Common use of Initial Funding Clause in Contracts

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until and of any Issuing Bank to issue any Letters of Credit hereunder is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing sole member with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower or its sole member (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation formation and bylaws, as amended, operating agreement of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the certificate of formation and operating agreement (or equivalent constituent documents) of such Guarantor, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed by the respective parties thereto in sufficient number of counterparts for recording, if necessary including delivery of all original stock certificates, blank stock powers, and Intercompany Notes payable to the order of each Lender in a principal amount equal to its Commitment dated duly endorsed as of the date hereofrequired under such Security Instruments. (g) The Borrower shall have delivered Review of Obligors’ financial condition satisfactory to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Lenders. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx & XxxxxxLedgewood, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower Obligors and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory from other local counsel acceptable to the Administrative Agent setting forth with respect to enforceability of the status Security Instruments under the laws of title to the states wherein the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as are located, each in form and scope substance satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas PropertiesAgent, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference matters incident to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vi) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify A certificate of insurance coverage of the Borrower and each Guarantor evidencing that the Lenders of the Effective Date, Borrower and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Guarantor are carrying insurance in accordance with Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.20

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Lead Arranger in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower or such Guarantor (yi) who are authorized to sign the Loan Documents to which the Borrower or such Guarantor is a party and (zii) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the BorrowerBorrower and such Guarantor, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and its Consolidated Subsidiaries. (c) The Notes, duly completed and executed for each Lender. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DPerfection Certificate and Security Instruments, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts for recording, if necessary, including delivery of any requisite mortgage tax affidavit and dated payment for applicable mortgage tax, if any due; all original certificates of partnership units or members’ equity, blank stock powers, and Intercompany Notes duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party.[Reserved] (f) The Administrative Agent shall have received duly executed Notes payable An opinion of counsel to the order of each Lender in a principal amount equal Borrower (including local counsel) acceptable to its Commitment dated as the Lead Arranger, with respect to the existence of the date hereofBorrower and its Consolidated Subsidiaries, due authorization and execution of the Loan Documents and the Formation Agreements, enforceability of the Loan Documents and the Formation Agreements, including without limitation the Security Instruments, under the laws of the states wherein the Pipeline Properties are located, no conflicts among the Loan Documents and any Material Agreements and other matters incident to the transactions herein contemplated as the Lead Arranger may reasonably request, each in form and substance satisfactory to the Lead Arranger. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator its Subsidiaries are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil 7.20 and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations amendment and restatement of the Existing ESTE Credit Agreement and the Existing BE Credit Agreement and the obligation of the Lenders under this Agreement are subject to make ---------------- their Loans under the Initial Funding shall not become effective until receipt by Agent and the date Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary a Responsible Officer of the Borrower setting forth (i) resolutions of its managing member board of directors, members, managers or other governing body, as applicable, with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate Charter Documents of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from Borrower to the Borrower contrary. (b) A certificate of a Responsible Officer of each Guarantor setting forth (i) resolutions of its board of directors, members, managers or other governing body, as applicable, with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the Charter Documents of such Guarantor, certified as being true and complete. Agent and the Lenders may conclusively rely on such certificate until Agent receives notice in writing from such Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and each Guarantor. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, A Compliance Certificate duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding and the Closing Financial Statements. (e) The Administrative Agent shall have received from each party hereto counterparts (A certificate duly and properly executed by a Responsible Officer of Borrower, in such number as may be requested by form and substance satisfactory to Agent, attesting to the Administrative Agent) Solvency of this Agreement signed on behalf of such partythe Loan Parties immediately after giving effect to the Transactions. (f) The Administrative Agent shall have received This Agreement, the Notes, and the Security Instruments (including those described on Exhibit D), each duly completed and executed Notes payable to the order and, if applicable, in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording. (g) The Borrower shall have delivered (i) certificates representing Capital Securities pledged pursuant to the Administrative Pledge and Security Agreement, together with an undated transfer power for each such certificate executed in blank by the pledgor thereof and (ii) promissory notes (if any) pledged to Agent pursuant to the Initial Funding Disbursement Request Pledge and Security Agreement, endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the amount of $3,700,000pledgor thereof. (h) The Administrative Agent shall have received from Favorable opinions of Xxxxx Xxxxx Xxxxxx LLP, counsel to Borrower and the Guarantors and special Oklahoma counsel to Borrower duly executed counterparts of and the ORRI Conveyance for each Lenders with respect Guarantors, Xxxxxxx Xxxxx PLLP, special North Dakota counsel to Borrower and the Guarantors, and Xxxxx X. X’Xxxxx XX, Esq., special Montana counsel to Borrower and the Guarantors, in form and substance satisfactory to Agent, as to such matters incident to the Borrower's Oil and Gas Properties transactions herein contemplated as of the date of such fundingAgent may reasonably request. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator Guarantors evidencing that Borrower and the Guarantors are carrying insurance in accordance with Section 8.137.18. (mj) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by Borrower and the Borrower, in such quantity as the Administrative Agent may reasonably requestGuarantors. (vk) The Administrative Fee Letter, duly executed. (l) Agent shall have received Direction Letters executed all appropriate evidence required by Agent necessary to determine that Agent (for its benefit and the benefit of the Beneficiaries) shall have (i) an Acceptable Security Interest in blank the Collateral (other than Oil and Gas Properties) and (ii) a perfected first priority Lien (subject only to Excepted Liens) on ninety percent (90%) of the value of the Oil and Gas Properties evaluated by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at Reserve Report delivered on or prior to 2:00 p.m., New York, New York time, on February 15, 2004 the Closing Date that are Proven Reserves (and, in provided that when calculating “Proven Reserves” for the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).purposes of this Section 6.01(

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner setting forth (i) resolutions of its managing member board of managers with respect to the authorization of the Borrower General Partner to execute and deliver on behalf of itself, the Borrower and APL Operating, and on behalf of APL Operating, as sole member for each of APL New York, APL Ohio, and APL Pennsylvania, the Loan Documents to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) General Partner who are authorized to sign the Loan Documents to which the Borrower each Obligor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate agreement of incorporation limited partnership for Borrower and bylaws, APL Operating as amended, amended and certified as being true and complete and (v) the articles or articles of organization of the BorrowerGeneral Partner, APL New York, APL Ohio, and APL Pennsylvania, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (c) The Notes, duly completed and executed. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Security Instruments, including those described on Exhibit D, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts for recording, if necessary including delivery of any requisite mortgage tax affidavit and dated payment for applicable mortgage tax, if any due; all original certificates of partnership units or members' equity, blank stock powers, and Intercompany Notes duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) Review of this Agreement signed on behalf of such partyObligors' financial condition satisfactory to Lenders. (f) The An opinion of Ledgewood Law Firm P.C., counsel to the Obligors and from other local counsel acceptable to the Administrative Agent shall have received duly executed Notes payable with respect to existence of Obligors and due authorization and execution of the Loan Documents, enforceability of the Loan Documents, including without limitation the Security Instruments under the laws of the states wherein the Pipeline Properties are located, in form and substance satisfactory to the order of each Lender in a principal amount equal Administrative Agent, as to its Commitment dated such matters incident to the transactions herein contemplated as of the date hereofAdministrative Agent may reasonably request. (g) The A certificate of insurance coverage of the Borrower shall have delivered to and each Guarantor evidencing that the Administrative Agent the Initial Funding Disbursement Request Borrower and each Guarantor are carrying insurance in the amount of $3,700,000accordance with Section 7.20 and Section 8.03(b). (h) The Title information as the Administrative Agent shall have received from may require setting forth the Borrower duly executed counterparts status of the ORRI Conveyance for each Lenders with respect title acceptable to the Borrower's Oil and Gas Properties as of Administrative Agent to the date of such fundingPipeline Properties. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of been furnished with appropriate UCC search certificates and other evidence satisfactory to the Warrant Agreement for each LenderAdministrative Agent with respect Obligors' Properties reflecting no prior Liens other than Excepted Liens. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested Environmental assessments and other reports to the extent maintained by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens Obligors covering Obligors' Properties reporting on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end current environmental condition of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the BorrowerProperties satisfactory to Lenders. (k) The Satisfactory review by Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ----------all Material Agreements. (l) The Administrative Agent shall have received a certificate Assignment of insurance coverage of the Borrower evidencing that the Borrower Notes, Documents and Liens and the Operator are carrying insurance in accordance with Section 8.13Note Purchase Agreement duly completed and executed. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory Consents to the Administrative Agent setting forth the status of title to the Oil Assignment duly completed and Gas Properties evaluated in the Initial Reserve Report as of the Effective Dateexecuted. (n) The Administrative Agent shall All authorizations, approvals or consents as may be satisfied with necessary for the environmental condition of the Oil execution, delivery and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerperformance by any Obligor under this Agreement. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of Guarantees duly completed and executed by the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03Guarantors. (p) The A letter from CT Corporation System, Inc., or other agent acceptable to the Administrative Agent shall have received (i) Agent, to accept service of process in the financial statements referred to in Section 8.04(a), (ii) State of New York on behalf of the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) Borrower and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Propertieseach Guarantor. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to SECTION 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied provided in this SECTION 6.01, each of which shall be satisfactory to the Co-Lead Arrangers in form and substance (other than each item, if any, listed on SCHEDULE 6.01, which items are hereby permitted to be delivered after the Closing Date but not later than the date for delivery of each such item specified on SCHEDULE 6.01, or waived in accordance with Section 13.02such later date as the Administrative Agent may agree): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner setting forth (i) resolutions of its managing member board of managers with respect to the authorization of the Borrower General Partner to execute and deliver on behalf of itself and each Obligor the Loan Documents to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) General Partner who are authorized to sign the Loan Documents to which the Borrower each Obligor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate agreement of incorporation limited partnership for Borrower, APL Operating and bylawsElk City, as amended, certified as being true and complete and (v) the articles of organization of the BorrowerGeneral Partner, APL New York, APL Ohio, APL Pennsylvania, APL Mid-Continent and Elk City GP, as amended, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (c) The Notes, duly completed and executed for each Lender. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DSecurity Instruments, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts for recording, if necessary, including delivery of any requisite mortgage tax affidavit and dated payment for applicable mortgage tax, if any due; all original certificates of partnership units or members' equity, blank stock powers, and Intercompany Notes duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from each party hereto counterparts Receipt of statement of Obligors setting forth pro forma Consolidated EBITDA of at least Forty-Six Million Dollars ($46,000,000), in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partya form substantially similar to SCHEDULE 6.01(e). (f) The Administrative Agent shall have received duly executed Notes payable An opinion of counsel to the order of each Lender in a principal amount equal Obligors (including local counsel) acceptable to its Commitment dated as the Co-Lead Arrangers, with respect to the existence of the date hereofObligors, due authorization and execution of the Loan Documents and the Elk City Acquisition Documents, enforceability of the Loan Documents and the Elk City Acquisition Documents, including without limitation the Security Instruments, under the laws of the states wherein the Pipeline Properties are located, and other matters incident to the transactions herein contemplated as the Co-Lead Arrangers may reasonably request, each in form and substance satisfactory to the Co-Lead Arrangers. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.13SECTION 7.20 and SECTION 8.03(b). (mh) The Administrative Agent shall have received title Title information as the Administrative Agent Co-Lead Arrangers may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated (including, without limitation, the Pipeline Properties (including title to the Pipelines acquired in connection with the Elk City Acquisition, which shall not reflect more than Ten Million Dollars ($10,000,000) in "Title Defects" (as defined in the Elk City Purchase and Sale Agreement) as identified by Borrower, for which Borrower shall receive a reduction in the purchase price or a direct payment from or cure of such Title Defects by the Elk City Seller (in excess of a Two Hundred Fifty Thousand Dollar ($250,000) threshold amount under the Elk City Purchase and Sale Agreement))) acceptable to the Co-Lead Arrangers, including delivery of mortgagee's policies of title insurance for such Properties as the Co-Lead Arrangers shall request, to the extent any Obligor obtains an owner's title policy thereon. (i) Appropriate UCC search certificates and other evidence satisfactory to the Co-Lead Arrangers with respect to the Obligors' Properties reflecting no prior Liens, other than Excepted Liens. (j) Environmental assessments and other reports to the extent maintained by the Obligors covering the Obligors' Properties reporting on the current environmental condition of such Properties satisfactory to the Co-Lead Arrangers and the Lenders. (k) A certificate of a Responsible Officer certifying that (i) no Default or Event of Default exists or would result from the Initial Reserve Report as Funding, and (ii) since December 31, 2004, there has occurred no Material Adverse Change. (l) Satisfactory review by Co-Lead Arrangers of the Effective Dateall Material Agreements. (m) The Consent to Assignment duly completed and executed. (n) The Administrative Agent shall All authorizations, approvals or consents as may be satisfied with necessary for the environmental condition of the Oil execution, delivery and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerperformance by any Obligor under this Agreement. (o) The From any Obligor (other than Borrower) (i) that has not previously executed a Guaranty Agreement, a Guaranty Agreement executed by such Obligor, or (ii) that executed a Guaranty Agreement under the Existing Credit Agreement, a Confirmation of Guaranty Agreement executed by such Obligor. (p) A letter from CT Corporation System, Inc., or other agent acceptable to the Administrative Agent shall have received a Agent, accepting service of process in the State of New York on behalf of the Obligors not otherwise qualified to transact business in New York. (q) A certificate of a Responsible Officer of the Borrower certifying that the (i) Borrower and the Operator have has received all governmental, shareholder, partnership and third party consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) necessary to consummate the financial statements referred to Elk City Acquisition, which consents and approvals are in Section 8.04(a)full force and effect, (ii) all waiting periods have expired without any action being taken by any Governmental Authority that could restrain, prevent or impose any material adverse condition on the Initial Reserve Report accompanied by a certificate covering Elk City Acquisition or that could seek to threaten the matters described in Section 9.12(b) consummation of the Elk City Acquisition, and no law or regulation is applicable that could have such effect, (iii) copies no order, decree, judgment, ruling or injunction exists which restrains the consummation of all material contracts the Elk City Acquisition or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportationtransactions contemplated by this Agreement, and processing agreements related (iv) no pending or threatened action, suit, investigation or proceeding exists which seeks to such Oil restrain or affect the Elk City Acquisition, or which, if adversely determined, could materially and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering adversely affect the Properties Borrower, any of its Subsidiaries, the Elk City Partnership Interests, any transaction contemplated hereby or the ability of Borrower for each to consummate the Elk City Acquisition or perform its obligations under this Agreement and the other Loan Documents, or the ability of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentLenders to exercise their rights hereunder or thereunder. (r) The Administrative Agent shall have received evidence A certificate of a Responsible Officer certifying that Borrower is, concurrently with the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% funding of the reasonably estimated projected natural gas production initial Loans on the Closing Date, consummating the Elk City Acquisition in accordance with the terms of currently producing xxxxx of Borrower for the first 24 months following Elk City Purchase and Sale Agreement, with all material conditions precedent thereto having been satisfied in all material respects by the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reportsparties thereto. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value Copies of the Borrower's Oil fully executed Elk City Purchase and Gas PropertiesSale Agreement and all other material Elk City Acquisition Documents, certified as true and correct by a Responsible Officer. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect Such other documents as the Co-Lead Arrangers, any Lender or counsel to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received LettersCo-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent Lead Arrangers may reasonably request. (vu) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel Review satisfactory to the Administrative Agent may reasonably request. The Administrative Agent shall notify Co-Lead Arrangers of a Reserve Report covering gas available for the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Elk City gathering system.

