Common use of Cash Collateral Accounts Clause in Contracts

Cash Collateral Accounts. Borrowers shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall within ten (10) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks by Borrowers has been paid in full and the Commitments have been terminated. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the Banks.

Cash Collateral Accounts. Borrowers shall establish and maintain ------------------------ with The Administrative Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall may from time to time specifyestablish one or more other Deposit Accounts and one or more Securities Accounts with such depositaries and Securities Intermediaries as it in its sole discretion shall determine for purposes of Sections 2.4(b), 2.9(f) or 7.3 of the Credit Agreement or otherwise. Such accounts Each such account shall be maintained with in the name of the Administrative Agent until all amounts due hereunder (but may also have words referring to the Borrower and the account's purpose). The Grantors agree that each such account shall be under the Notes have been paid in full. Borrowers shall within ten (10) days sole dominion and control of the Effective Date instruct Administrative Agent. The Administrative Agent shall be the Entitlement Holder with respect to each such Securities Account and cause all monetary proceeds of production from the Oil and Gas Properties only Person authorized to give Entitlement Orders with respect thereto. Without limiting the foregoing, funds on deposit in any Cash Collateral Account may be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without invested in Cash Equivalents at the prior written consent direction of the Administrative Agent until such time as all indebtedness due Banks by Borrowers has been paid in full and and, except during the Commitments have been terminated. If no Event continuance of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance Administrative Agent agrees with the Grantor to issue Entitlement Orders for such investments in Cash Equivalents as requested by the Borrower; provided, however, that the Administrative Agent shall not have any responsibility for, or bear any risk of loss of, any such investment or income thereon. Neither the Borrower nor any other Loan Party or Person claiming on behalf of or through the Borrower or any other Loan Party shall have any right to demand payment of any of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks funds held in and to the Lockbox Accounts and the Operating Accounts (collectively, the "any Cash Collateral Accounts") and all checks, drafts and other items ever received by Account at any Bank for deposit therein. If any time an Event of Default shall occur have occurred and be continuing, . The Administrative Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter on deposit in the a Cash Collateral Accounts for Account as provided in the ratable benefit Credit Agreement and, except during the continuance of an Event of Default, agrees to cause any funds remaining on deposit therein after all Obligations then due and payable have been satisfied (other than any funds deposited in accordance with clause (x)(B)(ii) or clause (y)(B)(ii) of Section 2.4(b) or Section 2.9(f) of the BanksCredit Agreement) at the written direction of the Borrower.

Cash Collateral Accounts. Borrowers Borrower shall establish establish, and shall ------------------------ cause each of its Subsidiaries to establish, and maintain ------------------------ with Agent one or more operating accounts for Borrower and each Borrower of its Subsidiaries (the "Operating Accounts") and lockbox accounts for Borrower and each Borrower of its Subsidiaries ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers Borrower and each such Subsidiary shall within ten thirty (1030) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks by Borrowers Borrower has been paid in full and the Commitments have Commitment has been terminated. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers Borrower hereby grant grants (and will cause the Subsidiaries to grant) a security interest to Banks in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' Borrower's obligations hereunder any and all funds legally and beneficially owned by the Borrowers Borrower and any such Subsidiary then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the Banks.

Cash Collateral Accounts. Borrowers shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall within ten (10) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks by Borrowers has been paid in full and the Commitments have been terminatedfull. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the Banks.

Cash Collateral Accounts. Borrowers Each deposit account maintained by each Borrower and each Subsidiary Guarantor shall establish be established and maintain ------------------------ maintained with Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall may from time to time specify. Such Operating Accounts shall be the sole operating accounts of Borrowers and the Subsidiary Guarantors; provided that Borrowers and the Subsidiary Guarantors may establish and maintain other operating accounts with Persons other than Agent so long as the aggregate balance of all such operating accounts not maintained with Agent does not exceed $50,000, for Borrowers and all Subsidiary Guarantors, taken as a whole. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall To the extent not already so instructed, each Borrower and each Subsidiary Guarantor shall, within ten sixty (1060) days of the Effective Date Date, instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox its Operating Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks Lenders by Borrowers has been paid in full and the Commitments have been terminated. If no Event of Default (Each Borrower hereby grants, and no event whichthe Company shall cause each Subsidiary Guarantor to grant, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks Lenders in and to the Lockbox Accounts and the their Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank Lender for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers any Borrower and any Subsidiary Guarantor then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the BanksLenders.

