Common use of Use of Loan Proceeds and Letters of Credit Clause in Contracts

Use of Loan Proceeds and Letters of Credit. (a) Proceeds of all Loans shall be used solely by the Borrower (i) to acquire and develop Oil and Gas Properties, (ii) to advance funds to the Subsidiary Guarantors for working capital and general business purposes and capital expenditures not prohibited under the provisions of this Agreement or to acquire and develop Oil and Gas Properties, (iii) to advance funds to the Parent needed by the Parent for payment of its cash operating expenses, including general and administrative expenses, Taxes and scheduled debt service on the Indebtedness of the Parent listed on Schedule 6.1 (provided that scheduled debt service shall not include payment at maturity when such maturity arises by way of acceleration following a default), (iv) for the Borrower’s working capital and general business purposes and capital expenditures not otherwise prohibited under applicable provisions of this Agreement and (v) to pay fees and expenses incurred in connection with this Agreement and for other general business purposes of the Borrower. (b) Letters of Credit shall be issued solely for the account of the Borrower for general business purposes of the Borrower and the Subsidiary Guarantors not otherwise prohibited under applicable provisions of this Agreement.

Use of Loan Proceeds and Letters of Credit. (a) Proceeds of all Loans shall be used solely by the Borrower (i) to acquire and develop Oil and Gas Properties, (ii) to advance funds to the Subsidiary Guarantors for working capital and general business purposes and capital expenditures not prohibited under the provisions of this Agreement or to acquire and develop Oil and Gas Properties, (iii) to advance funds to the Parent needed by the Parent for payment of its cash operating expenses, including general and administrative expenses, Taxes and Taxes, scheduled debt service on the Indebtedness of the Parent listed on Schedule 6.1 (provided that scheduled debt service shall not include payment at maturity when such maturity arises by way of acceleration following a default)) and Indebtedness under the Term Loan Agreement, (iv) for the Borrower’s working capital and general business purposes and capital expenditures not otherwise prohibited under applicable provisions of this Agreement and (v) to pay fees and expenses incurred in connection with this Agreement and for other general business purposes of the Borrower. (b) Letters of Credit shall be issued solely for the account of the Borrower for general business purposes of the Borrower and the Subsidiary Guarantors not otherwise prohibited under applicable provisions of this Agreement.”