XCO Exhibit 10.43 Q1 2013


Exhibit 10.43


EXECUTION VERSION










CREDIT AGREEMENT
dated as of
February 14, 2013
among
EXCO/HGI JV ASSETS, LLC, 
as Borrower
The Other Loan Parties Party Hereto
The Lenders Party Hereto
JPMORGAN CHASE BANK, N.A., 
as Administrative Agent,
BANK OF AMERICA, N.A. and DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Co-Syndication Agents,
UBS SECURITIES LLC and BMO HARRIS FINANCING, INC.,
as Co-Documentation Agents
and
J.P. MORGAN SECURITIES LLC, 
as Sole Bookrunner and Sole Lead Arranger









EXCO/HGI Credit Agreement








TABLE OF CONTENTS
Page
		
	Article I
	Definitions    1


		
	Section 1.01.
	Defined Terms    1


		
	Section 1.02.
	Types of Loans and Borrowings    30


		
	Section 1.03.
	Terms Generally    31


		
	Section 1.04.
	Accounting Terms; GAAP    31


		
	Section 1.05.
	Oil and Gas Definitions    31


		
	Section 1.06.
	Time of Day    32


		
	Article II
	The Credits    32


		
	Section 2.01.
	Commitments    32


		
	Section 2.02.
	Loans and Borrowings    32


		
	Section 2.03.
	Requests for Borrowings    33


		
	Section 2.04.
	Additional Lenders; Increases in the Aggregate Maximum Credit Amounts    33


		
	Section 2.05.
	Letters of Credit    34


		
	Section 2.06.
	Funding of Borrowings    39


		
	Section 2.07.
	Interest Elections    39


		
	Section 2.08.
	Termination and Reduction of Aggregate Maximum Credit Amounts    40


		
	Section 2.09.
	Borrowing Base    41


		
	Section 2.10.
	Repayment of Loans; Evidence of Debt    44


		
	Section 2.11.
	Prepayment of Loans    45


		
	Section 2.12.
	Fees    47



EXCO/HGI Credit Agreement
i    


Page


		
	Section 2.13.
	Interest    48


		
	Section 2.14.
	Alternate Rate of Interest    48


		
	Section 2.15.
	Increased Costs    49


		
	Section 2.16.
	Break Funding Payments    50


		
	Section 2.17.
	Taxes    51


		
	Section 2.18.
	Payments Generally; Allocation of Proceeds; Sharing of Set-offs    54


		
	Section 2.19.
	Mitigation Obligations; Replacement of Lenders    56


		
	Section 2.20.
	Defaulting Lenders    57


		
	Section 2.21.
	Returned Payments    59


		
	Section 2.22.
	Collection of Proceeds of Production    59


		
	Article III
	Representations and Warranties    60


		
	Section 3.01.
	Organization; Powers    60


		
	Section 3.02.
	Authorization; Enforceability    60


		
	Section 3.03.
	Governmental Approvals; No Conflicts    60


		
	Section 3.04.
	Financial Condition; No Material Adverse Change    60


		
	Section 3.05.
	Properties; Titles, Etc    60


		
	Section 3.06.
	Litigation and Environmental Matters    61


		
	Section 3.07.
	Compliance with Laws and Agreements; No Defaults or Borrowing Base Deficiency    62


		
	Section 3.08.
	Investment Company Status    62


		
	Section 3.09.
	Taxes    62


		
	Section 3.10.
	ERISA    62



EXCO/HGI Credit Agreement
ii


Page


		
	Section 3.11.
	Disclosure    62


		
	Section 3.12.
	Solvency    62


		
	Section 3.13.
	Insurance    63


		
	Section 3.14.
	Capitalization    63


		
	Section 3.15.
	Security Interest in Collateral    63


		
	Section 3.16.
	Employment Matters    64


		
	Section 3.17.
	Margin Stock    64


		
	Section 3.18.
	Maintenance of Properties    64


		
	Section 3.19.
	Gas Imbalances; Prepayments    65


		
	Section 3.20.
	Marketing of Production    65


		
	Section 3.21.
	Swap Agreements    65


		
	Section 3.22.
	Foreign Corrupt Practices    65


		
	Section 3.23.
	OFAC    66


		
	Article IV
	Conditions    66


		
	Section 4.01.
	Effective Date    66


		
	Section 4.02.
	Each Credit Event    69


		
	Article V
	Affirmative Covenants    70


		
	Section 5.01.
	Financial Statements; Other Information    70


		
	Section 5.02.
	Notices of Material Events    73


		
	Section 5.03.
	Existence; Conduct of Business    74


		
	Section 5.04.
	Payment of Obligations    74


		
	Section 5.05.
	Operation and Maintenance of Properties    74



EXCO/HGI Credit Agreement
iii


Page


		
	Section 5.06.
	Insurance    75


		
	Section 5.07.
	 Books and Records; Inspection Rights    75


		
	Section 5.08.
	Compliance with Laws    76


		
	Section 5.09.
	Use of Proceeds and Letters of Credit    76


		
	Section 5.10.
	Further Assurances    76


		
	Section 5.11.
	Reserve Reports    77


		
	Section 5.12.
	Title Data    77


		
	Section 5.13.
	Mortgages; Additional Collateral; Additional Guarantors    78


		
	Section 5.14.
	Swap Agreements    79


		
	Section 5.15.
	Unrestricted Subsidiaries    80


		
	Section 5.16.
	Post-Closing Swap Agreements    80


		
	Article VI
	Negative Covenants    80


		
	Section 6.01.
	Indebtedness    80


		
	Section 6.02.
	Liens    82


		
	Section 6.03.
	Fundamental Changes    82


		
	Section 6.04.
	Investments, Loans, Advances, Guarantees and Acquisitions    83


		
	Section 6.05.
	Asset Dispositions    84


		
	Section 6.06.
	Swap Agreements    85


		
	Section 6.07.
	Restricted Payments    87


		
	Section 6.08.
	Transactions with Affiliates    88


		
	Section 6.09.
	Restrictive Agreements    88


		
	Section 6.10.
	Activities of E/H MLP and the General Partner    89



EXCO/HGI Credit Agreement
iv


Page


		
	Section 6.11.
	[Reserved]    89


		
	Section 6.12.
	Gas Imbalances, Take-or-Pay or Other Prepayments    89


		
	Section 6.13.
	Marketing Activities    90


		
	Section 6.14.
	Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities    90


		
	Section 6.15.
	Disqualified Capital Stock    90


		
	Section 6.16.
	Amendments to Organizational Documents and Contribution Documents; Changes in Fiscal Year End; Foreign Subsidiaries; Accounting Changes    90


		
	Section 6.17.
	Designation and Conversion of Restricted and Unrestricted Subsidiaries    90


		
	Section 6.18.
	Financial Covenants    92


		
	Section 6.19.
	Senior Notes Restrictions    92


		
	Article VII
	Events of Default    93


		
	Article VIII
	The Administrative Agent    95


		
	Article IX
	Miscellaneous    97


		
	Section 9.01.
	Notices    97


		
	Section 9.02.
	Waivers; Amendments    99


		
	Section 9.03.
	Expenses; Indemnity; Damage Waiver    102


		
	Section 9.04.
	Successors and Assigns    104


		
	Section 9.05.
	Survival    107


		
	Section 9.06.
	Counterparts; Integration; Effectiveness    107


		
	Section 9.07.
	Severability    108


		
	Section 9.08.
	Right of Setoff    108



EXCO/HGI Credit Agreement
v


Page


		
	Section 9.09.
	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS    108


		
	Section 9.10.
	WAIVER OF JURY TRIAL    109


		
	Section 9.11.
	Headings    109


		
	Section 9.12.
	Confidentiality    110


		
	Section 9.13.
	Several Obligations; Nonreliance; Violation of Law    111


		
	Section 9.14.
	USA PATRIOT Act    111


		
	Section 9.15.
	Disclosure    111


		
	Section 9.16.
	Appointment for Perfection    111


		
	Section 9.17.
	Interest Rate Limitation    111


		
	Section 9.18.
	Collateral Matters; Swap Agreements    112


		
	Section 9.19.
	Flood Insurance    112


		
	Section 9.20.
	No Fiduciary Duty    112


		
	Article X
	Loan Guaranty    113


		
	Section 10.01.
	Guaranty    113


		
	Section 10.02.
	Guaranty of Payment    113


		
	Section 10.03.
	No Discharge or Diminishment of Loan Guaranty    113


		
	Section 10.04.
	Defenses Waived    114


		
	Section 10.05.
	Rights of Subrogation    115


		
	Section 10.06.
	Reinstatement; Stay of Acceleration    115


		
	Section 10.07.
	Information    115


		
	Section 10.08.
	Termination    115


		
	Section 10.09.
	Taxes    115



EXCO/HGI Credit Agreement
vi


Page


		
	Section 10.10.
	Maximum Liability    116


		
	Section 10.11.
	Contribution    116


		
	Section 10.12.
	Liability Cumulative    117


		
	Section 10.13.
	Subordination    117





EXCO/HGI Credit Agreement
vii






ANNEXES


Annex I – Maximum Credit Amounts, Applicable Percentages and Commitments


EXHIBITS:


Exhibit A -- Form of Assignment and Assumption
Exhibit B – Form of Borrowing Request
Exhibit C – Form of Interest Election Request
Exhibit D – Form of Note
Exhibit E – Form of Compliance Certificate
Exhibit F – Reserved
Exhibit G – Form of Joinder Agreement
Exhibit H – Form of Lender Certificate
Exhibit I-1 – Form of U.S. Tax Certificate (for Non-U.S. [Lenders] [Participants] That Are Not Partnerships)
Exhibit I-2 – Form of U.S. Tax Certificate (for Non-U.S. [Lenders][Participants] That are Partnerships)


SCHEDULES:


Schedule 3.06 – Disclosed Matters
Schedule 3.14 – Capitalization
Schedule 3.15 – Filing Offices for Mortgages and Financing Statements
Schedule 3.19 – Gas Imbalances
Schedule 3.20 – Marketing Contracts
Schedule 3.21 – Swap Agreements
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 – Existing Investments
Schedule 6.08 – Transactions with Affiliates
Schedule 6.09 -- Existing Restrictions



EXCO/HGI Credit Agreement
viii    






CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of February 14, 2013, among: EXCO/HGI JV ASSETS, LLC, a Delaware limited liability company, (the “Borrower”), EXCO/HGI PRODUCTION PARTNERS, LP, a Delaware limited partnership (“E/H MLP”), EXCO/HGI GP, LLC, a Delaware limited liability company (the “General Partner”), certain SUBSIDIARIES OF E/H MLP from time to time party hereto, the LENDERS from time to time party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
Article I 
 
Definitions
Section 1.01.    Defined Terms.  As used in this Agreement, the following terms have the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
“Acquisition” means, the acquisition by any Loan Party, whether by purchase, exchange, issuance of stock, or other equity or debt securities, merger, reorganization, amalgamation, or any other method and whether by a single transaction or a series of related or unrelated transactions (and, in the case of a merger with any such Person, with such Person being the surviving corporation), of all or substantially all of the Equity Interests of, or the business, property or fixed assets of or business line or unit or a division of, any other Person primarily engaged in the business of (a) producing crude oil, natural gas and natural gas liquids or (b) owning or operating Oil and Gas Properties.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or for any ABR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as administrative agent for the Lenders hereunder.
“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
“Advance Payment Contract” means any contract whereby any Loan Party either (a) receives or becomes entitled to receive (either directly or indirectly) any payment (an “Advance Payment”) to be applied toward payment of the purchase price of Hydrocarbons produced or to be produced from Oil and Gas Properties owned by any Loan Party and which Advance Payment is, or is to be, paid in advance of actual delivery of such production to or for the account of the purchaser regardless 

EXCO/HGI Credit Agreement – Page 1 







of such production, or (b) grants an option or right of refusal to the purchaser to take delivery of such production in lieu of payment, and, in either of the foregoing instances, the Advance Payment is, or is to be, applied as payment in full for such production when sold and delivered or is, or is to be, applied as payment for a portion only of the purchase price thereof or of a percentage or share of such production; provided that inclusion of the standard “take or pay” provisions in any gas sales or purchase contract or any other similar contract shall not, in and of itself, constitute such contract as an Advance Payment Contract for the purposes hereof.
“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
“Aggregate Credit Exposure” means, as of any date of determination, the sum of the Credit Exposure of all of the Lenders as of such date.
“Aggregate Maximum Credit Amounts” at any time shall equal the sum of the Maximum Credit Amounts, as the same may be increased pursuant to Section 2.04 or reduced or terminated pursuant to Section 2.08.  The initial Aggregate Maximum Credit Amounts of the Lenders is $400,000,000.
“Agreement” means this Credit Agreement, dated as of February 14, 2013.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if such day is not a Business Day, the immediately preceding Business Day) plus 1%, provided that, with respect to the determination of the Alternate Base Rate, the Adjusted LIBO Rate for any day shall be based on the rate appearing on the Reuters Screen LIBOR01 Page (or on any successor or substitute page) at approximately 11:00 a.m. London time on such day (without any rounding).  Any change in the Alternate Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate shall be effective from and including the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the Adjusted LIBO Rate, respectively.
“Applicable Percentage” means, with respect to any Lender at any time, the percentage of the Aggregate Maximum Credit Amounts represented by such Lender’s Maximum Credit Amount at such time as such percentage is set forth on Annex I or in an Assignment and Assumption, as the case may be; provided that if the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect; provided; further that, in accordance with Section 2.20 (other than Section 2.20(e)), so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s Maximum Credit Amount or Commitment, as the case may be, shall be disregarded.
“Applicable Rate” means, for any day, with respect to any ABR Loan or Eurodollar Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar Spread” or “Commitment Fee Rate”, as the case may be, based upon the Borrowing Base Usage applicable on such date:

