THE ADMINISTRATIVE QUESTIONNAIRE REFERRED TO
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IN SECTION 2.06(C)(II), IF APPLICABLE, AND THE WRITTEN CONSENT OF THE
ADMINISTRATIVE AGENT TO SUCH INCREASE REQUIRED BY SECTION 2.06(C)(I), THE
ADMINISTRATIVE AGENT SHALL ACCEPT SUCH MAXIMUM CREDIT AMOUNT INCREASE
CERTIFICATE OR ADDITIONAL LENDER CERTIFICATE AND RECORD THE INFORMATION
CONTAINED THEREIN IN THE REGISTER REQUIRED TO BE MAINTAINED BY THE
ADMINISTRATIVE AGENT PURSUANT TO SECTION 12.04(B)(IV).
NO INCREASE IN THE
AGGREGATE MAXIMUM CREDIT AMOUNTS SHALL BE EFFECTIVE FOR PURPOSES OF THIS
AGREEMENT UNLESS IT HAS BEEN RECORDED IN THE REGISTER AS PROVIDED IN THIS
SECTION 2.06(C)(IV).
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 $1,000,000,000.
NOTWITHSTANDING
THE FOREGOING, THE BORROWING BASE MAY BE SUBJECT TO FURTHER ADJUSTMENTS FROM
TIME TO TIME PURSUANT TO SECTION 2.07(E), SECTION 2.07(F), 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 REDETERMINATION"), AND, SUBJECT TO SECTION 2.07(D),
SUCH REDETERMINED BORROWING BASE SHALL BECOME EFFECTIVE AND APPLICABLE TO THE
BORROWER, THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS ON
APRIL 1ST AND OCTOBER 1ST OF EACH YEAR, COMMENCING OCTOBER 1, 2009.
IN
ADDITION, THE BORROWER MAY, BY NOTIFYING THE ADMINISTRATIVE AGENT THEREOF, AND
THE ADMINISTRATIVE AGENT MAY, AT THE DIRECTION OF THE REQUIRED LENDERS, BY
NOTIFYING THE BORROWER THEREOF, ONE TIME DURING ANY 12-MONTH PERIOD, EACH ELECT
TO CAUSE THE BORROWING BASE TO BE REDETERMINED BETWEEN SCHEDULED
REDETERMINATIONS (AN "INTERIM REDETERMINATION") IN ACCORDANCE WITH THIS
SECTION 2.07.
(C)
SCHEDULED AND INTERIM REDETERMINATION
PROCEDURE.
(I)
EACH SCHEDULED REDETERMINATION AND EACH INTERIM REDETERMINATION
SHALL BE EFFECTUATED AS FOLLOWS:
UPON RECEIPT BY THE ADMINISTRATIVE AGENT OF
(A) THE RESERVE REPORT AND THE RESERVE REPORT CERTIFICATE, AND (B) SUCH OTHER
REPORTS, DATA AND SUPPLEMENTAL INFORMATION, INCLUDING, WITHOUT LIMITATION, THE
INFORMATION PROVIDED PURSUANT TO SECTION 8.12(C), AS MAY, FROM TIME TO TIME, BE
REASONABLY REQUESTED BY THE MAJORITY LENDERS (THE RESERVE REPORT, SUCH
CERTIFICATE AND SUCH OTHER REPORTS, DATA AND SUPPLEMENTAL INFORMATION BEING THE
"ENGINEERING REPORTS"), THE ADMINISTRATIVE AGENT SHALL EVALUATE THE INFORMATION
CONTAINED IN THE ENGINEERING REPORTS AND SHALL, IN ITS SOLE DISCRETION, PROPOSE
A NEW BORROWING BASE (THE "PROPOSED BORROWING BASE") BASED UPON SUCH INFORMATION
AND SUCH OTHER INFORMATION (INCLUDING, WITHOUT LIMITATION, THE STATUS OF TITLE
INFORMATION WITH RESPECT TO THE OIL AND GAS PROPERTIES AS DESCRIBED IN THE
ENGINEERING REPORTS AND THE EXISTENCE OF ANY OTHER DEBT) AS THE ADMINISTRATIVE
AGENT DEEMS APPROPRIATE IN ITS SOLE DISCRETION AND CONSISTENT WITH ITS NORMAL
OIL AND GAS LENDING CRITERIA AS IT EXISTS AT THE PARTICULAR TIME.
(II)
THE ADMINISTRATIVE AGENT SHALL NOTIFY THE BORROWER AND THE
LENDERS OF THE PROPOSED BORROWING BASE (THE "PROPOSED BORROWING BASE NOTICE"):
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(A)
IN THE CASE OF A SCHEDULED REDETERMINATION (1) IF THE
ADMINISTRATIVE AGENT SHALL HAVE RECEIVED THE ENGINEERING REPORTS REQUIRED TO BE
DELIVERED BY THE BORROWER PURSUANT TO SECTION 8.12(A) AND (C) IN