THE SALE OR OTHER DISPOSITION OF OIL AND GAS
PROPERTIES FOR OTHER OIL AND GAS PROPERTIES HELD BY THIRD PARTIES TO THE EXTENT
SUCH EXCHANGED OIL AND GAS PROPERTY IS NOT CURRENTLY INCLUDED IN THE THEN
APPLICABLE BORROWING BASE AND WHERE THE CONSIDERATION THEREFORE IS SOLELY OTHER
OIL AND GAS PROPERTIES OF MATERIALLY EQUIVALENT FAIR MARKET VALUE; AND (F) SALES
AND OTHER TRANSFERS OF OIL AND GAS PROPERTIES NOT REGULATED BY
SECTION 9.12(A) TO (E) AND NOT CURRENTLY INCLUDED IN THE THEN APPLICABLE
BORROWING BASE HAVING A FAIR MARKET VALUE NOT TO EXCEED $2,000,000 DURING ANY
12-MONTH PERIOD.
SECTION 9.13
ENVIRONMENTAL MATTERS.
THE BORROWER
WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, CAUSE OR PERMIT ANY OF ITS
PROPERTY TO BE IN VIOLATION OF, OR DO ANYTHING OR PERMIT ANYTHING TO BE DONE
WHICH WILL SUBJECT ANY SUCH PROPERTY TO A RELEASE OR THREATENED RELEASE OF
HAZARDOUS MATERIALS, EXPOSURE TO ANY HAZARDOUS MATERIALS, OR TO ANY REMEDIAL
WORK UNDER ANY ENVIRONMENTAL LAWS, ASSUMING DISCLOSURE TO THE APPLICABLE
GOVERNMENTAL AUTHORITY OF ALL RELEVANT FACTS, CONDITIONS AND CIRCUMSTANCES, IF
ANY, PERTAINING TO SUCH PROPERTY WHERE SUCH VIOLATIONS, RELEASE OR THREATENED
RELEASE, EXPOSURE, OR REMEDIAL WORK COULD REASONABLY BE EXPECTED TO HAVE A
MATERIAL ADVERSE EFFECT.
SECTION 9.14
TRANSACTIONS WITH AFFILIATES.
THE
BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, ENTER INTO ANY
TRANSACTION, INCLUDING, WITHOUT LIMITATION, ANY PURCHASE, SALE, LEASE OR
EXCHANGE OF PROPERTY OR THE RENDERING OF ANY SERVICE, WITH ANY AFFILIATE (OTHER
THAN THE GUARANTORS AND WHOLLY-OWNED SUBSIDIARIES OF THE BORROWER) UNLESS SUCH
TRANSACTIONS ARE OTHERWISE PERMITTED UNDER THIS AGREEMENT AND ARE UPON FAIR AND
REASONABLE TERMS NO LESS FAVORABLE TO IT THAN IT WOULD OBTAIN IN A COMPARABLE
ARM'S LENGTH TRANSACTION WITH A PERSON NOT AN AFFILIATE.
SECTION 9.15
SUBSIDIARIES.
THE BORROWER WILL
NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, CREATE OR ACQUIRE ANY ADDITIONAL
SUBSIDIARY UNLESS THE BORROWER GIVES WRITTEN NOTICE TO THE ADMINISTRATIVE AGENT
OF SUCH CREATION OR ACQUISITION AND COMPLIES WITH SECTION 8.14(B).
THE BORROWER
SHALL NOT, AND SHALL NOT PERMIT ANY SUBSIDIARY TO, SELL, ASSIGN OR OTHERWISE
DISPOSE OF ANY EQUITY INTERESTS IN ANY SUBSIDIARY EXCEPT IN COMPLIANCE WITH
SECTION 9.12(D).
NEITHER THE BORROWER NOR ANY SUBSIDIARY SHALL HAVE ANY
SUBSIDIARIES THAT ARE ORGANIZED UNDER THE LAWS OF A JURISDICTION OTHER THAN THE
UNITED STATES OF AMERICA, ANY STATE THEREOF OR THE DISTRICT OF COLUMBIA.
SECTION 9.16
NEGATIVE PLEDGE AGREEMENTS; DIVIDEND
RESTRICTIONS.
THE BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO,
CREATE, INCUR, ASSUME OR SUFFER TO EXIST ANY CONTRACT, AGREEMENT OR
UNDERSTANDING (OTHER THAN THIS AGREEMENT, THE SECURITY INSTRUMENTS OR CAPITAL
LEASES CREATING LIENS PERMITTED BY SECTION 9.03(C)) WHICH IN ANY WAY PROHIBITS
OR RESTRICTS THE GRANTING, CONVEYING, CREATION OR IMPOSITION OF ANY LIEN ON ANY
OF ITS PROPERTY IN FAVOR OF THE ADMINISTRATIVE AGENT AND THE LENDERS OR
RESTRICTS ANY SUBSIDIARY FROM PAYING DIVIDENDS OR MAKING DISTRIBUTIONS TO THE
BORROWER OR ANY GUARANTOR, OR WHICH REQUIRES THE CONSENT OF OR NOTICE TO OTHER
PERSONS IN CONNECTION THEREWITH.