MAY NOT BE
CANCELLED, REDUCED OR AFFECTED IN ANY MANNER FOR ANY REASON WITHOUT FIFTEEN (15)
DAYS PRIOR NOTICE TO ADMINISTRATIVE AGENT, AND (B) TO PROVIDE FOR SUCH OTHER
MATTERS AS THE LENDERS MAY REASONABLY REQUIRE.
SECTION 6.06.
BOOKS AND RECORDS; INSPECTION RIGHTS. THE BORROWER WILL,
AND WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, KEEP PROPER BOOKS OF RECORD AND
ACCOUNT IN WHICH FULL, TRUE AND CORRECT ENTRIES ARE MADE OF ALL DEALINGS AND
TRANSACTIONS IN RELATION TO ITS BUSINESS AND ACTIVITIES. THE BORROWER WILL, AND
WILL CAUSE EACH RESTRICTED SUBSIDIARY TO, PERMIT ANY REPRESENTATIVES DESIGNATED
BY THE ADMINISTRATIVE AGENT OR ANY LENDER, UPON REASONABLE PRIOR NOTICE, TO
VISIT AND INSPECT ITS PROPERTIES, TO EXAMINE AND MAKE EXTRACTS FROM ITS BOOKS
AND RECORDS, AND TO DISCUSS ITS AFFAIRS, FINANCES AND CONDITION WITH ITS
OFFICERS AND, PROVIDED AN OFFICER OF THE BORROWER HAS THE REASONABLE OPPORTUNITY
TO PARTICIPATE, ITS INDEPENDENT ACCOUNTANTS, ALL AT SUCH REASONABLE TIMES AND AS
OFTEN AS REASONABLY REQUESTED.
SECTION 6.07.
COMPLIANCE WITH LAWS. THE BORROWER WILL, AND WILL CAUSE
EACH RESTRICTED SUBSIDIARY TO, COMPLY WITH ALL LAWS, RULES, REGULATIONS AND
ORDERS OF ANY GOVERNMENTAL AUTHORITY APPLICABLE TO IT OR ITS PROPERTY, EXCEPT
WHERE THE FAILURE TO DO SO, INDIVIDUALLY OR IN THE AGGREGATE, COULD NOT
REASONABLY BE EXPECTED TO RESULT IN A MATERIAL ADVERSE EFFECT.
SECTION 6.08.
USE OF PROCEEDS AND LETTERS OF CREDIT. THE PROCEEDS OF
THE LOANS WILL BE USED ONLY TO (A) PAY THE FEES, EXPENSES AND TRANSACTION COSTS
OF THE TRANSACTIONS, (B) TO SATISFY REIMBURSEMENT OBLIGATIONS WITH RESPECT TO
LETTERS OF CREDIT AND (C) FINANCE THE WORKING CAPITAL NEEDS OF THE BORROWER,
INCLUDING CAPITAL EXPENDITURES, AND FOR GENERAL CORPORATE PURPOSES OF THE
BORROWER AND THE GUARANTORS, IN THE ORDINARY COURSE OF BUSINESS, INCLUDING THE
EXPLORATION, ACQUISITION AND DEVELOPMENT OF OIL AND GAS INTERESTS. NO PART OF
THE PROCEEDS OF ANY LOAN WILL BE USED, WHETHER DIRECTLY OR INDIRECTLY, TO
PURCHASE OR CARRY ANY MARGIN STOCK (AS DEFINED IN REGULATION U ISSUED BY THE
FEDERAL RESERVE BOARD). LETTERS OF CREDIT WILL BE ISSUED ONLY TO SUPPORT GENERAL
CORPORATE PURPOSES OF THE BORROWER AND THE RESTRICTED SUBSIDIARIES.
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SECTION 6.09.
MORTGAGES. EACH BORROWER WILL, AND WILL CAUSE EACH
GUARANTOR TO, EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT, FOR THE BENEFIT
OF THE SECURED PARTIES, MORTGAGES IN FORM AND SUBSTANCE ACCEPTABLE TO THE
ADMINISTRATIVE AGENT TOGETHER WITH SUCH OTHER ASSIGNMENTS, CONVEYANCES,
AMENDMENTS, AGREEMENTS AND OTHER WRITINGS, INCLUDING, WITHOUT LIMITATION, UCC-1
FINANCING STATEMENTS (EACH DULY AUTHORIZED AND EXECUTED, AS APPLICABLE) AS THE
ADMINISTRATIVE AGENT SHALL DEEM NECESSARY OR APPROPRIATE TO GRANT, EVIDENCE,
PERFECT AND MAINTAIN LIENS IN BORROWING BASE PROPERTIES HAVING AN ENGINEERED
VALUE EQUAL TO OR GREATER THAN 125% OF THE AGGREGATE COMMITMENT. ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY ACKNOWLEDGES THAT, AS OF THE EFFECTIVE DATE, THE
BORROWER IS IN COMPLIANCE WITH SECTION 6.09; PROVIDED THAT, ON THE EFFECTIVE
DATE AND THEREAFTER, THE BORROWER WILL, AND WILL CAUSE EACH GUARANTOR TO,
EXECUTE AND DELIVER TO THE ADMINISTRATIVE AGENT (I) AMENDMENTS OF, OR AMENDMENTS
AND RESTATEMENTS OF,