Common use of Interim Operations of Parent Clause in Contracts

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from that, after the date of this Agreement until hereof and prior to the Effective Time (except as otherwise expressly contemplated by this Agreement or the date, if any, on which this Stock Option Agreement is earlier terminated pursuant to Section 7.1, except or as (w) disclosed set forth in Section 5.2 6.1(b) of the Parent Disclosure Letter), (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by without the prior written consent of the Company, after the date of this Agreement and prior to the Effective Timewhich consent shall not be unreasonably withheld or delayed: (ai) its and its Subsidiaries' businesses shall be conducted in the business ordinary and usual course; (ii) to the extent consistent with (i) above, each of Parent it and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially their reasonable best efforts to preserve intact its business organization intact and maintain its existing relations and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officersreinsurers, distributors, creditors, lessors, employees and creditorsbusiness associates; (biii) Parent it shall notnot (v) issue, nor shall sell, pledge, dispose of or encumber any capital stock owned by it permit in any of its Significant Subsidiaries (other than direct as defined in Regulation S-X under the Securities Exchange Act); (w) amend its charter; (x) split, combine or indirect wholly owned Subsidiariesreclassify its outstanding shares of stock; (y) toauthorize, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with in respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify of any capital stock other than dividends from its direct or issueindirect wholly-owned Subsidiaries and other than regular quarterly cash dividends paid by Parent not in excess of $0.47 per share; or (z) repurchase, grantredeem or otherwise acquire, sell, transfer, pledge, dispose except in connection with any of or encumber any additional shares ofthe Parent Stock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, exercisable for any shares of capital its stock of any class if such purchase, redemption or of any other such securities or agreements of acquisition would preclude Parent, other than issuances of stock pursuant to 's accounting for the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except Merger as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Optionsa pooling-of-interests; (div) Parent shall notexcept for ordinary course investment activities, neither it nor shall it permit any of its Subsidiaries toshall make any acquisition of, change its methods or investment in, assets or stock of accounting any other Person or entity (other than Tax accounting, which shall be governed by clause (n) belowa Subsidiary) in effect as excess of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 2.0 billion in the aggregate; (fv) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, neither it nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree shall take any action that would cause any of its representations and warranties herein to sell, lease, exchange, transfer or otherwise dispose of, become untrue in any material Parent Assetsrespect; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time;and (gvi) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, neither it nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), will authorize or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement agreement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees that prior to the Effective Date, except (i) as to itself and its Subsidiaries that during the period from the date of expressly contemplated by this Agreement until the Effective Time or the dateRelated Agreements, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except (ii) as (w) disclosed set forth in Section 5.2 8.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable LawSchedule, or (ziii) as agreed to in writing by the Company, Company after the date of this Agreement and prior to the Effective TimeAgreement: (a) the business of Parent and its the Parent Subsidiaries shall be conducted only in the usual, regular and ordinary course consistent with past practice; and substantially in the same manner as previously conducted, and each of Parent and the Parent Subsidiaries shall use its all commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and intact, keep available the services of their its current officers and employees and preserve and maintain its existing relations with customersPersons having business dealings with it, suppliers, officers, employees to the end that the goodwill and creditorsongoing business of each of them shall be unimpaired at the Effective Time; (b) neither Parent nor any Parent Subsidiary shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or any other property or right, with respect to any shares of any class or series of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) neither Parent nor any Parent Subsidiary shall not (i) adjust, split, combine incur or reclassify modify any capital stock indebtedness or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries toliability, other than in the ordinary and usual course of business and consistent with past practice; or (ii) modify, amend or pursuant to agreements in effect on the date terminate any of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letterits material contracts or waive, acquire release or assign any Person material rights or other business organizationclaims, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons except in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (gd) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practiceneither Parent nor any Parent Subsidiary shall pay, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, payrepurchase, discharge or satisfy any claims (including claims of stockholders)its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment), discharge or satisfaction would require any payment except for other than the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business and consistent with past practice and not in violation practice, of this Agreementclaims, in each case to which Parent liabilities or any of its Subsidiaries is bound, and except for any payments, discharges obligations reflected or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregatereserved against in, or contemplated by, the consolidated financial statements (iior the notes thereto) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where Parent and the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregateParent Subsidiaries; (le) neither Parent nor any Parent Subsidiary shall take, or agree or commit to take, any action that would or is reasonably likely to result in any of the conditions to the Merger set forth in Section 9.2 not being satisfied, or would make any representation or warranty of Parent contained in this Agreement materially inaccurate in any respect at, or as of any time prior to, the Effective Time, or that would materially impair the ability of Parent, the Company, Merger Sub to consummate the Merger or materially delay consummation; (f) Parent shall not, nor shall it permit not issue any equity securities of its Subsidiaries to, Parent or rights to acquire equity securities of Parent other than (i) incur Parent Common Stock in an underwritten or assume any long-term debtinstitutional secondary offering, other than any advances, loans in grants or other obligations sales to employees under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than Parent's stock plans in the ordinary course of business consistent business, in connection with past practice an acquisition permitted under clause (g) below or any short-term Indebtedness under in connection with exercises of rights to acquire Parent Common Stock outstanding on the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations date hereof or granted in compliance with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), clause (ii) and of this Section 8.2(f) or (iiiii) rights to acquire Parent Common Stock in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of connection with stock option grants under Parent), except 's stock option plans in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j)business; (mg) Parent shall notnot acquire, nor shall it or permit any Subsidiary to acquire, any business or assets, whether by merger, consolidation, tender offer, exchange offer, stock purchase, purchase of its Subsidiaries toassets or otherwise, fail to maintain the aggregate assets or revenues of which would exceed ten percent (10%) of the assets or revenues, as the case may be, of Parent on a consolidated basis as of the end of the most recent fiscal quarter of Parent in full force and effect its existing insurance policies or insurance with respect to its the case of assets and businesses against such liabilitieson an annualized basis (including pro forma for the SoundView acquisition for periods prior to the closing thereof) since January 1, casualties, risks and contingencies as is customary 2000 in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any case of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liabilityrevenues; and (oh) neither Parent nor any Parent Subsidiary shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 , or to the contraryauthorize, Parent shall not intentionallyrecommend, nor shall it permit propose or announce an intention to do any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parentforegoing.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed set forth in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, including without limitation Section 5.3 of this Agreement or (y) required by applicable Law, or (z) agreed consented to in writing by the Company, Company after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in in, and Parent and its Subsidiaries shall not take any action except in, the ordinary course of business consistent with past practice; and provided, however, that neither the foregoing nor anything to the contrary in this Agreement (including without limitation Section 5.2(h) of this Agreement) shall be deemed to prohibit Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill or any of its Subsidiaries from engaging in any acquisition or divestiture transaction that does not constitute an Acquisition Proposal for Parent and keep available would not reasonably be expected to have a Material Adverse Effect on Parent or materially impair or delay the services consummation of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsthe transactions contemplated by this Agreement; (b) Parent shall not, nor shall it permit any Subsidiary of its Subsidiaries (other than direct or indirect Parent that is not wholly owned Subsidiaries) by Parent to, declare, set aside aside, make or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stockstock or other equity interests; (c) Parent shall not not, nor shall it permit any of its Subsidiaries to (i) adjust, split, combine combine, subdivide or reclassify any capital stock or other equity interests or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of ParentParent or any of its Subsidiaries, other than issuances (1) of stock shares of Parent Common Stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance (2) by a wholly owned Subsidiary of Parent of such Subsidiary’s capital stock options or other equity interests to directors the Parent or employees consistent with any other wholly owned Subsidiary of Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) ), other than purchases of shares of Parent Common Stock pursuant to any “cashless” exercise provisions of existing Parent OptionsParent’s previously announced stock repurchase program; (d) Parent shall not change its methods of accounting in effect at December 31, 2007, except changes in accordance with GAAP or applicable Law as concurred with by Parent’s independent auditors; (e) Parent shall not amend its certificate of incorporation or bylaws in a manner that adversely affects the terms of the Parent Common Stock; (f) Parent shall not, and shall use its reasonable best efforts to cause its affiliates and associates not to acquire ownership or become a “beneficial owner” for the purposes of Section 78.414 of the NRS of any shares of any voting securities of the Company, other than shares so owned as of the date of this Agreement or any shares beneficially owned as a result of Parent and Merger Sub entering into the Stockholder Agreements or acquired pursuant to this Agreement; (g) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting take any action that would reasonably be expected to (other than Tax accounting, which shall be governed by clause (ni) below) result in effect as any of the date of this Agreement, except in accordance with changes in GAAP as concurred conditions to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and Merger set forth in Section 4.12 Article VI not being satisfied, (ii) result in a Material Adverse Effect on Parent or (iii) materially impair or delay consummation of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice Merger or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereoftransactions contemplated hereby; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger Merger) or with respect any agreement relating to an inactive wholly-owned Subsidiary of Parent); providedAcquisition Proposal, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) heretoexcept for Acceptable Confidentiality Agreements; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make any change to any material Tax method of accounting, make or change any material Tax election, change authorize or undertake any material method indemnities for Taxes, extend any period for assessment of Tax accountingany Tax, grant file any material extension of time to assess any Tax request for ruling or settle any Tax claimdetermination, amend any material Return in any material respect (including by way of a claim for refund) or settle or compromise any material Tax liability, except where such action would not have a material effect on the Tax position of Parent and its Subsidiaries taken as a whole; and (oj) Parent shall not, nor shall it Parent permit any of its Subsidiaries to, publicly announce an intention, or enter into an agreement, contract, commitment or arrangement arrangement, to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. From the date hereof until the Effective Time, Parent covenants and agrees as to itself and its Subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, and except (i) to the extent that during the period from the date of Company shall otherwise agree in writing, (ii) as expressly contemplated in this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except (iii) as (w) disclosed set forth in Section 5.2 6.01 of the Parent Disclosure LetterSchedule, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after from the date of this Agreement and prior to hereof until the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use not adopt or propose any change to its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill articles of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsincorporation or bylaws; (b) Parent shall not, nor and shall it not permit any of its Subsidiaries to, adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of Parent or any of its Subsidiaries (other than direct a liquidation or indirect dissolution of a wholly owned SubsidiariesSubsidiary of Parent (or of Nuveen) or a merger or consolidation between wholly owned Subsidiaries of Parent (or of Nuveen) or of any wholly owned Subsidiary into Parent or of any wholly owned Subsidiary of Nuveen into Nuveen); (c) Parent shall not, and shall not permit any of its Subsidiaries to make any equity investment in or acquisition of any Person or any amount of assets material to Parent and its Subsidiaries on a consolidated basis, except for (i) capital expenditures permitted by Section 6.01(h), (ii) equity investments in or capital contributions to any wholly owned Subsidiary of Parent or (iii) investment activities in the ordinary course of business consistent with past practices; provided that the consent of the Company with respect to any action otherwise prohibited by this Section 6.01(c) shall not be unreasonably withheld or delayed; (d) Parent shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any assets material to Parent and its Subsidiaries on a consolidated basis, except (i) in the ordinary course of business consistent with past practices or (ii) pursuant to existing contracts or commitments; provided that the consent of the Company with respect to any action otherwise prohibited by this Section 6.01(d) shall not be unreasonably withheld or delayed; (e) Parent shall not, and shall not permit any of its Subsidiaries to, (i) split, combine, subdivide or reclassify any shares of capital stock of Parent or its Subsidiaries or (ii) declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or any other property or right, with respect to its capital stock; providedstock (other than, howeverwith respect to clause (ii), that nothing contained herein shall prohibit Parent (A) dividends from paying the required its direct or indirect wholly owned Subsidiaries or by Nuveen, (B) regular quarterly cash dividends paid by Parent on the Parent Common Stock not in excess of $0.29 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Parent Common Stock), with usual record and payment dates and in accordance with Parent’s past dividend policy, (C) one or more special dividends by Parent on the Parent Common Stock of cash or obligations to pay cash in an aggregate amount consistent with Section 7.13, (D) required dividends on the Parent Preferred StockStock or (E) required distributions on the Parent Trust Securities or on the Parent Equity Units); (cf) Parent shall not, and shall not permit any of its Subsidiaries to, (ix) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, pledge or dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of any other such securities Parent or agreements of Parent, its Subsidiaries (other than (i) (A) issuances of stock pursuant to the exercise of the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practiceConvertible Notes, or (iiB) except as (x) required issuances pursuant to the terms of the Parent Plans Equity Units or (C) issuances pursuant to stock options or stock-based awards granted pursuant to a Parent Stock Plan or an equity compensation plan of Nuveen and outstanding on the date hereof or granted pursuant to clause (ii) below, (ii) additional stock options or stock-based awards granted in the ordinary course consistent with past practices pursuant to any Parent Stock Plan as in effect on the date of this Agreementhereof (provided, however, that any such stock option shall be granted in accordance with Section 6.01(s)) or (y) permitted granted pursuant to the terms of the certificate any equity compensation plan of designation Nuveen, or (iii) issuances by any Subsidiary of Parent relating to Parent or to any wholly owned subsidiary of Parent) or (y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of Parent Preferred Stockor of any Subsidiary of Parent; (g) Parent shall not, and shall not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of its Parent’s capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions in the ordinary course of existing Parent Optionsbusiness on behalf of or as fiduciary for third parties); (dh) Parent shall not, nor and shall it not permit any of its Subsidiaries to, change make or commit to make any capital expenditures that are material to Parent and its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this AgreementSubsidiaries on a consolidated basis, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreementpractices; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness debt or issue any debt securities (other than issuances of commercial