THE ASSIGNMENT OF THE
MEMBERSHIP INTERESTS TO BUYER.
UNTIL SUCH APPROVALS AND CONSENTS ARE OBTAINED,
SELLER SHALL CONTINUE TO HOLD LEGAL TITLE TO AND TO REMAIN IN PRIVITY UNDER SUCH
OIL AND GAS LEASES AND MATERIAL CONTRACTS AS NOMINEE FOR THE COMPANY.
IN
FURTHERANCE OF THE FOREGOING, AND IF REQUIRED PURSUANT TO SECTION 9.2(G), THE
PARTIES WILL EXECUTE AN OPERATIONS AND PROCEEDS AGREEMENT SUBSTANTIALLY IN THE
FORM ATTACHED HERETO AS EXHIBIT 7.2 (THE "OPERATIONS AND PROCEEDS AGREEMENT").
SELLER SHALL NOT BE OBLIGATED TO INCUR ANY EXPENSES IN SELLER'S CAPACITY AS
NOMINEE.
FROM AND AFTER THE CLOSING DATE, AND FOR PURPOSES OF ARTICLE XIII,
SELLER AND BUYER SHALL TREAT AND DEAL WITH SUCH INTERESTS AS IF FULL LEGAL AND
EQUITABLE TITLE TO SUCH INTERESTS HAD PASSED FROM SELLER TO THE COMPANY AT
CLOSING.
ARTICLE VIII.
COVENANTS OF SELLER AND BUYER
SECTION 8.1
CONDUCT OF BUSINESS PENDING CLOSING.
SUBJECT TO SECTION
8.2 AND THE CONSTRAINTS OF APPLICABLE OPERATING AGREEMENTS AND OTHER EXISTING
AGREEMENTS, FROM THE DATE HEREOF THROUGH THE CLOSING, EXCEPT AS DISCLOSED IN
SCHEDULE 8.1 OR AS OTHERWISE CONSENTED TO OR APPROVED BY BUYER (WHICH CONSENT OR
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED), SELLER COVENANTS AND
AGREES THAT:
(A)
CHANGES IN BUSINESS.
SELLER SHALL NOT:
(1)
MAKE ANY MATERIAL CHANGE IN THE CONDUCT OF ITS BUSINESS OR
OPERATIONS WITH RESPECT TO THE ASSETS;
(2)
EXCEPT IN THE ORDINARY COURSE OF BUSINESS AND CONSISTENT WITH PAST
PRACTICES, ENTER INTO, ASSIGN, TERMINATE OR AMEND, IN ANY MATERIAL RESPECT, ANY
CONTRACT OR AGREEMENT REQUIRED TO BE DISCLOSED PURSUANT TO SECTION 4.1(J);
(3)
SELL, LEASE OR OTHERWISE DISPOSE OF ANY OF THE ASSETS, EXCEPT (I)
OIL, GAS AND OTHER HYDROCARBONS SOLD OR OTHERWISE DISPOSED OF IN THE ORDINARY
COURSE OF BUSINESS, (II) INCIDENT TO THE EXPLORATION, OPERATION OR DEVELOPMENT
OF THE ASSETS IN ACCORDANCE WITH THIS SECTION 8.1 OR SECTION 8.2, (III) PERSONAL
PROPERTY OR EQUIPMENT WHICH IS REPLACED WITH PERSONAL PROPERTY OR EQUIPMENT OF
COMPARABLE OR BETTER VALUE AND UTILITY IN CONNECTION WITH THE MAINTENANCE,
REPAIR AND OPERATION OF THE ASSETS, AND (IV) ANY ITEM OF PERSONAL PROPERTY OR
EQUIPMENT HAVING A VALUE OF LESS THAN $5,000; OR
(4)
MATERIALLY INCREASE OR CHANGE THE WAGES, SALARIES AND BENEFITS
PAYABLE TO THE COMPANY EMPLOYEES.
(B)
LIENS.
SELLER SHALL NOT CREATE ANY EXPRESS LIEN OR SECURITY
INTEREST ON ANY ASSETS, EXCEPT TO THE EXTENT (I) REQUIRED OR PERMITTED INCIDENT
TO THE EXPLORATION, OPERATION OR DEVELOPMENT OF THE ASSETS PURSUANT TO THIS
SECTION 8.1 OR SECTION 8.2, (II) REQUIRED OR EVIDENCED BY
12
the Hydrocarbon Interests, joint operating agreements or unitization or pooling
agreements relating to the Subject Interests, or (iii) required or evidenced by
any contract or agreement required to be disclosed pursuant to Section 4.1(j).
(C)
OPERATION OF ASSETS.
SELLER SHALL:
(1)
CAUSE THE ASSETS TO BE MAINTAINED AND OPERATED (AND THE PRODUCTION
ATTRIBUTABLE THERETO MARKETED, SOLD, EXCHANGED, PROCESSED AND OTHERWISE HANDLED)
IN THE ORDINARY COURSE OF BUSINESS IN ACCORDANCE WITH SELLER'S PAST PRACTICES
(INCLUDING THE REPAIR OR REPLACEMENT OF DAMAGED, DESTROYED,