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	Borrowing Base Usage:
	ABR 
Spread
	Eurodollar 
Spread
	Commitment  
Fee Rate

	Equal to or greater than 90%
	1.75
	%
	2.75
	%
	0.500
	%

	Equal to or greater than 75% but less than 90%
	1.50
	%
	2.50
	%
	0.500
	%

	Equal to or greater than 50% but less than 75%
	1.25
	%
	2.25
	%
	0.500
	%

	Equal to or greater than 25% but less than 50%
	1.00
	%
	2.00
	%
	0.375
	%

	Less than 25%
	0.75
	%
	1.75
	%
	0.375
	%






Each change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next change.
“Approved Counterparty” means, at any time and from time to time, (a) any Lender or any Affiliate of a Lender (other than a Defaulting Lender or an Affiliate of a Defaulting Lender), or (b) any Person engaged in the business of writing Swap Agreements for commodity, interest rate or currency risk that is acceptable to the Administrative Agent and has (or the credit support provider of such Person has), at the time any Loan Party enters into a Swap Agreement with such Person, a long term senior unsecured debt credit rating of BBB+ or better from S&P or Baa1 or better from Moody’s.
“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Approved Petroleum Engineer” means Lee Keeling & Associates, Inc., Netherland Sewell & Associates, Inc. or any other reputable firm of independent petroleum engineers selected by the Borrower and reasonably acceptable to the Administrative Agent and the Required Lenders.
“Arranger” means J.P. Morgan Securities LLC, in its capacities as sole lead arranger and sole bookrunner hereunder.
“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee, and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.
“Banking Services” means each and any of the following bank services provided to any Loan Party by any Banking Services Provider: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).

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“Banking Services Obligations” of the Loan Parties means any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whenever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.
“Banking Services Provider” means any Lender or any Affiliate of a Lender that provides Banking Services to any Loan Party.
“Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person or any Parent thereof by a Governmental Authority or instrumentality thereof so long as such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States of America or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality), to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
“Board” means the Board of Governors of the Federal Reserve System of the United States of America.
“Board of Directors” means (1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board; (2) with respect to a partnership, the board of directors of the general partner of the partnership; (3) with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and (4) with respect to any other Person, the board or committee of such Person serving a similar function
“Borrower” has the meaning assigned to such term in the preamble hereto.
“Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of Eurodollar Loans, as to which a single Interest Period is in effect.
“Borrowing Base” means, at any time, an amount equal to the amount determined in accordance with Section 2.09, as the same may be redetermined, adjusted or reduced from time to time pursuant to Section 2.09(f), Section 2.09(g) or Section 5.12.
“Borrowing Base Deficiency” occurs if at any time the Aggregate Credit Exposure exceeds the Borrowing Base then in effect; provided, that, for purposes of determining whether a Borrowing Base Deficiency exists, obligations under any Letter of Credit will not be deemed to be outstanding to the extent such obligations are secured by cash in the manner contemplated by Section 2.05(j).

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“Borrowing Base Swap” means any Swap Agreement (or hedge position) entered into by the Borrower or any of its Restricted Subsidiaries and relied upon by the Administrative Agent in determining the then effective Borrowing Base.
“Borrowing Base Usage” means, as of any date and for all purposes, the quotient, expressed as a percentage, of (a) the Aggregate Credit Exposure as of such date, divided by (b) the Borrowing Base as of such date.
“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Borrower or of any other Loan Party having a fair market value in excess of $5,000,000. 


“Change in Control” means (a) any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof) having, directly or indirectly, beneficially or of record, ownership of a greater percentage of the Equity Interests of, or a greater percentage of the outstanding voting Equity Interests of, the General Partner than EXCO and its Affiliates, (b) for any reason, EXCO no longer has a right to appoint at least one-half of the members of the Board of Directors of the General Partner, (c) any Person (other than EXCO and its Affiliates) conducting the day to day management of E/H MLP, the Borrower and their respective Subsidiaries or acting as the contract operator for the Loan Parties’ Oil and Gas Properties, (d) the occurrence of an EXCO Change of Control or (e) the occurrence of a “Change of Control of EXCO” under and as defined in the E/H MLP Partnership Agreement and/or the GP LLC Agreement.  
“Change in Law” means (a) the adoption of any law, rule, regulation or treaty (including any rules or regulations issued under or implementing any existing law) after the date of this Agreement, (b) any change in any law, rule, regulation or treaty or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (i) 

EXCO/HGI Credit Agreement – Page 5 







the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder, issued in connection therewith or in implementation thereof, and (ii) all requests, rules, guidelines and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States of America or foreign regulatory authorities, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.
“Charges” has the meaning assigned to such term in Section 9.17.
“Co-Documentation Agent” means (a) so long as each such Person is a Lender, each Person identified as such on Annex I and (b) so long as UBS Loan Finance LLC is a Lender, UBS Securities LLC.
“Co-Syndication Agent” means, so long as each such Person is a Lender, each Person identified as such on Annex I.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means any and all assets covered by the Security Instruments and any and all other Property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, for the benefit of the Secured Parties, to secure the Secured Obligations.
“Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Credit Exposure hereunder, as such commitment may be (a) modified from time to time pursuant to Sections 2.04 and 2.08 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04(b), and “Commitments” means the aggregate amount of the Commitments of all the Lenders.  The amount representing each Lender’s Commitment shall at any time be the lesser of such Lender’s Maximum Credit Amount and such Lender’s Applicable Percentage of the then effective Borrowing Base.  The initial Commitment of each Lender shall be the amount set forth opposite such Lender’s name on Annex I under the caption “Initial Commitments”.  
“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
“Consolidated Current Assets” means, as of any date of determination, the sum of (a) the consolidated current assets of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) determined in accordance with GAAP as of such date, plus (b) all Unused Commitments as of such date, less (c) any non-cash assets required to be included in the consolidated current assets of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) as a result of the requirements of Accounting Standards Codification Section 815-10 (as successor to FASB Statement 133) as of such date.

EXCO/HGI Credit Agreement – Page 6 







“Consolidated Current Liabilities” means, as of any date of determination, the sum of (a) consolidated current liabilities of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries), as determined in accordance with GAAP as of such date, less (b) current maturities of the Loans, less (c) any non-cash obligations required to be included in consolidated current liabilities of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) as a result of the requirements of Accounting Standards Codification Section 815-10 (as successor to FASB Statement 133) as of such date.
“Consolidated Current Ratio” means, as of any date of determination, the ratio of Consolidated Current Assets to Consolidated Current Liabilities as of such date.
“Consolidated EBITDAX” means, with respect to E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) for any period, Consolidated Net Income for such period; plus without duplication and to the extent deducted in the calculation of Consolidated Net Income for such period, the sum of (a) income, franchise or margin Taxes paid or accrued (including any federal, state, local and foreign income and similar Taxes); (b) Consolidated Interest Expense; (c) amortization, depletion and depreciation expense; (d) any non-cash losses or charges on any Swap Agreement resulting from the requirements of Accounting Standards Codification Section 815-10 (as successor to FASB Statement 133) for such period; (e) oil and gas exploration expenses (including all drilling, completion, geological and geophysical costs) for such period; (f) losses from Dispositions of assets (other than Hydrocarbons produced in the ordinary course of business) and other extraordinary or non-recurring losses; (g) workover expenses for such period; (h) cash payments made during such period as a result of any Swap Liquidation (giving effect to any netting agreements); and (i) other non-cash charges (excluding accruals for cash expenses made in the ordinary course of business); minus without duplication and to the extent included in the calculation of Consolidated Net Income for such period, (h) the sum of (i) any non-cash gains on any Swap Agreements resulting from the requirements of Accounting Standards Codification Section 815-10 (as successor to FASB Statement 133) for such period; (ii) extraordinary or non-recurring gains; (iii) gains from Dispositions of assets (other than Hydrocarbons produced in the ordinary course of business); and (iv) other non-cash gains; provided that, with respect to the determination of Borrower’s compliance with the Consolidated Leverage Ratio set forth in Section 6.18(b) for any period, Consolidated EBITDAX shall be adjusted to give effect, on a pro forma basis and consistent with GAAP, to any Acquisitions or Dispositions made during such period as if such Acquisition or Disposition, as the case may be, was made at the beginning of such period.
“Consolidated Interest Expense” means, for any period, the sum of the aggregate interest expense (including that attributable to Capital Lease Obligations) of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) for such period with respect to all outstanding Indebtedness of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates to the extent such net costs are allocable to such period in accordance with GAAP), calculated on a consolidated basis for E/H MLP and its Consolidated 

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Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) for such period in accordance with GAAP. 
“Consolidated Leverage Ratio” means the ratio of (A) Consolidated Total Indebtedness as of the end of such fiscal quarter to (B) Consolidated EBITDAX for the trailing four fiscal quarter period ending on the last day of such fiscal quarter.
“Consolidated Net Income” means for any period, the consolidated net income (or loss) of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries), as applicable, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or loss) of any Person accrued prior to the date it becomes a Restricted Subsidiary of the Borrower, or is merged into or consolidated with the Borrower or any of its Restricted Subsidiaries, as applicable, (b) the undistributed earnings of any Restricted Subsidiary of the Borrower, to the extent that the declaration or payment of dividends or similar distributions by such Restricted Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or by any law applicable to such Restricted Subsidiary and (c) the income (or loss) of any Person in which any other Person (other than any Loan Party) has an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid in cash to E/H MLP or any of its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries) during such period.
“Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that are Consolidated Subsidiaries.
“Consolidated Subsidiaries” means, as to any Person, each Subsidiary of such Person (whether now existing or hereafter created or acquired) the financial statements of which shall be consolidated with the financial statements of such Person in accordance with GAAP.
“Consolidated Unrestricted Subsidiaries” means any Unrestricted Subsidiaries that are Consolidated Subsidiaries. 


“Consolidated Total Indebtedness” means, as of any date, without duplication, all Indebtedness of E/H MLP and its Consolidated Subsidiaries (other than any Consolidated Unrestricted Subsidiaries).
“Contribution Agreement” means that certain Unit Purchase and Contribution Agreement, dated as of November 5, 2012, by and among EXCO, EXCO Operating, the General Partner and HGI Energy.
“Contribution Documents” means, collectively, (a) the Contribution Agreement, (b) the E/H MLP Partnership Agreement, (c) the GP LLC Agreement, (d) the Assignments, the Administrative Services Agreement, the Contribution and Assignment of Common Units, the Distribution Agreement, the Assignment of MLP LLC Membership Interests, the Registration Rights Agreement, the EOC Operating Agreement, the EXCO Parent Operating Agreement, the Marketing Agreement, and the Shared Assets/Use Agreement (each as defined in the Contribution Agreement as in effect on the Effective Date) and (e) any other material agreements, instruments or documents executed 

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and delivered after the Effective Date in connection with the agreements and assignments described in the foregoing clauses (a), (b), (c) and (d).
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.
“Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans and LC Exposure at such time.
“Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or (iii) pay over to the Administrative Agent, the Issuing Bank or any Lender any other amount required to be paid by it hereunder, unless, in the case of clauses (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) has not been satisfied, (b) has notified the Borrower, the Administrative Agent, the Issuing Bank or any Lender in writing, or has made a public statement, to the effect that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular Default, if any) cannot be satisfied), (c) has failed, within three (3) Business Days after request by the Administrative Agent or the Issuing Bank, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations to fund prospective Loans and participations in then outstanding Letters of Credit under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt by the Administrative Agent or the Issuing Bank of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has, or has a Parent that has, become the subject of a Bankruptcy Event.
“Disclosed Matters” means the actions, suits and proceedings and the environmental matters disclosed on Schedule 3.06. 
“Disposition” or “Dispose” means the sale, transfer, conveyance, license, lease, farm-out, exchange or other disposition (including any sale and leaseback transaction) of any Property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.
“Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, matures or is mandatorily redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Indebtedness or redeemable for any 

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consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof (other than solely as a result of a change of control or Disposition), in whole or in part, on or prior to the date that is one year after the Maturity Date.
“Dollars” or “$” refers to lawful money of the United States of America.
“Domestic Subsidiary” means, with respect to any Person, a subsidiary of such Person that is incorporated or formed under the laws of the United States of America, any state thereof or the District of Columbia.
“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“E/H MLP” has the meaning assigned to such term in the preamble hereto.
“E/H MLP Partnership Agreement” means that certain Amended and Restated Agreement of Limited Partnership of E/H MLP dated as of February 14, 2013.
“Eligible Assignee” means any Person that qualifies as an assignee pursuant to Section 9.04(b)(i); provided that, notwithstanding the foregoing, “Eligible Assignee” shall not include (a) the Borrower or any of the Borrower’s Affiliates or Subsidiaries, (b) any Defaulting Lender or (c) any natural person.
“Engineering Reports” has the meaning assigned to such term in Section 2.09(c).
“Engineered Value” means, with respect to any Oil and Gas Property of a Loan Party, the value the Administrative Agent attributed to such Oil and Gas Property in connection with the most recent redetermination of the Borrowing Base pursuant to Section 2.09 (or in connection with determining the initial Borrowing Base in the event no such redetermination has occurred).
“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Loan Party directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in 

