GUARANTOR, AS APPLICABLE, ENFORCEABLE IN
ACCORDANCE WITH ITS TERMS, SUBJECT TO APPLICABLE BANKRUPTCY, INSOLVENCY,
REORGANIZATION, MORATORIUM OR OTHER LAWS AFFECTING CREDITORS' RIGHTS GENERALLY
AND SUBJECT TO GENERAL PRINCIPLES OF EQUITY, REGARDLESS OF WHETHER CONSIDERED IN
A PROCEEDING IN EQUITY OR AT LAW.
SECTION 7.03.
APPROVALS; NO CONFLICTS.
THE
TRANSACTIONS (A) DO NOT REQUIRE ANY CONSENT OR APPROVAL OF, REGISTRATION OR
FILING WITH, OR ANY OTHER ACTION BY, ANY GOVERNMENTAL AUTHORITY OR ANY OTHER
THIRD PERSON (INCLUDING MEMBERS OR ANY CLASS OF MANAGERS, WHETHER INTERESTED OR
DISINTERESTED, OF THE BORROWER OR ANY OTHER PERSON), NOR IS ANY SUCH CONSENT,
APPROVAL, REGISTRATION, FILING OR OTHER ACTION NECESSARY FOR THE VALIDITY OR
ENFORCEABILITY OF ANY LOAN DOCUMENT OR THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED THEREBY, EXCEPT SUCH AS HAVE BEEN OBTAINED OR MADE AND ARE IN FULL
FORCE AND EFFECT OTHER THAN (I) THE RECORDING AND FILING OF THE SECURITY
INSTRUMENTS AS REQUIRED BY THIS AGREEMENT, (II) THOSE THIRD PARTY APPROVALS OR
CONSENTS WHICH, IF NOT MADE OR OBTAINED, WOULD NOT CAUSE A DEFAULT HEREUNDER,
COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT OR DO NOT
HAVE AN ADVERSE EFFECT ON THE ENFORCEABILITY OF THE LOAN DOCUMENTS, AND
(III) CONSENTS BY, REQUIRED NOTICES TO, OR OTHER ACTIONS BY STATE AND FEDERAL
GOVERNMENTAL ENTITIES IN CONNECTION WITH THE ASSIGNMENT OF STATE AND FEDERAL OIL
AND GAS LEASES OR OTHER INTERESTS THEREIN THAT ARE CUSTOMARILY OBTAINED
SUBSEQUENT TO SUCH ASSIGNMENTS, (B) WILL NOT VIOLATE ANY APPLICABLE LAW OR
ORGANIZATIONAL DOCUMENTS OF THE BORROWER OR ANY SUBSIDIARY OR ANY ORDER OF ANY
GOVERNMENTAL AUTHORITY, (C) WILL NOT VIOLATE OR RESULT IN A DEFAULT UNDER ANY
INDENTURE, AGREEMENT OR OTHER INSTRUMENT BINDING UPON THE BORROWER OR ANY
SUBSIDIARY OR ITS PROPERTIES, OR GIVE RISE TO A RIGHT THEREUNDER TO REQUIRE ANY
PAYMENT TO BE MADE BY THE BORROWER OR SUCH SUBSIDIARY AND (D) WILL NOT RESULT IN
THE CREATION OR IMPOSITION OF ANY LIEN ON ANY PROPERTY OF THE BORROWER OR ANY
SUBSIDIARY (OTHER THAN THE LIENS CREATED BY THE LOAN DOCUMENTS).
SECTION 7.04.
FINANCIAL CONDITION; NO MATERIAL
ADVERSE CHANGE.
(A)
THE BORROWER HAS HERETOFORE FURNISHED TO
THE LENDERS ITS CONSOLIDATED BALANCE SHEET AND STATEMENTS OF INCOME, MEMBERS'
EQUITY AND CASH FLOWS (A) AS OF AND FOR THE FISCAL YEAR ENDED DECEMBER 31, 2006,
REPORTED ON BY UHY LLP, INDEPENDENT PUBLIC ACCOUNTANT AND (B) AS OF AND FOR THE
FISCAL QUARTER AND THE PORTION OF THE FISCAL YEAR ENDED SEPTEMBER 30, 2007,
CERTIFIED BY ITS CHIEF FINANCIAL OFFICER.
SUCH FINANCIAL STATEMENTS PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL CONDITION AND RESULTS OF
OPERATIONS AND CASH FLOWS OF THE 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 ABSENCE OF FOOTNOTES IN THE CASE OF THE UNAUDITED
QUARTERLY FINANCIAL STATEMENTS.
SUCH BALANCE SHEETS AND THE NOTES THERETO
DISCLOSE ALL MATERIAL LIABILITIES, DIRECT OR CONTINGENT, OF THE BORROWER AND ITS
CONSOLIDATED SUBSIDIARIES AS OF THE DATES THEREOF.
(B)
SINCE SEPTEMBER