IN THE
HYDROCARBONS ATTRIBUTABLE TO SUCH PROPERTIES AND INTERESTS AND THE PROCEEDS
THEREOF (SUBJECT TO LIENS PERMITTED UNDER SECTION 5.10), AND (III) COVERING SUCH
OTHER MATTERS AS THE ADMINISTRATIVE AGENT MAY REASONABLY REQUEST.
SECTION 5.18.
DEPOSIT OF PRODUCTION PROCEEDS. NOTWITHSTANDING THAT, BY
THE TERMS OF THE VARIOUS LOAN DOCUMENTS, THE GUARANTOR, THE BORROWER AND THEIR
RESTRICTED SUBSIDIARIES ARE AND WILL BE ASSIGNING TO THE ADMINISTRATIVE AGENT
AND THE LENDERS ALL OF THE "PRODUCTION PROCEEDS" (AS DEFINED THEREIN) ACCRUING
TO THE OIL AND GAS PROPERTY CONSTITUTING COLLATERAL AND COVERED THEREBY, SO LONG
AS NO EVENT OF DEFAULT HAS OCCURRED THE BORROWER AND EACH RESTRICTED SUBSIDIARY
MAY CONTINUE TO RECEIVE FROM THE PURCHASERS OF PRODUCTION ALL SUCH PRODUCTION
PROCEEDS, SUBJECT, HOWEVER, TO THE LIENS CREATED UNDER THE LOAN DOCUMENTS, WHICH
LIENS ARE HEREBY AFFIRMED AND RATIFIED AND PROVIDED THAT TO FURTHER SECURE THE
ADMINISTRATIVE AGENT'S AND LENDERS' LIENS UPON SUCH PRODUCTION PROCEEDS, THE
BORROWER SHALL, AND SHALL CAUSE EACH RESTRICTED SUBSIDIARY TO, MAINTAIN THEIR
OPERATING ACCOUNTS WITH THE ADMINISTRATIVE AGENT AND NOT TO REDIRECT THE PAYMENT
OF PRODUCTION PROCEEDS FROM SUCH OPERATING ACCOUNTS WITHOUT THE WRITTEN CONSENT
OF THE ADMINISTRATIVE AGENT. UPON THE OCCURRENCE OF A EVENT OF DEFAULT, THE
ADMINISTRATIVE AGENT AND THE LENDERS MAY EXERCISE ALL RIGHTS AND REMEDIES
GRANTED UNDER THE LOAN DOCUMENTS, INCLUDING THE RIGHT TO OBTAIN POSSESSION OF
ALL PRODUCTION PROCEEDS THEN HELD BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY
OR TO RECEIVE DIRECTLY FROM THE PURCHASERS OF PRODUCTION ALL PRODUCTION
PROCEEDS. IN NO CASE SHALL ANY FAILURE, WHETHER PURPOSED OR INADVERTENT, BY THE
ADMINISTRATIVE AGENT OR THE LENDERS TO COLLECT DIRECTLY ANY SUCH PRODUCTION
PROCEEDS CONSTITUTE IN ANY WAY A WAIVER, REMISSION OR RELEASE OF ANY OF THEIR
RIGHTS UNDER THE LOAN DOCUMENTS, NOR SHALL ANY RELEASE OF ANY PRODUCTION
PROCEEDS BY THE ADMINISTRATIVE AGENT OR THE LENDERS TO THE BORROWER OR ANY
RESTRICTED SUBSIDIARY CONSTITUTE A WAIVER, REMISSION, OR RELEASE OF ANY OTHER
PRODUCTION PROCEEDS OR OF ANY RIGHTS OF THE ADMINISTRATIVE AGENT OR THE LENDERS
TO COLLECT OTHER PRODUCTION PROCEEDS THEREAFTER.
SECTION 5.19.
SUBSIDIARY GUARANTY. THE BORROWER SHALL CAUSE EACH
RESTRICTED SUBSIDIARY, WHETHER NOW EXISTING OR CREATED, ACQUIRED OR COMING INTO
EXISTENCE AFTER THE DATE HEREOF, TO EXECUTE AND DELIVER TO THE ADMINISTRATIVE
AGENT AN ABSOLUTE AND UNCONDITIONAL GUARANTY OF THE TIMELY REPAYMENT OF THE
LOANS AND THE DUE AND PUNCTUAL PERFORMANCE OF THE OBLIGATIONS OF BORROWER
HEREUNDER, WHICH GUARANTY SHALL BE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT IN FORM AND SUBSTANCE. THE BORROWER SHALL CAUSE EACH RESTRICTED SUBSIDIARY
EXISTING ON THE DATE HEREOF TO DULY EXECUTE AND DELIVER SUCH A GUARANTY PRIOR TO
THE MAKING OF ANY LOAN HEREUNDER.
THE BORROWER WILL CAUSE EACH OF ITS
RESTRICTED SUBSIDIARIES TO DELIVER TO THE ADMINISTRATIVE AGENT, SIMULTANEOUSLY
WITH ITS DELIVERY OF SUCH A GUARANTY, WRITTEN EVIDENCE REASONABLY SATISFACTORY
TO THE ADMINISTRATIVE AGENT AND ITS COUNSEL THAT SUCH RESTRICTED SUBSIDIARY HAS
TAKEN ALL COMPANY ACTION NECESSARY TO DULY APPROVE AND AUTHORIZE ITS EXECUTION,
DELIVERY AND PERFORMANCE OF SUCH GUARANTY AND ANY OTHER DOCUMENTS THAT IT IS