Common use of Mineral Interests Clause in Contracts

Mineral Interests. Except to the extent disposed of since the date of the most recently delivered Reserve Report, each Loan Party has good and defensible title to all of its Borrowing Base Properties evaluated in such Reserve Report, free and clear of all Liens except Permitted Encumbrances and Immaterial Title Deficiencies. Subject only to Immaterial Title Deficiencies and Permitted Encumbrances, all Borrowing Base Properties are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Party has determined in good faith that payment and discharge thereof is not in such Loan Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any Proved Mineral Interests of any Loan Party, but subject to Immaterial Title Deficiencies and Permitted Encumbrances, each Loan Party’s share of (a) the costs for each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) is not greater than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,” or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) is not less than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar terms. Each well drilled in respect of each Borrowing Base Property evaluated in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (i) is capable of, and, with the exception of xxxxx which are presently not producing Hydrocarbons as a result of maintenance or repair in the ordinary course of business or due to circumstances outside any Loan Party’s control, is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Party is receiving payments for its share of production, and no material amount of funds in respect of any thereof are held in suspense, and (ii) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 shall not automatically cause an Event of Default under Section 8.01(d) hereof. Instead, upon becoming aware that any Loan Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.

Mineral Interests. Except The real property described in Exhibit K hereto (the “Property Description”) is an accurate and complete description of all Mortgaged Properties owned by the Borrower and its Subsidiaries which are real property on and as of the Closing Date, and such Mortgaged Properties, together with the Mortgaged Properties described in Exhibit K to the extent disposed U.S. Credit Agreement, constitute the Required Reserve Value. Subject only to Immaterial Title Deficiencies (as herein defined) and Permitted Encumbrances, the Borrower and each of since the date of the most recently delivered Reserve Report, each Loan Party has its Subsidiaries executing a Security Document (as applicable) have good and defensible title to all of its Borrowing Base Properties evaluated in such Reserve Reportowned by the Borrower and its Subsidiaries, as applicable, free and clear of all Liens except Permitted Encumbrances and Immaterial Title Deficiencies. Subject only to Immaterial Title Deficiencies and for Permitted Encumbrances, all Borrowing Base Properties are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Party has determined in good faith that payment and discharge thereof is not in such Loan Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any of the Borrower’s or such Subsidiary’s (as applicable) Proved Mineral Interests of any Loan PartyInterests, but subject to Immaterial Title Deficiencies and Permitted Encumbrances, each Loan Partythe Borrower’s share and/or the share of each Subsidiary executing a Security Document (as applicable) of (a) the costs for each of its Borrowing Base Properties evaluated Proved Mineral Interest described in the most recently delivered recent Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) delivered pursuant hereto is not greater than 105% of the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,” or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) Proved Mineral Interest is not less than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar terms. Each well drilled in respect of each Borrowing Base Property evaluated in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (i) is capable of, and, with the exception of xxxxx which are presently not producing Hydrocarbons as a result of maintenance or repair in the ordinary course of business or due to circumstances outside any Loan Party’s control, is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Party is receiving payments for its share of production, and no material amount of funds in respect of any thereof are held in suspense, and (ii) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 shall not automatically cause an Event of Default under Section 8.01(d) hereof. Instead, upon becoming aware that any Loan Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18As used herein, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.term “Immaterial Title

