ANY INVESTMENT OR ANY OTHER INTEREST
IN, ANY OTHER PERSON, OR PURCHASE OR OTHERWISE ACQUIRE (IN ONE TRANSACTION OR A
SERIES OF TRANSACTIONS) ANY ASSETS OF ANY OTHER PERSON CONSTITUTING A BUSINESS
UNIT, EXCEPT:
(A)
PERMITTED INVESTMENTS;
(B)
INVESTMENTS BY THE BORROWER IN THE EQUITY
INTERESTS OF ANY RESTRICTED SUBSIDIARY;
(C)
INVESTMENTS BY THE BORROWER OR GUARANTOR
CONSISTING OF INTERCOMPANY INDEBTEDNESS PERMITTED UNDER SECTION 7.01(C)
(D)
GUARANTEES CONSTITUTING INDEBTEDNESS
PERMITTED BY SECTION 7.01;
(E)
INVESTMENTS BY THE BORROWER AND ITS
RESTRICTED SUBSIDIARIES THAT ARE (1) CUSTOMARY IN THE OIL AND GAS BUSINESS,
(2) MADE IN THE ORDINARY COURSE OF THE BORROWER'S OR SUCH RESTRICTED
SUBSIDIARY'S BUSINESS, AND (3) MADE IN THE FORM OF, OR PURSUANT TO, OIL, GAS AND
MINERAL LEASES, OPERATING AGREEMENTS, FARM-IN AGREEMENTS, FARM-OUT AGREEMENTS,
DEVELOPMENT AGREEMENTS, UNITIZATION AGREEMENTS, JOINT BIDDING AGREEMENTS,
SERVICES CONTRACTS AND OTHER SIMILAR AGREEMENTS THAT A REASONABLE AND PRUDENT
OIL AND GAS INDUSTRY OWNER OR OPERATOR WOULD FIND ACCEPTABLE (EXCLUDING,
HOWEVER, ANY JOINT VENTURE OR PARTNERSHIP WITH ANY PERSON THAT IS NOT A
RESTRICTED SUBSIDIARY);
(F)
INVESTMENTS CONSISTING OF SWAP AGREEMENTS
TO THE EXTENT PERMITTED UNDER SECTION 7.05; AND
(G)
OTHER INVESTMENTS BY THE BORROWER AND THE
RESTRICTED SUBSIDIARIES; PROVIDED THAT, ON THE DATE ANY SUCH OTHER INVESTMENT IS
MADE, THE AMOUNT OF SUCH INVESTMENT, TOGETHER WITH ALL OTHER INVESTMENTS MADE
PURSUANT TO THIS CLAUSE (G) OF SECTION 7.04 (IN EACH CASE DETERMINED BASED ON
THE COST OF SUCH INVESTMENT) SINCE THE EFFECTIVE DATE, DOES NOT EXCEED IN THE
AGGREGATE, $10,000,000.
47
SECTION 7.05.
SWAP AGREEMENTS.
THE BORROWER WILL
NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, ENTER INTO OR
MAINTAIN ANY SWAP AGREEMENT, EXCEPT THE EXISTING SWAP AGREEMENTS AND SWAP
AGREEMENTS ENTERED INTO IN THE ORDINARY COURSE OF BUSINESS WITH APPROVED
COUNTERPARTIES AND NOT FOR SPECULATIVE PURPOSES TO (A) HEDGE OR MITIGATE CRUDE
OIL AND NATURAL GAS PRICE RISKS TO WHICH THE BORROWER OR ANY RESTRICTED
SUBSIDIARY HAS ACTUAL EXPOSURE AND (B) EFFECTIVELY CAP, COLLAR OR EXCHANGE
INTEREST RATES (FROM FIXED TO FLOATING RATES, FROM ONE FLOATING RATE TO ANOTHER
FLOATING RATE OR OTHERWISE) WITH RESPECT TO ANY INTEREST-BEARING LIABILITY OR
INVESTMENT OF ANY CREDIT PARTY.
SECTION 7.06.
RESTRICTED PAYMENTS.
THE BORROWER
WILL NOT, NOR WILL IT PERMIT ANY OF ITS RESTRICTED SUBSIDIARIES TO, DECLARE OR
MAKE, OR AGREE TO PAY OR MAKE, DIRECTLY OR INDIRECTLY, ANY RESTRICTED PAYMENT,
EXCEPT THAT (A) THE BORROWER MAY DECLARE AND MAKE RESTRICTED PAYMENTS WITH
RESPECT TO ITS EQUITY INTERESTS PAYABLE SOLELY IN ITS EQUITY INTERESTS (OTHER
THAN DISQUALIFIED STOCK), (B) THE BORROWER MAY MAKE RESTRICTED PAYMENTS PURSUANT
TO AND IN ACCORDANCE WITH STOCK OPTION PLANS OR OTHER BENEFIT PLANS FOR
MANAGEMENT OR EMPLOYEES OF THE BORROWER AND ITS RESTRICTED SUBSIDIARIES IN AN
AGGREGATE AMOUNT NOT TO EXCEED $2,000,000 IN ANY FISCAL YEAR, (C) ANY RESTRICTED
SUBSIDIARY MAY MAKE RESTRICTED PAYMENTS TO THE BORROWER OR ANY GUARANTOR;
PROVIDED THAT NO DEFAULT HAS OCCURRED AND IS CONTINUING OR WOULD RESULT FROM THE
MAKING OF SUCH RESTRICTED PAYMENT, AND (D) RESTRICTED PAYMENTS BY THE BORROWER