Common use of Calculation of Borrowing Base Clause in Contracts

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafter, beginning with August 31, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28, beginning February 28, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower Company shall deliver to the Administrative Agent and each of the Revolving Lenders on or before August each March 1st, beginning March 1, 2010, and each August 31st thereafter, beginning with August 31, 20112021, an Independent Engineering Reserve Report dated effective as of the immediately preceding June 30December 31st, and such other information as may be reasonably requested by any Lender the Administrative Agent with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Revolving Lenders’ receipt of such Independent Engineering Reserve Report (and such additional Reserve Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d)clause (e) below, and (C) the Administrative Agent shall promptly notify the Borrower Company in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower Company shall deliver to the Administrative Agent and each Lenderthe Lenders, on or before each February 28September 1st, beginning February 28September 1, 20112020, an Internal Engineering Reserve Report or an Independent Reserve Report dated effective as of the immediately preceding December 31 and June 30th and, in each instance, such other information as may be reasonably requested by the Administrative Agent or any Revolving Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Revolving Lenders’ receipt of such Internal Engineering Reserve Report or Internal Reserve Report (and such additional Reserve Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d)clause (e) below, and (C) the Administrative Agent shall promptly notify the Borrower Company in writing of the amount of the Borrowing Base as so redetermined; provided that no redetermination of the Borrowing Base (other than reductions pursuant to clause (d)) shall occur prior to the First Scheduled Borrowing Base Redetermination (absent the occurrence of any Event of Default). (iii) In the event that the Borrower Company does not furnish to the Administrative Agent and the Revolving Lenders the Independent Engineering Reserve Report, Internal Engineering Reserve Report or other information specified in clauses (i) and (ii) above by the date specified thereintherein (or such additional Reserve Report, if any, required under the last sentence of subsection (iv) below), the Administrative Agent and the Revolving Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion (but subject to clause (e) below) until the Administrative Agent and the Revolving Lenders receive the relevant Independent Engineering Reserve Report, Internal Engineering Reserve Report, or other information, as applicable, whereupon at which time the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02Section. (iv) Each delivery of an Engineering a Reserve Report by the Borrower Company to the Administrative Agent and the Revolving Lenders shall constitute a representation and warranty by the Borrower Company to the Administrative Agent and the Revolving Lenders that (A) the Borrower Borrowers and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest to the extent required hereunder (other than any thereof that have been Disposed of since the date of such Reserve Report in a Disposition permitted by this Agreement and noted to the Administrative Agent under the certificate required under Section 5.11(c)) and free and clear of any Liens (except Permitted Liens), ) and (B) to the knowledge of the Borrowers and the Guarantors on and as of the date of such Engineering Report Reserve Report, each material Oil and Gas Property described identified as “proved proved, developed, producing” therein was developed for oil and gas, and the material xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Reserve Report) or xxxxx that were shut in for maintenance, repair or offset drilling activity (each as noted in such Reserve Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each March 1st, beginning March 1, 2010, and each August 31st thereafter, beginning with August 31, 20112017, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1st, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Independent Engineering Report (and such additional Engineering Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.02(e), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lenderthe Lenders, on or before each February 28September 1st, beginning February 28September 1, 20112017, an Internal Engineering Report or an Independent Engineering Report dated effective as of the immediately preceding December 31 and July 1st and, in each instance, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Internal Engineering Report or Internal Engineering Report (and such additional Engineering Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.02(e), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified thereintherein (or such additional Engineering Report, if any, required under the last sentence of subsection (iv) below), the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion (but subject to Section 2.02(e)) until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon at which time the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report (including, without limitation, the initial Engineering Report delivered pursuant to Section 3.01) by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest to the extent required hereunder (other than any thereof that have been Disposed of since the date of such Engineering Report in a Disposition permitted by this Agreement and noted to the Administrative Agent under the certificate required under Section 5.06(e)(iv)(C)) and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report) or xxxxx that were shut in for maintenance, repair or offset drilling activity (each as noted in such Engineering Report), (C) the descriptions of quantum and the nature of the record title interests of the Borrower and its Subsidiariesthe Guarantors, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries the Guarantors in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries the Guarantors is a party or by which the Borrower or any of its Subsidiaries the Guarantors is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries the Guarantors to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries the Guarantors in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries the Guarantors is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesGuarantors’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Guarantor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Guarantor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)) other than any discrepancy disclosed by the Borrower or such Guarantor in writing to the Administrative Agent at or prior to the delivery of such Engineering Report. Notwithstanding anything herein to the contrary, if the Administrative Agent is notified of such discrepancy, then the Borrower shall promptly (but in any event within 10 days after such original Engineering Report was required to be delivered or such longer period as the Administrative Agent may agree in its sole discretion) deliver an updated Internal Engineering Report (or an Independent Engineering Report if the original Engineering Report was required to be an Independent Engineering Report) taking into account such discrepancy.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28th (or February 29th, 2010, and as applicable) of each August 31st thereafter, beginning with August 31, 2011year, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base; provided that with respect to the February 29, 2008 redetermination, the Independent Engineering Report delivered pursuant to this Section shall be comprised of (A) an Independent Engineering Report dated effective as of December 31, 2007 and delivered on or before February 29, 2008, covering all of the Oil and Gas Properties owned by the Borrower or any of its Subsidiaries (other than those Oil and Gas Properties acquired pursuant to the Closing Date Acquisition), and (B) an Independent Engineering Report dated effective as of a date on or before March 31, 2008 and delivered on or before April 30, 2008, covering all of the Oil and Gas Properties acquired by the Borrower or any of its Subsidiaries pursuant to the Closing Date Acquisition, in each case, together with such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Reports and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent's initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 20112008, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Report and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent's initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) will, after giving full effect delivered to all Permitted Liens, afford the Borrower or the applicable Subsidiary Administrative Agent; provided that such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The For the November 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each of the Lenders Agent, on or before August each October 1, 2010beginning October 1, and each August 31st thereafter, beginning with August 31, 20112014, an Independent Engineering Internal Reserve Report dated effective as of the immediately preceding June 30, July 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base; provided that for the November 1, 2014 Borrowing Base redetermination, the Internal Reserve Report shall be dated effective as of September 1, 2014. Within 30 days after the Administrative Agent and the Lenders’ Agent’s receipt of such Independent Engineering Internal Reserve Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Lenders (or in the Lenders case of an increase to the Borrowing Base, all Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The For the February 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each LenderAgent, on or before each February 28January 1, beginning February 28, 20112015, an Internal Engineering Reserve Report dated effective as of the immediately preceding December 31 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent’s receipt of such Internal Engineering Reserve Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Lenders (or in the Lenders case of an increase to the Borrowing Base, all Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) For the May 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent, on or before each April 1st, beginning April 1, 2015, an Independent Reserve Report dated effective as of the immediately preceding January 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base; provided that for the May 1, 2015 Borrowing Base redetermination, the Independent Reserve Report shall be dated effective as of March 1, 2015. Within 30 days after the Administrative Agent’s receipt of such Independent Reserve Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Required Lenders (or in the case of an increase to the Borrowing Base, all Lenders) shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iv) For the August 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent, on or before July 1, 2015, an Internal Reserve Report dated effective as of the immediately preceding June 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Internal Reserve Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Required Lenders (or in the case of an increase to the Borrowing Base, all Lenders) shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (v) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Reserve Report, Internal Engineering Reserve Report or other information specified in clauses (i), (ii), (iii) and (iiiv) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower by the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02writing. (ivvi) Each delivery of an Engineering Reserve Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicableLoan Parties, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Reserve Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Reserve Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableLoan Parties, set forth in such Engineering Reserve Report include the entire record title interests of the Borrower and its Subsidiaries Loan Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Loan Parties in such Oil and Gas Properties except as set forth in Engineering Reserve Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Loan Party is a party or by which the Borrower or any of its Subsidiaries Loan Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Loan Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Loan Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Reserve Report, except in the event the Borrower or any of its Subsidiaries Loan Party is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesLoan Parties’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Reserve Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Loan Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Reserve