Common use of CALCULATION OF BORROWING BASES Clause in Contracts

CALCULATION OF BORROWING BASES. (i) The Borrowers shall deliver to the Agent and each of the Lenders on or before each March 15, beginning March 15, 2004, an Independent Engineering Report evaluating the Mortgaged Properties as of January 1 of such calendar year, and such other information as may be reasonably requested by any Lender with respect to the Mortgaged Properties included or to be included in the Borrowing Base. Within 30 days after the Agent and the Lenders' receipt of such Independent Engineering Report and other information, the Agent shall deliver to each Lender the Agent's recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders' receipt of the Agent's recommendation, the Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.10(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders) and the Agent shall promptly notify the Borrowers in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrowers shall deliver to the Agent and each Lender on or before each September 15, beginning September 15, 2004, an Internal Engineering Report evaluating the Mortgaged Properties of the Borrowers as of July 1 of such calendar year, and such other information as may be reasonably requested by the Agent or any Lender with respect to the Mortgaged Properties included or to be included in the Borrowing Base. Within 30 days after the Agent and the Lenders' receipt of such Internal Engineering Report and other information, the Agent shall deliver to each Lender the Agent's recommendation for the redetermined

CALCULATION OF BORROWING BASES. (i) The Borrowers shall deliver to the Agent and each of the Lenders on or before each March 15, beginning March 15, 20042001, an Independent Engineering Report evaluating the Mortgaged Properties of the Borrowers as of January 1 of such calendar year, and such other information as may be reasonably requested by any Lender with respect to the Mortgaged Properties included or to be included in the Borrowing Base. Within 30 days after the Agent and the Lenders' receipt of such Independent Engineering Report and other information, the Agent shall deliver to each Lender the Agent's recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders' receipt of the Agent's recommendation, the Agent and the Required Lenders shall redetermine the Borrowing Base in accordance with Section 2.10(d) (except that any increase in the Borrowing Base shall require the consent of all the Lenders) and the Agent shall promptly notify the Borrowers in writing of the amount of the Borrowing Base as so redetermined. (ii) The Borrowers shall deliver to the Agent and each Lender on or before each September 15, beginning September 15, 20042001, an Internal Engineering Report evaluating the Mortgaged Properties of the Borrowers as of July 1 of such calendar year, and such other information as may be reasonably requested by the Agent or any Lender with respect to the Mortgaged Properties included or to be included in the Borrowing Base. Within 30 days after the Agent and the Lenders' receipt of such Internal Engineering Report and other information, the Agent shall deliver to each Lender the Agent's recommendation for the redetermined Borrowing Base. Within 15 days after the Lenders' receipt of the Agent's recommendation, the Agent and the Lenders shall redetermine the Borrowing Base in accordance with Section 2.10(d) and the Agent shall promptly notify the Borrowers in writing of the amount of the Borrowing Base as so redetermined. (iii) In the event that a Borrower does not furnish to the 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 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 Agent and the Lenders receive the relevant Independent Engineering Report, Internal Engineering Report, or other information, as applicable, whereupon the Agent and the Lenders shall redetermine the Borrowing Base as otherwise specified in this Section 2.10. (iv) Each delivery of an Engineering Report by the Borrowers to the Agent and the Lenders shall constitute a representation and warranty by the Borrowers to the Agent and the Lenders that (A) the Borrowers, as applicable, own the Oil and Gas Properties specified therein 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 ▇▇▇▇▇ pertaining to such Oil and Gas Properties that are described therein as producing ▇▇▇▇▇ ("▇▇▇▇▇"), were each producing oil and gas in paying quantities, except for ▇▇▇▇▇ that were unitized as water or gas injection ▇▇▇▇▇ or as water disposal ▇▇▇▇▇. (v) The Borrowing Base, as established by the procedures set forth in this Section 2.10(b) and as such Borrowing Base may be redetermined periodically, shall automatically and permanently reduce in equal amounts on a monthly basis on the last day of each calendar month commencing with, unless the parties otherwise agree, the calendar month immediately following each redetermination (except that the first such reduction occurring after the date of this Agreement shall occur on October 31, 2000). Concurrent with each redetermination, the Agent and the Lenders shall establish the amount of the monthly Borrowing Base reduction that shall apply until the next redetermination. The initial monthly Borrowing Base reduction amount shall be equal to $300,000 and shall commence on October 31, 2000. (vi) For the period from and including the date of this Agreement to and including the first redetermination, the amount of the Borrowing Base shall be $5,000,000.