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a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with any Loan Party, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30‐day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by any Loan Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Loan Party or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.
“Excluded Swap Agreements” means, collectively, Swap Agreements that are (a) put option contracts that are not related to corresponding calls, collars or swaps and with respect to which neither the Borrower nor any other Loan Party has any payment obligation other than fixed premiums or other fixed charges or (b) basis differential swaps on volumes already hedged pursuant to other Swap Agreements permitted under Section 6.06(a).
“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding Taxes imposed on amounts payable to or 

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for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b), or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17, and (d) any U.S. federal withholding Taxes imposed under FATCA.
“EXCO” means EXCO Resources, Inc., a Texas corporation.
“EXCO Change of Control” means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the Effective Date), of Equity Interests representing more than fifty percent (50%) of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of EXCO, (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of EXCO by persons who were neither (i) nominated by the board of directors of EXCO nor (ii) appointed by directors so nominated, (c) the acquisition of direct or indirect Control of EXCO by any Person or group, or (d) the occurrence of a “Change of Control” as such term is defined in the EXCO Indenture.
“EXCO Credit Agreement” means that certain Credit Agreement, dated as of April 30, 2010, among EXCO, as borrower, certain Subsidiaries of EXCO, as guarantors, the lenders from time to time party thereto, and JPMorgan Chase Bank, N.A., as administrative agent.
“EXCO Indenture” means that certain Indenture among EXCO and the Wilmington Trust Company, as trustee, with respect to the issuance of certain senior notes dated September 15, 2010, and any supplements thereto.
“EXCO Operating” means EXCO Operating Company, LP, a Delaware limited partnership
“FASB” means Financial Accounting Standards Board.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement, any regulations or official interpretations thereof, and any agreements entered into pursuant to Section 1471(b)(i) of the Code.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the 

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next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
“Fee Letter” means that certain Fee Letter, dated as of September 18, 2012, among EXCO, HGI, HGI Energy, the Administrative Agent and the Arranger.
“Financial Officer” means the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of any Loan Party.  Any document delivered hereunder that is signed by a Financial Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Financial Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Foreign Subsidiary” means, with respect to any Person, a subsidiary of such Person that is not a Domestic Subsidiary. 


“GAAP” means generally accepted accounting principles in the United States of America.
“General Partner” has the meaning assigned to such term in the preamble hereto.
“Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity properly exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Governmental Requirement” means any law, statute, code, ordinance, order, rule, regulation, judgment, decree, injunction, franchise, permit, license, authorization or other directive or requirement, whether now or hereinafter in effect, of any Governmental Authority.
“GP LLC Agreement” means that certain Amended and Restated Limited Liability Company Agreement of the General Partner dated as of February 14, 2013.
“Guarantee” of or by any Person (in this definition, the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

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“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.
“Hazardous Materials”  means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“HGI” means Harbinger Group Inc., a Delaware corporation.
“HGI Energy” means HGI Energy Holdings, LLC, a Delaware limited liability company.
“Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature.
“Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom.
“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding accounts payable incurred in the ordinary course of business that are not past due), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, and (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances.  The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Indemnitee” has the meaning assigned to such term in Section 9.03.

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“Indenture” means any indenture by and among the Borrower or any Restricted Subsidiary, as issuer, and a trustee, pursuant to which any Senior Notes are issued, as the same may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under this Agreement.
“Information” has the meaning assigned to such term in Section 9.12.
“Initial Financial Statements” means (a) the unaudited pro forma condensed statement of operations of E/H MLP and its Consolidated Subsidiaries for the year ended September 30, 2012, and (b) the unaudited pro forma condensed balance sheet of E/H MLP and its Consolidated Subsidiaries as of September 30, 2012.
“Initial Reserve Report” means the Reserve Report prepared by EXCO’s internal reserve engineering staff as of September 30, 2012 with respect to certain Oil and Gas Properties being contributed to the Borrower by EXCO and certain of its Affiliates pursuant to the Contribution Agreement and other Contribution Documents, upon which the Lenders have relied upon in the determination of the initial Borrowing Base hereunder.
“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.07.
“Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each calendar quarter and the Maturity Date, and (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part (and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period) and the Maturity Date.
“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless, in the case of a Eurodollar Borrowing only, such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar Borrowing that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing. 
“Interim Redetermination” has the meaning assigned such term in Section 2.09(b).

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“Interim Redetermination Date” means the date on which a Borrowing Base that has been redetermined pursuant to an Interim Redetermination becomes effective as provided in Section 2.09(d).
“IRS” means the United States Internal Revenue Service.
“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.05(i).  The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.
“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit G delivered by a Loan Guarantor pursuant to Section 5.13. 
“LC Collateral Account” has the meaning assigned to such term in Section 2.05(j).
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
“Lender Certificate” has the meaning assigned to such term in Section 2.04.
“Lenders” means the Persons listed on Annex I and any other Person that shall have become a party hereto pursuant to an Assignment and Assumption or a Lender Certificate, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.  
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Reuters Screen LIBOR01 Page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market), at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a maturity comparable to such Interest Period.  In the event that such rate is not available at such time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period.  Notwithstanding the foregoing, 

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to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with an ABR Borrowing, such rate shall be determined as modified by the definition of Alternate Base Rate.
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Loan Documents” means this Agreement, any Notes issued pursuant to this Agreement, the Letters of Credit, any Letter of Credit applications, the Security Instruments, the Loan Guaranty, the Fee Letter, and all other agreements, instruments, and documents now or hereafter executed and delivered by a Loan Party to, or in favor of, the Administrative Agent or any Lender in connection with this Agreement or the transactions contemplated hereby.
“Loan Guarantor” means, collectively, the Borrower (with respect to the Secured Obligations of the other Loan Parties and Restricted Subsidiaries), E/H MLP, each Restricted Subsidiary party to this Agreement on the Effective Date and each other Person that guarantees the Secured Obligations pursuant to Section 5.13.
“Loan Guaranty” means Article X of this Agreement.
“Loan Parties” means collectively, the Borrower, the General Partner and the Loan Guarantors, and each individually, a “Loan Party”.
“Loans” means the loans and advances made by the Lenders to the Borrower pursuant to this Agreement.
“Majority Lenders” means, at any time no Loans or LC Exposure is outstanding, Lenders having more than fifty percent (50%) of the Aggregate Maximum Credit Amounts; and at any other time, Lenders holding more than fifty percent (50%) of the outstanding aggregate principal amount of the Loans or participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 9.04(c)).  The Maximum Credit Amount and Credit Exposure of any Defaulting Lender shall be disregarded in determining Majority Lenders at any time.
“Material Acquisition” means, the acquisition by the Borrower or any Restricted Subsidiary, whether by a single transaction or a series of related or unrelated transactions, of any Oil and Gas Properties that involves the payment of consideration by the Borrower or such Restricted Subsidiary in excess of a Dollar amount equal to twenty-five percent (25%) of the then effective Borrowing Base.
“Material Adverse Effect” means a material adverse effect on (a) the assets or properties, financial condition, businesses or operations of the Loan Parties taken as a whole, (b) the ability of any Loan Party to carry out its business as of the Effective Date or as proposed to be conducted on 

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the Effective Date, (c) the ability of any Loan Party to perform fully and on a timely basis its respective obligations under any of the Loan Documents to which it is a party, or (d) the validity or enforceability of any of the Loan Documents or the rights and remedies of the Administrative Agent, the Issuing Bank or the Lenders under this Agreement and the other Loan Documents.  
“Material Domestic Subsidiary” means, as of any date, any Domestic Subsidiary that, together with its Subsidiaries, owns or holds Property having a fair market value greater than 5% of the fair market value of all of the consolidated Property of the Borrower and its Consolidated Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements have been delivered pursuant to Sections 5.01(a) or 5.01(b).
“Material Indebtedness” means Indebtedness under the Senior Notes (and any Permitted Refinancing thereof) and any other Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any Loan Party or any one or more of the Restricted Subsidiaries in an aggregate principal amount exceeding $10,000,000.  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or any Restricted Subsidiary in respect of any Swap Agreement at any time shall be the Swap Termination Value.  
“Material Sales Contract” means, as of any date of determination, any agreement for the sale of Hydrocarbons to which the Borrower or any Restricted Subsidiary is a party if the aggregate volume of Hydrocarbons sold pursuant to such agreement during the twelve months immediately preceding such date equals or exceeds 10% of the aggregate volume of Hydrocarbons sold by the Borrower and its Consolidated Restricted Subsidiaries during the twelve months immediately preceding such date.
“Maturity Date” means February 14, 2018 or any earlier date on which the Commitments are reduced to zero or otherwise terminated.
“Maximum Credit Amount” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Maximum Credit Amounts,” or in the Assignment and Assumption or Lender Certificate pursuant to which such Lender shall have assumed or agreed to provide its Maximum Credit Amount, as applicable, as the same may be (a) increased from time to time pursuant to Section 2.04, (b) reduced or terminated from time to time in connection with a reduction or termination of the Aggregate Maximum Credit Amounts pursuant to Section 2.08 or (c) modified from time to time pursuant to any assignment permitted by Section 9.04(b).
“Maximum Liability” has the meaning assigned to such term in Section 10.10.
“Maximum Rate” has the meaning assigned to such term in Section 9.17.
“Minimum Mortgaged Value” has the meaning assigned to such term in Section 5.13.
“MLP Incentive Plan” means the incentive plan adopted by E/H MLP, as the plan sponsor, on or before the Effective Date, for the payment of incentive compensation to the participants in such plan consisting of cash bonuses, annual grants of phantom units and initial phantom units.

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“Moody’s” means Moody’s Investors Service, Inc.
“Mortgaged Properties” means the Oil and Gas Properties owned by the Borrower or any Restricted Subsidiary which are subject to the Liens created under the terms of the Mortgages.
“Mortgages”  means any mortgage, deed of trust or other agreement which conveys or evidences a Lien in favor of the Administrative Agent, for the benefit of the Secured Parties, on Oil and Gas Properties owned by the Borrower or any Restricted Subsidiary, including any amendment, modification or supplement thereto.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“Net Cash Proceeds” means, (a) with respect to any Disposition of any Oil and Gas Properties (including any Equity Interests of any Restricted Subsidiary owning Oil and Gas Properties) by the Borrower or any Restricted Subsidiary, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such Disposition, but only as and when so received, over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by such Oil and Gas Properties and that is senior to the Liens securing the Secured Obligations and required to be repaid in connection with such Disposition (other than the Loans), (B) the out-of-pocket costs and expenses incurred by the Borrower or such Restricted Subsidiary in connection with such Disposition, (C) all legal, title and recording tax expense and all federal, state, provincial, foreign and local Taxes required to be accrued as a liability under GAAP as a consequence of such Disposition, (D) all distributions and other payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such Disposition, (E) the deduction of appropriate amounts provided by the seller as a reserve, in accordance with GAAP, against any liabilities associated with the Property Disposed of in such Disposition and retained by the Borrower or any Restricted Subsidiary after such Disposition, (F) cash payments made to satisfy obligations resulting from Swap Liquidations or the early termination of any Swap Agreements in connection with or as a result of any such Disposition of Oil and Gas Properties, and (G) any portion of the purchase price from such Disposition placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in respect of such Disposition or otherwise in connection with such Disposition; provided, however, that upon the termination of that escrow, Net Cash Proceeds will be increased by any portion of funds in the escrow that are released to the Borrower or any Restricted Subsidiary, (b) with respect to any Permitted Refinancing or issuance of Senior Notes, the cash proceeds received from such Permitted Refinancing or issuance of Senior Notes, as the case may be, net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith, including reasonable legal fees and expenses, and (c) with respect to any Swap Liquidation by any Loan Party or any Restricted Subsidiary, the excess, if any, of (i) the sum of cash and cash equivalents received in connection with such Swap Liquidation (after giving effect to any netting arrangements), over (ii) the out-of-pocket expenses incurred by such Loan Party or such Restricted Subsidiary in connection with such Swap Liquidation.
“New Borrowing Base Notice” has the meaning assigned to such term in Section 2.09(d). 
“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

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“Non-U.S. Lender” means a Lender that is not a U.S. Person.
“Non-Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“Non-Recourse Debt” means any Indebtedness of any Unrestricted Subsidiary, in each case in respect of which: (a) the holder or holders thereof (i) shall have recourse only to, and shall have the right to require the obligations of such Unrestricted Subsidiary to be performed, satisfied, and paid only out of, the Property of such Unrestricted Subsidiary and/or one or more of its Subsidiaries (but only to the extent that such Subsidiaries are Unrestricted Subsidiaries) and/or any other Person (other than any Loan Party and/or any Restricted Subsidiary) and (ii) shall have no direct or indirect recourse (including by way of guaranty, support or indemnity) to any Loan Party or any Restricted Subsidiary or to any of the Property of any Loan Party or any Restricted Subsidiary (other than Equity Interests of such Unrestricted Subsidiary), whether for principal, interest, fees, expenses or otherwise; and (b) the terms and conditions relating to the non-recourse nature of such Indebtedness are in form and substance reasonably acceptable to the Administrative Agent.
“Notes” means the promissory notes of the Borrower described in Section 2.10(e) and being in the form of Exhibit D, together with all amendments, modifications, replacements, extensions and rearrangements thereof.
“Obligated Party” has the meaning assigned to such term in Section 10.02.
“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Administrative Agent, the  Issuing Bank or any indemnified party arising under the Loan Documents.
“OFAC” means the Office of Foreign Assets Control of the United States Department of Treasury. 