Report and (ii) will cause the Borrower or the applicable Subsidiary Loan Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Reserve Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Reserve Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1March 15, 2010, 2004 and thereafter on or before the last day of each August 31st thereafterFebruary, beginning with August 31February 28, 20112005, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders' receipt of the Administrative Agent's recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28April 30, July 31, and October 31 of each year beginning February 28July 31, 20112004, an Internal Engineering Report dated effective as of the immediately preceding December 31 April 1, July 1, and October 1, respectively, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within Notwithstanding the foregoing sentence, after the Tranche B Advances have been repaid in full, the Borrower shall not be required to deliver an Internal Engineering Report on or before any April 30 or October 31, as applicable, occurring during any fiscal year so long as the Unused Tranche A Commitment Amount as of the fiscal quarter ended March 31 (in the case of the April 30 deadline) or September 30 (in the case of the October 31 deadline) during such year is at least $10,000,000 and a Borrowing Base Redetermination under this Section 2.02(b)(ii) shall not be made at such time. The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders' receipt of the Administrative Agent's recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute delivered with a certificate executed on behalf of the Borrower by a Responsible Officer of the Borrower, which certificate shall contain a representation and warranty by the Borrower to the Administrative Agent and the Lenders that that, except as noted in such certificate, (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits delivered to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Administrative Agent.

Calculation of Borrowing Base. (i) The Borrower Representative shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterMarch 31st, beginning with August March 31, 20112006, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31st, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower Representative shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28September 30th, beginning February 28September 30, 20112006, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1st, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower Representative does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion (but in accordance with Section 2.02(d) other than clause (iii) thereof) until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower Representative to the Administrative Agent and the Lenders shall constitute be delivered with a certificate executed on behalf of the Borrower Representative by a Responsible Officer of the Borrower Representative, which certificate shall contain a representation and warranty by the Borrower Representative to the Administrative Agent and the Lenders that that, except as noted in such certificate, (Aa) the Borrower Parent and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (Bb) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx wxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx wxxxx (“XxxxxWxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx Wxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx wxxxx or as water disposal xxxxx (each as noted in such Engineering Report)wxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in Representative shall deliver with each such Engineering Report include a list of any Proven Reserves that have been sold or acquired by the entire record title interests of the Borrower Parent and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits delivered to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Administrative Agent.

Calculation of Borrowing Base. (i) The For the November 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each of the Lenders Agent, on or before August each October 1, 2010beginning October 1, and each August 31st thereafter, beginning with August 31, 20112015, an Independent Internal Engineering Report dated effective as of the immediately preceding June 30, September 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders’ Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) For the May 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent, on or before each April 1st, beginning April 1, 2015, an Independent Engineering Report dated effective as of the immediately preceding March 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28, beginning February 28, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower in writing. Upon receipt by the Administrative Agent and the Lenders receive of the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.2. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicableCredit Parties, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableCredit Parties, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries Credit Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Credit Parties in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Credit Party is a party or by which the Borrower or any of its Subsidiaries Credit Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Credit Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Credit Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries Credit Party is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesCredit Parties’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Credit Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Credit Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterSeptember 30, beginning with August 31September 30, 20112009, an Independent Engineering Report dated effective as of the immediately preceding June 30July 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each LenderLender (A) on or prior to May 1, 2009, and (B) on or before each February 28March 31, beginning February 28March 31, 20112010, an Internal Engineering Report dated effective as of the immediately preceding December 31 January 1 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, and (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each March 1st, beginning March 1, 2010, and each August 31st thereafter, beginning with August 31, 20112013, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of If such Independent Engineering Report and other information are timely delivered, then within fifteen (15) days after receipt of such Engineering Report and all such information, (A) the Administrative Agent shall deliver make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to each Lender the Administrative last sentence of this Section 2.12(b)(i), the Required Lenders shall approve or reject the Agent’s recommendation initial determination of the proposed Borrowing Base by written notice to the Agent within fifteen (15) days of the Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Agent hereunder in such fifteen (15) day period, then the Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.12(b)(i) and, subject to the redetermined last sentence of this Section 2.12(b)(i), such amounts shall become the new Borrowing Base effective on the date specified in this Section 2.12(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Agent and the Required Lenders of the new Borrowing Base, (B) the Administrative Agent shall, by written notice to the Borrower and the Lenders Lenders, designate the new Borrowing Base, which Borrowing Base shall redetermine be effective as of March 31st of such year. Such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.12(d). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28(A) June 1, beginning February 282012 and June 1, 20112013, an Internal Engineering Report dated effective as of the immediately preceding April 1st, (B) each September 1st beginning September 1, 2012, an Internal Engineering Report dated effective as of the immediately preceding July 1st, and (C) December 31 1, 2012 and December 1, 2013, an Internal Engineering Report dated effective as of the immediately preceding October 1st, together with and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 If such Engineering Reports and other information are timely delivered, within fifteen (15) days after receipt of such Engineering Report and all such information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.12(b)(ii), the Required Lenders shall approve or reject the Agent’s initial determination of the proposed Borrowing Base by written notice to the Agent within fifteen (15) days of the Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Agent hereunder in such fifteen (15) day period, then the Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.12(b)(ii) and, subject to the last sentence of this Section 2.12(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.12(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined new Borrowing Base, (B) the Administrative Agent shall, by written notice to the Borrower and the Lenders Lenders, designate the new Borrowing Base, which Borrowing Base shall redetermine be effective as of June 30, September 30, or December 31, as applicable. Such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.12(d). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and may in its sole discretion or, at the Lenders request of the Required Lenders, shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.12. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, Subsidiaries own the Oil and Gas Properties specified therein with at least 80% (by value) of included in the Proven Reserves covered therein Borrowing Base subject to an Acceptable Security Interest a legal, valid and free and clear of any Liens enforceable first priority Lien (except subject to Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property included in the Borrowing Base and described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include a list of any Proven Reserves included in the entire record title interests of Borrowing Base that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) will, after giving full effect delivered to all Permitted Liens, afford the Borrower or the applicable Subsidiary Agent; provided that such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August July 1, 2010, and each August 31st thereafter, beginning with August 31, 20112012, an Independent Internal Engineering Report dated effective as of the immediately preceding June 301, 2012, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Independent Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each LenderAgent, on or before each February 28October 1, beginning February 28October 1, 20112012, an Internal Engineering Report dated effective as of the immediately preceding December 31 September 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) The Borrower shall deliver to the Administrative Agent, on or before January 1, 2013, an Internal Engineering Report dated effective as of December 1, 2012 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent's receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iv) The Borrower shall deliver to the Administrative Agent, on or before each April 1st, beginning April 1, 2013, an Independent Engineering Report dated effective as of the immediately preceding March 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent's receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (v) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) ), (ii), (iii), and (iiiv) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower in writing. Upon receipt by the Administrative Agent and the Lenders receive of the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.2. (ivvi) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicableRestricted Credit Parties, own the Oil and Gas Properties specified therein with at least 8085% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableRestricted Credit Parties, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries Restricted Credit Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Restricted Credit Parties in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Restricted Credit Party is a party or by which the Borrower or any of its Subsidiaries Restricted Credit Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Restricted Credit Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Restricted Credit Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries Restricted Credit Party is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s and the Subsidiaries’ Restricted Credit Parties' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Restricted Credit Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Restricted Credit Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafter, beginning with August 31, 2011, March 15 an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about 15 days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease or