BORROWING BASE OIL
AND GAS PROPERTIES OF THE CYMRI AND TRIUMPH AND ALL IMPROVEMENTS, PERSONAL
PROPERTY, AND FIXTURES RELATED THERETO;
(II)
FINANCING STATEMENTS FROM EACH BORROWER,
AS DEBTOR, COVERING ALL OF THEIR PERSONAL PROPERTY AND FIXTURES;
(III)
SECURITY AGREEMENT EXECUTED BY THE BORROWERS
PLEDGING ACCOUNTS, CONTRACT RIGHTS, AND ALL OTHER PERSONAL PROPERTY OF BORROWER;
(IV)
UNDATED LETTERS, IN FORM AND SUBSTANCE
SATISFACTORY TO THE LENDER, EXECUTED BY THE BORROWERS TO EACH PURCHASER OF
PRODUCTION AND DISBURSER OF THE PROCEEDS OF PRODUCTION FROM OR ATTRIBUTABLE TO
THE BORROWING BASE OIL AND GAS PROPERTIES LISTED ON EXHIBIT VI, TOGETHER WITH
ADDITIONAL LETTERS WITH THE ADDRESSEES LEFT BLANK, AUTHORIZING AND DIRECTING THE
ADDRESSEES TO MAKE FUTURE PAYMENTS ATTRIBUTABLE TO PRODUCTION FROM THE BORROWING
BASE OIL AND GAS PROPERTIES DIRECTLY TO THE LENDER;
(V)
THE STOCK PLEDGE AGREEMENT FROM GUARANTOR
COVERING ALL OF ITS EQUITY INTERESTS IN EACH BORROWER, TOGETHER WITH (A) THE
STOCK OR MEMBERSHIP CERTIFICATES EVIDENCING SUCH EQUITY INTERESTS, IF
CERTIFICATED AND (B) BLANK TRANSFER POWERS RELATING THERETO;
(VI)
THE GUARANTY EXECUTED BY GUARANTOR; AND
(VII)
AN EXECUTED ASSIGNMENT OF NOTES AND LIENS -
STERLING BANK.
(G)
UNAUDITED FINANCIAL STATEMENTS OF THE
BORROWER AND GUARANTOR AS OF MARCH 31, 2008;
(H)
CERTIFICATES DATED AS OF A RECENT DATE FROM
THE SECRETARY OF STATE OR OTHER APPROPRIATE GOVERNMENTAL AUTHORITY EVIDENCING
THE EXISTENCE OR QUALIFICATION AND GOOD STANDING OF EACH BORROWER IN ITS
RESPECTIVE JURISDICTION OF FORMATION AND IN ANY OTHER JURISDICTIONS WHERE IT
DOES BUSINESS;
22
(I)
RESULTS OF SEARCHES OF THE UCC RECORDS
OF THE SECRETARY OF STATE OF THE STATE OF FORMATION FROM A SOURCE ACCEPTABLE TO
THE LENDER AND REFLECTING NO LIENS AGAINST ANY OF THE COLLATERAL AS TO WHICH
PERFECTION OF A LIEN IS ACCOMPLISHED BY THE FILING OF A FINANCING STATEMENT
OTHER THAN IN FAVOR OF THE LENDER;
(J)
CONFIRMATION, ACCEPTABLE TO THE LENDER,
THAT CYMRI AND TRIUMPH HAVE DEFENSIBLE TITLE TO NOT LESS THAN 80% OF THE VALUE
OF THE BORROWING BASE OIL AND GAS PROPERTIES, FREE AND CLEAR OF LIENS OTHER THAN
PERMITTED LIENS;
(K)
ALL OPERATING, LEASE, SUBLEASE, ROYALTY,
SALES, EXCHANGE, PROCESSING, FARMOUT, BIDDING, POOLING, UNITIZATION,
COMMUNITIZATION, AND OTHER AGREEMENTS RELATING TO THE BORROWING BASE OIL AND GAS
PROPERTIES REQUESTED BY THE LENDER;
(L)
ENGINEERING REPORTS COVERING THE
BORROWING BASE OIL AND GAS PROPERTIES;
(M)
THE OPINION OF HAYNES & BOONE, LLP, COUNSEL TO
THE BORROWERS AND GUARANTOR, AND AN OPINION OF COUNSEL TO TRIUMPH THAT IS
LICENSED TO PRACTICE IN LOUISIANA, COVERING THE SECURITY INSTRUMENTS THAT ARE
REQUIRED TO BE FILED IN THE STATE OF LOUISIANA REGARDING, AMONG OTHER THINGS,
THE PERFECTION OF LIENS AND ENFORCEABILITY THEREOF, IN THE FORM AND SUBSTANCE
ACCEPTABLE TO THE LENDER IN ITS DISCRETION;
(N)
CERTIFICATES EVIDENCING THE INSURANCE
COVERAGE REQUIRED PURSUANT TO SECTION 5.18;
(O)
PAYMENT OF THE INITIAL FACILITY FEE;
(P)
PAYMENT OF THE FEES DESCRIBED IN
SECTION 5.14;
(Q)
AN EXECUTED SUBORDINATION AGREEMENT; AND
(R)
SUCH OTHER AGREEMENTS, DOCUMENTS,
INSTRUMENTS, OPINIONS, CERTIFICATES, WAIVERS, CONSENTS, AND EVIDENCE AS THE
LENDER MAY REASONABLY REQUEST.
3.2
EACH LOAN