ISSUANCE (AFTER THE DATE OF THIS AGREEMENT) OF ANY EQUITY INTEREST; AND
(IV)
100% OF ANY INDEBTEDNESS INCURRED BY ANY
BORROWER, OTHER THAN INDEBTEDNESS PERMITTED UNDER SECTION 6.1 HEREOF.
2.9
VOLUNTARY PREPAYMENTS OF LOANS. SUBJECT TO
APPLICABLE PROVISIONS OF THIS AGREEMENT, THE BORROWER SHALL HAVE THE RIGHT AT
ANY TIME OR FROM TIME TO TIME TO PREPAY LOANS WITHOUT PREPAYMENT PENALTY
PROVIDED, HOWEVER, (A) THE BORROWER SHALL PAY ALL ACCRUED AND UNPAID INTEREST ON
THE AMOUNTS PREPAID, AND (B) NO SUCH PREPAYMENT SHALL SERVE TO POSTPONE THE
REPAYMENT WHEN DUE OF ANY OBLIGATION.
2.10
COMMITMENT FEE.
IN ADDITION TO INTEREST ON THE
NOTE AS PROVIDED HEREIN AND ALL OTHER FEES PAYABLE HEREUNDER AND TO COMPENSATE
THE LENDER FOR MAINTAINING FUNDS AVAILABLE, THE BORROWER SHALL PAY TO THE
LENDER, IN IMMEDIATELY AVAILABLE FUNDS, ON THE FIRST DAY OF SEPTEMBER, 2008, AND
ON THE FIRST DAY OF EACH CALENDAR MONTH THEREAFTER DURING THE COMMITMENT PERIOD,
A FEE IN THE AMOUNT OF ONE-QUARTER PERCENT (0.25%) PER ANNUM, CALCULATED ON THE
BASIS OF A YEAR OF 365 OR 366 DAYS, AS THE CASE MAY BE, AND ACTUAL DAYS ELAPSED
(INCLUDING THE FIRST DAY BUT
17
EXCLUDING THE LAST DAY), ON THE AVERAGE DAILY AMOUNT OF THE AVAILABLE COMMITMENT
DURING THE PRECEDING MONTH.
2.11
FACILITY FEE.
IN ADDITION TO INTEREST ON THE
NOTE AS PROVIDED HEREIN AND ALL OTHER FEES PAYABLE HEREUNDER AND TO COMPENSATE
THE LENDER FOR THE COSTS OF THE EXTENSION OF CREDIT HEREUNDER, THE BORROWER
SHALL PAY TO THE LENDER (I) ON THE CLOSING DATE, IN IMMEDIATELY AVAILABLE FUNDS,
A FACILITY FEE (THE "FACILITY FEE") IN THE AMOUNT OF $17,000 AND (II) A FACILITY
FEE EQUAL TO ONE-HALF OF ONE PERCENT (0.5%) ON ANY FUTURE INCREASE IN THE
BORROWING BASE OVER THE HIGHEST BORROWING BASE PREVIOUSLY IN EFFECT, ON THE DATE
OF ANY SUCH BORROWING BASE REDETERMINATION.
2.12
REIMBURSEMENT FOR ENGINEERING EXPENSES.
IN
ADDITION TO INTEREST AND OTHER FEES PAYABLE HEREUNDER AND TO COMPENSATE THE
LENDER FOR THE COSTS OF EVALUATING THE BORROWING BASE OIL AND GAS PROPERTIES AND
REVIEWING THE RESERVE REPORTS, THE BORROWER SHALL REIMBURSE THE LENDER $2,500
FOR ALL EXPENSES RELATING TO SUCH REVIEWS, IN IMMEDIATELY AVAILABLE FUNDS, ON
THE DATE OF EACH REDETERMINATION OF THE BORROWING BASE, INCLUDING ON THE CLOSING
DATE.
2.13
LOANS TO SATISFY OBLIGATIONS OF BORROWERS. THE
LENDER MAY, BUT SHALL NOT BE OBLIGATED TO, MAKE LOANS FOR THE BENEFIT OF THE
BORROWERS AND APPLY PROCEEDS THEREOF TO THE SATISFACTION OF ANY CONDITION,
WARRANTY, REPRESENTATION, OR COVENANT OF THE BORROWERS CONTAINED IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT.
ANY SUCH LOAN SHALL BE EVIDENCED BY THE
NOTE AND SHALL BE MADE AT THE FLOATING RATE.
2.14
SECURITY INTEREST IN ACCOUNTS; RIGHT OF OFFSET.
AS SECURITY FOR THE PAYMENT AND PERFORMANCE OF THE OBLIGATIONS, EACH BORROWER
HEREBY TRANSFERS, ASSIGNS, AND PLEDGES TO THE LENDER AND GRANTS TO THE LENDER A
SECURITY INTEREST IN ALL FUNDS OF EACH BORROWER NOW OR HEREAFTER OR FROM TIME TO
TIME ON DEPOSIT WITH THE LENDER, WITH SUCH INTEREST