Common use of Redeterminations of the Borrowing Base Clause in Contracts

Redeterminations of the Borrowing Base. The Lenders shall redetermine the Borrowing Base semi-annually on May 1 and November 1 of each year beginning November 1, 2004 or as Special Redeterminations. By April 1 each year, beginning April 1, 2005, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent prepared by an Approved Petroleum Engineer, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from time to time, 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. By October 1 of each year beginning October 1, 2004, or within thirty (30) days after (i) the failure of a Capital Markets Event to occur within ninety (90) days after the Closing Date and the receipt by the Borrowers of notice from the Administrative Agent or the Required Lenders that a Special Redetermination is required, (ii) the receipt by the Borrowers of notice from the Administrative Agent that the Lenders require a Special Redetermination, or (iii) the Borrowers give notice to the Administrative Agent of their desire to have a Special Redetermination performed, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from to time, together with such other information, reports and data concerning the value of such Borrowing Base Properties as the Administrative Agent shall deem reasonably necessary to determine the value of such Borrowing Base Properties. The Administrative Agent shall by written notice to the Borrowers no later than May 1 and November 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrowers of the designation by the Lenders of the new Borrowing Base and for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If a Special Redetermination is to be made by the Lenders, the Administrative Agent shall notify the Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, and such new Borrowing Base shall continue until the next Determination Date. If the Borrowers do not furnish all such information, reports and data by any date specified in this Section 4.2, unless such failure is not the fault of the Borrowers, the Lenders may nonetheless designate the Borrowing Base at any amounts which the Lenders in their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Lenders receive all such information, reports and data, whereupon the Lenders shall designate a new Borrowing Base, as described above. The procedure for determining the Borrowing Base at each redetermination shall be that the Borrowers shall submit to the Administrative Agent and the Lenders, in writing, a proposed amount as the Borrowing Base as of the next redetermination date. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Required Lenders. If any redetermined Borrowing Base is not approved by Required Lenders within twenty (20) days after the submission to the Administrative Agent and the Lenders by the Borrowers of the proposed amount, the Administrative Agent shall notify each of the Lenders that the proposed Borrowing Base has not been approved and each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each Lender, said proposals to be weighted according to each Lender’s Pro Rata Share. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which such Lender in its sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to Borrowing Base Properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Borrowing Base Properties at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of CWEI and the Subsidiaries) as such Lender customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Lenders have no obligation to designate the Borrowing Base at any particular amounts, except in the exercise of their discretion, whether in relation to the Commitments or otherwise; provided, that the Lenders shall not designate a Borrowing Base in an amount in excess of the Aggregate Commitment.

Redeterminations of the Borrowing Base. The Lenders Borrowing Base shall be redetermined (i) after receipt by the Administrative Agent of each scheduled Reserve Report, commencing with the June 30, 1999 Reserve Report, (ii) upon the delivery of a Lender Redetermination Notice (which shall not be delivered until after the Applicable Redetermination) to the Borrower and (iii) upon the delivery of a Borrower Redetermination Notice (which, except as provided in paragraph (f) below, shall not be delivered until after the Applicable Redetermination) to the Administrative Agent, all as provided in this subsection 4.9. Within 15 days after the delivery of a Borrower Redetermination Notice or a Lender Redetermination Notice, the Borrower shall furnish to the Administrative Agent and to each Lender a Reserve Report as of the most recent practicable date. If the Borrower fails to deliver a Reserve Report within the time period provided for in the preceding sentence, then the Administrative Agent shall have the right to rely on the last Reserve Report previously delivered by the Borrower with any such adjustments and taking into account any additional information as the Administrative Agent may deem appropriate, in its sole discretion. Other than in connection with the August '99 Redetermination or the Special Redetermination, on or before the date which is 30 days after receipt (i) of a scheduled semi-annual Reserve Report or (ii) of a Reserve Report in connection with a Lender Redetermination Notice or a Borrower Redetermination Notice, the Administrative Agent shall redetermine the Borrowing Base semi-annually on May 1 in its sole discretion, and November 1 of each year beginning November 1, 2004 or as Special Redeterminations. By April 1 each year, beginning