paper, or borrowings under the Nuveen Credit Facilities, in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (ipractices), ; (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person Person, except (A) in the ordinary course of business consistent with past practices or (B) for obligations of the wholly owned Subsidiaries of Parent; (iii) make any loans or advances to or debt investments in any other Person, other than a Subsidiary (x) loans or advances to or debt investments in Parent’s wholly owned subsidiaries or Nuveen, (y) investment activities in the ordinary course of Parent)business consistent with past practices or (z) agency loans in the ordinary course of business consistent with past practices; (iv) pledge or otherwise encumber shares of capital stock of Parent or its Subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Lien thereupon, except in the ordinary course of business consistent with past practice practices; (j) except as may be required by law or by existing agreements or arrangements, Parent shall not, and shall not permit any of its Subsidiaries to, increase in no event exceeding $2,000,000 individuallyany manner the compensation or benefits under any Parent Employee Plan or Parent International Plan of any director, employee or independent contractor or pay any benefit or compensation not required by any plan and arrangement as in effect as of the date hereof (including, the granting of stock options, stock appreciation rights or other stock-based award), other than (i) increases in salary or performance bonuses consistent with past practices in light of actual performance, (vii) make arrangements for newly hired individuals that are consistent with existing policies and practices or (iii) increases of not more than $250,000 in the aggregate for any loans, advances or capital contributions to, or investments in, any other Person individual; (other than to wholly owned Subsidiaries of Parent and k) except as otherwise authorized in Sections 5.2(e) expressly provided for herein, Parent shall not, and 5.2(j))shall not permit any of its Subsidiaries to, or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material contract, agreement, commitment or transactiontransactions, except other than in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f)practices; (l) Parent shall not, and 5.2(j)shall not permit any of its Subsidiaries to, enter into any agreement that limits or otherwise restricts in any material respect Parent or any of its Subsidiaries (or, following completion of the Merger, the Company or any of its Subsidiaries) or any successor thereto, from engaging or competing in any line of business or in any geographical area; (m) Parent shall not, nor and shall it not permit any of its Subsidiaries to, fail to maintain in full force and effect its existing pay, discharge, settle or satisfy (i) any non-insurance policies claim, liability or insurance with respect to its assets and businesses against such liabilitiesobligation (including extra-contractual obligations), casualties, risks and contingencies as is customary other than (A) in the domestic ordinary course of business for amounts not in excess of $100,000,000 in the aggregate (or, if in excess of $100,000,000 in the aggregate, with the consent of the Company, such consent not to be unreasonably withheld or applicable foreign oil and gas exploration industrydelayed) or (B) pursuant to existing contractual obligations or (ii) any insurance claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) for amounts in excess of $100,000,000 (or, if in excess of $100,000,000, with the consent of the Company, such consent not to be unreasonably withheld or delayed); (n) Parent shall not, nor and shall it not permit any of its Subsidiaries to, make make, change or change revoke any material Tax election, election or change any material its method of Tax accounting, grant any accounting if such change would have a material extension of time to assess any Tax adverse impact on Taxes or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; andchange its fiscal year; (o) Parent shall not, nor and shall it not permit any of its Subsidiaries to, enter into any new reinsurance transaction as ceding insurer (i) which does not contain market cancellation, termination and commutation provisions or (ii) which materially changes the existing reinsurance profile of Parent and its Subsidiaries on a consolidated basis outside of the ordinary course of business; (p) Parent shall not, and shall not permit any of its Subsidiaries to, alter or amend in any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or any material assumption underlying an agreementactuarial practice or policy, contractexcept as may be required by GAAP or applicable SAP or the local equivalent in the applicable jurisdictions; (q) Parent shall use its reasonable best efforts not to, commitment and shall use its reasonable best efforts not to permit any of its Subsidiaries to, take any action (including any action otherwise permitted by this Section 6.01) that would prevent or arrangement impede the Merger from qualifying as a reorganization under Section 368(a) of the Code; (r) Parent shall not, and shall not permit any of its Subsidiaries to, intentionally take any action (i) that would make any representation or warranty of Parent hereunder inaccurate at, or as of any time prior to the Effective Time, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect or (ii) that would, or would reasonably be expected to, result in any of the conditions to the Merger set forth in Article 8 not being satisfied; (s) Parent shall not, and shall not permit any of its Subsidiaries to, grant (i) any initial stock options with any option reload features and (ii) except as may be required by law or by existing agreements or arrangements or is consistent with past practices, any reloaded stock options with any further option reload features; and (t) Parent shall not, and shall not permit any of its Subsidiaries to, authorize or enter into an agreement to do any of the foregoing. Notwithstanding anything in ; provided, however, that Parent’s obligations pursuant to this Section 5.2 6.01 with respect to the contrary, Parent Nuveen shall not intentionally, nor shall it permit any of its Subsidiaries be limited to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent’s reasonable best efforts.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Merger I Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed set forth in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, including without limitation Section 5.3 of this Agreement, (y) required by applicable Law, or (z) agreed consented to in writing by the Company, Company after the date of this Agreement and prior to the Merger I Effective Time:Time (which consent shall not be unreasonably withheld, delayed or conditioned): (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course substantially consistent with past practice; and provided, however, that neither the foregoing nor anything to the contrary in this Agreement shall be deemed to prohibit Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill or any of its Subsidiaries from engaging in any acquisition or divestiture transaction that does not constitute an Acquisition Proposal for Parent and keep available would not reasonably be expected to have a Material Adverse Effect on Parent or materially impair or delay the services consummation of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsthe transactions contemplated by this Agreement; (b) Parent shall not, nor shall it permit any of its Subsidiaries to, take any action that would reasonably be expected to (i) result in any of the conditions to the Merger set forth in Article VI not being satisfied, (ii) result in a Material Adverse Effect on Parent or (iii) materially impair or delay consummation of the Mergers or the other than direct or indirect transaction contemplated hereby; (c) Parent shall not, nor shall it permit any Subsidiary of Parent that is not wholly owned Subsidiaries) by Parent to, declare, set aside or pay any extraordinary, special or other dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Optionsequity interests; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, not change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreementat December 31, 2005, except changes in accordance with changes in GAAP or applicable Law as concurred to with by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided in a manner that adversely affects the terms of the Parent Common Stock; (f) Parent shall be permitted not, and shall use its reasonable best efforts to amend cause its Certificate affiliates and associates not to acquire ownership or become an “owner” for the purposes of Incorporation to increase Section 203 of the number DGCL of its authorized any shares of any voting securities of the Company, other than shares so owned as of the date of this Agreement or shares owned as a result of Parent Common Stock and Merger Sub entering into the Voting Agreement or acquired pursuant to effectuate any other transactions contemplated by this Agreement; (ig) Parent shall not, nor shall it permit any of its Subsidiaries to, not adopt or enter into a plan of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (nh) Parent shall not, nor shall it permit any of its Subsidiaries to, make any change to any material Tax method of accounting, make or change any material Tax election, change authorize or undertake any material method indemnities for Taxes, extend any period the assessment of Tax accountingany Tax, grant file any material extension of time to assess any Tax request for ruling or settle any Tax claimdetermination, amend any material Return in any material respect (including by way of a claim for refund) or settle or compromise any material Tax liability, except where such action would not have a material effect on the Tax position of Parent and its Subsidiaries taken as a whole; and (oi) Parent shall not, nor shall it permit any of its Subsidiaries to, not enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees Employees and preserve and maintain existing relations with customers, suppliers, officers, employees Employees and creditors; (b) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents in any manner that adversely affects the terms of the Parent Common Stock, provided Parent shall be permitted to amend its certificate of incorporation to increase the number of its authorized shares of Parent Common Stock; (c) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (cd) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Optionsstock; (de) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at on the time date of this Agreement and disclosed in the Parent SEC Documents or set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause paragraph (gf), the term “affiliates” shall not include any employees Employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (hg) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parentand the Second Merger); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) to adopt or enter into any new line a plan of business except as may reasonably relate to Parent’s existing businessescomplete or partial liquidation, dissolution, restructuring or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments recapitalization (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after Merger and the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(jSecond Merger); (mh) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (ni) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (oj) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) the Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2005 other than direct capital expenditures and obligations or indirect liabilities incurred or committed to in an amount not greater in the aggregate than, and during the same time period set forth in, the Parent’s total capital budget for calendar year 2005 approved by the Board of Directors of Parent in February 2005, which has been furnished to the Company prior to the date of this Agreement, plus $5 million; (c) solely in the case of Parent and any non-wholly owned Subsidiaries) toSubsidiary of Parent, Parent shall not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (cd) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants and convertible notes outstanding on the date of this Agreement or issuance of stock options to directors or new employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options6.1(d); (de) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (ef) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, (i) acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or (ii) other than in the ordinary course of business consistent with past practice or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any assets, where provided however, to the purchase price for extent the total value of such Persons and assets acquired in one or more transactions exceeds acquisitions subsequent to the date of this Agreement during calendar year 2005 do not exceed $40,000,000 in the aggregate40 million, such restrictions shall not apply; (fg) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practiceLetter, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from 40 million subsequent to the date of this Agreement to the Effective Timeduring calendar year 2005; (gh) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage take any action that would, or could reasonably be expected to, result in any transaction with (except pursuant to agreements in effect at the time of this Agreement its representations and warranties set forth in this Agreement becoming untrue in a manner that would give rise to the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any failure of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (gclosing condition set forth in Section 6.2(a), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (hi) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided in a manner that adversely affects the terms of the Parent Common Stock, provided, Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Company Common Stock and to effectuate any other transactions contemplated by this AgreementStock; (ij) solely in the case of Parent, Parent shall not, nor shall it permit any of its Subsidiaries to, not adopt or enter into a plan of complete or partial liquidation, liquidation or dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course enter into any new line of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case as may reasonably relate to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liabilitybusinesses; and (ol) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionallynot, nor shall it permit any of its Subsidiaries to intentionallyto, enter into any transaction or take any other action (including any amendment of Parent’s certificate of incorporation) that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during (a) During the period from the date of this Agreement until to the earlier of the Effective Time or and the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.18.1, except (i) as may be required by Law, (wii) disclosed with the prior written consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned, (iii) as contemplated or permitted by this Agreement or (iv) as set forth in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this AgreementParent shall, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and shall cause its Subsidiaries shall be conducted only to, carry on its business in the ordinary course consistent with past practice; practice and the Parent shall use its commercially reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and organization, keep available the services of their its current officers and employees employees, maintain in effect all material licenses and permits required to carry on their respective businesses, maintain in effect any exemptive orders or exemptive relief which they have received from the SEC and which are currently in effect and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stocktheir material business relationships; provided, however, that nothing contained herein no action by Parent or any of its Subsidiaries with respect to matters addressed specifically by any provision of this Section 6.2 shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock;be deemed a breach of this sentence unless such action would constitute a breach of such specific provision. (cb) Parent shall not Without limiting the generality of the foregoing, during the period from the date of this Agreement to the earlier of the Effective Time and the date, if any, on which this Agreement is terminated pursuant to Section 8.1, except (i) adjustas may be required by Law, split(ii) with the prior written consent of the Company, combine which consent shall not be unreasonably withheld, delayed or reclassify conditioned, (iii) as required, contemplated or permitted by this Agreement or (iv) as set forth in the Parent Disclosure Letter, Parent shall not, and shall not permit any of its Subsidiaries to: (i) except (A) for shares of Parent’s capital stock to be issued or delivered pursuant to options outstanding on the date hereof, pursuant to the Parent Benefit Plans, (B) as provided for in Parent’s dividend reinvestment plan and (C) issuances of Parent Common Shares at a price per share at or above the Parent’s then current Net Asset Value per Parent Common Share in one or more underwritten offerings for cash, issue, grantdeliver, sell, transfer, pledge, dispose of or encumber any additional shares of, pledge or securities convertible into or exchangeable forotherwise encumber, or optionsauthorize or propose the issuance, warrantssale, calls, commitments disposition or rights pledge or other encumbrance of any kind to acquire, (i) any shares of capital stock of any class or any other ownership interest of Parent or any of its Subsidiaries, or any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for any shares of capital stock or any other ownership interest of Parent or any of its Subsidiaries, or any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of capital stock or any other such ownership interest of Parent or any of its Subsidiaries or any securities or agreements rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of Parent, capital stock or any other than issuances ownership interest of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date or any of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practiceits Subsidiaries, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities of Parent or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries toin respect of, change its methods of accounting (other than Tax accountingin lieu of, which shall be governed by clause (n) below) or in effect as of substitution for, capital stock outstanding on the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditorshereof; (eii) split, combine, subdivide or reclassify any Parent shall notCommon Shares or declare, nor shall it permit set aside for payment or pay any dividend (whether in cash, stock or property, or any combination thereof) in respect of its Subsidiaries toany Parent Common Shares or otherwise make any payments to stockholders in their capacity as such, other than dividends by a wholly-owned Subsidiary of Parent or regular quarterly dividends in the ordinary course of business consistent with past practice, or pursuant and special dividends in such amounts as determined by the Parent’s board of directors in its sole discretion (but not to agreements exceed Parent’s undistributed net investment income at the time of such dividend), in effect each case, on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure LetterCommon Shares; (iii) acquire or agree to acquire by merging or consolidating with, acquire any Person or other business organization, division or business by merger, consolidation, purchase of purchasing an equity interest in or assetsassets or properties