Initial Funding. The obligations obligation of the Lenders to amend and restate the Prior Credit Agreement to make ---------------- their Loans under the Initial Funding shall not become effective until and of any Issuing Bank to issue any Letters of Credit hereunder is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws (or equivalent constituent documents) of such Guarantor, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed by the respective parties thereto in sufficient number of counterparts for recording, if necessary including delivery of all original stock certificates, blank stock powers, and Intercompany Notes payable to the order of each Lender in a principal amount equal to its Commitment dated duly endorsed as of the date hereofrequired under such Security Instruments. (g) The Borrower shall have delivered Review of Obligors' financial condition satisfactory to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Lenders. (h) An opinion of The Ledgewood Law Firm, counsel to the Obligors and from other local counsel acceptable to the Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to enforceability of the Borrower's Security Instruments under the laws of the states wherein the Oil and Gas Properties are located, each in form and substance satisfactory to the Administrative Agent, as to such matters incident to the transactions herein contemplated as the Administrative Agent may reasonably request including, without limitation, opinions as to the continued priority and perfection of the date of such fundingExisting Liens to secure the Obligations. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts A certificate of insurance coverage of the Warrant Agreement for Borrower and each LenderGuarantor evidencing that the Borrower and each Guarantor are carrying insurance in accordance with Section 7.20 and Section 8.03(b). (j) The Title information as the Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by require setting forth the status of title acceptable to the Administrative Agent) Agent to at least 80% of the Security Instrumentsvalue of the Oil and Gas Properties of the Obligors, including the Security Agreement, Obligors' pro rata interest in the Pledge Agreement Partnerships' Oil and Gas Properties included in the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the BorrowerInitial Reserve Report. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel been furnished with appropriate UCC search certificates and other evidence satisfactory to the Borrower, substantially in Administrative Agent with respect Obligors' and the form of Exhibit E hereto. ----------Partnerships' Oil and Gas Properties reflecting no prior Liens other than Excepted Liens. (l) The Administrative Agent shall have received a certificate of insurance coverage of Environmental assessments and other reports to the Borrower evidencing that the Borrower extent maintained by Obligors covering Obligors' and the Operator are carrying insurance in accordance with Section 8.13Partnerships' Oil and Gas Properties reporting on the current environmental condition of such Properties satisfactory to Lenders. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status Assignment of title to the Oil Notes, Documents and Gas Properties evaluated in the Initial Reserve Report as of the Effective DateLiens duly completed and executed. (n) The Administrative Agent shall All authorizations, approvals or consents as may be satisfied with necessary for the environmental condition of the Oil execution, delivery and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerperformance by any Obligor under this Agreement. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of Guaranty Agreements duly completed and executed by the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03Guarantors. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower and of Kinder Xxxxxx X.X. setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower or Kinder Xxxxxx X.X. to execute and deliver the Loan Documents and the Acquisition Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower or Kinder Xxxxxx X.X. (y) who are authorized to sign the Loan Documents to which the Borrower or Kinder Xxxxxx X.X. is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the BorrowerBorrower or Kinder Xxxxxx X.X., certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower or Kinder Xxxxxx X.X. to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower.Borrower and Kinder Xxxxxx X.X. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Security Instruments, including those described on Exhibit E, duly completed and executed in sufficient number of counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording, if necessary. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx Xxxxxxxx & Xxxxxx, L.L.P., special counsel to the BorrowerBorrower and Kinder Xxxxxx X.X., substantially in the form of Exhibit E D hereto. ----------. (lg) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mh) The Administrative Agent shall have received title information as been furnished with appropriate UCC search certificates reflecting the Administrative Agent may require satisfactory filing of all financing statements required to perfect the Administrative Agent setting forth security interests granted by the status of title to the Oil Security Instruments and Gas Properties evaluated in the Initial Reserve Report as of the Effective Datereflecting no prior liens or security interests. (ni) The Administrative Agent shall be satisfied Evidence that the Borrower has (i) obtained all necessary or advisable orders, consents, approvals and authorizations from, and (ii) made all filings and notifications with, all Governmental Authorities and other Persons required in connection with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the BorrowerAcquisition. (oj) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) at least $9,000,000 of equity has been contributed to the financial statements referred to in Section 8.04(aBorrower of which at least $1,486,651 has been contributed by Xxxxxxx X. Xxxxxx (or his Affiliate) and $4,866,301 by Xxxxxxx X. Xxxxxx (or his Affiliate), (ii) true and complete executed copies of the Initial Reserve Report accompanied Acquisition Documents, said agreements being in form and substance reasonably satisfactory to the Agent, and being certified by a certificate covering the matters described such Responsible Officer as being in Section 9.12(b) full force and effect, and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering such other related documents and information as the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas PropertiesAgent shall have reasonably requested. (qk) Evidence that the Acquisition shall be completed with the Initial Funding. (l) The Administrative Debt of Xxxxxx Xxxxxx Operating B shall have been refinanced on terms acceptable to the Agent. (m) The Agent shall have received appropriate UCC search certificates reflecting no an LP Unit Certificate registered in the name of Kinder Xxxxxx X.X. (or Enron Liquids Pipeline Company which is the prior Liens encumbering the Properties the Borrower for each corporate name of the following jurisdictions: State Kinder Xxxxxx X.X.), evidencing Kinder Xxxxxx X.X.'s ownership of Wyoming431,000 LP Units, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agenttogether with a stock power endorsed in blank. (rn) The Administrative Such other documents as the Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars any Lender or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied provided in this Section 6.01, each of which shall be satisfactory to the Sole Lead Arranger in form and substance (other than each item, if any, listed on Schedule 6.01, which items are hereby permitted to be delivered after the Closing Date but not later than the date for delivery of each such item specified on Schedule 6.01, or waived in accordance with Section 13.02such later date as the Administrative Agent may agree): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner setting forth (i) resolutions of its managing member board of managers with respect to the authorization of the Borrower General Partner to execute and deliver on behalf of itself and each Obligor the Loan Documents to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) General Partner who are authorized to sign the Loan Documents to which the Borrower each Obligor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate agreement of incorporation and bylawslimited partnership for Borrower, as amended, certified as being true and complete and (v) the articles of organization of the BorrowerGeneral Partner, as amended, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (c) The Notes, duly completed and executed for each Lender. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DSecurity Instruments, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts; all original certificates of partnership units or members’ equity, and dated blank stock powers and Intercompany Notes duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from An opinion of counsel to the Obligors acceptable to the Sole Lead Arranger, with respect to the existence of the Obligors, due authorization and execution of the Loan Documents, enforceability of the Loan Documents, including without limitation the Security Instruments, and other matters incident to the transactions herein contemplated as the Sole Lead Arranger may reasonably request, each party hereto counterparts (in such number as may be requested by form and substance satisfactory to the Administrative Agent) of this Agreement signed on behalf of such partySole Lead Arranger. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil 7.17 and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.05 and the Fee Letter on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement Agreement, the other Loan Documents and the transactions contemplated herebyhereby and thereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, the bylaws of the Borrower, Borrower certified as being true to be correct and completecomplete copies. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors or other governing body with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement, the other Loan Documents and the transactions contemplated hereby and thereby, (iii) specimen signatures of the authorized officers, and (iv) a certification that the articles or certificate of incorporation, bylaws, partnership agreements, or other organizational documents of such Guarantor have not been modified in any respect from the copies previously provided to the Administrative Agent and the Lenders in connection with the Existing Credit Agreement. The Administrative Agent shall have received certificates and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Guarantors. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DA Compliance Certificate, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number Notes dated as may be requested by of the Administrative Agent) of this Agreement signed on behalf of such partyClosing Date, duly completed and executed. (f) The Administrative Agent shall have received duly executed Notes payable to the order Opinions of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special legal counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance Guarantors, in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require form and substance satisfactory to the Administrative Agent setting forth the status of title Agent, as to such matters incident to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vg) The Administrative Agent shall have received Direction Letters executed in blank Pro forma projections prepared by the Borrower, in form and substance satisfactory to the Administrative Agent. (h) Audit of Borrower's and its Subsidiaries' assets in form and substance satisfactory to the Administrative Agent. (i) Form S-1 and all amendments thereto as filed with the SEC by WCA Corp., such quantity filings to be in form and substance reasonably acceptable to the Administrative Agent. (j) Evidence that the outstanding Term A Loans and Revolving Credit Loans (each as defined in the Existing Credit Agreement) have been paid in full. (k) Unaudited consolidated balance sheet of the Borrower as at March 31, 2004 and the related consolidated statement of income, stockholders' equity and cash flow for the portion of the fiscal year ended on such date, all in accordance with GAAP, as applied on a consistent basis (subject to normal year-end adjustments). (l) Such other documents, agreements, and instruments as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been or any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower MMR setting forth (i) resolutions of its managing the board of directors of MMR, as the sole member of the Borrower, with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of MMR and the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the limited liability company agreement of the Borrower, and (v) the certificate of incorporation and bylawsformation filed with the Delaware Secretary of State, as amended, of the Borrower, all certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from MMR or the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx Jones, Walker, Waechter, Poitevent, Carrere & XxxxxxDenegre, special counsel L.L.P. xxxxxxl to the Borrower, substantially in the form of Exhibit E D hereto. ----------. (lf) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mg) The Administrative Receipt by the Agent shall have received of the fees due and payable after the Closing Date as provided for in the Fee Letter. (h) Receipt by the Agent of each of the Security Instruments, including those described on Exhibit E, duly completed and executed in sufficient number of counterparts for recording, if necessary, and otherwise in recordable form and substance satisfactory to the Agent. (i) Receipt by the Agent of such title information as the Administrative Agent may require from attorneys satisfactory to the Administrative Agent setting forth the status of title to at least 100% of the Oil and Gas Properties evaluated value of the Hydrocarbon Interests included in the Initial Reserve Report as of the Effective DateBorrowing Base. (nj) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received been furnished with appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agentliens or security interests. (rk) The Administrative Receipt by the Agent shall have received evidence of documentation in form and substance satisfactory to the Agent, evidencing that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% acquisition of the reasonably estimated projected natural gas production Properties listed in Subpart B of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve ReportsSchedule 7.22 has been completed. (sl) The Administrative Receipt by the Agent shall be satisfied that there are no negative price deviations in of such other documents as the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect or any Lender or special counsel to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make the ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agents and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date or as otherwise agreed to in writing among the Borrower, the Agents and the Arrangers and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of each of the Borrower and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower or each Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the BorrowerBorrower and each Guarantor, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.; (cb) The Administrative Agent shall have received certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower.Borrower and each Guarantor; (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date.Initial Funding; (d) this Agreement and the Notes, duly completed and executed; (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments those described on Exhibit F-1E-1, duly completed and executed in a sufficient number of counterparts for recording, if necessary. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being (subject only to Excepted Liens identified in clauses (ai) to (dv), (vii) and (eviii) of the definition thereof, but subject to ) on at least 80% of the provisos at total value of all of the end of such definitionOil and Gas Properties evaluated in the Initial Reserve Report; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests capital stock of each of the Borrower.Guarantors and not less than 65% of all of the issued and outstanding capital stock of each Foreign Subsidiary with total assets in excess of $1,000,000 that is not a Guarantor, which is directly owned by either the Borrower or a Domestic Subsidiary; (kf) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx(i) Roland Sledge, special counsel General Counsel to the Borrower, substantially in the xxxx xx Xxxxbit D-1 hereto, (ii) Haynes and Boone, LLP, special Texas counsel to the Borrower, substaxxxxxxy in xxx xorm of Exhibit D-2 hereto, and (ii) local counsel in each of the following states: Louisiana, New Mexico and any other jurisdictions requested by the Administrative Agent, substantially in the form of Exhibit E hereto. ----------D-3; (lg) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.13.7.19; (mh) The Administrative Agent shall have received title information as the Administrative Agent may reasonably require satisfactory to the Administrative Agent setting forth the status of title to at least 80% of the value of the Oil and Gas Properties evaluated included in the Initial Reserve Report as of the Effective Date.Borrowing Base; (ni) The the Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to its Restricted Subsidiaries; (j) the Administrative Agent shall be reasonably satisfied with the terms and conditions of the Merger and the Lenders as they may request related thereto, including Merger Documents; (k) a Phase 1 Environmental Report with respect to all xxxxx certificate of a part Responsible Officer of the Oil Borrower certifying that: (i) Bargo and Gas Properties the Borrower are concurrently consummating the Merger in axxxxxance with the terms of the Borrower.Merger Documents (with all of the material conditions precedent thereto having been satisfied in all material respects by the parties thereto), (ii) attached thereto is a true and complete copy of the Certificate of Merger filed with the Delaware Secretary of State and any equivalent documents or certificates filed with the Texas Secretary of State by Bargo and (iii) attached thereto is a true and complete copy of the Xxxxxment to the Articles of Incorporation filed with the Delaware Secretary of State reflecting its change of name; (ol) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have has received all consents and approvals required by Section 8.03.7.06 of this Agreement; (m) evidence that the Borrower has obtained one or more plugging and abandonment surety bonds issued by sureties and in amounts reasonably satisfactory to the Administrative Agent; (n) the Initial Reserve Reports; (o) a certificate of a Responsible Officer of the Borrower certifying that that the 5 million shares of Bargo Cumulative Redeemable Preferred Stock, Series B, par value $0.00, xave been or are being redeemed or repurchased prior to or on the Closing Date or in connection with the Merger; (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens liens or security interests encumbering the Mortgaged Properties the Borrower for each of the following jurisdictions: State of WyomingTexas, AlbanyLouisiana, ConverseNew Mexico, PlatteOklahoma, CampbellCalifornia, Kansas and Xxxxxxx Counties, and any Mississippi other jurisdiction requested than those being assigned or released on the Closing Date or Liens permitted by the Administrative Agent.Section 9.03; (rq) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, floors or collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that which have a floor strike price of not less than $20 per barrel in respect of crude oil (NYMEX/WTI basis adjusted equivalent) and not less than $3.00 mcf in respect of natural gas (NYMEX/Henry Hub basis adjusted equivalent), and (iii) which have aggregate notional xxxxonal volumes of not less than 7550% of the reasonably estimated projected crude oil production and not less than 30% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereofproduction, in each case, from its Proved Developed Producing Reservesproved developed, producing Oil and Gas Properties (excluding Oil and Gas Properties in Equador) as determined by reference to the Initial Reserve Reports.Reports for each year during the period commencing with the Closing Date and ending on December 31, 2002; (r) a copy, certified by a Responsible Officer as true and complete, of the Agreement and Plan of Merger (together with all amendments, if any), the Senior Subordinated Indenture pursuant to which the Senior Subordinated Notes have been issued and the Coral Agreement; and (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Agents or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by Administrative Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary officer of the Borrower setting forth (i) resolutions of its managing member Managers with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate Operating Agreement of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from Borrower to the Borrower contrary. (b) A certificate of the Secretary or an Assistant Secretary of Parent setting forth (i) resolutions of its board of directors with respect to the authorization of Parent to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of Parent (y) who are authorized to sign the Loan Documents to which Parent is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of Parent, certified as being true and complete. Administrative Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from Parent to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Parent. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, A Compliance Certificate duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording, if necessary. (g) The A favorable opinion of (i) Xxxxxxxxx Xxxxxxxxxx P.C., counsel to Borrower shall have delivered and Parent and (ii) Aboudi & Xxxxxxxxxx, special counsel to Parent, each in form and substance satisfactory to Administrative Agent, as to such matters incident to the transactions herein contemplated as Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000may reasonably request. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect Environmental assessment reports relating to the Borrower's Oil and Gas Properties of Borrower as may be requested by Administrative Agent, including environmental audits, phase I reports or other environmental reports of any nature whatsoever (whether prepared internally or by third party consultants); and Administrative Agent must be satisfied with the results of the date review of such fundingreports and environmental condition of such Oil and Gas Properties. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts received, reviewed and be satisfied with the results of the Warrant Agreement review of the Initial Reserve Report and any other related engineering data with respect to the Oil and Gas Properties included therein for each Lenderwhich value was given to the Borrowing Base. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.18. (mk) The Title information as Administrative Agent may require setting forth a status of title acceptable to Administrative Agent and the Lenders to at least 80% of the value of the Oil and Gas Properties included in the Initial Reserve Report. (l) Administrative Agent shall have received title and reviewed, with respect to Parent and its Subsidiaries, (i) most recent annual and quarterly financial statements, (ii) organizational and governing documents of Parent and Borrower, and (iii) information as regarding litigation, insurance, contingent liabilities, pension liabilities (actual and contingent) and the material contracts described in Section 7.21; and Administrative Agent may require satisfactory Agent, the Lenders and counsel to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition results of such reviews. (m) Letters in Lieu executed by Borrower to Purchasers as of the Oil Closing Date, Letters in Lieu executed by Borrower in blank, and Gas Properties a list of Purchasers with address, telephone and facsimile numbers, e-mail address (if available) and contact individual for each Purchaser. (n) Appropriate UCC search certificates reflecting no prior Liens in any Property of Borrower and releases of Liens and UCC Termination Statements relating to Liens in favor of Bank of Texas, N.A. covering various of the Borrower and have received such reports Properties being acquired as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the BorrowerFive States Acquisition. (o) The Administrative Agent shall have received and reviewed all necessary information regarding Hedging Agreements entered into by Borrower to be in effect on the Closing Date and be satisfied with the results of such review. (p) Administrative Agent shall have received and reviewed documentation pursuant to which Parent is to contribute to Borrower net cash proceeds as equity in an amount of at least $50,000,000 and be satisfied with the results of such review, and received evidence reasonably satisfactory to Administrative Agent that prior to or concurrently with the Initial Funding, Borrower shall have received such equity contribution in the amount of at least $50,000,000. (q) Administrative Agent shall have received a certificate of a Responsible Officer of Officer, in form and substance satisfactory to Administrative Agent, certifying to various matters in connection with the Five States Acquisition, including that concurrently with the Initial Funding, Borrower certifying that is consummating the Borrower and the Operator have received all consents and approvals required by Section 8.03Five States Acquisition. (pr) The Administrative Agent shall have received (i) and reviewed a pro-forma balance sheet of Borrower reflecting Borrower's financial position immediately upon closing of the financial statements referred to in Section 8.04(a), (ii) Five States Acquisition and be satisfied with the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies results of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Propertiesreview. (qs) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering and reviewed the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent Xxx Management Agreement and the Arranger (i) with one or more Approved Counterparties, Xxx Management JOA and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in with the oil and gas prices that would have a Material Adverse Effect on the value results of the Borrower's Oil and Gas Propertiessuch review. (t) The Such other documents as Administrative Agent shall be satisfied that there has been no Material Adverse Effect or any Lender or special counsel to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the U.S. Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the U.S. Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the U.S. Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the U.S. Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the U.S. Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the U.S. Borrower (y) who are authorized to sign the Loan Documents to which the U.S. Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the U.S. Borrower, certified on behalf of the U.S. Borrower as being true and complete. The Administrative U.S. Agent and the Lenders may conclusively rely on such certificate until the Administrative U.S. Agent receives notice in writing from the U.S. Borrower to the contrary. (b) A certificate of the respective Secretary or an Assistant Secretary of each of the Canadian Borrowers setting forth (i) resolutions of its board of directors with respect to the authorization of such Canadian Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Canadian Borrower (y) who are authorized to sign the Loan Documents to which such Canadian Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws or partnership agreement, as applicable, of such Canadian Borrower certified on behalf of such Canadian Borrower as being true and complete. The Agents and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Canadian Borrower to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state and Canadian agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Funding. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower Borrower, setting forth (i) resolutions of its managing member board of directors with respect to the Borrower’s authorization of the Borrower to execute and deliver the Loan Documents Documents, to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons Responsible Officers of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws, as amendedapplicable, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its or its general partner’s board of directors or managers, as applicable, with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws (or equivalent constituent documents) of such Guarantor, and its general partner, as applicable, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer of the Borrower and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated counterparts for recording, as of the date hereofnecessary. (g) The Borrower shall have delivered An opinion of Bond & Xxxxxx LLP, counsel to the Obligors and from other local counsel acceptable to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil due formation, authorization and Gas Properties as existence of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts Obligors and the enforceability of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) Loan Documents and perfection of the Security Instruments, including Instruments under the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery laws of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to states wherein the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as are located in form and scope substance satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas PropertiesAgent, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference matters incident to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vh) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify A certificate of insurance coverage of the Borrower and each Guarantor evidencing that the Lenders of the Effective Date, Borrower and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Guarantor are carrying insurance in accordance with Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the U.S. Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the U.S. Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the U.S. Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the U.S. Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the U.S. Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the U.S. Borrower (y) who are authorized to sign the Loan Documents to which the U.S. Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the U.S. Borrower, certified on behalf of the U.S. Borrower as being true and complete. The Administrative U.S. Agent and the Lenders may conclusively rely on such certificate until the Administrative U.S. Agent receives notice in writing from the U.S. Borrower to the contrary. (b) A certificate of the respective Secretary or an Assistant Secretary of each of the Canadian Borrowers setting forth (i) resolutions of its board of directors with respect to the authorization of such Canadian Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Canadian Borrower (y) who are authorized to sign the Loan Documents to which such Canadian Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws or partnership agreement, as applicable, of such Canadian Borrower certified on behalf of such Canadian Borrower as being true and complete. The Agents and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Canadian Borrower to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state and Canadian agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Guaranty Agreement, duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereofcompleted and executed. (g) The Borrower shall have delivered Opinions of Mayor, Day, Xxxxxxxx & Xxxxxx, L.L.P., U.S. counsel to the Administrative Obligors, and Xxxx, Xxx & Boers, Canadian counsel to the Obligors, each in form and substance satisfactory to the U.S. Agent, as to such matters incident to the transactions herein contemplated as the U.S. Agent the Initial Funding Disbursement Request in the amount of $3,700,000may reasonably request. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.137.19. (mi) The Administrative U.S. Agent shall have received title information as environmental reports and conducted such due diligence relating to environmental matters such that the Administrative U.S. Agent may require satisfactory to and the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be Lenders are reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Obligors' Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations In addition to the conditions set forth in Section 4.01 above, the obligation of the Lenders each Bank to make ---------------- their Loans under its initial Loan hereunder shall be subject to the Initial Funding shall not become effective until the date on which each satisfaction of the following further conditions is satisfied (or waived in accordance with Section 13.02):precedent: (a) Each Bank shall have received a duly executed Note complying with the provisions of Section 2.04. (b) The Administrative Agent shall have received a favorable written opinion of Timoxxx X. Xxxxxxxxx, Xxnior Vice President and General Counsel of the Borrower, dated the Initial Funding Date and addressed to the Banks, to the effect set forth in Exhibit D hereto, and the Borrower hereby instructs such counsel to deliver such opinion to the Agent. (c) All legal matters incident to this Agreement and the borrowings hereunder shall be satisfactory from a legal point of view to each Bank's counsel and to Butlxx & Xinixx, X.L.P., counsel for the Agent. (d) The Agent shall have received: (i) a certificate of the Secretary or Assistant Secretary of the Borrower and each Guarantor dated the Closing Date and certifying (A) that attached thereto are true and complete copies of the certificate or articles of incorporation and by-laws, respectively, of the Borrower or such Guarantor, as the case may be, as in effect on the Closing Date and at all times since a date prior to the date of the resolutions described in clause (B) below, (B) that attached thereto is a true and complete copy of resolutions duly adopted by the Board of Directors of the Borrower or such Guarantor, as the case may be, authorizing the execution, delivery and performance of the Loan Documents and the borrowings hereunder (or of this Agreement, in the case of the Guarantors), and that such resolutions have not been modified, rescinded or amended and are in full force and effect, and (C) as to the (ii) a certificate of another Responsible Officer dated the Closing Date as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant to (i) above; (iii) a certificate of incorporation and good standing, as of a recent date, as to the Borrower and each of the Guarantors, from their respective states of organization; (iv) a certificate of a Responsible Officer, and such other evidence as the Agent may require, dated the Initial Funding Date, certifying that (A) the Merger Agreement and the Offer to Purchase are and remain in full force and effect, (B) all shareholder, governmental and other third party approvals, and all filings, registrations and other material actions, required for the consummation of the Acquisition have been obtained, made or taken, as applicable, and all applicable waiting periods, if any, have expired, without, in each case, any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of Acquisition, (C) none of the events or circumstances described in Annex I to the Merger Agreement has occurred or exists, (D) the shareholders of NCS have irrevocably tendered for purchase, and the Borrower has accepted for payment, pursuant to the terms of the Merger Agreement and the Offer to Purchase, (i) shares of common stock, par value $.01 per share, of NCS at a price not in excess of $27.00 per share and (ii) warrants ("Warrants") to purchase shares of NCS common stock issued pursuant to the Warrant Agreement dated as of March 9, 1993, between NCS and Boatmen's Trust Company, as Warrant Agent, at a price not in excess of $9.25 per Warrant, (E) upon funding of the Arranger initial Loans hereunder in accordance with the Borrower's notice of Borrowing with respect thereto, the Borrower will own, beneficially and of record, shares and warrants representing not less than 66-2/3% of the Lenders NCS common stock (on a fully-diluted basis), and (F) attached thereto are true and correct copies of all amendments to the Merger Agreement and Offer to Purchase, if any; (v) a certificate of a Responsible Officer dated the Initial Funding Date certifying that (A) the Senior Debt Documents have been amended so that the covenants contained therein are not more restrictive than the covenants contained in this Credit Agreement, and (B) attached thereto (vi) evidence that all Indebtedness of NCS under the NCS Credit Facilities shall have been (or shall simultaneously be) repaid and that the agent for the lenders under the NCS Credit Facilities shall have agreed to terminate and release all liens securing said Indebtedness; and (vii) such other documents as the Banks or their counsel or Butlxx & Xinixx, X.L.P., counsel for the Agent, may reasonably request. (e) The Agent shall have received a certificate, dated the Initial Funding Date and signed by a Financial Officer of the Borrower, confirming compliance with the conditions precedent set forth in paragraphs (b) and (c) of Section 4.01. (f) The Agent shall have received all fees Fees and other amounts due and payable on or prior to the Effective Initial Funding Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower conditions set forth in this Section 4.02 shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000been satisfied not later than March 31, 1996. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of Holdings setting forth (i) resolutions of its board of directors with respect to the authorization of Holdings to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of Holdings (y) who are authorized to sign the Loan Documents to which Holdings is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of Holdings, certified as being true and complete. The Administrative Agent shall have received certificates and the Lenders may conclusively rely on such certificate until they receive notice in writing from Holdings to the contrary. (c) A certificate of the Secretary or an Assistant Secretary of each Subsidiary party to a Loan Document, setting forth (i) resolutions of its board of directors with respect to the authorization of such Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Subsidiary (y) who are authorized to sign the Loan Documents to which such Subsidiary is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Subsidiary, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Borrower to the contrary. (d) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower, Holdings and each Subsidiary party to a Loan Document. (de) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received Notes, duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereofcompleted and executed. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request Security Instruments, including those described on Exhibit D, duly completed and executed in the amount sufficient number of $3,700,000counterparts for recording, if necessary. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts An opinion of the ORRI Conveyance for each Lenders with respect Gardere Wynnx Xxxxxx, xxunsel to the Borrower's Oil , Holdings and Gas Properties the Subsidiaries party to a Loan Document, in form and substance satisfactory to the Administrative Agent, as of to such matters incident to the date of such fundingtransactions herein contemplated and as the Administrative Agent may reasonably request. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of each of Brigham Exploration, the Borrower Gexxxxx Xartner and the manager of each other Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the its authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower it is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such its authorized officers, and (iv) the its articles or certificate of incorporation and bylaws, as amended, of the Borrowerbylaws or operating agreement, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and the Guarantors. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC-1, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Loan Documents listed on Exhibit D hereto, duly completed and, where necessary or appropriate, executed in sufficient counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording. (f) The Administrative Agent shall have received duly executed Notes payable Evidence satisfactory to the order of each Lender Agent that the Enron Indebtedness has been paid and satisfied in a principal amount equal full, the Enron Mortgages and all other Liens securing the Enron Indebtedness have been fully released in proper recordable form, the Term ORRI has be reconveyed to its Commitment dated as of the date hereofBorrower, the Enron Warrants have been cancelled, and the Enron Shares returned to Brigham Exploration by paymxxx xx Brigham Exploratixx xx x sum not to exceed $20,000,000 plus reasonable Enron legal fees. (g) The Borrower shall have delivered to Execution and delivery of the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Subordination Agreement. (h) The Administrative Agent shall have received from An opinion of Thompson & Knight LLP, specxxx xxxxsel to the Borrower duly executed counterparts of and the ORRI Conveyance for each Lenders with respect Guarantors in form reasonably satisfactory to the Borrower's Oil and Gas Properties as of the date of such fundingAgent. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mj) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of Mortgaged Properties. (k) Appropriate UCC search certificates reflecting no prior liens or security interests, except those securing the Senior Indebtedness. (l) Borrower and shall have received such reports as submitted to the Lenders the initial CAPEX Plan, which CAPEX Plan shall be satisfactory in form and scope satisfactory substance to the Administrative Agent and Majority Lenders. (m) Borrower shall have submitted to the Lenders as they may request related theretothe Hedging Agreements described on Schedule 7.20, including a Phase 1 Environmental Report with respect which Hedging Agreements shall be satisfactory in form and substance to all xxxxx a part the Majority Lenders. (n) Execution and delivery of the Oil and Gas Properties of the BorrowerAgent's Fee Letter. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower Warrant Agreement, duly executed and the Operator have received all consents and approvals required by Section 8.03delivered. (p) The Administrative Agent shall have received (i) Execution and delivery of the financial statements referred Ancillary Agreement between SCI and Borrower pertaining to in Section 8.04(a)the reduction, (ii) under certain circumstances, of a portion of SCI's outstanding indebtedness under the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas PropertiesSenior Credit Agreement. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower issuance by Brigham Exploration of prefxxxxx xquity securities for each a consideration of the following jurisdictions: State not less than $20,000,000, before deduction of Wyoming, Albany, Converse, Platte, Campbellfees and commissions, and Xxxxxxx Counties, and any other jurisdiction requested by otherwise on terms reasonably acceptable to the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations execution and delivery of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (Loan Documents may occur at any time on or waived pursuant to Section 13.02) at or prior to 2:00 p.m.before November 3, New York, New York time, on February 15, 2004 (2000 and, in connection therewith, Borrower will deliver a supplementary or replacement opinion of counsel that supplements or replaces the event original opinion delivered pursuant to subsection (h) above, with such conditions are not so satisfied or waivedopinion to cover Brigham Holdings I, LLC and Xxxxxxm Holdings II, LLC adxxxxxxxlly and to the Commitments same effect as the original opinion delivered pursuant to subsection (h) above. Failure to deliver the documents described in this paragraph shall terminate at such time)constitute an "Event of Default" under this Agreement.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding (which shall not become effective until include the date rearrangement of the principal balance on which each the Prior Notes) is subject to the receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of each of Brigxxx Xxxloration, the Borrower General Partner and the manager of each other Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the its authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower it is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such its authorized officers, and (iv) the its articles or certificate of incorporation and bylaws, as amended, of the Borrowerbylaws or operating agreement, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and the Guarantors. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC-1, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Loan Documents described on Exhibit D, duly completed and executed in sufficient number of counterparts (in such number as may be requested by for recording, if necessary, including the Administrative Agent) of this Agreement signed on behalf of such partySCI Assignment, the New Mortgage and the Standard Mortgage. (f) The Administrative Agent shall have received duly executed Notes payable Execution and delivery of amendments to the order Subordinated Debt documents and the Subordination Agreement, including the ratification of each Lender in a principal amount equal to its Commitment dated as this transaction by the holders of the date hereofSubordinated Debt. (g) The Borrower shall have delivered An opinion of Thomxxxx & Xnight LLP, special counsel to the Administrative Agent Borrower and the Initial Funding Disbursement Request Guarantors in form reasonably satisfactory to the amount of $3,700,000Agent. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations effectiveness of this Agreement and the Lenders obligation of each Lender and Issuing Bank to make ---------------- their Loans under the its Initial Funding shall not become effective until hereunder is subject to the date on which each receipt by Administrative Agent of the following documents, each of which shall be satisfactory to Administrative Agent in form and substance, and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower Borrower, setting forth (i) resolutions of its managing member board of directors with respect to the Borrower’s authorization of the Borrower to execute and deliver the Loan Documents Documents, to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons Responsible Officers of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws, as amendedapplicable, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from Borrower to the Borrower contrary. (b) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its or its general partner’s board of directors or managers, as applicable, with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws (or equivalent constituent documents) of such Guarantor, and its general partner, as applicable, certified as being true and complete. Administrative Agent and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, foreign qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer of Borrower and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be Any Notes requested by the Administrative Agent) of this Agreement signed on behalf of such partyLenders, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated counterparts for recording, as of the date hereofnecessary. (g) An opinion of The Borrower shall have delivered Bond Law Firm, counsel to the Obligors and from other local counsel acceptable to Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil due formation, authorization and Gas Properties as existence of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts Obligors and the enforceability of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) Loan Documents and perfection of the Security Instruments, including Instruments under the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery laws of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to states wherein the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as are located in form and scope substance satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas PropertiesAgent, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference matters incident to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vh) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The A certificate of insurance coverage of Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the each Guarantor evidencing that Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Guarantor are carrying insurance in accordance with Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.18

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Subsidiary setting forth (i) resolutions of its board of directors with respect to the authorization of such Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Subsidiary (y) who are authorized to sign the Loan Documents to which such Subsidiary is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Subsidiary, certified as being true and complete. The Administrative Agent shall have received certificates and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Borrower to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Subsidiaries. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and A Compliance Certificate dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on EXHIBIT D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording, if necessary. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount Opinions of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx Andrewx & XxxxxxXxxth X.X.X., special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as Subsidiaries, and Milbank, Tweed, Hadley & XxXloy, xxxxial California counsel to the Administrative Agent may require Agent, each in form and substance satisfactory to the Administrative Agent setting forth the status of title Agent, as to such matters incident to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vh) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel Evidence satisfactory to the Administrative Agent may reasonably request. The Administrative Agent shall notify that the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Subsidiary are carrying insurance in accordance with Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to, on or before the date on which of the Initial Funding, (i) the Agent's having completed a review satisfactory to it of the environmental files of the Borrower and the Restricted Subsidiaries, and (ii) the receipt by the Lenders and Agent of all fees due and payable as of such date and the following documents, each of which shall be satisfactory to the following conditions is satisfied (or waived Agent in accordance with Section 13.02):form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower and each Guarantor to execute and deliver the Loan Documents to which it such Person is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower General Partner and each Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative representatives for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officersofficers of the Borrower and each Guarantor, and (iv) the articles or certificate of incorporation and bylawsbylaws or the partnership agreement, as amendedapplicable, of the BorrowerGeneral Partner and each Guarantor and the Borrower Partnership Agreement, each certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate certificates until the Administrative Agent receives notice in writing from the Borrower or such Guarantor, as the case may be, to the contrary, and (iv) copies of all governmental approvals required in connection with the execution, delivery and performance of the Loan Documents by each party thereto, other than the Agent and the Lenders. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing standing, as appropriate, of the Borrower, each Guarantor and the General Partner. (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in A Compliance Certificate for the form of Exhibit Dfiscal quarter ending June 30, 2003 duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (ed) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes A promissory note payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased requests one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)2.07.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied provided in this Section 6.01, each of which shall be satisfactory to the Co-Lead Arrangers in form and substance (other than each item, if any, listed on Schedule 6.01, which items are hereby permitted to be delivered after the Closing Date but not later than the date for delivery of each such item specified on Schedule 6.01, or waived in accordance with Section 13.02such later date as the Administrative Agent may agree): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner setting forth (i) resolutions of its managing member board of managers with respect to the authorization of the Borrower General Partner to execute and deliver on behalf of itself and each Obligor the Loan Documents to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) General Partner who are authorized to sign the Loan Documents to which the Borrower each Obligor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate agreement of incorporation limited partnership for Borrower, APL Operating and bylawsElk City, as amended, certified as being true and complete and (v) the articles of organization of the BorrowerGeneral Partner, APL New York, APL Ohio, APL Pennsylvania, APL Mid-Continent and Elk City GP, as amended, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (c) The Notes, duly completed and executed for each Lender. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DSecurity Instruments, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts for recording, if necessary, including delivery of any requisite mortgage tax affidavit and dated payment for applicable mortgage tax, if any due; all original certificates of partnership units or members’ equity, blank stock powers, and Intercompany Notes duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from each party hereto counterparts Receipt of statement of Obligors setting forth pro forma Consolidated EBITDA of at least Forty-Six Million Dollars ($46,000,000), in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partya form substantially similar to Schedule 6.01(e). (f) The Administrative Agent shall have received duly executed Notes payable An opinion of counsel to the order of each Lender in a principal amount equal Obligors (including local counsel) acceptable to its Commitment dated as the Co-Lead Arrangers, with respect to the existence of the date hereofObligors, due authorization and execution of the Loan Documents and the Elk City Acquisition Documents, enforceability of the Loan Documents and the Elk City Acquisition Documents, including without limitation the Security Instruments, under the laws of the states wherein the Pipeline Properties are located, and other matters incident to the transactions herein contemplated as the Co-Lead Arrangers may reasonably request, each in form and substance satisfactory to the Co-Lead Arrangers. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.137.20 and Section 8.03(b). (mh) The Administrative Agent shall have received title Title information as the Administrative Agent Co-Lead Arrangers may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated (including, without limitation, the Pipeline Properties (including title to the Pipelines acquired in connection with the Elk City Acquisition, which shall not reflect more than Ten Million Dollars ($10,000,000) in “Title Defects” (as defined in the Elk City Purchase and Sale Agreement) as identified by Borrower, for which Borrower shall receive a reduction in the purchase price or a direct payment from or cure of such Title Defects by the Elk City Seller (in excess of a Two Hundred Fifty Thousand Dollar ($250,000) threshold amount under the Elk City Purchase and Sale Agreement))) acceptable to the Co-Lead Arrangers, including delivery of mortgagee’s policies of title insurance for such Properties as the Co-Lead Arrangers shall request, to the extent any Obligor obtains an owner’s title policy thereon. (i) Appropriate UCC search certificates and other evidence satisfactory to the Co-Lead Arrangers with respect to the Obligors’ Properties reflecting no prior Liens, other than Excepted Liens. (j) Environmental assessments and other reports to the extent maintained by the Obligors covering the Obligors’ Properties reporting on the current environmental condition of such Properties satisfactory to the Co-Lead Arrangers and the Lenders. (k) A certificate of a Responsible Officer certifying that (i) no Default or Event of Default exists or would result from the Initial Reserve Report as Funding, and (ii) since December 31, 2004, there has occurred no Material Adverse Change. (l) Satisfactory review by Co-Lead Arrangers of the Effective Dateall Material Agreements. (m) The Consent to Assignment duly completed and executed. (n) The Administrative Agent shall All authorizations, approvals or consents as may be satisfied with necessary for the environmental condition of the Oil execution, delivery and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerperformance by any Obligor under this Agreement. (o) The From any Obligor (other than Borrower) (i) that has not previously executed a Guaranty Agreement, a Guaranty Agreement executed by such Obligor, or (ii) that executed a Guaranty Agreement under the Existing Credit Agreement, a Confirmation of Guaranty Agreement executed by such Obligor. (p) A letter from CT Corporation System, Inc., or other agent acceptable to the Administrative Agent shall have received a Agent, accepting service of process in the State of New York on behalf of the Obligors not otherwise qualified to transact business in New York. (q) A certificate of a Responsible Officer of the Borrower certifying that the (i) Borrower and the Operator have has received all governmental, shareholder, partnership and third party consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) necessary to consummate the financial statements referred to Elk City Acquisition, which consents and approvals are in Section 8.04(a)full force and effect, (ii) all waiting periods have expired without any action being taken by any Governmental Authority that could restrain, prevent or impose any material adverse condition on the Initial Reserve Report accompanied by a certificate covering Elk City Acquisition or that could seek to threaten the matters described in Section 9.12(b) consummation of the Elk City Acquisition, and no law or regulation is applicable that could have such effect, (iii) copies no order, decree, judgment, ruling or injunction exists which restrains the consummation of all material contracts the Elk City Acquisition or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportationtransactions contemplated by this Agreement, and processing agreements related (iv) no pending or threatened action, suit, investigation or proceeding exists which seeks to such Oil restrain or affect the Elk City Acquisition, or which, if adversely determined, could materially and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering adversely affect the Properties Borrower, any of its Subsidiaries, the Elk City Partnership Interests, any transaction contemplated hereby or the ability of Borrower for each to consummate the Elk City Acquisition or perform its obligations under this Agreement and the other Loan Documents, or the ability of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentLenders to exercise their rights hereunder or thereunder. (r) The Administrative Agent shall have received evidence A certificate of a Responsible Officer certifying that Borrower is, concurrently with the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% funding of the reasonably estimated projected natural gas production initial Loans on the Closing Date, consummating the Elk City Acquisition in accordance with the terms of currently producing xxxxx of Borrower for the first 24 months following Elk City Purchase and Sale Agreement, with all material conditions precedent thereto having been satisfied in all material respects by the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reportsparties thereto. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value Copies of the Borrower's Oil fully executed Elk City Purchase and Gas PropertiesSale Agreement and all other material Elk City Acquisition Documents, certified as true and correct by a Responsible Officer. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect Such other documents as the Co-Lead Arrangers, any Lender or counsel to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received LettersCo-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent Lead Arrangers may reasonably request. (vu) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel Review satisfactory to the Administrative Agent may reasonably request. The Administrative Agent shall notify Co-Lead Arrangers of a Reserve Report covering gas available for the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Elk City gathering system.

