Common use of Sale of Production Clause in Contracts

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas Property is subject to any contractual or other arrangement (a) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 days, and in the case of gas, not in excess of 60 days) or (b) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to any “take or pay” or other similar arrangement (A) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to ------------------ any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., for wells in pay status, in the case of oil, not in excess of 30 60 days, and xxx in the case of gas, not in excess of 60 90 days, and for wells not in pay status, the time period provided by statute) or (bxx) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit A (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: where they relate), (i1) except for the contracts and Mortgaged Properties associated therewith as set forth on Schedule 2.1 (c)A, no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s length transactions made on the best terms available transactions, and except for contractual and other arrangements with Four Winds Marketing, LLC, will be with third parties not affiliated with Restricted PersonsMortgagor, and shall, with respect to all contracts and other arrangements be at the best price (and on the best terms) then available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Mortgaged Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit A as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as To the best of Mortgagor's knowledge, the gas imbalances set forth in Schedule 7.19 of the Disclosure ScheduleCredit Agreement reflects the gas balancing position of the Mortgaged Properties as of January 27, 2003. Except as otherwise disclosed to Agent in writing, as of December 31, 2001, there is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereofsuch date, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and the Disclosure Schedule accurately reflectstake which has resulted, for each well on such date, in Mortgagor being materially overproduced or unit materially underproduced with respect to such Mortgaged Property. Mortgagor will not after the date hereof become "overproduced" (as above defined) with respect to any well on the Mortgaged Properties (or on any unit in which the Mortgaged Properties participate), in an amount in excess of Mortgagor's share of gas produced from such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) well during the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such informationpreceding four calendar months. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Mortgaged Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Mortgaged Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s Mortgagor's knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Loan Party other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted PersonsLoan Parties. Each Restricted Person Loan Party is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person Loan Party is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no Restricted PersonLoan Party, nor, to the knowledge of nor any Restricted Person after due inquiry, any Restricted PersonLoan Party’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to any “take or pay” or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted PersonLoan Party, or, to the knowledge of or any Restricted Person after due inquiry, any Restricted PersonLoan Party’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1i) whether such Restricted Person Loan Party is overproduced or underproduced and (2ii) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonLoan Party’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Loan Party other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted PersonsLoan Parties. Each Restricted Person Loan Party is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person Loan Party is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure Schedule, no Restricted PersonLoan Party, nor, to the knowledge of nor any Restricted Person after due inquiry, any Restricted Person’s Loan Party's predecessors in title, has received prepayments (including payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted PersonLoan Party, or, to the knowledge of or any Restricted Person after due inquiry, any Restricted Person’s Loan Party's predecessors in title, has, prior to the date hereof, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1i) whether such Restricted Person Loan Party is overproduced or underproduced and (2ii) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s Loan Party's knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no No Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no No Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, and to the best knowledge of the Restricted Persons, on a net basis there are no Oil and Gas Property is subject to any “gas imbalances, take or pay” pay or other similar arrangement prepayments that would require the Restricted Persons to deliver, in the aggregate, one fourth of one percent (A0.25%) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties of their aggregate Proved Reserves at some future time without then or thereafter receiving full payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other propertiestherefor. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonBorrower’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit A (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: they relate), (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled on 120 days’ (or less) notice, other for a term longer than as consented to by the Administrative Agent, one year and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a Mortgagor and shall be at the best price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of best terms) then available (such contractprice shall, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedulecase of Production sales which are subject to price controls, no Restricted Personbe determined giving consideration to such fact). Neither Mortgagor, nor, to the knowledge best of any Restricted Person after due inquiryMortgagor's knowledge, any Restricted Person’s of its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in The amount by which the Disclosure Schedule, there is no Oil volume of gas taken by Mortgagor and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has, title prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from hereof exceeds the lands covered thereby (or pooled or unitized therewith) than amount that its ownership interest in such Oil and Gas Property the Mortgage Properties would entitle it to take; and take ("overproduced") is not greater than 250,000 MCF. Mortgagor will not, after the Disclosure Schedule accurately reflectsdate hereof, for each well or unit become "overproduced" (as above defined) with respect to any well on the Mortgaged Properties (or on any unit in which the Mortgaged Properties participate), in an amount in excess of Mortgagor's share of gas produced from such an imbalance is shown thereon to exist, well during the preceding four calendar months plus ten percent (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units10%) of such overproduction actual production from any such well. No Mortgaged Property is, or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedulewill become, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Mortgaged Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed.without