Mineral Interests. Except The Property Description is an accurate ----------------- and complete description of all Borrowing Base Properties on the Closing Date. Subject only to the extent disposed Immaterial Title Deficiencies (as herein defined), Borrower and each of since the date of the most recently delivered Reserve Report, each Loan Party has its Subsidiaries executing a Mortgage (as applicable) have good and defensible title to all of its Mineral Interests described in the Reserve Report, including, without limitation, all Borrowing Base Properties evaluated in such Reserve ReportProperties, free and clear of all Liens except for Permitted Encumbrances and Immaterial Title DeficienciesEncumbrances. Subject only to Immaterial Title Deficiencies and Permitted EncumbrancesDeficiencies, all Borrowing Base Properties Mineral Interests described in the Reserve Report are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Party has determined in good faith that payment and discharge thereof is not in such Loan Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any of Borrower's or such Subsidiary's (as applicable) Proved Mineral Interests of any Loan PartyInterests, but subject to Immaterial Title Deficiencies and Permitted EncumbrancesDeficiencies, Borrower's share and/or the share of each Loan Party’s share Subsidiary executing a Mortgage (as applicable) of (a) the costs for each of its Borrowing Base Properties evaluated Proved Mineral Interest described in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) is not greater than the decimal fraction set forth in such the Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “"working interests,” “" "WI,” “" "gross working interest,” “" "GWI,” " or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) Proved Mineral Interest is not less than the decimal fraction set forth in such the Reserve Report, before and after payout, as the case may be, and described therein by the designations “"net revenue interest,” “" "NRI,” " or similar terms. As used herein, the term "Immaterial Title Deficiencies" means minor defects or ----------------------------- deficiencies in title which do not effect, in the aggregate, more than two percent (2%) (by value) of all Borrowing Base Properties. Each well drilled in respect of each Borrowing Base Property evaluated Proved Producing Mineral Interest described in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (iy) is capable of, and, with the exception of xxxxx which are presently not producing Hydrocarbons as a result of maintenance or repair in the ordinary course of business or due to circumstances outside any Loan Party’s control, and is presently, producing Hydrocarbons in commercially profitable quantities, and after giving effect to the transactions contemplated by this Agreement, Borrower and each Loan Party is receiving of its Subsidiaries executing a Mortgage (as applicable) will receive payments on a current basis for its share of production, and with no material amount of funds in respect of any thereof are held in suspense, other than any such funds held in suspense pending delivery of appropriate division orders, and (iiz) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 shall not automatically cause an Event of Default under Section 8.01(d) hereof. Instead, upon becoming aware that any Loan Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.

Mineral Interests. Except to the extent disposed of since the date of the most recently delivered Reserve Report, each Loan Credit Party has good and defensible title to all of its Borrowing Base Properties evaluated in such Reserve Report, free and clear of all Liens except Permitted Encumbrances and Immaterial Title Deficiencies. Subject only to Immaterial Title Deficiencies and Permitted Encumbrances, all Borrowing Base Properties are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Credit Party has determined in good faith that payment and discharge thereof is not in such Loan Credit Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any Proved Mineral Interests of any Loan Credit Party, but subject to Immaterial Title Deficiencies and Permitted Encumbrances, each Loan Credit Party’s share of (a) the costs for each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative AgentReport) is not greater than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,” or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative AgentReport) is not less than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar terms. Each well drilled in respect of each Borrowing Base Property evaluated in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (i) is capable of, and, with the exception of xxxxx wxxxx which are presently not producing Hydrocarbons as a result pending the completion of maintenance or repair in the ordinary course of business or due workovers and repairs to circumstances outside any Loan Party’s controlsuch wxxxx, is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Credit Party is receiving payments for its share of production, and no material amount of funds in respect of any thereof are held in suspense, and (ii) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 5.09 shall not automatically cause an Event of Default under Section 8.01(d8.01(e) hereof. Instead, upon becoming aware that any Loan Party has breached, or caused the such breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18, the Required Lenders may shall cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination if and when such breach results in an Event of Default under the Borrowing Base, Senior Credit Agreement and the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from Borrower’s Obligations under the Borrowing Base in effect immediately prior to Senior Credit Agreement are accelerated and such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are acceleration is not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interestsrescinded.

