OR REMEDIAL OBLIGATIONS COULD REASONABLY BE
EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
THE BORROWER WILL USE ITS
REASONABLE EFFORTS TO CAUSE THE OPERATOR OF PROPERTIES WHICH THE BORROWER OR ANY
SUBSIDIARY DOES NOT OPERATE TO COMPLY WITH THE TERMS AND PROVISIONS OF THIS
SECTION 9.13.
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.
77
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) AND SECTION 8.14(C).
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 FOREIGN
SUBSIDIARIES.
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.
SECTION 9.17.
GAS IMBALANCES, TAKE-OR-PAY OR OTHER PREPAYMENTS.
THE
BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, (A) INCUR, BECOME OR
REMAIN LIABLE FOR, ANY MATERIAL GAS IMBALANCE, OR (B) ALLOW TAKE-OR-PAY OR OTHER
PREPAYMENTS WITH RESPECT TO THE OIL AND GAS PROPERTIES OF THE BORROWER OR ANY
SUBSIDIARY THAT WOULD REQUIRE THE BORROWER OR SUCH SUBSIDIARY TO DELIVER
HYDROCARBONS AT SOME FUTURE TIME WITHOUT THEN OR THEREAFTER RECEIVING FULL
PAYMENT THEREFOR.
SECTION 9.18.
SWAP AGREEMENTS.
THE BORROWER WILL NOT, AND WILL NOT
PERMIT ANY SUBSIDIARY TO, ENTER INTO ANY SWAP AGREEMENTS WITH ANY PERSON OTHER
THAN (A) SWAP AGREEMENTS IN RESPECT OF COMMODITIES (I) WITH AN APPROVED
COUNTERPARTY AND (II) THE NOTIONAL VOLUMES FOR WHICH (WHEN AGGREGATED WITH OTHER
COMMODITY SWAP AGREEMENTS THEN IN EFFECT OTHER THAN BASIS DIFFERENTIAL SWAPS ON
VOLUMES ALREADY HEDGED PURSUANT TO OTHER SWAP AGREEMENTS) DO NOT EXCEED, AS OF
THE DATE SUCH SWAP AGREEMENT IS EXECUTED, 95% OF THE REASONABLY ANTICIPATED
PROJECTED PRODUCTION FROM PROVED, DEVELOPED, PRODUCING OIL AND GAS PROPERTIES
FOR EACH MONTH DURING THE PERIOD DURING