January 12, 2001,  from Former  Borrower to
     Bank of America,  N.A., as administrative agent, filed on February 7, 2001,
     as File Number  0064322,  Book 1768, Page 82, with the County Clerk of Wood
     County, Texas, as assigned and amended by that certain

     Assignment and Amendment to Mortgages dated as of September 12, 2002, among
     Bank of America,  N.A., as administrative  agent,  Administrative Agent and
     Former  Borrower,  filed with the County  Clerk of Wood County,  Texas,  on
     October 10, 2002 as Document Number 00091212, in Book 01874, Page 00377.

186. UCC  Financing  Statement  executed by Former  Borrower in favor of Bank of
     America,  N.A., as administrative agent, filed on February 7, 2001, as File
     Number 26353, with the Clerk of Court of Wood County, Texas.

                                Schedule 2.2-42
<PAGE>
                              SCHEDULE 2.3

              Restructuring Transactions/Post-Closing Transactions



Part I            Restructuring Transactions

FORMATION OF NEWCOS

1.   Former Borrower forms Parent through the  contribution of nominal assets in
     exchange for Parent stock.

2.   Parent  forms  Borrower  through  the  contribution  of  nominal  assets in
     exchange for Borrower membership interests.

MERGERS

3.   Denbury  Energy  Service  Inc.  merges with and into Former  Borrower  with
     Former Borrower surviving.

4.   Former Borrower merges with and into Borrower with Borrower surviving.  The
     Former Borrower stock will convert into Parent Stock and Former  Borrower's
     stock in Parent will be cancelled.

MOVEMENT OF DEBT

5.   Parent becomes a co-obligor of Borrower's public debt.

INTERNAL SPINS OF DG&M AND OFFSHORE

6.   Borrower will distribute the stock of both DG&M and Offshore to Parent.

formation of operating and contribution of borrower

7.   Parent forms Operating for nominal  consideration in exchange for Operating
     stock.

8.   Parent contributes the membership interests in Borrower to Operating.

DISSOLUTION OF SUBSIDIARIES

9.   Tallahatchie  Resources  Inc.  will be  dissolved  or merged  with and into
     Borrower.

DISTRIBUTION OF LLCS

10.  Borrower distributes its membership interests in TRF to Operating.

11.  Borrower distributes its membership interests in Marine to Operating.


                                 Schedule 2.3-1

<PAGE>

Part II           Post-Closing Transactions

1.   Parent contributes the stock of Offshore to Operating.

2.   Offshore converts into a single member limited liability company.

3.   Offshore changes its name to Denbury Offshore LLC.















                                 Schedule 2.3-2


<PAGE>
                                  SCHEDULE 8.5

                                   Litigation



                                      None.






















                                 Schedule 8.5-1
<PAGE>

                                  SCHEDULE 8.10

                             Licenses, Permits, Etc.



                                      None.














Schedule 8.10-1
<PAGE>
                                  SCHEDULE 8.13

                               Jurisdictions, Etc.




















                                Schedule 8.13-1
<PAGE>


                                  SCHEDULE 9.10

                            Environmental Disclosure



                                      None.



















                                Schedule 9.10-1


</TEXT>
</DOCUMENT>