Mineral Interests. Except The Property Description is an accurate ----------------- and complete description of all Borrowing Base Properties on the Closing Date. Subject only to Immaterial Title Deficiencies (as herein defined), after giving effect to the extent disposed of since the date of the most recently delivered Reserve ReportClosing Transactions, each Loan Party has Borrower will have good and defensible title to all of its Mineral Interests described in the Reserve Report, including, without limitation, all Borrowing Base Properties evaluated in such Reserve ReportProperties, free and clear of all Liens except for Permitted Encumbrances and Immaterial Title DeficienciesEncumbrances. Subject only to Immaterial Title Deficiencies and Permitted EncumbrancesDeficiencies, all Borrowing Base Properties Mineral Interests described in the Reserve Report are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Party has determined in good faith that payment and discharge thereof is not in such Loan Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any of Borrower's Proved Mineral Interests of any Loan PartyInterests, after giving effect to the Closing Transactions, but subject to Immaterial Title Deficiencies and Permitted EncumbrancesDeficiencies, each Loan Party’s Borrower's share of (a) the costs for each of its Borrowing Base Properties evaluated Proved Mineral Interest described in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) is not greater than the decimal fraction set forth in such the Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “"working interests,” “" "WI,” “" "gross working interest,” “" "GWI,” " or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) Proved Mineral Interest is not less than the decimal fraction set forth in such the Reserve Report, before and after payout, as the case may be, and described therein by the designations “"net revenue interest,” “" "NRI,” " or similar terms. As used herein, the term "Immaterial Title Deficiencies" means minor defects or ----------------------------- deficiencies in title which do not effect, in the aggregate, more than two percent (2%) (by value) of all Borrowing Base Properties. Each well drilled in respect of each Borrowing Base Property evaluated Proved Producing Mineral Interest described in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (iy) is capable of, and, with the exception of xxxxx which are presently not producing Hydrocarbons as a result of maintenance or repair in the ordinary course of business or due to circumstances outside any Loan Party’s control, and is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Party is receiving after giving effect to the Closing Transactions, Borrower will receive payments on a current basis for its share of production, and with no material amount of funds in respect of any thereof are held in suspense, other than any such funds held in suspense pending delivery of appropriate division orders, and (iiz) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 shall not automatically cause an Event of Default under Section 8.01(d) hereof. Instead, upon becoming aware that any Loan Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.

Mineral Interests. Except to the extent disposed of since the date of the most recently delivered Reserve Report, each Loan Credit Party has good and defensible title to all of its Borrowing Base Properties evaluated in such Reserve Report, free and clear of all Liens except Permitted Encumbrances and Immaterial Title Deficiencies. Subject only to Immaterial Title Deficiencies and Permitted Encumbrances, all Borrowing Base Properties are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Credit Party has determined in good faith that payment and discharge thereof is not in such Loan Credit Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any Proved Mineral Interests of any Loan Credit Party, but subject to Immaterial Title Deficiencies and Permitted Encumbrances, each Loan Credit Party’s share of (a) the costs for each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative AgentReport) is not greater than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,” or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative AgentReport) is not less than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar terms. Each well drilled in respect of each Borrowing Base Property evaluated in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (i) is capable of, and, with the exception of xxxxx wxxxx which are presently not producing Hydrocarbons as a result pending the completion of maintenance or repair in the ordinary course of business or due workovers and repairs to circumstances outside any Loan Party’s controlsuch wxxxx, is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Credit Party is receiving payments for its share of production, and no material amount of funds in respect of any thereof are held in suspense, and (ii) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 5.09 shall not automatically cause an Event of Default under Section 8.01(d8.01(e) hereof. Instead, upon becoming aware that any Loan Credit Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.185.09, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c2.13(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 5.09 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.