reaffirmation of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28September 1 (commencing on September 1, beginning February 28, 2011, 2025) an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about 15 days after receipt of each Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the sum of the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (iSection 2.02(b)(i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own (or, with respect to Oil and Gas Properties to be acquired, will own) the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28 or February 29, 2010as applicable (beginning February 29, and each August 31st thereafter, beginning with August 31, 2011, 2008) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Report and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) HOUSTON\2059604 -24- day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 20112007, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Report and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding HOUSTON\2059604 -25- anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterFebruary 28th, beginning with August 31February 28, 20112014, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31st, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 In the normal course of business (but in any event within 60 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Independent Engineering Report and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base (which, regardless of when such Borrowing Base takes effect, will be "as of" May 1st of such year unless otherwise provided in writing by the Borrower and requisite Lenders determining such Borrowing Base), (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lenderthe Lenders, on or before each February 28August 31st, beginning February 28August 31, 20112013, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30th and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 In the normal course of business (but in any event within 60 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Internal Engineering Report and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase (which, regardless of when such Borrowing Base takes effect, will be "as of" November 1st of such year), (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report (including, without limitation, the initial Engineering Report delivered pursuant to Section 3.01) by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (other than any thereof that have been Disposed of since the date of such Engineering Report in a Disposition permitted by valuethis Agreement) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiariesthe Guarantors, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries the Guarantors in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries the Guarantors in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries the Guarantors is a party or by which the Borrower or any of its Subsidiaries the Guarantors is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries the Guarantors to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries the Guarantors in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries the Guarantors is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesGuarantors’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Guarantor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Guarantor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28 or February 29, 2010as applicable (beginning February 29, and each August 31st thereafter, beginning with August 31, 2011, 2012) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 20112014, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Internal -30- Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August July 1, 2010, and each August 31st thereafter, beginning with August 31, 20112013, an Independent Internal Engineering Report dated effective as of the immediately preceding June 301, 2013, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders’ Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent, on or before each October 1, beginning October 1, 2013, an Internal Engineering Report dated effective as of the immediately preceding September 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) The Borrower shall deliver to the Administrative Agent, on or before January 1, 2014, an Internal Engineering Report dated effective as of December 1, 2013 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iv) The Borrower shall deliver to the Administrative Agent, on or before each April 1st, beginning April 1, 2014, an Independent Engineering Report dated effective as of the immediately preceding March 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent’s receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28, beginning February 28, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iiiv) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) ), (ii), (iii), and (iiiv) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower in writing. Upon receipt by the Administrative Agent and the Lenders receive of the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.2. (ivvi) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicableCredit Parties, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableCredit Parties, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries Credit Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Credit Parties in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Credit Party is a party or by which the Borrower or any of its Subsidiaries Credit Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Credit Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Credit Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries Credit Party is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesCredit Parties’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Credit Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Credit Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August May 1, 2010, an Independent Engineering Report dated effective as of the immediately preceding January 1, and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. On or before June 1, 2010, and based on such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each August 31st thereafterLender the Administrative Agent's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before each April 1, beginning with August 31April 1, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112010, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 8085% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” Report, the PDP Reserves identified therein was were developed for oil and gasHydrocarbons, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas Hydrocarbons in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Restricted Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Restricted Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s 's and the Restricted Subsidiaries’ ' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties Properties. (except for any increases in working interest v) Concurrently with each delivery of an Engineering Report, the Borrower shall deliver to the Administrative Agent a corresponding increase in First Lien Cap Certificate. The First Lien Cap Certificate required under this clause (v) shall no longer be required once the net revenue interest in such Oil and Gas Property).Second Lien Debt Payoff has occurred

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010, and each August 31st thereafter, beginning with August 31April 1, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect Lender, including but not limited to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the After Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28October 1, beginning February 28October 1, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1st and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect including but not limited to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the After Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.2. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that that: (A) the Borrower and its Subsidiaries, as applicable, own owns the Oil and Gas Properties specified therein with at least 8090% (by value) of the Proven Proved Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), , (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each capable of producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), , (C) the descriptions of quantum and nature of the record title interests of the Borrower and its SubsidiariesBorrower, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, , (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in such Engineering Report, , (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest Net Revenue Interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest Working Interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest Working Interest with a corresponding increase in the net revenue interest Net Revenue Interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders Banks on or before August 1, 2010, and each August 31st thereafterMarch 31, beginning with August March 31, 20111999, an Independent Engineering Report dated effective as of the immediately preceding June 30, and such other information as may be reasonably requested by any Lender Bank with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Banks' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender Bank the Administrative Agent’s 's recommendation for the redetermined Borrowing Base. Within 15 days after the Banks' receipt of the Agent's recommendation, (B) the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base in accordance with Section 2.02(d), ) and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Bank on or before each February 28September 30, beginning February 28September 30, 20111998, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender Bank with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Banks' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender Bank the Administrative Agent’s 's recommendation for the redetermined Borrowing Base. Within 15 days after the Banks' receipt of the Agent's recommendation, (B) the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base in accordance with Section 2.02(d), ) and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders Banks the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders Banks may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders Banks receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders Banks shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders Banks that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own applicable owns the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”"XXXXX"), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized unitized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August May 1, 2010, an Independent Engineering Report dated effective as of the immediately preceding January 1, and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. On or before June 1, 2010, and based on such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each August 31st thereafterLender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before each April 1, beginning with August 31April 1, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112010, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 8085% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” Report, the PDP Reserves identified therein was were developed for oil and gasHydrocarbons, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas Hydrocarbons in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Restricted Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Restricted Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Restricted Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Properties.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterFebruary 15, beginning with August 31February 15, 20112005, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined; provided, however that the failure to give such notice shall not affect the validity of any such redetermination. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 15, beginning February 28August 15, 20112005, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, or other information whereupon the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. The failure of the Administrative Agent and the Lenders to redetermine the Borrowing Base and redesignate the Borrowing Base by the dates specified above shall not affect the validity of any redetermination and redesignation conducted from time-to-time hereafter. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx wxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx wxxxx (“XxxxxWxxxx”), ) were each producing oil and/or and gas in paying quantities, except for Xxxxx Wxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx wxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)wxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August May 1, 2010, an Independent Engineering Report dated effective as of the immediately preceding January 1, and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. On or before June 1, 2010, and based on such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each August 31st thereafterLender the Administrative Agent's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before each April 1, beginning with August 31April 1, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112010, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 8085% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” Report, the PDP Reserves identified therein was were developed for oil and gasHydrocarbons, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas Hydrocarbons in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Restricted Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Restricted Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s 's and the Restricted Subsidiaries’ ' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties Properties. (except for any increases in working interest v) Concurrently with each delivery of an Engineering Report, the Borrower shall deliver to the Administrative Agent a corresponding increase in First Lien Cap Certificate. The First Lien Cap Certificate required under this clause (v) shall no longer be required once the net revenue interest in such Oil and Gas Property).Junior Debt Payoff has occurred

