Common use of Use of Loans and Letters of Credit Clause in Contracts

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capital, (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to fund capital expenditures related to Borrower’s drilling program, (b) to provide funds working capital for working capitallease acquisitions, exploration and production operations, and development (ii) to finance capital expendituresincluding the drilling and completion of producing xxxxx), and (iiic) for the acquisition general business purposes, including fees and development by the expenses. The Borrower and its Restricted Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration, (ii) development and production operations, to finance capital expendituresprovide funding in connection with Acquisitions, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes purposes, for Restricted Payments permitted by Section 9.04, and for repayment of debt and distributions pursuant to the Borrower Contribution Agreement as allowed by Section 9.02(h) and its SubsidiariesSection 9.05(a). No The Loan Party is Parties are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration and production operations, to refinance Debt under the Existing Credit Agreement and for general corporate purposes. No proceeds of the Loans or Letters of Credit may be used to retire any Debt (iiother than accounts payable) to finance capital expendituresand the Existing Credit Agreement, (iii) for provided that the acquisition and development by the Existing Credit Agreement is paid in full. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds working capital for working capitallease acquisitions, for exploration and production operations and for development (including the drilling and completion of producing xxxxx), (ii) to finance capital expenditures, (iiib) for the acquisition acquisitions and development by the Borrower and its Subsidiaries Investments permitted hereunder (including acquisitions of Oil and Gas Properties permitted hereunder, (ivand joint ventures) to refinance existing debt, and (vc) for funding general corporate purposes of purposes. The Parent and the Borrower and its Subsidiaries. No Loan Party is Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds for working capitalrefinance the Indebtedness of the Borrower under the Existing Credit Agreement, (iib) to finance capital expendituresfor the Acquisition, (iiic) for the acquisition and development by the Borrower and its Subsidiaries of Oil other exploration and Gas Properties permitted hereunder, (iv) to refinance existing debtproduction properties, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is The Borrower and its Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capital, (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iva) to refinance existing debtin full all obligations outstanding under the Existing Credit Agreement, and (vb) for working capital for exploration and production operations and for other general corporate purposes of the Borrower and the Subsidiaries, including the acquisition of Oil and Gas Properties and (c) to pay fees and expenses associated with the Transactions. The Borrower and its Subsidiaries. No Loan Party is Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Federal Reserve Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Federal Reserve Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used for (ia) to provide funds general corporate purposes, including use for working capitalcapital for exploration and production operations, (iib) to finance capital expendituresthe issuance of letters of credit, (iiic) for the acquisition and development acquisitions permitted by the terms hereof and (d) the redemption of Senior Notes permitted by Section 9.04(c)(i)(C)(I). The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration and production, midstream trading and marketing operations, (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries, including the acquisition of exploration and production and midstream properties, (iii) to refinance the Prior Agreement, and (iv) to finance the Acquisitions. No Loan Party is The Borrower and its Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds for working capital, (iib) to finance capital expendituresamend and restate existing indebtedness (including the Existing Credit Agreement), (iiic) for the acquisition acquisition, exploration and development by of oil and gas properties, including the Acquisition, (d) for the issuance of Letters of Credit, and (e) for general corporate purposes, including Restricted Payments. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capitalcapital to the Borrower and its Subsidiaries, (ii) to finance capital expenditures, expenditures and acquisitions (iiiother than acquisitions of “margin stock”) for the acquisition and development by of the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iviii) to refinance existing debt, and (v) provide for general corporate purposes letters of credit for the account of the Borrower and its Subsidiaries. No Loan Party The Borrower is not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the BoardBoard of Governors of the Federal Reserve System). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates violation the provisions of Regulations T, U or X of the BoardBoard of Governors of the Federal Reserve System.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to (ia) to pay fees and expenses associated with the Transactions and (b) provide funds working capital for working capitallease acquisitions, for exploration and production operations, for development (ii) to finance capital expendituresincluding the drilling and completion of producing wxxxx), (iii) for the acquisition and development by the Borrower and its Subsidiaries acquisitions of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, hereunder and (v) for other general corporate purposes of the Borrower and its Subsidiaries. No Loan Party Group Member is engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to refinance Existing Indebtedness, to pay fees and expenses incurred in connection with the consummation of the Closing Transactions, to provide funds working capital for working capital, (ii) to finance capital expenditures, (iii) for the acquisition exploration and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debtproduction, and (v) for general corporate purposes of the Borrower Borrowers, including but not limited to the drilling, operating and its Subsidiariesacquisition of exploration and production properties or any other payments, in each case, to the extent permitted under this Agreement. No Loan Credit Party is engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.. CHAPARRAL ENERGY, L.L.C. EIGHTH RESTATED CREDIT AGREEMENT

Use of Loans and Letters of Credit. The proceeds of the Loans ---------------------------------- and the Letters of Credit shall be used (ia) to provide funds working capital for working capitalexploration, development and production operations, (iib) to finance capital expendituresthe acquisition of Oil & Gas Properties, (iiic) to renew, rearrange, modify and extend the Debt under the Existing Credit Agreement, and (d) for the acquisition and development by the general corporate purposes. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration and production operations, (ii) to finance capital expenditures, (iii) for provide funding in connection with the acquisition of additional Oil and development by Gas Properties, subject to Section 9.05, to provide funding in connection with the acquisition of Equity Interests in Persons owning Oil and Gas Properties and for general corporate purposes, including the issuance of letters of credit. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.”

