THERE ARE NO STRIKES,
LOCKOUTS OR SLOWDOWNS AGAINST THE BORROWER OR ANY OF ITS RESTRICTED SUBSIDIARIES
PENDING OR, TO THE KNOWLEDGE OF THE BORROWER, THREATENED THAT COULD REASONABLY
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT. THE HOURS WORKED BY AND PAYMENTS
MADE TO EMPLOYEES OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES HAVE NOT BEEN
IN VIOLATION OF THE FAIR LABOR STANDARDS ACT OR ANY OTHER LAW DEALING WITH SUCH
MATTERS TO THE EXTENT THAT SUCH VIOLATION COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
SECTION 4.13.
CAPITALIZATION AND CREDIT PARTY
INFORMATION. SCHEDULE 4.13 LISTS, AS OF THE EFFECTIVE DATE FOR THE BORROWER AND
FOR EACH RESTRICTED SUBSIDIARY, ITS FULL LEGAL NAME, ITS JURISDICTION OF
ORGANIZATION, ITS ORGANIZATIONAL IDENTIFICATION NUMBER, ITS FEDERAL TAX
IDENTIFICATION NUMBER, THE NUMBER OF SHARES OF CAPITAL STOCK OR OTHER EQUITY
INTERESTS OUTSTANDING AND THE OWNER(S) OF SUCH EQUITY INTERESTS.
SECTION 4.14.
MARGIN STOCK. NEITHER THE BORROWER NOR
ANY RESTRICTED SUBSIDIARY IS ENGAGED PRINCIPALLY, OR AS ONE OF ITS IMPORTANT
ACTIVITIES, IN THE BUSINESS OF EXTENDING CREDIT FOR THE PURPOSE OF PURCHASING OR
CARRYING MARGIN STOCK (WITHIN THE MEANING OF REGULATION U ISSUED BY THE BOARD),
AND NO PART OF THE PROCEEDS OF ANY LOAN WILL BE USED TO PURCHASE OR CARRY ANY
MARGIN STOCK OR TO EXTEND CREDIT TO OTHERS FOR THE PURPOSE OF PURCHASING OR
CARRYING MARGIN STOCK.
SECTION 4.15.
OIL AND GAS INTERESTS. EACH CREDIT
PARTY HAS GOOD AND DEFENSIBLE TITLE TO SUBSTANTIALLY ALL OF THE PROVED RESERVES
INCLUDED IN ITS OIL AND GAS INTERESTS (FOR PURPOSES OF THIS SECTION 4.15,
"PROVED OIL AND GAS INTERESTS"), FREE AND CLEAR OF ALL LIENS EXCEPT LIENS
PERMITTED PURSUANT TO SECTION 7.02.
ALL SUCH PROVED OIL AND GAS INTERESTS ARE
VALID, SUBSISTING, AND IN FULL FORCE AND EFFECT, AND ALL RENTALS, ROYALTIES, AND
OTHER AMOUNTS DUE AND PAYABLE IN RESPECT THEREOF HAVE BEEN DULY PAID. EACH WELL
DRILLED IN RESPECT OF PROVED PRODUCING OIL AND GAS INTERESTS (1) IS CAPABLE OF,
AND IS PRESENTLY, EITHER PRODUCING HYDROCARBONS IN COMMERCIALLY PROFITABLE
QUANTITIES OR IN THE PROCESS OF BEING WORKED OVER OR ENHANCED, AND THE CREDIT
PARTY THAT OWNS SUCH PROVED PRODUCING OIL AND GAS INTERESTS IS CURRENTLY
RECEIVING PAYMENTS FOR ITS SHARE OF PRODUCTION, WITH NO FUNDS IN RESPECT OF ANY
THEREOF BEING PRESENTLY HELD IN SUSPENSE, OTHER THAN ANY SUCH FUNDS BEING HELD
IN SUSPENSE PENDING DELIVERY OF APPROPRIATE DIVISION ORDERS, AND (2) HAS BEEN
DRILLED, BOTTOMED, COMPLETED, AND OPERATED IN COMPLIANCE WITH ALL APPLICABLE
LAWS, IN THE CASE OF CLAUSES (1) AND (2), EXCEPT WHERE ANY FAILURE TO SATISFY
CLAUSE (1) OR TO COMPLY WITH CLAUSE (2) WOULD NOT HAVE A MATERIAL ADVERSE
EFFECT, AND NO SUCH WELL WHICH IS CURRENTLY PRODUCING HYDROCARBONS IS SUBJECT TO
ANY PENALTY IN PRODUCTION BY REASON OF SUCH WELL HAVING PRODUCED IN EXCESS OF
ITS ALLOWABLE PRODUCTION.
SECTION 4.16.
INSURANCE. THE CERTIFICATE SIGNED BY
THE RESPONSIBLE OFFICER THAT ATTESTS TO THE EXISTENCE AND ADEQUACY OF, AND
SUMMARIZES, THE PROPERTY AND CASUALTY INSURANCE PROGRAM MAINTAINED BY THE CREDIT