Common use of Limitation on Sale of Collateral Clause in Contracts

Limitation on Sale of Collateral. Neither Borrower nor Guarantor will sell, assign or discount any of the Collateral or Negative Pledge Property other than (i) sales of oil and gas production in the ordinary course of business, and (ii) sales or other disposition of obsolete equipment which are no longer needed for the ordinary business of Borrower or Guarantor or which are being replaced by equipment of at least comparable value and utility. If and as any of such Collateral or Negative Pledge Properties and interests are sold, conveyed or assigned during the term of the Revolving Commitment, Borrower or Guarantor will prepay against the Notes or Guarantor's obligation under its guaranty agreement, as the case may be, 100% of the Release Price. The term "Release Price" as used herein shall mean the loan value of the Collateral or the Negative Pledge Property being sold as determined by the Agent. Any such prepayment of principal on the Notes required by this Section 13(e) shall not be in lieu of, but shall be in addition to, any Monthly Commitment Reduction or any mandatory prepayment of principal required to be made pursuant to Section 9(b) hereof. Any such prepayment shall be applied pro rata to the principal due on the Revolving Notes until such Revolving Notes are paid in full, principal, interest and other amounts. Provided, however, that the Borrower and Guarantor may, without consent of Banks and Agent and without prepaying the Notes, sell Negative Pledge Properties where the sales proceeds from any such sale do not exceed $500,000 on an annual basis.

Limitation on Sale of Collateral. Neither Borrower nor Guarantor will sell, assign or discount any of the Collateral or Negative Pledge Property other than (i) sales of oil and gas production in the ordinary course of business, and (ii) sales or other disposition of obsolete equipment which are no longer needed for the ordinary business of Borrower or Guarantor or which are being replaced by equipment of at least comparable value and utility, and (iii) sales or other dispositions not exceeding $1,000,000 in the aggregate between Borrowing Base redeterminations. If and as any of such Collateral or Negative Pledge Properties and interests are sold, conveyed or assigned during the term of the Revolving Commitment, Borrower or Guarantor will prepay against the Notes or Guarantor's obligation under its guaranty agreement, as the case may be, 100% of the Release Price, provided, however, that no such payments shall be required from Borrower or Guarantor until the aggregate proceeds received between any Borrowing Base redetermination exceeds $1,000,000. Provided, however, notwithstanding the foregoing, if an Event of Default has occurred and is continuing all such amounts received by Borrower and/or Guarantor from such sale during the continuance of an Event of Default shall be paid to the Agent for the ratable benefit of the Banks. The term "Release Price" as used herein shall mean the loan value of the Collateral or the Negative Pledge Property being sold as determined by the Agent. Any such prepayment of principal on the Notes required by this Section 13(e) shall not be in lieu of, but shall be in addition to, any Monthly Commitment Reduction or any mandatory prepayment of principal required to be made pursuant to Section 9(b) hereof. Any such prepayment shall be applied pro rata to the principal due on the Revolving Notes until such Revolving Notes are paid in full, principal, interest and other amounts. Provided, however, that the Borrower and Guarantor may, without consent of Banks and Agent and without prepaying the Notes, sell Negative Pledge Properties where the sales proceeds from any such sale do not exceed $500,000 on an annual basis."

Limitation on Sale of Collateral. Neither Borrower nor Guarantor will sell, assign or discount any of the Collateral or Negative Pledge Property other than (i) sales of oil and gas production in the ordinary course of business, and (ii) sales or other disposition of obsolete equipment which are no longer needed for the ordinary business of Borrower or Guarantor or which are being replaced by equipment of at least comparable value and utility, and (iii) sales or other dispositions not exceeding $1,000,000 in the aggregate between Borrowing Base redeterminations. If and as any of such Collateral or Negative Pledge Properties and interests are sold, conveyed or assigned during the term of the Revolving Commitment, Borrower or Guarantor will prepay against the Notes or Guarantor's obligation under its guaranty agreement, as the case may be, 100% of the Release Price. The term "Release Price" as used herein shall mean the loan value of the Collateral or the Negative Pledge Property being sold as determined by the Agent. Any , provided, however, that no such prepayment of principal on the Notes required by this Section 13(e) shall not be in lieu of, but payments shall be in addition to, required from Borrower or Guarantor until the aggregate proceeds received between any Monthly Commitment Reduction or any mandatory prepayment of principal required to be made pursuant to Section 9(b) hereof. Any such prepayment shall be applied pro rata to the principal due on the Revolving Notes until such Revolving Notes are paid in full, principal, interest and other amountsBorrowing Base redetermination exceeds $1,000,000. Provided, however, that notwithstanding the foregoing, if an Event of Default has occurred and is continuing all such amounts received by Borrower and and/or Guarantor may, without consent of Banks and Agent and without prepaying the Notes, sell Negative Pledge Properties where the sales proceeds from any such sale do not exceed $500,000 on during the continuance of an annual basis.Event of Default shall be paid to the Agent for the ratable benefit of the -35-

Limitation on Sale of Collateral. Neither Borrower nor Guarantor will sell, assign or discount any of the Collateral or Negative Pledge Property other than (i) sales of oil and gas production in the ordinary course of business, and (ii) sales or other disposition of obsolete equipment which are no longer needed for the ordinary business of Borrower or Guarantor or which are being replaced by equipment of at least comparable value and utility, and (iii) sales or other dispositions not exceeding $1,000,000 in the aggregate between Borrowing Base redeterminations. If and as any of such Collateral or Negative Pledge Properties and interests are sold, conveyed or assigned during the term of the Revolving Commitment, Borrower or Guarantor will prepay against the Notes or Guarantor's ’s obligation under its guaranty agreement, as the case may be, 100% of the Release Price, provided, however, that no such payments shall be required from Borrower or Guarantor until the aggregate proceeds received between any Borrowing Base redetermination exceeds $1,000,000. Provided, however, notwithstanding the foregoing, if an Event of Default has occurred and is continuing all such amounts received by Borrower and/or Guarantor from such sale during the continuance of an Event of Default shall be paid to the Agent for the ratable benefit of the Banks. The term "“Release Price" ” as used herein shall mean the loan value of the Collateral or the Negative Pledge Property being sold as determined by the Agent. Any such prepayment of principal on the Notes required by this Section 13(e) shall not be in lieu of, but shall be in addition to, any Monthly Commitment Reduction or any mandatory prepayment of principal required to be made pursuant to Section 9(b) hereof. Any such prepayment shall be applied pro rata to the principal due on the Revolving Notes until such Revolving Notes are paid in full, principal, interest and other amounts. Provided, however, that the Borrower and Guarantor may, without consent of Banks and Agent and without prepaying the Notes, sell Negative Pledge Properties where the sales proceeds from any such sale do not exceed $500,000 on an annual basis.