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capital, (ii) to finance capital expendituresthe Exxon Acquisition, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, the loans outstanding on the Existing Credit Agreement and (v) for general corporate purposes of the Borrower Borrower, including the acquisition of exploration and its Subsidiariesproduction and midstream properties and to benefit the other Loan Parties and the Unrestricted Subsidiaries as allowed by Section 9.05. No The Loan Party is Parties and the Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to pay all amounts currently due under the Existing Credit Agreement, to provide funds working capital for working capitallease acquisitions, for exploration and production operations, for development (ii) to finance capital expendituresincluding the drilling and completion of producing wxxxx), (iii) for the acquisition and development by the Borrower and its Subsidiaries acquisitions of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, hereunder and (v) for general corporate corporate, limited liability company or partnership, as applicable, purposes of the Borrower and its Subsidiariesthe other Loan Parties. No Loan Party is engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds for working capital, (iib) to finance capital expendituresamend and restate existing indebtedness (including the Existing Credit Agreement), (iiic) for the acquisition acquisition, exploration and development by of oil and gas properties, (d) for the issuance of Letters of Credit, and (e) for general corporate purposes, including Restricted Payments. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration and production operations, (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries acquisitions of Oil and Gas Properties permitted hereunder, (iv) to consummate the Merger in accordance with the terms of the Merger Agreement and for general corporate, partnership or equivalent purpose, including to refinance existing debt, and (v) for general corporate purposes Debt of the Borrower under the Existing Credit Agreement. The Borrower and its Subsidiaries. No Loan Party is Restricted Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds for working capitalcapital and other general corporate purposes, including to fund lease acquisitions, exploration and production operations, development (iiincluding the drilling and completion of producing xxxxx) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries acquisitions of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, hereunder and (vb) for general corporate purposes of fees and expenses related to the Transactions. The Borrower and its Subsidiaries. No Loan Party is Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds working capital for working capitalexploration and production operations, (ii) to finance capital expenditures, (iii) for the acquisition of oil and development by the Borrower gas properties and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes and (b) for Restricted Payments permitted under Section 9.04. A portion of the Borrowing Base (not to exceed the LC Commitment) may be used for the issuance of Letters of Credit that shall expire prior to the Termination Date. The Borrower and its Subsidiaries. No Loan Party is not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to (ia) to provide funds for working capitalfinance acquisitions, including the Acquisition and fees and expenses related thereto (iib) to finance capital expenditures, (iii) for the acquisition exploration and development by of oil and gas assets of the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (vc) provide for working capital for and for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is The Borrower and its Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to provide funds working capital for working capitallease acquisitions, for exploration and production operations and for development (including the drilling and completion of producing xxxxx), (ii) to finance capital expenditures, (iiib) for the acquisition acquisitions and development by the Borrower and its Subsidiaries Investments permitted hereunder (including acquisitions of Oil and Gas Properties permitted hereunder, (ivand joint ventures) to refinance existing debt, and (vc) for funding general corporate purposes of the purposes. The Borrower and its Subsidiaries. No Loan Party is the Restricted Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capital, (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Federal Reserve Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Federal Reserve Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (ia) to fund capital expenditures related to Borrower’s drilling program, (b) to provide funds working capital for working capitallease acquisitions, exploration and production operations, and development (ii) to finance capital expendituresincluding the drilling and completion of producing xxxxx), and (iiic) for the acquisition general business purposes, including fees and development by the expenses. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds working capital for working capitalexploration and production operations, acquisition of oil and gas properties and general corporate purposes, including for Restricted Payments permitted under Section 9.04. A portion of the Borrowing Base (iinot to exceed the LC Commitment) to finance capital expenditures, (iii) may be used for the acquisition and development by issuance 77 of Letters of Credit that shall expire prior to the Termination Date. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used (i) to provide funds for working capital, capital (ii) to finance capital expenditures, (iii) for the acquisition and development by the Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iva) to refinance existing debtthe Existing Credit Agreement and pay fees and expenses incurred therewith, (b) for Capital Expenditures and Permitted Acquisitions, and (vc) for general corporate purposes of the purposes, including distributions permitted under Section 9.04(d). The Borrower and its Subsidiaries. No Loan Party is Restricted Subsidiaries are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board. Following the application of any Loan or Letter of Credit, not more than 25% of the value of the assets of the Borrower and its Restricted Subsidiaries will be represented by or made up of margin stock.

Use of Loans and Letters of Credit. The proceeds of the Loans and the Letters of Credit shall be used to (ia) to provide funds for working capitalrefinance the Existing Credit Agreement, (iib) repay the loan from Wexford Capital LLC which was used to finance purchase certain rigs and (c) provide working capital expendituresfor lease acquisitions, exploration, production operations, development (iii) including the drilling and completion of producing xxxxx), and for the acquisition and development by the general corporate purposes. The Borrower and its Subsidiaries of Oil and Gas Properties permitted hereunder, (iv) to refinance existing debt, and (v) for general corporate purposes of the Borrower and its Subsidiaries. No Loan Party is are not engaged principally, or as one of its or their important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying margin stock (within the meaning of Regulation T, U or X of the Board). No part of the proceeds of any Loan or Letter of Credit will be used for any purpose which violates the provisions of Regulations T, U or X of the Board.