THE ADMINISTRATIVE AGENT (I) PROMPTLY AFTER THE FILING
THEREOF WITH THE UNITED STATES SECRETARY OF LABOR, THE INTERNAL REVENUE SERVICE
OR THE PBGC, COPIES OF EACH ANNUAL AND OTHER REPORT WITH RESPECT TO EACH PLAN OR
ANY TRUST CREATED THEREUNDER, (II) IMMEDIATELY UPON BECOMING AWARE OF THE
OCCURRENCE OF ANY ERISA EVENT OR OF ANY "PROHIBITED TRANSACTION," AS DESCRIBED
IN SECTION 406 OF ERISA OR IN SECTION 4975 OF THE CODE, IN CONNECTION WITH ANY
PLAN OR ANY TRUST CREATED THEREUNDER, A WRITTEN NOTICE SIGNED BY THE PRESIDENT
OR THE PRINCIPAL FINANCIAL OFFICER, THE SUBSIDIARY OR THE ERISA AFFILIATE, AS
THE CASE MAY BE, SPECIFYING THE NATURE THEREOF, WHAT ACTION THE BORROWER, THE
SUBSIDIARY OR THE ERISA AFFILIATE IS TAKING OR PROPOSES TO TAKE WITH RESPECT
THERETO, AND, WHEN KNOWN, ANY ACTION TAKEN OR PROPOSED BY THE INTERNAL REVENUE
SERVICE, THE DEPARTMENT OF LABOR OR THE PBGC WITH RESPECT THERETO, AND
(III) IMMEDIATELY UPON RECEIPT THEREOF, COPIES OF ANY NOTICE OF THE PBGC'S
INTENTION TO TERMINATE OR TO HAVE A TRUSTEE APPOINTED TO ADMINISTER ANY PLAN.
WITH RESPECT TO EACH
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PLAN (OTHER THAN A MULTIEMPLOYER PLAN), THE BORROWER WILL, AND WILL CAUSE EACH
SUBSIDIARY AND ERISA AFFILIATE TO, (I) SATISFY IN FULL AND IN A TIMELY MANNER,
WITHOUT INCURRING ANY LATE PAYMENT OR UNDERPAYMENT CHARGE OR PENALTY AND WITHOUT
GIVING RISE TO ANY LIEN, ALL OF THE CONTRIBUTION AND FUNDING REQUIREMENTS OF
SECTION 412 OF THE CODE (DETERMINED WITHOUT REGARD TO SUBSECTIONS (D), (E),
(F) AND (K) THEREOF) AND OF SECTION 302 OF ERISA (DETERMINED WITHOUT REGARD TO
SECTIONS 303, 304 AND 306 OF ERISA), AND (II) PAY, OR CAUSE TO BE PAID, TO THE
PBGC IN A TIMELY MANNER, WITHOUT INCURRING ANY LATE PAYMENT OR UNDERPAYMENT
CHARGE OR PENALTY, ALL PREMIUMS REQUIRED PURSUANT TO SECTIONS 4006 AND 4007 OF
ERISA.
SECTION 8.16.
SWAP AGREEMENTS AND PUT OPTION
CONTRACTS.
THE BORROWER SHALL MAINTAIN IN EFFECT, AND SHALL CAUSE ITS
SUBSIDIARIES TO MAINTAIN IN EFFECT, A COMMODITY PRICE HEDGE POSITION
ESTABLISHING MINIMUM FIXED PRICES ACCEPTABLE TO THE ADMINISTRATIVE AGENT ON A
VOLUME OF HYDROCARBONS SET FORTH ON SCHEDULE 8.16 WHICH IS EQUAL TO
APPROXIMATELY 85% OF THE PROJECTED PRODUCTION FROM PROVED, DEVELOPED, PRODUCING
OIL AND GAS PROPERTIES OF THE BORROWER AND ITS SUBSIDIARIES FOR THE YEARS 2008,
2009, 2010 AND 2011, THROUGH DECEMBER 31, 2011, WITH ONE OR MORE APPROVED
COUNTERPARTIES.
THE BORROWER SHALL MAINTAIN IN EFFECT, AND CAUSE ITS
SUBSIDIARIES TO MAINTAIN IN EFFECT, A PRODUCTION PUT OPTION CONTRACT FOR THE
YEARS 2008 AND 2009 AT THE PRODUCTION VOLUMES OR MMBTU EQUIVALENTS AND THE
MINIMUM PRICE SET FORTH ON SCHEDULE 8.16, WITH ONE OR MORE APPROVED
COUNTERPARTIES.
THE MAJORITY LENDERS MAY DIRECT THE ADMINISTRATIVE AGENT TO
CAUSE AN INTERIM REDETERMINATION OF THE BORROWING BASE IN THE EVENT THE SWAP
AGREEMENTS ENTERED INTO PURSUANT TO THIS SECTION 8.16 ARE NOT HEDGED AT PRICES
SUFFICIENT TO SUPPORT, IN THE OPINION OF THE MAJORITY LENDERS, THE CURRENT
BORROWING BASE.
SECTION 8.17.
ADMINISTRATIVE AGENT AS PRINCIPAL
DEPOSITORY.
THE BORROWER SHALL MAINTAIN THE