SUCH QUALIFICATION NECESSARY EXCEPT WHERE THE FAILURE TO SO
QUALIFY WOULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE EFFECT, AND
(II) MAINTAIN SUCH GOVERNMENTAL PERMITS, LICENSES AND AUTHORIZATIONS AS ARE
REQUIRED IN CONNECTION WITH ITS BUSINESS TO PREVENT THE OCCURRENCE OF A MATERIAL
ADVERSE EFFECT; PROVIDED THAT THE FOREGOING SHALL NOT PROHIBIT ANY ACTION NOT
PROHIBITED BY SECTION 3.3(F) OR PROHIBIT CWEI FROM PARTICIPATING IN ANY MERGER,
CONSOLIDATION, AMALGAMATION OR TRANSFER OF ASSETS.
BORROWER SHALL GIVE
ADMINISTRATIVE AGENT NOT LESS THAN THIRTY (30) DAYS PRIOR WRITTEN NOTICE OF ANY
CHANGE IN NAME (INCLUDING ANY FICTITIOUS NAME) OR CHIEF EXECUTIVE OFFICE, PLACE
OF BUSINESS, OR AS APPLICABLE, THE JURISDICTION OF ORGANIZATION OR PRINCIPAL
OFFICE.
(G)
MERGER, CHANGE IN BUSINESS; ETC.
EXCEPT
UPON THE PRIOR WRITTEN CONSENT OF ADMINISTRATIVE AGENT AND MAJORITY LENDERS,
WHICH CONSENT WILL NOT BE UNREASONABLY DELAYED, CONDITIONED OR WITHHELD,
BORROWER WILL NOT, AND WILL NOT PERMIT ANY SUBSIDIARY TO, (I) FORM ANY
SUBSIDIARY, UNLESS PROMPTLY AFTER THE FORMATION THEREOF, SUCH SUBSIDIARY
EXECUTES AND DELIVERS TO ADMINISTRATIVE AGENT A GUARANTY, (II) CONSUMMATE ANY
MERGER OR CONSOLIDATION WITH, OR PURCHASE OR OTHERWISE ACQUIRE ALL OR
SUBSTANTIALLY ALL OR A MATERIAL PART OF THE ASSETS OF, OR ANY MATERIAL STOCK,
PARTNERSHIP, JOINT VENTURE OR OTHER EQUITY INTEREST IN, ANY PERSON, EXCEPT FOR
ANY SUCH ACTION IN WHICH BORROWER SHALL BE THE SURVIVING PARTY, (III) OR SELL,
DISPOSE OF OR TRANSFER ANY COLLATERAL, (IV) SELL, DISPOSE OF OR TRANSFER ANY
ASSETS OTHER THAN COLLATERAL IN EXCESS OF $100,000 IN THE AGGREGATE IN ANY ONE
FISCAL YEAR, EXCEPT FOR SALES IN THE ORDINARY COURSE OF BUSINESS; (V) ENGAGE IN
ANY MATERIAL BUSINESS SUBSTANTIALLY DIFFERENT FROM ITS BUSINESS IN EFFECT AS OF
THE DATE OF APPLICATION BY BORROWER FOR CREDIT FROM ADMINISTRATIVE AGENT, OR
CEASE OPERATING ANY SUCH MATERIAL BUSINESS; OR (VI) CAUSE OR PERMIT ANY OTHER
PERSON TO ASSUME OR SUCCEED TO ANY MATERIAL BUSINESS OR OPERATIONS OF BORROWER
OR A SUBSIDIARY.
(H)
IDENTIFICATION OF COLLATERAL.
BORROWER HAS
INFORMED ADMINISTRATIVE AGENT THAT BORROWER HAS ASSIGNED TO EACH RIG
CONSTITUTING COLLATERAL A SPECIFIC NUMBER, AND AS
26
OF THE CLOSING DATE, SUCH NUMBERS ARE LISTED ON THE EXHIBIT A ATTACHED HERETO.
BORROWER SHALL NOT CHANGE THE NUMBER ASSIGNED TO EACH RIG CONSTITUTING
COLLATERAL WITHOUT PROVIDING ADMINISTRATIVE AGENT WITH AT LEAST TEN
(10) BUSINESS DAYS PRIOR WRITTEN NOTICE THEREOF.
(I)
ANNUAL RENTAL EXPENSE.
BORROWER SHALL
NOT PERMIT THE AGGREGATE AMOUNT OF ALL OPERATING RENTAL EXPENSES (EXCLUDING
EXPENSES PASSED-THROUGH TO OPERATORS UNDER DRILLING CONTRACTS) IN ANY FISCAL
YEAR TO EXCEED $500,000.
(J)
ENVIRONMENTAL COMPLIANCE.
EXCEPT, IN
EACH CASE, WHERE THE FAILURE TO SO COMPLY COULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT, BORROWER WILL CONDUCT ITS BUSINESS OPERATIONS,
HANDLE, STORE, TRANSMIT, DISCHARGE, EMIT, RELEASE AND DISPOSE OF HAZARDOUS
SUBSTANCES, AND SO LONG AS ANY OBLIGATIONS REMAINS OUTSTANDING, WILL USE THE
COLLATERAL SO AS TO COMPLY WITH ALL ENVIRONMENTAL LAWS IN ALL MATERIAL RESPECTS
AND WILL AVOID ENVIRONMENTAL CONTAMINATION; AND BORROWER, SO LONG AS ANY
OBLIGATIONS REMAINS OUTSTANDING, WILL CONTINUE TO