“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any liability under any Sale and Leaseback Transaction which is not a Capital Lease Obligation, (c) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, (d) any Advance Payment Contract, or (e) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from the foregoing clauses (c) through (e) operating leases and usual and customary oil, gas and mineral leases.
“Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, communitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and 

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agreements, which relate to any of the Hydrocarbon Interests or the production, sale, purchase, exchange or processing of Hydrocarbons from or attributable to such Hydrocarbon Interests; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests and (g) all Properties, rights, titles, interests and estates described or referred to above, including any and all Property, real or personal, now owned or hereafter acquired and situated upon, used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests or Property (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) and including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, field gathering systems, tanks and tank batteries, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements and servitudes together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing.
“Organizational Documents” means (a) with respect to any corporation, its certificate or articles of incorporation or organization, as amended, and its by‐laws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its certificate of formation or articles of organization, as amended, and its limited liability company agreement or operating agreement, as amended.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, enforced, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, or engaged in any other transaction pursuant to, or enforced, any Loan Document), or sold or assigned an interest in any Loan Document).


“Other Taxes” means any present or future stamp, court, documentary, intangible, recording, filing or similar excise or property Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or from the registration, receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19(b)).
“Parent” means, with respect to any Lender, the Person as to which such Lender is, directly or indirectly, a Subsidiary.
“Participant” has the meaning assigned to such term in Section 9.04(c).

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“Participant Register” has the meaning assigned to such term in Section 9.04(c).
“Paying Guarantor” has the meaning assigned to such term in Section 10.11.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“Permitted Encumbrances” means:
(a)    Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;
(b)    carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, and contractual Liens granted to operators and non-operators under oil and gas operating agreements, in each case, arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04;
(c)    pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d)    deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e)    judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII; 
(f)    easements, zoning restrictions, rights-of-way, servitudes, permits, surface leases, and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of any Loan Party;
(g)    royalties, overriding royalties, reversionary interests and similar burdens granted by the Borrower or any Restricted Subsidiary with respect to the Oil and Gas Properties owned by the Borrower or such Restricted Subsidiary, as the case may be, if the net cumulative effect of such burdens does not operate to deprive the Borrower or any Restricted Subsidiary of any material right in respect of its Properties (except for rights customarily granted with respect to such interests);
(h)    Liens arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by any Loan Party or any Restricted Subsidiary in the ordinary course of business covering the Property under the lease;
(i)    unperfected Liens reserved in leases (other than oil, gas and mineral leases) or arising by operation of law for rent or compliance with the lease in the case of leasehold estates; 

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(j)    defects in or irregularities of title (other than defects or irregularities of title with respect to Oil and Gas Properties), if such defects or irregularities do not deprive any Loan Party or any Restricted Subsidiary of any material right in respect of its Properties;
(k)    Liens arising solely by virtue of any statutory or common law provision relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Board and no such deposit account is intended by any Loan Party or any Restricted Subsidiary to provide collateral to the depository institution; and
(l)    preferential rights to purchase, and provisions requiring a third party’s consent prior to assignment and similar restraints on alienation, in each case, granted pursuant to an oil and gas operating agreement and arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties; provided such right, requirement or restraint does not materially affect the value of such Oil and Gas Properties;
provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness (other than contractual Liens described in the foregoing clause (b) granted to operators and non-operators under oil and gas operating agreements to the extent the obligations secured by such Liens constitute Indebtedness) and provided, further that no intention to subordinate the first priority Lien granted in favor of the Administrative Agent is to be hereby implied or expressed by the permitted existence of such Permitted Encumbrances.
“Permitted Investments” means:
(a)    direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(b)    investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating at the time as of which any investment therein is made of P-1 (or higher) according to Moody’s or A-1+ (or higher) according to S&P;
(c)    investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $500,000,000;
(d)    fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; 

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(e)    securities with maturities of six (6) months or less from the date of acquisition issued or fully guaranteed by any State, commonwealth or territory of the United States of America or by any political subdivision or taxing authority thereof, and rated at least “A+” by S&P or “A-1” by Moody’s; and
(f)    money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.
“Permitted Refinancing” means any Indebtedness of the Borrower or any Restricted Subsidiary, and Indebtedness constituting Guarantees thereof by any Loan Party (other than General Partner), incurred or issued in exchange for, or the Net Cash Proceeds of which are used solely to extend, refinance, renew, replace, defease or refund, existing Senior Notes, in whole or in part, from time to time; provided that (a) the principal amount of such Permitted Refinancing (or if such Permitted Refinancing is issued at a discount, the initial issuance price of such Permitted Refinancing) does not exceed the principal amount of Indebtedness permitted under Section 6.01(i) (plus the amount of any premiums, accrued and unpaid interest, fees and expenses incurred in connection therewith), (b) such Permitted Refinancing does not provide for any scheduled repayment, mandatory redemption or payment of a sinking fund obligation prior to the date that is one year after the Maturity Date (except for any offer to redeem such Indebtedness required as a result of asset sales or the occurrence of a “Change in Control” (or other similar event, however denominated) under and as defined in the Indenture), (c)  the covenant, default and remedy provisions of such Permitted Refinancing are not materially more onerous to the Loan Parties and their Subsidiaries than those imposed by such existing Senior Notes, (d) the mandatory prepayment, repurchase and redemption provisions of such Permitted Refinancing are not materially more onerous to the Loan Parties and their Subsidiaries than those imposed by such existing Senior Notes, (e) the non-default cash interest rate on the outstanding principal balance of such Permitted Refinancing does not exceed the prevailing market rate then in effect for similarly situated credits at the time such Permitted Refinancing is incurred, (f) such Permitted Refinancing is unsecured, (g) no Subsidiary of any Loan Party is required to Guarantee such Permitted Refinancing unless such Subsidiary is (or concurrently with any such Guarantee becomes) a Loan Guarantor hereunder, and (h) to the extent such Permitted Refinancing is or is intended to be expressly subordinate to the payment in full of all or any portion of the Obligations, the subordination provisions contained therein are either (x) at least as favorable to the Secured Parties as the subordination provisions contained in such existing Senior Notes or (y) reasonably satisfactory to the Administrative Agent and the Required Lenders.
“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which any Loan Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

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“Pledge Agreement” means that certain Pledge Agreement dated as of the Effective Date, in favor of the Administrative Agent for the benefit of the Secured Parties, covering, among other things, the rights and interests of the Loan Parties in all of the Equity Interests of E/H MLP (other than the limited partner common units of E/H MLP), the Borrower and each Restricted Subsidiary, and otherwise in form and substance satisfactory to the Administrative Agent.
“Prime Rate” means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.  THE PRIME RATE IS A REFERENCE RATE AND MAY NOT BE JPMORGAN CHASE BANK, N.A.’S LOWEST RATE.
“Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.
“Proposed Borrowing Base” has the meaning assigned to such term in Section 2.09(c).
“Proposed Borrowing Base Notice” has the meaning assigned to such term in Section 2.09(c).
“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) the Issuing Bank.
“Redetermination Date” means, with respect to any Scheduled Redetermination or any Interim Redetermination, the date that the redetermined Borrowing Base related thereto becomes effective pursuant to Section 2.09(d).
“Register” has the meaning assigned to such term in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“Reorganization” has the meaning assigned to such term in the Contribution Agreement.
“Required Lenders” means, at any time no Loans or LC Exposure is outstanding, Lenders having at least sixty-six and two-thirds percent (66 2/3%) of the Aggregate Maximum Credit Amounts; and at any other time, Lenders holding at least sixty-six and two-thirds percent (66 2/3%) of the outstanding aggregate principal amount of the Loans or participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 9.04(c)).  The Maximum Credit Amount and Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.
“Requirement of Law” means, as to any Person, the certificate of incorporation and by‐laws or other Organizational Documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable 

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to or binding upon such Person or any of its Property or to which such Person or any of its Property is subject.
“Reserve Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each March 31st or September 30th (or such other date in the event of an Interim Redetermination), the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries, together with a projection of the rate of production and future net income, taxes, operating expenses and capital expenditures with respect thereto as of such date, based upon the economic assumptions consistent with the Administrative Agent’s lending requirements at the time.
“Responsible Officer” means the chief executive officer, president, any vice president, or any Financial Officer of a Loan Party.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.
“Restricted Payment” means (a) any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests in any Loan Party, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in any Loan Party or any option, warrant or other right to acquire any such Equity Interests in any Loan Party or (b) any payment of management, directors, consulting, monitoring, financing or advisory fees to EXCO, HGI or any of their respective Affiliates; provided that for the avoidance of doubt, any cash bonuses paid by E/H MLP (or the reimbursement by E/H MLP of cash bonuses paid by EXCO on behalf of E/H MLP) to the participants in the MLP Incentive Plan shall not be deemed to be Restricted Payments for purposes of this Agreement and the other Loan Documents.
“Restricted Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.
“Sale and Leaseback Transaction” means any sale or other Disposition of any Property by any Person with the intent to lease such Property as lessee.
“Scheduled Redetermination” has the meaning assigned to such term in Section 2.09(b).
“Scheduled Redetermination Date” means the date on which a Borrowing Base that has been determined pursuant to a Scheduled Redetermination becomes effective as provided in Section 2.09(d).
“Secured Obligations” means all Obligations, together with all (a) Banking Services Obligations and (b) all Secured Swap Obligations.

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“Secured Party” means the Administrative Agent, any Lender, any Secured Swap Provider, any Banking Services Provider and any other holder of Secured Obligations.  
“Secured Swap Obligations” means any and all obligations owing by any Loan Party or any Restricted Subsidiary (whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising) to any Secured Swap Provider under any Swap Agreement between the Borrower or any Restricted Subsidiary and such Secured Swap Provider, in each case, after giving effect to all netting arrangements relating to such Swap Agreement; provided that if such Secured Swap Provider ceases to be a Lender or an Affiliate of a Lender hereunder, Secured Swap Obligations shall only include such obligations to the extent arising from transactions and confirmations entered into under Swap Agreements at any time such Secured Swap Provider was a Lender or an Affiliate of a Lender hereunder, without giving effect to any extension, increases, or modifications thereof which are made after such Secured Swap Provider ceases to be a Lender or an Affiliate of a Lender hereunder.
“Secured Swap Provider” means any Person that is a party to a Swap Agreement with the Borrower or any Restricted Subsidiary if (a) at the time such Swap Agreement was entered into or assumed, such Person was a Lender or an Affiliate of a Lender hereunder, even if such Person subsequently ceases to be a Lender (or an Affiliate thereof) for any reason or (b) such Swap Agreement was in effect on the Effective Date and such Person or an Affiliate of such Person was a Lender on the Effective Date, even if such Person subsequently ceases to be a Lender (or an Affiliate thereof) for any reason.
“Security Agreement” means that certain Security Agreement dated as of the Effective Date, in favor of the Administrative Agent for the benefit of the Secured Parties, covering, among other things, the rights and interests of the Loan Parties in all or substantially all of the assets of such Loan Parties, and otherwise in form and substance satisfactory to the Administrative Agent. 
“Security Instruments” means collectively, the Loan Guaranty, the Security Agreement, the Pledge Agreement, the Mortgages and all other security agreements, pledge agreements, collateral assignments, guarantees and other collateral documents now or hereafter executed and delivered by the Borrower or any other Loan Party as security for the payment and performance of the Secured Obligations, in each case, in form and substance reasonably satisfactory to the Administrative Agent.
“Senior Notes” means any senior or senior subordinated notes issued by the Borrower or any Restricted Subsidiary pursuant to and in accordance with the terms of the applicable Indenture; provided that (a) the terms of such Senior Notes do not provide for any scheduled repayment, mandatory redemption (including any required offer to redeem) or payment of a sinking fund obligation prior to the date that is one year after the Maturity Date (except for any offer to redeem such senior notes required as a result of asset sales or the occurrence of a “Change of Control” (or other similar event, however denominated) under and as defined in the applicable Indenture), (b) such Senior Notes are unsecured, (c) the non-default interest rate on the outstanding principal balance of such Senior Notes does not exceed the prevailing market rate then in effect for similarly situated credits at the time such Senior Notes are issued, (d) no Subsidiary of any Loan Party is required to Guarantee the Indebtedness evidenced by such Senior Notes unless such Subsidiary is (or concurrently with any such Guarantee becomes) a Loan Guarantor hereunder, and (e) the terms and 

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conditions of the applicable Indenture pursuant to which such Senior Notes are issued are reasonably satisfactory to the Administrative Agent and the Required Lenders.
“Senior Note Documents” means the Senior Notes, the Indentures and any documents or instruments contemplated by or executed in connection with any of them, in each case, as amended, restated, supplemented or otherwise modified from time to time to the extent permitted under this Agreement.
“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
“Subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.  Unless the context otherwise clearly requires, references herein to a “Subsidiary” refer to a Subsidiary of the Borrower.