of, or by any other manner, any business or acquire any assetscorporation, where partnership, association or other business organization or division thereof, if such transaction would reasonably be expected to prevent or materially delay the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in consummation of the aggregateMerger; (fiv) other than the sale enter into any new line of business; (v) commence or consumption of inventory and Hydrocarbons settle any material claim, suit, action or proceeding; (vi) take any action that would, or would reasonably be expected to, (i) result in the ordinary course of business consistent with past practice or the sale failure of any assets pursuant to agreements in effect on the date of this Agreement and condition set forth in Section 4.12 Article VII or (ii) prevent, materially delay or materially impede the consummation of the Parent Disclosure Letter or Merger and/or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (ivii) directly or indirectly take any action, or knowingly fail to take any action, which action or failure to act is reasonably likely to cause Parent shall not, nor shall it permit any of its Subsidiaries to, adopt to fail to qualify or enter into not be subject to tax as a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) heretoRIC; (jviii) Parent shall not, nor shall it permit make any material change in any of its Subsidiaries tothe tax or financial accounting principles, practices or methods used by the Parent unless required by GAAP or applicable law; (iix) except as contemplated by this Agreement, amend the charter or bylaws or similar organizational documents of the Parent or Merger Subs; (x) take any action that would reasonably be expected to delay materially or adversely affect the ability of any of the parties hereto to obtain any consent, authorization, order or approval of any Governmental Entity or the expiration of any waiting period under applicable antitrust laws required to consummate the transactions contemplated by this Agreement; or (xi) enter into any new line of business except as may reasonably relate to Parent’s existing businessescontract, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Merger I Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed consented to in writing by the Company, Company after the date of this Agreement and prior to the Merger I Effective Time:Time (which consent shall not be unreasonably withheld, delayed or conditioned): (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course substantially consistent with past practicepractices; and provided, however, that the foregoing shall not be deemed (i) to prohibit Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill or any of its Subsidiaries and keep available from engaging in any acquisition or divestiture transaction that would not reasonably be expected to materially impair, delay or prevent the services consummation of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsthe transactions contemplated by this Agreement or (ii) to prohibit Parent from taking any action in response to an unsolicited proposal to acquire directly or indirectly all or any substantial portion of the assets or equity of Parent or any of its Subsidiaries; (b) Parent shall not, nor shall it permit any Subsidiary of its Subsidiaries (other than direct or indirect Parent that is not wholly owned Subsidiaries) by Parent to, declare, set aside or pay any extraordinary, special or other dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stockstock or other equity interests; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose transfer or distribute to any employee of Parent or encumber any additional shares of, or securities convertible into or exchangeable for, or of its Subsidiaries any options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of capital stock of any class or of any other such securities or agreements of ParentParent Ordinary Shares, other than issuances of stock pursuant to in the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business substantially consistent with past practicepractices; (d) Parent will not, or (ii) except as (x) required pursuant to the terms and will not permit any of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stockits Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of its Parent’s capital stock, except for repurchases, redemptions or acquisitions (i) required by the terms of Parent’s capital stock or any other securities outstanding on the date of this Agreement, (ii) contemplated by any Parent Plan existing on the date of this Agreement or agreements (iii) pursuant to arrangements described in Section 5.2 of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent OptionsDisclosure Letter; (de) Parent shall not, nor shall it permit any of its Subsidiaries to, not change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreementat December 31, 2005, except in accordance with changes in GAAP IFRS or applicable Law as concurred to by Parent’s independent auditors; (ef) Parent shall not, nor shall it permit any not amend its articles of its Subsidiaries to, other than association or by-laws in a manner that adversely affects the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 terms of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective TimeOrdinary Shares; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), not adopt or enter into any agreement, arrangement, a plan of complete or understanding with, directly partial liquidation or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereofdissolution; (h) solely in the case of Parent, Parent shall not amend its certificate take any action that would reasonably be expected to result in (i) any of incorporation the conditions to the Mergers set forth in Article VI not being satisfied or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement(ii) a Material Adverse Effect on Parent; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or make any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit material change to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date Tax method of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries toaccounting, make or change any material Tax election, change amend any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability, except where such action would not have a material effect on the Tax position of Parent and its Subsidiaries taken as a whole; and (oj) Parent shall not, nor shall it permit any of its Subsidiaries to, not enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after Between the date of this Agreement and prior to the Effective Time: (a) the business , Parent shall, and shall cause each of Parent and its Subsidiaries to (unless the Company shall be conducted only otherwise approve in writing or except as otherwise expressly contemplated by this Agreement or disclosed in the Parent Disclosure Letter): (i) conduct its business in all material respects in the ordinary course and, to the extent consistent with past practice; and the Parent shall therewith, use its commercially reasonable best efforts to (x) preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and organization, (y) keep available the services of their current its officers and employees and preserve and (z) maintain its existing relations and goodwill with customers, suppliers, officersregulators, employees distributors, creditors, lessors, and creditors; (b) others having business dealings with it; provided that the failure of any officer or employee of Parent shall not, nor shall it permit any of or its Subsidiaries to remain an officer or employee of Parent or its Subsidiaries shall not constitute a breach of this covenant. (ii) not (A) amend the Restated Certificate of Incorporation or By-laws of Parent; (B) split, combine, subdivide or reclassify its outstanding shares of capital stock or other than direct or indirect wholly owned Subsidiariesequity securities; (C) to, declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or property in respect of any other property or right, with respect to of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any shares of capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares ofother equity securities, or securities convertible into into, exercisable for or exchangeable for, any of its shares of capital stock or optionsother equity securities, warrantsother than (x) quarterly cash dividends of $.20 per share in respect of the outstanding shares of Parent Common Stock, callsdeclared, commitments set aside and paid at such times during the quarter as is consistent with past practice, and (y) dividends and distributions by wholly owned Subsidiaries of Parent; (D) repurchase, redeem or rights otherwise acquire or permit any of any kind its Subsidiaries to purchase, redeem or otherwise acquire, any shares of its capital stock or other equity securities, or securities convertible into, exercisable for or exchangeable for, any of its shares of capital stock or other equity securities (it being understood that this clause (D) shall not prohibit the exercise, exchange or conversion of Parent Equity Equivalent Securities); or (E) enter into any agreement, letter of intent, agreement in principle or similar agreement to sell, transfer or otherwise dispose of, or purchase or otherwise acquire assets of any class business that A-35 37 generated net revenues or net income in the most recently completed fiscal year constituting, or is comprised of any other such securities net assets having a book value equal to, 25% or agreements more of the consolidated net revenue or net income of Parent for its most recently completed fiscal year, or the consolidated net assets of Parent, other than issuances as applicable, by merger, consolidation, transfer or acquisition of shares of capital stock or otherwise; (iii) not take any action that to the knowledge of Parent would prevent the business combination to be effected pursuant to the Parent Plans Merger from qualifying for pooling of interests accounting treatment under GAAP and with respect the rules and regulations of the SEC or would prevent the business combination to be effected pursuant to the Parent Stock Options and warrants outstanding on Merger or the date Alternative Merger, as applicable, from qualifying as a "reorganization" within the meaning of this Agreement or issuance Section 368 of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or the Code; (iiiv) except as (x) required by applicable law or pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) contractual obligations in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred not (A) execute, establish, adopt or amend, or accelerate rights or benefits under, any agreement relating to by Parent’s independent auditors; severance or change-in-control or any Parent Employee Plan (eprovided that Parent and its Subsidiaries shall be permitted hereunder to (i) Parent shall notenter into or amend consulting, nor shall it permit employment and collective bargaining agreements and (ii) to amend its Key Executive Severance Protection Plan and Employee Severance Protection Plan to exclude the employees of the Company and its Subsidiaries from participating therein following the Effective Time), (B) increase the compensation payable to any of its Subsidiaries toofficers, other than directors or employees (except for increases in the ordinary course of business consistent with past practicepractices), (C) grant any severance or termination pay to an officer or director of Parent, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire (D) grant any Person stock options or other business organizationequity related awards; (v) not issue, division or business by mergerdeliver, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries togrant, sell, lease, exchange, transfer pledge or otherwise dispose ofof shares of any class of its capital stock, other equity securities, or agree to sellany securities convertible, lease, exchange, transfer exercisable or otherwise dispose ofexchangeable for or into, any material such shares as other equity securities, except (x) upon the exercise, exchange or conversion of Parent AssetsEquity Equivalent Securities, and (y) in connection with a purchase or acquisition permitted under Section 5.2 (ii)(E), provided that the issuance, delivery, grant, sale, pledge or other disposition does not require the approval of the stockholders of Parent under the rules of the NYSE or applicable law; provided Parent shall be permitted to (vi) not change its accounting policies, practices or methods except as required by GAAP or by the rules and regulations of the SEC; (vii) not (x) take any such actions provided action to amend the total value of all assets Parent Rights Agreement, (y) redeem the rights subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Parent Rights Agreement or (z) take any action to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter)render inapplicable, or enter into to exempt any agreement, arrangement, or understanding with, directly or indirectlythird party from, any provision of the Parent’s affiliates; provided, that for the avoidance Restated Certificate of doubt, for purposes Incorporation of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than statute referred to in Section 6.15. (viii) not take any action to cause the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate cease to be listed on the NYSE; (ix) not take any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit action that would be reasonably likely to result in any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as conditions set forth in clause (ii) below, and except for payment Article VII hereof not being satisfied or that would impair the ability of current accounts payable in Parent to consummate the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations transactions contemplated hereby in accordance with the terms hereof or delay such consummation; (x) not waive any of agreements in effect on the date its rights under, or release any other party from such other party's obligations under, or amend any provision of, any standstill agreement; (xi) not issue, deliver, grant, sell, pledge or otherwise dispose of this Agreement any bonds, debentures, notes or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreementother indebtedness, in each case having the right to which Parent or vote together with Parent's stockholders on any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) matter; and (iiixii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment commitments or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement agreements to do any of the foregoing. Notwithstanding anything in this A-36 38 Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.5.3

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (wa) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior Prior to the Effective Time, except as contemplated by another provision of this Agreement, unless the Company has consented in writing thereto, Parent: (ai) shall, and shall cause its Subsidiaries to, conduct their operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted; provided, however, that any Subsidiary of Parent shall be permitted, and Parent shall be permitted to cause such Subsidiary, without the written consent of the Company, to take actions outside the usual, regular and ordinary course of such Subsidiary's business if such actions do not have a material effect on the operations of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent Subsidiaries, taken as a whole; (ii) shall use its commercially reasonable efforts (A) to preserve intact its business organization and goodwill and the business organization organizations and goodwill of Parent and its Subsidiaries and Subsidiaries, (B) to keep available the services of their current Parent's officers and employees and preserve each of its Subsidiaries' officers and maintain existing relations with customers, suppliers, officers, key employees and creditors(C) to maintain satisfactory relationships with those persons having business relationships with them; (biii) Parent shall not, nor and shall it not permit any of its Subsidiaries to, amend their respective Certificates of Incorporation or Bylaws or comparable charter documents (other than amendments to the charter documents of any Subsidiary, which amendments are not material to Parent or to the consummation of the transactions contemplated by this Agreement); (iv) shall promptly notify the Company of (A) any material change in its condition (financial or otherwise), business, properties, assets, liabilities or the normal course of its business or of its properties, (B) any material litigation or, to the extent known to Parent, material governmental complaints, investigations or hearings against or otherwise involving Parent or any of its Subsidiaries (or communications indicating that the same may be contemplated), or (C) the breach by Parent or Merger Sub of any of its representations or warranties contained herein; (v) shall promptly deliver to the Company true and correct copies of any report, statement or schedule filed by Parent with the Commission subsequent to the date of this Agreement; (vi) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into negotiations or an agreement with respect to any acquisition of assets or securities, any disposition of assets or securities or any release or relinquishment of any contract rights, which acquisitions, dispositions, releases or relinquishments would be outside the ordinary course of business and would involve aggregate consideration in excess of $2,500,000; (vii) shall not issue any shares of capital stock or securities, except upon exercise of Parent Options outstanding as of the date hereof; (viii) except in the ordinary course or business, shall not grant, confer or award any options, appreciation rights, warrants, conversion rights, restricted stock, stock units, performance shares or other rights, not existing on the date hereof, with respect to any shares of its capital stock or other securities of Parent; (ix) shall not, and shall not permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiariesincluding without limitation Merger Sub) to, take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization within the meaning of section 368 of the Code; (x) shall not, and shall not permit any of its Subsidiaries (including without limitation Merger Sub) to, take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a transaction to be accounted for as a pooling of interests in accordance with XXX Xx. 00; (xi) shall not incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity, except in the ordinary course of business; (xii) shall not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or make any other property distribution or right, payment with respect to any shares of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (cxiii) Parent shall not (i) adjust, split, combine directly or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, indirectly redeem, purchase or otherwise acquire directly or indirectly any shares of its capital stock or make any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to commitment for any “cashless” exercise provisions of existing Parent Options;such action; and (dxiv) Parent shall not, nor and shall it not permit any of its Subsidiaries to, change its methods of accounting (other than Tax accountingagree, which shall be governed by clause (n) below) in effect as of the date of this Agreementwriting or otherwise, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include foregoing actions or take any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, action which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances representation or capital contributions to, warranty in Article 4 hereof untrue or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return incorrect in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any as of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on ParentClosing Date.