Mineral Interests. Except to the extent disposed of since the date of the most recently delivered Reserve Report, each Loan Credit Party has good and defensible title to all of its Borrowing Base Properties evaluated in such Reserve Report, free and clear of all Liens except Permitted Encumbrances and Immaterial Title Deficiencies. Subject only to Immaterial Title Deficiencies and Permitted Encumbrances, all Borrowing Base Properties are valid, subsisting, and in full force and effect, and all material rentals, royalties, and other amounts due and payable in respect thereof have been duly paid, except for delay rentals with respect to which the applicable Loan Credit Party has determined in good faith that payment and discharge thereof is not in such Loan Credit Party’s best interest. Without regard to any consent or non-consent provisions of any joint operating agreement covering any Proved Mineral Interests of any Loan Credit Party, but subject to Immaterial Title Deficiencies and Permitted Encumbrances, each Loan Credit Party’s share of (a) the costs for each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such costs were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative AgentReport) is not greater than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the respective designations “working interests,” “WI,” “gross working interest,” “GWI,” or similar terms, and (b) production from, allocated to, or attributed to each of its Borrowing Base Properties evaluated in the most recently delivered Reserve Report (except to the extent such Borrowing Base Properties were disposed of since the date of such Reserve Report or such allocations were altered by any operating agreements, joint venture agreements, partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, purchase, transportation, processing or exchange of oil, gas or other hydrocarbons, unitization and pooling declarations and agreements, area of mutual interest agreements, development agreements, joint ownership arrangements and other agreements which are customary in the oil and gas business which have been disclosed to the Administrative Agent) is Report)is not less than the decimal fraction set forth in such Reserve Report, before and after payout, as the case may be, and described therein by the designations “net revenue interest,” “NRI,” or similar terms. Each well drilled in respect of each Borrowing Base Property evaluated in the most recently delivered Reserve Report (except to the extent disposed of since the date of such Reserve Report) which is categorized as proved developed producing reserves and described in such Reserve Report (i) is capable of, and, with the exception of xxxxx wxxxx which are presently not producing Hydrocarbons as a result pending the completion of maintenance or repair in the ordinary course of business or due workovers and repairs to circumstances outside any Loan Party’s controlsuch wxxxx, is presently, producing Hydrocarbons in commercially profitable quantities, and each Loan Credit Party is receiving payments for its share of production, and no material amount of funds in respect of any thereof are held in suspense, and (ii) has been drilled, bottomed, completed, and operated in compliance with all applicable Laws in all material respects and no such well which is currently producing Hydrocarbons is subject to any material penalty in production by reason of such well having produced in excess of its allowable production. The breach of any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 5.09 shall not automatically cause an Event of Default under Section 8.01(d8.01(e) hereof. Instead, upon becoming aware that any Loan Credit Party has breached, or caused the breach of, any representation or warranty set forth in Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.185.09, the Required Lenders may cause to be made a Special Redetermination of the Borrowing Base according to Section 2.15(c2.13(c) hereof, in which case that portion of the Borrowing Base Properties as to which the representations and warranties of Section 5.08 (as it relates to Borrowing Base Properties) or this Section 5.18 5.09 have been breached shall be excluded from the Mineral Interests evaluated for purposes of the Borrowing Base; provided, however, an Event of Default shall occur if, upon redetermination of the Borrowing Base, the Borrowing Base as so redetermined has been reduced by more than twenty-five percent (25%) from the Borrowing Base in effect immediately prior to such Redetermination or the Borrower fails to pay in full when due any mandatory prepayment required by Section 2.04 hereof as a result of such Borrowing Base Deficiency. In lieu of the foregoing requirement of a Special Redetermination, within 60 days of notice from the Administrative Agent that such title defects or exceptions exist with respect to Borrowing Base Properties (or such longer period as the Majority Lenders may agree), the Borrower may either (i) cure any such title defects or exceptions (including defects or exceptions as to priority) which are not permitted by this Section 5.18 and raised by such information, (ii) substitute acceptable Proved Mineral Interests by subjecting them to a Mortgage, with such Proved Mineral Interests having an equivalent value to the Proved Mineral Interests substituted therefor, or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least 75% of the Recognized Value of all Proved Mineral Interests.