OR OTHERWISE DISPOSE OF ANY OIL AND GAS PROPERTY OR ANY INTEREST THEREIN
THAT WAS INCLUDED IN THE DETERMINATION OF THE BORROWING BASE THEN IN EFFECT
(OTHER THAN A DISPOSITION OF THE TYPE IDENTIFIED AS ITEM (VII) OR (VIII) OF THE
DEFINITION OF ASSET DISPOSITION), BORROWER SHALL GIVE ADMINISTRATIVE AGENT
PROMPT NOTICE THEREOF.
IN THE EVENT THAT THE BORROWING BASE VALUE OF ALL OIL
AND GAS PROPERTIES OR INTEREST THEREIN (AS DETERMINED BY ADMINISTRATIVE AGENT),
SUBJECT TO AN ASSET DISPOSITION SINCE THE BEGINNING OF THE THEN CURRENT
BORROWING BASE PERIOD EXCEEDS FIVE PERCENT (5%) OF THE BORROWING BASE IN EFFECT
AT THE BEGINNING OF THE THEN CURRENT BORROWING BASE PERIOD, THEN WITHIN ONE (1)
BUSINESS DAY OF THE CONSUMMATION OF SUCH SALE OR DISPOSITION, (I)
THE BORROWING
BASE SHALL BE REDUCED BY THE BORROWING BASE VALUE (AS DETERMINED BY
ADMINISTRATIVE AGENT) OF SUCH OIL AND GAS PROPERTIES, AND (II) DURING THE
OVERADVANCE PERIOD, THE OVERADVANCE AMOUNT SHALL BE REDUCED BY THE AMOUNT BY
WHICH THE NET CASH PROCEEDS OF SUCH SALE OR DISPOSITIONS OF OIL AND GAS
PROPERTIES EXCEEDS THE REDUCTION IN THE BORROWING BASE PURSUANT TO THE PRECEDING
CLAUSE (I).
(E)
OVERADVANCE PERIOD.
DURING THE OVERADVANCE PERIOD, AT THE TIME OF
EACH DETERMINATION OF THE BORROWING BASE UNDER SECTION 2.16 (B) OR (C),
ADMINISTRATIVE AGENT AND REQUIRED LENDERS SHALL DETERMINE THE OVERADVANCE AMOUNT
IN THEIR DISCRETION.
THE REDETERMINED OVERADVANCE AMOUNT SHALL BE EFFECTIVE ON
SAME DATE AS THE REDETERMINED BORROWING BASE SHALL BECOME EFFECTIVE.
(F)
PERMITTED SECURITIES.
IN ADDITION TO EACH OF THE DETERMINATIONS
OF THE BORROWING BASE SET FORTH IN THIS AGREEMENT, TO THE EXTENT FROM TIME TO
TIME ANY PERMITTED SECURITIES ARE OUTSTANDING, THE BORROWING BASE OTHERWISE
DETERMINED PURSUANT TO THE TERMS OF THIS SECTION 2.16 SHALL BE REDUCED BY TWENTY
FIVE PERCENT (25%) OF THE AMOUNT (WHETHER OF PRINCIPAL AMOUNT, FACE AMOUNT OR
LIQUIDATION PREFERENCE AMOUNT) OF SUCH PERMITTED SECURITIES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
To induce Administrative Agent and Lenders to enter into this Agreement and to
make the Loans and other credit accommodations contemplated hereby, Borrower
hereby represents and warrants to Administrative Agent and each Lender that:
38
SECTION 3.1
EXISTENCE AND POWER.
Each Credit Party is an entity as specified on Schedule 3.1 (or, as to those
Persons becoming a Credit Party after the Closing Date, as notified to
Administrative Agent), is duly organized, validly existing and in good standing
under the laws of the jurisdiction specified on Schedule 3.1 (or, as to those
Persons becoming a Credit Party after the Closing Date, as notified to
Administrative Agent), has the same legal name as it appears in such Credit
Party's Organizational Documents and an organizational identification number (if
any), in each case as specified on Schedule 3.1 (or, as to those Persons
becoming a Credit Party after the Closing Date, as notified to Administrative
Agent), and has all powers and all governmental licenses, authorizations,
registrations, permits, consents and approvals required under all applicable
Laws and required in order to carry on its