Interim Operations of Parent. Parent covenants and agrees (a) During the Interim Period, except (i) as to itself and its Subsidiaries that during may be required by Law, (ii) with the period prior written consent of the Company (which may be via email from the date of this Agreement until the Effective Time or the date, if any, person named under Section 9.3 to receive notices on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 behalf of the Parent Disclosure LetterCompany hereunder), which consent shall not be unreasonably withheld, delayed or conditioned, (xiii) as expressly contemplated or permitted by this Agreement, (y) required by applicable Law, Agreement or (ziv) agreed to as set forth in writing by the CompanyParent Disclosure Letter, after the date Parent shall, and shall cause each of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only to, carry on its business in the ordinary course consistent with past practice; of business and the Parent shall use its commercially reasonable best efforts to (1) preserve intact its business organization organization, (2) maintain in effect all material licenses and goodwill permits required to carry on its business, (3) maintain in effect any exemptive orders or exemptive relief which it has received from the SEC and the which are currently in effect and (4) preserve its material business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stockrelationships; provided, however, that nothing contained herein no action by Parent or any of its Subsidiaries with respect to matters addressed specifically by any provision of Section 5.2(b) shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock;be deemed a breach of this sentence unless such action would constitute a breach of such specific provision. (cb) Parent shall not Without limiting the generality of the foregoing, during the Interim Period, except (i) adjustas may be required by Law, split(ii) with the prior written consent of the Company (which may be via email from the person named under Section 9.3 to receive notices on behalf of the Company hereunder), combine which consent shall not be unreasonably withheld, delayed or reclassify conditioned, (iii) as expressly required, contemplated or permitted by this Agreement or (iv) as set forth in the Parent Disclosure Letter, Parent shall not, and shall not permit any capital stock of its Subsidiaries to: (i) except (A) as provided in Parent’s dividend reinvestment plan and (B) for issuances of Parent Common Shares at a price per share at or above Parent’s then current net asset value per Parent Common Share in one or more underwritten offerings for cash, issue, deliver, sell, dispose of, grant, sell, transfer, pledge, dispose of pledge or otherwise encumber or subject to any additional shares ofLien, or securities convertible into authorize or exchangeable forpropose the issuance, sale, disposition, pledge or options, warrants, calls, commitments or rights other encumbrance of any kind to acquire, (1) any shares of capital stock of any class or of any other such securities or agreements ownership interest of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, (2) any securities or rights convertible into, exchangeable for, exercisable for, or evidencing the right to subscribe for any shares of capital stock or any other than the directors and executive officers thereof; (h) solely in the case ownership interest of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number any of its authorized Subsidiaries, including any rights, warrants, options, calls, commitments or any other agreements of any character to purchase or acquire any shares of Parent Common Stock and to effectuate capital stock or any other transactions contemplated by this Agreement; (i) ownership interest of Parent shall not, nor shall it permit or any of its Subsidiaries toor any securities or rights convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of capital stock or any other ownership interest of Parent or any of its Subsidiaries on a deferred basis or (3) any other securities of Parent or any of its Subsidiaries in respect of, in lieu of, or in substitution for, Parent Common Shares outstanding on the date hereof; (ii) adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (Subsidiaries, other than the Merger Mergers; (iii) redeem, purchase or with otherwise acquire, or propose to redeem, repurchase or otherwise acquire, or otherwise amend the terms of, any outstanding Parent Common Shares or Subsidiary equity interests of non-wholly owned Subsidiaries; (iv) split, combine, subdivide or reclassify any Parent Common Shares or declare, set aside for payment, authorize, make or pay any dividend (whether in cash, stock or property, or any combination thereof) in respect of any Parent Common Shares or any Subsidiary equity interests, or otherwise make any payments to an inactive stockholders in their capacity as such, other than (A) dividends and distributions by a wholly-owned Subsidiary of Parent or regular quarterly dividends and distributions payable by Parent); provided, that, this Section 5.2(iin each case (1) does not apply to the activities permitted by Section 5.2(econsistent with past practice and (2) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided0.08 per share per quarter, howeverand in compliance with Section 5.13 of this Agreement, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus and (zB) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) heretoa Tax Dividend; (kv) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable other than in the ordinary course of business, paydirectly or indirectly sell, discharge lease, license or satisfy otherwise subject to any claims Lien or otherwise dispose of, in whole or in part, any of its properties, assets or rights or any interest therein, in each case that are material to Parent and its Subsidiaries, taken as a whole, to any Person other than a wholly owned Subsidiary; (including claims vi) make any material change in any of stockholders), liabilities the accounting methods used by Parent unless required by GAAP or obligations applicable Law; (absolute, accrued, asserted vii) (A) make or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require change any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement material Tax election other than in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries tobusiness, (iB) incur or assume change any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness material method of Tax accounting other than in the ordinary course of business consistent with past practice or (C) agree to any short-term Indebtedness under extension or waiver of the Parent Credit Agreements, (iii) modify the terms statute of any Indebtedness to increase Parent’s obligations limitations with respect thereto, provided that Parent may increase the to a material amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted of Tax; (viii) except as contemplated by this sectionAgreement, amend the certificate of incorporation or bylaws of Parent may incur long-term, short-term or increases in its obligation under existing debt under items Merger Sub; (i), (iiix) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business, directly or indirectly (A) acquire (including by merger, consolidation or acquisition of stock or assets) any corporation, partnership, limited liability company, other business consistent with past practice organization or any division or amount of assets thereof, in each case that are material to Parent and in no event exceeding $2,000,000 individuallyits Subsidiaries, taken as a whole, or (vB) make any loansinvestment in, advances either by purchase of stock or capital securities, contributions toto capital, property transfers or investments inpurchase of any property or assets of, any other Person (other than Person, in each case that are material to wholly owned Subsidiaries of Parent and except its Subsidiaries, taken as otherwise authorized a whole (in Sections 5.2(ethe case of each of clauses (A) and 5.2(j(B)), or by such Subsidiaries to Parent, other than customary loans wholly owned Subsidiaries); (x) enter into a new line of business outside of Parent’s investment objective as described in the Parent SEC Reports (provided, that the foregoing shall not apply in any way to any portfolio company); (xi) directly or advances to employees in accordance with past practiceindirectly take any action, or knowingly fail to take any action, which action or failure to act is reasonably likely to cause Parent to fail to qualify, or not be subject to tax, as a RIC; (vixii) amend the Parent Investment Advisory Agreement (except for decreases to any fees paid to the Investment Adviser under such agreement); or (xiii) enter into any material commitment or transactioncontract, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (wa) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior Prior to the Effective Time: , except as contemplated by another provision of this Agreement, unless the Company has consented in writing thereto, Parent: (ai) shall, and shall cause its Subsidiaries to, conduct their operations according to their usual, regular and ordinary course in substantially the same manner as heretofore conducted; PROVIDED, HOWEVER, that any Subsidiary of Parent shall be permitted, and Parent shall be permitted to cause such Subsidiary, without the written consent of the Company, to take actions outside the usual, regular and ordinary course of such Subsidiary's business if such actions do not have a material effect on the operations of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practiceSubsidiaries, taken as a whole; and the Parent (ii) shall use its commercially reasonable efforts (A) to preserve intact its business organization and goodwill and the business organization organizations and goodwill of Parent and its Subsidiaries and Subsidiaries, (B) to keep available the services of their current Parent's officers and employees and preserve each of its Subsidiaries' officers and maintain existing relations with customers, suppliers, officers, key employees and creditors; (bC) Parent to maintain satisfactory relationships with those persons having business relationships with them; (iii) shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent and shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods amend their respective Certificates of accounting Incorporation or Bylaws or comparable charter documents (other than Tax accountingamendments to the charter documents of any Subsidiary, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred amendments are not material to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement); (iv) shall promptly notify the Company of (A) any material change in its condition (financial or otherwise), business, properties, assets, liabilities or the normal course of its business or of its properties, (B) any material litigation or, to the extent known to Parent, material governmental complaints, investigations or hearings against or otherwise involving Parent or any of its Subsidiaries (or communications indicating that the same may be contemplated), or that would be reasonably likely (C) the breach by Parent or Merger Sub of any of its representations or warranties contained herein; (v) shall promptly deliver to have a Material Adverse Effect on Parent.the Company true and correct copies of any report, statement or schedule filed by Parent with the Commission subsequent to the date of this Agreement; (vi) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into negotiations or an agreement with respect to any acquisition of assets or securities, any disposition of assets or securities or any release or

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the earlier of the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of the Parent and its Subsidiaries shall be conducted only in the ordinary course of business consistent in all material respects with past practice; practices, and the Parent shall use its commercially reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries Subsidiaries, and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; ; and, except (b1) as expressly contemplated by this Agreement, (2) for transactions between or among Parent and its Subsidiaries, (3) as required by applicable Law, (4) with the prior written consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), and (5) as set forth in Section 5.2 of the Parent Disclosure Letter, after the date of this Agreement until the earlier of the Effective Time or the date, if any, on which this Agreement is terminated pursuant to Section 7.1, Parent shall not, nor shall it permit any of its Subsidiaries to: (other than direct a) with respect to Parent only, except to the extent required in order to comply with the rules and regulations of the OSE or indirect wholly owned Subsidiariesthe LSE, as applicable, amend its certificate of incorporation, bylaws or similar organizational documents; (b) towith respect to Parent only, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares ofof capital stock of any class, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parentagreements, other than issuances of stock shares pursuant to the Parent Plans and with respect to Parent Stock Options and warrants stock options outstanding on the date of this Agreement or issuance and disclosed in Section 4.2(a) of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practicethe Parent Disclosure Letter, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant ), except shares of capital stock that are withheld to any “cashless” exercise provisions of existing Parent Optionssatisfy applicable tax withholding requirements; (d) Parent shall not, nor shall it permit change in any of its Subsidiaries to, change material respect its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreementat December 31, 2009, except in accordance with changes in GAAP as concurred to with by Parent’s its independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided assets, except for (A) the total value sale of all assets subject to inventory or the activities set forth herein shall not exceed $50,000,000 during the period from the date leasing of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses equipment in the ordinary course of business consistent with past practicepractices and (B) sales to non-affiliated Persons in arms-length transactions for not less than fair market value, not less than book value, and not in excess of $1,000,000 individually or $3,000,000 in the aggregate; (f) (i) pay, discharge or satisfy any material claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) if such payment, discharge or satisfaction would require any material payment, other than the payment, discharge or satisfaction of liabilities or obligations (A) in accordance with the terms of any Parent shall notMaterial Contract as in effect on the date of this Agreement or (B) in accordance with the following clause (ii), nor shall it permit or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of its Subsidiaries toLitigation in which the full amount to be paid is covered by insurance or in which the amount to be paid in excess of the applicable insurance coverage does not exceed $500,000 individually or $1,500,000 in the aggregate; (g) except pursuant to the terms of any Parent Material Contract as in effect on the date of this Agreement, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter)with, or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, affiliate (provided that for the avoidance of doubt, for purposes purpose of this clause (g)) only, the term “affiliatesaffiliate” shall not include any employees employee of the Parent or any of its Subsidiaries, Subsidiaries (as the case may be) other than the directors and executive officers thereofthereof and any employees who share the same household as any such directors and executive officers); (h) solely in the case of Parent, with respect to Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries toonly, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of ParentMerger); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (ji) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to assume any capital expendituresIndebtedness, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice practices and not in violation of this Agreement, in each case except for Indebtedness incurred under any credit agreement to which Parent it or any of its Subsidiaries is bounda party and that is outstanding on the date hereof and disclosed in Section 5.2(i) of the Parent Disclosure Letter, and except for any payments, discharges in no event shall the amount so incurred or settlements that do not assumed exceed $2,000,000 individually or $5,000,000 1,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent)Person, except in the ordinary course of business and consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except 1,000,000 