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) All Borrowings (other than Borrowings resulting solely from Conversions) shall be made simultaneously on the Funding Date and shall consist of Advances of the same Type and Interest Period made on such day by the Lenders ratably according to their respective Commitments. The Borrower may request that more than one Borrowing, but no more than six Borrowings, be made on the Funding Date, within the limits of the Commitments. All such Borrowings shall be made on notice, given not later than 10:00 A.M. (New York City time) three Business Days prior to the date of the proposed Funding Date, by the Borrower to the Administrative Agent, who shall give to each Lender prompt notice thereof on the Arranger same day such notice is received. Each such notice of a Borrowing (a "Notice of Borrowing") shall be in substantially the form of Exhibit 3.01A hereto, specifying therein the requested (i) Funding Date, (ii) Type of Advances comprising such Borrowing and the Lenders (iii) Interest Period for each such Advance. Each requested Borrowing shall have received all fees and other amounts due and payable on or prior be subject to the Effective Dateprovisions of Sections 3.03, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder4.03 and 5.02 hereof. (b) The Each Lender shall, before 12:00 noon (New York City time) on the Funding Date, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's address referred to in Section 10.02, in same day funds, such Lender's ratable portion of each Borrowing to be made on such date. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Section 5.02, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent's aforesaid address. (c) Unless the Administrative Agent shall have received notice from a certificate Lender prior to the Funding Date that such Lender will not make available to the Administrative Agent such Lender's ratable portion of all or any Borrowings to be made on such date, the Secretary or an Assistant Secretary Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on such date in accordance with subsection (b) of this Section 3.01 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower setting forth on such date a corresponding amount. If and to the extent that any such Lender (a "non-performing Lender") shall not have so made such ratable portion available to the Administrative Agent, the non-performing Lender and the Borrower severally agree to repay (but without duplication) to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) resolutions of its managing member with respect to in the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, case of the Borrower, certified as being true the interest rate applicable at the time to Advances comprising such Borrowing and complete(ii) in the case of such Lender, the Federal Funds Rate. The Administrative Agent and the Lenders Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borroweragainst any non-performing Lender. (d) The Administrative Agent failure of any Lender to make the Advance to be made by it as part of any Borrowing shall have received a compliance certificate which shall be substantially in the form not relieve any other Lender of Exhibit Dits obligation, duly and --------- properly executed by a Responsible Officer and dated if any, hereunder to make its Advance as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, includingsuch Borrowing, but not limited to, all operating agreements covering no Lender shall be responsible for the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each failure of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested Lender to make the Advance to be made by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Lender.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. Such certificate shall be accompanied by an incumbency certificate signed by another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing such certificate. (b) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Guarantor, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Guarantor to the contrary. Such certificate shall be accompanied by an incumbency certificate signed by another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing such certificate. (c) The Administrative Agent shall have received certificates [Reserved.] (d) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13Guarantor(s)/Subsidiaries. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders Lender to make ---------------- their Loans under the Initial Funding on the Closing Date shall not become effective until be subject to the date satisfaction, on which or before the Closing Date, of each and every one of the following conditions is satisfied (or waived in accordance with Section 13.02):respect to each of the Borrower: (a) The Administrative Agentfollowing documents, certificates and opinions, each in form and substance satisfactory to the Lender and its counsel, shall have been delivered to the Lender by the Borrower: (i) the Borrowing Request with respect to the initial Advance to be made hereunder, together with a letter of direction from the Borrower with respect to the disbursement of funds pursuant to the Initial Funding; (ii) the Credit Facility Note payable to the order of the Lender, duly executed by Borrower; (iii) Intentionally deleted (iv) the Collateral Security Agreement and all financing statements, agreements, and other instruments required by the Lender to create, perfect or continue the perfected status of such security interest or otherwise to effectuate the transactions contemplated by the Collateral Security Documents, with respect to which Borrower shall pay the fees or amounts to be paid as recording and filing fees or shall provide evidence reasonably satisfactory to the Lender of arrangements to pay the same; (v) completed requests for information or other evidence satisfactory to the Lender that the financing statements and other instruments delivered to the Lender pursuant to Section 6.1(a)(iv), have been filed in all appropriate filing offices, and that such filed financing statements perfect a security interest in favor of the Lender in the property described therein; (vi) a copy of the resolutions (duly adopted in accordance with the applicable requirements of law and the charter documents and by-laws of such corporation) of the Board of Directors of Borrower authorizing or ratifying the execution, delivery and performance of this Agreement, the Arranger Note, the Loan Documents and any other instrument or document hereunder or under any Loan Document to which such Borrower is a party and the Lenders shall have received all fees transactions contemplated hereby and other amounts due and payable on or prior to the Effective Datethereby, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid certified in each case by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the corporation; (vii) a copy of a certificate signed by the Secretary or an Assistant Secretary of Borrower setting forth as to the incumbency and specimen signature of each person authorized to execute and deliver this Agreement, the Note, any of the other Loan Documents and any other instrument or agreement hereunder and under any other Loan Document; (iviii) resolutions Intentionally deleted. (ix) Intentionally deleted. (x) a copy of the articles or certificate of incorporation of Borrower, as certified as of a recent date by the Secretary of State of its managing member jurisdiction of incorporation and a copy of the certificate of the Secretary, an Assistant Secretary or authorized representative of Borrower certifying to the true and complete copies of its respective articles or certificate of incorporation and bylaws as amended to the Closing Date; (xi) certified copies of all documents evidencing all necessary consents or approvals by governmental authorities or of other Persons or entities with respect to the authorization execution, delivery and performance of this Agreement, the Borrower to execute and deliver the Note, any other Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, hereby and (iv) the certificate of incorporation and bylawsthereby, as amended, of listed on Schedule 6 and all other consents and approvals as may be reasonably requested by the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.Lender; (cxii) The Administrative Agent shall have received currently dated long-form certificates of the appropriate Secretary of State agencies with respect of the state of incorporation or organization of Borrower and each Subsidiary of a Borrower and of each jurisdiction in which either Borrower or such Subsidiary is qualified to do business, certifying as to the existence, qualification legal existence and good standing standing, of such Borrower and each such Subsidiary (this contingency may be fulfilled pursuant to Subparagraph 6.2); (xiii) a certificate of the Borrower. chief executive or chief financial officer of Borrower certifying that (dA) The Administrative Agent shall have received a compliance certificate which shall be substantially immediately prior to the Initial Funding, there has been no material adverse change in the form financial condition, business, existing or ongoing operations or properties of Exhibit Dthe Borrower since the Borrower's last audited financial statement, duly (B) all representations and --------- properly executed by a Responsible Officer warranties set forth in Section 3 hereof are true and dated correct in all respects on the date of the Closing Date as though made on and as of the date of Effective the Closing Date. , (eC) The Administrative Agent shall have received from each party hereto counterparts (in such number as may all covenants, agreements and obligations to be requested performed by the Administrative Agent) of this Agreement signed or on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil hereunder have been performed, and Gas Properties as of (D) on the date of such funding.Closing Date, after giving effect to the Initial Funding, no Event of Default or Unmatured Event of Default shall have occurred or will exist; (ixiv) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an written opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially addressed to the Lender, as to the matters and to the effect set forth respectively in the form of Exhibit E and F hereto. ----------; (lxv) The Administrative Agent shall have received a certificate certificates of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements insurance referred to in Section 8.04(a)4.5 hereof, naming the Lender as additional named insured; (iixvi) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or other certificates, orders, authorizations, consents, affidavits, schedules, instruments, security agreements, includingfinancing statements, but not limited to, all operating agreements covering the Oil mortgages and Gas Properties, as well as all marketing, transportation, other documents which are provided for hereunder in form and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference substance satisfactory to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in Lender, or which the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent Lender may reasonably request. (vb) The Administrative Agent following conditions shall exist: (i) the Lender shall have received Direction Letters executed in blank by not later than five (5) Business Days preceding the Borrower, in such quantity as Closing Date the Administrative Agent may reasonably request.Borrowing Request with respect to the Initial Funding; (wii) Since December 1, 2003, there the Lender shall not be reasonably satisfied as to the truth and accuracy of each of the matters set forth in the certificate referred to in Section 6.1(a)(xiii); (iii) payment shall have been any disruption or adverse change in made to, and received by, the financial or capital markets. (x) The Borrower Lender of all expenses of the Lender and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special by counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders Lender of the Effective fees and expenses of counsel to the Lender as provided in Section 8.4 hereof or otherwise in the amounts requested by the Lender to be paid on the Closing Date, and such notice ; it is agreed that the fees for work performed by Lender's counsel in connection with the closing of the Loan shall be conclusive paid in the form of 4000 three year warrants of Borrower, exercisable at $3.00 per share; (iv) no litigation or other proceedings by or against Borrower shall have been commenced or threatened which would have a material adverse effect on Borrower or which seeks to prohibit the execution and binding. Notwithstanding the foregoing, the obligations delivery of this Agreement or any of the Lenders to make Loans hereunder other Loan Documents or the transactions contemplated hereby or thereby; (v) no Event of Default or Unmatured Event of Default shall not become effective unless each have occurred and be continuing under Section 7 hereof or under the terms of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)any Indebtedness of Borrower.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower Borrower’s general partner, SB Energy, setting forth (i) resolutions of its managing member board of directors or managers, as applicable, with respect to the authorization of the Borrower SB Energy to execute and deliver the Loan Documents on behalf of the Borrower and itself, to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons Responsible Officers of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws, as amendedapplicable, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its or its general partner’s board of directors or managers, as applicable, with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of organization, incorporation and bylaws (or equivalent constituent documents) of such Guarantor, and its general partner, as applicable, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer of the Borrower and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated counterparts for recording, as of the date hereofnecessary. (g) The Borrower shall have delivered An opinion of Xxxxxxxx Xxxx, Esq., counsel to the Obligors and from other local counsel acceptable to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil due formation, authorization and Gas Properties as existence of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts Obligors and the enforceability of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) Loan Documents and perfection of the Security Instruments, including Instruments under the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery laws of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to states wherein the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as are located, each in form and scope substance satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas PropertiesAgent, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference matters incident to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vh) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify A certificate of insurance coverage of the Borrower and each Guarantor evidencing that the Lenders of the Effective Date, Borrower and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Guarantor are carrying insurance in accordance with Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agents and the Lenders of all fees payable pursuant to Section 2.05 and the Fee Letter on which each or before the Closing Date and the receipt by the Agents of the following documents (in sufficient original counterparts for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative AgentGuaranty Agreement, the Arranger Security Agreements, the Intercreditor Agreement and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective DateLoan Documents, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid duly executed by the Borrower hereunderappropriate parties thereto. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement Agreement, the other Loan Documents and the transactions contemplated herebyhereby and thereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, the bylaws of the Borrower, Borrower certified as being true to be correct and completecomplete copies. The Administrative Agent Agents and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors or other governing body with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement, the other Loan Documents and the transactions contemplated hereby and thereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation, bylaws, partnership agreements, or other organizational documents of such Guarantor certified to be correct and complete copies. The Administrative Agent shall have received certificates Agents and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Guarantor to the contrary. (d) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Guarantors. (de) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DA Compliance Certificate, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number the Initial Funding but with all calculations made as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyMarch 31, 2005. (f) The Administrative Agent shall have received duly executed Notes payable to the order Opinions of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special legal counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance Guarantors, in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require form and substance satisfactory to the Administrative Agent setting forth the status of title Agent, as to such matters incident to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vg) The Administrative Agent shall have received Direction Letters executed in blank Pro forma projections prepared by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and copies of the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel Financial Statements, all in form and substance satisfactory to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Agent.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate certificates until the Administrative Agent receives notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of the Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of the Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Guarantor (y) who are authorized to sign the Loan Documents to which Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of the Guarantor, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Guarantor. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received other Loan Documents, including those described on Exhibit D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording, if necessary. (g) The Borrower shall have delivered Opinions of (i) Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to the Administrative Borrower and Guarantor and (ii) Borrower's and the Guarantor's General Counsel, in form and substance satisfactory to the Agent, as to such matters incident to the transactions herein contemplated as the Agent the Initial Funding Disbursement Request in the amount of $3,700,000may reasonably request. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mi) The Administrative Agent Concurrent with the Initial Funding, the Borrower shall have received title information as acquired from Amoco Production Company the Administrative Agent may require satisfactory to Amoco Properties other than the Administrative Agent setting forth Beaver Creek Unit (except for the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective DateBeaver Creek gas plant). (nj) The Administrative Such other documents as the Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory or any Lender or special counsel to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (vk) The Administrative Agent shall have received Direction Letters executed in blank by All indebtedness and other obligations of the Borrower and its Subsidiaries under that certain Credit Agreement among the Borrower, in such quantity Bank One, Texas, N.A., Bank of Montreal, Compass Bank-Houston and DenNorske Bank AS, dated as the Administrative Agent may reasonably request. (w) Since December 1of March 31, 20031995, there shall not have been any disruption or adverse change paid and satisfied in the financial or capital marketsfull. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date on which each receipt by the Administrative Agent of the following and/or satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) a certification that the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified attached as being true an exhibit thereto are true, correct and complete, and have not been modified or revoked and are in full force and effect. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. Such certificate shall be accompanied by an incumbency certificate signed by another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing such certificate. (cb) The Administrative Agent shall have received certificates A certificate of the appropriate State agencies Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors or other governing body with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf authorization of such party. (f) The Administrative Agent shall have received duly executed Notes payable Guarantor to execute and deliver the order of each Lender Loan Documents to which it is a party and to enter into the transactions contemplated in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a)those documents, (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies officers of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. Guarantor (y) The Administrative Agent shall have received such other documents as who are authorized to sign the Administrative Agent or special counsel Loan Documents to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions which Guarantor is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (a party and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to: (i) the date on which each receipt by the Agents of all fees payable pursuant to Section 2.04 or otherwise payable under this Agreement, and (ii) the receipt by the Agents of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agents in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documentsthe Loan Documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents Loan Documents and giving notices and other communications in connection with this Agreement Agreement, the other Loan Documents and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent Agents and the Lenders may conclusively rely on such certificate until the Administrative Agent receives Agents receive notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of QSRD and each Subsidiary Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Person to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in the Loan Documents, (ii) its officers (y) who are authorized to sign the Loan Documents to which it is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing Loan Documents and giving notices and other communications in connection with this Agreement, the other Loan Documents and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Person, certified as being true and complete. The Agents and the Lenders may conclusively rely on such certificate until the Agents receive notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of QSRD, the BorrowerBorrower and each Subsidiary Guarantor. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC-1, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto Security Instruments described on Schedule S-1 duly completed and executed in sufficient number of counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording, if necessary. (f) The Administrative Agent shall have received duly executed Notes payable Transfer Order Letters to the order of each Lender in a principal amount equal to its Commitment dated as purchasers, the holders of the date hereofworking interests (with respect to payments due to the holders of net revenue, overriding royalty and similar Hydrocarbon Interests), paying agents or others responsible for the payment of the proceeds of Hydrocarbon production with respect to each Oil and Gas Property of the Borrower, in each case in form and substance satisfactory to the Agents. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shallfollowing opinions: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & XxxxxxHaynxx xxx Boonx, X.L.P., special counsel to the Borrower, substantially in form and substance reasonably satisfactory to the form of Exhibit E hereto. ----------Agents. (lii) The Administrative Agent shall have received an opinion of local counsel in each of the following jurisdictions: Louisiana, Oklahoma, Nevada, Kansas, Wyoming, Kentucky, (if available, and, if not, as a condition subsequent under Section 6.05), and New Mexico, in each case in form and substance satisfactory to the Agents. (h) A certificate of insurance coverage of the Borrower QSRD evidencing that the Borrower QSRD and the Operator its Subsidiaries are carrying insurance in accordance with Section 8.137.19 hereof. (mi) The Administrative Agent Agents and the Lenders shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth be reasonably satisfied with the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the BorrowerSubsidiary Guarantors. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and the Material Subsidiaries. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (d) The Loan Documents, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) Opinions of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil Cxxxx & Dxxxxxx and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security InstrumentsJxxxxxx Xxxxxx L.L.P., including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require substance satisfactory to the Administrative Agent setting forth the status of title Agent, as to such matters incident to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (vf) The Administrative Agent shall have received Direction Letters executed in blank by merger of American Exploration Company with and into the Borrower, in such quantity with the Borrower as the Administrative Agent may reasonably requestsurviving entity, shall have occurred. (wg) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or special any Lender or counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans the initial Funding is subject to the receipt by the Administrative Agent and the Lenders of all fees payable in connection with the transactions under this Agreement on or before the Initial Funding shall not become effective until Closing Date and the date on which each receipt by the Administrative Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be reasonably satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Guarantor, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and each Guarantor. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Guaranty Agreement, duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereofcompleted and executed. (g) The An opinion of Vinsxx & Xlkixx X.X.P., counsel to the Borrower shall have delivered and the Guarantors, in form and substance satisfactory to the Administrative Agent, as to such matters incident to the transactions herein contemplated as the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000may reasonably request. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mi) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied been furnished with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentLiens. (rj) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% Contemporaneous payment in full of the reasonably estimated projected natural gas production Prior Debt and termination of currently producing xxxxx all commitments and other obligations of Borrower for the first 24 months following administrative agent and lenders under the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve ReportsPrior Credit Agreement. (sk) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until hereunder (which Initial Funding will include the date on which each refinancing of the Debt outstanding under the Prior Credit Agreements and the assumption of the obligations under all Letters of Credit outstanding under the Prior Credit Agreements) is subject to the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance unless otherwise indicated: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower Company setting forth (i) that the resolutions of its managing member board of directors attached to such certificate are in full force and effect with respect to the authorization of the Borrower execution, delivery and performance of the obligations contained in the Notes, this Agreement and the other Loan Documents to execute which it is a party, (ii) that the officers of the Company specified in such Secretary's Certificate are authorized to sign this Agreement, the Notes, and deliver the other Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who willwho, until replaced by another officer or officers duly authorized for that purpose, will act as its representative the Company's representative(s) for the purposes of signing documents and giving notices and other communications in connection with this Agreement Agreement, the other Loan Documents to which it is a party and the transactions contemplated herebyhereby and thereby, (iii) specimen signatures of such authorized officersthe officers so authorized, and (iv) that attached to such certificate are true and complete copies of the certificate articles of incorporation and bylaws, as amended, the bylaws of the Borrower, certified as being true and completeCompany. The Administrative Agent Agents and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower Company to the contrary. (b) A certificate of the Secretary or Assistant Secretary of OEI setting forth (i) that the resolutions of its board of directors attached to such certificate are in full force and effect with respect to the authorization of the execution, delivery and performance of the obligations contained in the Loan Documents to which it is a party, (ii) that the officers specified in such Secretary's Certificate are authorized to sign the Loan Documents to which it is a party and who, until replaced by another officer or officers duly authorized for that purpose, will act as its representative(s) for the purposes of signing documents and giving notices and other communications in connection with such Loan Documents and the transactions contemplated thereby, (iii) specimen signatures of the officers so authorized, and (iv) that attached to such certificate are true and complete copies of the articles or certificate of incorporation and the bylaws of OEI. The Agents and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from OEI to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of OEI, the BorrowerCompany and certain material Restricted Subsidiaries in certain specified jurisdictions. (d) The Notes, the Guaranty Agreement and the other Loan Documents listed on Exhibit F, each duly completed and executed. (e) The following opinions: (i) an opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., counsel to OEI and the Company, substantially in the form of Exhibit X-0. (ii) an opinion of Onebane, Bernard, Torian, Diaz, McNamera & Abell, special Louisiana counsel to the Compxxx, xxxxxxxxxxxly in the form of Exxxxxx B-2. (f) the Initial Reserve Reports. (g) The Administrative Agent shall have received a compliance certificate which shall be substantially in one or more certificates or policies of insurance reflecting that OEI and its Restricted Subsidiaries, including the form of Exhibit DCompany, duly and --------- properly executed by a Responsible Officer and dated as of are carrying insurance consistent with the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) requirements of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable as to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000amounts, coverages and provisions. (h) The Administrative Agent All conditions to closing the Canadian Credit Agreement shall have received from been satisfied or waived contemporaneously with the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such fundingInitial Funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts Evidence of termination of the Warrant Agreement for each LenderPrior Credit Agreements and the commitments thereunder. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) Appropriate UCC search certificates of the Security Instruments, including the Security Agreement, the Pledge Agreement OEI and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected its Restricted Subsidiaries reflecting no Liens on the Collateral, any of their Properties except for such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrowerpermitted by Section 9.02. (k) The Administrative Agent shall Satisfactory evidence that the Merger and the Operating Merger have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially been consummated and that all Governmental Requirements reasonably necessary in the form of Exhibit E hereto. ----------connection therewith have been obtained. (l) The Administrative Agent Lender Group shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower all fees due and the Operator are carrying insurance in accordance with payable pursuant to Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory 2.04 on or prior to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (nm) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or Technical Agents or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04(f) on which or before the Closing Date or otherwise under this Agreement and the following documents and satisfaction of the other conditions provided in this Section 6.01, each of which shall be satisfactory to the following conditions is satisfied (or waived Agent in accordance with Section 13.02):form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of (b) A certificate of the Secretary or an Assistant Secretary of the Parent Company and each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Person to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) its officers (y) who are authorized to sign the Loan Documents to which it is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrowersuch Person, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DParent Company, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13each Guarantor. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to, on or before the date on which of the Initial Funding, the receipt by the Lenders and Agent of (i) all fees and expenses that are due and payable as of such date and (ii) the following documents, each of which shall be satisfactory to the following conditions is satisfied (or waived Agent in accordance with Section 13.02):form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower and each Guarantor to execute and deliver the Loan Documents to which it such Person is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower General Partner and each Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative representatives for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officersofficers of the Borrower and each Guarantor, and (iv) the articles or certificate of incorporation and bylawsbylaws or the partnership agreement, as amendedapplicable, of the BorrowerGeneral Partner and each Guarantor and the Borrower Partnership Agreement, each certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate certificates until the Administrative Agent receives notice in writing from the Borrower or such Guarantor, as the case may be, to the contrary, and (v) copies of all governmental approvals required in connection with the execution, delivery and performance of the Loan Documents by each party thereto, other than the Agent, the Lenders and any Issuing Bank. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing standing, as appropriate, of the Borrower, each Guarantor and the General Partner. (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in A Compliance Certificate for the form of Exhibit Dfiscal quarter ending March 31, 2004, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (ed) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes A promissory note payable to the order of each Lender that requests one pursuant to Section 2.06. (e) The Loan Documents, duly completed and executed in a principal amount equal sufficient number of counterparts as reasonably requested by the Agent. (f) Opinions of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to its Commitment dated the Borrower and the Guarantors and certain local counsel to the Borrower and the Guarantors, each in form and substance satisfactory to the Agent, as of to such matters incident to the date hereoftransactions herein contemplated as the Agent may reasonably request. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mh) The Administrative Agent shall have received title information as Evidence that, upon the Administrative Agent may require satisfactory to application of the Administrative Agent setting forth the status proceeds of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as Funding, the commitments of the Effective Date. (n) The Administrative Agent lenders under the Existing Credit Agreements shall be satisfied with terminated and the environmental condition of the Oil and Gas Properties obligations of the Borrower and have received such reports as the Restricted Subsidiaries under the Existing Credit Agreements shall be paid in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerfull. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) Such other documents as the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts Agent or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one Lender or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of each of Brigxxx Xxxloration, the Borrower General Partner and the manager of each other Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the its authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower it is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such its authorized officers, and (iv) the its articles or certificate of incorporation and bylaws, as amended, of the Borrowerbylaws or operating agreement, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and the Guarantors. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC-1, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Loan Documents listed on Exhibit D hereto, duly completed and, where necessary or appropriate, executed in sufficient counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording. (f) The Administrative Agent shall have received duly executed Notes payable Evidence satisfactory to the order Agent that the Enron Indebtedness has been paid and satisfied in full, the Enron Mortgages and all other Liens securing the Enron Indebtedness have been fully released in proper recordable form, the Term ORRI has be reconveyed to the Borrower, the Enron Warrants have been cancelled, and the Enron Shares returned to Brigxxx Exploration by payment by Brigxxx Xxxloration of each Lender in a principal amount equal sum not to its Commitment dated as of the date hereofexceed $20,000,000 plus reasonable Enron legal fees. (g) The Borrower shall have delivered to Execution and delivery of the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Subordination Agreement. (h) The Administrative Agent shall have received from An opinion of Thomxxxx & Xnight LLP, special counsel to the Borrower duly executed counterparts of and the ORRI Conveyance for each Lenders with respect Guarantors in form reasonably satisfactory to the Borrower's Oil and Gas Properties as of the date of such fundingAgent. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mj) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of Mortgaged Properties. (k) Appropriate UCC search certificates reflecting no prior liens or security interests, except those securing the Senior Indebtedness. (l) Borrower and shall have received such reports as submitted to the Lenders the initial CAPEX Plan, which CAPEX Plan shall be satisfactory in form and scope satisfactory substance to the Administrative Agent and Majority Lenders. (m) Borrower shall have submitted to the Lenders as they may request related theretothe Hedging Agreements described on Schedule 7.20, including a Phase 1 Environmental Report with respect which Hedging Agreements shall be satisfactory in form and substance to all xxxxx a part the Majority Lenders. (n) Execution and delivery of the Oil and Gas Properties of the BorrowerAgent's Fee Letter. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower Warrant Agreement, duly executed and the Operator have received all consents and approvals required by Section 8.03delivered. (p) The Administrative Agent shall have received (i) Execution and delivery of the financial statements referred Ancillary Agreement between SCI and Borrower pertaining to in Section 8.04(a)the reduction, (ii) under certain circumstances, of a portion of SCI's outstanding indebtedness under the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas PropertiesSenior Credit Agreement. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower issuance by Brigxxx Xxxloration of preferred equity securities for each a consideration of the following jurisdictions: State not less than $20,000,000, before deduction of Wyoming, Albany, Converse, Platte, Campbellfees and commissions, and Xxxxxxx Counties, and any other jurisdiction requested by otherwise on terms reasonably acceptable to the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent or any Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations execution and delivery of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (Loan Documents may occur at any time on or waived pursuant to Section 13.02) at or prior to 2:00 p.m.before November 3, New York, New York time, on February 15, 2004 (2000 and, in connection therewith, Borrower will deliver a supplementary or replacement opinion of counsel that supplements or replaces the event original opinion delivered pursuant to subsection (h) above, with such conditions are not so satisfied or waivedopinion to cover Brigxxx Xxxdings I, LLC and Brigxxx Xxxdings II, LLC additionally and to the Commitments same effect as the original opinion delivered pursuant to subsection (h) above. Failure to deliver the documents described in this paragraph shall terminate at such time)constitute an "Event of Default" under this Agreement.