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no No Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil Mid-Con Energy Properties, LLC Credit Agreement and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no No Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, and to the best knowledge of the Restricted Persons, on a net basis there are no Oil and Gas Property is subject to any “gas imbalances, take or pay” pay or other similar arrangement prepayments that would require the Restricted Persons to deliver, in the aggregate, one fourth of one percent (A0.25%) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties of their aggregate Proved Reserves at some future time without then or thereafter receiving full payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other propertiestherefor. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonBorrower’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are listed on Production) entered into in the Disclosure Schedule ordinary course of business and consistent with Mortgagor's past practices (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: (i) they relate), no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person Mortgagor is presently receiving a price for all production Production from (or attributable to) each Oil and Gas Mortgaged Property covered by a any applicable production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person and, to the best of Mortgagor's knowledge, is not having deliveries of production Production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereofhereof as to which there are recoupment rights outstanding, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production Production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor therefore as a result of payments made, or other actions taken, with respect to other properties. Except as set forth for immaterial overproduction that occurs in the Disclosure Schedulecourse of routine operations where no party is affirmatively taking more than its share of gas, there is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, or (to the knowledge best of any Restricted Person after due inquiry, any Restricted Person’s Mortgagor's knowledge) its predecessors in title, has, prior to the date hereof, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and . Mortgagor will not (except for immaterial over-production that occurs in the Disclosure Schedule accurately reflects, for each well or unit course of routine operations where no party is affirmatively taking more than its share of gas) become "overproduced" (as above defined) with respect to any well on the Mortgaged Properties (or on any unit in which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such informationMortgaged Properties participate). Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production Production attributable to such Oil and Gas Mortgaged Property without payment (or without full payment) therefor therefore as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Mortgaged Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s Mortgagor's knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production Production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: Production), (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted PersonsMortgagor and shall be at the best price (and on the best terms) available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Property Production covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit A as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Property Production curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there There is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereof, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and take plus or minus five percent (5%) in the Disclosure Schedule accurately reflects, for each well or unit aggregate with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such informationall Mortgaged Properties. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Mortgaged Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Mortgaged Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s Mxxxxxxxx's knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., for xxxxx in pay status, in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days, and for xxxxx not in pay status, the time period provided by statute) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit A (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: where they relate), and except as otherwise disclosed to the Agent in writing, (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s length transactions made on the best terms available transactions, and except for contractual and other arrangements with Four Winds Marketing, LLC, will be with third parties not affiliated with Restricted PersonsMortgagor, and shall, with respect to all contracts and other arrangements be at the best price (and on the best terms) then available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Mortgaged Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit A as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “take or pay” or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as To the best of Mortgagor’s knowledge, the gas imbalances set forth in Schedule 7.19 of the Disclosure ScheduleCredit Agreement reflects the net gas balancing position of the Mortgaged Properties as of the Effective Date (as such term is defined in the Credit Agreement). Except as otherwise disclosed to Agent in writing, as of December 31, 2008, there is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereofsuch date, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and the Disclosure Schedule accurately reflectstake which has resulted, for each well on such date, in Mortgagor being materially overproduced or unit materially underproduced with respect to such Mortgaged Property. Mortgagor will not after the date hereof become “overproduced” (as above defined) with respect to any well on the Mortgaged Properties (or on any unit in which the Mortgaged Properties participate), in an amount in excess of Mortgagor’s Houston 3941837v.4 share of gas produced from such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) well during the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such informationpreceding four calendar months. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas the Mortgaged Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Mortgaged Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonMortgagor’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit A (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: where they relate), (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted PersonsMortgagor and shall be at the best price (and on the best terms) available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Mortgaged Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit A as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there There is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereof, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and . Mortgagor will not after the Disclosure Schedule accurately reflects, for each well or unit date hereof become "overproduced" (as above defined) with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) any well on the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment Mortgaged Properties (or without full payment) therefor as a result on any unit in which the Mortgaged Properties participate), in an amount in excess of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed.Mortgagor's

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit "A" (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: where they relate), (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted PersonsMortgagor and shall be at the best price (and on the best terms) available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Mortgaged Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit "A" as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there There is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereof, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and . Mortgagor will not after the Disclosure Schedule accurately reflects, for each well or unit date hereof become "overproduced" (as above defined) with respect to any well on the Mortgaged Properties (or on any unit in which the Mortgaged Properties participate), in an amount in excess of Mortgagor's share of gas produced from such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) well during the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such informationpreceding four calendar months. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Mortgaged Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Mortgaged Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s Mortgagor's knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby which permits payment for production is or can to be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice without a customary 33 CREDIT AGREEMENT breakage fee and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) from any Oil and Gas Property to which any Restricted Person is a party or, to Borrower’s knowledge otherwise, are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by that is subject to a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to any “take or pay” or other similar arrangement (A) which can be satisfied in whole or in part by the production or transportation Section 5.29 of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, or any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and Section 5.29 of the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1i) whether such Restricted Person is overproduced or underproduced and (2ii) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed. As used in this Section, “Oil and Gas Properties” means Oil and Gas Properties to which Proved Reserves of the Restricted Persons in Texas are properly attributed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is will become subject to any contractual or other arrangement (ai) whereby payment for production Production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for currently existing production sales contracts, processing agreements or transportation agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s 's length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a Mortgagor and shall be at the best price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of best terms) available (such contractprice shall, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedulecase of Production sales which are subject to price controls, no Restricted Person, nor, be determined giving consideration to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, such fact). Mortgagor has not received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor therefore as a result of payments made, or other actions taken, with respect to other properties. Except Mortgagor will not after the date hereof become "overproduced" (as set forth in the Disclosure Schedule, there is no Oil and Gas Property above defined) with respect to any well on the Mortgaged Properties (or on any unit in which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”Mortgaged Properties participate), or less (“underproduced”), in an amount in excess of Mortgagor's share of gas produced from such well during the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas preceding four calendar months. No Mortgaged Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is will become subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Mortgaged Property without full payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposedtherefore.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to ------------------ any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (i.e., for wells in pay status, in the case of oil, not in excess of 30 60 days, and xxx in the case of gas, not in excess of 60 90 days, and for wells not in pay status, the time period provided by statute) or (bxx) whereby payments are made to a Restricted Person Mortgagor other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, agreements or transportation agreements and (or other agreements relating to the marketing of production that are Production) listed on the Disclosure Schedule Exhibit A (in connection with the Oil and Gas Mortgaged Properties to which such contract or agreement relates: where they relate), (i) except as otherwise disclosed to Agent in writing, no Oil and Gas Mortgaged Property is or will become subject to any contractual or other arrangement for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) which (except for contracts with a term of 270 days or less) cannot be canceled cancelled on 120 days’ ' (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production Production (or otherwise related to the marketing of productionProduction) are shall be bona fide arm’s length transactions made on the best terms available transactions, and will be with third parties not affiliated with Restricted PersonsMortgagor, and shall, with respect to all contracts and other arrangements be at the best price (and on the best terms) then available (such price shall, in the case of Production sales which are subject to price controls, be determined giving consideration to such fact). Each Restricted Person Mortgagor is presently receiving a price for all production from (or attributable to) each Oil and Gas Mortgaged Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is Exhibit A as computed in accordance with the terms of such contract, and no Restricted Person is not having deliveries of production from such Oil and Gas Mortgaged Property curtailed substantially below such property’s 's delivery capacity. Except as set forth in the Disclosure ScheduleNeither Mortgagor, no Restricted Person, nor, to the knowledge nor any of any Restricted Person after due inquiry, any Restricted Person’s its predecessors in title, has received prepayments (including including, but not limited to, payments for gas not taken pursuant to “"take or pay” " or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas the Mortgaged Properties after the date hereof, and Mortgagor hereby covenants not to enter into any such advance or prepayment arrangements whereby it accepts consideration for oil, gas or other hydrocarbons not yet produced. Except as set forth in the Disclosure Schedule, no Oil and Gas No Mortgaged Property is or will become subject to any “"take or pay” " or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property the Mortgaged Properties may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as To the best of Mortgagor's knowledge, the gas imbalances set forth in Schedule 7.19 of the Disclosure ScheduleCredit Agreement reflects the gas balancing position of the Mortgaged Properties as of January 27, 2003. Except as otherwise disclosed to Agent in writing, as of December 31, 2002, there is no Oil and Gas Mortgaged Property with respect to which any Restricted PersonMortgagor, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s or its predecessors in title, has, prior to the date hereofsuch date, taken more (“"overproduced”"), or less (“"underproduced”"), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Mortgaged Property would entitle it to take; and the Disclosure Schedule accurately reflectstake which has resulted, for each well on such date, in Mortgagor being materially overproduced or unit materially underproduced with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (Mortgaged Property in cubic feet or British thermal units) violation of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion Section 9.18 of the production attributable Credit Agreement. Mortgagor will not after the date hereof become "overproduced" (as above defined) with respect to such Oil and Gas Property without payment any well on the Mortgaged Properties (or without full payment) therefor as a result on any unit in which the Mortgaged Properties participate), in violation of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed.Section 9.18

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no No Oil and Gas Property is subject to any contractual or other arrangement (ai) Mid-Con Energy Properties, LLC Compiled Credit Agreement 58 whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no No Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, and to the best knowledge of the Restricted Persons, on a net basis there are no Oil and Gas Property is subject to any “gas imbalances, take or pay” pay or other similar arrangement prepayments that would require the Restricted Persons to deliver, in the aggregate, one fourth of one percent (A0.25%) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties of their aggregate Proved Reserves at some future time without then or thereafter receiving full payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other propertiestherefor. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonBorrower’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 180 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Properties after the date hereof. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to any “take or pay” or other similar arrangement (Ai) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (Bii) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties without payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, or any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1i) whether such Restricted Person is overproduced or underproduced and (2ii) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to may take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other properties. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted Person’s knowledge, no facts exist which might cause the same to be imposed.

