AND GAS PROPERTIES (INCLUDING THOSE OWNED BY
GUARANTOR), WHICH REPORTS SHALL HAVE AN
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EFFECTIVE DATE OF SEPTEMBER 30 OF EACH YEAR.
BORROWER SHALL ALSO FURNISH BANKS
ON OR BEFORE MAY 1 OF EACH YEAR BEGINNING MAY 1, 2003 RESERVE REPORTS AND INCOME
PROJECTIONS FOR ALL OIL AND GAS PROPERTIES, WHICH RESERVE REPORTS SHALL HAVE AN
EFFECTIVE DATE OF JANUARY 1 OF EACH YEAR AND SHALL BE PREPARED BY WILLIAMSON
PETROLEUM CONSULTANTS, INC. (OR OTHER RESERVOIR ENGINEERING FIRM SATISFACTORY TO
MAJORITY BANKS), WHICH JANUARY 1 EFFECTIVE DATE REPORT SHALL BE ACCOMPANIED BY
INTERNALLY GENERATED INFORMATION SUFFICIENT TO ALLOW SUCH JANUARY 1 REPORT AND
THE INFORMATION CONTAINED THEREIN TO BE ROLLED FORWARD TO AN EFFECTIVE DATE OF
MARCH 31.
ALL SUCH ENGINEERING REPORTS, SHALL BE IN A FORM ACCEPTABLE TO AGENT
AND SHALL UTILIZE OIL AND GAS PRICES, ESCALATION FACTORS AND DISCOUNT RATES
CURRENTLY THEN BEING USED BY AGENT IN ITS GENERAL PETROLEUM LENDING BUSINESS;
(IV)
MONTHLY OPERATING AND PRODUCTION REPORTS.
BORROWER SHALL FURNISH
BANKS, WITHIN FORTY-FIVE (45) DAYS FOLLOWING THE CLOSE OF EACH MONTH, OIL AND
GAS PRODUCTION REPORTS (INCLUSIVE OF PRICES RECEIVED THEREON), DRILLING AND
COMPLETION REPORTS FOR THE WILLIAMS CONSOLIDATED ENTITIES;
(V)
BUDGETS AND PROJECTIONS.
ON EACH JUNE 1 AND DECEMBER 1 BORROWER
SHALL FURNISH TO BANKS A BUDGET AND CASH FLOW FORECAST FOR THE WILLIAMS
CONSOLIDATED ENTITIES PREPARED ON A TWELVE (12) MONTH ROLLING FORWARD BASIS WITH
RESPECT TO THEIR OPERATIONS IN A FORM SATISFACTORY TO AGENT;
(VI)
HEDGING REPORT.
BORROWER SHALL FURNISH BANKS AT THE SAME TIME IT
FURNISHES THE RESERVE REPORTS REQUIRED ABOVE IN SECTION 12(A)(III) AND IN
SECTION 6 HEREOF, WITH A REPORT OF RATE MANAGEMENT TRANSACTIONS THEN IN EFFECT,
SAID INFORMATION TO BE PROVIDED ON A MONTHLY AND AN AGGREGATE BASIS FOR ALL SUCH
FORWARD SALES;
(VII)
ADDITIONAL INFORMATION.
PROMPTLY UPON REQUEST OF THE BANKS FROM
TIME TO TIME ANY ADDITIONAL FINANCIAL INFORMATION OR OTHER INFORMATION THAT THE
BANKS MAY REASONABLY REQUEST.
All such reports referred to in Subsection 12(a) above shall be in such detail
as the Banks may reasonably request.
(B)
CERTIFICATES OF COMPLIANCE.
CONCURRENTLY WITH THE FURNISHING OF
THE ANNUAL FINANCIAL STATEMENTS PURSUANT TO SUBSECTION 12(A)(I) HEREOF AND EACH
OF THE QUARTERLY FINANCIAL STATEMENTS PURSUANT TO SUBSECTION 12(A)(II) HEREOF,
BORROWER WILL FURNISH OR CAUSE TO BE FURNISHED TO THE BANKS A CERTIFICATE IN THE
FORM OF EXHIBIT "C" HERETO, SIGNED BY A PERSON DULY AUTHORIZED TO EXECUTE SUCH A
CERTIFICATE ON BEHALF OF BORROWER (I) TO THE EXTENT REQUESTED FROM TIME TO TIME
BY THE BANKS, SPECIFICALLY AFFIRMING COMPLIANCE OF BORROWER IN ALL MATERIAL
RESPECTS WITH ANY OF ITS REPRESENTATIONS
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OR OBLIGATIONS UNDER THE SECURITY INSTRUMENTS; (II) SETTING FORTH THE
COMPUTATION, IN REASONABLE DETAIL AS OF THE END OF EACH PERIOD COVERED BY SUCH
CERTIFICATE, OF COMPLIANCE WITH SECTION 13(C), 13(D) AND 13(M) CONTAINING OR
ACCOMPANIED BY SUCH FINANCIAL OR OTHER DETAILS, INFORMATION AND MATERIAL AS THE
BANKS MAY REASONABLY REQUEST TO EVIDENCE SUCH COMPLIANCE; AND (III) CERTIFYING
TO THE BENEFICIAL OWNERSHIP OF AT LEAST 20% OF