Calculation of Borrowing Base. (i) The Borrower Representative shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112009, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower Representative shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112009, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower Representative does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, Report or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower Representative to the Administrative Agent and the Lenders shall constitute a representation and warranty by the each Borrower to the Administrative Agent and the Lenders that (A) the Borrower COI (and, if Contango and/or CEC acquires any Oil and its SubsidiariesGas Properties, Contango and/or CEC, as applicable, own the case may be) owns the Oil and Gas Properties specified therein with at least 80% (by value) all of the such Proven Reserves of COI (and, if applicable, Contango and/or CEC, as the case may be) covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August April 1, 20102003, and thereafter on or before each August 31st thereafterFebruary 15, beginning with August 31February 15, 20112004, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined; provided, however that the failure to give such notice shall not affect the validity of any such redetermination. (ii) The Borrower shall deliver to the Administrative Agent and each LenderLender on or before October 1, 2003, and thereafter on or before each February 28August 15, beginning February 28August 15, 20112004, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, or other information whereupon the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. The failure of the Administrative Agent and the Lenders to redetermine the Borrowing Base and redesignate the Borrowing Base by the dates specified above shall not affect the validity of any redetermination and redesignation conducted from time-to-time hereafter. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), ) were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterSeptember 30, beginning with August 31September 30, 20112006, an Independent Engineering Report dated effective as of the immediately preceding June 30July 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28March 31, beginning February 28March 31, 20112006, an Internal Engineering Report dated effective as of the immediately preceding December 31 January 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112007, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, its requested amount for the redetermined Borrowing Base and such other information and data as may be reasonably requested by any Lender with respect to the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, including all such Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 twenty (20) days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within ten (10) days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders in the case of an increase in the Borrowing Base, and the Administrative Agent and the Required Lenders in the case of a decrease in the Borrowing Base or a reaffirmation of the then existing Borrowing Base, shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112006, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, its requested amount for the redetermined Borrowing Base and such other information and data as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, including all such Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 twenty (20) days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within ten (10) days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders in the case of an increase in the Borrowing Base, and the Administrative Agent and the Required Lenders in the case of a decrease in the Borrowing Base or a reaffirmation of the then existing Borrowing Base, shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information and data specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other informationinformation and data, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.02(b) and Section 2.02(d). (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein, (B) the Oil and Gas Properties specified therein with at least 80% (by value) of that are included in the Proven Reserves covered therein Borrowing Base are subject to an Acceptable Security Interest Interest, except as otherwise permitted by Section 6.19, and free and clear of any Liens (except Permitted Liens), (BC) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” constituting Proved Developed Producing Reserves therein was developed for oil and gas, and the xxxxx wxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), wxxxx were each producing oil and/or and gas in paying quantities, except for Xxxxx any such wxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx wxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)wxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafter, beginning with August 31, 2011, an Independent the Engineering Report dated effective as of the immediately preceding June 30Reports specified in Section 5.06(d), and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report Reports and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28, beginning February 28, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28 or February 29, 2010as applicable (beginning February 29, and each August 31st thereafter, beginning with August 31, 2011, 2012) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and and/or gas, and the xxxxx wxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx wxxxx (“Xxxxx”"Wxxxx"), were each producing oil and/or gas in paying quantities, except for Xxxxx Wxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx wxxxx or as water disposal xxxxx (each as noted in such Engineering Report)wxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112017, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112017, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ ' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 8090% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” Report, the PDP Reserves identified therein was were developed for oil and gasHydrocarbons, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas Hydrocarbons in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Restricted Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Restricted Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s 's and the Restricted Subsidiaries’ ' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Properties.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each March 1st, beginning March 1, 2010, and each August 31st thereafter, beginning with August 31, 20112017, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1st, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Independent Engineering Report (and such additional Engineering Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, including whether the Blocker Period should be lifted, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d)2.02(e) and the Required Lenders shall determine whether the Blocker Period should be lifted, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. and whether the Blocker Period has been lifted; provided that if such writing does not state that a Blocker Period has been lifted then a Blocker Period is deemed to be in effect with such redetermination. Notwithstanding the foregoing, if the Minimum Hedge Condition has been satisfied, then the Borrowing Base redetermination scheduled for the Spring of 2021 under the foregoing provisions of this clause (i) shall not be required. For the avoidance of doubt, regardless of whether the Minimum Hedge Condition has been satisfied, the Borrower shall deliver the Independent Engineering Report dated effective as of January 1, 2021 as required in the first sentence of this clause (i). (ii) The Borrower shall deliver to the Administrative Agent and each Lenderthe Lenders, on or before each February 28September 1st, beginning February 28September 1, 20112017, an Internal Engineering Report or an Independent Engineering Report dated effective as of the immediately preceding December 31 and July 1st and, in each instance, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within In the normal course of business (but in any event within 30 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Internal Engineering Report or Internal Engineering Report (and such additional Engineering Report, if any, required under the last sentence of subsection (iv) below) and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase and whether the Blocker Period should be lifted, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d)2.02(e) and the Required Lenders shall determine whether the Blocker Period should be lifted, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redeterminedredetermined and whether the Blocker Period has been lifted; provided that if such writing does not state that a Blocker Period has been lifted then a Blocker Period is deemed to be in effect with such redetermination. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified thereintherein (or such additional Engineering Report, if any, required under the last sentence of subsection (iv) below), the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion (but subject to Section 2.02(e)) until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon at which time the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report (including, without limitation, the initial Engineering Report delivered pursuant to Section 3.01) by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest to the extent required hereunder (other than any thereof that have been Disposed of since the date of such Engineering Report in a Disposition permitted by this Agreement and noted to the Administrative Agent under the certificate required under Section 5.06(e)(iv)(C)) and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report) or xxxxx that were shut in for maintenance, repair or offset drilling activity (each as noted in such Engineering Report), (C) the descriptions of quantum and the nature of the record title interests of the Borrower and its Subsidiariesthe Guarantors, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries the Guarantors in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries the Guarantors is a party or by which the Borrower or any of its Subsidiaries the Guarantors is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries the Guarantors to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries the Guarantors in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries the Guarantors is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesGuarantors’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Guarantor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Guarantor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)) other than any discrepancy disclosed by the Borrower or such Guarantor in writing to the Administrative Agent at or prior to the delivery of such Engineering Report. Notwithstanding anything herein to the contrary, if the Administrative Agent is notified of such discrepancy, then the Borrower shall promptly (but in any event within 10 days after such original Engineering Report was required to be delivered or such longer period as the Administrative Agent may agree in its sole discretion) deliver an updated Internal Engineering Report (or an Independent Engineering Report if the original Engineering Report was required to be an Independent Engineering Report) taking into account such discrepancy.

