AND ANY GOVERNMENTAL OR REGULATORY BODY OR ANY OTHER PERSON OR ENTITY
WHICH, IF ADVERSELY DETERMINED, MIGHT REASONABLY BE EXPECTED TO CAUSE A MATERIAL
ADVERSE EFFECT; OR (IV) ANY OTHER MATTER WHICH IN ITS REASONABLE OPINION COULD
BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT.
(K)
ERISA INFORMATION AND COMPLIANCE.
BORROWER WILL PROMPTLY FURNISH
TO THE BANKS IMMEDIATELY UPON BECOMING AWARE OF THE OCCURRENCE OF ANY
"REPORTABLE EVENT", AS SUCH TERM IS DEFINED IN SECTION 4043 OF ERISA, OR OF ANY
"PROHIBITED TRANSACTION", AS SUCH TERM IS DEFINED IN SECTION 4975 OF THE
INTERNAL REVENUE CODE OF 1954, AS AMENDED, IN CONNECTION WITH ANY PLAN OR ANY
TRUST CREATED THEREUNDER, A WRITTEN NOTICE SPECIFYING THE NATURE THEREOF, WHAT
ACTION BORROWER IS TAKING OR PROPOSES TO TAKE WITH RESPECT THERETO, AND, WHEN
KNOWN, ANY ACTION TAKEN BY THE INTERNAL REVENUE SERVICE WITH RESPECT THERETO.
(L)
ENVIRONMENTAL REPORTS AND NOTICES.
BORROWER AND GUARANTOR WILL
DELIVER TO THE BANKS (I) PROMPTLY UPON ITS BECOMING AVAILABLE, ONE COPY OF EACH
REPORT SENT BY BORROWER OR GUARANTOR TO ANY COURT, GOVERNMENTAL AGENCY OR
INSTRUMENTALITY PURSUANT TO ANY ENVIRONMENTAL LAW (EXCLUDING, HOWEVER, REPORTS
FILED WITH THE TEXAS RAILROAD COMMISSION OR ANY SIMILAR STATE OR FEDERAL AGENCY
IN THE ORDINARY COURSE OF CONDUCTING BORROWER'S BUSINESS WHERE THE REPORT DOES
NOT DISCLOSE, OR IS NOT IN RESPONSE TO ALLEGATIONS OF, VIOLATION BY BORROWER OF
AN ENVIRONMENTAL LAW), (II) NOTICE, IN WRITING, PROMPTLY UPON BORROWER'S OR
GUARANTOR'S LEARNING THAT EITHER OF THEM HAVE RECEIVED NOTICE OR OTHERWISE
LEARNED OF ANY CLAIM, DEMAND, ACTION, EVENT, CONDITION, REPORT OR INVESTIGATION
INDICATING ANY POTENTIAL OR ACTUAL LIABILITY ARISING IN CONNECTION WITH (X) THE
NON-COMPLIANCE WITH OR VIOLATION OF THE REQUIREMENTS OF ANY ENVIRONMENTAL LAW
WHICH REASONABLY COULD BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT; (Y) THE
RELEASE OR THREATENED RELEASE OF ANY TOXIC OR HAZARDOUS WASTE INTO THE
ENVIRONMENT WHICH REASONABLY COULD BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT
OR WHICH RELEASE BORROWER OR GUARANTOR WOULD HAVE A DUTY TO REPORT TO ANY COURT
OR GOVERNMENT AGENCY OR INSTRUMENTALITY, OR (Z) THE EXISTENCE OF ANY
ENVIRONMENTAL LIEN ON ANY PROPERTIES OR ASSETS OF BORROWER OR GUARANTOR, AND
BORROWER OR GUARANTOR SHALL IMMEDIATELY DELIVER A COPY OF ANY SUCH NOTICE TO
BANKS.
(M)
MAINTENANCE.
BORROWER AND GUARANTOR WILL, TO THE BEST OF THEIR
ABILITY, ACT PRUDENTLY AND IN ACCORDANCE WITH CUSTOMARY APPLICABLE INDUSTRY
STANDARDS IN MANAGING AND OPERATING THEIR ASSETS, PROPERTIES, BUSINESSES AND
INVESTMENTS, AND BORROWER WILL USE THEIR BEST EFFORTS TO KEEP IN GOOD WORKING
ORDER AND CONDITION, ORDINARY WEAR AND TEAR EXCEPTED, ALL OF BORROWER'S AND
GUARANTOR'S ASSETS AND PROPERTIES, INCLUDING, BUT NOT LIMITED TO, THE
COLLATERAL, EXCEPT WHERE THE FAILURE TO DO SO WOULD NOT REASONABLY BE EXPECTED
TO CAUSE A MATERIAL ADVERSE EFFECT.
(N)
TITLE MATTERS.
WITHIN ONE HUNDRED TWENTY (120) DAYS AFTER THE
DATE OF THIS AGREEMENT, BORROWER OR GUARANTOR WILL PROVIDE SUCH TITLE OPINIONS
ON THE OIL AND GAS PROPERTIES, IF ANY, BEING PLEDGED TO AGENT FOR THE RATABLE
BENEFIT OF THE BANKS PURSUANT TO