AND BONDING.
BUYER OR ITS
AFFILIATE WHICH WILL OPERATE THE OIL AND GAS PROPERTIES IS, OR WILL BE ON THE
CLOSING DATE, IN COMPLIANCE WITH THE BONDING AND LIABILITY INSURANCE
REQUIREMENTS OF ALL APPLICABLE STATE OR FEDERAL LAWS OR REGULATIONS THAT COULD
AFFECT ITS ABILITY OR AUTHORITY TO OPERATE THE OIL AND GAS PROPERTIES.
(E)
NON-SECURITY ACQUISITION.
BUYER INTENDS TO
ACQUIRE THE MEMBERSHIP INTERESTS FOR ITS OWN BENEFIT AND ACCOUNT AND IS NOT
ACQUIRING THE MEMBERSHIP INTERESTS WITH THE INTENT OF DISTRIBUTING SUCH
INTERESTS SUCH AS WOULD BE SUBJECT TO REGULATION BY FEDERAL OR STATE SECURITIES
LAWS, AND IF, IN THE FUTURE, IT SHOULD SELL, TRANSFER OR OTHERWISE DISPOSE OF
THE MEMBERSHIP INTERESTS, IT WILL DO SO IN COMPLIANCE WITH ANY APPLICABLE
FEDERAL AND STATE SECURITIES LAWS.
(F)
EVALUATION.
BY REASON OF BUYER'S KNOWLEDGE
AND EXPERIENCE IN THE EVALUATION, ACQUISITION AND OPERATION OF OIL AND GAS
PROPERTIES, BUYER HAS EVALUATED THE MERITS AND RISKS OF PURCHASING THE
MEMBERSHIP INTERESTS FROM SELLER AND HAS FORMED AN OPINION BASED SOLELY UPON
BUYER'S KNOWLEDGE AND EXPERIENCE AND NOT UPON ANY REPRESENTATIONS OR WARRANTIES
BY SELLER EXCEPT THOSE SET FORTH HEREIN.
(G)
FINANCING.
BUYER HAS SUFFICIENT CASH,
AVAILABLE LINES OF CREDIT OR OTHER SOURCES OF IMMEDIATELY AVAILABLE FUNDS TO
ENABLE IT TO PAY THE PURCHASE PRICE TO SELLER AT THE CLOSING.
(H)
BROKER'S FEES.
BUYER HAS INCURRED NO OBLIGATION
OR LIABILITY, CONTINGENT OR OTHERWISE, FOR BROKERS' OR FINDERS' FEES IN RESPECT
OF THE MATTERS PROVIDED FOR IN THIS AGREEMENT FOR WHICH SELLER SHALL HAVE ANY
RESPONSIBILITY.
31
9.
CERTAIN AGREEMENTS OF SELLER.
SELLER AND
THE COMPANY AGREE AND COVENANT THAT, UNLESS BUYER SHALL HAVE OTHERWISE AGREED IN
WRITING, THE FOLLOWING PROVISIONS SHALL APPLY:
9.1
MAINTENANCE OF OIL AND GAS PROPERTIES.
FROM
THE EFFECTIVE TIME UNTIL CLOSING, SELLER AND THE COMPANY AGREE THAT THEY AND
THEIR AFFILIATES SHALL:
(A)
ADMINISTER AND OPERATE THE OPERATED OIL AND GAS
PROPERTIES IN A GOOD AND WORKMANLIKE MANNER AND IN ACCORDANCE WITH THE
APPLICABLE OPERATING AGREEMENTS.
(B)
NOT INTRODUCE ANY NEW METHODS OF MANAGEMENT,
OPERATION OR ACCOUNTING WITH RESPECT TO ANY OR ALL OF THE OIL AND GAS
PROPERTIES.
(C)
USE COMMERCIALLY REASONABLE EFFORTS TO MAINTAIN
AND KEEP THE OIL AND GAS PROPERTIES IN FULL FORCE AND EFFECT; AND FULFILL ALL
CONTRACTUAL OR OTHER COVENANTS, OBLIGATIONS AND CONDITIONS IMPOSED UPON THE
COMPANY WITH RESPECT TO THE OIL AND GAS PROPERTIES, INCLUDING, BUT NOT LIMITED
TO, PAYMENT OF ROYALTIES, DELAY RENTALS, SHUT-IN GAS ROYALTIES AND ANY AND ALL
OTHER REQUIRED PAYMENTS.
(D)
EXCEPT TO THE EXTENT NECESSARY OR ADVISABLE TO
AVOID FORFEITURE OR PENALTIES, NOT ENTER INTO AGREEMENTS TO DRILL NEW WELLS OR
TO REWORK, PLUG BACK, DEEPEN, PLUG OR ABANDON ANY WELL, NOR COMMENCE ANY
DRILLING, REWORKING OR COMPLETING OR OTHER OPERATIONS ON THE LEASES WHICH
REQUIRES ESTIMATED EXPENDITURES EXCEEDING TEN THOUSAND DOLLARS ($10,000.00), NET
TO THE WORKING INTEREST OF THE COMPANY, FOR EACH OPERATION (EXCEPT FOR EMERGENCY
OPERATIONS AND OPERATIONS REQUIRED UNDER PRESENTLY EXISTING CONTRACTUAL
OBLIGATIONS) WITHOUT OBTAINING THE PRIOR WRITTEN CONSENT OF BUYER (WHICH CONSENT
SHALL