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under and of the Initial Funding Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which the Agreement has become effective pursuant to Section 4.01 and each of the following conditions is satisfied (or waived in accordance with Section 13.029.02): (a) The Administrative AgentAgent shall have received a certificate, dated the Initial Borrowing Date and signed by the President, a Vice President or a Financial Officer of the Borrower, confirming compliance as of such date with the conditions set forth in paragraphs (a), (b) and (c) of Section 4.03 or, with respect to Certain Funds Loans during the Certain Funds Period, the Arranger and the Lenders conditions set forth in Section 4.04(a). (b) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Initial Borrowing Date, including, to the extent invoiced, reimbursement or payment of all out-of-out of pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one delivered to the Existing Agent an irrevocable notice with respect to the Existing Credit Agreement, notifying the Existing Agent that on the Initial Borrowing Date, the total commitments under the Existing Credit Agreement will be terminated, all loans thereunder will be repaid in full, together with interest thereon, all letters of credit, if any, issued thereunder will be terminated (or more commodity price floors, collars or swaps acceptable shall constitute Existing Letters of Credit hereunder) and all other amounts owing pursuant to Administrative Agent the Existing Credit Agreement and the Arranger (i) with one or more Approved Counterparties, all agreements related thereto will be repaid in full and (ii) that the Borrower shall have aggregate notional volumes of not less than 75% irrevocably directed the Administrative Agent to disburse to the Existing Agent out of the reasonably estimated projected natural gas production proceeds of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to Loans being made on the Initial Reserve ReportsBorrowing Date an amount sufficient to effect such repayment in full. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (ud) The Administrative Agent shall have received Letters-in-Lieu (i) all stock (or unit) certificates evidencing all Equity Interests to be pledged pursuant to the US Pledge Agreement, accompanied by stock (or unit) powers executed in blank, and all notes to be pledged pursuant to the US Pledge Agreement (including notes evidencing indebtedness required to be so evidenced pursuant to Section 6.05), accompanied by note powers executed in blank (provided that to the extent that such certificates are in the possession of the Existing Agent, this condition shall be satisfied by the Borrower, in such quantity as receipt by the Administrative Agent may reasonably requestof evidence that the Borrower has irrevocably directed the Existing Agent to immediately deliver upon termination of commitments and repayment of amounts due under the Existing Credit Agreement, all such certificates to the Administrative Agent), (ii) all share certificates evidencing all Equity Interests in Newco to be charged pursuant to the UK Security Agreement, accompanied by executed and (unless exempt from stamp duty), pre-stamped share transfers with the transferee left blank, and (iii) pledged certificates or statements of pledge, as applicable, in the form attached to the French Pledge Agreement. (ve) Substantially contemporaneously with the making of the initial Loans, the Administrative Agent will receive duly executed copies of (Mortgages (in substantially the form of Exhibit E or F, as applicable) with respect to the Real Property and leasehold mortgages identified on Schedule 4.02. (f) In the case of an Offer, the Administrative Agent shall have received evidence that the board of directors of the Target shall have recommended the Acquisition. (g) The Administrative Agent shall have received Direction Letters executed in blank by certified copies of the BorrowerAcquisition Documents (it being acknowledged that if the Scheme Document and Offer Document conform with Sections 5.14(a)(iv) and 5.15(a)(iv), in such quantity as respectively, they shall be satisfactory to the Administrative Agent may reasonably requestAgent). (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (yh) The Administrative Agent shall have received such other documents as a certificate of the Administrative Agent Borrower dated no earlier than the Initial Borrowing Date confirming and attaching evidence that, (i) the Unconditional Date has occurred, (ii) (A) the European Commission has taken a decision that it will not initiate proceedings under Article 6(1)(c) of the EC Merger Regulation, (B) the European Commission has taken a decision (or special counsel has been deemed to have taken a decision) to refer the whole or part of the Offer or Scheme to the Administrative Agent may reasonably requestcompetent authorities of one or more member states of the European Union under Article 9(3) of the EC Merger Regulation; and (x) each such authority has taken a decision with equivalent effect to that referred to in Section 4.02(h)(ii)(A) with respect to those parts of the Offer or Scheme referred to it; and (y) the European Commission has taken any of the decisions referred to in Section 4.02(h)(ii)(A) with respect to any part of the Offer or Scheme retained by it; and (C) all required filings have been made and any waiting period, including any extensions thereof, applicable under the United States Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976 (as amended) and the regulations made thereunder has expired, lapsed or been terminated, (iii) Newco has not agreed to any arrangements with any Governmental Authority in order to satisfy any term or condition of the Offer or Scheme without the consent of the Required Lenders (other than the disposition of certain subsidiaries or businesses of the Borrower or Target) and (iv) either (A) the Acquisition is being effected by means of the Scheme or (B) if not, each of the Lenders shall have consented to the Acquisition being effected by means of the Offer. The Administrative Agent shall notify the Borrower and the Lenders promptly of the Effective Initial Borrowing Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.029.02) at or prior to 2:00 3:00 p.m., New York, New York City time, on February 15, 2004 the last day of the Certain Funds Period (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) The Administrative Agent, the Arranger Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of each of Parent and the Borrower Borrower, and each Subsidiary setting forth (i) resolutions of its managing member Board of Directors, Board of Managers or similar body with respect to the authorization of the Borrower such Person to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower such (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and incorporation, bylaws, as amendedcertificate of formation, operating agreement, partnership agreement or other similar organizational documents, of the Borrowereach Person, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower applicable Person to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of Parent, the BorrowerBorrower and each Subsidiary. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit EXHIBIT D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000the Initial Funding. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit EXHIBIT F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and. (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower, and each Subsidiary. (ki) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Parent and Borrower, substantially in the form of Exhibit forms set forth in EXHIBIT E hereto. ----------. (lj) The Administrative Agent shall have received a certificate of insurance coverage of the Parent and Borrower evidencing that the Parent and Borrower and the Operator are is carrying insurance in accordance with Section 8.13. (mk) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Coal Properties, including the Coal Properties evaluated in the Initial Reserve Report Reports as of the Effective Date. (nl) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Coal Properties of the Parent, Borrower and their Subsidiaries and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (om) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Parent, Borrower and the Operator their Subsidiaries have received all consents and approvals required by Section 8.038.03 except those to be obtained after the Effective Date as provided in Section 9.20, provided that Borrower will provide Administrative Agent with a written statement from the Tennessee Valley Authority or one of its Affiliates to the effect that it will consent to the assignment of certain leases under which it is the "lessor" that Borrower will receive pursuant to the Purchase Agreement. (pn) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report Reports accompanied by a certificate covering the matters described in Section 9.12(b9.12(a) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Coal Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Coal Properties. (qo) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties Properties, the Parent, the Borrower and each Subsidiary for each of the following jurisdictions: State of WyomingFlorida, AlbanyTennessee, ConverseKentucky, Platteincluding the following Tennessee counties: Scott, Anderson, and Campbell, and Xxxxxxx Countiesthe following Kentucky counties: Bell, Harlan and Xxxxxx and any other jurisdiction requested by the Administrative requesxxx xx xxx Xdministxxxxxx Agent. (rp) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) required Swap Agreements set forth in Section 8.19 in place with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (sq) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas coal prices that would have a Material Adverse Effect on the value of the Borrower's Oil Coal Properties of Parent, Borrower and Gas Propertiestheir Subsidiaries. (tr) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Parent or Borrower since December 1September 30, 20032004. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (ws) Since December 1September 30, 20032004, there shall not have been any disruption or adverse change in the financial or capital markets. (t) The Administrative Agent shall be reasonably satisfied with the potential environmental liabilities associated with the Coal Properties, including, without limitation, the bonding or collateralization obligations of the Parent and Borrower associated therewith. (u) The Administrative Agent shall have completed, and be satisfied with, its due diligence review of the Parent, Borrower, its operations and financial condition, the Material Agreements, the Coal Properties and other related matters. (v) The transactions contemplated by the Purchase Agreement and Operating Agreement shall have been consummated simultaneously with the funding hereunder and the Administrative Agent shall have received counterparts of the Purchase Agreement and all related transfer and conveyance documents described therein and the Operating Agreement, each in form and substance acceptable to the Administrative Agent and the Lenders, duly executed by a duly authorized representative on behalf of each counterparty thereto. (w) The Administrative Agent shall have received evidence satisfactory to the Administrative Agent, in its sole discretion, that the Parent, the Borrower, and each of their Subsidiaries, has obtained all bonds required by any Governmental Authority in connection with its contemplated conduct of mining operations, including, without limitation, all performance and reclamation bonds required in connection with the mining permits for the Coal Properties. (x) The Borrower and the Lenders Administrative Agent shall have agreed upon received evidence satisfactory to Administrative Agent that Borrower has filed all necessary applications with respect to Reclamation Bonds related to the Development Planproperties being acquired in the Purchase Agreement that may be required by any Governmental Authority. (y) releases of all Liens with respect to the Stewart Flink Debt that has been repaid and releases of Liens undex xxx Xxxxxx Xank Loan relating to personal property of Borrower and Parexx. (z) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15November 26, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders under this Agreement are subject to make ---------------- their Loans under the Initial Funding shall not become effective until receipt by Agent and the date Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate Charter Documents of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from Borrower to the Borrower contrary. (b) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors, members, managers or other governing body, as applicable, with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the Charter Documents of such Guarantor, certified as being true and complete. Agent and the Lenders may conclusively rely on such certificate until Agent receives notice in writing from such Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and each Guarantor. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, A Compliance Certificate duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding and the Closing Financial Statements. (e) The Administrative Agent shall have received from each party hereto counterparts (A certificate duly and properly executed by a Responsible Officer of Borrower, in such number as may be requested by form and substance satisfactory to Agent, attesting to the Administrative Agent) Solvency of this Agreement signed on behalf of such partythe Loan Parties immediately after giving effect to the Transactions. (f) The Administrative Agent shall have received This Agreement, the Notes, and the Security Instruments (including those described on Exhibit D), each duly completed and executed Notes payable to the order and, if applicable, in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording. (g) The Borrower shall have delivered (i) certificates representing Capital Securities pledged pursuant to the Administrative Pledge and Security Agreement, together with an undated transfer power for each such certificate executed in blank by the pledgor thereof and (ii) promissory notes (if any) pledged to Agent pursuant to the Initial Funding Disbursement Request Pledge and Security Agreement, endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the amount of $3,700,000pledgor thereof. (h) The Administrative Agent shall have received from Favorable opinions of Xxxxxxxx LLP, counsel to Borrower and the Guarantors, Liskow & Xxxxx, special Louisiana counsel to Borrower duly executed counterparts of and the ORRI Conveyance for each Lenders with respect Guarantors, Xxxxxxxx LLP, special Oklahoma counsel to Borrower and the Guarantors, Xxxxxxxx LLP, special North Dakota counsel to Borrower and the Guarantors, and Xxxxx X. X’Xxxxx XX, Esq., special Montana counsel to Borrower and the Guarantors, in form and substance satisfactory to Agent, as to such matters incident to the Borrower's Oil and Gas Properties transactions herein contemplated as of the date of such fundingAgent may reasonably request. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator Guarantors evidencing that Borrower and the Guarantors are carrying insurance in accordance with Section 8.137.18. (mj) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by Borrower and the BorrowerGuarantors. (k) The Fee Letter, duly executed. (l) Agent shall have received all appropriate evidence required by Agent necessary to determine that Agent (for its benefit and the benefit of the Beneficiaries) shall have an Acceptable Security Interest in the Collateral, subject to proper recording thereof. (m) Title information in form and substance reasonably acceptable to Agent covering enough of the Mortgaged Properties evaluated by the Reserve Report delivered on or prior to the Closing Date, so that Agent shall have received together with title information previously delivered to Agent, satisfactory title information on at least sixty percent (60%) of the value of the Oil and Gas Properties evaluated in the most recent Reserve Report that are Proven Reserves. (n) Agent shall be satisfied that all existing Debt of Borrower and its Subsidiaries (excluding Debt permitted pursuant to Section 9.01) shall be repaid in full, all commitments (if any) in respect thereof shall have been terminated and all guarantees therefor and security therefor shall be released, and Agent shall have received payoff letters evidencing such quantity repayment, termination and release, and cancellations, terminations and releases releasing such security, all in form and substance satisfactory to Agent. (o) Agent shall have received evidence, reasonably satisfactory to Agent, that the Borrower has consummated the acquisition of the equity interests in OVO, EF and Sabine pursuant to the Exchange Agreement. (p) Agent shall be satisfied with the results of a recent search of all effective UCC financing statements (or equivalent filings) made with respect to any personal or mixed property of Borrower and each Guarantor that is Collateral in all applicable jurisdictions. (q) Agent shall be satisfied with the ownership, management, capital and corporate, organization, tax and legal structure of Borrower and the Guarantors. (r) Within five (5) Business days prior to the Closing Date, Agent shall have received all documentation and other information that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act. (s) Such other documents as the Administrative Agent or any Lender or special counsel to Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees then due and payable pursuant to SECTION 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied provided in this SECTION 6.01, each of which shall be satisfactory to the Sole Lead Arranger in form and substance (other than each item, if any, listed on SCHEDULE 6.01, which items are hereby permitted to be delivered after the Closing Date but not later than the date for delivery of each such item specified on SCHEDULE 6.01, or waived in accordance with Section 13.02such later date as the Administrative Agent may agree): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner setting forth (i) resolutions of its managing member board of managers with respect to the authorization of the Borrower General Partner to execute and deliver on behalf of itself and each Obligor the Loan Documents to which it each is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) General Partner who are authorized to sign the Loan Documents to which the Borrower each Obligor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate agreement of incorporation and bylawslimited partnership for Borrower, as amended, certified as being true and complete and (v) the articles of organization of the BorrowerGeneral Partner, as amended, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (c) The Notes, duly completed and executed for each Lender. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DSecurity Instruments, duly completed and --------- properly executed by a Responsible Officer in sufficient number of counterparts; all original certificates of partnership units or members' equity, and dated blank stock powers duly endorsed as of the date of Effective Daterequired under such Security Instruments. (e) The Administrative Agent shall have received from An opinion of counsel to the Obligors acceptable to the Sole Lead Arranger, with respect to the existence of the Obligors, due authorization and execution of the Loan Documents, enforceability of the Loan Documents, including without limitation the Security Instruments, and other matters incident to the transactions herein contemplated as the Sole Lead Arranger may reasonably request, each party hereto counterparts (in such number as may be requested by form and substance satisfactory to the Administrative Agent) of this Agreement signed on behalf of such partySole Lead Arranger. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.13SECTION 7.17 and SECTION 8.03(B). (g) Appropriate UCC search certificates and other evidence satisfactory to the Sole Lead Arranger with respect to the Obligors' Properties reflecting no prior Liens, other than Excepted Liens. (h) A certificate of a Responsible Officer certifying that (i) no Default or Event of Default exists or would result from the Initial Funding, and (ii) since December 31, 2005, there has occurred no Material Adverse Effect. (i) Satisfactory review by Sole Lead Arranger of all Material Agreements. (j) All authorizations, approvals or consents as may be necessary for the execution, delivery and performance by any Obligor under this Agreement. (k) From any Obligor (other than Borrower) a Guaranty Agreement executed by such Obligor. (l) A letter from CT Corporation System, Inc., or other agent acceptable to the Administrative Agent, accepting service of process in the State of New York on behalf of the Obligors not otherwise qualified to transact business in New York. (m) The Administrative Agent Borrower shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status net proceeds of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as a public offering of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties limited partnership interests of the Borrower and have received such reports as in form and scope satisfactory to registered under the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations Securities Act in the oil and gas prices that would have a Material Adverse Effect on the value amount of the Borrower's Oil and Gas Propertiesat least $_________________. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member Board of Managers or similar body with respect to the authorization of the Borrower such Person to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower such (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and incorporation, bylaws, as amendedcertificate of formation, operating agreement, partnership agreement or other similar organizational documents, of the Borrowereach Person, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower applicable Person to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000the Initial Funding. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance Conveyances for each Lenders with respect to the Borrower's ’s Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. the Borrower and each holder of any Equity Interest in the Borrower, duly executed counterparts of the Warrant Participation Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and; (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower and each Affiliate of Borrower.; and (k) The Administrative Agent shall have received an opinion of Xxxxxx Glast Pxxxxxxx & XxxxxxMxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ----------. (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Borrower’s and its Affiliates’ Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx wxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have has received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties of the Borrower for each of the following jurisdictions: State of WyomingTexas and the following Texas counties: Axxxxxxx, Albany, Converse, Platte, Campbell, Xxxxxxxx and Xxxxxxx Counties, Sxxxxxxxxxx and any other jurisdiction reasonably requested by the Administrative Agent. The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties being pledged pursuant to the Pledge Agreement for the State of Texas and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports[Intentionally omitted.] (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's ’s Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1March 31, 20032005. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1March 31, 20032005, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall be reasonably satisfied with the potential plugging and abandonment liabilities associated with the Oil & Gas Properties, including, without limitation, the bonding or collateralization obligations of the Borrower associated therewith. (z) The Administrative Agent shall have completed, and be satisfied with, its due diligence review of the Borrower, its operations including title, engineering, and environmental and financial condition, the Material Agreements and such other Agreements as Lenders may determine, the Oil & Gas Properties and other related matters. (aa) The Administrative Agent and Lenders will be satisfied with Borrower’s current tax position. (bb) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February September 15, 2004 2005 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate Certificates of the Secretary or an Assistant Secretary of KOC and the Borrower Parent setting forth (i) resolutions of its managing member the boards of directors with respect to the authorization of each of the Borrower Borrowers to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of KOC and the Borrower Parent (y) who are authorized to sign the Loan Documents to which the a Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylawsbylaws or Partnership Agreement, as amendedapplicable, of the BorrowerBorrowers, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificates until the Agent receives notice in writing from the Borrowers to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of each of the Guarantors or the Guarantors' general partner, as applicable, setting forth (i) resolutions of its board of directors with respect to the authorization of each of the Guarantor's to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Guarantors or the Guarantors' general partner (y) who are authorized to sign the Loan Documents to which a Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws or Partnership Agreement, as applicable, of the Guarantors, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives they receive notice in writing from the Borrower Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DNotes, duly completed and --------- properly executed by a Responsible Officer and dated as of the date of Effective Dateexecuted. (e) The Administrative Agent shall have received from each party hereto Security Instruments, including those described on EXHIBIT D, duly completed and executed in sufficient number of counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording, if necessary. (f) The Administrative Agent shall have received duly executed Notes payable Favorable opinions of Xxxxxx X. Xxxxx, general counsel of Parent, and local counsel opinions for the States of Alabama, Arkansas, Louisiana, New Mexico and Texas, in form and substance reasonably satisfactory to the order of each Lender in a principal amount equal Agent and the Lenders, as to its Commitment dated such matters incident to the transactions herein contemplated as of the date hereofAgent and the Lenders may reasonably require. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower Borrowers evidencing that the Borrower and the Operator Borrowers are carrying insurance in accordance with Section 8.137.19 hereof and certifying that such coverage is usual and customary for similar companies operating in the oil and gas business and complies with the requirements of the Loan Documents. (mh) The Administrative Security Instruments and accompanying financing statements covering the Mortgaged Property shall have been properly executed and delivered to the Agent for subsequent filing and recording, as applicable, in the appropriate offices to establish and perfect the Liens and security interests created thereby. (i) The Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied been furnished with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering liens or security interests except for liens being released with the Properties the Borrower for each proceeds of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by Initial Funding or securing the Administrative AgentIndebtedness. (rj) The Administrative Confirmation satisfactory to the Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve ReportsSCANA Acquisition shall be concurrently consummated. (sk) The Administrative Agent Contour Transaction shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Propertiesbeen consummated. (tl) The Administrative Such other documents as the Agent shall be satisfied that there has been no Material Adverse Effect or any Lender or special counsel to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to, on or before the date on which of the Initial Funding, (i) the Agent's having completed a review satisfactory to it of the environmental files of the Borrower and the Restricted Subsidiaries, and (ii) the receipt by the Lenders and Agent of all fees due and payable as of such date and the following documents, each of which shall be satisfactory to the following conditions is satisfied (or waived Agent in accordance with Section 13.02):form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower and each Guarantor to execute and deliver the Loan Documents to which it such Person is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower General Partner and each Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative representatives for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officersofficers of the Borrower and each Guarantor, and (iv) the articles or certificate of incorporation and bylawsbylaws or the partnership agreement, as amendedapplicable, of the BorrowerGeneral Partner and each Guarantor and the Borrower Partnership Agreement, each certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate certificates until the Administrative Agent receives notice in writing from the Borrower or such Guarantor, as the case may be, to the contrary, and (iv) copies of all governmental approvals required in connection with the execution, delivery and performance of the Loan Documents by each party thereto, other than the Agent and the Lenders. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing standing, as appropriate, of the Borrower, each Guarantor and the General Partner. (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in A Compliance Certificate for the form of Exhibit Dfiscal quarter ending June 30, 2001, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (ed) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes A promissory note payable to the order of each Lender that requests one pursuant to Section 2.07. (e) The Loan Documents, duly completed and executed in a principal amount equal sufficient number of counterparts as reasonably requested by the Agent. (f) Opinions of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to its Commitment dated the Borrower and the Guarantors and certain local counsel to the Borrower and the Guarantors, each in form and substance satisfactory to the Agent, as of to such matters incident to the date hereoftransactions herein contemplated as the Agent may reasonably request. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mh) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective DateUCC search results reflecting no Liens other than Excepted Liens. (ni) The Administrative Agent Evidence that, upon the application of the proceeds of the Initial Funding, the commitments of the lenders under the Existing Credit Agreements shall be satisfied with terminated and the environmental condition of the Oil and Gas Properties obligations of the Borrower and have received such reports as the Restricted Subsidiaries under the Existing Credit Agreements shall be paid in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerfull. (oj) The Administrative Such other documents as the Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one Lender or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agents and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date or as otherwise agreed to in writing among the Borrower, the Agents and the Arranger and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary of each of the Borrower and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower or such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower or each Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the BorrowerBorrower and each Guarantor, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.; (cb) The Administrative Agent shall have received certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower.Borrower and each Guarantor; (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date.Initial Funding; (d) this Agreement, duly completed and executed; (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments those described on Exhibit F-1F, duly completed and executed in a sufficient number of counterparts for recording, if necessary. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being (subject only to Excepted Liens identified in clauses (ai) to (dv), (vii) and (eviii) of the definition thereof, but subject to ) on at least 80% of the provisos at total value of all of the end of such definitionOil and Gas Properties evaluated in the Initial Reserve Report; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests capital stock of each of the Borrower.Guarantors; (kf) The Administrative Agent shall have received an opinion of (i) Xxxxx X. Xxxxxx, Esq., General Counsel to Borrower, substantially in the form of Exhibit D-1 hereto, (ii) Xxxxxx & XxxxxxXxxxxx L.L.P., special counsel to the Borrower, substantially in the form of Exhibit E D-2 hereto. ----------, and (iii) local counsel in each of the Table of Contents following states: Mississippi, Texas, Virginia, West Virginia and any other jurisdictions requested by the Administrative Agent, substantially in the form of Exhibit D-3; (lg) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.13.7.19; (mh) The Administrative Agent shall have received title information as the Administrative Agent may reasonably require satisfactory to the Administrative Agent setting forth the status of title to at least 80% of the value of the Oil and Gas Properties evaluated included in the Initial Reserve Report as of the Effective Date.Borrowing Base; (ni) The the Administrative Agent shall be reasonably satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower.its Restricted Subsidiaries; (oj) The the Administrative Agent shall have received reasonably satisfactory evidence that (i) the initial public offering by the MLP of certain common units representing limited partnership interests in the MLP (the “MLP IPO”) shall have been consummated as contemplated by and pursuant to that certain Form S-1 Registration Statement, as amended, (ii) the MLP IPO has generated net proceeds of at least $90,000,000, and (iii) at least $90,000,000 of the net proceeds of the MLP IPO have been received as a distribution by the Borrower; (k) the Lenders shall have received a copy of the unaudited summary, pro forma balance sheets of the Borrower as of June 30, 2001 that show the pro forma effect of the MLP IPO as if such offering had occurred on June 30, 2001, duly certified by a Responsible Officer as fairly presenting, in all material respects, the pro forma financial condition of the Borrower as of such date; (l) a certificate of a Responsible Officer of the Borrower certifying that all government and third party approvals necessary or, in the discretion of the Administrative Agent, advisable in connection with the financing contemplated hereby and the continuing operations of the Borrower and its Restricted Subsidiaries have been obtained and are in full force and effect. All applicable appeal periods have expired and there are no actual governmental or judicial action restraining, preventing or imposing burdensome conditions on all related transactions, including the Operator concurrent issuance, closing and funding under this Agreement; (m) the Initial Reserve Reports; (n) the Administrative Agent shall have received all consents satisfactory proof of the Borrower’s termination of the Existing Credit Facility and approvals required any obligations of Borrower in connection therewith; (o) appropriate UCC search certificates reflecting no prior liens or security interests encumbering the Mortgaged Properties other than permitted by Section 8.03.9.03 for each of the following jurisdictions: Delaware, Kentucky, Louisiana, Mississippi, Texas, Virginia and West Virginia; Table of Contents (p) The Administrative Agent except as disclosed to Lenders in writing prior to execution of the Credit Agreement, there shall be no pending or threatened litigation against the Borrower or any of its Restricted Subsidiaries, which could reasonably be expected to have a Material Adverse Effect; (q) the Lenders shall have received (i) the financial statements referred to in Section 8.04(a), (ii) of the Initial Reserve Report accompanied by a certificate covering the matters Borrower and its consolidated Subsidiaries described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties7.02(a), and (ii) that have aggregate notional volumes copies of not less than 75% of all financial statements (including pro forma financial statements), material reports, material notices and proxy statements sent by the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for to its limited partners and all material SEC filings concerning the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports.MLP IPO; and (sr) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Agents or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower MMR setting forth (i) resolutions of its managing the board of directors of MMR, as the sole member of the Borrower, with respect to the authorization of the Borrower to execute and deliver the Tranche A Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of MMR and the Borrower (y) who are authorized to sign the Tranche A Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the limited liability company agreement of the Borrower, and (v) the certificate of incorporation and bylawsformation filed with the Delaware Secretary of State, as amended, of the Borrower, all certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from MMR or the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (d) The Tranche A Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx Jones, Walker, Waechter, Poitevent, Carrere & XxxxxxXxxxxxx, special L.L.P. counsel to the Borrower, substantially in the form of Exhibit E D hereto. ----------. (lf) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mg) The Administrative Receipt by the Agent shall have received of the fees due and payable after the Closing Date as provided for in the Fee Letter. (h) Receipt by the Agent of each of the Tranche A Security Instruments, including those described on Exhibit E, duly completed and executed in sufficient number of counterparts for recording, if necessary, and otherwise in recordable form and substance satisfactory to the Agent. (i) Receipt by the Agent of such title information as the Administrative Agent may require from attorneys satisfactory to the Administrative Agent setting forth the status of title to 100% of the Oil and Gas Properties evaluated value of the Hydrocarbon Interests included in the Initial Reserve Report as of the Effective DateBorrowing Base. (nj) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received been furnished with appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentLiens. (rk) The Administrative Receipt by the Agent shall have received evidence that of such other documents as the Borrower has purchased one Agent or more commodity price floors, collars any Lender or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (vl) The Administrative Agent Borrower shall have received Direction Letters executed be in blank by compliance with all covenants and agreements contained in Article VIII and Article IX (after giving effect to the Borrower, in such quantity as the Administrative Agent may reasonably requestrequested Tranche A Loan). (wm) Since December 1, 2003, The Tranche B Loans shall be fully advanced and there shall not have been any disruption or adverse change be no availability for Tranche B Loans under the Aggregate Maximum Tranche B Credit Amounts (as defined in the financial or capital marketsAnnex I). (xn) The Borrower and the Lenders No Default shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower occurred and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).continuing under Annex I.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.05 and the Fee Letter on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents (in sufficient original counterparts for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative AgentGuaranty Agreement, the Arranger Security Agreement, and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective DateLoan Documents, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid duly executed by the Borrower hereunder.appropriate parties thereto listed on the Closing Checklist attached hereto as Exhibit E. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement Agreement, the other Loan Documents and the transactions contemplated herebyhereby and thereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, the bylaws of the Borrower, Borrower certified as being true to be correct and completecomplete copies. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors or other governing body with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement, the other Loan Documents and the transactions contemplated hereby and thereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation, bylaws, partnership agreements, or other organizational documents of such Guarantor certified to be correct and complete copies. The Administrative Agent shall have received certificates and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Guarantor to the contrary. (d) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly Borrower and --------- properly executed by a Responsible Officer and dated as of the date of Effective DateGuarantors. (e) The Administrative Agent Borrower shall have received from each party hereto counterparts (in such number as may be requested by provided a pro forma Covenant Compliance Certificate based on Borrower’s quarterly financial statements for the Administrative Agent) of this Agreement signed on behalf of such partyfiscal quarter ending March 31, 2006. (f) The Administrative Agent shall have received duly executed Notes payable to the order Opinions of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special legal counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance Guarantors, in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require form and substance satisfactory to the Administrative Agent setting forth the status of title Agent, as to such matters incident to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity transactions herein contemplated as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate of the Secretary or an Assistant Secretary a Responsible Officer of the Borrower setting forth (i) resolutions approval by the members of its managing member the Borrower with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it the Borrower is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation formation and bylaws, as amendedlimited liability company agreement, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and its Subsidiaries. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,00017,560,742. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance Assignments for each Lenders with respect to the Borrower's Oil and Gas Properties of the Borrower as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. each party thereto duly executed counterparts of the Warrant Agreement for each LenderParticipation Agreement. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Guarantee and Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) shall be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to through (d) and (ej) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx(i) Miles X. Xxxxx, special counsel to the Borrower, substantially in the form of Exhibit E E-1 hereto and (ii) Xxxxxxx, Haughey, Hanson, Toole & Xxxxxxxx P.L.L.P., special North Dakota counsel to the Borrower, substantially in the form of Exhibit E-2 hereto. ----------. (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower and the Subsidiaries evidencing that the Borrower and the Operator Subsidiaries are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Borrower’s and/or its Subsidiaries’ Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that (i) the Borrower and the Operator have has received all consents and approvals required by Section 8.038.03 and (ii) the Borrower has received, directly or indirectly, at least $10,500,000 from its Equity Interest holders for use in acquiring the Properties described in the PSA and to fund future Operating Costs in excess of $85,000 per month. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b9.12(b)(i) and through (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of WyomingNorth Dakota, Albany, Converse, Platte, Campbell, and Xxxxxxx CountiesDelaware, and any other jurisdiction requested by the Administrative Agent. (r) . The Administrative Agent shall have received evidence that appropriate UCC search certificates reflecting no prior Liens encumbering the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% Equity Interests of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve ReportsBorrower. (sr) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices since January 15, 2007 that would have a Material Adverse Effect on the value of the Borrower's ’s Oil and Gas Properties. (ts) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Parent, the Borrower or any of its Subsidiaries since December January 1, 20032007. (ut) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (vu) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (wv) Since December 1January 15, 20032007, there shall not have been any disruption or adverse change in the financial or capital markets. (xw) The Borrower and the Lenders shall have agreed upon the Development Plan. (x) Completion by the Administrative Agent and the Lenders of a satisfactory due diligence review, including, but not limited to the review of all engineering, operations, land, title, environmental and financial data or information. (y) Satisfactory due diligence review of the Borrower’s material agreements, including, but not limited to, satisfactory review of the operating agreements governing the Oil and Gas Properties, marketing agreements, transportation agreements and processing agreements. (z) The Administrative Agent shall be reasonably satisfied with the potential plugging and abandonment liabilities associated with the Oil & Gas Properties, including, without limitation, the bonding or collateralization obligations of the Borrower associated therewith. (aa) The Administrative Agent shall have received (i) a certificate of a Responsible Officer of the Borrower certifying: (A) that the Borrower is concurrently consummating the Acquisition in accordance with the terms of the Acquisition Documents (with all of the material conditions precedent thereto having been satisfied in all material respects by the parties thereto) and acquiring substantially all of the Acquisition Properties contemplated by the Acquisition Documents; (B) as to the final purchase price for the Acquisition Properties after giving effect to all adjustments as of the closing date contemplated by the Acquisition Documents and specifying, by category, the amount of such adjustment; (C) that attached thereto is a true and complete list of the Acquisition Properties which have been excluded from the Acquisition pursuant to the terms of the Acquisition Documents, specifying with respect thereto the basis of exclusion as (1) title defect, (2) preferential purchase right, (3) environmental or (4) casualty loss; (D) that attached thereto is a true and complete list of all Acquisition Properties for which any seller has elected to cure a title defect, (E) that attached thereto is a true and complete list of all Acquisition Properties for which any seller has elected to remediate an adverse environmental condition, and (F) that attached thereto is a true and complete list of all Acquisition Properties which are currently pending final decision by a third party regarding purchase of such property in accordance with any preferential right; (ii) a true and complete executed copy of each of the Acquisition Documents; (iii) original counterparts or copies, certified as true and complete, of the assignments, deeds and leases for all of the Acquisition Properties; and (iv) such other related documents and information as the Administrative Agent shall have reasonably requested. (bb) The Administrative Agent shall have received such other documents as the Administrative Agent it or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York City time, on February 15April 1, 2004 2007 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower and of each Subsidiary setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower and of each Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower and of each Subsidiary (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the BorrowerBorrower and of each Subsidiary, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and of each Subsidiary. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Closing Date. (d) The Notes, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Security Instruments, including those described on Exhibit E, duly completed and executed in sufficient number of counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording, if necessary. (f) The Administrative Agent shall have received duly executed Notes payable opinions of the following special counsel to the order of Borrower and each Lender Guarantor, each in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered form and substance satisfactory to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priorityChamberlain, perfected Liens on the CollateralHrdlicka, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereofWhite, but subject to the provisos at the end of such definition; and Willxxxx & Martxx (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and [New York counsel] (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).[Louisiana counsel]

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date on which each receipt by the Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons managers of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary.. 44 (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and its Material Subsidiaries. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (d) The Notes, duly completed and executed and payable to the order of Lender designated as the payee thereof. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested A Guaranty duly executed by the Administrative Material Subsidiaries of the Borrower and delivered to the Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable A favorable opinion addressed to the order Agent and the Lenders in form and substance satisfactory to the Agent of each Lender (i) Johnson, Jones, Xxxxxxxxxx, Xxxxxxx & Xxxxx, counsel to the Borrower, as to such matters incident to the transactions herein contemplated as the Agent may reasonably request, and (ii) such local counsel in a principal amount equal to its Commitment dated New Mexico and Texas or such other jurisdiction as of deemed necessary or appropriate by the date hereofAgent in which the Oil and Gas Properties are situated. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mh) The Administrative Agent shall have received Title information (divisions orders, runs checks and other comparable title information data) as the Administrative Agent may reasonably require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as such portion of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition value of the Oil and Gas Properties included in the Reserve Report initially submitted to the Agent as deemed necessary or appropriate by the Agent in satisfaction of the Borrower Eighty Percent Coverage Requirement, all of which such existing title information the Lenders stipulate, acknowledge and have received such reports as in form and scope satisfactory agree (i) was previously furnished to the Administrative Agent in connection with the due diligence undertaken in connection with the Existing Credit Agreement as summarized in writing to the Lenders, and the Lenders (ii) is hereby approved as they may request related thereto, including a Phase 1 Environmental Report with respect acceptable and satisfactory and in full satisfaction of this clause (h) as to all xxxxx a part of the Oil and Gas Properties of encumbered by the BorrowerMortgages. (oi) The Administrative Such restatements of and/or supplements to or amendments of the Security Instruments , including without limitation, such supplements to and/or amendments of the existing Mortgages, to encumber not less than eighty percent (80%) of the Proven Developed Producing Reserves and other Collateral shall be delivered to Agent within thirty (30) days following the Closing Date, each in sufficient number of fully executed counterparts as may be necessary or appropriate by the Agent and its legal counsel, for filing and recording in the appropriate offices to perfect the Liens and security interests created thereby in accordance with the requirements for perfection provided by the Agent’s legal counsel, and, as applicable, the attorneys who have furnished the legal opinions called for in (f) above. (j) Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower been furnished with appropriate tax lien searches, judgment lien searches and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting the filing of all financing statements required to perfect the Liens granted by the Security Instruments and reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent.Liens. 45 (rk) The Administrative Agent shall have received evidence that from the Borrower has purchased one or more commodity price floorsBorrower, collars or swaps acceptable to Administrative Agent reviewed, and be satisfied, in Agent’s sole discretion, of the Arranger Borrower’s (i) with one or more Approved Counterpartiesexisting charter documents; (ii) annual financial statements; (iii) most recent interim financial statements; (iv) valuation information of assets proposed by the Borrower to secure the Obligations; (v) all judgment and tax lien searches covering any and all of the Mortgaged Property; (vi) other material documents and agreements (including, without limitation, all: (1) Material Agreements listed on Schedule 7.22, and (ii2) that all other material documents and agreements as the Agent shall have aggregate notional volumes of not less than 75% requested); (vii) the legal, corporate and capital structure of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for on the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference Closing Date and after giving effect to the Initial Reserve Reportstransactions contemplated hereby; and (xi) evidence satisfactory to Agent that any existing Hedging Agreements executed by the Borrower and its Subsidiaries are acceptable to the Agent with counterparties acceptable to the Agent and have been provided to Agent for purposes of calculating the Borrowing Base. (sl) The Administrative Borrower shall have paid to (i) the Agent for the ratable benefit of the Lenders the fees to be paid on the Closing Date, (ii) all fees, expenses and disbursements of legal counsel for the Agent to the extent invoiced on or prior to the Closing Date, together with such additional amounts as shall be satisfied that there are no negative price deviations constitute such legal counsel’s reasonable estimate of fees, expenses and disbursements incurred by such legal counsel through the Closing Date; provided, that, such estimate shall not thereafter preclude further settling of accounts between the Borrower and the Agent, and (iii) the agency fee described in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas PropertiesAgency Fee Letter. (tm) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank Such other Loan Documents as deemed necessary or appropriate by the BorrowerAgent, the Agency Fee Letter, letters in such quantity lieu, authorization letters and other certificates, instruments and documents, each in form and substance reasonably satisfactory and acceptable to Agent, as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been or any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent All matters related to this Agreement, the other Loan Documents, including the Security Instruments, and all transactions contemplated thereby shall notify have been delivered by the Borrower and the Lenders of Guarantor to the Effective Date, Agent and such notice each Lender as shall be conclusive requested thereby to substantiate any matters related to this Agreement and binding. Notwithstanding the foregoing, other Loan Documents as the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (Agent or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)any Lender may reasonably request.