April 1, 2005, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent prepared by an Approved Petroleum Engineer, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from time to time, 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. By October 1 of each year beginning October 1, 2004, or within thirty (30) days after (i) the failure of a Capital Markets Event to occur within ninety (90) days after the Closing Date and the receipt by the Borrowers of notice from the Administrative Agent or the Required Lenders that a Special Redetermination is required, (ii) the receipt by the Borrowers of notice from the Administrative Agent that the Lenders require a Special Redetermination, or (iii) the Borrowers give notice to the Administrative Agent of their desire to have a Special Redetermination performed, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from to time, together with such other information, reports and data concerning the value of such Borrowing Base Properties as the Administrative Agent shall deem reasonably necessary to determine the value of such Borrowing Base Properties. The Administrative Agent shall by written notice to the Borrowers no later than May 1 and November 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrowers of the designation by the Lenders of the new Borrowing Base and for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If a Special Redetermination is to be made by the Lenders, the Administrative Agent shall notify the Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, and such new Borrowing Base shall continue until the next Determination Date. If the Borrowers do not furnish all such information, reports and data by any date specified in this Section 4.2, unless such failure is not the fault of the Borrowers, the Lenders may nonetheless designate the Borrowing Base at any amounts which the Lenders in their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Lenders receive all such information, reports and data, whereupon the Lenders shall designate a new Borrowing Base, as described above. The procedure for determining the Borrowing Base at each redetermination shall be that the Borrowers shall submit to the Administrative Agent and the Lenders, in writing, a proposed amount as the Borrowing Base as of the next redetermination date. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Required Lenders. If any redetermined Borrowing Base is not approved by Required Lenders within twenty (20) days after the submission to the Administrative Agent Borrower and the Lenders by the Borrowers of its redetermination of the proposed amountBorrowing Base. In connection with the August '99 Redetermination, the Administrative Agent shall redetermine the Borrowing Base by August 13, 1999 provided the June 30, 1999 Reserve Report has been received by it no later than July 30, 1999. In connection with a Special Redetermination, the Administrative Agent shall redetermine the Borrowing Base within 14 days of receipt from the Borrower of the Reserve Report to be used in connection therewith. Within 10 days after receipt from the Administrative Agent of the amount of its redetermination of the Borrowing Base, each Lender shall notify each the Administrative Agent stating whether or not such Lender agrees with that redetermination. Failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. If the Supermajority Lenders (or, with respect to the Applicable Redetermination, all of the Lenders) agree with that redetermination, then the Administrative Agent promptly shall notify the Borrower of the Borrowing Base as so redetermined, whereupon that redetermined value shall automatically become effective (and shall remain effective until the Borrowing Base is again redetermined as provided in this subsection 4.9(c)). If the Supermajority Lenders (or, with respect to the Applicable Redetermination, all of the Lenders) have not approved or are not deemed to have approved the Borrowing Base within the 10 day period following their receipt of the proposed amount from the Administrative Agent, the Borrowing Base shall be set at the amount of the then current Borrowing Base and the Borrowing Base shall remain at such level until the Supermajority Lenders (or, with respect to the Applicable Redetermination, all of the Lenders), utilizing the procedure outlined herein, agree on a new Borrowing Base. Each redetermination provided for by this subsection 4.9(c) shall be made in accordance with the provisions of subsection 4.9(d). Other than in connection with the Applicable Redetermination, it is the intention of the Borrower and the Lenders that the proposed Borrowing Base has not been approved and be redetermined within 45 days after the furnishing of each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each LenderReserve Report, said proposals to be weighted according to each Lender’s Pro Rata Share. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which such Lender in its sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to Borrowing Base Properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Borrowing Base Properties at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of CWEI and the Subsidiaries) as such Lender customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Lenders have no obligation to designate the Borrowing Base at any particular amounts, except in the exercise of their discretion, whether in relation subject to the Commitments or otherwise; provided, that the Lenders shall not designate a Borrowing Base in an amount in excess provisions of the Aggregate Commitmentthis paragraph (c).

