THE BORROWING BASE
IS TERMINATED OR REDUCED TO ZERO, THEN THE COMMITMENTS SHALL TERMINATE ON THE
EFFECTIVE DATE OF SUCH TERMINATION OR REDUCTION.
(B)
OPTIONAL TERMINATION AND REDUCTION OF
AGGREGATE CREDIT AMOUNTS.
(I)
THE BORROWER MAY AT ANY TIME TERMINATE,
OR FROM TIME TO TIME REDUCE, THE AGGREGATE MAXIMUM CREDIT AMOUNTS; PROVIDED THAT
(A) EACH REDUCTION OF THE AGGREGATE MAXIMUM CREDIT AMOUNTS SHALL BE IN AN AMOUNT
THAT IS AN INTEGRAL MULTIPLE OF $100,000 AND NOT LESS THAN $100,000 AND (B) THE
BORROWER SHALL NOT TERMINATE OR REDUCE THE AGGREGATE MAXIMUM CREDIT AMOUNTS IF,
AFTER GIVING EFFECT TO ANY CONCURRENT PREPAYMENT OF THE LOANS IN ACCORDANCE WITH
SECTION 3.04(B), THE TOTAL REVOLVING CREDIT EXPOSURES WOULD EXCEED THE TOTAL
COMMITMENTS.
(II)
THE BORROWER SHALL NOTIFY THE
ADMINISTRATIVE AGENT OF ANY ELECTION TO TERMINATE OR REDUCE THE AGGREGATE
MAXIMUM CREDIT AMOUNTS UNDER SECTION 2.06(B)(I) AT LEAST THREE BUSINESS DAYS
PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION OR REDUCTION, SPECIFYING SUCH
ELECTION AND THE EFFECTIVE DATE THEREOF.
PROMPTLY FOLLOWING RECEIPT OF ANY
NOTICE, THE ADMINISTRATIVE AGENT SHALL ADVISE THE LENDERS OF THE CONTENTS
THEREOF.
EACH NOTICE DELIVERED BY THE BORROWER PURSUANT TO THIS
SECTION 2.06(B)(II) SHALL BE IRREVOCABLE.
ANY TERMINATION OR REDUCTION OF THE
AGGREGATE MAXIMUM CREDIT AMOUNTS SHALL BE PERMANENT AND MAY NOT BE REINSTATED.
EACH REDUCTION OF THE AGGREGATE MAXIMUM CREDIT AMOUNTS SHALL BE MADE RATABLY
AMONG THE LENDERS IN ACCORDANCE WITH EACH LENDER'S APPLICABLE PERCENTAGE.
SECTION 2.07
BORROWING BASE.
(A)
INITIAL BORROWING BASE.
FOR THE PERIOD
FROM AND INCLUDING THE EFFECTIVE DATE TO BUT EXCLUDING THE FIRST REDETERMINATION
DATE, THE AMOUNT OF THE BORROWING BASE SHALL BE TWENTY MILLION DOLLARS
$20,000,000.
NOTWITHSTANDING THE FOREGOING, THE BORROWING BASE MAY BE SUBJECT
TO FURTHER ADJUSTMENTS FROM TIME TO TIME PURSUANT TO SECTION 2.07(E),
SECTION 8.13(C) OR SECTION 9.12.
(B)
SCHEDULED AND INTERIM REDETERMINATIONS.
THE
BORROWING BASE SHALL BE REDETERMINED SEMI-ANNUALLY IN ACCORDANCE WITH THIS
SECTION 2.07 (A "SCHEDULED
24
REDETERMINATION"), AND, SUBJECT TO SECTION 2.07(D), SUCH REDETERMINED BORROWING
BASE SHALL BECOME EFFECTIVE AND APPLICABLE TO THE BORROWER, THE AGENTS, THE
ISSUING BANK AND THE LENDERS ON APRIL 1ST AND OCTOBER 1ST OF EACH YEAR,
COMMENCING OCTOBER 1, 2010.
IN ADDITION, (I) THE BORROWER MAY, BY NOTIFYING THE
ADMINISTRATIVE AGENT THEREOF, AND THE ADMINISTRATIVE AGENT MAY, AT THE DIRECTION
OF THE MAJORITY LENDERS, BY NOTIFYING THE BORROWER THEREOF, ONE TIME DURING ANY
6-MONTH PERIOD, EACH ELECT TO CAUSE THE BORROWING BASE TO BE REDETERMINED
BETWEEN SCHEDULED REDETERMINATIONS AND (II) AT ANY TIME ANY OF THE BORROWER'S
OIL AND GAS PROPERTIES INCLUDED IN THE MOST RECENT RESERVE REPORT WHICH HAVE
BEEN GIVEN VALUE IN THE THEN CURRENT BORROWING BASE ARE SUBJECT TO LEASES OR
OTHER AGREEMENTS WITH FEDERALLY RECOGNIZED INDIAN TRIBES AND THE ADMINISTRATIVE
AGENT HAS NOT RECEIVED (A) AN OPINION OF COUNSEL ACCEPTABLE TO THE
ADMINISTRATIVE AGENT REGARDING SUCH OIL AND GAS PROPERTIES AND (B) ANY
APPLICABLE CONSENTS TO WAIVERS REQUIRED BY THE ADMINISTRATIVE AGENT, THE
ADMINISTRATIVE AGENT MAY CAUSE THE BORROWING BASE TO BE REDETERMINED (EACH OF
(I) AND (II)