Calculation of Borrowing Base. (i) The Borrower Representative shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112009, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower Representative shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112009, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Lenders shall promptly, and in any event within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower Representative in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower Representative does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, Report or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower Representative to the Administrative Agent and the Lenders shall constitute a representation and warranty by the each Borrower to the Administrative Agent and the Lenders that (A) the Borrower CRC (and, if Contango acquires any Oil and its SubsidiariesGas Properties, as applicable, own Contango) owns the Oil and Gas Properties specified therein with at least 80% (by value) all of the such Proven Reserves of CRC (and, if applicable, Contango) covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28 or February 29, 2010as applicable (beginning February 29, and each August 31st thereafter, beginning with August 31, 2011, 2008) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Report and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent's initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 20112007, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of all such Engineering Report and information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent's initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determinations; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with Section 2.02(d)this Agreement. Notwithstanding anything contained herein to the contrary, and (CA) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02, and (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112018, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and and, in any case, such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112018, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Required Lenders (except that any increase in the Borrowing Base shall require the consent of all the Lenders) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 8090% (by value) of the PV-10 of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” Report, the PDP Reserves identified therein was were developed for oil and gasHydrocarbons, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas Hydrocarbons in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Restricted Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Restricted Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Restricted Subsidiaries is a party or by which the Borrower or any of its Restricted Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Restricted Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Restricted Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Restricted Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Restricted Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, Liens afford the Borrower or the applicable Restricted Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Restricted Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Properties.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders Banks on or before August 1, 2010, and each August 31st thereafterSeptember 30, beginning with August 31September 30, 20111998, an Independent Engineering Report dated effective as of the immediately preceding June 30, and such other information as may be reasonably requested by any Lender Bank with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Banks' receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender Bank the Administrative Agent’s 's recommendation for the redetermined Borrowing Base. Within 15 days after the Banks' receipt of the Agent's recommendation, (B) the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base in accordance with Section 2.02(d), ) and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Bank on or before each February 28March 31, beginning February 28March 31, 20111998, an Internal Engineering Report dated effective as of the immediately preceding December 31 and such other information as may be reasonably requested by the Administrative Agent or any Lender Bank with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Banks' receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender Bank the Administrative Agent’s 's recommendation for the redetermined Borrowing Base. Within 15 days after the Banks' receipt of the Agent's recommendation, (B) the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base in accordance with Section 2.02(d), ) and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders Banks the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders Banks may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders Banks receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders Banks shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders Banks shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders Banks that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own applicable owns the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”"XXXXX"), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized unitized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112012, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Supermajority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined; provided, however that the failure to give such notice shall not affect the validity of any such redetermination. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 2011, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Supermajority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Supermajority Lenders (or all the Lenders in case of an increase in the Borrowing Base) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, or other information whereupon the Administrative Agent and the Supermajority Lenders (or all the Lenders in case of an increase in the Borrowing Base) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. The failure of the Administrative Agent and the Lenders to redetermine the Borrowing Base and redesignate the Borrowing Base by the dates specified above shall not affect the validity of any redetermination and redesignation conducted from time-to-time hereafter. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gasproperly classified in accordance with the PRMS, and (C) attached to the xxxxx pertaining to such certificate is a list of its Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) added to and deleted from the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such immediately prior Engineering Report include the entire record title interests of the Borrower and a list showing any change in working interest or net revenue interest in its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)occurring.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafter, beginning with August 31, 2011, March 15 an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about 15 days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease or reaffirmation of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28, beginning February 28, 2011, September 1 an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about 15 days after receipt of each Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the sum of the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (iSection 2.02(b)(i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own (or, with respect to Oil and Gas Properties to be acquired, will own) the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each March 1, 2010as applicable (beginning March 1, and each August 31st thereafter, beginning with August 31, 2011, 2016) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent's initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28September 1, beginning February 28September 1, 20112015, an Independent Engineering Report or Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 On or about thirty (30) days after receipt of the Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent's initial determination of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent's notification of its initial determination; provided, however that, the failure by any Lender to confirm in writing the Administrative Agent's determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to paragraph (e) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report)xxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower Company shall deliver to the Administrative Agent and each of the Revolving Lenders on or before August March 1, 2010, 2006 and on or before the first day of each August 31st March thereafter, beginning with August 31, 2011, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Revolving Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent Agent’s and the Revolving Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Revolving Lenders shall promptly, and in any event on the later of (A) April 1 and (B) 15 days after the Revolving Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d2.3(d), and (C) the Administrative Agent shall promptly notify the Borrower Company in writing of the amount of the Borrowing Base as so redetermined, which redetermined Borrowing Base shall become effective as of the date of such notice. (ii) The Borrower Company shall deliver to the Administrative Agent and each Lender, Revolving Lender on or before September 1 of each February 28year beginning September 1, beginning February 28, 2011, 2005 an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1 and such other information as may be reasonably requested by the Administrative Agent or any Revolving Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within The Administrative Agent shall promptly, and in any event within 30 days after the Administrative Agent Agent’s and the Revolving Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Revolving Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the . The Administrative Agent and the Revolving Lenders shall promptly, and in any event on the later of (A) October 1 and (B) 15 days after the Revolving Lenders’ receipt of the Administrative Agent’s recommendation, redetermine the Borrowing Base in accordance with Section 2.02(d2.3(d), and (C) the Administrative Agent shall promptly notify the Borrower Company in writing of the amount of the Borrowing Base as so redetermined, which redetermined Borrowing Base shall become effective as of the date of such notice. (iii) In the event that the Borrower Company does not furnish to the Administrative Agent and the Revolving Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Revolving Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter as provided herein in their sole discretion until the Administrative Agent and the Revolving Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.3. (iv) Each delivery of an Engineering Report by the Borrower Company to the Administrative Agent and the Revolving Lenders shall constitute be delivered with a certificate executed on behalf of the Company by an Authorized Officer of the Company, which certificate shall contain a representation and warranty by the Borrower Company to the Administrative Agent and the Revolving Lenders that that, except as noted in such certificate, (A) the Borrower Company and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest on not less than 80% of the total value of Proven Reserves indicated therein, and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report Report, each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (xxxxx. Additionally, the Company shall deliver with each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include a list of any Proven Reserves that have been sold or acquired by the entire record title interests Company and the Guarantors since the date of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits delivered to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Administrative Agent.