Sale of Production. Except as set forth in Section 7.21 of the Disclosure Schedule, no No Oil and Gas Property is subject to any contractual or other arrangement (ai) whereby payment for production is or can be deferred for a substantial period after the month in which such production is delivered (in the case of oil, not in excess of 30 60 days, and in the case of gas, not in excess of 60 90 days) or (bii) whereby payments are made to a Restricted Person other than by checks, drafts, wire transfer advises or other similar writings, instruments or communications for the immediate payment of money. Except for production sales contracts, processing agreements, transportation agreements and other agreements relating to the marketing of production that are listed on the Disclosure Schedule in connection with the Oil and Gas Properties to which such contract or agreement relates: (i) no Oil and Gas Property is subject to any contractual or other arrangement for the sale, processing or transportation of production (or otherwise related to the marketing of production) which cannot be canceled on 120 days’ (or less) notice, other than as consented to by the Administrative Agent, notice and (ii) all contractual or other arrangements for the sale, processing or transportation of production (or otherwise related to the marketing of production) are bona fide arm’s length transactions made on the best terms available with third parties not affiliated with Restricted Persons. Each Restricted Person is presently receiving a price for all production from (or attributable to) each Oil and Gas Property covered by a production sales contract or marketing contract listed on the Disclosure Schedule that is computed in accordance with the terms of such contract, and no Restricted Person is having deliveries of production from such Oil and Gas Property curtailed substantially below such property’s delivery capacity. Except as set forth in the Disclosure Schedule, no No Restricted Person, nor, to the knowledge of any Restricted Person after due inquiry, nor any Restricted Person’s predecessors in title, has received prepayments (including payments for gas not taken pursuant to “take or pay” or other similar arrangements) for any Hydrocarbons oil, gas or other hydrocarbons produced or to be produced from any Oil and Gas Mid-Con Energy Properties, LLC Compiled Credit Agreement Properties after the date hereof. Except as set forth in the Disclosure Schedule, and to the best knowledge of the Restricted Persons, on a net basis there are no Oil and Gas Property is subject to any “gas imbalances, take or pay” pay or other similar arrangement prepayments that would require the Restricted Persons to deliver, in the aggregate, one fourth of one percent (A0.25%) which can be satisfied in whole or in part by the production or transportation of gas from other properties or (B) as a result of which production from any Oil and Gas Property may be required to be delivered to one or more third parties of their aggregate Proved Reserves at some future time without then or thereafter receiving full payment (or without full payment) therefor as a result of payments made, or other actions taken, with respect to other properties. Except as set forth in the Disclosure Schedule, there is no Oil and Gas Property with respect to which any Restricted Person, or, to the knowledge of any Restricted Person after due inquiry, any Restricted Person’s predecessors in title, has, prior to the date hereof, taken more (“overproduced”), or less (“underproduced”), gas from the lands covered thereby (or pooled or unitized therewith) than its ownership interest in such Oil and Gas Property would entitle it to take; and the Disclosure Schedule accurately reflects, for each well or unit with respect to which such an imbalance is shown thereon to exist, (1) whether such Restricted Person is overproduced or underproduced and (2) the volumes (in cubic feet or British thermal units) of such overproduction or underproduction and the effective date of such information. Except as set forth in the Disclosure Schedule, no Oil and Gas Property is subject to a gas balancing arrangement under which one or more third parties has a right to take a portion of the production attributable to such Oil and Gas Property without payment (or without full payment) therefor as a result of production having been taken from, or as a result of other actions or inactions with respect to, other propertiestherefor. No Oil and Gas Property is subject at the present time to any regulatory refund obligation and, to the best of Restricted PersonBorrower’s knowledge, no facts exist which might cause the same to be imposed.