FROM THEIR OIL AND GAS PROPERTIES AT SOME FUTURE TIME WITHOUT THEN OR THEREAFTER
RECEIVING FULL PAYMENT THEREFOR EXCEEDING TWO (2) BCF OF GAS (ON AN MCF
EQUIVALENT BASIS) IN THE AGGREGATE.
SECTION 7.19
MARKETING OF PRODUCTION.
EXCEPT FOR CONTRACTS LISTED AND
IN EFFECT ON THE DATE HEREOF ON SCHEDULE 7.19, AND THEREAFTER EITHER DISCLOSED
IN WRITING TO THE ADMINISTRATIVE AGENT OR INCLUDED IN THE MOST RECENTLY
DELIVERED RESERVE REPORT (WITH RESPECT TO ALL OF WHICH CONTRACTS THE BORROWER
REPRESENTS THAT IT OR ITS SUBSIDIARIES ARE RECEIVING A PRICE FOR ALL PRODUCTION
SOLD THEREUNDER WHICH IS COMPUTED SUBSTANTIALLY IN ACCORDANCE WITH THE TERMS OF
THE RELEVANT CONTRACT AND ARE NOT HAVING DELIVERIES CURTAILED SUBSTANTIALLY
BELOW THE SUBJECT PROPERTY'S DELIVERY CAPACITY), NO MATERIAL AGREEMENTS EXIST
WHICH ARE NOT CANCELABLE ON 60 DAYS NOTICE OR LESS WITHOUT PENALTY OR DETRIMENT
FOR THE SALE OF PRODUCTION FROM THE BORROWER'S OR ITS SUBSIDIARIES' HYDROCARBONS
(INCLUDING, WITHOUT LIMITATION, CALLS ON OR OTHER RIGHTS TO PURCHASE,
PRODUCTION, WHETHER OR NOT THE SAME ARE CURRENTLY BEING EXERCISED) THAT
(A) PERTAIN TO THE SALE OF PRODUCTION AT A FIXED PRICE AND (B) HAVE A MATURITY
OR EXPIRY DATE OF LONGER THAN SIX (6) MONTHS FROM THE DATE HEREOF.
SECTION 7.20
SWAP AGREEMENTS.
SCHEDULE 7.20, AS OF THE DATE HEREOF,
AND AFTER THE DATE HEREOF, EACH REPORT REQUIRED TO BE DELIVERED BY THE BORROWER
PURSUANT TO SECTION 8.01(D), SETS FORTH, A TRUE AND COMPLETE LIST OF ALL SWAP
AGREEMENTS OF THE BORROWER AND EACH SUBSIDIARY, THE MATERIAL TERMS THEREOF
(INCLUDING THE TYPE, TERM, EFFECTIVE DATE, TERMINATION DATE AND NOTIONAL AMOUNTS
OR VOLUMES), THE NET MARK TO MARKET VALUE THEREOF, ALL CREDIT SUPPORT AGREEMENTS
RELATING THERETO (INCLUDING ANY MARGIN REQUIRED OR SUPPLIED) AND THE
COUNTERPARTY TO EACH SUCH AGREEMENT.
64
SECTION 7.21
USE OF LOANS AND LETTERS OF CREDIT.
THE PROCEEDS OF THE
LOANS AND THE LETTERS OF CREDIT SHALL BE USED TO PROVIDE WORKING CAPITAL FOR
EXPLORATION AND PRODUCTION OPERATIONS, TO REFINANCE DEBT UNDER THE EXISTING
CREDIT AGREEMENT AND FOR GENERAL CORPORATE PURPOSES.
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.
SECTION 7.22
SOLVENCY.
AFTER GIVING EFFECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY, (A) THE AGGREGATE ASSETS (AFTER GIVING EFFECT TO AMOUNTS
THAT COULD REASONABLY BE RECEIVED BY REASON OF INDEMNITY, OFFSET, INSURANCE OR
ANY SIMILAR ARRANGEMENT), AT A FAIR VALUATION, OF THE BORROWER AND THE
GUARANTORS, TAKEN AS A WHOLE, WILL EXCEED THE AGGREGATE DEBT OF THE BORROWER AND
THE GUARANTORS ON A CONSOLIDATED BASIS, AS THE DEBT BECOMES ABSOLUTE AND
MATURES, (B) EACH OF THE BORROWER AND THE GUARANTORS WILL NOT HAVE INCURRED OR