Common use of Limitations on Borrowings Clause in Contracts

Limitations on Borrowings. Outstanding borrowings under the Line of Credit, to a maximum of the principal amount set forth above, shall not at any time exceed an aggregate of eighty percent (80%) of Borrower's eligible accounts receivable, plus, upon completion of an appraisal of Borrower’s finished goods inventory the results of which are satisfactory to Bank in Bank’s sole discretion, thirty percent (30%) of the value of Borrower's finished goods (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value; provided however, that outstanding borrowings against such finished goods inventory shall not at any time exceed an aggregate of Four Million Dollars ($4,000,000). All of the foregoing shall be DOCSOC/1656044v2/018854-0004 Exhibit 10.27 determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include: (i) any account which is either (a) more than sixty (60) days past due or (b) has not paid within ninety (90) days of invoice date regardless of invoice payment period terms; (ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted; (iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction); (iv) any account which represents an obligation of an account debtor located in a foreign country except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank; DOCSOC/1656044v2/018854-0004 Exhibit 10.27 (v) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower; (vi) that portion of any account, which represents interim or progress ▇▇▇▇▇▇▇▇ or retention rights on the part of the account debtor; (vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above; (viii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; (ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.” 11. Section 4.9(a) of the Agreement hereby is amended and restated in its entirety to read as follows: (a) Modified Quick Ratio greater than (i) 2.00 to 1.00 at all times, measured quarterly beginning with the quarter ending June 30, 2013, with “Modified Quick Ratio” defined as (I) the sum of the aggregate of Borrower’s unrestricted cash at Bank or subject to an account control agreement in favor of, and in form and substance satisfactory to, Bank, plus accounts receivable, divided by (II) total current liabilities plus, to the extent not already included therein, all indebtedness owing from Borrower to Bank.” 12. Section 4.9(b) of the Agreement hereby is amended and restated in its entirety to read as follows:

Limitations on Borrowings. Outstanding borrowings under From the Line Tenth Amendment Effective Date through the effectiveness of the November 1, 2022 Scheduled Redetermination, the Borrower shall not request that (x) the Lenders make any Loans or (y) the Issuing Banks issue, amend, renew or extend any Letter of Credit, if at the time of and immediately after giving effect to a maximum such Borrowing or issuance, amendment, renewal or extension of such Letter of Credit, as applicable, the principal amount set forth abovetotal Revolving Credit Exposures would exceed $525,000,000, and it is agreed that any request made in violation hereof shall not at any time exceed an aggregate of eighty percent (80%) of Borrower's eligible accounts receivablebe null and void; provided, plus, upon completion of an appraisal of Borrower’s finished goods inventory the results of which are satisfactory to Bank in Bank’s sole discretion, thirty percent (30%) of the value of Borrower's finished goods (exclusive of work in process and inventory which is obsolete, unsaleable or damaged), with value defined as the lower of cost or market value; provided however, that outstanding borrowings against such finished goods inventory this Section 9.20 shall not at any time exceed an aggregate of Four Million Dollars ($4,000,000). All of the foregoing shall be DOCSOC/1656044v2/018854-0004 Exhibit 10.27 determined by Bank upon receipt and review of all collateral reports required hereunder and such other documents and collateral information as Bank may from time cease to time require. Borrower acknowledges that said borrowing base was established by Bank with the understanding that, among other items, the aggregate of all returns, rebates, discounts, credits and allowances for the immediately preceding three (3) months at all times shall be less than five percent (5%) of Borrower's gross sales for said period. If such dilution of Borrower's accounts for the immediately preceding three (3) months at any time exceeds five percent (5%) of Borrower's gross sales for said period, or if there at any time exists any other matters, events, conditions or contingencies which Bank reasonably believes may affect payment of any portion of Borrower's accounts, Bank, in its sole discretion, may reduce the foregoing advance rate against eligible accounts receivable to a percentage appropriate to reflect such additional dilution and/or establish additional reserves against Borrower's eligible accounts receivable. As used herein, "eligible accounts receivable" shall consist solely of trade accounts created in the ordinary course of Borrower's business, upon which Borrower's right to receive payment is absolute and not contingent upon the fulfillment of any condition whatsoever, and in which Bank has a perfected security interest of first priority, and shall not include: (i) any account which is either (a) more than sixty (60) days past due or (b) has not paid within ninety (90) days of invoice date regardless of invoice payment period terms; (ii) that portion of any account for which there exists any right of setoff, defense or discount (except regular discounts allowed in the ordinary course of business to promote prompt payment) or for which any defense or counterclaim has been asserted; (iii) any account which represents an obligation of any state or municipal government or of the United States government or any political subdivision thereof (except accounts which represent obligations of the United States government and for which the assignment provisions of the Federal Assignment of Claims Act, as amended or recodified from time to time, have been complied with to Bank's satisfaction); (iv) any account which represents an obligation of an account debtor located in a foreign country except to the extent any such account, in Bank's determination, is supported by a letter of credit or insured under a policy of foreign credit insurance, in each case in form, substance and issued by a party acceptable to Bank; DOCSOC/1656044v2/018854-0004 Exhibit 10.27 (v) any account which arises from the sale or lease to or performance of services for, or represents an obligation of, an employee, affiliate, partner, member, parent or subsidiary of Borrower; (vi) that portion of any account, which represents interim or progress ▇▇▇▇▇▇▇▇ or retention rights on the part of the account debtor; (vii) any account which represents an obligation of any account debtor when twenty percent (20%) or more of Borrower's accounts from such account debtor are not eligible pursuant to (i) above; (viii) that portion of any account from an account debtor which represents the amount by which Borrower's total accounts from said account debtor exceeds twenty-five percent (25%) of Borrower's total accounts; (ix) any account deemed ineligible by Bank when Bank, in its sole discretion, deems the creditworthiness or financial condition of the account debtor, or the industry in which the account debtor is engaged, to be unsatisfactory.” 11. Section 4.9(a) of the Agreement hereby is amended and restated in its entirety to read as followsapply if: (a) Modified Quick Ratio greater The Administrative Agent has received reasonably satisfactory evidence that the Borrower and/or one of its Subsidiaries has consummated the Sundance Acquisition pursuant to the Sundance Acquisition Agreement without giving effect to any waiver, amendment, modification or consent thereto, in each case, that is materially adverse to the interests of the Lenders (as reasonably determined by the Administrative Agent in good faith) without the consent of the Administrative Agent; (b) The Administrative Agent has received a reserve report (the “Sundance Acquisition Reserve Report”) covering the Oil and Gas Properties subject of the Sundance Acquisition constituting Proved Reserves prepared by one or more Approved Petroleum Engineers, with an “as of” date of December 31, 2021 and substantially the same as the Borrower-prepared database provided to the Lenders prior to the Tenth Amendment Effective Date. For the avoidance of doubt, the Administrative Agent agrees that such database previously sent to the Administrative Agent by the Borrower on April 21, 2022 satisfies the requirements of this clause (b); (c) The Administrative Agent has received evidence reasonably satisfactory to it (including customary lien search results, duly executed recordable mortgage releases and UCC-3 financing statement terminations) that all Liens on the Sundance Assets (other than Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition) have been released or terminated, or will be released and terminated subject only to the filing of applicable terminations and releases and that such filings have been duly authorized; and (d) The Administrative Agent has received a certificate of a Responsible Officer of the Borrower certifying as of the Sundance Acquisition Closing Date that (i) 2.00 to 1.00 at attached thereto are true, accurate and complete copies of the Sundance Acquisition Agreement (including any amendments, supplements or other modifications thereto and any waivers or consents delivered in connection therewith) and all timesside letters and all other material agreements, measured quarterly beginning documents and assignments (including any assignments and bills of sale) executed and delivered in connection with the quarter ending June 30, 2013, with “Modified Quick Ratio” defined as Sundance Acquisition; and (Iii) the sum Loan Parties have acquired all of the aggregate Oil and Gas Properties evaluated in the Sundance Acquisition Reserve Report other than the Oil and Gas Properties set forth in a schedule attached to such certificate which are not acquired by the Borrower and/or one of Borrower’s unrestricted cash at Bank or subject to an account control agreement in favor of, and in form and substance satisfactory to, Bank, plus accounts receivable, divided by (II) total current liabilities plus, to its Subsidiaries on the extent not already included therein, all indebtedness owing from Borrower to Bank.” 12. Section 4.9(b) closing date of the Agreement hereby is amended Sundance Acquisition and restated in its entirety to read as follows:the basis therefor, if any.