BE, AS A LENDER PARTY TO THIS AGREEMENT IN ACCORDANCE WITH AND
SUBJECT TO THE RESTRICTIONS CONTAINED IN, AND CONSENTS REQUIRED BY SECTION
11.04; PROVIDED THAT (I) THE BORROWER SHALL HAVE RECEIVED THE PRIOR WRITTEN
CONSENT OF THE ADMINISTRATIVE AGENT (AND IF A COMMITMENT IS BEING ASSIGNED, THE
ISSUING BANK), WHICH CONSENT SHALL NOT UNREASONABLY BE WITHHELD, (II) SUCH
LENDER SHALL HAVE RECEIVED PAYMENT OF AN AMOUNT EQUAL TO THE OUTSTANDING
PRINCIPAL OF ITS LOANS AND PARTICIPATIONS IN LC DISBURSEMENTS, ACCRUED INTEREST
THEREON, ACCRUED FEES AND ALL OTHER AMOUNTS PAYABLE TO IT HEREUNDER, FROM THE
ASSIGNEE (TO THE EXTENT OF SUCH OUTSTANDING PRINCIPAL AND ACCRUED INTEREST AND
FEES) OR THE BORROWER (IN THE CASE OF ALL OTHER AMOUNTS) AND (III) IN THE CASE
OF ANY SUCH ASSIGNMENT RESULTING FROM A CLAIM FOR COMPENSATION UNDER SECTION
2.16 OR PAYMENTS REQUIRED TO BE MADE PURSUANT TO SECTION 2.18, SUCH ASSIGNMENT
WILL RESULT IN A REDUCTION IN SUCH COMPENSATION OR PAYMENTS. A LENDER SHALL NOT
BE REQUIRED TO MAKE ANY SUCH ASSIGNMENT AND DELEGATION IF, PRIOR THERETO, AS A
RESULT OF A WAIVER BY SUCH LENDER OR OTHERWISE, THE CIRCUMSTANCES ENTITLING THE
BORROWER TO REQUIRE SUCH ASSIGNMENT AND DELEGATION CEASE TO APPLY OR, IN THE
CASE OF A DEFAULTING LENDER, SUCH LENDER IS NO LONGER A DEFAULTING LENDER.
ARTICLE III
BORROWING BASE
SECTION 3.01.
RESERVE REPORT; PROPOSED BORROWING BASE. DURING THE
PERIOD FROM THE EFFECTIVE DATE UNTIL THE FIRST REDETERMINATION AFTER THE
EFFECTIVE DATE, THE BORROWING BASE SHALL BE $750,000,000 (THE "INITIAL BORROWING
BASE"). AS SOON AS AVAILABLE AND IN ANY EVENT BY APRIL 1 AND OCTOBER 1 OF EACH
YEAR, BEGINNING OCTOBER 1, 2006, THE BORROWER SHALL DELIVER TO THE
ADMINISTRATIVE AGENT AND EACH LENDER A RESERVE REPORT, PREPARED AS OF THE
IMMEDIATELY PRECEDING DECEMBER 31 AND JUNE 30, RESPECTIVELY, IN FORM AND
SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT AND PREPARED BY AN
APPROVED PETROLEUM ENGINEER (OR, IN THE CASE OF THE RESERVE REPORT DUE ON
OCTOBER 1 OF EACH YEAR, BY PETROLEUM ENGINEERS EMPLOYED BY THE BORROWER), SAID
RESERVE REPORT TO UTILIZE ECONOMIC AND PRICING PARAMETERS ESTABLISHED FROM TIME
TO TIME BY THE ADMINISTRATIVE AGENT, TOGETHER WITH SUCH OTHER INFORMATION,
REPORTS AND DATA CONCERNING THE VALUE OF THE BORROWING BASE PROPERTIES AS THE
ADMINISTRATIVE AGENT SHALL DEEM REASONABLY NECESSARY TO DETERMINE THE VALUE OF
SUCH BORROWING BASE PROPERTIES. SIMULTANEOUSLY WITH THE DELIVERY TO THE
ADMINISTRATIVE AGENT AND THE LENDERS OF EACH RESERVE REPORT, THE BORROWER SHALL
SUBMIT TO THE ADMINISTRATIVE AGENT AND EACH LENDER THE BORROWER'S REQUESTED
AMOUNT OF THE BORROWING BASE AS OF THE NEXT REDETERMINATION DATE. PROMPTLY AFTER
THE RECEIPT BY THE ADMINISTRATIVE AGENT OF SUCH RESERVE REPORT AND BORROWER'S
REQUESTED AMOUNT FOR THE BORROWING BASE, THE ADMINISTRATIVE AGENT SHALL SUBMIT
TO THE LENDERS A RECOMMENDED AMOUNT
47
OF THE BORROWING BASE TO BECOME EFFECTIVE FOR THE PERIOD COMMENCING ON THE NEXT
REDETERMINATION DATE.
SECTION 3.02.
SCHEDULED REDETERMINATIONS OF THE BORROWING BASE;
PROCEDURES AND STANDARDS. BASED IN PART ON THE RESERVE REPORTS MADE AVAILABLE TO
THE ADMINISTRATIVE