in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j)aggregate; (mj) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its the existing insurance policies covering it and its Subsidiaries or insurance with respect to its their respective properties, assets and businesses against or replacement policies that are comparable in all material respects, except to the extent such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry;policies cease to be available on commercially reasonable terms; or (nk) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment any Contract or arrangement obligation to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionallynot, nor shall it permit any of its Subsidiaries to, take or fail to intentionally, enter into any transaction or take any other action that would be reasonably likely action, which actions or failures to have a material adverse impact onact, individually or in the aggregate, are intended to, or would reasonably be expected to, prevent, materially delay, delay or materially impede the consummation of the Merger and the other transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. (a) Prior to the Effective Time, except for the transactions currently being considered by Parent, which have been described to the Company (and which Parent covenants shall not consummate prior to the Effective Time unless and agrees until it shall have received a fairness opinion from an independent investment banking firm of national reputation reasonably satisfactory to the Company), or as to itself contemplated by any other provision of this Agreement, unless the Company has consented in writing thereto, Parent: (i) shall not, and shall cause its Subsidiaries that during not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments (other than amendments which are not material to Parent or to the period from consummation of the transactions contemplated by this Agreement); (ii) shall promptly deliver to the Company true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement until Agreement; (iii) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Effective Time Merger), any acquisition of assets or securities, any disposition of assets or securities or any release or relinquishment of any contract rights in which, in any such case, the date, if any, aggregate consideration for such transaction is in excess of $500 million or which would have an adverse impact on which this Agreement is earlier terminated pursuant Parent's ability to Section 7.1, except as consummate the Merger; (wiv) disclosed in Section 5.2 shall promptly notify the Company of the Parent Disclosure Letter, (x) expressly contemplated any material change in its condition (financial or permitted by this Agreementotherwise), business, properties, assets, liabilities or the normal course of its business or of its properties, (y) required by applicable Lawany material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) agreed to in writing by the Company, after the date breach of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsany representation or warranty contained herein; (bv) Parent shall not, nor and shall it not permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; (vi) shall not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or make any other property distribution or right, payment with respect to any shares of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required stock (other than regular quarterly cash dividend dividends not to exceed $0.40 per share of Parent Common Stock and regular dividends on Parent Preferred Stock;); and (cvii) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor and shall it not permit any of its Subsidiaries to, change its methods agree, in writing or otherwise, to take any of accounting (other than Tax accounting, the foregoing actions or take any action which shall be governed by clause (n) below) would make any representation or warranty in effect Article 4 hereof untrue or incorrect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on ParentClosing Date.

Interim Operations of Parent. From the date hereof until the Effective Time, Parent covenants and agrees as to itself and its Subsidiaries shall conduct their business in the ordinary course consistent with past practices and shall use all reasonable efforts to preserve intact their business organizations and relationships with third parties and to keep available the services of their present officers and employees. Without limiting the generality of the foregoing, and except (i) to the extent that during the period from the date of Company shall otherwise agree in writing, (ii) as expressly contemplated in this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except (iii) as (w) disclosed set forth in Section 5.2 6.01 of the Parent Disclosure LetterSchedule, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after from the date of this Agreement and prior to hereof until the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use not adopt or propose any change to its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill articles of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsincorporation or bylaws; (b) Parent shall not, nor and shall it not permit any of its Subsidiaries to, adopt a plan or agreement of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other material reorganization of Parent or any of its Subsidiaries (other than direct a liquidation or indirect dissolution of a wholly owned SubsidiariesSubsidiary of Parent (or of Nuveen) or a merger or consolidation between wholly owned Subsidiaries of Parent (or of Nuveen) or of any wholly owned Subsidiary into Parent or of any wholly owned Subsidiary of Nuveen into Nuveen); (c) Parent shall not, and shall not permit any of its Subsidiaries to make any equity investment in or acquisition of any Person or any amount of assets material to Parent and its Subsidiaries on a consolidated basis, except for (i) capital expenditures permitted by Section 6.01(h), (ii) equity investments in or capital contributions to any wholly owned Subsidiary of Parent or (iii) investment activities in the ordinary course of business consistent with past practices; provided that the consent of the Company with respect to any action otherwise prohibited by this 0 shall not be unreasonably withheld or delayed; (d) Parent shall not, and shall not permit any of its Subsidiaries to, sell, lease, license or otherwise dispose of any assets material to Parent and its Subsidiaries on a consolidated basis, except (i) in the ordinary course of business consistent with past practices or (ii) pursuant to existing contracts or commitments; provided that the consent of the Company with respect to any action otherwise prohibited by this Section 6.01(d) shall not be unreasonably withheld or delayed; (e) Parent shall not, and shall not permit any of its Subsidiaries to, (i) split, combine, subdivide or reclassify any shares of capital stock of Parent or its Subsidiaries or (ii) declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or any other property or right, with respect to its capital stock; providedstock (other than, howeverwith respect to clause (ii), that nothing contained herein shall prohibit Parent (A) dividends from paying the required its direct or indirect wholly owned Subsidiaries or by Nuveen, (B) regular quarterly cash dividends paid by Parent on the Parent Common Stock not in excess of $0.29 per share per quarter (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Parent Common Stock), with usual record and payment dates and in accordance with Parent's past dividend policy, (C) one or more special dividends by Parent on the Parent Common Stock of cash or obligations to pay cash in an aggregate amount consistent with Section 7.13, (D) required dividends on the Parent Preferred StockStock or (E) required distributions on the Parent Trust Securities or on the Parent Equity Units); (cf) Parent shall not, and shall not permit any of its Subsidiaries to, (ix) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, pledge or dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or series of any other such securities Parent or agreements of Parent, its Subsidiaries (other than (i) (A) issuances of stock pursuant to the exercise of the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practiceConvertible Notes, or (iiB) except as (x) required issuances pursuant to the terms of the Parent Plans Equity Units or (C) issuances pursuant to stock options or stock-based awards granted pursuant to a Parent Stock Plan or an equity compensation plan of Nuveen and outstanding on the date hereof or granted pursuant to clause (ii) 60 below, (ii) additional stock options or stock-based awards granted in the ordinary course consistent with past practices pursuant to any Parent Stock Plan as in effect on the date of this Agreementhereof (provided, however, that any such stock option shall be granted in accordance with Section 6.01(s) or (y) permitted granted pursuant to the terms of the certificate any equity compensation plan of designation Nuveen, or (iii) issuances by any Subsidiary of Parent relating to Parent or to any wholly owned subsidiary of Parent) or (y) reduce the exercise or conversion price, extend the term or otherwise modify in any material respect the terms of any such securities of Parent Preferred Stockor of any Subsidiary of Parent; (g) Parent shall not, and shall not permit any of its Subsidiaries to, redeem, purchase or otherwise acquire directly or indirectly any of its Parent's capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions in the ordinary course of existing Parent Optionsbusiness on behalf of or as fiduciary for third parties); (dh) Parent shall not, nor and shall it not permit any of its Subsidiaries to, change make or commit to make any capital expenditures that are material to Parent and its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this AgreementSubsidiaries on a consolidated basis, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreementpractices; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness debt or issue any debt securities (other than issuances of commercial paper, or borrowings under the Nuveen Credit Facilities, in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (ipractices), ; (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person Person, except (A) in the ordinary course of business consistent with past practices or (B) for obligations of the wholly owned Subsidiaries of Parent; (iii) make any loans or advances to or debt investments in any other Person, other than a Subsidiary (x) loans or advances to or debt investments in Parent's wholly owned subsidiaries or Nuveen, (y) investment activities in the ordinary course of Parent)business consistent with past practices or (z) agency loans in the ordinary course of business consistent with past practices; (iv) pledge or otherwise encumber shares of capital stock of Parent or its Subsidiaries; or (v) mortgage or pledge any of its material assets, tangible or intangible, or create any material Lien thereupon, except in the ordinary course of business consistent with past practice practices; (j) except as may be required by law or by existing agreements or arrangements, Parent shall not, and shall not permit any of its Subsidiaries to, increase in no event exceeding $2,000,000 individuallyany manner the compensation or benefits under any Parent Employee Plan or Parent International Plan of any director, employee or independent contractor or pay any benefit or compensation not required by any plan and arrangement as in effect as of the date hereof (including, the granting of stock options, stock appreciation rights or other stock-based award), other than (i) increases in salary or performance bonuses consistent with past practices in light of actual performance, (vii) make arrangements for newly hired individuals that are consistent with existing policies and practices or (iii) increases of not more than $250,000 in the aggregate for any loans, advances or capital contributions to, or investments in, any other Person individual; (other than to wholly owned Subsidiaries of Parent and k) except as otherwise authorized in Sections 5.2(e) expressly provided for herein, Parent shall not, and 5.2(j))shall not permit any of its Subsidiaries to, or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material contract, agreement, commitment or transactiontransactions, except other than in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f)practices; (l) Parent shall not, and 5.2(j)shall not permit any of its Subsidiaries to, enter into any agreement that limits or otherwise restricts in any material respect Parent or any of its Subsidiaries (or, following completion of the Merger, the Company or any of its Subsidiaries) or any successor thereto, from engaging or competing in any line of business or in any geographical area; (m) Parent shall not, nor and shall it not permit any of its Subsidiaries to, fail to maintain in full force and effect its existing pay, discharge, settle or satisfy (i) any non-insurance policies claim, liability or insurance with respect to its assets and businesses against such liabilitiesobligation (including extra-contractual obligations), casualties, risks and contingencies as is customary other than (A) in the domestic ordinary course of business for amounts not in excess of $100,000,000 in the aggregate (or, if in excess of $100,000,000 in the aggregate, with the consent of the Company, such consent not to be unreasonably withheld or applicable foreign oil and gas exploration industrydelayed) or (B) pursuant to existing contractual obligations or (ii) any insurance claim, liability or obligation (absolute, accrued, asserted or unasserted, contingent or otherwise) for amounts in excess of $100,000,000 (or, if in excess of $100,000,000, with the consent of the Company, such consent not to be unreasonably withheld or delayed); (n) Parent shall not, nor and shall it not permit any of its Subsidiaries to, make make, change or change revoke any material Tax election, election or change any material its method of Tax accounting, grant any accounting if such change would have a material extension of time to assess any Tax adverse impact on Taxes or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; andchange its fiscal year; (o) Parent shall not, nor and shall it not permit any of its Subsidiaries to, enter into any new reinsurance transaction as ceding insurer (i) which does not contain market cancellation, termination and commutation provisions or (ii) which materially changes the existing reinsurance profile of Parent and its Subsidiaries on a consolidated basis outside of the ordinary course of business; (p) Parent shall not, and shall not permit any of its Subsidiaries to, alter or amend in any material respect their existing underwriting, claim handling, loss control, investment, actuarial, financial reporting or accounting practices, guidelines or policies or any material assumption underlying an agreementactuarial practice or policy, contractexcept as may be required by GAAP or applicable SAP or the local equivalent in the applicable jurisdictions; (q) Parent shall use its reasonable best efforts not to, commitment and shall use its reasonable best efforts not to permit any of its Subsidiaries to, take any action (including any action otherwise permitted by this Section 6.01 that would prevent or arrangement impede the Merger from qualifying as a reorganization under Section 368(a) of the Code; (r) Parent shall not, and shall not permit any of its Subsidiaries to, intentionally take any action (i) that would make any representation or warranty of Parent hereunder inaccurate at, or as of any time prior to the Effective Time, subject to such exceptions as would not, individually or in the aggregate, reasonably be expected to have a Parent Material Adverse Effect or (ii) that would, or would reasonably be expected to, result in any of the conditions to the Merger set forth in Article 8 not being satisfied; (s) Parent shall not, and shall not permit any of its Subsidiaries to, grant (i) any initial stock options with any option reload features and (ii) except as may be required by law or by existing agreements or arrangements or is consistent with past practices, any reloaded stock options with any further option reload features; and (t) Parent shall not, and shall not permit any of its Subsidiaries to, authorize or enter into an agreement to do any of the foregoing. Notwithstanding anything in ; provided, however, that Parent's obligations pursuant to this Section 5.2 6.01 with respect to the contrary, Parent Nuveen shall not intentionally, nor shall it permit any of its Subsidiaries be limited to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent's reasonable best efforts.