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“Supermajority Lenders” means, at any time no Loans or LC Exposure is outstanding, Lenders having at least eighty (80%) of the Aggregate Maximum Credit Amounts; and at any other time, Lenders holding at least eighty percent (80%) of the outstanding aggregate principal amount of the Loans or participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 9.04(c)).  The Maximum Credit Amount and Credit Exposure of any Defaulting Lender shall be disregarded in determining Supermajority at any time.
“Swap Agreement” means any agreement with respect to any swap, forward, spot, future or credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that in no event shall any (a) phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of any Loan Party or any Restricted Subsidiary or (b) near term spot market purchase and sale of a commodity in the ordinary course of business based on a price determined by a rate quoted on an organized exchange for actual physical delivery, be a Swap Agreement.
“Swap Liquidation” means the sale, assignment, novation, liquidation, unwind, cancellation, modification or termination of all or any part of any Borrowing Base Swap (other than, in each case, at its scheduled maturity).  
“Swap Termination Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (a) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined by the counterparties to such Swap Agreements.
“Taxes” means any present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Transactions” means (a) the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, (b) the borrowing of Loans, (c) the use of the proceeds thereof, (d) the issuance of Letters of Credit hereunder, (e) the grant of Liens by the Loan Parties on the Mortgaged Properties and the other Collateral pursuant to the Security Instruments, (f) the consummation of the Reorganization in accordance with the Contribution Agreement, (g) the execution and delivery by the parties thereto of the Contribution Documents and the substantially simultaneous performance of the obligations required to be performed by the parties thereto for the consummation of the transactions contemplated thereby, and (h) the receipt by E/H MLP of a cash equity contribution of not less than $372,500,000 (as such amount may be adjusted upward or downward based on purchase price adjustments pursuant to the terms of the Contribution Agreement, but in any event not less than $340,000,000).

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“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.
“Unrestricted Subsidiary” means any Subsidiary designated as such on Schedule 3.14 or which the Borrower has designated in writing to the Administrative Agent to be an Unrestricted Subsidiary pursuant to the terms of Section 6.17, in each case, unless subsequently designated as a Restricted Subsidiary pursuant to Section 6.17.
“Unused Commitment” means, with respect to each Lender at any time, such Lender’s Commitment at such time minus such Lender’s Credit Exposure at such time.
“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.
“Vernon” means Vernon Gathering, LLC, a Delaware limited liability company.
“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“Withholding Agent” means the Borrower, any other Loan Party and the Administrative Agent.
Section 1.02.    Types of Loans and Borrowings.  For purposes of this Agreement, Loans may be classified and referred to by Type (e.g., a “Eurodollar Loan” or an “ABR Loan”.  Borrowings also may be classified and referred to by Type (e.g., a “Eurodollar Borrowing” or an “ABR Borrowing”).
Section 1.03.    Terms Generally.  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding.”  The 

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section titles, table of contents, and list of exhibits appear as a matter of convenience only and shall not affect the interpretation of this Agreement or any other Loan Document. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (b) except for purposes of the definition of “Change in Control” and “EXCO Change of Control”, any reference herein to any Person shall be construed to include such Person’s successors and assigns (but this clause shall not be construed as any consent to any transaction or circumstance giving rise to any successor or assign), (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Annexes, Articles, Sections, Exhibits and Schedules shall be construed to refer to Annexes, Articles and Sections of, and Exhibits and Schedules to, this Agreement, (e) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, (f) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights and (g) any reference herein to any law shall be construed as referring to such law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to time.  No provision of this Agreement or any other Loan Document shall be construed or interpreted to the disadvantage of any party hereto by reason of such party’s having, or being deemed to have, drafted, structured, or dictated such provision.
Section 1.04.    Accounting Terms; GAAP.  Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if after the date hereof there occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such change  in GAAP or in the application thereof  (or if the Administrative Agent notifies the Borrower that the Majority Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
Section 1.05.    Oil and Gas Definitions.   For purposes of this Agreement and the other Loan Documents, the terms “proved reserves,” “proved developed reserves,” “proved undeveloped reserves,” “proved developed nonproducing reserves” and “proved developed producing reserves,” have the meaning given such terms from time to time and at the time in question by the Society of Petroleum Engineers of the American Institute of Mining Engineers.
Section 1.06.    Time of Day.  Unless otherwise specified, all references to times of day shall be references to Central time (daylight or standard, as applicable).

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Article II     
 
The Credits
Section 2.01.    Commitments.  Subject to the terms and conditions set forth herein, each Lender agrees to make Loans to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result in (a) such Lender’s Credit Exposure exceeding such Lender’s Commitment or (b) the Aggregate Credit Exposure exceeding the total Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans.
Section 2.02.    Loans and Borrowings. 
(a)    Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required.
(b)    Subject to Section 2.14, each Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith, provided that all Borrowings made on the Effective Date must be made as ABR Borrowings but may be converted into Eurodollar Borrowings in accordance with Section 2.07.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.
(c)    At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000.  At the time that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less than $1,000,000; provided that, notwithstanding the foregoing, an ABR Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e).  Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of eight (8) Eurodollar Borrowings outstanding.
(d)    Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
Section 2.03.    Requests for Borrowings.  To request a Borrowing, the Borrower shall notify the Administrative Agent of such request either in writing (delivered by hand or facsimile or by electronic communications in accordance with Section 9.01(b)) in substantially the form of Exhibit B or such other form approved by the Administrative Agent and signed by the Borrower or by telephone not later than (a) in the case of a Eurodollar Borrowing, 11:00 a.m., three Business Days 

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before the date of the proposed Borrowing or (b) in the case of an ABR Borrowing, 11:00 a.m., on the date of the proposed Borrowing; provided that any such notice of an ABR Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.05(e) may be given not later than 10:00 a.m., on the date of the proposed Borrowing.  Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile (or by electronic communications in accordance with Section 9.01(b)) to the Administrative Agent of a written Borrowing Request in substantially the form of Exhibit B or such other form approved by the Administrative Agent and signed by the Borrower.  Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i)    the aggregate amount of the requested Borrowing;
(ii)    the date of such Borrowing, which shall be a Business Day;
(iii)    whether such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
(iv)    in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period”; 
(v)    the amount of the then effective Borrowing Base, the current Aggregate Credit Exposure (without regard to the requested Borrowing) and the pro forma Aggregate Credit Exposure (giving effect to the requested Borrowing); and
(vi)    the location and number of the Borrower’s account to which funds are to be disbursed, which shall comply with the requirements of Section 2.06.
If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be an ABR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.  Promptly following receipt of a  Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
Section 2.04.    Additional Lenders; Increases in the Aggregate Maximum Credit Amounts.  If (a) no Default exists as of the date of such increase or would be caused by such increase, (b) the Borrower shall concurrently pay any additional fees required as a result of such increase, and (c) at the time of and immediately after giving effect to such increase and any Borrowing made on the date of such increase, the Borrower is in pro forma compliance with the financial covenants set forth in Section 6.18 as of the last day of the most recently ended fiscal quarter for which the financial statements required under Section 5.01(a) or (b), as applicable, have been delivered to the Administrative Agent and the Lenders (calculated as though any Borrowing made on the date of such increase had been made as of the last day of such fiscal quarter), the Borrower may, at any time and from time to time, with the consent of the Administrative Agent, increase the Aggregate 

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Maximum Credit Amounts to an amount not to exceed $750,000,000 by providing written notice of such increase to the Administrative Agent.  Each Lender shall have the right, but not the obligation, in each such Lender’s sole discretion, to provide a portion of such increase in the Aggregate Maximum Credit Amounts up to the portion of such increase that such Lender’s existing Maximum Credit Amount bears to the aggregate amount of the existing Maximum Credit Amounts of all Lenders electing to participate in such requested increase by executing and delivering to the Borrower and the Administrative Agent a certificate substantially in the form of Exhibit H hereto (a “Lender Certificate”).  In the event that within ten (10) Business Days of the Administrative Agent’s receipt of such written notice the existing Lenders fail to provide increases in their respective Maximum Credit Amounts sufficient to satisfy such requested increase in the Aggregate Maximum Credit Amounts, the Borrower may adjust the previously requested increase to reflect the increased Maximum Credit Amounts of existing Lenders or one or more financial institutions reasonably acceptable to the Administrative Agent may become a Lender under this Agreement by executing and delivering to the Borrower and the Administrative Agent a Lender Certificate.  Upon receipt by the Administrative Agent of Lender Certificates representing increases to the Maximum Credit Amounts of existing Lenders and/or Maximum Credit Amounts from new Lenders as provided in this Section 2.04 in an aggregate amount equal to the requested increase (as the same may have been adjusted), (i) the Aggregate Maximum Credit Amounts (including the Maximum Credit Amount of any Person that becomes a Lender by delivery of such a Lender Certificate) automatically without further action by the Borrower, the Administrative Agent or any Lender shall be increased on the effective date set forth in such Lender Certificates by the amount indicated in such Lender Certificates, (ii) each of the Register and Annex I shall be amended to add the Maximum Credit Amount of each additional Lender or to reflect the increase in the Maximum Credit Amount of each existing Lender, and the Applicable Percentages of the Lenders shall be adjusted accordingly to reflect each additional Lender or the increase in the Maximum Credit Amount of each existing Lender, (iii) any such additional Lender shall be deemed to be a party in all respects to this Agreement and any other Loan Documents to which the Lenders are a party, and (iv) upon the effective date set forth in such Lender Certificate, any such Lender party to the Lender Certificate shall purchase and each existing Lender shall assign to such Lender a pro rata portion of the outstanding Credit Exposure of each of the existing Lenders such that the Lenders (including any additional Lender, if applicable) shall have the appropriate portion of the Aggregate Credit Exposure of the Lenders (based in each case on such Lender’s Applicable Percentage, as revised pursuant to this Section), and the Borrower shall have paid to the Lenders any amounts due pursuant to Section 2.16 as a result of such purchase and assignment.
Section 2.05.    Letters of Credit.
(a)    General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own or the account of any Restricted Subsidiary, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period.  In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control.

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(b)    Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall deliver by hand or facsimile (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the Administrative Agent (not less than three (3) Business Days prior to the requested date of issuance, amendment, renewal or extension or such shorter time period as may be reasonably acceptable to the Issuing Bank) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with clause (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank's standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $20,000,000 and (ii) the Aggregate Credit Exposure shall not exceed the total Commitments.
(c)    Expiration Date.  Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Maturity Date.
(d)    Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in clause (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this clause in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default, the existence of a Borrowing Base Deficiency or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e)    Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement (i) not later than noon on the date that such LC Disbursement is made, if the Borrower shall have received notice of such LC 

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Disbursement prior to 10:00 a.m. on such date, or, (ii) if such notice has not been received by the Borrower prior to such time on such date, then not later than noon on (a) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m. on the day of receipt, or (b) the Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 that such payment be financed with an ABR Borrowing in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and replaced by the resulting ABR Borrowing.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage thereof.  Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as provided in Section 2.06 with respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this clause, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this clause to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear.  Any payment made by a Lender pursuant to this clause to reimburse the Issuing Bank for any LC Disbursement (other than the funding of ABR Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.
(f)    Obligations Absolute.  The Borrower's obligation to reimburse LC Disbursements as provided in clause (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's obligations hereunder.  Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by 

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applicable law) suffered by the Borrower that are caused by the Issuing Bank's failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g)    Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement.  
(h)    Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the Borrower fails to reimburse such LC Disbursement when due pursuant to clause (e) of this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to this clause shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to clause (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.
(i)    Replacement of the Issuing Bank.  The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters 

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of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
(j)    Cash Collateralization.  If (i) any Event of Default shall occur and be continuing and the Borrower receives notice from the Administrative Agent or the Majority Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this Section 2.05(j), (ii) the Borrower is required to pay to the Administrative Agent the excess attributable to any LC Exposure in connection with any prepayment pursuant to Section 2.11, or (iii) the Borrower is required to cash collateralize a Defaulting Lender’s LC Exposure pursuant to Section 2.20, then the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Issuing Bank and the Lenders (the “LC Collateral Account”), an amount in cash equal to (x) in the case of an Event of Default, 103% of the LC Exposure as of such date plus accrued and unpaid interest thereon, (y) in the case of a payment required by Section 2.11, the excess attributable to such LC Exposure, and (z) in the case cash collateral is required by Section 2.20, the LC Exposure of such Defaulting Lender; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower or any other Loan Party described in clause (h) or (i) of Article VII.  Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account.  Other than any interest earned on the investment of such deposits, which investments shall be made by the Administrative Agent in consultation with the Borrower (unless an Event of Default shall have occurred and be continuing, in which case, such investments shall be made at the option and sole discretion of the Administrative Agent) and at the Borrower's risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in the LC Collateral Account.  Moneys in the LC Collateral Account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such Events of Defaults have been cured or waived as confirmed in writing by the Administrative Agent.  If the Borrower is required to provide an amount of cash collateral hereunder pursuant to Section 2.20, then so long as no Event of Default exists, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after such Defaulting Lender’s LC Exposure no longer exists and such amount of cash collateral is no longer required under Section 2.20.  

