ASSETS. THE BORROWERS AND GUARANTOR
HAVE GOOD AND INDEFEASIBLE TITLE TO ALL OF THEIR PROPERTIES, FREE AND CLEAR OF
ALL LIENS EXCEPT PERMITTED LIENS.
4.6
SCORE AND ACCURACY OF FINANCIAL STATEMENTS.
THE CONSOLIDATED AND CONSOLIDATING FINANCIAL STATEMENTS OF THE BORROWERS AND
GUARANTOR AS OF MARCH 31, 2008, PRESENT FAIRLY THE
25
FINANCIAL POSITION AND RESULTS OF OPERATIONS AND CASH FLOWS OF THE BORROWER AND
GUARANTOR AS AT THE RELEVANT POINT IN TIME OR FOR THE PERIOD INDICATED, AS
APPLICABLE.
NO EVENT OR CIRCUMSTANCE HAS OCCURRED SINCE SUCH DATES WHICH COULD
REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
4.7
NO MATERIAL MISSTATEMENTS. NO INFORMATION,
EXHIBIT, STATEMENT, OR REPORT FURNISHED TO THE LENDER BY OR AT THE DIRECTION OF
THE BORROWERS IN CONNECTION WITH THIS AGREEMENT CONTAINS ANY MATERIAL
MISSTATEMENT OF FACT OR OMITS TO STATE A MATERIAL FACT OR ANY FACT NECESSARY TO
MAKE THE STATEMENTS CONTAINED THEREIN NOT MISLEADING AS OF THE DATE MADE OR
DEEMED MADE.
4.8
LIABILITIES, LITIGATION, AND RESTRICTIONS.
OTHER THAN AS LISTED UNDER THE HEADING "LIABILITIES" ON EXHIBIT IV ATTACHED
HERETO, THE BORROWERS HAVE NO LIABILITIES, DIRECT, OR CONTINGENT, WHICH MAY
MATERIALLY AND ADVERSELY AFFECT ITS BUSINESS OR OPERATIONS OR ITS OWNERSHIP OF
THE COLLATERAL.
EXCEPT AS SET FORTH UNDER THE HEADING "LITIGATION" ON
EXHIBIT IV HERETO, NO LITIGATION OR OTHER ACTION OF ANY NATURE AFFECTING EITHER
BORROWER OR GUARANTOR IS PENDING BEFORE ANY GOVERNMENTAL AUTHORITY OR, TO THE
BEST KNOWLEDGE OF EITHER BORROWER, THREATENED AGAINST OR AFFECTING EITHER
BORROWER OR GUARANTOR WHICH MIGHT REASONABLY BE EXPECTED TO RESULT IN ANY
IMPAIRMENT OF ITS OWNERSHIP OF ANY COLLATERAL OR HAVE A MATERIAL ADVERSE
EFFECT.
TO THE BEST KNOWLEDGE OF THE BORROWERS, AFTER DUE INQUIRY, NO UNUSUAL
OR UNDULY BURDENSOME RESTRICTION, RESTRAINT OR HAZARD EXISTS BY CONTRACT,
REQUIREMENT OF LAW, OR OTHERWISE RELATIVE TO THE BUSINESS OR OPERATIONS OF
EITHER BORROWER OR THE OWNERSHIP AND OPERATION OF THE COLLATERAL OTHER THAN SUCH
AS RELATE GENERALLY TO PERSONS ENGAGED IN BUSINESS ACTIVITIES SIMILAR TO THOSE
CONDUCTED BY THE BORROWERS AND GUARANTOR.
4.9
AUTHORIZATIONS; CONSENTS.
EXCEPT AS
EXPRESSLY CONTEMPLATED BY THIS AGREEMENT, NO AUTHORIZATION, CONSENT, APPROVAL,
EXEMPTION, FRANCHISE, PERMIT, OR LICENSE OF, OR FILING WITH, ANY GOVERNMENTAL
AUTHORITY OR ANY OTHER PERSON IS REQUIRED TO AUTHORIZE OR IS OTHERWISE REQUIRED
IN CONNECTION WITH THE VALID EXECUTION AND DELIVERY BY THE BORROWERS AND
GUARANTOR OF THE LOAN DOCUMENTS OR ANY INSTRUMENT CONTEMPLATED HEREBY, THE
REPAYMENT BY THE BORROWERS OF THE NOTE AND INTEREST AND FEES PROVIDED IN THE
NOTE AND THIS AGREEMENT, OR THE PERFORMANCE BY THE BORROWERS OF THE OBLIGATIONS.
4.10
COMPLIANCE WITH LAWS. THE BORROWERS AND THE
BORROWERS' PROPERTY, INCLUDING, WITHOUT LIMITATION, THE BORROWING BASE OIL AND
GAS PROPERTIES, ARE IN COMPLIANCE WITH ALL APPLICABLE REQUIREMENTS OF LAW,
INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LAWS, THE NATURAL GAS POLICY ACT OF
1978, AS AMENDED, AND ERISA, EXCEPT TO THE EXTENT NON-COMPLIANCE WITH ANY SUCH
REQUIREMENTS OF LAW COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.
4.11
ERISA. THE BORROWERS DO NOT MAINTAIN NOR HAVE