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s 's ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “"cashless” " exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s 's independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s 's affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “"affiliates” " shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s 's existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s 's total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s 's share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s 's obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as that prior to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1Date, except (i) as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (yii) required by applicable Lawas set forth in Section 8.1 of the Disclosure Schedule, or (ziii) as agreed to in writing by the CompanySoundView, after the date of this Agreement and prior to the Effective Timehereof: (a) the business of Parent and its the Parent Subsidiaries shall be conducted only in the usual, regular and ordinary course consistent with past practice; and substantially in the same manner as heretofore conducted, and each of Parent and the Parent Subsidiaries shall use its all commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and intact, keep available the services of their its current officers and employees and preserve and maintain its existing relations with customersPersons having business dealings with it, suppliers, officers, employees to the end that the goodwill and creditorsongoing business of each of them shall be unimpaired at the Effective Time; (b) neither Parent nor any Parent Subsidiary shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or any other property or right, with respect to any shares of any class or series of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) neither Parent nor any Parent Subsidiary shall not (i) adjust, split, combine incur or reclassify modify any capital stock indebtedness or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries toliability, other than in the ordinary and usual course of business and consistent with past practice; or (ii) modify, amend or pursuant to agreements in effect on the date terminate any of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letterits material contracts or waive, acquire release or assign any Person material rights or other business organizationclaims, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons except in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (gd) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practiceneither Parent nor any Parent Subsidiary shall pay, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, payrepurchase, discharge or satisfy any claims (including claims of stockholders)its claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment), discharge or satisfaction would require any payment except for other than the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business and consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, of claims, liabilities or obligations reflected or reserved against in, or contemplated by, the consolidated financial statements (vior the notes thereto) enter into any material commitment or transaction, except in of Parent and the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j)Parent Subsidiaries; (me) neither Parent shall not, nor shall it permit any Parent Subsidiary will change any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industryaccounting methods used by it unless required by GAAP; (nf) neither Parent shall notnor any Parent Subsidiary will take, nor shall it permit or agree to commit to take, any action that would or is reasonably likely to result in any of its Subsidiaries the conditions to the Merger set forth in Section 9.2 not being satisfied, or would make any representation or warranty of Parent contained herein materially inaccurate in any respect at, or as of any time prior to, make the Effective Time, or change any material Tax electionthat would materially impair the ability of Parent, change any material method of Tax accountingSoundView, grant any material extension of time Merger Sub to assess any Tax consummate the Merger in accordance with the terms hereof or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liabilitymaterially delay such consummation; and (og) neither Parent shall not, nor shall it permit any of its Subsidiaries to, Parent Subsidiary will enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 , or to the contraryauthorize, Parent shall not intentionallyrecommend, nor shall it permit propose or announce an intention to do any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parentforegoing.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) solely in the case of Parent and any non-wholly owned Subsidiary of Parent, Parent shall not, nor shall it permit any of its Subsidiaries not (other than direct or indirect wholly owned Subsidiariesi) to, declare, set aside or pay any extraordinary or special dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying increasing the required quarterly cash dividend on Parent Preferred Common Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as engage in any spin-off or split-off without receiving fair consideration (x) required pursuant to determined in the terms good faith judgment of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent OptionsParent); (dc) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (ed) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practicetake any action that would, or pursuant to agreements could reasonably be expected to, result in effect on the date any of its representations and warranties set forth in this Agreement and becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate6.2(a); (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (he) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate in a manner that adversely affects the terms of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this AgreementStock; (if) solely in the case of Parent, Parent shall not adopt or enter into a plan of complete or partial liquidation or dissolution; (g) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business business, except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (oh) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionallynot, nor shall it permit any of its Subsidiaries to intentionallyto, enter into any transaction or take any other action (including any amendment of Parent’s certificate of incorporation) that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Company, after the date of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) solely in the case of Parent and any non-wholly owned Subsidiary of Parent, Parent shall not, nor shall it permit any of its Subsidiaries not (other than direct or indirect wholly owned Subsidiariesi) to, declare, set aside or pay any extraordinary or special dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying increasing the required quarterly cash dividend on Parent Preferred Common Stock; (c) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as engage in any spin-off or split-off without receiving fair consideration (x) required pursuant to determined in the terms good faith judgment of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent OptionsParent); (dc) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s 's independent auditors; (ed) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practicetake any action that would, or pursuant to agreements could reasonably be expected to, result in effect on the date any of its representations and warranties set forth in this Agreement and becoming untrue in a manner that would give rise to the failure of the closing condition set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate6.2(a); (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (he) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate in a manner that adversely affects the terms of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this AgreementStock; (if) solely in the case of Parent, Parent shall not adopt or enter into a plan of complete or partial liquidation or dissolution; (g) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business business, except as may reasonably relate to Parent’s 's existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (oh) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionallynot, nor shall it permit any of its Subsidiaries to intentionallyto, enter into any transaction or take any other action (including any amendment of Parent's certificate of incorporation) that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Companythat, after the date of this Agreement hereof and prior to the Effective TimeTime (except as otherwise expressly contemplated by this Agreement or as set forth in Section 6.2. of the Parent Disclosure Schedule), without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed: (a) the business of Parent its and its Subsidiaries Subsidiaries' businesses shall be conducted only in all material respects in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsusual course; (b) Parent shall not, nor shall it permit any of and its Subsidiaries shall use their reasonable best efforts to preserve intact in all material respects their present business organizations, to maintain existing relations and goodwill with contract parties, customers, suppliers, distributors, creditors, lessors, employees and business associates, and to comply in all material respects with all Laws; (other than direct c) it shall not (i) amend its certificate of incorporation or indirect wholly owned Subsidiariesbylaws in any respect that would require a shareholder vote or adversely affect the rights of shareholders; (ii) toauthorize, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or property in respect of any other property or right, with respect to its capital stock; providedor (iii) repurchase, howeverredeem or otherwise acquire, that nothing contained herein shall prohibit except in connection with any of the Parent from paying the required quarterly cash dividend on Parent Preferred StockStock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock; (cd) Parent shall not neither it nor any of its Subsidiaries shall: (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional (A) shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of of, its capital stock of any class or of (B) securities convertible into or exchangeable for any other such securities property or agreements of Parent, assets (other than issuances shares of stock Parent Common Stock issuable pursuant to the Parent Plans and with respect to Parent Stock Options and warrants options outstanding on the date hereof, or options granted in the ordinary course, under any of this Agreement the Parent Stock Plans or issuance securities issued in any transaction or series of stock options transactions for consideration determined by the Board of Directors of Parent in good faith to directors or employees consistent with Parent’s constitute fair market value); (ii) other than in the ordinary and usual course of business consistent with past practice, or (ii) except as (x) required pursuant to in any transaction or series of transactions for consideration determined by the terms Board of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation Directors of Parent relating in good faith to the Parent Preferred Stockconstitute fair market value, redeemtransfer, purchase lease, license, guarantee, sell, mortgage, pledge, dispose of or otherwise acquire directly encumber any other material property or indirectly assets (including capital stock of any of its capital Subsidiaries) or take any action to incur or modify any material indebtedness or other material liability; or (iii) make any acquisition of, or investment in, the assets or stock or of any other securities Person or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting entity (other than Tax accountinga Subsidiary) except for ordinary course investment activities or in any transaction or series of transactions for consideration determined by the Board of Directors of Parent in good faith to constitute fair market value, which shall be governed or as otherwise permitted by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditorsSection 6.2.(a); (e) Parent shall not, neither it nor shall it permit any of its Subsidiaries to, other than shall take any action that would cause any of its representations and warranties herein to become untrue in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate;material respect; and (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, neither it nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), will authorize or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement agreement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1that, except (i) as (w) disclosed expressly provided in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (zii) agreed to in writing by with the prior written consent of the Company, which consent shall not be unreasonably withheld, delayed or conditioned, after the date of this Agreement hereof and prior to the Effective Time: (ai) the business of Parent and its Subsidiaries shall will be conducted only in the ordinary and customary course consistent with past practice; practice and the Parent shall use its commercially reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve intact and maintain its existing relations with customers, suppliers, officersemployees, employees creditors and creditorsbusiness partners; (bii) except for (y) Parent Common Stock issued in connection with the Parent Financing (as defined in Section 6.19) and (z) up to an additional $3,000,000 of Parent Common Stock to be sold by Parent at a price per share of not less than $13.50, Parent shall not issue, deliver, sell or grant (A) any shares of its capital stock (except pursuant to the exercise or conversion of warrants or other rights outstanding on the date hereof), (B) any Voting Parent Debt or other voting securities, (C) any securities convertible into or exchangeable for, or any options (except pursuant to the Parent Stock Option Plans), warrants or rights to acquire, any such shares, Voting Parent Debt, voting securities or convertible or exchangeable securities or (D) any "phantom" stock, "phantom" stock rights, stock appreciation rights or stock-based performance units, other than the issuance of Parent Common Stock upon the exercise of Parent Stock Options outstanding on the date of this Agreement and in accordance with their present terms; (iii) Parent will not, directly or indirectly, split, combine or reclassify the outstanding Parent Common Stock; (iv) Parent shall not acquire or agree to acquire (A) by merging or consolidating with, or by purchasing an equity interest in or portion of the assets of, or by any other manner, any business or any corporation, partnership, joint venture, association or other business organization or division thereof or (B) any assets in excess of $50,000, and, except for purchases of equipment or software in the ordinary course of business consistent with past practice; (v) Parent shall not, nor shall it permit any : (i) amend its articles of its Subsidiaries incorporation or by-laws; or (other than direct or indirect wholly owned Subsidiariesii) to, declare, set aside or pay any dividend or other distribution, whether distribution payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stockstock other than those consistent with past practice; (cvi) Parent shall not (i) adjustchange any of the accounting principles used by it unless required by a change in GAAP; or (ii) take or allow to be taken any action which would jeopardize qualification of the Merger as a reorganization within the meaning of Section 368(a) of the Code; (vii) Except as set forth on Schedule 5.01(b), split, combine or reclassify any capital stock or issue, grant, Parent shall not sell, transferlease (as lessor), pledge, license or otherwise dispose of or encumber subject to any additional shares ofLien any material properties or assets, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights except (A) sales of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to obsolete assets in the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, and (B) sales of inventory in the ordinary course of business consistent with past practice; (viii) Except as set forth on Schedule 5.01(b), Parent shall not (A) incur any indebtedness for borrowed money or (ii) except as (x) required pursuant guarantee any such indebtedness of another person, issue or sell any debt securities or warrants or other rights to the terms acquire any debt securities of the Parent Plans in or any Parent Subsidiary, guarantee any debt securities of another person, enter into any "keep well" or other agreement to maintain any financial statement condition of another person or enter into any arrangement having the economic effect on the date of this Agreement, or (y) permitted pursuant to the terms any of the certificate foregoing, except for short-term borrowings from persons that are not directors, officers or employees of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than Subsidiary incurred in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (vB) make any loans, advances or capital contributions to, or investments in, any other Person (person, other than to or in the Parent or any direct or indirect wholly owned Subsidiaries subsidiary of the Parent or loans, investments and advances in connection with the sale of the products of the Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such the Parent Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized to persons that are not directors, stockholders, officers or employees of the Parent or any Parent Subsidiary, not to exceed $10,000 individually or $100,000 in Sections 5.2(e), 5.2(f), and 5.2(j)the aggregate; (mix) Parent shall notwill not take, nor shall it permit or agree to commit to take, any action that would make any representation or warranty of its Subsidiaries toParent and Sub contained herein inaccurate as of Closing, fail to maintain such that the condition set forth in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in 7.02(a) would not be satisfied at the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liabilityClosing; and (ox) Parent shall notnot adopt a plan of complete or partial liquidation, nor shall it permit dissolution, consolidation, restructuring, recapitalization or other reorganization of the Parent or any of its Subsidiaries to, the Parent's Subsidiaries; and (xi) Parent will not enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 , or to the contraryauthorize, Parent shall not intentionallyrecommend, nor shall it permit propose or announce an intention to do any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parentforegoing.