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterFebruary 28th, beginning with August 31February 28, 20112014, an Independent Engineering Report dated effective as of -26- the immediately preceding June 30December 31st, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 In the normal course of business (but in any event within 60 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Independent Engineering Report and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase (which, regardless of when such Borrowing Base takes effect, will be "as of" May 1st of such year), (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lenderthe Lenders, on or before each February 28August 31st, beginning February 28August 31, 20112013, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30th and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 In the normal course of business (but in any event within 60 days after the Administrative Agent Agent’s and the Lenders’ receipt of such Internal Engineering Report and other information), (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase (which, regardless of when such Borrowing Base takes effect, will be "as of" November 1st of such year), (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report (including, without limitation, the initial Engineering Report delivered pursuant to Section 3.01) by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiariesthe Guarantors, as applicable, own the Oil and Gas Properties specified therein with at least 80% (other than any thereof that have been Disposed of since the date of such Engineering Report in a Disposition permitted by valuethis Agreement) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiariesthe Guarantors, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries the Guarantors in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries the Guarantors in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries the Guarantors is a party or by which the Borrower or any of its Subsidiaries the Guarantors is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries the Guarantors to bear any -27- of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries the Guarantors in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries the Guarantors is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the SubsidiariesGuarantors’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Guarantor not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary Guarantor to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafterMarch 1st, beginning with August 31March 1, 20112009, an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent’s receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, on or before each February 28September 1st, beginning February 28with September 1, 20112008, an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent’s receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) the Administrative Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive receives the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. The Borrowing Base shall be redetermined on a semi-annual basis on or about each May 1 and November 1 as follows: (i) The For the May 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each of the Lenders Agent, on or before August each April 1st, beginning April 1, 2010, and each August 31st thereafter, beginning with August 31, 20112021, an Independent Engineering Reserve Report dated effective as of the immediately preceding June 30, January 1st and such other information as may be reasonably requested by the Administrative Agent or any Tier I Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Independent Engineering Reserve Report and other information, (A) the Administrative Agent shall deliver to each Tier I Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Tier I Lenders (or in the Lenders case of an increase to the Borrowing Base, all Tier I Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The For the November 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each LenderAgent, on or before each February 28October 1, beginning February 28October 1, 20112021, an Internal Engineering Reserve Report dated effective as of the immediately preceding December 31 July 1st and such other information as may be reasonably requested by the Administrative Agent or any Tier I Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Internal Engineering Reserve Report and other information, (A) the Administrative Agent shall deliver to each Tier I Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Tier I Lenders (or in the Lenders case of an increase to the Borrowing Base, all Tier I Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Tier I Lenders the Independent Engineering Reserve Report, Internal Engineering Reserve Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Tier I Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower by the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02writing. (iv) Each delivery of an Engineering a Reserve Report by the Borrower to the Administrative Agent and the Tier I Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Tier I Lenders that (A) the Borrower and its Subsidiaries, as applicableLoan Parties, own the Oil and Gas Properties specified therein with at least 8095% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Reserve Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Reserve Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableLoan Parties, set forth in such Engineering Reserve Report include the entire record title interests of the Borrower and its Subsidiaries Loan Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Loan Parties in such Oil and Gas Properties except as set forth in Engineering such Reserve Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Loan Party is a party or by which the Borrower or any of its Subsidiaries Loan Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Loan Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Loan Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Reserve Report, except in the event the Borrower or any of its Subsidiaries Loan Party is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s and the Subsidiaries’ Loan Parties' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Reserve Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Loan Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Reserve Report and (ii) will cause the Borrower or the applicable Subsidiary Loan Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Reserve Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Reserve Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1, 2010, and each August 31st thereafter, beginning with August 31, 2011, March 15 an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base; provided that any Oil and Gas Properties of the Joint Venture included in the Borrowing Base shall be net to the Equity Interest owned by the Borrower in the Joint Venture. Within 30 On or about 15 days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease or reaffirmation of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28, beginning February 28, 2011, September 1 an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1 and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base; provided that any Oil and Gas Properties of the Joint Venture included in the Borrowing Base shall be net to the Equity Interest owned by the Borrower in the Joint Venture. Within 30 On or about 15 days after receipt of each Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Lenders shall approve or reject the Administrative Agent’s initial determination of the proposed Borrowing Base by written notice to the Administrative Agent on or about 15 days after the Administrative Agent’s notification of its initial determination; provided, however, that the failure by any Lender to confirm or reject in writing the Administrative Agent’s determination of the proposed Borrowing Base within such period shall be deemed an approval of such proposed Borrowing Base by such Lender. If the Required Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such period, then the Administrative Agent shall poll the Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Lenders in their sole discretion but subject to Section 2.02(d2.02(e), (B) in no event shall the sum of the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of “Required Lenders” will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (iSection 2.02(b)(i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower Borrower, its Subsidiaries and its Subsidiariesthe Joint Venture, as applicable, own (or, with respect to Oil and Gas Properties to be acquired, will own) the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and and/or gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.

Calculation of Borrowing Base. The Borrowing Base shall be redetermined on or about August 1, 2017 and on a semi-annual basis each November 1 and May 1 thereafter as follows: (i) The For the August 1, 2017 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each of the Lenders Agent, on or before August July 1, 2010, and each August 31st thereafter, beginning with August 31, 20112017, an Independent Engineering Internal Reserve Report dated effective as of the immediately preceding June 30April 1, 2017 and such other information as may be reasonably requested by the Administrative Agent or any Tier I Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Independent Engineering Internal Reserve Report and other information, (A) the Administrative Agent shall deliver to each Tier I Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Tier I Lenders (or in the Lenders case of an increase to the Borrowing Base, all Tier I Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The For the November 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent and each LenderAgent, on or before each February 28October 1, beginning February 28October 1, 20112017, an Internal Engineering Reserve Report dated effective as of the immediately preceding December 31 July 1st and such other information as may be reasonably requested by the Administrative Agent or any Tier I Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent and the Lenders’ Agent's receipt of such Internal Engineering Reserve Report and other information, (A) the Administrative Agent shall deliver to each Tier I Lender the Administrative Agent’s 's recommendation for the redetermined Borrowing Base, (B) the Administrative Agent and Required Tier I Lenders (or in the Lenders case of an increase to the Borrowing Base, all Tier I Lenders) shall redetermine the Borrowing Base in accordance with Section 2.02(d2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) For the May 1 Borrowing Base redetermination, the Borrower shall deliver to the Administrative Agent on or before each April 1st, beginning April 1, 2018, an Independent Reserve Report dated effective as of the immediately preceding January 1st and such other information as may be reasonably requested by the Administrative Agent or any Tier I Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 days after the Administrative Agent's receipt of such Independent Reserve Report and other information, (A) the Administrative Agent shall deliver to each Tier I Lender the Administrative Agent's recommendation for the redetermined Borrowing Base, (B) the Required Tier I Lenders (or in the case of an increase to the Borrowing Base, all Tier I Lenders) shall redetermine the Borrowing Base in accordance with Section 2.2(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iv) In the event that the Borrower does not furnish to the Administrative Agent and the Tier I Lenders the Independent Engineering Reserve Report, Internal Engineering Reserve Report or other information specified in clauses (i), (ii) and (iiiii) above by the date specified therein, the Administrative Agent and the Tier I Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until discretion, with notice of such redetermination promptly provided to the Borrower by the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02writing. (ivv) Each delivery of an Engineering a Reserve Report by the Borrower to the Administrative Agent and the Tier I Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Tier I Lenders that (A) the Borrower and its Subsidiaries, as applicableLoan Parties, own the Oil and Gas Properties specified therein with at least 8090% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), (B) on and as of the date of such Engineering Reserve Report each Oil and Gas Property described identified as “proved developed” PDP Reserves therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“"Xxxxx”"), were each producing oil and/or gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Reserve Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicableLoan Parties, set forth in such Engineering Reserve Report include the entire record title interests of the Borrower and its Subsidiaries Loan Parties in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “"back-in” " or “"reversionary” " interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries Loan Parties in such Oil and Gas Properties except as set forth in Engineering Reserve Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries Loan Party is a party or by which the Borrower or any of its Subsidiaries Loan Party is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries Loan Party to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries Loan Party in such portion of the such Oil and Gas Properties except as set forth in such Engineering Reserve Report, except in the event the Borrower or any of its Subsidiaries Loan Party is obligated under an operating agreement to assume a portion of a defaulting party’s 's share of costs, and (F) the Borrower’s and the Subsidiaries’ Loan Parties' ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Reserve Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary Loan Parties not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Reserve Report and (ii) will cause the Borrower or the applicable Subsidiary Loan Parties to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Reserve Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Reserve Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property).

