Common use of Automatic Increases Clause in Contracts

Automatic Increases. (i) Notwithstanding the foregoing and subject to satisfaction of the condition precedent contained in Section 2.2(d)(ii), the Borrowing Base will automatically increase as follows (A) to $25,000,000.00 when two of the three New ▇▇▇▇▇ as described on Schedule IV attached hereto are completed and produce for at least seven consecutive days at rates materially consistent with the database received by the Administrative Agent from the Borrower in March of 2015 that was dated effective January of 2015 (as determined by the Administrative Agent in its sole discretion) and (B) to $32,500,000 when all three of the New ▇▇▇▇▇ described on Schedule IV are completed and produce for at least seven consecutive days at rates materially consistent with the database received by the Administrative Agent from the Borrower in March of 2015 that was dated effective January of 2015 (as determined by the Administrative Agent in its sole discretion). If the Administrative Agent determines in its sole discretion that such production rates for the New ▇▇▇▇▇ are materially less than the Borrower’s forecast for such New ▇▇▇▇▇, the Administrative Agent and the Lenders may in their sole discretion reduce the amount of the proposed increases described in clause (A) and (B) in this Section 2.2(d). Notwithstanding anything to the contrary contained herein, the automatic increases described in clause (A) and (B) in this Section 2.2(d) shall, to the extent either such increase has not already occurred, expire at the first Scheduled Redetermination of the Borrowing Base that occurs on or after October 1, 2015. (ii) Notwithstanding the foregoing, the Borrowing Base will not automatically increase as described in clause (A) and (B) in Section 2.2(d)(i) unless the Borrower both: (A) executes Mortgages, or supplements to existing Mortgages, granting an Acceptable Security Interest in the applicable New ▇▇▇▇▇, and (B) provides to the Administrative Agent title information regarding such New ▇▇▇▇▇ that is reasonably satisfactory to the Administrative Agent; provided that such requirement shall not change on a going forward basis the 80% mortgage requirement as described in Section 5.7 herein. (iii) Notwithstanding the foregoing, the Borrowing Base will not automatically increase as described in either clause (A) or (B) in Section 2.2(d)(i), as applicable, if the Borrowing Base is reduced pursuant to Section 2.2(g) hereof prior to such applicable automatic increases. If the Borrowing Base is reduced pursuant to Section 2.2(g) hereof prior to the automatic increase described in clause (A) of Section 2.2(d)(i) above, then the Borrowing Base will automatically increase by $5,000,000 when the conditions of clause (A) in Section 2.2(d)(i) and in Section 2.2(d)(ii) above are fully met (as determined by the Administrative Agent in its sole discretion). If the Borrowing Base is reduced pursuant to Section 2.2(g) hereof prior to the automatic increase described in clause (B) of Section 2.2(d)(i) above, then the Borrowing Base will automatically increase by $7,500,000 when the conditions of clause (B) in Section 2.2(d)(i) and in Section 2.2(d)(ii) above are fully met (as determined by the Administrative Agent in its sole discretion).