Cash Collateral Accounts. Borrowers Each deposit account maintained by Borrower and each Subsidiary Guarantor shall establish be established and maintain ------------------------ maintained with Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall may from time to time specify. Such Operating Accounts shall be the sole operating accounts of the Borrower and the Subsidiary Guarantors; provided that Borrower and the Subsidiary Guarantors may establish and maintain other operating accounts with Persons other than Agent so long as the aggregate balance of all such operating accounts not maintained with Agent does not exceed C$75,000 for Borrower and all Subsidiary Guarantors, taken as a whole. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall To the extent not already so instructed, Borrower, and each Subsidiary Guarantor shall, within ten sixty (1060) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox its Operating Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks Lenders by Borrowers Borrower has been paid in full and the Commitments have Commitment has been terminated. If no Event of Default (Borrower hereby grants, and no event whichBorrower shall cause each Subsidiary Guarantor to grant, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks Lenders in and to the Lockbox Accounts and the its Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank Lender for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' Borrower's obligations hereunder any and all funds legally and beneficially owned by the Borrowers Borrower and any Subsidiary Guarantor then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the BanksLenders.

Cash Collateral Accounts. Borrowers Borrower shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers To the extent not already so instructed, Borrower shall within ten (10) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent Required Lenders until such time as all indebtedness due Banks Lenders by Borrowers Borrower has been paid in full and the Commitments have Commitment has been terminated. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers Borrower hereby grant grants a security interest to Banks Agent and the Lenders in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' Borrower's obligations hereunder any and all funds legally and beneficially owned by the Borrowers Borrower then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the BanksLenders. One of the Operating Accounts required herein shall be a special purpose sinking fund account (the "Sinking Fund Account") for the accumulation of the interest payments to be made on the Senior Notes, and each month Borrower shall deposit into such Sinking Fund Account one-twelfth (1/12th) of the annual aggregate interest payments due on the Senior Notes beginning December 31, 1999. Borrower shall withdraw the funds deposited in such Operating Account only for the purpose of paying interest payments due on the Senior Notes. Borrower shall have deposited $3,500,000 in such Sinking Fund Account on or before the Effective Date.

Cash Collateral Accounts. Borrowers (a) At, or at any time before, the time Parent shall be required to make a deposit into the "Parent Cash Collateral Account" defined below, the Agent shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower at its offices at 1185 Avenue of the Americas, New York, New York in the name of the Parent but under the sole dominion and control of the Agent, a separate cash collateral account designated as "GP Strategies Corporation Cash Collateral Account" (collectively the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox AccountsParent Cash Collateral Account"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall . Parent may from time to time specifymake one or more deposits into the Parent Cash Collateral Account. Such accounts Parent hereby pledges to the Agent for its benefit, the benefit of the Issuing Bank and the pro rata benefit of the Lenders, a Lien on and security interest in the Parent Cash Collateral Account and all sums at any time and from time to time on deposit therein (the Parent Cash Collateral Account, together with all sums on deposit therein, being sometimes hereinafter collectively referred to as the "Parent Cash Collateral"), as first priority collateral security for the prompt payment in full when due, whether at stated maturity, by acceleration or otherwise of all the Parent Obligations. Parent agrees that at any time and from time to time at its expense, it will promptly execute and deliver to the Agent any further instruments and documents, and take any further actions, that may be necessary or that the Agent may reasonably request, in order to perfect and protect any first priority security interest granted or purported to be granted hereby or to enable the Agent to exercise and enforce its rights and remedies hereunder with respect to any Parent Cash Collateral. Parent agrees that it will not (i) sell or otherwise dispose of any of the Parent Cash Collateral, or (ii) create or permit to exist any Lien upon any of the Parent Cash Collateral, except for Permitted Liens. Parent hereby authorizes the Agent, promptly after each drawing under any Letter of Credit shall become due and payable and at any time any other Parent Obligations shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall within ten (10) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks by Borrowers has been paid in full and the Commitments have been terminated. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demandowing, to take and apply against the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter cash on deposit in the Parent Cash Collateral Accounts for Account towards the ratable benefit reimbursement of the BanksIssuing Bank for all sums paid in respect of such drawing, and all other such Parent Obligations which shall then be due and owing.