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Section 2.06.    Funding of Borrowings.
(a)    Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 1:00 p.m. to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to a deposit account of the Borrower maintained with JPMorgan Chase Bank, N.A. and designated by the Borrower in the applicable Borrowing Request; provided that ABR Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be remitted by the Administrative Agent to the Issuing Bank.
(b)    Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with clause (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to ABR Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such Borrowing.
Section 2.07.    Interest Elections.
(a)    Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  
(b)    To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in substantially the form of Exhibit C or such other form approved by the Administrative Agent and signed by the Borrower.

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(c)    Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i)    the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii)    the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii)    whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and
(iv)    if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period contemplated by the definition of the term “Interest Period”.
If any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.
(d)    Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.
(e)    If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Majority Lenders, so notifies the Borrower, then, so long as an Event of Default is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the Interest Period applicable thereto.
Section 2.08.    Termination and Reduction of Aggregate Maximum Credit Amounts.
(a)    Unless previously terminated, the Commitments shall terminate on the Maturity Date.  If at any time the Aggregate Maximum Credit Amounts or the Borrowing Base is terminated or reduced to zero, then the Commitments shall terminate on the effective date of such termination or reduction.
(b)    The Borrower may at any time terminate, or from time to time reduce, the Aggregate Maximum Credit Amounts; provided that (i) each reduction of the Aggregate Maximum Credit 

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Amounts shall be in an amount that is an integral multiple of $5,000,000 and not less than $10,000,000 and (ii) the Borrower shall not terminate or reduce the Aggregate Maximum Credit Amounts if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the Aggregate Credit Exposure would exceed the total Commitments.
(c)    The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Aggregate Maximum Credit Amounts under clause (b) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination or reduction of the Aggregate Maximum Credit Amounts delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, debt offerings or any other similar transactions, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Aggregate Maximum Credit Amounts shall be permanent.  Each reduction of the Aggregate Maximum Credit Amounts shall be made ratably among the Lenders in accordance with each Lender’s Applicable Percentage.
Section 2.09.    Borrowing Base.
(a)    Initial Borrowing Base. For the period from and including the Effective Date to but excluding the first Redetermination Date, the amount of the Borrowing Base shall be $400,000,000. Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time pursuant to Section 2.09(f), Section 2.09(g) and Section 5.12.
(b)    Scheduled and Interim Redeterminations.  Except as set forth in the following sentence, the Borrowing Base shall be redetermined semi-annually in accordance with this Section 2.09 (a “Scheduled Redetermination”), and, subject to Section 2.09(d), such redetermined Borrowing Base shall become effective and applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders on or about January 1 and July 1 of each year, commencing July 1, 2013.  In addition, (i) the Borrower may, by notifying the Administrative Agent thereof, elect to cause the Borrowing Base to be redetermined once between Scheduled Redeterminations, and (ii) the Administrative Agent may (either in its discretion or at the direction of the Required Lenders), by notifying the Borrower thereof, elect to cause the Borrowing Base to be redetermined once between Scheduled Redeterminations (each such redetermination, an “Interim Redetermination”), in the case of each of clauses (i) and (ii) above, in accordance with this Section 2.09.  
(c)    Scheduled and Interim Redetermination Procedure.
(i)    Each Scheduled Redetermination and each Interim Redetermination shall be effectuated as follows:  Upon receipt by the Administrative Agent of (A) the Reserve Report and (B) such other reports, data and supplemental information, including, without limitation, the information provided pursuant to Section 5.11, as may, from time to time, be reasonably requested by the Required Lenders (the Reserve Report, such certificate and such other reports, data and supplemental information being the “Engineering Reports”), the 

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Administrative Agent shall evaluate the information contained in the Engineering Reports and shall, in good faith, propose a new Borrowing Base (the “Proposed Borrowing Base”) based upon such information and such other information (including, without limitation, the status of title information with respect to the Oil and Gas Properties as described in the Engineering Reports, the existence of any other Indebtedness, the financial condition of the Loan Parties, the economic effect of the Borrower’s and its Restricted Subsidiaries’ Swap Agreements then in effect and such other credit factors) as the Administrative Agent deems appropriate in its sole discretion and consistent with its normal oil and gas lending criteria as it exists at the particular time.  
(ii)    The Administrative Agent shall notify the Borrower and the Lenders of the Proposed Borrowing Base (the “Proposed Borrowing Base Notice”):
(1)    in the case of a Scheduled Redetermination (A) if the Administrative Agent shall have received the Engineering Reports and other information required to be delivered by the Borrower pursuant to Section 5.11(a) in a timely and complete manner, then on or about December 15th and June 15th of such year following the date of delivery or (B) if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 5.11(a) in a timely and complete manner, then promptly after the Administrative Agent has received complete Engineering Reports and other information from the Borrower and has had a reasonable opportunity to determine the Proposed Borrowing Base in accordance with Section 2.09(c)(i); and
(2)    in the case of an Interim Redetermination, promptly, and in any event, within fifteen (15) days after the Administrative Agent has received the required Engineering Reports.
(iii)    Any Proposed Borrowing Base that would increase the Borrowing Base then in effect must be approved or deemed to have been approved by all of the Lenders as provided in this Section 2.09(c)(iii); and any Proposed Borrowing Base that would decrease or maintain the Borrowing Base then in effect must be approved or be deemed to have been approved by the Administrative Agent and the Required Lenders (in each Lender’s sole discretion consistent with its normal oil and gas lending criteria as it exists at the particular time) as provided in this Section 2.09(c)(iii).  Upon receipt of the Proposed Borrowing Base Notice, each Lender shall have fifteen (15) days to agree with the Proposed Borrowing Base or disagree with the Proposed Borrowing Base by proposing an alternate Borrowing Base, and each Lender shall make its determination of the appropriate amount of the Borrowing Base consistent with each such Lender’s normal and customary oil and gas lending criteria as it exists at the particular time. If at the end of such fifteen (15) days, any Lender has not communicated its approval or disapproval in writing to the Administrative Agent, such silence shall be deemed to be an approval of the Proposed Borrowing Base.  If, at the end of such 15-day period, all of the Lenders, in the case of a Proposed Borrowing Base that would increase the Borrowing Base then in effect, or the Administrative Agent and the Required Lenders, in the case of a Proposed Borrowing Base that would decrease or maintain 

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the Borrowing Base then in effect, have approved or deemed to have approved, as aforesaid, then the Proposed Borrowing Base shall become the new Borrowing Base, effective on the date specified in Section 2.09(d). If, however, at the end of such 15-day period, all of the Lenders or the Administrative Agent and the Required Lenders, as applicable, have not approved or deemed to have approved, as aforesaid, then the Administrative Agent shall poll the Lenders to ascertain the highest Borrowing Base then acceptable to a number of Lenders sufficient to constitute the Required Lenders or all of the Lenders, as applicable, and, subject to the approval rights contained in this Section 2.09(c), such amount shall become the new Borrowing Base, effective on the date specified in Section 2.09(d).
(d)    Effectiveness of a Redetermined Borrowing Base. After a redetermined Borrowing Base is approved or is deemed to have been approved by all of the Lenders or the Administrative Agent and the Required Lenders, as applicable, pursuant to Section 2.09(c)(iii), the Administrative Agent shall notify the Borrower and the Lenders of the amount of the redetermined Borrowing Base (the “New Borrowing Base Notice”), and such amount shall become the new Borrowing Base, effective and applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders:in the case of a Scheduled Redetermination, (1) if the Administrative Agent shall have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 5.11(a) in a timely and complete manner, then on or about January 1st and July 1st of such year, as applicable, following such notice, or if the Administrative Agent shall not have received the Engineering Reports required to be delivered by the Borrower pursuant to Section 5.11(a) in a timely and complete manner, then on the Business Day next succeeding delivery of such notice; and
(i)    in the case of an Interim Redetermination, on the Business Day next succeeding delivery of such notice.
Such amount shall then become the Borrowing Base until the next Scheduled Redetermination Date, the next Interim Redetermination Date or the next adjustment to the Borrowing Base under Section 2.09(f), Section 2.09(g) or Section 5.12, whichever occurs first.  Notwithstanding the foregoing, no Scheduled Redetermination or Interim Redetermination shall become effective until the New Borrowing Base Notice related thereto is received by the Borrower.
(e)    Lenders’ Sole Discretion.  The Lenders shall have no obligation to determine the Borrowing Base at any particular amount, either in relation to the Aggregate Maximum Credit Amounts or otherwise.  Furthermore, Borrower acknowledges that the Lenders have no obligation to increase the Borrowing Base and that any increase in the Borrowing Base is in each Lender’s sole discretion and subject to the individual credit approval processes of each of the Lenders which processes shall be conducted in good faith and based upon such information and such other information (including, without limitation, the status of title information with respect to the Oil and Gas Properties as described in the Engineering Reports, the existence of any other Indebtedness, the financial condition of the Loan Parties, the economic effect of the Borrower’s and its Restricted Subsidiaries’ Swap Agreements then in effect and such other credit factors) as such Lender deems appropriate in its sole discretion and consistent with its normal oil and gas lending criteria as it exists at the particular time.

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(f)    Reduction of Borrowing Base Upon Asset Dispositions.  If at any time between Scheduled Redeterminations of the Borrowing Base, the aggregate Engineered Value of Oil and Gas Properties Disposed of (whether pursuant to a Disposition of Equity Interests of a Restricted Subsidiary or otherwise) by the Loan Parties pursuant to Section 6.05 exceeds five percent (5%) of the Borrowing Base then in effect, then the Borrowing Base shall be automatically reduced, effective immediately upon any such Disposition, by an amount equal to the Engineered Value (as determined by the Required Lenders) of such Oil and Gas Properties Disposed of, and the Borrowing Base as so reduced shall become the new Borrowing Base immediately upon the consummation of such Disposition, effective and applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders until the next redetermination or adjustment of the Borrowing Base pursuant to this Agreement.  Upon any such redetermination, the Administrative Agent shall promptly deliver a New Borrowing Base Notice to the Borrower and the Lenders.
(g)    Reduction of Borrowing Base Upon Issuance of Senior Notes.  Unless otherwise waived in writing by the Required Lenders, upon the issuance of any Senior Notes by the Borrower or any Restricted Subsidiary in accordance with Section 6.01(i) (other than any Permitted Refinancing that extends, refinances, renews, replaces, defeases or refunds existing Senior Notes), the Borrowing Base then in effect shall automatically be reduced by the lesser of (a) $250 for each $1,000 in stated principal amount of such Senior Notes on the date such Senior Notes are issued and (b) such other amount, if any, determined by the Required Lenders in their sole discretion prior to the issuance of such Senior Notes, and the Borrowing Base as so reduced shall become the new Borrowing Base immediately upon the date of such issuance, effective and applicable to the Borrower, the Administrative Agent, the Issuing Bank and the Lenders until the next redetermination or adjustment of the Borrowing Base pursuant to this Agreement.  Upon any such redetermination, the Administrative Agent shall promptly deliver a New Borrowing Base Notice to the Borrower and the Lenders.
Section 2.10.    Repayment of Loans; Evidence of Debt.
(a)    The Borrower hereby unconditionally promises to pay to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Loan on the Maturity Date.
(b)    Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c)    The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(d)    The entries made in the accounts maintained pursuant to clause (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts 

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or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.
(e)    Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in the form attached hereto as Exhibit D.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and its registered assigns).
Section 2.11.    Prepayment of Loans.
(a)    Optional Prepayments.  The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole and or in part, subject to prior notice in accordance with clause (b) of this Section 2.11 and any break funding costs payable pursuant to Section 2.16.
(b)    Notice and Terms of Optional Prepayment.  The Borrower shall notify the Administrative  Agent by telephone (confirmed by facsimile) of any prepayment hereunder not later than 11:00 a.m. (A) in the case of prepayment of a Eurodollar Borrowing, three (3) Business Days before the date of prepayment, or (B) in the case of prepayment of an ABR Borrowing, one (1) Business Day before the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination or reduction of the Aggregate Maximum Credit Amounts as contemplated by Section 2.08, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.08.  Promptly following receipt of any such notice relating to a Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.   Each partial prepayment of any shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by accrued interest to the extent required by Section 2.13.
(c)    Mandatory Prepayment of Loans.  
(i)    If, after giving effect to any termination or reduction of the Aggregate Maximum Credit Amounts pursuant to Section 2.08(b), the Aggregate Credit Exposure exceeds the total Commitments, then the Borrower shall immediately (and in any event on the Business Day of such termination or reduction) (i) prepay the Borrowings on the date of such termination or reduction in an aggregate principal amount equal to such excess, and (ii) if any excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.05(j).

