KNOWLEDGE OF PFC OR THE COMPANY, ORAL NOTICE OR CLAIM FROM ANY
GOVERNMENTAL ENTITY OR THIRD PARTY, WHICH REMAINS UNRESOLVED AS OF THE DATE OF
THIS AGREEMENT, THAT ANY OF THE WELLS ARE BEING OVERPRODUCED AND THERE ARE NO
WELL BORE IMBALANCES SUCH THAT ANY WELL IS SUBJECT OR LIABLE TO BEING SHUT-IN OR
TO ANY OVERPRODUCTION PENALTY;
(2)
NEITHER THE COMPANY NOR ANY SUBSIDIARY HAS RECEIVED WRITTEN, OR TO
THE KNOWLEDGE OF PFC OR THE COMPANY, ORAL NOTICE OR CLAIM THAT THERE HAS BEEN
ANY CHANGE PROPOSED IN THE PRODUCTION ALLOWABLES FOR ANY WELLS;
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(3)
NEITHER THE COMPANY NOW ANY SUBSIDIARY HAS INCURRED, MADE OR
ENTERED INTO ANY COMMITMENTS TO INCUR, CAPITAL EXPENDITURES OUTSIDE OF THE
CAPITAL EXPENDITURES BUDGET FOR 2006 PREVIOUSLY PROVIDED TO BUYER AND THE
PROJECT PLAN PROVIDED IN ACCORDANCE WITH SECTION 7.18;
(4)
SINCE THE VALUATION DATE, NONE OF THE COMPANY OR ANY SUBSIDIARY
HAS ABANDONED, OR IS IN THE PROCESS OF ABANDONING, ANY WELLS (OR REMOVED, OR IS
IN THE PROCESS OF REMOVING, ANY MATERIAL ITEMS OF EQUIPMENT, EXCEPT THOSE
REPLACED BY ITEMS OF SUBSTANTIALLY EQUIVALENT SUITABILITY AND VALUE) ON THE
PROPERTIES;
(5)
THERE ARE NO OUTSTANDING PROPOSALS (WHETHER MADE BY THE COMPANY,
ANY SUBSIDIARY, OR ANY OTHER PARTY) TO DRILL ADDITIONAL WELLS, OR TO DEEPEN,
PLUG BACK, OR REWORK EXISTING WELLS, OR TO CONDUCT OTHER OPERATIONS FOR WHICH
CONSENT IS REQUIRED UNDER THE APPLICABLE OPERATING AGREEMENT, OR TO CONDUCT ANY
OTHER OPERATIONS, OR TO ABANDON ANY WELLS, ON THE PROPERTIES WHICH, IF
AUTHORIZED, WOULD REQUIRE THE EXPENDITURE OF MORE THAN $2,000,000 NET TO THE
APPLICABLE COMPANY'S OR SUBSIDIARY'S WORKING INTEREST;
(6)
COMPANY SCHEDULE 4.17(A)(6) SETS FORTH, BY WELL, THE AMOUNT OF
MONEY HELD IN SUSPENSE BY COMPANY OR ANY SUBSIDIARY OUT OF THE COLLECTED
PROCEEDS FROM THE SALE OF HYDROCARBONS; AND
(7)
EXCEPT AS SET FORTH ON COMPANY SCHEDULE 4.17(A)(7), THERE ARE NO
WRITTEN, OR TO THE KNOWLEDGE OF PFC AND THE COMPANY, ORAL CLAIMS OUTSTANDING BY
OWNERS OF ROYALTY, OVERRIDING ROYALTY, COMPENSATORY ROYALTY OR OTHER PAYMENTS
DUE FROM OR IN RESPECT OF PRODUCTION FROM THE PROPERTIES THAT SUCH PAYMENTS HAVE
NOT BEEN PROPERLY AND CORRECTLY PAID OR PROVIDED FOR IN ALL MATERIAL RESPECTS.
(B)
COMPANY SCHEDULE 4.17(B) SETS FORTH ALL IMBALANCES AS OF THE
VALUATION DATE WITH RESPECT TO THE PROPERTIES AND/OR THE MIDSTREAM ASSETS.
EXCEPT AS SET FORTH ON COMPANY SCHEDULE 4.17(B), NONE OF THE COMPANY OR ANY
SUBSIDIARY HAS RECEIVED, OR IS OBLIGATED TO RECEIVE, PREPAYMENTS (INCLUDING
PAYMENTS FOR GAS NOT TAKEN PURSUANT TO "TAKE-OR-PAY" ARRANGEMENTS) FOR ANY OF
THE COMPANY'S OR ANY SUBSIDIARY'S SHARE OF THE HYDROCARBONS PRODUCED FROM THE
PROPERTIES, AS A RESULT OF WHICH THE OBLIGATION EXISTS TO DELIVER HYDROCARBONS
PRODUCED FROM THE PROPERTIES AFTER THE VALUATION DATE WITHOUT THEN OR THEREAFTER
RECEIVING PAYMENT THEREFOR.
(C)
EXCEPT AS SET FORTH ON COMPANY SCHEDULE 4.17(C), THERE EXIST NO
AGREEMENTS OR ARRANGEMENTS FOR THE SALE OF PRODUCTION FROM THE PROPERTIES
(INCLUDING CALLS ON, OR OTHER RIGHTS TO PURCHASE, PRODUCTION, WHETHER OR NOT THE
SAME ARE CURRENTLY BEING EXERCISED)