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from From the date hereof until the Closing or the earlier termination of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1Agreement, except as (w) disclosed in set forth on Section 5.2 of the Parent Disclosure Letter, (x) expressly Letter or as required or contemplated or permitted by this Agreement, (y) Agreement or as required by applicable Law, unless the Company has previously consented thereto (which consent will not be unreasonably withheld, conditioned or (z) agreed to in writing by the Companydelayed), after the date Parent will, and will cause each of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall to, use its commercially reasonable efforts to (i) conduct its operations in all material respects in the ordinary course of business, (ii) maintain and preserve substantially intact its business organization organization, and goodwill (iii) comply in all material respects with applicable Law. Without limiting the foregoing, and as an extension thereof, except as required by applicable Law or as expressly required by this Agreement, or otherwise with the business organization and goodwill prior written consent of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customersCompany, suppliers, officers, employees and creditors; (b) Parent shall not, nor shall it permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required quarterly cash dividend on Parent Preferred Stock; (c) Parent and shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on between the date of this Agreement and set forth in Section 4.12 the earlier of the Parent Disclosure LetterEffective Time and the termination of this Agreement: (a) declare, acquire set aside, make or pay any Person dividend or other business organizationdistribution (whether payable in cash, division stock, property or business by merger, consolidation, purchase a combination thereof) with respect to any capital stock of an equity interest or assetsParent, or by reclassify, combine, split, subdivide or make any other manner, similar change or acquire any assets, where amend the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose terms of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any capital stock of Parent (other than issuances of awards under the Parent’s affiliates; provided, that for Parent Equity Plans as in effect on the avoidance date hereof in the ordinary course of doubt, for purposes of this clause (gbusiness), the term “affiliates” it being understood that Parent shall not include any employees be precluded from repurchasing shares of the Parent or any of its Subsidiaries, other than the directors and executive officers thereofCommon Stock; (hb) solely acquire (including by merger, consolidation, acquisition of stock or assets, recapitalization, joint venture or otherwise) any business, material assets or securities of any Person if such acquisition would reasonably be expected to delay the Closing Date; (c) authorize, issue, split, combine, subdivide or reclassify any capital stock, or securities exercisable for, exchangeable for or convertible into capital stock, or other equity or voting interests other than (A) the authorization and issuance in accordance with this Agreement, (B) the issuance of capital stock, or securities exercisable for, exchangeable for or convertible into capital stock in the case ordinary course of business, and (C) issuances of awards or shares under the Parent Equity Plans as in effect on the date hereof in the ordinary course of business; (d) amend, modify, waive, rescind or otherwise change Parent, Parent shall not amend its ’s or Merger Sub’s certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any bylaws, other transactions than as contemplated by this Agreement; (ie) Parent shall nottake any action for the winding up, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization dissolution or other reorganization of Parent or any for the appointment of a receiver, administrator or administrative receiver, trustee or similar officer of its Subsidiaries (other than the Merger assets or with respect to an inactive wholly-owned Subsidiary of Parent)revenues; provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto;or (jf) Parent shall notagree, nor shall it permit any of its Subsidiaries tooffer, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur authorize or commit to any capital expenditures, or any obligations or liabilities (whether in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent writing or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do take any of the foregoing. Notwithstanding anything actions described in clauses (a) through (e) of this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent5.2.

Interim Operations of Parent. Parent covenants and agrees as to itself and its Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed in Section 5.2 of the Parent Disclosure Letter, (x) expressly contemplated or permitted by this Agreement, (y) required by applicable Law, or (z) agreed to in writing by the Companythat, after the date of this Agreement hereof and prior to the Effective TimeTime (except as otherwise expressly contemplated by this Agreement or as set forth in SECTION 6.2. of the Parent Disclosure Schedule), without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed: (a) the business of Parent its and its Subsidiaries Subsidiaries' businesses shall be conducted only in all material respects in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsusual course; (b) Parent shall not, nor shall it permit any of and its Subsidiaries shall use their reasonable best efforts to preserve intact in all material respects their present business organizations, to maintain existing relations and goodwill with contract parties, customers, suppliers, distributors, creditors, lessors, employees and business associates, and to comply in all material respects with all Laws; (other than direct c) it shall not (i) amend its certificate of incorporation or indirect wholly owned Subsidiariesbylaws in any respect that would require a shareholder vote or adversely affect the rights of shareholders; (ii) toauthorize, declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or property in respect of any other property or right, with respect to its capital stock; providedor (iii) repurchase, howeverredeem or otherwise acquire, that nothing contained herein shall prohibit except in connection with any of the Parent from paying the required quarterly cash dividend on Parent Preferred StockStock Plans, or permit any of its Subsidiaries to purchase or otherwise acquire, any shares of its stock or any securities convertible into or exchangeable or exercisable for any shares of its stock; (cd) Parent shall not neither it nor any of its Subsidiaries shall: (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional (A) shares of, or securities convertible into or exchangeable or exercisable for, or options, warrants, calls, commitments or rights of any kind to acquire, acquire any shares of of, its capital stock of any class or of (B) securities convertible into or exchangeable for any other such securities property or agreements of Parent, assets (other than issuances shares of stock Parent Common Stock issuable pursuant to the Parent Plans and with respect to Parent Stock Options and warrants options outstanding on the date hereof, or options granted in the ordinary course, under any of this Agreement the Parent Stock Plans or issuance securities issued in any transaction or series of stock options transactions for consideration determined by the Board of Directors of Parent in good faith to directors or employees consistent with Parent’s constitute fair market value); (ii) other than in the ordinary and usual course of business consistent with past practice, or (ii) except as (x) required pursuant to in any transaction or series of transactions for consideration determined by the terms Board of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation Directors of Parent relating in good faith to the Parent Preferred Stockconstitute fair market value, redeemtransfer, purchase lease, license, guarantee, sell, mortgage, pledge, dispose of or otherwise acquire directly encumber any other material property or indirectly assets (including capital stock of any of its capital Subsidiaries) or take any action to incur or modify any material indebtedness or other material liability; or (iii) make any acquisition of, or investment in, the assets or stock or of any other securities Person or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting entity (other than Tax accountinga Subsidiary) except for ordinary course investment activities or in any transaction or series of transactions for consideration determined by the Board of Directors of Parent in good faith to constitute fair market value, which shall be governed or as otherwise permitted by clause (n) below) in effect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditorsSECTION 6.2.(a); (e) Parent shall not, neither it nor shall it permit any of its Subsidiaries to, other than shall take any action that would cause any of its representations and warranties herein to become untrue in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate;material respect; and (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, neither it nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), will authorize or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement agreement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on Parent.

Interim Operations of Parent. (a) Prior to the Effective Time, except for the transactions currently being considered by Parent, which have been described to the Company (and which Parent covenants shall not consummate prior to the Effective Time unless and agrees until it shall have received a fairness opinion from an independent investment banking firm of national reputation reasonably satisfactory to the Company), or as to itself contemplated by any other provision of this Agreement, unless the Company has consented in writing thereto, Parent: (i) shall not, and shall cause its Subsidiaries that during not to, amend their respective Certificates of Incorporation or Bylaws or comparable governing instruments (other than amendments which are not material to Parent or to the period from consummation of the transactions contemplated by this Agreement); (ii) shall promptly deliver to the Company true and correct copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement until Agreement; (iii) shall not, and shall not permit any of its Subsidiaries to, authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, any merger, consolidation or business combination (other than the Effective Time Merger), any acquisition of assets or securities, any disposition of assets or securities or any release or relinquishment of any contract rights in which, in any such case, the date, if any, aggregate consideration for such transaction is in excess of $500 million or which would have an adverse impact on which this Agreement is earlier terminated pursuant Parent's ability to Section 7.1, except as consummate the Merger; (wiv) disclosed in Section 5.2 shall promptly notify the Company of the Parent Disclosure Letter, (x) expressly contemplated any material change in its condition (financial or permitted by this Agreementotherwise), business, properties, assets, liabilities or the normal course of its business or of its properties, (y) required by applicable Lawany material litigation or material 19 governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (z) agreed to in writing by the Company, after the date breach of this Agreement and prior to the Effective Time: (a) the business of Parent and its Subsidiaries shall be conducted only in the ordinary course consistent with past practice; and the Parent shall use its commercially reasonable efforts to preserve intact its business organization and goodwill and the business organization and goodwill of its Subsidiaries and keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditorsany representation or warranty contained herein; (bv) Parent shall not, nor and shall it not permit any of its Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, take any actions which would, or would be reasonably likely to, prevent the Merger from qualifying as a reorganization within the meaning of Section 368 of the Code; (vi) shall not declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or make any other property distribution or right, payment with respect to any shares of its capital stock; provided, however, that nothing contained herein shall prohibit Parent from paying the required stock (other than regular quarterly cash dividend dividends not to exceed $0.40 per share of Parent Common Stock and regular dividends on Parent Preferred Stock;); and (cvii) Parent shall not (i) adjust, split, combine or reclassify any capital stock or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, or securities convertible into or exchangeable for, or options, warrants, calls, commitments or rights of any kind to acquire, any shares of capital stock of any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practice, or (ii) except as (x) required pursuant to the terms of the Parent Plans in effect on the date of this Agreement, or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or any other securities or agreements of the type described in clause (i) of this Section 5.2(c) other than pursuant to any “cashless” exercise provisions of existing Parent Options; (d) Parent shall not, nor and shall it not permit any of its Subsidiaries to, change its methods agree, in writing or otherwise, to take any of accounting (other than Tax accounting, the foregoing actions or take any action which shall be governed by clause (n) below) would make any representation or warranty in effect Article 4 hereof untrue or incorrect as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) Parent shall not, nor shall it permit any of its Subsidiaries to, other than in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons in the ordinary course of business consistent with past practice or the sale of any assets pursuant to agreements in effect on the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (g) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares of Parent Common Stock and to effectuate any other transactions contemplated by this Agreement; (i) Parent shall not, nor shall it permit any of its Subsidiaries to, adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or any of its Subsidiaries (other than the Merger or with respect to an inactive wholly-owned Subsidiary of Parent); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (j) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to the contrary, Parent shall not intentionally, nor shall it permit any of its Subsidiaries to intentionally, enter into any transaction or take any other action that would be reasonably likely to have a material adverse impact on, or materially delay, the consummation of the transactions contemplated by this Agreement, or that would be reasonably likely to have a Material Adverse Effect on ParentClosing Date.