Redeterminations of the Borrowing Base. The Lenders Borrowing Base shall be redetermined (i) after receipt by the Administrative Agent of each scheduled Reserve Report, commencing with the June 30, 1999 Reserve Report, (ii) upon the delivery of a Lender Redetermination Note (which shall not be delivered until after the Applicable Redetermination) to the Borrower and (iii) upon the delivery of a Borrower Redetermination Notice (which, except as provided in paragraph (f) below, shall not be delivered until after the Applicable Redetermination) to the Administrative Agent, all as provided in this subsection 4.9. Within 15 days after the delivery of a Borrower Redetermination Notice or a Lender Redetermination Notice, the Borrower shall furnish to the Administrative Agent and to each Lender a Reserve Report as of the most recent practicable date. If the Borrower fails to deliver a Reserve Report within the time period provided for in the preceding sentence, then the Administrative Agent shall have the right to rely on the last Reserve Report previously delivered by the Borrower which any such adjustments and taking into account any additional information as the Administrative Agent may deem appropriate, in its sole discretion. Other than in connection with the August '99 Redetermination or the Special Redetermination, on or before the date which is 30 days after receipt (i) of a scheduled semi-annual Reserve Report or (ii) of a Reserve Report in connection with a Lender Redetermination Notice or a Borrower Redetermination Notice, the Administrative Agent shall redetermine the Borrowing Base semi-annually on May 1 in its sole discretion, and November 1 of each year beginning November 1, 2004 or as Special Redeterminations. By April 1 each year, beginning April 1, 2005, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent prepared by an Approved Petroleum Engineer, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from time to time, 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. By October 1 of each year beginning October 1, 2004, or within thirty (30) days after (i) the failure of a Capital Markets Event to occur within ninety (90) days after the Closing Date and the receipt by the Borrowers of notice from the Administrative Agent or the Required Lenders that a Special Redetermination is required, (ii) the receipt by the Borrowers of notice from the Administrative Agent that the Lenders require a Special Redetermination, or (iii) the Borrowers give notice to the Administrative Agent of their desire to have a Special Redetermination performed, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from to time, together with such other information, reports and data concerning the value of such Borrowing Base Properties as the Administrative Agent shall deem reasonably necessary to determine the value of such Borrowing Base Properties. The Administrative Agent shall by written notice to the Borrowers no later than May 1 and November 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrowers of the designation by the Lenders of the new Borrowing Base and for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If a Special Redetermination is to be made by the Lenders, the Administrative Agent shall notify the Borrowers within a reasonable time after receipt of all requested information of the new Borrowing Base, and such new Borrowing Base shall continue until the next Determination Date. If the Borrowers do not furnish all such information, reports and data by any date specified in this Section 4.2, unless such failure is not the fault of the Borrowers, the Lenders may nonetheless designate the Borrowing Base at any amounts which the Lenders in their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter until the Lenders receive all such information, reports and data, whereupon the Lenders shall designate a new Borrowing Base, as described above. The procedure for determining the Borrowing Base at each redetermination shall be that the Borrowers shall submit to the Administrative Agent and the Lenders, in writing, a proposed amount as the Borrowing Base as of the next redetermination date. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Required Lenders. If any redetermined Borrowing Base is not approved by Required Lenders within twenty (20) days after the submission to the Administrative Agent borrower and the Lenders by the Borrowers of its redetermination of the proposed amountBorrowing Base. In connection with the August '99 Redetermination , the Administrative Agent shall redetermine the Borrowing Base by August 13, 1999 provided the June 30, 1999 Reserve Report has been received by it no later than July 30, 1999. In connection with a Special Redetermination, the Administrative Agent shall redetermine the Borrowing Base within 14 days of receipt from the Borrower of the Reserve Report to be used in connection therewith. Within 10 days after receipt from the Administrative Agent of the amount of its redetermination of the