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agents and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date or as otherwise agreed to in writing among the Obligors, the Agents and the Arranger and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a certificate dated the Closing Date of the Secretary or an Assistant Secretary of each of the Borrower Obligors and Guarantors or the general partner of each such Person that is a partnership setting forth (i) resolutions of its managing member board of directors (or applicable governing body) with respect to the authorization of the Borrower such Person to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower such Person (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate Organizational Documents of incorporation and bylaws, as amended, of the Borrowersuch Person, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower such Person to the contrary.; (cb) The Administrative Agent shall have received certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower.each Obligor and Guarantor; (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date.Initial Funding; (d) this Agreement and the Notes, duly completed and executed; (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments those described on Exhibit F-1E-1 (other than the Blocked Account Control Agreements and the Securities Account Control Agreements for Deposit Accounts or Securities Accounts with a depositary institution or Securities Intermediary other than JPMorgan or an Affiliate thereof), duly completed and executed in a sufficient number of counterparts for recording, if necessary. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create (a) first priorityand prior security interests in the issued and outstanding capital stock and other equity and ownership interests of all existing or hereafter created or acquired Domestic Subsidiaries of the Obligors and Guarantors (other than the Subsidiaries of EEX Reserves, perfected Liens and in the case of EEX Reserves only the rights to share in allocations and distributions on the Collateraloutstanding ownership interests of EEX Reserves actually owned by the Obligors and Guarantors), as well as sixty-five percent (65%) of such Liens being issued and outstanding stock and other equity interests of all existing or hereafter created or acquired first-tier Foreign Subsidiaries (other than EEX Asahan Ltd.) of the Obligors and Guarantors, (b) first and prior mortgage liens and security interests (subject only to Excepted Liens identified in clauses (ai) to (dv), (vii), (viii), (xi) and (exii) of the definition thereof) covering all of the Borrower's and Guarantors' off-shore Oil and Gas Properties and all proved and probable reserves attributable to the Borrower's and Guarantors' onshore Oil and Gas Properties (other than Oil and Gas Properties outside the states of Texas and Louisiana not exceeding an aggregate amount of $500,000.00), but and (c) first and prior security interests (subject to Excepted Liens) in the provisos at other material tangible and intangible assets of the end of such definitionBorrower and Guarantors, including, without limitation, the EEX Note and the Convertible Notes; andprovided, however, that in no event shall the aforementioned first and prior mortgage lien and security interest extend to the FPS or any Secured Notes repurchased by the Obligors; (ii) be reasonably satisfied that the Security Instruments create security interests in any hedging obligations owing to the Lenders or their Affiliates permitted under this Agreement; (iii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests capital stock or equivalent ownership interest of each of the BorrowerDomestic Subsidiaries (other than the Subsidiaries of EEX Reserves and not less than 65% of all of the issued and outstanding capital stock or equivalent ownership interest of each first-tier Foreign Subsidiary (other than EEX Asahan Ltd.) which is directly owned by either an Obligor or a Domestic Subsidiary; and (iv) have received fully executed Blocked Account Control Agreements and Securities Account Control Agreements in substantially the same form as Exhibit E-3 and E-4, as the case may be, for all Deposit Accounts and Securities Accounts, as applicable, that a Borrower and Guarantor holds with JPMorgan or an Affiliate thereof. (kf) The Administrative Agent shall have received an opinion addressed to each of Xxxxxx the Agents, Issuing Bank and Lenders of (i) Akin, Gump, Strauss, Xxxxx & XxxxxxXxxx, special L.L.P., counsel to the BorrowerObligors, substantially in the form of Exhibit E D-1 hereto. ----------, (ii) Xxxxxxx X. Xxxxxxxx, General Counsel of the Obligors, substantially in the form of Exhibit D-2 hereto, (iii) local counsel in each of the following states: Texas, Louisiana and any other jurisdictions requested by the Administrative Agent, substantially in the forms of Exhibit D-3(a) and (b) hereto, and (iv) local counsel in the Cayman Islands, substantially in the form of Exhibit D-4 hereto; (lg) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower Obligors evidencing that the Borrower and the Operator Obligors are carrying insurance in accordance with Section 8.13.7.19; (mh) The Administrative Agent shall have received title information as the Administrative Agent may reasonably require satisfactory to the Administrative Agent setting forth the status of title to the EEX's and each of its Subsidiaries' Oil and Gas Properties evaluated in the Initial Reserve Report as Properties; (i) evidence of the Effective Date. (n) The Administrative Agent shall be satisfied with the reasonably satisfactory environmental condition of the Oil EEX's and Gas Properties each of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower.its Subsidiaries' Property; (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (iij) the Initial Reserve Report accompanied by a certificate Reserve Report Certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties.8.07(b); (qk) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens liens or security interests encumbering the Mortgaged Properties other than those being assigned or released on the Borrower Closing Date or Liens permitted by Section 9.03, for each of the following jurisdictions: State Texas and Louisiana; (i) an audited consolidated balance sheet as of WyomingDecember 31, Albany2001 and related consolidated statement of operations, Converseshareholders' equity and cash flow for the year ended December 31, Platte2001 of EEX and its Consolidated Subsidiaries, Campbellsetting forth in comparative form the figures for the previous fiscal year and accompanied by the related opinion of an independent public accountant of recognized national standing which opinion shall state that said consolidated financial statements present fairly in all material respects the consolidated financial condition and consolidated results of operations of EEX and its Consolidated Subsidiaries, in accordance with GAAP except for such changes in such principles with which the independent public accountant shall have concurred, (ii) an unaudited consolidating balance sheet as of December 31, 2001 and related consolidating statement of operations for the year ended December 31, 2001 of EEX and its Consolidated Subsidiaries and (iii) an unaudited unconsolidated balance sheet, statement of operations, shareholders' equity and cash flow for the year ended December 31, 2001 for each of the Borrower and EEX E&P, each of (i), (ii) and (iii) accompanied by a certificate from the Chief Financial Officer or Controller of EEX, which 42 certificate shall state that said financial statements present fairly in all material respects the financial condition and results of operations (and with regard to (ii) the consolidating financial condition and consolidating results of operations) of the Persons covered by each such financial statement, and Xxxxxxx Counties, as to the financial statements in (i) and any other jurisdiction requested (iii) in accordance with GAAP; (m) a note made by EEX payable to the Borrower in an amount equal to the in tercompany loan made by the Administrative Agent.Borrower to EEX with the proceeds of the Loan from the Initial Funding (the "EEX Note") shall have been executed and delivered by EEX to the Borrower; (n) evidence that the Obligors' and EEX E&P's proved reserves attributable to the Oil and Gas Property, based on the most recent Reserve Report, are not less that 375 Bcfe; (o) evidence that EEX E&P has provided adequate notice of termination to ENA under the EEX E&P Guaranty of EEX E&P's guarantee of any hedging obligations other than the Enron Xxxx-to-Market Related Xxxxxx; (p) evidence that the Borrower owns the Convertible Notes; (q) evidence that EEX has made not less than a $100,000,000.00 prepayment on the Existing Senior Credit Facility; and (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Agents or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until and of any Issuing Bank to issue any Letters of Credit hereunder is subject to the date receipt by the Administrative Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Administrative Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Administrative Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing sole member with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower or its sole member (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation formation and bylaws, as amended, operating agreement of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (cb) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the certificate of formation and operating agreement (or equivalent constituent documents) of such Guarantor, certified as being true and complete. The Administrative Agent shall have received and the Lenders may conclusively rely on such certificates until they receive notice in writing from any Guarantor to the contrary. (c) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerObligors. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on Exhibit D, duly completed and executed by the respective parties thereto in sufficient number of counterparts for recording, if necessary including delivery of all original stock certificates, blank stock powers, and Intercompany Notes payable to the order of each Lender in a principal amount equal to its Commitment dated duly endorsed as of the date hereofrequired under such Security Instruments. (g) The Borrower shall have delivered Review of Obligors’ financial condition satisfactory to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000Lenders. (h) The An opinion of Ledgewood, counsel to the Obligors and from other local counsel acceptable to the Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to enforceability of the Borrower's Security Instruments under the laws of the states wherein the Oil and Gas Properties are located, each in form and substance satisfactory to the Administrative Agent, as of to such matters incident to the date of such fundingtransactions herein contemplated as the Administrative Agent may reasonably request. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts A certificate of insurance coverage of the Warrant Agreement for Borrower and each LenderGuarantor evidencing that the Borrower and each Guarantor are carrying insurance in accordance with Section 7.20 and Section 8.03(b). (j) The Title information as the Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by require setting forth the status of title acceptable to the Administrative Agent) Agent to at least 80% of the Security Instrumentsvalue of the Oil and Gas Properties of the Obligors, including the Security Agreement, Obligors’ pro rata interest in the Pledge Agreement Partnerships’ Oil and Gas Properties included in the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the BorrowerInitial Reserve Report. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel been furnished with appropriate UCC search certificates and other evidence satisfactory to the Borrower, substantially in Administrative Agent with respect to Obligors’ and the form of Exhibit E hereto. ----------Partnerships’ Oil and Gas Properties reflecting no prior Liens other than Excepted Liens. (l) The Administrative Agent shall have received a certificate of insurance coverage of Environmental assessments and other reports to the Borrower evidencing that the Borrower extent maintained by Obligors covering Obligors’ and the Operator are carrying insurance in accordance with Section 8.13Partnerships’ Oil and Gas Properties reporting on the current environmental condition of such Properties satisfactory to Lenders. (m) The Administrative Agent shall have received title information All authorizations, approvals or consents as may be necessary for the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil execution, delivery and Gas Properties evaluated in the Initial Reserve Report as of the Effective Dateperformance by any Obligor under this Agreement. (n) The Administrative Agent shall be satisfied with Guaranty Agreements duly completed and executed by the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the BorrowerGuarantors. (o) Consummation of the Initial Public Offering on or prior to January 31, 2007, on substantially the same terms as contained in the Registration Statement. (A) The Administrative Agent Borrower shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower all governmental, shareholder and the Operator have received all third party consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) necessary to consummate the financial statements referred to Initial Public Offering, which consents and approvals are in Section 8.04(a)full force and effect, (iiB) no order, decree, judgment, ruling or injunction exists which restrains the consummation of the Initial Reserve Report accompanied Public Offering or the transactions contemplated by a certificate covering the matters described in Section 9.12(b) this Agreement, and (iiiC) copies there is no pending, or to the knowledge of all material contracts the Borrower, threatened, action, suit, investigation or agreementsproceeding which seeks to restrain or affect the Initial Public Offering, includingor which, but not limited toif adversely determined, all operating agreements covering could materially and adversely affect the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related ability of AER to such Oil and Gas Propertiesconsummate the Initial Public Offering. (q) The Administrative Agent shall Evidence that the AAI Credit Agreement has been, or concurrently with the Closing Date is being, terminated and all Liens securing obligations under the AAI Credit Agreement have received appropriate UCC search certificates reflecting no prior Liens encumbering been, or concurrently with the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentClosing Date are being released. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one Such other assurances, certificates, documents, consents or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity opinions as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been or any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent Lender or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of each Subsidiary setting forth (i) resolutions of its board of directors with respect to the authorization of such Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Subsidiary (y) who are authorized to sign the Loan Documents to which such Subsidiary is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Subsidiary, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Subsidiaries. (d) The Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and A Compliance Certificate dated as of the date of Effective Datethe Initial Funding substantially in the form of EXHIBIT C hereto. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number A Borrowing Base Certificate dated as may be requested by of the Administrative Agent) date of this Agreement signed on behalf of such partythe Initial Funding. (f) The Administrative Agent shall have received Notes, duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereofcompleted and executed. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request Security Instruments, including those described on EXHIBIT D, duly completed and executed in the amount sufficient number of $3,700,000counterparts for recording, if necessary. (h) The Administrative Agent shall have received from An opinion of Andrews & Kurth L.L.P., special counsel to the Borrower duly executed counterparts of and the ORRI Conveyance for each Lenders with respect Subsxxxxxxxs, xx xxrm and substance satisfactory to the Borrower's Oil and Gas Properties Agent, as of to such matters incident to the date of such fundingtransactions herein contemplated as the Agent may reasonably request. (i) The Administrative Agent Completion of an initial public offering by the Borrower of its common stock pursuant to the Registration Statement which results in no less than $35,000,000 cash proceeds (cash proceeds shall have received from U.S. Energy Corp. duly executed counterparts be net of underwriter's discounts and offering expenses including, without limitation, legal, accounting, printing and listing fees) to the Warrant Agreement for each LenderBorrower. (j) The Administrative Agent Agreements and Plans of Organization and other merger and/or acquisition documents pursuant to which the Borrower will acquire the Founding Companies shall have been received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject found satisfactory to the provisos at the end of Agent such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrowerapproval not to be unreasonably withheld. (k) The Administrative Agent shall have received an opinion Completion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in 's acquisition of the form of Exhibit E hereto. ----------Founding Companies as contemplated by the Registration Statement prior to or contemporaneously with the Initial Funding. (l) The Administrative Agent shall have received a certificate of insurance coverage Consolidated financial statements of the Founding Companies comprising the Borrower evidencing and the other Subsidiaries for the year ending December 31, 1996, and the nine (9) month period ending September 30, 1997, including balance sheets, statements of income and cash flow audited (except Capitol Bolt & Supply, Inc.) by independent public accountants of recognized national standing and prepared in accordance with GAAP. (m) Evidence satisfactory to the Agent that the Borrower and the Operator each Subsidiary are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations obligation of the Lenders Lender to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Lender of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Lender of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Lender in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders Lender may conclusively rely on such certificate until the Administrative Agent it receives notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of MERI setting forth (i) resolutions of its board of directors with respect to the authorization of MERI to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of MERI (y) who are authorized to sign the Loan Documents to which MERI is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of MERI, certified as being true and complete. The Lender may conclusively rely on such certificate until it receives notice in writing from MERI to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and MERI. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNote, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments described on Exhibit E, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording, if necessary. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx Hellums, Hartley & XxxxxxJohnson, special xxxxxxx Xxxxxxa counsel to the Borrower, substantially in the form of Exhibit E D hereto. ----------. (lh) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).7.19

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to, on or before the date on which of the Initial Funding, (i) the Agent's having completed a review satisfactory to it of the environmental files of the Borrower and the Restricted Subsidiaries, and (ii) the receipt by the Lenders and Agent of all fees due and payable as of such date and the following documents, each of which shall be satisfactory to the following conditions is satisfied (or waived Agent in accordance with Section 13.02):form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower General Partner and each Guarantor setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower and each Guarantor to execute and deliver the Loan Documents to which it such Person is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower General Partner and each Guarantor (y) who are authorized to sign the Loan Documents to which the Borrower such Person is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative representatives for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officersofficers of the Borrower and each Guarantor, and (iv) the articles or certificate of incorporation and bylawsbylaws or the partnership agreement, as amendedapplicable, of the BorrowerGeneral Partner and each Guarantor and the Borrower Partnership Agreement, each certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate certificates until the Administrative Agent receives notice in writing from the Borrower or such Guarantor, as the case may be, to the contrary, and (iv) copies of all governmental approvals required in connection with the execution, delivery and performance of the Loan Documents by each party thereto, other than the Agent, the Lenders and any Issuing Bank. (cb) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing standing, as appropriate, of the Borrower, each Guarantor and the General Partner. (dc) The Administrative Agent shall have received a compliance certificate which shall be substantially in A Compliance Certificate for the form of Exhibit Dfiscal quarter ending June 30, 2001, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (ed) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes A promissory note payable to the order of each Lender that requests one pursuant to Section 2.06. (e) The Loan Documents, duly completed and executed in a principal amount equal sufficient number of counterparts as reasonably requested by the Agent. (f) Opinions of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to its Commitment dated the Borrower and the Guarantors and certain local counsel to the Borrower and the Guarantors, each in form and substance satisfactory to the Agent, as of to such matters incident to the date hereoftransactions herein contemplated as the Agent may reasonably request. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mh) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective DateUCC search results reflecting no Liens other than Excepted Liens. (ni) The Administrative Agent Evidence that, upon the application of the proceeds of the Initial Funding, the commitments of the lenders under the Existing Credit Agreements shall be satisfied with terminated and the environmental condition of the Oil and Gas Properties obligations of the Borrower and have received such reports as the Restricted Subsidiaries under the Existing Credit Agreements shall be paid in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrowerfull. (oj) The Administrative Such other documents as the Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one Lender or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02): (a) All Borrowings (other than Borrowings resulting solely from Conversions) shall be made simultaneously on the Closing Date and shall consist of Advances of the same Type and Interest Period made on such day by the Lenders ratably according to their respective Commitments. The Borrower may request that more than one Borrowing, but no more than six Borrowings, be made on the Closing Date, within the limits of the Commitments. All such Borrowings shall be made on notice, given not later than 10:00 A.M. (New York City time) three Business Days prior to the date of the proposed Closing Date, by the Borrower to the Administrative Agent, who shall give to each Lender prompt notice thereof on the Arranger same day such notice is received. Each such notice of a Borrowing (a "Notice of Borrowing") shall be in substantially the form of Exhibit 3.01A hereto, specifying therein the requested (i) Closing Date, (ii) Type of Advances comprising such Borrowing and the Lenders (iii) Interest Period for each such Advance. Each requested Borrowing shall have received all fees and other amounts due and payable on or prior be subject to the Effective Dateprovisions of Sections 3.03, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder4.03 and 5.02 hereof. (b) The Each Lender shall, before 12:00 noon (New York City time) on the Closing Date, make available for the account of its Applicable Lending Office to the Administrative Agent at the Administrative Agent's address referred to in Section 10.02, in same day funds, such Lender's ratable portion of each Borrowing to be made on such date. After the Administrative Agent's receipt of such funds and upon fulfillment of the applicable conditions set forth in Section 5.02, the Administrative Agent will make such funds available to the Borrower at the Administrative Agent's aforesaid address. (c) Unless the Administrative Agent shall have received notice from a certificate Lender prior to the Closing Date that such Lender will not make available to the Administrative Agent such Lender's ratable portion of all or any Borrowings to be made on such date, the Secretary or an Assistant Secretary Administrative Agent may assume that such Lender has made such portion available to the Administrative Agent on such date in accordance with subsection (b) of this Section 3.01 and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower setting forth on such date a corresponding amount. If and to the extent that any such Lender (a "non-performing Lender") shall not have so made such ratable portion available to the Administrative Agent, the non-performing Lender and the Borrower severally agree to repay (but without duplication) to the Administrative Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date such amount is made available to the Borrower until the date such amount is repaid to the Administrative Agent, at (i) resolutions of its managing member with respect to in the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, case of the Borrower, certified as being true the interest rate applicable at the time to Advances comprising such Borrowing and complete(ii) in the case of such Lender, the Federal Funds Rate. The Administrative Agent and the Lenders Nothing herein shall in any way limit, waive or otherwise reduce any claims that any party hereto may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received certificates of the appropriate State agencies with respect to the existence, qualification and good standing of the Borroweragainst any non-performing Lender. (d) The Administrative Agent failure of any Lender to make the Advance to be made by it as part of any Borrowing shall have received a compliance certificate which shall be substantially in the form not relieve any other Lender of Exhibit Dits obligation, duly and --------- properly executed by a Responsible Officer and dated if any, hereunder to make its Advance as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such party. (f) The Administrative Agent shall have received duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereof. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are carrying insurance in accordance with Section 8.13. (m) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, includingsuch Borrowing, but not limited to, all operating agreements covering no Lender shall be responsible for the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each failure of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested Lender to make the Advance to be made by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Lender.