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(ii)    Upon any redetermination of or adjustment to the amount of the Borrowing Base in accordance with Section 2.09 (other than in accordance with Section 2.09(f) or Section 2.09(g)) or Section 5.12, if the Aggregate Credit Exposure exceeds the redetermined or adjusted Borrowing Base, then the Borrower shall take one or more of the following actions to cure the Borrowing Base Deficiency: (i) deliver to the Administrative Agent within thirty days engineering and Mortgages covering such Oil and Gas Properties not previously evaluated by the Borrower in the immediately preceding Reserve Report with a value and quality satisfactory to the Lenders in their sole discretion sufficient to eliminate such Borrowing Base Deficiency or (ii) prepay the Borrowings in an aggregate principal amount equal to such excess, and if any excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.05(j).  The Borrower shall be obligated to make such prepayments either within thirty days or in six substantially equal monthly installments, with accrued interest thereon, the first of which shall be due within such thirty days and each subsequent payment being due and payable on the same day in each of the subsequent calendar months.
(iii)    Upon any adjustment to the Borrowing Base pursuant to Section 2.09(f) or Section 2.09(g), if the Aggregate Credit Exposure exceeds the Borrowing Base as adjusted, then the Borrower shall (i) prepay the Borrowings in an aggregate principal amount equal to such excess, and (ii) if any excess remains after prepaying all of the Borrowings as a result of an LC Exposure, pay to the Administrative Agent on behalf of the Lenders an amount equal to such excess to be held as cash collateral as provided in Section 2.05(j).  The Borrower shall be obligated to make such prepayment and/or deposit of cash collateral (x) in the case of an adjustment to the Borrowing Base pursuant to Section 2.09(f), within two (2) Business Days of the date it or any of the Restricted Subsidiaries receives Net Cash Proceeds from the applicable Disposition and (y) in the case of an adjustment to the Borrowing Base pursuant to Section 2.09(g), on the date it or any of its Restricted Subsidiaries receives Net Cash Proceeds from the issuance of the applicable Senior Notes.
(iv)    If the Borrower or any Restricted Subsidiary enters into any Swap Liquidation in accordance with Section 6.06(c), then the Borrower shall prepay the Loans or provide cash collateral to the extent required under Section 6.06(c).  
(v)    Each prepayment of Borrowings pursuant to this Section shall be applied first, ratably to any ABR Borrowings then outstanding, and, second, to any Eurodollar Borrowings then outstanding, and if more than one Eurodollar Borrowing is then outstanding, to each such Eurodollar Borrowing in order of priority beginning with the Eurodollar Borrowing with the least number of days remaining in the Interest Period applicable thereto and ending with the Eurodollar Borrowing with the most number of days remaining in the Interest Period applicable thereto. 
(vi)    Each prepayment of Borrowings pursuant to this Section shall be applied ratably to the Loans included in the prepaid Borrowings.  Prepayments pursuant to this Section shall be accompanied by accrued interest to the extent required by Section 2.13.

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(vii)    Prepayments permitted under this Section shall be without premium or penalty, except for any break funding costs as required under Section 2.16.
Section 2.12.    Fees.
(a)    The Borrower agrees to pay to the Administrative Agent, for the account of each Lender, a commitment fee, which shall accrue at the Applicable Rate on the average daily amount of the Unused Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders’ Commitments terminate.  Accrued commitment fees shall be payable in arrears on the last day of each March, June, September and December and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.
(b)    The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Loans on the average daily amount of such Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Commitment terminates and the date on which such Lender ceases to have any LC Exposure, (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum separately agreed upon between the Borrower and the Issuing Bank on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, and (iii) to the Issuing Bank, for its own account, its standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder.  Participation fees and fronting fees accrued through and including the last day of each calendar quarter shall be payable on the last day of March, June, September and December, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this clause shall be payable within 10 days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed.
(c)    The Borrower agrees to pay to the Administrative Agent and the Arranger, for their respective accounts, the fees set forth in the Fee Letter payable to the Administrative Agent and the Arranger and such other fees payable in the amounts and at the times separately agreed upon between the Borrower, the Administrative Agent and the Arranger.
(d)    All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders.  Fees paid shall not be refundable under any circumstances.

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Section 2.13.    Interest.
(a)    The Loans comprising each ABR Borrowing shall bear interest at the Alternate Base Rate plus the Applicable Rate.  
(b)    The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.  
(c)    Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding clauses of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in clause (a) of this Section.
(d)    Accrued interest on each Loan (for ABR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Commitments and on the Maturity Date; provided that (i) interest accrued pursuant to clause (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period at a time when no Borrowing Base Deficiency exists), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(e)    All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
Section 2.14.    Alternate Rate of Interest.  If prior to the commencement of any Interest Period for a Eurodollar Borrowing:
(a)    the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or
(b)    the Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;

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then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing.
Section 2.15.    Increased Costs.
(a)    If any Change in Law shall:
(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
(ii)    impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit or participation therein; or
(iii)    subject any Recipient to any Taxes on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes, and (C) Connection Income Taxes);
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Eurodollar Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.
(b)    If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will 

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compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.
(c)    A certificate of a Lender or the Issuing Bank setting forth (i) the amount or amounts reasonably necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in clause (a) or (b) of this Section, (ii) the factual basis for such compensation, and (iii) the manner in which such amount or amounts were calculated, shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.  
(d)    Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
Section 2.16.    Break Funding Payments.  In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Sections 2.08(c) and is revoked in accordance therewith), (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section and the manner in which such amount or amounts were calculated shall be delivered to the Borrower within 180 days after such Lender incurs such loss, cost or expense and shall be conclusive absent 

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manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.
Section 2.17.    Taxes.
(a)    Withholding of Taxes; Gross-Up. Each payment by or account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, unless required by any applicable law.  If any applicable law (as determined by an applicable Withholding Agent in its sole discretion exercised in good faith) requires the deduction or withholding of any such payment by a Withholding Agent, then the applicable Withholding Agent may so deduct or withhold and shall timely pay the full amount of deducted or withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by the applicable Loan Party shall be increased as necessary so that, net of such deduction or withholding (including such deduction or withholding applicable to additional amounts payable under this Section), the applicable Recipient receives the amount it would have received had no such deduction or withholding been made. 
(b)    Payment of Other Taxes by the Borrower.  The Loan Parties shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c)    Evidence of Payments.  As soon as practicable after any payment of Indemnified Taxes by any Loan Party to a Governmental Authority, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.  
(d)    Indemnification by the Borrower.  The Loan Parties shall jointly and severally indemnify each Recipient for any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts paid or payable under this Section 2.17(d))  that are paid or payable by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.17(d) shall be paid within 10 days after the Recipient delivers to the Borrower a certificate stating the amount of such payment or liability.  Such certificate shall be conclusive absent manifest error.  Such Recipient shall deliver a copy of such certificate to the Administrative Agent.
(e)    Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent for (i) any Taxes (but, in the case of any Indemnified Taxes, only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so) attributable to such Lender that are paid or payable by the Administrative Agent in connection with any Loan Document, (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with 

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any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  The indemnity under this Section 2.17(e) shall be paid within 10 days after the Administrative Agent delivers to the applicable Lender a certificate stating the amount of such payment or liability.  Such certificate shall be conclusive absent manifest error. 
(f)    Status of Lenders.  
(i)    Any Lender that is entitled to an exemption from, or reduction of, any applicable withholding Tax with respect to any payments under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without, or at a reduced rate of, withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to any backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii) (D) below) shall not be required if in the Lender’s judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.  If any form or certification previously delivered pursuant to this Section expires or becomes obsolete or inaccurate in any respect with respect to a Lender, such Lender shall update such form or certificate or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so. 
(ii)    Without limiting the generality of the foregoing,
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), duly completed executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)    any Non-U.S. Lender shall, if it is legally eligible to do so, deliver to the Borrower and the Administrative Agent (in such number of copies reasonably requested by the Borrower and the Administrative Agent) on or prior to the date on which such Lender becomes a party under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), duly completed and executed copies of whichever of the following is applicable:

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(1)    in the case of a Non-U.S. Lender claiming the benefits of an income tax treaty to which the United States of America is a party (x) with respect to payments of interest under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (2) with respect to any other applicable payments under this Agreement, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(2)    in the case of a Non-U.S. Lender for whom payments under this Agreement constitute income that is effectively connected with such Lender’s conduct of a trade or business in the United States of America, IRS Form W-8ECI;
(3)    in the case of a Non-U.S. Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code both (x) IRS Form W-8BEN and (y) a tax certificate substantially in the form of Exhibit I-1 to the effect that such Lender is not (a) a “bank” within the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (c) a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code(a “U.S. Tax Compliance Certificate”); or
(4)    in the case of a Non-U.S. Lender that is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-1, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Non-U.S. Lender is a partnership and one or more direct or indirect partners of such Non-U.S. Lender are claiming the portfolio interest exemption, such Non-U.S. Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit I-2 on behalf of each such direct and indirect partner.
(C)    any Non-U.S. Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Non-U.S. Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by law as a basis for claiming exemption from, or a reduction of, U.S. federal withholding Tax together with such supplementary documentation necessary to enable the Borrower or the Administrative Agent to determine the withholding or deduction required by law to be made.

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(D)    If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent, at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent, such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA, to determine that such Lender has or has not complied with such Lender’s obligations under FATCA and, as necessary, to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 2.17(f)(ii)(D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
(g)    Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including additional amounts paid pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including any Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid to such indemnified party pursuant to the previous sentence (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this Section 2.17(g), in no event will any indemnified party be required to pay any amount to any indemnifying party pursuant to this Section 2.17(g) if such payment would place such indemnified party in a less favorable position (on a net after-Tax basis) than such indemnified party would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This Section 2.17(g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes which it deems confidential) to the indemnifying party or any other Person.
(h)    Issuing Bank.  For purposes of Section 2.17(e) and (f), the term “Lender” includes any Issuing Bank.
(i)    Survival.  Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.
Section 2.18.    Payments Generally; Allocation of Proceeds; Sharing of Set-offs.

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(a)    The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, Section 2.16 or Section 2.17, or otherwise) prior to 2:00 p.m. on the date when due, in immediately available funds, without set‐off or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 383 Madison Avenue, 27th Floor, New York, New York 10179, except payments to be made directly to the Issuing Bank as expressly provided herein and except that payments pursuant to Section 2.15, Section 2.16, Section 2.17 and Section 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in Dollars.
(b)    Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower), or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (ii) after an Event of Default has occurred and is continuing, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements including amounts then due to the Administrative Agent and the Issuing Bank from the Borrower or any other Loan Party (other than in connection with Banking Services or Secured Swap Obligations), second, to pay any fees or expense reimbursements then due to the Lenders from the Borrower or any other Loan Party (other than in connection with Banking Services or Secured Swap Obligations), third, to pay interest then due and payable on the Loans and unreimbursed LC Disbursements ratably, fourth, to pay the portion of the Secured Obligations constituting unpaid principal of the Loans, unreimbursed LC Disbursements and payment obligations then owing with respect to Banking Services Obligations and Secured Swap Obligations and to pay an amount to the Administrative Agent equal to one hundred three percent (103%) of the aggregate LC Exposure to be held as cash collateral for such Obligations (to the extent not otherwise cash collateralized by the Borrower pursuant to this Agreement), in each case, ratably among the Administrative Agent, the Lenders, the Issuing Bank, the Banking Services Providers and the Secured Swap Providers, and fifth, to the payment of any other Secured Obligations due to the Administrative Agent, any Lender or any other Secured Party by any Loan Party or any Restricted Subsidiary.  Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless an Event of Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable thereto or (b) in the event, and only to the extent, that there are no outstanding ABR Loans and, in any such event, the Borrower shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.

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(c)    If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of set‐off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall provide the Administrative Agent with written notice of such set-off or counterclaim and thereafter purchase (for cash at face value) participations in the Loans and participations in LC Disbursements of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this clause shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this clause shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.
(d)    Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)    If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(d) or Section 2.05(e), Section 2.06(b), Section 2.17(e), Section 2.18(c) or Section 2.18(d) or Section 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent or the Issuing Bank to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under such Sections; application of amounts 

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pursuant to clauses (i) and (ii) above shall be made in such order as may be determined by the Administrative Agent in its discretion.
Section 2.19.    Mitigation Obligations; Replacement of Lenders.
(a)    If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 2.15 or Section 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b)    If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained and consents required in Section 9.04), all its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); 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 funded 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 2.15 or payments required to be made pursuant to Section 2.17, 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.
Section 2.20.    Defaulting Lenders.  Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:
(a)    Fees shall cease to accrue on the Unused Commitment of such Defaulting Lender pursuant to Section 2.12(a).
(b)    Such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Maximum Credit Amount and Credit Exposure of such Defaulting Lender shall not be included in determining whether 

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the Supermajority Lenders, the Required Lenders or the Majority Lenders have taken or may take any action hereunder.
(c)    If any LC Exposure exists at the time a Lender becomes a Defaulting Lender then:
(iii)    all or any part of the LC Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent (x) the sum of all non-Defaulting Lenders’ Credit Exposures plus such Defaulting Lender’s LC Exposure does not exceed the total of all non-Defaulting Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are satisfied at that time;
(iv)    if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall, within one (1) Business Day following notice by the Administrative Agent, cash collateralize for the benefit of the Issuing Bank, the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.05(j) for so long as such LC Exposure is outstanding; 
(v)    if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;
(vi)    if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and
(vii)    if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clauses (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC Exposure is reallocated and/or cash collateralized.
(d)    So long as such Lender is a Defaulting Lender, the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(c), and participating interests in any such newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(c)(i) (and such Defaulting Lender shall not participate therein).

