ON THE DATE SUCH ACTION TAKES PLACE.
THEREAFTER THE LENDERS SHALL HAVE THE RIGHT, BUT NOT THE OBLIGATION, TO PERFORM
AN UNSCHEDULED REDETERMINATION OF THE BORROWING BASE IF THEY DESIRE TO DO SO.
(J)
DIVIDENDS.
BORROWER WILL NOT DECLARE OR PAY ANY CASH DIVIDEND,
PURCHASE, REDEEM OR OTHERWISE ACQUIRE FOR VALUE ANY OF ITS STOCK NOW OR
HEREAFTER OUTSTANDING, RETURN ANY CAPITAL TO STOCK OWNERS, OR MAKE ANY
DISTRIBUTION OF ITS ASSETS TO ITS STOCKHOLDERS AS SUCH, EXCEPT (I) REPURCHASE OR
REDEMPTION OF ITS STOCK IN AN AMOUNT NOT TO EXCEED $3,000,000 IN THE AGGREGATE
(EXCLUDING COMMISSIONS) AND (II) CASH DIVIDENDS PAID ON THE STOCK OF BORROWER
WHICH SHALL NOT EXCEED, IN ANY FISCAL YEAR, AN AMOUNT EQUAL TO 50% OF BORROWER'S
NET INCOME FOR SUCH FISCAL YEAR DETERMINED IN ACCORDANCE WITH GAAP, PROVIDED
THAT IMMEDIATELY BEFORE AND AFTER GIVING EFFECT THERETO NO (X) DEFAULT OR EVENT
OF DEFAULT OR (Y) BORROWING BASE DEFICIENCY, SHALL EXIST.
(K)
INVESTMENTS.
NEITHER BORROWER NOR GUARANTOR SHALL MAKE ANY
INVESTMENTS IN ANY PERSON OR ENTITY, EXCEPT THAT THE FOREGOING RESTRICTION SHALL
NOT APPLY TO:
(I)
INVESTMENTS AND DIRECT OBLIGATIONS OF THE UNITED STATES OF
AMERICA OR ANY AGENCY THEREOF;
(II)
INVESTMENTS IN CERTIFICATES OF DEPOSIT ISSUED BY THE AGENT OR
CERTIFICATES OF DEPOSIT WITH MATURITIES OF LESS THAN ONE YEAR ISSUED BY OTHER
COMMERCIAL BANKS IN THE UNITED STATES HAVING CAPITAL AND SURPLUS IN EXCESS OF
$500,000,000 AND HAVE A RATING OF (A) 50 OR ABOVE BY SHESHUNOFF AND (B) "B" OR
ABOVE BY KEEF-BRUETT;
(III)
INVESTMENTS SUCH AS INSURED MONEY MARKET FUNDS, EURODOLLAR
INVESTMENT ACCOUNTS AND OTHER SIMILAR ACCOUNTS WITH THE AGENT OR SUCH
INVESTMENTS WITH MATURITIES OF LESS THAN NINETY (90) DAYS AT OTHER COMMERCIAL
BANKS IN THE UNITED STATES HAVING CAPITAL AND SURPLUS IN EXCESS OF $500,000,000
AND HAVING A RATING OF (A) 50 OR ABOVE BY SHESHUNOFF AND (B) "B" OR ABOVE BY
KEEF-BRUETT;
(IV)
INVESTMENTS IN THE SUBSIDIARIES (OTHER THAN GUARANTOR) EXISTING ON
THE EFFECTIVE DATE;
-37-
(V)
BORROWER'S INVESTMENTS IN GUARANTOR;
(VI)
THE REPURCHASE OF BORROWER'S STOCK AS PERMITTED BY SECTION 13(J)
HEREOF; AND
(VII)
OTHER INVESTMENTS NOT EXCEEDING $1,000,000 IN THE AGGREGATE AFTER
THE EFFECTIVE DATE.
(L)
CHANGE OF CONTROL.
BORROWER WILL NOT PERMIT CLAYTON W. WILLIAMS,
JR. AND HIS AFFILIATES, IN THE AGGREGATE, TO EVER OWN, OF RECORD OR
BENEFICIALLY, LESS THAN 20% OF THE OUTSTANDING VOTING SECURITIES OF CWE.
FAILURE TO COMPLY WITH THIS COVENANT SHALL (I) IMMEDIATELY RELIEVE THE BANKS OF
ANY FURTHER COMMITMENT TO ADVANCE FUNDS UNDER THE REVOLVING COMMITMENT, AND (II)
RESULT IN THE ENTIRE AMOUNT OF PRINCIPAL AND INTEREST DUE ON THE NOTES TO BE
ACCELERATED SO THAT THE ENTIRE BALANCE THEREOF SHALL BE DUE AND PAYABLE ON OR
BEFORE ONE HUNDRED TWENTY (120) DAYS AFTER THE DATE THE AGENT FIRST RECEIVES
NOTICE THAT SUCH A CHANGE OF CONTROL HAS OCCURRED.
14.
EVENTS OF DEFAULT.
ANY ONE OR MORE OF THE FOLLOWING EVENTS SHALL
BE CONSIDERED AN "EVENT OF DEFAULT" AS THAT TERM IS USED HEREIN:
(A)
BORROWER SHALL FAIL