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date CREDIT AGREEMENT and the receipt by the Agent of the following documents (in sufficient original counterparts, other than the Notes, for each Lender) and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of any Subsidiary that is a corporation or a limited liability company (an "LLC") or a general partner of a Subsidiary setting forth (i) resolutions of its board of directors with respect to the authorization of the Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of the Subsidiary (y) who are authorized to sign the Loan Documents to which the Subsidiary is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws (and the Regulations if such Subsidiary is an LLC) of the Subsidiary, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Subsidiary to the contrary. (c) A certificate of each partner of each partnership that is a Subsidiary setting forth (i) resolutions of its partners with respect to the authorization of such Subsidiary to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the Persons of such Subsidiary (y) who are authorized to sign the Loan Documents to which such Subsidiary is a party and (z) who will, until replaced by another Person duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized Persons, and (iv) the partnership agreement of such Subsidiary, certified as being true and complete. The Administrative Agent shall have received certificates and the Lenders may conclusively rely on such certificate until they receive notice in writing from the Borrower to the contrary. CREDIT AGREEMENT (d) Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the Borrower, Guarantor(s), and Subsidiaries. (de) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DEXHIBIT C, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Date. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyInitial Funding. (f) The Administrative Agent shall have received Notes, duly executed Notes payable to the order of each Lender in a principal amount equal to its Commitment dated as of the date hereofcompleted and executed. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request Security Instruments, including those described on EXHIBIT D, duly completed and executed in the amount sufficient number of $3,700,000counterparts for recording, if necessary. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an An opinion of Xxxxxx & Xxxxxx, special L.L.P., and Schully, Roberts, Slattery, Jaubert & Marino, PC and Xxxxx Xxxxx, Attorney at Law, counsel to the Borrower, substantially Guarantor, and the Subsidiaries, in form and substance satisfactory to the form Agent, as to such matters incident to the transactions herein contemplated as the Agent may reasonably request, including, without limitation, the enforceability of Exhibit E hereto. ----------the Mortgages and other Security Instruments and the validity, perfection, and priority of the liens created thereby. (li) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mj) The Administrative Agent shall have received title Title information as the Administrative Agent may require from attorneys satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as at least eight-five percent (85%) of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition value of the Oil and Gas Properties included in the Initial Reserve Report. (k) The Security Instruments and related financing statements covering the Mortgaged Property shall have been delivered to special counsel for the Agent for filing and recording in the appropriate offices to perfect the Liens and security interests created thereby in accordance with the requirements for perfection provided by the attorneys who have furnished the legal opinions called for in (h) above. (l) Letters in Lieu executed by the Borrower or any Subsidiary, as applicable, and a list of the purchasers of the Hydrocarbons of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of or any Subsidiary produced from the Borrower. (o) The Administrative Agent shall have received a certificate 's and any of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such its Subsidiaries' Oil and Gas Properties. (qm) The Administrative Agent shall have received been furnished with appropriate UCC search certificates reflecting the filing of all financing statements required to perfect the Liens granted by the Security Instruments and reflecting no prior Liens encumbering Liens. (n) The organizational chart of Borrower and its Subsidiaries (unless there are no Subsidiaries). (o) All consents in form and substance satisfactory to all Lenders and of all Persons required by the Properties Lenders. CREDIT AGREEMENT (p) [INTENTIONALLY DELETED.] (q) Agent shall have received from the Borrower, reviewed, and be satisfied, in Agent's sole discretion, of the Borrower's and each Subsidiary's (i) existing corporate and partnership documents; (ii) annual financial statements; (iii) most recent interim financial statements; (iv) valuation information of assets proposed by the Borrower for each to secure the Obligations; (v) all lien searches covering any and all of the following jurisdictionsMortgaged Property; (vi) other material documents and agreements (including, without limitation, all: State of Wyoming, Albany, Converse, Platte, Campbell(1) Material Agreements listed on SCHEDULE 7.23, and Xxxxxxx Counties(2) all other material documents and agreements as the Agent shall have requested); (vii) the legal, corporate, partnership, and any other jurisdiction requested capital structure of the Borrower and its Subsidiaries on the Closing Date and after giving effect to the transactions contemplated hereby; (viii) evidence satisfactory to Agent that prior to or concurrently with the closing, the Borrower shall have received gross cash proceeds from the Second Lien Notes to the Borrower of at least Twenty-Five Million Dollars ($25,000,000.00) (minus reasonable fees and expenses not to exceed Seven Hundred Fifty Thousand and No/100 Dollars ($750,000.00) on terms and conditions satisfactory to the Agent, together with a intercreditor agreement executed by Agent, Borrower, and the Second Lien Noteholder containing terms and conditions satisfactory to Agent and satisfactory review and approval of all loan documents and instruments executed in connection with the Second Lien Notes; (ix) evidence satisfactory to Agent that prior to or concurrently with the closing, the Borrower shall have received gross cash proceeds from the Senior Unsecured Notes of at least One Hundred Thirty Million Dollars ($130,000,000.00) on terms and conditions satisfactory to the Agent and satisfactory review and approval by Agent of all loan documents and instruments executed in connection with the Senior Unsecured Notes; (x) evidence satisfactory to Agent that concurrent with the closing of this transaction, all Debt of Borrower and its Subsidiaries for borrowed money existing prior to closing, shall have been repaid and/or provided for except for purchase money indebtedness not to exceed $100,000.00 in the aggregate and insurance premium financing notes not to exceed $100,000.00 in the aggregate; and (xi) evidence satisfactory to Agent that all existing Hedging Agreements executed by the Administrative AgentBorrower and its Subsidiaries are acceptable to the Agent with counterparties acceptable to the Agent and have been provided to Agent for purposes of calculating the Borrowing Base. (r) The Administrative Such other documents, in form and substance reasonably satisfactory to Agent, as the Agent shall have received evidence that or any Lender or special counsel to the Borrower has purchased one or more commodity price floorsAgent may reasonably request, collars or swaps acceptable to Administrative Agent and the Arranger including, without limitation, (i) with one or more Approved Counterparties, documentation of all environmental and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference title matters relating to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value all of the Borrower's Oil and Gas PropertiesProperties including, without limitation, the Mortgaged Properties and (ii) all Material Agreements. (s) A receipt from The Bank of New York for the funds to be deposited with The Bank of New York in connection with the redemption of the Existing Senior Subordinated Unsecured Notes, such funds to be in the amount specified in the Certificate described in subsection (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003below. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to the date receipt by the Agent and the Lenders of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Agent of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be reasonably satisfactory to the Agent in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the articles or certificate of incorporation and bylaws, as amended, bylaws of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (b) A certificate of the Secretary or an Assistant Secretary of each Guarantor setting forth (i) resolutions of its board of directors with respect to the authorization of such Guarantor to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers of such Guarantor (y) who are authorized to sign the Loan Documents to which such Guarantor is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the authorized officers, and (iv) the articles or certificate of incorporation and bylaws of such Guarantor, certified as being true and complete. The Agent and the Lenders may conclusively rely on such certificate until they receive notice in writing from such Guarantor to the contrary. (c) The Administrative Agent shall have received certificates Certificates of the appropriate State state agencies with respect to the existence, qualification and good standing of the BorrowerBorrower and Subsidiaries. (d) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DEXHIBIT C, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (e) The Administrative Agent shall have received from each party hereto counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyNotes, duly completed and executed. (f) The Administrative Agent shall have received Security Instruments, including those described on EXHIBIT D, duly completed and executed Notes payable to the order in sufficient number of each Lender in a principal amount equal to its Commitment dated as of the date hereofcounterparts for recording, if necessary. (g) The Borrower shall have delivered An opinion of Bracewell & Patterson, L.L.P., counsel to the Administrative Borrower, in form and xxxxxxxxx saxxxxxxxxxy to the Agent, as to such matters incident to the transactions herein contemplated as the Agent the Initial Funding Disbursement Request in the amount of $3,700,000may reasonably request. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19. (mi) The Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report Pro forma balance sheet as of the Effective DateSeptember 30, 1997. (nj) The Administrative Agent shall be satisfied with the environmental condition Repayment of at least $5,400,000 of the Oil currently outstanding debt owed to NationsBank pursuant to that certain Amended and Gas Properties Restated Credit Agreement dated as of the Borrower May 31, 1996, by and have received such reports as in form between NationsBank and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (ok) The Administrative Such other documents as the Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportation, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one Lender or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference special counsel to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations of Before or concurrently with the Lenders to make ---------------- their Loans under the Initial Funding shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 13.02):initial Funding: (a) The Administrative Agenteach of the representations and warranties set forth herein and in the other Loan Documents shall be and remain true and correct (or, in the Arranger case of any representation or warranty not qualified as to materiality, true and the Lenders shall have received correct in all fees and other amounts due and payable on or prior to the Effective Datematerial respects) as of said time, including, except to the extent invoicedthe same expressly relate to an earlier date (and in such case shall be true and correct (or, reimbursement in the case of any representation or payment warranty not qualified as to materiality, true and correct in all material respects) as of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.such earlier date); (b) The the Administrative Agent shall have determined that no event has occurred which could reasonably be expected to have a Material Adverse Effect; (c) the Administrative Agent shall have received duly executed copies of all Loan Documents in form and substance satisfactory to the Administrative Agent; (d) no Early Amortization Event or Servicer Replacement Event shall have occurred and be continuing or would occur as a certificate result of such Funding; (e) no Borrowing Base Deficit shall exist before or after giving effect to such Funding; (f) the Administrative Agent shall have received the Notice of Borrowing required by Section 2.3; (g) the Administrative Agent shall have received an Appraisal Report prepared for the Administrative Agent by an Eligible Appraiser, which Appraisal Report describes the Appraised Value of the Secretary or an Assistant Secretary Eligible Units owned by the Borrower as of the Borrower setting forth Closing Date dated no earlier than December 1, 2012; (h) such Funding shall not violate any Legal Requirement applicable to the Administrative Agent or any Lender (including Regulation U of the Board of Governors of the Federal Reserve System) as then in effect; provided that, any such Legal Requirement shall not entitle any Lender that is not affected thereby to not honor its obligation hereunder to advance, continue or convert any Loan; Table of Contents (i) resolutions the Collateral Agent shall have received the original Lease Agreements related to each of the Units owned by the Borrower; (j) the Administrative Agent shall have received for each Lender requesting a Note, such Lender’s duly executed Note of the Borrower, dated the date hereof and otherwise in compliance with the provisions of Section 2.8(d); (k) the Administrative Agent shall have received evidence of the Equipment Insurance Policies required to be maintained under the Loan Documents, covering the Borrower and the Collateral and naming the Administrative Agent as additional insured, mortgagee and/or lenders loss payee, as applicable; (l) the Administrative Agent shall have received copies of the Borrower’s, the Servicer’s and the Seller’s Organization Documents, certified in each instance by its managing member Secretary, Assistant Secretary, Chief Financial Officer or other officer acceptable to the Administrative Agent and, with respect to Organization Documents filed with a Governmental Authority, by the authorization applicable Governmental Authority; (m) the Administrative Agent shall have received copies of resolutions of the Borrower to execute Borrower’s, the Servicer’s and deliver the Seller’s board of directors (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party and to enter into the consummation of the transactions contemplated in those documentshereby and thereby, (ii) the officers or other designated persons of the Borrower (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection together with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of the persons authorized to execute such authorized officersdocuments on the Borrower’s and Seller’s behalf, and all certified in each instance by its Secretary, Assistant Secretary, Chief Financial Officer or other officer acceptable to the Administrative Agent; (ivn) the certificate of incorporation and bylaws, as amended, of the Borrower, certified as being true and complete. The Administrative Agent and the Lenders may conclusively rely on such certificate until the Administrative Agent receives notice in writing from the Borrower to the contrary. (c) The Administrative Agent shall have received copies of the certificates of good standing, or nearest equivalent in the appropriate State agencies with respect relevant jurisdiction, for the Borrower, the Servicer and the Seller (dated no earlier than 30 days prior to the existence, qualification and good standing date hereof) from the office of the Borrower.secretary of state or other appropriate governmental department or agency of the state of its formation, incorporation or organization, as applicable; (do) The the Administrative Agent shall have received a compliance certificate which shall be substantially in the form of Exhibit D, duly and --------- properly executed by a Responsible Officer and dated as list of the date of Effective Date.Borrower’s, the Servicer’s and the Seller’s Authorized Representatives; (ep) The the Administrative Agent shall have received from each party hereto counterparts (in such number as may for the Co-Agents and for the Lenders the fees required by Section 2.9 to be requested by paid on the Administrative Agent) of this Agreement signed on behalf of such party.Closing Date; (fq) The the Administrative Agent shall have received duly executed Notes payable to certification from the order of each Lender in a principal amount equal to its Commitment dated as Borrower’s Chief Financial Officer or other officer of the date hereof. (g) The Borrower shall have delivered acceptable to the Administrative Agent certifying (i) that all Units listed on Schedule 1 of the Initial Funding Disbursement Request Security Agreement are Eligible Units, (ii) the original copy of all Lease Agreements related to the such Units have been delivered to Collateral Agent and such Lease Agreements are Eligible Lease Agreements, (iii) since December 31, 2011, there has been no event which could reasonably be expected to have a Material Adverse Effect and (iv) as to the Solvency of the Borrower and the Seller, in each instance after giving effect to the amount initial Funding; Table of $3,700,000.Contents (hr) The the Administrative Agent shall have received from financing statement and, as appropriate, tax and judgment lien search results against the Equipment owned by the Borrower duly executed counterparts and the Seller evidencing the absence of Liens on the Property included as part of the ORRI Conveyance Collateral except for Permitted Liens; (s) the Administrative Agent shall have received the audited consolidated financial statements of the Seller and the Servicer as at December 31, 2011, and the unaudited interim consolidated financial statements of the Seller and the Servicer as at March 31, 2012, June 30, 2012 and September 30, 2012 for the three (3) months then ended; (t) the Administrative Agent shall have received the favorable written opinions of counsel to the Borrower, the Servicer and the Seller, in form and substance satisfactory to the Administrative Agent; (u) each Lenders Lender’s due diligence with respect to the Borrower's Oil , the Servicer, the Seller and Gas Properties as its Subsidiaries, if any, shall be completed in a manner reasonably acceptable to each such Lender; (v) each of the date of such funding. (i) The Administrative Agent Lenders shall have received from U.S. Energy Corp. duly executed counterparts received, sufficiently in advance of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be Closing Date, all documentation and other information requested by the Administrative Agent) of the Security Instrumentsany such Lender required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the Security Agreement, the Pledge Agreement Patriot Act; and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a certificate of insurance coverage of fully executed Internal Revenue Service Form W-9 (or its equivalent) for the Borrower evidencing that Borrower, the Borrower Servicer and the Operator are carrying insurance in accordance with Section 8.13.Seller; and (mw) The the Administrative Agent shall have received title information as the Administrative Agent may require satisfactory to the Administrative Agent setting forth the status of title to the Oil and Gas Properties evaluated in the Initial Reserve Report as of the Effective Date. (n) The Administrative Agent shall be satisfied with the environmental condition of the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the Borrower. (o) The Administrative Agent shall have received a certificate of a Responsible Officer of the Borrower certifying that the Borrower and the Operator have received all consents and approvals required by Section 8.03. (p) The Administrative Agent shall have received (i) the financial statements referred to in Section 8.04(a), (ii) the Initial Reserve Report accompanied by a certificate covering the matters described in Section 9.12(b) and (iii) copies of all material contracts or other agreements, includinginstruments, but not limited todocuments, all operating agreements covering the Oil and Gas Properties, as well as all marketing, transportationcertificates, and processing agreements related to such Oil and Gas Properties. (q) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative Agent. (r) The Administrative Agent shall have received evidence that the Borrower has purchased one or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties. (t) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003. (u) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity opinions as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such other documents as the Administrative Agent or special counsel to the Administrative Agent may reasonably request. The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time).

Initial Funding. The obligations obligation of the Lenders Lender to make ---------------- their Loans under the Initial Funding shall not become effective until is subject to its receipt by the date Lender of all fees payable pursuant to Section 2.04 on which each or before the Closing Date and the receipt by the Lender of the following documents and satisfaction of the other conditions is satisfied (or waived provided in accordance with this Section 13.02):6.01, each of which shall be satisfactory to the Lender in form and substance: (a) The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder. (b) The Administrative Agent shall have received a A certificate of the Secretary or an Assistant Secretary of the Borrower Managing Venturer setting forth (i) resolutions of its managing member board of directors with respect to the authorization of the Borrower to execute and deliver the Loan Documents to which it is a party and to enter into the transactions contemplated in those documents, (ii) the officers or other designated persons of the Borrower Managing Venturer (y) who are authorized to sign the Loan Documents to which the Borrower is a party and (z) who will, until replaced by another officer or officers duly authorized for that purpose, act as its representative for the purposes of signing documents and giving notices and other communications in connection with this Agreement and the transactions contemplated hereby, (iii) specimen signatures of such the authorized officers, and (iv) the certificate of incorporation and bylaws, as amended, of the BorrowerPartnership Agreement, certified as being true and complete. The Administrative Agent and the Lenders Lender may conclusively rely on such certificate until the Administrative Agent it receives notice in writing from the Borrower to the contrary. (cb) The Administrative Agent shall have received certificates Certificate issued by the Secretary of State for Louisiana stating that the appropriate State agencies with respect Borrower is registered to the existence, qualification and good standing of the Borrowerdo business in such state. (dc) The Administrative Agent shall have received a A compliance certificate which shall be substantially in the form of Exhibit DC, duly and --------- properly executed by a Responsible Officer and dated as of the date of Effective Datethe Initial Funding. (d) The Note, duly completed and executed. (e) The Administrative Agent shall have received from each party hereto Security Instruments described on Exhibit E, duly completed and executed in sufficient number of counterparts (in such number as may be requested by the Administrative Agent) of this Agreement signed on behalf of such partyfor recording, if necessary. (f) The Administrative Agent shall have received duly executed Notes payable to the order An opinion of each Lender in a principal amount equal to its Commitment dated as Xxxxxx Xxxxxx, general counsel of the date hereofBorrower, in form and substance reasonably satisfactory to Lender. (g) The Borrower shall have delivered to the Administrative Agent the Initial Funding Disbursement Request in the amount of $3,700,000. (h) The Administrative Agent shall have received from the Borrower duly executed counterparts of the ORRI Conveyance for each Lenders with respect to the Borrower's Oil and Gas Properties as of the date of such funding. (i) The Administrative Agent shall have received from U.S. Energy Corp. duly executed counterparts of the Warrant Agreement for each Lender. (j) The Administrative Agent shall have received from each party thereto duly executed counterparts (in such number as may be requested by the Administrative Agent) of the Security Instruments, including the Security Agreement, the Pledge Agreement and the other Security Instruments described on Exhibit F-1. In connection with the execution and delivery of the Security ------------ Instruments, the Administrative Agent shall: (i) be reasonably satisfied that the Security Instruments create first priority, perfected Liens on the Collateral, such Liens being subject only to Excepted Liens identified in clauses (a) to (d) and (e) of the definition thereof, but subject to the provisos at the end of such definition; and (ii) have received certificates, together with undated, blank stock powers for each such certificate, representing all of the issued and outstanding Equity Interests of the Borrower. (k) The Administrative Agent shall have received an opinion of Xxxxxx & Xxxxxx, special counsel to the Borrower, substantially in the form of Exhibit E hereto. ---------- (l) The Administrative Agent shall have received a A certificate of insurance coverage of the Borrower evidencing that the Borrower and the Operator are is carrying insurance in accordance with Section 8.137.19 hereof. (mh) The Administrative Agent shall have received Copies of the most recent title information as the Administrative Agent may require satisfactory to the Administrative Agent opinions setting forth the status of title to the Oil and Gas Properties evaluated Borrower's interest in the Initial Reserve Report as of the Effective DateMortgaged Property. (ni) The Administrative Agent shall Letters in Lieu executed in blank by the Borrower which may be satisfied with sent by Lender to each of the environmental condition purchasers of the Hydrocarbons of the Borrower produced from the Oil and Gas Properties of the Borrower and have received such reports as in form and scope satisfactory pursuant to the Administrative Agent and the Lenders as they may request related thereto, including a Phase 1 Environmental Report with respect to all xxxxx a part of the Oil and Gas Properties of the BorrowerSection 11.02. (oj) The Administrative Agent Lender shall have received a certificate been furnished with appropriate UCC search certificates reflecting the filing of a Responsible Officer of all financing statements required to perfect the Borrower certifying that security interests granted by the Borrower Security Instruments and the Operator have received all consents and approvals required by Section 8.03reflecting no prior liens or security interests. (pk) The Administrative Agent shall have received Lender's satisfactory review of (i) the financial statements referred to title opinions described in Section 8.04(a), (h) above; (ii) the Initial Reserve Report accompanied by a certificate covering Borrower's in-house land records as to the matters described in Section 9.12(b) Mortgaged Properties; and (iii) copies of all any material contracts or agreements, including, but not limited to, all operating agreements covering the Oil and Gas Propertiescontracts, as well as all marketing, transportation, Lender may require concerning the title to and processing agreements related to such operations of the Oil and Gas Properties. (ql) The Administrative Agent shall have received appropriate UCC search certificates reflecting no prior Liens encumbering the Properties the Borrower for each A copy of the following jurisdictions: State of Wyoming, Albany, Converse, Platte, Campbell, and Xxxxxxx Counties, and any other jurisdiction requested by the Administrative AgentInitial Reserve Report. (rm) The Administrative Agent shall have received evidence that the Borrower has purchased one A list of remitters or more commodity price floors, collars or swaps acceptable to Administrative Agent and the Arranger (i) with one or more Approved Counterparties, and (ii) that have aggregate notional volumes purchasers of not less than 75% of the reasonably estimated projected natural gas production of currently producing xxxxx of Borrower for the first 24 months following the date hereof, in each case, from its Proved Developed Producing Reserves, as determined by reference to the Initial Reserve Reports. (s) The Administrative Agent shall be satisfied that there are no negative price deviations in the oil and gas prices that would have a Material Adverse Effect on the value of the Borrower's Oil and Gas Properties, together with addresses of same. (tn) The Administrative Agent shall be satisfied that there has been no Material Adverse Effect to the Borrower since December 1, 2003Evidence of consent of Edge Group II Limited Partnership. (uo) The Administrative Agent shall have received Letters-in-Lieu executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (v) The Administrative Agent shall have received Direction Letters executed in blank by the Borrower, in such quantity as the Administrative Agent may reasonably request. (w) Since December 1, 2003, there shall not have been any disruption or adverse change in the financial or capital markets. (x) The Borrower and the Lenders shall have agreed upon the Development Plan. (y) The Administrative Agent shall have received such Such other documents as the Administrative Agent Lender or special counsel to the Administrative Agent Lender may reasonably request. The Administrative Agent Upon the Initial Funding, it shall notify be conclusively presumed that the Borrower and has satisfactorily complied by items (a) through (o) above, except as may be communicated to Borrower by Lender in writing contemporaneously with the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders to make Loans hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 13.02) at or prior to 2:00 p.m., New York, New York time, on February 15, 2004 (and, in the event such conditions are not so satisfied or waived, the Commitments shall terminate at such time)Initial Funding.