Borrowing Base, each Lender shall notify each the Administrative Agent stating whether or not such Lender agrees with that determination. Failure of any Lender to give such Notice within such period of time shall be deemed to constitute an acceptance of such redetermination. If the Supermajority Lenders (or, with respect to the Applicable Redetermination, all of the Lenders) agree with that redetermination, then the Administrative Agent promptly shall notify the Borrower of the Borrowing Base as so redetermined, whereupon that redetermined value shall automatically become effective (and shall remain effective until the Borrowing Base is again redetermined as provided in this subsection 4.9(c)). If the Supermajority Lenders (or with respect to the Applicable Redetermination, all of the Lenders) have not approved or are not deemed to have approved the Borrowing Base within the 10 day period following their receipt of the proposed amount from the Administrative Agent, the Borrowing Base shall be set at the amount of the then current Borrowing Base and the Borrowing Base shall remain at such level until the Supermajority Lenders (or, with respect to the Applicable Redetermination, all of the Lenders), utilizing the procedure outlined herein, agree on a new Borrowing Base. Each redetermination provided for by this subsection 4.9(c) shall be made in accordance with the provisions of subsection 4.9(d). Other than in connection with the Applicable Redetermination, it is the intention of the Borrower and the Lenders that the proposed Borrowing Base has not been approved and be redetermined within 45 days after the furnishing of each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each LenderReserve Report, said proposals to be weighted according to each Lender’s Pro Rata Share. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which such Lender in its sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to Borrowing Base Properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Borrowing Base Properties at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of CWEI and the Subsidiaries) as such Lender customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Lenders have no obligation to designate the Borrowing Base at any particular amounts, except in the exercise of their discretion, whether in relation subject to the Commitments or otherwise; provided, that the Lenders shall not designate a Borrowing Base in an amount in excess provisions of the Aggregate Commitmentthis paragraph (c).

Redeterminations of the Borrowing Base. The Lenders Borrowing Base shall be redetermined (i) after receipt by the Administrative Agent of each scheduled Reserve Report, commencing with the Reserve Report prepared as of December 31, 1998, (ii) upon the delivery of a Lender Redetermination Notice to the Borrower and (iii) upon the delivery of a Borrower Redetermination Notice to the Administrative Agent, all as provided in this subsection 4.9. Within 15 days after the delivery of a Borrower Redetermination Notice or a Lender Redetermination Notice, the Borrower shall furnish to the Administrative Agent and to each Lender a Reserve Report as of the most recent practicable date. If the Borrower fails to deliver a Reserve Report within the time period provided for in the preceding sentence, then the Administrative Agent shall have the right to rely on the last Reserve Report previously delivered by the Borrower with any such adjustments and taking into account any additional information as the Administrative Agent may deem appropriate, in its sole discretion. On or before the date which is 30 days after receipt (i) of a scheduled semi-annual Reserve Report or (ii) of a Reserve Report in connection with a Lender Redetermination Notice or a Borrower Redetermination Notice, the Administrative Agent shall redetermine the Borrowing Base semi-annually on May 1 in its sole discretion, and November 1 of each year beginning November 1, 2004 or as Special Redeterminations. By April 1 each year, beginning April 1, 2005, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent prepared by an Approved Petroleum Engineer, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from time to time, 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. By October 1 of each year beginning October 1, 2004, or within thirty (30) days after (i) the failure of a Capital Markets Event to occur within ninety (90) days after the Closing Date and the receipt by the Borrowers of notice from the Administrative Agent or the Required Lenders that a Special Redetermination is required, (ii) the receipt by the Borrowers of notice from the Administrative Agent that the Lenders require a Special Redetermination, or (iii) the Borrowers give notice to the Administrative Agent of their desire to have a Special Redetermination performed, the Borrowers shall furnish to the Lenders a Reserve Report in form and substance reasonably satisfactory to the Administrative Agent, said Reserve Report to utilize economic