STATES OF ANY OTHER BANK OR TRUST
COMPANY WHICH IS ORGANIZED UNDER THE LAWS OF THE UNITED STATES OR ANY STATE
THEREOF, HAS CAPITAL, SURPLUS AND UNDIVIDED PROFITS AGGREGATING AT LEAST
$100,000,000 (AS OF THE DATE OF SUCH BANK OR TRUST COMPANY'S MOST RECENT
FINANCIAL REPORTS) AND HAS A SHORT TERM DEPOSIT RATING OF NO LOWER THAN A2 OR
P2, AS SUCH RATING IS SET FORTH FROM TIME TO TIME, BY S&P OR MOODY'S,
RESPECTIVELY;
(VI)
DEPOSITS IN MONEY MARKET FUNDS INVESTING
EXCLUSIVELY IN INVESTMENTS DESCRIBED IN CLAUSES (III), (IV) AND (V) ABOVE;
(VII)
INVESTMENTS MADE BY BORROWER IN OR TO THE
GUARANTORS (OTHER THAN CWEI) AND MADE BY ANY GUARANTOR IN OR TO BORROWER OR ANY
OTHER GUARANTOR;
(VIII)
INVESTMENTS IN STOCK, OBLIGATIONS OR SECURITIES
RECEIVED IN SETTLEMENT OF DEBTS ARISING FROM INVESTMENTS PERMITTED UNDER THIS
SECTION 3.3(N) OWING TO BORROWER OR ANY OTHER SUBSIDIARY AS A RESULT OF A
BANKRUPTCY OR OTHER INSOLVENCY PROCEEDING OF THE OBLIGOR IN RESPECT OF SUCH
DEBTS OR UPON THE ENFORCEMENT OF ANY LIEN IN FAVOR OF BORROWER OR ANY OF ITS
SUBSIDIARIES; AND
28
(IX)
OTHER INVESTMENTS NOT TO EXCEED $250,000 IN
THE AGGREGATE AT ANY TIME.
(O)
TRANSACTIONS WITH AFFILIATES.
BORROWER WILL
NOT CONDUCT ANY TRANSACTIONS WITH ANY OF ITS AFFILIATES EXCEPT (I) ON TERMS THAT
ARE FAIR AND REASONABLE AND NO LESS FAVORABLE TO BORROWER THAN THOSE THAT COULD
BE OBTAINED IN A COMPARABLE TRANSACTION AT THE TIME OF SUCH TRANSACTION IN
ARM'S-LENGTH DEALINGS WITH A PERSON WHO IS NOT SUCH AN AFFILIATE AND (II) IN
COMPLIANCE WITH ALL APPLICABLE LAWS.
(P)
NEGATIVE PLEDGE.
BORROWER WILL NOT ENTER
INTO OR SUFFER TO EXIST ANY AGREEMENT PROHIBITING OR CONDITIONING A CREATION OR
ASSUMPTION OF ANY LIEN UPON ANY OF THE COLLATERAL (WHETHER NOW OWNED OR
HEREAFTER ACQUIRED) EXCEPT IN FAVOR OF ADMINISTRATIVE AGENT.
(Q)
AMENDMENTS TO PARTNERSHIP DOCUMENTS AND
DRILLING CONTRACTS.
BORROWER WILL NOT (A) AMEND ITS LIMITED PARTNERSHIP
AGREEMENT OR CERTIFICATE OF LIMITED PARTNERSHIP; AND (B) AMEND OR MODIFY, OR
PERMIT THE AMENDMENT OR MODIFICATION OF THE DRILLING SERVICES CONTRACT, IN EACH
CASE WITHOUT THE PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT.
(R)
ERISA.
BORROWER WILL NOT INCUR
LIABILITIES UNDER TITLE IV OF ERISA EXCEPT TO THE EXTENT THAT SUCH LIABILITIES
WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
SECTION 3.4
COLLATERAL.
(A)
PLEDGE OF COLLATERAL.
TO SECURE PAYMENT
AND PERFORMANCE OF THE OBLIGATIONS, BORROWER HEREBY PLEDGES, ASSIGNS, TRANSFERS
AND SETS OVER TO ADMINISTRATIVE AGENT, FOR ITSELF AND EACH OF THE LENDERS, AND
GRANTS TO ADMINISTRATIVE AGENT FIRST LIENS AND SECURITY INTERESTS IN AND UPON
ALL OF THE COLLATERAL, SUBJECT ONLY TO PERMITTED LIENS.
(B)
LIENS.
EXCEPT UPON THE PRIOR WRITTEN
CONSENT OF ADMINISTRATIVE AGENT, BORROWER SHALL NOT CREATE OR PERMIT TO EXIST
ANY LIEN, ENCUMBRANCE OR SECURITY INTEREST UPON OR WITH RESPECT TO ANY
COLLATERAL NOW OWNED OR HEREAFTER ACQUIRED OTHER THAN PERMITTED LIENS.
(C)
PERFORMANCE OF OBLIGATIONS.
BORROWER SHALL
PERFORM ALL OF ITS OBLIGATIONS AND ALL OTHER MATERIAL OBLIGATIONS OWING ON
ACCOUNT OF OR WITH