BORROWER AND
ITS CONSOLIDATED SUBSIDIARIES AS OF SUCH DATES AND FOR SUCH PERIODS IN
ACCORDANCE WITH GAAP, SUBJECT TO YEAR-END AUDIT ADJUSTMENTS AND THE ABSENCES OF
FOOTNOTES.
(B)
SINCE DECEMBER 31, 2007, THERE HAS BEEN NO
MATERIAL ADVERSE CHANGE IN THE BUSINESS, ASSETS, OPERATIONS, PROSPECTS OR
CONDITION, FINANCIAL OR OTHERWISE, OF THE BORROWER AND ITS SUBSIDIARIES, TAKEN
AS A WHOLE (IT BEING UNDERSTOOD THAT CHANGES IN COMMODITY PRICES FOR
HYDROCARBONS AFFECTING THE OIL AND GAS INDUSTRY AS A WHOLE DO NOT CONSTITUTE A
MATERIAL ADVERSE CHANGE).
SECTION 4.05.
PROPERTIES.
(A)
EXCEPT AS OTHERWISE PROVIDED IN
SECTION 4.15 WITH RESPECT TO PROVED RESERVES INCLUDED IN THE OIL AND GAS
INTERESTS OF THE BORROWER AND EACH RESTRICTED SUBSIDIARY, THE BORROWER AND EACH
RESTRICTED SUBSIDIARY HAS GOOD TITLE TO, OR VALID LEASEHOLD INTERESTS IN, ALL
SUCH REAL AND PERSONAL PROPERTY MATERIAL TO ITS BUSINESS, EXCEPT FOR MINOR
DEFECTS IN TITLE THAT DO NOT INTERFERE WITH ITS ABILITY TO CONDUCT ITS BUSINESS
AS CURRENTLY CONDUCTED OR TO UTILIZE SUCH PROPERTIES FOR THEIR INTENDED
PURPOSES.
(B)
THE BORROWER AND EACH RESTRICTED SUBSIDIARY
OWNS, OR IS LICENSED TO USE, ALL TRADEMARKS, TRADENAMES, COPYRIGHTS, PATENTS AND
OTHER INTELLECTUAL PROPERTY MATERIAL TO ITS BUSINESS, AND THE USE THEREOF BY THE
BORROWER AND SUCH RESTRICTED SUBSIDIARIES, AS THE CASE MAY BE, DOES NOT INFRINGE
UPON THE RIGHTS OF ANY OTHER PERSON, EXCEPT FOR ANY SUCH INFRINGEMENTS THAT,
INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT REASONABLY BE EXPECTED TO RESULT IN
A MATERIAL ADVERSE EFFECT.
SECTION 4.06.
LITIGATION AND ENVIRONMENTAL MATTERS.
(A)
THERE ARE NO ACTIONS, SUITS,
INVESTIGATIONS, OR PROCEEDINGS BY OR BEFORE ANY ARBITRATOR OR GOVERNMENTAL
AUTHORITY PENDING AGAINST OR, TO THE KNOWLEDGE OF THE BORROWER, THREATENED
AGAINST OR AFFECTING THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (I) AS TO WHICH
THERE IS A REASONABLE POSSIBILITY OF AN ADVERSE DETERMINATION AND THAT, IF
ADVERSELY DETERMINED, COULD REASONABLY BE EXPECTED, INDIVIDUALLY OR IN THE
AGGREGATE, TO RESULT IN A MATERIAL ADVERSE EFFECT (OTHER THAN THE DISCLOSED
MATTERS) OR (II) THAT INVOLVE THIS AGREEMENT OR THE TRANSACTIONS.
(B)
EXCEPT FOR THE DISCLOSED MATTERS AND EXCEPT
WITH RESPECT TO ANY OTHER MATTERS THAT, INDIVIDUALLY OR IN THE AGGREGATE, COULD
NOT REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT, NEITHER THE
BORROWER NOR ANY RESTRICTED SUBSIDIARY TO THE BORROWER'S KNOWLEDGE (I) HAS
FAILED TO COMPLY WITH ANY ENVIRONMENTAL LAW OR TO OBTAIN, MAINTAIN OR COMPLY
WITH ANY PERMIT, LICENSE OR OTHER APPROVAL REQUIRED UNDER ANY ENVIRONMENTAL LAW,
(II) HAS BECOME SUBJECT TO ANY ENVIRONMENTAL LIABILITY, (III) HAS RECEIVED
NOTICE OF ANY CLAIM WITH RESPECT TO ANY ENVIRONMENTAL LIABILITY OR (IV) KNOWS OF
ANY BASIS FOR ANY ENVIRONMENTAL LIABILITY.
33
(C)
SINCE THE DATE OF THIS AGREEMENT, THERE HAS
BEEN NO CHANGE IN THE STATUS OF THE DISCLOSED MATTERS THAT, INDIVIDUALLY OR IN
THE AGGREGATE, HAS RESULTED IN, OR MATERIALLY INCREASED THE LIKELIHOOD OF, A
MATERIAL ADVERSE EFFECT.
SECTION 4.07.
COMPLIANCE WITH LAWS AND AGREEMENTS.
THE BORROWER AND EACH RESTRICTED SUBSIDIARY IS IN COMPLIANCE WITH ALL LAWS,
REGULATIONS AND ORDERS OF ANY