AND FOR WHICH ADEQUATE RESERVES
HAVE BEEN MAINTAINED IN ACCORDANCE WITH GAAP.
(D)
DEBT ASSOCIATED WITH BONDS OR SURETY OBLIGATIONS REQUIRED BY
GOVERNMENTAL REQUIREMENTS IN CONNECTION WITH THE OPERATION OF THE OIL AND GAS
PROPERTIES.
(E)
INTERCOMPANY DEBT BETWEEN THE BORROWER AND ANY SUBSIDIARY OR
BETWEEN SUBSIDIARIES TO THE EXTENT PERMITTED BY SECTION 9.05(G); PROVIDED THAT
SUCH DEBT IS NOT HELD, ASSIGNED, TRANSFERRED, NEGOTIATED OR PLEDGED TO ANY
PERSON OTHER THAN THE BORROWER OR ONE OF ITS WHOLLY-OWNED SUBSIDIARIES, AND,
PROVIDED FURTHER, THAT ANY SUCH DEBT OWED BY EITHER THE BORROWER OR A GUARANTOR
SHALL BE SUBORDINATED TO THE INDEBTEDNESS ON TERMS SET FORTH IN THE GUARANTY
AGREEMENT.
(F)
ENDORSEMENTS OF NEGOTIABLE INSTRUMENTS FOR COLLECTION IN THE
ORDINARY COURSE OF BUSINESS.
(G)
PERMITTED ADDITIONAL SENIOR NOTES ISSUED BY THE BORROWER PROVIDED
THAT (I) AT THE TIME OF INCURRING SUCH DEBT (A) NO DEFAULT HAS OCCURRED AND IS
THEN CONTINUING AND (B) NO DEFAULT WOULD RESULT FROM THE INCURRENCE OF SUCH DEBT
AFTER GIVING EFFECT TO THE INCURRENCE OF SUCH DEBT (AND ANY CONCURRENT REPAYMENT
OF DEBT WITH THE PROCEEDS OF SUCH INCURRENCE), (II) SUCH DEBT DOES NOT HAVE ANY
SCHEDULED AMORTIZATION PRIOR TO ONE YEAR AFTER THE MATURITY DATE, (III) SUCH
DEBT DOES NOT MATURE SOONER THAN FIVE YEARS AFTER ITS ISSUANCE, (IV) THE TERMS
OF SUCH DEBT ARE NOT MATERIALLY MORE ONEROUS, TAKEN AS A WHOLE, THAN THE TERMS
OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (V) SUCH DEBT AND ANY GUARANTEES
THEREOF ARE ON PREVAILING MARKET TERMS FOR SIMILAR SITUATED COMPANIES AND
(VI) THE BORROWING BASE IS REDUCED AS PURSUANT TO SECTION 2.07(F) AND PREPAYMENT
IS MADE TO THE EXTENT REQUIRED BY SECTION 3.04(C)(IV); AND ANY PERMITTED
REFINANCING DEBT IN RESPECT THEREOF.
(H)
INDEBTEDNESS OF BORROWER IN RESPECT OF GUARANTEE OBLIGATIONS OF
SUBSIDIARIES WHICH DO NOT IN THE AGGREGATE EXCEED $50,000,000 AT ANY ONE TIME
OUTSTANDING.
(I)
NON-RECOURSE DEBT OF (I) THE RILEY RIDGE SPV NOT TO EXCEED
$300,000,000 AND (II) OTHER SUBSIDIARIES NOT TO EXCEED $100,000,000 IN THE
AGGREGATE AT ANY ONE TIME OUTSTANDING.
(J)
OTHER DEBT NOT TO EXCEED $40,000,000 IN THE AGGREGATE AT ANY ONE
TIME OUTSTANDING.
SECTION 9.03
LIENS.
THE BORROWER WILL NOT, AND WILL NOT PERMIT ANY
SUBSIDIARY TO, CREATE, INCUR, ASSUME OR PERMIT TO EXIST ANY LIEN ON ANY OF ITS
PROPERTIES (NOW OWNED OR HEREAFTER ACQUIRED), EXCEPT:
(A)
LIENS SECURING THE PAYMENT OF ANY INDEBTEDNESS.
(B)
EXCEPTED LIENS.
76
(C)
LIENS SECURING ANY PERMITTED REFINANCING DEBT PROVIDED THAT ANY
SUCH PERMITTED REFINANCING DEBT IS NOT SECURED BY ANY ADDITIONAL OR DIFFERENT
PROPERTY NOT SECURING THE REFINANCED DEBT.
(D)
LIENS ON (I) ANY PROPERTY OF THE RILEY RIDGE SPV AND ON THE EQUITY
INTERESTS OF THE RILEY RIDGE SPV TO SECURE THE DEBT PERMITTED UNDER CLAUSE
(I) OF SECTION 9.02(I), AND (II) ON PROPERTY NOT INCLUDED IN THE BORROWING BASE
AND PLEDGED TO SECURE NON-RECOURSE DEBT UNDER CLAUSE (II) OF SECTION 9.02(I).
SECTION 9.04
DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS; REPAYMENT OF
SENIOR NOTES.
(A)
RESTRICTED PAYMENTS.
THE BORROWER WILL NOT, AND