Cash Collateral Accounts. Borrowers Each deposit and Permitted Cover under Sections 2.12(a), (b) and (c) shall establish be held by the Administrative Agent (subject to Section 7.09) as collateral for the payment and maintain ------------------------ performance of the obligations of the Borrower under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. If required by the Administrative Agent, the Borrower shall enter into any pledge or security agreement and any UCC financing statement with respect to such cash collateral in favor of the Administrative Agent one as the Administrative Agent shall require. Such deposits shall be invested in Permitted Investments selected by the Administrative Agent in its sole discretion. All losses and expenses incurred as a result of such Permitted Investment activities shall be for the account of the Borrower. Interest or more operating profits, if any, on such investments shall accumulate in such accounts for each Borrower (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), account of the maintenance of each of which shall be subject to Borrower. Moneys in such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with applied by the Administrative Agent until all amounts due hereunder (i) to reimburse Issuing Lenders for LC Disbursements for which they have not been reimbursed; and under (ii) to the Notes have been paid in full. Borrowers shall within ten (10) days extent not so applied, may be held for the satisfaction of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent reimbursement obligations of the Agent until Borrower for the LC Exposure at such time as all indebtedness due Banks or any other Obligations or to cover any losses in respect of any Excess; provided that moneys in such accounts relating to the Borrower’s obligations under Section 2.12(c) shall be applied by Borrowers has the Administrative Agent to reimburse the Issuing Lenders on a ratable basis for the applicable Defaulting Lender’s Applicable Percentage of LC Disbursements for which the Issuing Lenders have not been paid in full and the Commitments have been terminatedreimbursed. If no Event the Borrower is required to provide an amount of Default (and no event which, with notice or lapse cash collateral hereunder as a result of time or both, would become the occurrence of an Event of Default) has occurred , and all Defaults are subsequently cured or waived and no Excess is continuingthen in existence, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and such amount (to the Lockbox Accounts extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Excess, and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Administrative Agent shall have subsequently determine that the immediate right, without prior notice amount of such Excess is equal to or demand, to take and apply against less than the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter amount on deposit in the Cash Collateral Accounts for the ratable benefit respect of the Banksexistence of such Excess, provided there is no Default then in existence, such excess amount of cash, if greater than $1,000,000 (to the extent not applied as aforesaid), shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Lender becoming a Defaulting Lender, and such Lender ceases to be a Defaulting Lender or the LC Exposure and Revolving Advances outstanding are subsequently reduced such that the amount of cash collateral provided therefor exceeds such Defaulting Lender’s Applicable Percentage of the sum of the LC Exposure and Revolving Advances outstanding, such cash collateral (or excess amount of cash collateral, if applicable), to the extent not previously applied to the Defaulting Lender’s obligations hereunder, shall be returned to the Borrower within three (3) Business Days after request therefor by the Borrower.

Cash Collateral Accounts. Borrowers Borrower and Guarantor shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower and Guarantor (the "Operating Accounts") and lockbox accounts for each Borrower ("Lockbox Accounts"), the maintenance of each of which shall be subject to such rules and regulations as the Agent shall from time to time specify. Such accounts shall be maintained with the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers To the extent not already so instructed, Borrower and Guarantor shall within ten (10) days of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent of the Agent until such time as all indebtedness due Banks by Borrowers Borrower has been paid in full and the Commitments have been terminated. If no Event of Default (and no event which, with notice or lapse of time or both, would become an Event of Default) has occurred and is continuing, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers Borrower and Guarantor hereby grant a security interest to Banks in and to the Lockbox Accounts and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Agent shall have the immediate right, without prior notice or demand, to take and apply against the Borrowers' Borrower's and Guarantor's obligations hereunder any and all funds legally and beneficially owned by the Borrowers Borrower or Guarantor then or thereafter on deposit in the Cash Collateral Accounts for the ratable benefit of the Banks.

