FROM THEIR
PROVED OIL AND GAS PROPERTIES DURING THE PERIOD OF SUCH CONTRACT, (II) CONTRACTS
FOR THE SALE OF HYDROCARBONS SCHEDULED OR REASONABLY ESTIMATED TO BE PRODUCED
FROM PROVED OIL AND GAS PROPERTIES OF THIRD PARTIES DURING THE PERIOD OF SUCH
CONTRACT ASSOCIATED WITH THE OIL AND GAS PROPERTIES OF THE BORROWER AND ITS
SUBSIDIARIES THAT THE BORROWER OR ONE OF ITS SUBSIDIARIES HAS THE RIGHT TO
MARKET PURSUANT TO JOINT OPERATING AGREEMENTS, UNITIZATION AGREEMENTS OR OTHER
SIMILAR CONTRACTS THAT ARE USUAL AND CUSTOMARY IN THE OIL AND GAS BUSINESS AND
(III) OTHER CONTRACTS FOR THE PURCHASE AND/OR SALE OF HYDROCARBONS OF THIRD
PARTIES (A) WHICH HAVE GENERALLY OFFSETTING PROVISIONS (I.E. CORRESPONDING
PRICING MECHANICS, DELIVERY DATES AND POINTS AND VOLUMES) SUCH THAT NO
"POSITION" IS TAKEN AND (B) FOR WHICH APPROPRIATE CREDIT SUPPORT HAS BEEN TAKEN
TO ALLEVIATE THE MATERIAL CREDIT RISKS OF THE COUNTERPARTY THERETO.
(B)
THE BORROWER WILL NOT, AND WILL NOT PERMIT
ANY SUBSIDIARY TO, AMEND IN ANY MATERIAL RESPECT THE WRITTEN HYDROCARBON
MARKETING POLICY DELIVERED TO THE LENDERS PURSUANT TO SECTION 6.01(O) WITHOUT
THE PRIOR WRITTEN CONSENT OF THE ADMINISTRATIVE AGENT AND THE MAJORITY LENDERS.
SECTION 8.17
POST-CLOSING CONDITION.
(A)
WITHIN 30 DAYS OF AFTER THE DATE HEREOF,
THE BORROWER SHALL EITHER (I) NOVATE THE SWAP AGREEMENT LISTED ON SCHEDULE 7.20
TO THE ADMINISTRATIVE AGENT OR (II) UNWIND THE CALLS ASSOCIATED WITH SUCH SWAP
AGREEMENT, SO LONG AS THE REMAINING PUTS DO NOT REQUIRE THE POSTING OF ANY
COLLATERAL BY THE BORROWER AT ANY TIME.
(B)
ON OR BEFORE THE FIRST SCHEDULED
REDETERMINATION DATE FOLLOWING THE EFFECTIVE DATE, THE ADMINISTRATIVE AGENT
SHALL BE REASONABLY SATISFIED THAT THE SECURITY INSTRUMENTS CREATE FIRST
PRIORITY, PERFECTED LIENS (SUBJECT ONLY TO EXCEPTED LIENS IDENTIFIED IN CLAUSES
(A) TO (D) AND (F) OF THE DEFINITION THEREOF, BUT SUBJECT TO THE PROVISOS AT THE
END OF SUCH DEFINITION) ON AT LEAST 80% OF THE TOTAL VALUE OF THE OIL AND GAS
PROPERTIES EVALUATED IN THE RESERVE REPORT DELIVERED BY THE BORROWER FOR THE
PURPOSE OF DETERMINING THE BORROWING BASE ON SUCH SCHEDULED REDETERMINATION
DATE.
ARTICLE IX
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder and all other amounts
payable under the Loan Documents have been paid in full and all Letters of
Credit have expired or terminated and all LC
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Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 9.01
FINANCIAL COVENANTS.
(A)
RATIO OF TOTAL DEBT TO EBITDAX.
THE
BORROWER WILL NOT, AT ANY TIME, PERMIT ITS RATIO OF TOTAL DEBT AS OF SUCH TIME
TO EBITDAX FOR THE FOUR FISCAL QUARTERS ENDING ON THE LAST DAY OF THE FISCAL
QUARTER IMMEDIATELY PRECEDING THE DATE OF DETERMINATION FOR WHICH FINANCIAL
STATEMENTS ARE AVAILABLE TO BE GREATER THAN 3.75 TO 1.0.
NOTWITHSTANDING THE
FOREGOING, FOR THE PURPOSE OF DETERMINING EBITDAX OF THE BORROWER AND ITS
SUBSIDIARIES FOR THIS SECTION 9.01(A) FOR THE FOUR FISCAL QUARTERS ENDING
(I) MARCH 31,