OR PREPAY THE OBLIGATIONS, AS AFORESAID.
(J)
NOTICE OF CERTAIN EVENTS.
BORROWER
SHALL GIVE ADMINISTRATIVE AGENT PROMPT NOTICE OF ANY ATTACHMENT, LIEN, JUDICIAL
PROCESS, ENCUMBRANCE, OR CLAIM AFFECTING OR INVOLVING THE COLLATERAL OTHER THAN
A PERMITTED LIEN.
(K)
INDEMNIFICATION.
BORROWER SHALL INDEMNIFY,
DEFEND AND SAVE ADMINISTRATIVE AGENT AND EACH LENDER HARMLESS FROM AND AGAINST
ANY AND ALL CLAIMS, LIABILITIES, LOSSES, COSTS AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES AND EXPENSES) OF ANY NATURE WHATSOEVER
WHICH MAY BE ASSERTED AGAINST OR INCURRED BY ADMINISTRATIVE AGENT OR ANY LENDER
ARISING OUT OF OR IN ANY MANNER OCCASIONED BY (I) THE OWNERSHIP, COLLECTION,
POSSESSION, USE OR OPERATION OF ANY COLLATERAL, (II) ENVIRONMENTAL CLAIMS OR
ENVIRONMENTAL LOSS ATTRIBUTABLE TO A CREDIT PARTY OR (III) ANY FAILURE BY
BORROWER TO PERFORM ANY OF ITS OBLIGATIONS HEREUNDER OR UNDER THE OTHER LOAN
DOCUMENTS; EXCLUDING, HOWEVER, FROM SAID INDEMNITY ANY SUCH CLAIMS, LIABILITIES,
ETC. ARISING DIRECTLY OUT OF THE WILLFUL WRONGFUL ACT OR GROSS NEGLIGENCE OF
ADMINISTRATIVE AGENT OR A LENDER.
THIS INDEMNITY SHALL SURVIVE THE EXPIRATION
OR TERMINATION OF THIS LOAN AGREEMENT AS TO ALL MATTERS ARISING OR ACCRUING
PRIOR TO SUCH EXPIRATION OR TERMINATION.
34
(L)
LETTER OF CREDIT MATTERS.
(I)
PROVIDED NO EVENT OF DEFAULT HAS
OCCURRED AND IS THEN CONTINUING, ONCE THE NET OLV OF THE OPERATING RIGS EQUALS
ONE HUNDRED PERCENT (100%) OF THE OUTSTANDING PRINCIPAL AMOUNT OF THE LOAN,
ADMINISTRATIVE AGENT WILL CONTEMPORANEOUSLY RELEASE THE LETTER OF CREDIT TO
BORROWER UPON RECEIPT OF THE CWEI GUARANTY AND A SECRETARY'S CERTIFICATE
CERTIFYING THE SIGNATURE AND INCUMBENCY OF THE PERSON SIGNING THE CWEI GUARANTY
AND THE AUTHORIZING RESOLUTIONS THEREFOR.
(II)
NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, IN THE LETTER OF CREDIT, OR IN ANY OTHER LOAN DOCUMENT,
ADMINISTRATIVE AGENT SHALL ONLY HAVE THE RIGHT (WHICH RIGHT MAY BE EXERCISED
WITHOUT NOTICE, OPPORTUNITY TO CURE OR OTHER RESTRAINT) TO DRAW ON THE LETTER OF
CREDIT (X) IF AN EVENT OF DEFAULT HAS OCCURRED AND IS CONTINUING TO THE EXTENT
NECESSARY TO PAY AMOUNTS IN RESPECT OF THE OBLIGATIONS THAT ARE THEN DUE AND
PAYABLE HEREUNDER, AND (Y) UPON THE OCCURRENCE OF A BANKRUPTCY EVENT OR AN LC
EVENT, IN WHICH CASE AMOUNTS SO DRAWN SHALL BE APPLIED TO PREPAY THE LOAN
PURSUANT TO SECTION 2.10(C).
SECTION 3.5
EVENTS OF DEFAULT.
THE
OCCURRENCE OF ANY OF THE FOLLOWING EVENTS SHALL CONSTITUTE AN "EVENT OF DEFAULT"
UNDER THIS LOAN AGREEMENT:
(A)
FAILURE TO PAY.
BORROWER SHALL FAIL TO PAY
WHEN DUE ANY PRINCIPAL, INTEREST, FEE OR OTHER AMOUNT UNDER ANY LOAN DOCUMENT
WHEN AND AS THE SAME SHALL BECOME DUE AND PAYABLE AND ANY SUCH FAILURE TO PAY
SHALL CONTINUE UNREMEDIED FOR FIVE (5) BUSINESS DAYS.
(B)
FAILURE TO PERFORM.
ANY CREDIT PARTY SHALL
DEFAULT IN THE PERFORMANCE OR OBSERVANCE OF ANY COVENANT OR AGREEMENT ON ITS
PART TO BE PERFORMED OR OBSERVED UNDER THIS LOAN AGREEMENT, THE NOTE OR ANY OF
THE OTHER LOAN DOCUMENTS (NOT CONSTITUTING AN EVENT OF DEFAULT UNDER ANY OTHER
CLAUSE OF THIS SECTION), AND SUCH DEFAULT SHALL