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August 1each February 28 or February 29, as applicable (beginning February 28, 2010, and each August 31st thereafter, beginning with August 31, 2011, ) an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Revolving Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of the Independent Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Revolving Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(i), the Required Revolving Lenders shall approve or reject the Administrative Agent’s initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determinations; provided, however that, the failure by any Revolving Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of such proposed Borrowing Base by such Revolving Lender. If the Required Revolving Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Revolving Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Revolving Lenders for purposes of this Section 2.02(b)(i) and, subject to the last sentence of this Section 2.02(b)(i), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(i). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Revolving Lenders of such Independent Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Revolving Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Revolving Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Revolving Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Revolving Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28August 31, beginning February 28August 31, 20112010, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 thirty (30) days after receipt of the Internal Engineering Report and such other information, the Administrative Agent shall make an initial determination of the new Borrowing Base and upon such initial determination shall promptly notify the Revolving Lenders in writing of its initial determination of the proposed Borrowing Base. Subject to the last sentence of this Section 2.02(b)(ii), the Required Revolving Lenders shall approve or reject the Administrative Agent’s initial determinations of the proposed Borrowing Base by written notice to the Administrative Agent within fifteen (15) days of the Administrative Agent’s notification of its initial determinations; provided, however that, the failure by any Revolving Lender to confirm in writing the Administrative Agent’s determination of the proposed Borrowing Base within such fifteen (15) day period shall be deemed an approval of the such proposed Borrowing Base by such Revolving Lender. If the Required Revolving Lenders fail to approve any such proposed Borrowing Base determined by the Administrative Agent hereunder in such fifteen (15) day period, then the Administrative Agent shall poll the Revolving Lenders to ascertain the highest proposed Borrowing Base then acceptable to the Required Revolving Lenders for purposes of this Section 2.02(b)(ii) and, subject to the last sentence of this Section 2.02(b)(ii), such amounts shall become the new Borrowing Base, effective on the date specified in this Section 2.02(b)(ii). Until such approval or deemed approval, the Borrowing Base in effect before the proposed Borrowing Base shall remain in effect. Upon agreement by the Administrative Agent and the Lenders’ receipt Required Revolving Lenders of such Internal Engineering Report and other informationthe new Borrowing Base, (A) the Administrative Agent shall deliver shall, by written notice to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base, (B) the Administrative Agent Borrower and the Lenders Revolving Lenders, designate the new Borrowing Base available to the Borrower. Such designation shall redetermine be effective as of the Business Day specified in such written notice (or, if no effective date is specified in such written notice, the next Business Day following delivery of such written notice) and such new Borrowing Base shall remain in effect until the next determination or redetermination of the Borrowing Base in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, (A) any determination or redetermination of the Borrowing Base resulting in any increase of the Borrowing Base in effect immediately prior to such determination or redetermination shall require the written approval (and not deemed approval) of all the Revolving Lenders in their sole discretion but subject to paragraph (d) of this Section 2.02(d)2.02, (B) in no event shall the determined or redetermined Borrowing Base exceed the aggregate Commitments of the Revolving Lenders, and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount any determination or redetermination of the Borrowing Base as so redeterminedresulting in any decrease of the Borrowing Base in effect immediately prior to such determination or redetermination shall not require the approval of any Defaulting Lender (and the definition of "Required Revolving Lenders" will automatically be deemed modified accordingly with respect to any such determination or redetermination). (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Revolving Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Revolving Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Revolving Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Administrative Agent and the Revolving Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Revolving Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Revolving Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “"proved developed” " therein was developed for oil and and/or gas, and the xxxxx wxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx wxxxx (“Xxxxx”"Wxxxx"), were each producing oil and/or gas in paying quantities, except for Xxxxx Wxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx wxxxx or as water disposal xxxxx (each as noted in such Engineering Report)wxxxx. Additionally, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in shall deliver with each such Engineering Report include the entire record title interests a list of any Proven Reserves that have been sold or acquired by the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce since the interests date of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such last Engineering Report (i) willdelivered to the Administrative Agent; provided that, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary such requirement shall not less than those net interests (expressed constitute nor be construed as a fraction, percentage consent to any sale or decimal) in proposed sale that would not be permitted under the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, terms of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)this Agreement.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August April 1 of each calendar year, beginning April 1, 20102008, and each August 31st thereafter, beginning with August 31, 2011, (A) an Independent Engineering Report dated effective as of the immediately preceding June 30January 1, (B) an Oil and Gas Property Certificate and a Farmout/Participation Property Certificate, each dated effective as of such April 1 date, (C) its requested amount for the redetermined Borrowing Base, and (D) such other information and data as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, including all such Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 twenty (20) days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report Report, Oil and Gas Property Certificate and Farmout/Participation Property Certificate and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase (which recommendation may, for the avoidance of doubt, be to leave the Borrowing Base unchanged or to decrease the Borrowing Base as further provided in this Section 2.02). Within ten (B10) days after the Lenders’ receipt of the Administrative Agent’s recommendation, the Administrative Agent and the Lenders in the case of an increase in the Borrowing Base, and the Administrative Agent and the Required Lenders in the case of a decrease in the Borrowing Base or a reaffirmation of the then existing Borrowing Base, shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before October 1 of each February 28calendar year, beginning February 28October 1, 20112008, (A) an Internal Engineering Report dated effective as of the immediately preceding December 31 July 1, (B) an Oil and Gas Property Certificate and a Farmout/Participation Property Certificate, each dated effective as of such October 1 date, (C) its requested amount for the redetermined Borrowing Base, and (D) such other information and data as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries, including all such Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 twenty (20) days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report Report, Oil and Gas Property Certificate and Farmout/Participation Property Certificate and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing BaseBase (which recommendation may, for the avoidance of doubt, be to leave the Borrowing Base unchanged or to decrease the Borrowing Base as further provided in this Section 2.02). Within ten (B10) days after the Lenders’ receipt of the Administrative Agent’s recommendation, the Administrative Agent and the Lenders in the case of an increase in the Borrowing Base, and the Administrative Agent