VALUE OR (III) DELIVER TITLE INFORMATION IN FORM AND SUBSTANCE ACCEPTABLE TO THE
ADMINISTRATIVE AGENT SO THAT THE ADMINISTRATIVE AGENT SHALL HAVE RECEIVED,
TOGETHER WITH TITLE INFORMATION PREVIOUSLY DELIVERED TO THE ADMINISTRATIVE
AGENT, SATISFACTORY TITLE INFORMATION ON AT LEAST 80% OF THE VALUE OF THE OIL
AND GAS PROPERTIES EVALUATED BY SUCH RESERVE REPORT.
(C)
IF THE BORROWER IS UNABLE TO CURE ANY TITLE
DEFECT REQUESTED BY THE ADMINISTRATIVE AGENT OR THE LENDERS TO BE CURED WITHIN
THE 60-DAY PERIOD OR THE BORROWER DOES NOT COMPLY WITH THE REQUIREMENTS TO
PROVIDE ACCEPTABLE TITLE INFORMATION COVERING 80% OF THE VALUE OF THE OIL AND
GAS PROPERTIES EVALUATED IN THE MOST RECENT RESERVE REPORT, SUCH DEFAULT SHALL
NOT BE A DEFAULT, BUT INSTEAD THE ADMINISTRATIVE AGENT AND/OR THE MAJORITY
LENDERS SHALL HAVE THE RIGHT TO EXERCISE THE FOLLOWING REMEDY IN THEIR SOLE
DISCRETION FROM TIME TO TIME, AND ANY FAILURE TO SO EXERCISE THIS REMEDY AT ANY
TIME SHALL NOT BE A WAIVER AS TO FUTURE EXERCISE OF THE REMEDY BY THE
ADMINISTRATIVE AGENT OR THE LENDERS.
TO THE EXTENT THAT THE ADMINISTRATIVE
AGENT OR THE MAJORITY LENDERS ARE NOT SATISFIED WITH TITLE TO ANY MORTGAGED
PROPERTY AFTER THE 60-DAY PERIOD HAS ELAPSED, SUCH UNACCEPTABLE MORTGAGED
PROPERTY SHALL NOT COUNT TOWARDS THE 80% REQUIREMENT, AND THE ADMINISTRATIVE
AGENT MAY SEND A NOTICE TO THE BORROWER AND THE LENDERS THAT THE THEN
OUTSTANDING BORROWING BASE SHALL BE REDUCED BY AN AMOUNT AS DETERMINED BY THE
MAJORITY LENDERS TO CAUSE THE BORROWER TO BE IN COMPLIANCE WITH THE REQUIREMENT
TO PROVIDE ACCEPTABLE TITLE INFORMATION ON 80% OF THE VALUE OF THE OIL AND GAS
PROPERTIES.
THIS NEW BORROWING BASE SHALL BECOME EFFECTIVE IMMEDIATELY AFTER
RECEIPT OF SUCH NOTICE.
SECTION 8.14.
ADDITIONAL COLLATERAL; ADDITIONAL
GUARANTORS.
(A)
IN CONNECTION WITH EACH REDETERMINATION OF
THE BORROWING BASE, THE BORROWER SHALL REVIEW THE RESERVE REPORT AND THE LIST OF
CURRENT MORTGAGED PROPERTIES (AS DESCRIBED IN SECTION 8.12(C)(VI)) TO ASCERTAIN
WHETHER THE MORTGAGED PROPERTIES REPRESENT AT LEAST 90% OF THE TOTAL VALUE OF
THE OIL AND GAS PROPERTIES EVALUATED IN THE MOST RECENTLY COMPLETED RESERVE
REPORT AFTER GIVING EFFECT TO EXPLORATION AND PRODUCTION ACTIVITIES,
ACQUISITIONS, DISPOSITIONS AND PRODUCTION.
IN THE EVENT THAT THE MORTGAGED
PROPERTIES DO NOT REPRESENT AT LEAST 90% OF SUCH TOTAL VALUE, THEN THE BORROWER
SHALL, AND SHALL CAUSE ITS SUBSIDIARIES TO, GRANT, WITHIN THIRTY (30) DAYS OF
DELIVERY OF THE CERTIFICATE REQUIRED UNDER SECTION 8.12(C), TO THE
ADMINISTRATIVE AGENT AS SECURITY FOR THE INDEBTEDNESS A FIRST-PRIORITY LIEN
INTEREST (PROVIDED THAT EXCEPTED LIENS OF THE TYPE DESCRIBED IN CLAUSES (A) TO
(D) AND (F) OF THE DEFINITION THEREOF MAY EXIST, BUT SUBJECT TO THE PROVISOS AT
THE END OF SUCH DEFINITION) ON ADDITIONAL OIL AND GAS PROPERTIES NOT ALREADY
SUBJECT TO A LIEN OF THE SECURITY INSTRUMENTS SUCH THAT AFTER GIVING EFFECT
THERETO, THE MORTGAGED PROPERTIES WILL REPRESENT AT LEAST 90% OF SUCH TOTAL
VALUE.
ALL SUCH LIENS WILL BE CREATED AND PERFECTED BY AND IN ACCORDANCE WITH
THE PROVISIONS OF MORTGAGES, DEEDS OF TRUST, SECURITY