and pricing parameters used by the Administrative Agent as established from to time, together with such other information, reports and data concerning the value of such Borrowing Base Properties as the Administrative Agent shall deem reasonably necessary to determine the value of such Borrowing Base Properties. The Administrative Agent shall by written notice to the Borrowers no later than May 1 and November 1 of each year, or within a reasonable time thereafter (herein called the “Determination Date”), notify the Borrowers of the designation by the Lenders of the new Borrowing Base and for the period beginning on such Determination Date and continuing until, but not including, the next Determination Date. If a Special Redetermination is to be made by the Lenders, the Administrative Agent shall notify the Borrowers within a reasonable time Borrower and the Lenders of its redetermination of the Borrowing Base. Within 10 days after receipt of all requested information from the Administrative Agent of the new amount of the its redetermination of the Borrowing Base, each Lender shall notify the Administrative Agent stating whether or not such Lender agrees with that redetermination. Failure of any Lender to give such notice within such period of time shall be deemed to constitute an acceptance of such redetermination. If the Supermajority Lenders (or, with respect to the March '99 Redetermination, all of the Lenders) agree with that redetermination, then the Administrative Agent promptly shall notify the Borrower of the Borrowing Base as so redetermined, whereupon that redetermined value shall automatically become effective (and such new shall remain effective until the Borrowing Base is again redetermined as provided in this subsection 4.9(c)). If the Supermajority Lenders (or, with respect to the March '99 Redetermination, all of the Lenders) have not approved or are not deemed to have approved the Borrowing Base within the 10 day period following their receipt of the proposed amount from the Administrative Agent, the Borrowing Base shall continue until be set at the next Determination Date. If the Borrowers do not furnish all such information, reports and data by any date specified in this Section 4.2, unless such failure is not the fault amount of the Borrowers, the Lenders may nonetheless designate then current Borrowing Base and the Borrowing Base shall remain at any amounts which the Lenders in their reasonable discretion determine and may redesignate the Borrowing Base from time to time thereafter such level until the Supermajority Lenders receive (or, with respect to the March '99 Redetermination, all such informationof the Lenders), reports and datautilizing the procedure outlined herein, whereupon the Lenders shall designate agree on a new Borrowing Base, as described above. The procedure Each redetermination provided for determining the Borrowing Base at each redetermination by this subsection 4.9(c) shall be that made in accordance with the Borrowers shall submit to provisions of subsection 4.9(d). It is the Administrative Agent and the Lenders, in writing, a proposed amount as the Borrowing Base as intention of the next redetermination date. Increases in the Borrowing Base will require approval of all Lenders, but other changes in the Borrowing Base will be subject to the approval of Required Lenders. If any redetermined Borrowing Base is not approved by Required Lenders within twenty (20) days after the submission to the Administrative Agent Borrower and the Lenders by the Borrowers of the proposed amount, the Administrative Agent shall notify each of the Lenders that the proposed Borrowing Base has not been approved and be redetermined within 45 days after the furnishing of each Lender will submit within ten (10) days thereafter its proposed Borrowing Base. The redetermined Borrowing Base shall be then determined based upon the weighted arithmetic average of the proposed amounts submitted by each LenderReserve Report, said proposals to be weighted according to each Lender’s Pro Rata Share. Each Lender shall determine the amount of the Borrowing Base based upon the loan collateral value which such Lender in its sole discretion (using such methodology, assumptions and discount rates as such Lender customarily uses in assigning collateral value to Borrowing Base Properties, oil and gas gathering systems, gas processing and plant operations) assigns to such Borrowing Base Properties at the time in question and based upon such other credit factors consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of CWEI and the Subsidiaries) as such Lender customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Lenders have no obligation to designate the Borrowing Base at any particular amounts, except in the exercise of their discretion, whether in relation subject to the Commitments or otherwise; provided, that the Lenders shall not designate a Borrowing Base in an amount in excess provisions of the Aggregate Commitmentthis paragraph (c).