Interim Operations of Parent. Parent covenants and agrees as to itself and its the Parent Subsidiaries that during the period from the date of this Agreement until the Effective Time or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1, except as (w) disclosed for matters set forth in Section 5.2 of the Parent Disclosure Letter, (x) for matters expressly contemplated permitted or permitted required by this Agreement, (y) as required by applicable Law, Law or (z) agreed as consented to in writing by the Company, Company after the date of this Agreement and prior to the Effective Time:Time (which consent shall not be unreasonably withheld, delayed or conditioned): (a) the business of Parent and its the Parent Subsidiaries shall be conducted only in all material respects in the ordinary course consistent with past practice; practices, and the Parent shall use its commercially reasonable best efforts to preserve intact its business organization and goodwill and the business organization and goodwill of the Parent Subsidiaries, maintain its Subsidiaries rights, franchises, licenses and other authorizations issued by Governmental Entities, to keep available the services of their current officers and employees and preserve and maintain existing relations with customers, suppliers, officers, employees and creditors; (b) Parent and its Subsidiaries will use their reasonable best efforts to continue to, in consultation with the Government of Canada and its key stakeholders, execute its United States access strategy, which will include further restructuring of all or part of Parent’s corporate and operating structure so that the ultimate parent of the Company and Merlin Holdco is incorporated in the United States by the end of 2019, subject to customary approvals; (c) Parent shall not amend the Parent Notice of Articles and the Parent Articles and Merlin Holdco shall not adopt any material change in the comparable similar organizational documents of the Parent Subsidiaries that would adversely affect the consummation of the Merger or the other transactions contemplated by this Agreement; (d) Parent and Merlin Holdco shall not, nor shall it Merlin Holdco permit any of its the Parent Subsidiaries (other than direct or indirect wholly owned Subsidiaries) to, (i) declare, set aside or pay any dividend or other distribution, whether payable in cash, stock or any other property or right, with respect to its capital stock; provided, however, that nothing contained herein shall prohibit other than the payment by Parent from paying the required of quarterly cash dividend dividends on Parent Preferred Stock; Common Shares consistent with past practice at a rate not to exceed a quarterly rate of CAD$0.37 per Parent Common Share and dividends and distributions by a direct or indirect Parent Subsidiary to Parent or another Parent Subsidiary; (c) Parent shall not (iii) adjust, split, combine combine, consolidate, subdivide or reclassify any of its capital stock stock, other equity interests or issue, grant, sell, transfer, pledge, dispose of or encumber any additional shares of, voting securities or securities convertible into or exchangeable foror exercisable for capital stock or other equity interests or voting securities or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities; or (iii) repurchase, redeem or otherwise acquire, or optionsoffer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, Parent or any of the Parent Subsidiaries or any securities of Parent or any of its Subsidiaries convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, Parent or any of the Parent Subsidiaries, or any warrants, calls, commitments options or other rights to acquire any such capital stock, securities or interests, other than with respect to this clause (iii), (A) the withholding of shares of Parent Common Shares to satisfy tax obligations with respect to awards granted pursuant to the Parent Share Plans, (B) the acquisition by Parent of awards granted pursuant to the Parent Share Plans in connection with the termination or forfeiture of such awards or (C) the acquisition, redemption or repurchase or cash settlement by Parent or any kind Parent Subsidiary of its obligations under any awards granted pursuant to acquirethe Parent Share Plans; (e) Parent and Merlin Holdco shall not, nor shall Merlin Holdco permit any of the Parent Subsidiaries to issue, deliver, sell, grant, pledge or otherwise encumber or subject to any Lien (i) any shares of capital stock of Parent or any class or of any other such securities or agreements of Parent, other than issuances of stock pursuant to the Parent Plans and with respect to Parent Stock Options and warrants outstanding on the date of this Agreement or issuance of stock options to directors or employees consistent with Parent’s ordinary course of business consistent with past practiceSubsidiaries, or (ii) except as (x) required pursuant to the terms any other equity interests or voting securities of Parent or any of the Parent Plans in effect on the date of this AgreementSubsidiaries, (iii) any securities convertible into or (y) permitted pursuant to the terms of the certificate of designation of Parent relating to the Parent Preferred Stock, redeem, purchase exchangeable or otherwise acquire directly or indirectly any of its exercisable for capital stock or voting securities of, or other equity interests in, Parent or any other securities or agreements of the type described Parent Subsidiaries, (iv) any warrants, calls, options or other rights to acquire any capital stock or voting securities of, or other equity interests in, Parent or any of the Parent Subsidiaries or (v) any Parent Voting Debt, in clause (i) of this Section 5.2(c) each case other than pursuant to any “cashless” exercise provisions (A) the issuance of existing shares of Parent Options; (d) Common Shares in connection with the conversion or vesting of Parent shall not, nor shall it permit any of its Subsidiaries to, change its methods of accounting (other than Tax accounting, which shall be governed by clause (n) below) in effect equity awards outstanding as of the date of this Agreement, except in accordance with changes in GAAP as concurred to by Parent’s independent auditors; (e) hereof or Parent shall not, nor shall it permit any of its Subsidiaries to, other than equity awards issued after the date hereof in the ordinary course of business consistent with past practice, or pursuant to agreements in effect on the date issuance of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter, acquire any Person or other business organization, division or business by merger, consolidation, purchase of an equity interest or assets, or by any other manner, or acquire any assets, where the purchase price for such Persons and assets acquired in one or more transactions exceeds $40,000,000 in the aggregate; (f) other than the sale or consumption of inventory and Hydrocarbons awards in the ordinary course of business consistent with past practice pursuant to any Parent Share Plans sponsored or maintained by Parent, (B) the issuance by a wholly owned Subsidiary of Parent of such Subsidiary’s capital stock or other equity interests to Parent or any other wholly owned Subsidiary of Parent; (C) any grants, pledges, encumbrances or Liens with respect to the Parent Existing Credit Facility or the sale Parent Note Purchase Agreement, (D) sales of any assets pursuant to agreements Parent Common Shares in effect on a public offering for cash consideration if the number of shares of Parent Common Shares so issued does not exceed in the aggregate 10% of the issued and outstanding Parent Common Shares as of the date of this Agreement and set forth in Section 4.12 of the Parent Disclosure Letter or the sale of obsolete or other Parent Assets that are to be replaced or discontinued in the ordinary course of business consistent with past practiceAgreement, Parent shall not, nor shall it permit any of its Subsidiaries to, sell, lease, exchange, transfer or otherwise dispose of, or agree to sell, lease, exchange, transfer or otherwise dispose of, any material Parent Assets; provided Parent shall be permitted to take any such actions provided the total value of all assets subject to the activities set forth herein shall not exceed $50,000,000 during the period from the date of this Agreement to the Effective Time; (gE) other than the ordinary advance or reimbursement of expenses in the ordinary course of business consistent with past practice, Parent shall not, nor shall it permit any of its Subsidiaries to, engage in any transaction with (except pursuant to agreements in effect at the time of this Agreement and set forth in the Parent Disclosure Letter), or enter into any agreement, arrangement, or understanding with, directly or indirectly, any of the Parent’s affiliates; provided, that for the avoidance of doubt, for purposes of this clause (g), the term “affiliates” shall not include any employees of the Parent or any of its Subsidiaries, other than the directors and executive officers thereof; (h) solely in the case of Parent, Parent shall not amend its certificate of incorporation or bylaws or similar organizational documents provided Parent shall be permitted to amend its Certificate of Incorporation to increase the number of its authorized shares issuances of Parent Common Stock Shares as consideration in an acquisition, by merger or otherwise, of assets or any Person, subject to compliance with Section 5.2(h), and to effectuate (F) issuances of Parent Common Shares for cash consideration in connection with (1) the repayment of any other Indebtedness of the Company and its Subsidiaries or (2) any financing in connection with the consummation of the transactions contemplated by this Agreement; (if) Parent and Merlin Holdco shall not, nor shall it Merlin Holdco permit any of its the Parent Subsidiaries to, make any material change to its methods of accounting, except in accordance with changes in IFRS as concurred to by the Parent’s independent auditors; (i) Parent and Merlin Holdco shall not adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of Parent or Merlin Holdco (other than the Merger and other than as required or permitted pursuant to Section 5.2(b)) and (ii) except as would not or would not reasonably be expected to prevent, materially impede or materially delay the consummation of the Merger, Parent and Merlin Holdco shall not and Merlin Holdco shall not permit any of its the Parent Subsidiaries to adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Parent Subsidiaries (other than the Merger Merger); (h) except as would not or with respect would not reasonably be expected to an inactive wholly-prevent, materially impede or delay the consummation of the Merger, Parent and Merlin Holdco shall not acquire by merger or otherwise, any assets or securities of any Person (other than another wholly owned Subsidiary of ParentParent or Merlin Holdco) or any portion of the business or property of any entity or merger, consolidate or enter into any other business combination transaction with any Person (other than another wholly owned Subsidiary of Parent or Merlin Holdco); provided, that, this Section 5.2(i) does not apply to the activities permitted by Section 5.2(e) hereto; (ji) Parent and Merlin Holdco shall not, nor shall it Merlin Holdco permit any of its Subsidiaries to, (i) enter into any new line of business except as may reasonably relate to Parent’s existing businesses, or (ii) incur or commit to any capital expenditures, or any obligations or liabilities in connection with any capital expenditures during calendar year 2006 other than (x) capital expenditures and obligations or liabilities incurred or committed to in an amount not greater in the aggregate than the amount in Parent’s total capital budget for calendar year 2006 approved by Parent Board on December 8, 2005, which has been furnished to the Company prior to the date of this Agreement plus (y) any other capital expenditure, obligations, liabilities or commitments (other than in connection with acquisitions which is the subject of subparagraph (z)) made by Parent after the date of this Agreement in an aggregate amount not to exceed $10,000,000 provided, however, that notwithstanding the foregoing, Parent shall not incur any expenditure, obligation, liability or other payment with respect to any capital expenditure related to an exploration well in the event Parent’s share or portion of the initial authorization for expenditure with respect to such exploration well exceeds $3,000,000 plus (z) expenditures (or obligations or liabilities related thereto) in connection with acquisitions to the extent permitted in Section 5.2(e) hereto; (k) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) except as set forth in clause (ii) below, and except for payment of current accounts payable in the ordinary course of business, pay, discharge or satisfy any claims (including claims of stockholders), liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise) where such payment, discharge or satisfaction would require any payment except for the payment, discharge or satisfaction of liabilities or obligations in accordance with the terms of agreements in effect on the date of this Agreement or entered into after the date of this Agreement in the ordinary course of business consistent with past practice and not in violation of this Agreement, in each case to which Parent or any of its Subsidiaries is bound, and except for any payments, discharges or settlements that do not exceed $2,000,000 individually or $5,000,000 in the aggregate, or (ii) compromise, settle, grant any waiver or release relating to any Litigation, other than settlements or compromises of litigation where the amount paid or to be paid does not exceed $2,000,000 individually or $5,000,000 in the aggregate; (l) Parent shall not, nor shall it permit any of its Subsidiaries to, (i) incur or assume any long-term debt, other than any advances, loans or other obligations under the Parent Credit Agreements, (ii) incur or assume any short-term Indebtedness other than in the ordinary course of business consistent with past practice or any short-term Indebtedness under the Parent Credit Agreements, (iii) modify the terms of any Indebtedness to increase Parent’s obligations with respect thereto, provided that Parent may increase the amount outstanding under the Parent Credit Agreements and provided further that in addition to any obligations permitted by this section, Parent may incur long-term, short-term or increases in its obligation under existing debt under items (i), (ii) and (iii) in an aggregate amount not to exceed $20,000,000, (iv) assume, guarantee, endorse or otherwise become liable or responsible (whether directly, contingently or otherwise) for the obligations of any other Person (other than a Subsidiary of Parent), except in the ordinary course of business consistent with past practice and in no event exceeding $2,000,000 individually, (v) make any loans, advances or capital contributions to, or investments in, any other Person (other than to wholly owned Subsidiaries of Parent and except as otherwise authorized in Sections 5.2(e) and 5.2(j)), or by such Subsidiaries to Parent, other than customary loans or advances to employees in accordance with past practice, or (vi) enter into any material commitment or transaction, except in the ordinary course of business consistent with past practice and except as otherwise authorized in Sections 5.2(e), 5.2(f), and 5.2(j); (m) Parent shall not, nor shall it permit any of its Subsidiaries to, fail to maintain in full force and effect its existing insurance policies or insurance with respect to its assets and businesses against such liabilities, casualties, risks and contingencies as is customary in the domestic or applicable foreign oil and gas exploration industry; (n) Parent shall not, nor shall it permit any of its Subsidiaries to, make or change any material Tax election, change any material method of Tax accounting, grant any material extension of time to assess any Tax or settle any Tax claim, amend any Return in any material respect or settle or compromise any material Tax liability; and (o) Parent shall not, nor shall it permit any of its Subsidiaries to, enter into an agreement, contract, commitment or arrangement to do any of the foregoing. Notwithstanding anything in this Section 5.2 to ; and (j) the contrary, Parent shall not, and shall not intentionally, nor shall it permit any of its Subsidiaries to intentionallyParent Subsidiary to, enter into any transaction or take any other action that which would cause Parent to be reasonably likely treated as a domestic corporation for U.S. federal income tax purposes pursuant to have a material adverse impact on, or materially delay, the consummation Section 7874(b) of the transactions contemplated by this Agreement, or that would be reasonably likely to have Code from and after the Closing Date as a Material Adverse Effect on Parentresult of the Merger.