Cash Collateral Accounts. Borrowers shall establish Each deposit and maintain ------------------------ with Agent one or more operating accounts for each Borrower Permitted Cover under Sections 2.12(a), (the "Operating Accounts"b) and lockbox accounts (c) shall be held by the Administrative Agent (subject to Section 7.09) as collateral for each the payment and performance of the obligations of the Borrower ("Lockbox Accounts")under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. If required by the Administrative Agent, the maintenance Borrower shall enter into any pledge or security agreement and any UCC financing statement with respect to such cash collateral in favor of each of which the Administrative Agent as the Administrative Agent shall require. Such deposits shall be subject to invested in Permitted Investments selected by the Administrative Agent in its sole discretion. All losses and expenses incurred as a result of such rules and regulations as activities shall be for the Agent account of the Borrower. Interest or profits, if any, on such investments shall from time to time specifyaccumulate in such accounts. Such Moneys in such accounts shall be maintained with applied by the Administrative Agent until all amounts due hereunder (i) to reimburse Issuing Lenders for LC Disbursements for which they have not been reimbursed; and under (ii) to the Notes have been paid in full. Borrowers shall within ten (10) days extent not so applied, may be held for the satisfaction of the Effective Date instruct and cause all monetary proceeds of production from the Oil and Gas Properties to be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without the prior written consent reimbursement obligations of the Agent until Borrower for the LC Exposure at such time as all indebtedness due Banks or any other Obligations or to cover any losses in respect of any Excess; provided that moneys in such accounts relating to the Borrower’s obligations under Section 2.12(c) shall be applied by Borrowers has the Administrative Agent to reimburse the Issuing Lenders on a ratable basis for the applicable Defaulting Lender’s Applicable Percentage of LC Disbursements for which the Issuing Lenders have not been paid in full and the Commitments have been terminatedreimbursed. If no Event the Borrower is required to provide an amount of Default (and no event which, with notice or lapse cash collateral hereunder as a result of time or both, would become the occurrence of an Event of Default) has occurred , and all Defaults are subsequently cured or waived and no Excess is continuingthen in existence, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and such amount (to the Lockbox Accounts extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Excess, and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Administrative Agent shall have subsequently determine that the immediate right, without prior notice amount of such Excess is equal to or demand, to take and apply against less than the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter amount on deposit in the Cash Collateral Accounts for the ratable benefit respect of the Banksexistence of such Excess, provided there is no Default then in existence, such excess amount of cash, if greater than $1,000,000 (to the extent not applied as aforesaid), shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Lender becoming a Defaulting Lender, and such Lender ceases to be a Defaulting Lender or the LC Exposure and Revolving Advances outstanding are subsequently reduced such that the amount of cash collateral provided therefor exceeds such Defaulting Lender’s Applicable Percentage of the sum of the LC Exposure and Revolving Advances outstanding, such cash collateral (or excess amount of cash collateral, if applicable), to the extent not previously applied to the Defaulting Lender’s obligations hereunder, shall be returned to the Borrower within three (3) Business Days after request therefor by the Borrower.

Cash Collateral Accounts. Borrowers shall establish and maintain ------------------------ with Agent one or more operating accounts for each Borrower (the "Operating Accounts"Each deposit under Section 2.12(a) and lockbox accounts 2.12(b) shall be held by the Administrative Agent (subject to Section 7.09) as collateral for each the payment and performance of the obligations of the Borrower ("Lockbox Accounts")under this Agreement. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. If required by the Administrative Agent, the maintenance Borrower shall enter into any pledge or security agreement and Uniform Commercial Code financing statement with respect to such cash collateral in favor of each of which the Administrative Agent as the Administrative Agent shall require. Such deposits shall be subject to invested in Permitted Investments selected by the Administrative Agent in its sole discretion. All losses and expenses incurred as a result of such rules and regulations as the Agent shall from time to time specify. Such accounts activities shall be maintained with for the Agent until all amounts due hereunder and under the Notes have been paid in full. Borrowers shall within ten (10) days account of the Effective Date instruct Borrower. Interest or profits, if any, on such investments shall accumulate in such accounts. Moneys in such accounts may be applied by the Administrative Agent (at its sole discretion) (i) to reimburse each Issuing Lender for LC Disbursements for which it has not been reimbursed; and cause all monetary proceeds of production from (ii) to the Oil and Gas Properties to extent not so applied, may be remitted to their respective Lockbox Accounts. Such proceeds of production shall not be redirected without held for the prior written consent satisfaction of the Agent until reimbursement obligations of the Borrower for the LC Exposure at such time as all indebtedness due Banks by Borrowers has been paid or other any Obligations or to cover any losses in full and the Commitments have been terminatedrespect of any Excess. If no Event the Borrower is required to provide an amount of Default (and no event which, with notice or lapse cash collateral hereunder as a result of time or both, would become the occurrence of an Event of Default) has occurred , and all Defaults are subsequently cured or waived and no Excess is continuingthen in existence, the full balance of the Lockbox Accounts each day will be deposited into the Operating Accounts. The Borrowers hereby grant a security interest to Banks in and such amount (to the Lockbox Accounts extent not applied as aforesaid) shall be returned to the Borrower within three Business Days after request therefor by the Borrower. If the Borrower is required to provide an amount of cash collateral hereunder as a result of any Excess, and the Operating Accounts (collectively, the "Cash Collateral Accounts") and all checks, drafts and other items ever received by any Bank for deposit therein. If any Event of Default shall occur and be continuing, Administrative Agent shall have subsequently determine that the immediate right, without prior notice amount of such Excess is equal to or demand, to take and apply against less than the Borrowers' obligations hereunder any and all funds legally and beneficially owned by the Borrowers then or thereafter amount on deposit in the Cash Collateral Accounts for the ratable benefit respect of the Banksexistence of such Excess, provided there is no Default then in existence, such excess amount of cash, if greater than $1,000,000 (to the extent not applied as aforesaid), may be returned to the Borrower within three Business Days after request therefor by the Borrower.