OTHER THAN AGREEMENTS OR ARRANGEMENTS WHICH
ARE CANCELABLE ON 60 DAYS NOTICE OR LESS WITHOUT PENALTY OR DETRIMENT.
(D)
EXCEPT AS SET FORTH ON COMPANY SCHEDULE 4.17(D), ALL EXPENSES
(INCLUDING ALL BILLS FOR LABOR, MATERIALS AND SUPPLIES USED OR FURNISHED FOR USE
IN CONNECTION WITH THE PROPERTIES RELATING TO THE OWNERSHIP OR OPERATION OF THE
PROPERTIES, HAVE BEEN, AND ARE BEING, PAID (TIMELY, AND BEFORE THE SAME BECOME
DELINQUENT) BY THE COMPANY AND THE SUBSIDIARIES, EXCEPT
25
SUCH EXPENSES AS ARE DISPUTED IN GOOD FAITH BY THE COMPANY OR A SUBSIDIARY AND
FOR WHICH AN ADEQUATE ACCOUNTING RESERVE HAS BEEN ESTABLISHED BY THE COMPANY OR
A SUBSIDIARY.
(E)
EXCEPT AS SET FORTH ON COMPANY SCHEDULE 4.17(E) AND SUBJECT TO
NORMAL WEAR AND TEAR AND TO SCHEDULED OR NECESSARY REPAIRS IN THE ORDINARY
COURSE OF BUSINESS, ALL MATERIAL FIXTURES, FACILITIES AND EQUIPMENT ARE IN
REASONABLY GOOD AND SERVICEABLE CONDITION AND THERE ARE NO NECESSARY MATERIAL
REPAIRS, IMPROVEMENTS, RESTORATION OR OTHER SERVICE WORK NECESSARY TO MAKE SUCH
ASSETS SERVICEABLE. THE FIXTURE, FACILITIES AND EQUIPMENT ARE OWNED BY THE
COMPANY OR THE SUBSIDIARIES FREE AND CLEAR OF ANY LIEN OTHER THAN PERMITTED
ENCUMBRANCES.
(F)
COMPANY SCHEDULE 4.17(F), PART I, CONTAINS A COMPLETE AND CORRECT
LIST OF THE WELLS (AND THE ASSOCIATED API NUMBERS) AS OF THE DATE HEREOF, AND A
COMPLETE AND CORRECT LIST OF THE LEASES, WITH THE COMPANY'S AND ANY SUBSIDIARY'S
NET REVENUE INTEREST THEREIN. EXCEPT AS SET FORTH IN COMPANY SCHEDULE 4.17(F),
PART II, THERE ARE NO WELLS LOCATED ON THE LEASES THAT:
(1)
THE COMPANY OR ANY SUBSIDIARY HAS RECEIVED AN ORDER FROM ANY
GOVERNMENTAL ENTITY REQUIRING THAT SUCH WELL BE PLUGGED AND ABANDONED;
(2)
FORMERLY PRODUCED BUT THAT ARE CURRENTLY SHUT-IN OR TEMPORARILY
ABANDONED; AND
(3)
TO THE KNOWLEDGE OF PFC AND THE COMPANY, HAVE BEEN PLUGGED AND
ABANDONED BUT HAVE NOT BEEN PLUGGED IN ACCORDANCE WITH ALL APPLICABLE
REQUIREMENTS OF EACH GOVERNMENTAL ENTITY HAVING JURISDICTION OVER THE
PROPERTIES.
4.18
GAS REGULATORY MATTERS.
(A)
OTHER THAN FLOWLINES AND SIMILAR PIPELINES USED IN CONNECTION WITH
A SINGLE OIL AND GAS PROPERTY, ALL OF THE MIDSTREAM ASSETS ARE OWNED BY TGG,
TALCO AND GARRISON GATHERING (COLLECTIVELY, THE "MIDSTREAM COMPANIES") AND ARE
INTRASTATE, GATHERING AND TRANSMISSION PIPELINES USED TO GATHER AND TRANSPORT
NATURAL GAS PRODUCED FROM THE OIL AND GAS PROPERTIES AND THE OIL AND GAS
PROPERTIES OF THIRD PARTIES.
(B)
NONE OF TGG, TALCO OR GARRISON GATHERING IS A "NATURAL-GAS
COMPANY" UNDER THE NATURAL GAS ACT OF 1938 ("NGA") AND NONE OF TGG, TALCO OR
GARRISON GATHERING HAS OPERATED OR PROVIDED SERVICES ON ITS PIPELINE FACILITIES
IN A MANNER THAT WOULD SUBJECT IT TO THE JURISDICTION OF, OR REGULATION BY, THE
FEDERAL ENERGY REGULATORY COMMISSION UNDER THE NGA. NEITHER TALCO NOR GARRISON
GATHERING HAS PERFORMED SERVICES OR IS SUBJECT TO REGULATION UNDER THE NATURAL
GAS POLICY ACT OF 1978.
(C)
TGG IS A GAS UTILITY UNDER SECTION 121.001 AND SECTION 101.003(7)
OF THE TEXAS UTILITIES CODE.
(D)
NONE OF TGG, TALCO OR GARRISON GATHERING HAS OPERATED OR PROVIDED
SERVICES