and the Required Lenders in the case of a decrease in the Borrowing Base or a reaffirmation of the then existing Borrowing Base, shall redetermine the Borrowing Base in accordance with Section 2.02(d), and (C) the Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report Report, Oil and Gas Property Certificate, Farmout/Participation Property Certificate, or other information and data specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Lenders may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time to time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, Farmout/Participation Property Certificate, or other informationinformation and data, as applicable, whereupon the Administrative Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.022.02(b) and Section 2.02(d). (iv) Each delivery of an Engineering Report and related Oil and Gas Property Certificate by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Oil and Gas Properties specified described therein, (B) the Borrowing Base Properties described therein with at least 80% (by value) of the Proven Reserves covered therein are subject to an Acceptable Security Interest Lien, except to the extent otherwise expressly permitted in writing by the Lenders, and free and clear of any Liens (except Permitted Liens), (BC) on and as of the date of such Engineering Report Report, each of the Oil and Gas Property Properties owned by the Borrower or any of its Restricted Subsidiaries and described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), were each producing oil and/or and gas in paying quantities, except for Xxxxx any such xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx xxxxx. (v) Each delivery of a Farmout/Participation Property Certificate by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Restricted Subsidiaries, as applicable, own the Farmout Properties and the Participation Properties described therein (subject in each case to the reserved interests and burdens expressly set forth in the applicable Farmout Agreement or the applicable Participation Agreement, as noted the case may be), (B) the Farmout Properties described therein that are (or that are proposed to be) Borrowing Base Properties are Approved Farmout Properties, except to the extent otherwise expressly permitted in such Engineering Report)writing by the Lenders, (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Participation Properties described therein that are (or that are proposed to be) Borrowing Base Properties are Approved Participation Properties, are complete except to the extent permitted in writing by the Lenders and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held on and as of the date of such Farmout/Participation Property Certificate, each of the Farmout Properties and the Participation Properties owned by third parties which could reduce the interests of the Borrower or any of its Restricted Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement described therein relates to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)Proved Reserves.

Calculation of Borrowing Base. (i) The Borrower shall deliver to the Administrative Agent and each of the Lenders on or before August each April 1, 2010beginning April 1, and each August 31st thereafter, beginning with August 31, 20112006, an Independent Engineering Report dated effective as of the immediately preceding June 30December 31, and such other information as may be reasonably requested by any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Independent Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined; provided, however that the failure to give such notice shall not affect the validity of any such redetermination. (ii) The Borrower shall deliver to the Administrative Agent and each Lender, Lender on or before each February 28October 1, beginning February 28October 1, 20112005, an Internal Engineering Report dated effective as of the immediately preceding December 31 June 30, and such other information as may be reasonably requested by the Administrative Agent or any Lender with respect to the Oil and Gas Properties included or to be included in the Borrowing Base. Within 30 20 days after the Administrative Agent and the Lenders’ receipt of such Internal Engineering Report and other information, (A) the Administrative Agent shall deliver to each Lender the Administrative Agent’s recommendation for the redetermined Borrowing Base. Within 20 days after the Lenders’ receipt of the Administrative Agent’s recommendation, (B) each Lender shall advise the Administrative Agent whether or not such Lender agrees with the Administrative Agent’s recommendation and the Lenders shall redetermine the Borrowing Base shall be redetermined upon the approval of Majority Lenders (or all of the Lenders in accordance with Section 2.02(dcase of an increase in the Borrowing Base); provided, and (C) however, the failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. The Administrative Agent shall promptly notify the Borrower in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that the Borrower does not furnish to the Administrative Agent and the Lenders the Independent Engineering Report, Internal Engineering Report or other information specified in clauses (i) and (ii) above by the date specified therein, the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) may nonetheless redetermine the Borrowing Base and redesignate the Borrowing Base from time-to-time thereafter in their sole discretion until the Administrative Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, or other information whereupon the Administrative Agent and the Majority Lenders (or all the Lenders in case of an increase in the Borrowing Base) shall redetermine the Borrowing Base as otherwise specified in this Section 2.02. The failure of the Administrative Agent and the Lenders to redetermine the Borrowing Base and redesignate the Borrowing Base by the dates specified above shall not affect the validity of any redetermination and redesignation conducted from time-to-time hereafter. (iv) Each delivery of an Engineering Report by the Borrower to the Administrative Agent and the Lenders shall constitute a representation and warranty by the Borrower to the Administrative Agent and the Lenders that (A) the Borrower and its Subsidiaries, as applicable, own the Oil and Gas Properties specified therein with at least 80% (by value) of the Proven Reserves covered therein subject to an Acceptable Security Interest and free and clear of any Liens (except Permitted Liens), and (B) on and as of the date of such Engineering Report each Oil and Gas Property described as “proved developed” therein was developed for oil and gas, and the xxxxx pertaining to such Oil and Gas Properties that are described therein as producing xxxxx (“Xxxxx”), ) were each producing oil and/or and gas in paying quantities, except for Xxxxx that were utilized as water or gas injection xxxxx, carbon dioxide xxxxx or as water disposal xxxxx (each as noted in such Engineering Report), (C) the descriptions of quantum and nature of the record title interests of the Borrower and its Subsidiaries, as applicable, set forth in such Engineering Report include the entire record title interests of the Borrower and its Subsidiaries in such Oil and Gas Properties, are complete and accurate in all respects, and take into account all Permitted Liens, (D) there are no “back-in” or “reversionary” interests held by third parties which could reduce the interests of the Borrower or any of its Subsidiaries in such Oil and Gas Properties except as set forth in Engineering Report, (E) no operating or other agreement to which the Borrower or any of its Subsidiaries is a party or by which the Borrower or any of its Subsidiaries is bound affecting any part of such Oil and Gas Properties requires the Borrower or any of its Subsidiaries to bear any of the costs relating to such Oil and Gas Properties greater than the record title interest of the Borrower or any of its Subsidiaries in such portion of the such Oil and Gas Properties except as set forth in such Engineering Report, except in the event the Borrower or any of its Subsidiaries is obligated under an operating agreement to assume a portion of a defaulting party’s share of costs, and (F) the Borrower’s and the Subsidiaries’ ownership of the Hydrocarbons and the undivided interests in the Oil and Gas Properties as specified in such Engineering Report (i) will, after giving full effect to all Permitted Liens, afford the Borrower or the applicable Subsidiary not less than those net interests (expressed as a fraction, percentage or decimal) in the production from or which is allocated to such Hydrocarbons specified as net revenue interest in such Engineering Report and (ii) will cause the Borrower or the applicable Subsidiary to bear not more than that portion (expressed as a fraction, percentage or decimal), specified as working interest in such Engineering Report, of the costs of drilling, developing and operating the xxxxx identified in such Engineering Report or identified in the exhibits to the Mortgages encumbering such Oil and Gas Properties (except for any increases in working interest with a corresponding increase in the net revenue interest in such Oil and Gas Property)xxxxx.