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(e)    If a Defaulting Lender (or a Lender who would be a Defaulting Lender but for the expiration of the relevant grace period) as a result of the exercise of a set-off shall have received a payment in respect of its Credit Exposure which results in its Credit Exposure being less than its Applicable Percentage of the Aggregate Credit Exposure, then no payments will be made to such Defaulting Lender until such time as such Defaulting Lender shall have complied with this Section 2.20 and all amounts due and owing to the Lenders has been equalized in accordance with each Lender’s respective pro rata share of the Obligations.  Further, if at any time prior to the acceleration or maturity of the Loans, the Administrative Agent shall receive any payment in respect of principal of a Loan or a reimbursement of an LC Disbursement while one or more Defaulting Lenders shall be party to this Agreement, the Administrative Agent shall apply such payment first to the Borrowing(s) for which such Defaulting Lender(s) shall have failed to fund its pro rata share until such time as such Borrowing(s) are paid in full or each Lender (including each Defaulting Lender) is owed its Applicable Percentage of all Loans then outstanding.  After acceleration or maturity of the Loans, subject to the first sentence of this Section 2.20(e), all principal will be paid ratably as provided in Section 2.18(b).
(f)    In the event that each of the Administrative Agent, the Borrower and Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.
Section 2.21.    Returned Payments.  If after receipt of any payment which is applied to the payment of all or any part of the Obligations, the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason, then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender.  The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds.  The provisions of this Section 2.21 shall survive the termination of this Agreement.
Section 2.22.    Collection of Proceeds of Production.  The Security Instruments contain an assignment by the Borrower and/or the Loan Guarantors to and in favor of the Administrative Agent for the benefit of the Secured Parties of all of the Borrower’s or each Loan Guarantor’s interest in and to production and all proceeds attributable thereto which may be produced from or allocated to the Mortgaged Properties.  The Security Instruments further provide in general for the application of such proceeds to the satisfaction of the Secured Obligations and other obligations described therein and secured thereby.  Notwithstanding the assignment contained in such Security Instruments, (a) unless an Event of Default has occurred and is continuing, the Administrative Agent and the Lenders will neither notify the purchaser or purchasers of such production nor take any other action to cause such proceeds to be remitted to the Administrative Agent or the Lenders, 

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but the Lenders will instead permit such proceeds to be paid to the relevant Loan Party and (b) the Lenders hereby authorize the Administrative Agent to take such actions as may be necessary to cause such proceeds to be paid to the relevant Loan Party so long as no Event of Default has occurred and is continuing.
Article III     
 
Representations and Warranties 

Each Loan Party represents and warrants to the Lenders that: 
Section 3.01.    Organization; Powers.  Each Loan Party is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.  
Section 3.02.    Authorization; Enforceability.  The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders.  The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
Section 3.03.    Governmental Approvals; No Conflicts.  The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law applicable to any Loan Party, (c) will not violate or result in a default under any indenture, agreement or other instrument evidencing Material Indebtedness or a Material Sales Contract binding upon any Loan Party or any assets of any Loan Party, or give rise to a right thereunder to require any payment to be made by any Loan Party, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party, except Liens created pursuant to the Loan Documents or any other Lien permitted under Section 6.02.
Section 3.04.    Financial Condition; No Material Adverse Change.
(k)    The Borrower has heretofore furnished to the Lenders the Initial Financial Statements.
(l)    No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since September 30, 2012.

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Section 3.05.    Properties; Titles, Etc.
(c)    Each of the Borrower and the Restricted Subsidiaries has good and defensible title to the Oil and Gas Properties evaluated in the most recently delivered Reserve Report (other than those Disposed of in accordance with the terms of this Agreement), and good title to, or valid leasehold interests in, all its personal Properties material to its business, in each case, free and clear of all Liens other than (i) in the case of Properties other than Oil and Gas Properties, Liens permitted by Section 6.02 and (ii) in the case of Oil and Gas Properties, Liens permitted by the terms of Section 6.02 to exist on Oil and Gas Properties.  The Borrower or the Restricted Subsidiaries own at least the net interests in production attributable to the Hydrocarbon Interests as reflected in the most recently delivered Reserve Report, and the ownership of such Properties shall not in any material respect obligate the Borrower or the Restricted Subsidiaries to bear the costs and expenses relating to the maintenance, development and operations of each such Property in an amount in excess of the working interest of each Property set forth in such Reserve Report that is not offset by a corresponding proportionate increase in the Borrower’s or the Restricted Subsidiary’s net revenue interest in such Property.
(d)    All material leases and agreements necessary for the conduct of the business of the Loan Parties are valid and subsisting, in full force and effect, and there exists no default, or event or circumstance which with the giving of notice or the passage of time or both would give rise to a default, under any such lease or agreement which could reasonably be expected to have a Material Adverse Effect.
(e)    The rights and Properties presently owned, leased or licensed by the Loan Parties including all easements and rights of way, include all rights and Properties necessary to permit the Loan Parties to conduct their business.
(f)    All of the Properties of the Loan Parties (other than the Oil and Gas Properties, which are addressed in Section 3.18) which are reasonably necessary for the operation of their businesses are in good working condition and are maintained in accordance with prudent business standards.
(g)    Each Loan Party owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, and the use thereof by such Loan Party does not infringe in any material respects upon the rights of any other Person.
Section 3.06.    Litigation and Environmental Matters.
(f)    Except for the Disclosed Matters, there are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party, (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.

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(g)    Except for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, (i) no Loan Party has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) no Loan Party (1) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (2) has become subject to any Environmental Liability.
(h)    Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.
Section 3.07.    Compliance with Laws and Agreements; No Defaults or Borrowing Base Deficiency.  Each Loan Party is in compliance with all Requirements of Law applicable to it or its Property and all indentures, agreements and other instruments binding upon it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  No Default or Borrowing Base Deficiency has occurred and is continuing.
Section 3.08.    Investment Company Status.  No Loan Party is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
Section 3.09.    Taxes.  Each Loan Party has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.  To the Borrower’s knowledge, no tax liens have been filed and no claims are being asserted with respect to any such taxes.
Section 3.10.    ERISA.  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.  The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.
Section 3.11.    Disclosure.  Each Loan Party has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  None of the reports, financial statements, certificates or other information furnished by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) when taken as a whole contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the 

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circumstances under which they were made, not misleading as of the date made or deemed made; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered.
Section 3.12.    Solvency.  After giving effect to the Transactions and any contribution provisions contained in any Loan Document, each Loan Party is Solvent.
Section 3.13.    Insurance.  Each Loan Party has (a) all insurance policies sufficient for the compliance by each of them with all material Governmental Requirements and all material agreements to which such Loan Party is a party and (b) insurance coverage in such amounts and against such risk (including, without limitation, public liability) that are usually insured against by companies similarly situated and engaged in the same or a similar business for the assets and operations of the Loan Parties.  The Administrative Agent and the Lenders have been named as additional insureds in respect of such liability insurance policies and the Administrative Agent has been named as loss payee with respect to Property loss insurance.
Section 3.14.    Capitalization.  Schedule 3.14 sets forth, as of the Effective Date, (a) for each Loan Party and each Subsidiary, its full legal name, its jurisdiction of organization and its organizational identification number, (b) a correct and complete list of the name and relationship to the Borrower of each Subsidiary of the Borrower and whether such Subsidiary is an Unrestricted Subsidiary or a Restricted Subsidiary, (c) a true and complete listing of each class of each Loan Party’s and each Subsidiary’s authorized Equity Interests, of which all of such issued shares are validly issued, outstanding, fully paid and non-assessable, and owned beneficially, and of record by the Persons identified on Schedule 3.14, and (d) the type of entity each Loan Party and each Subsidiary.  All of the issued and outstanding Equity Interests owned by any Loan Party has been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non‐assessable.
Section 3.15.    Security Interest in Collateral.  
(a)    The provisions of the Mortgages create legal and valid Liens on all the Collateral described therein in favor of the Administrative Agent, for the benefit of the Secured Parties, and when the Mortgages are filed in the offices specified on Schedule 3.15 (in the case of Mortgages to be executed and delivered on the Effective Date) or in the recording office designated by the Borrower (in the case of any Mortgage to be executed and delivered pursuant to Section 5.13), each Mortgage shall constitute perfected and continuing Liens on the Borrower’s and the Restricted Subsidiaries’ right, title and interest in the Collateral described therein, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except for Liens permitted by Section 6.02.
(b)    The Security Agreement creates legal and valid Liens on all the Collateral described therein in favor of the Administrative Agent, for the benefit of the Secured Parties, and when financing statements in appropriate form are filed in the offices specified on Schedule 3.15 at any time and such other filings as are identified in the Security Agreement have been completed, the Security Agreement shall constitute perfected and continuing Liens on each Loan Parties’ right, 

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title and interest in the Collateral described therein, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except for Liens permitted by Section 6.02.
(c)    The Pledge Agreement creates legal and valid Liens on all the Collateral described therein in favor of the Administrative Agent, for the benefit of the Secured Parties, and when financing statements in appropriate form are filed in the offices specified on Schedule 3.15 at any time, the Pledge Agreement shall constitute perfected and continuing Liens on the each Loan Party’s right, title and interest in the Collateral described therein, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except for Liens permitted by Section 6.02.
Section 3.16.    Employment Matters.  As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect.  The hours worked by and payments made to employees of the Loan Parties have not been in violation of the Fair Labor Standards Act or any other applicable Federal, state, local or foreign law dealing with such matters to the extent that such violation could reasonably be expected to have a Material Adverse Effect.  All payments due from any Loan Party, or for which any claim may be made against any Loan Party, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party, except to the extent the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
Section 3.17.    Margin Stock.  No Loan Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve Board), and no part of the proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock.
Section 3.18.    Maintenance of Properties.  Except for such acts or failures to act as could not be reasonably expected to have a Material Adverse Effect, the Oil and Gas Properties (and Properties unitized therewith) of the Borrower and the Restricted Subsidiaries have been maintained, operated and developed in a good and workmanlike manner and in conformity with all Governmental Requirements and in conformity with the provisions of all leases, subleases or other contracts comprising a part of the Hydrocarbon Interests and other contracts and agreements forming a part of the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries.  Specifically in connection with the foregoing, except for those as could not be reasonably expected to have a Material Adverse Effect, (i) no Oil and Gas Property of the Borrower or any Restricted Subsidiary is subject to having allowable production reduced below the full and regular allowable (including the maximum permissible tolerance) because of any overproduction (whether or not the same was permissible at the time) and (ii) none of the wells comprising a part of the Oil and Gas Properties (or Properties unitized therewith) of the Borrower and the Restricted Subsidiaries is deviated from the vertical more than the maximum permitted by Governmental Requirements, and such wells are, in fact, bottomed under and are producing from, and the well bores are wholly within, the Oil and Gas Properties (or in the case of wells located on Properties unitized therewith, 

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such unitized Properties) of the Borrower and the Restricted Subsidiaries.  The wells drilled in respect of proved producing Oil and Gas Properties described in the Reserve Report (other than wells drilled in respect of such proved producing Oil and Gas Properties that have been subsequently Disposed of in accordance with the terms of this Agreement) are capable of, and are presently, either producing Hydrocarbons in commercially profitable quantities or in the process of being worked over or enhanced, and the Loan Party that owns such proved producing Oil and Gas Properties is currently receiving payments for its share of production, with no funds in respect of any thereof being presently held in suspense, other than any such funds being held in suspense pending delivery of appropriate division orders.  All pipelines, wells, gas processing plants, platforms and other material improvements, fixtures and equipment owned in whole or in part by the Borrower or any Restricted Subsidiary that are necessary to conduct normal operations are being maintained in a state adequate to conduct normal operations, and with respect to such of the foregoing which are operated by the Borrower or any Restricted Subsidiary, in a manner consistent with the past practices of the Borrower and the Restricted Subsidiaries (other than those the failure of which to maintain in accordance with this 


 could not reasonably be expected to have a Material Adverse Effect).
Section 3.19.    Gas Imbalances; Prepayments.  Except as set forth on Schedule 3.19, on a net basis there are no gas imbalances, take or pay or other prepayments (including pursuant to an Advance Payment Contract) which would require any Loan Party to deliver Hydrocarbons produced from the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries at some future time without then or thereafter receiving full payment therefor exceeding a volume equal to one (1) bcf of gas (on an mcf equivalent basis) in the aggregate.
Section 3.20.    Marketing of Production.  Except for contracts listed and in effect on the Effective Date on Schedule 3.20, and thereafter disclosed in writing to the Administrative Agent (with respect to all of which contracts the Borrower represents that it or the Restricted Subsidiary party thereto is receiving a price for all production sold thereunder which is computed substantially in accordance with the terms of the relevant contract and is not having deliveries curtailed substantially below the subject Property’s delivery capacity), no material agreements exist which are not cancelable on 60 days’ notice or less without penalty or detriment for the sale of production from Oil and Gas Properties of the Borrower and the Restricted Subsidiaries (including, without limitation, calls on or other rights to purchase, production, whether or not the same are currently being exercised) that (a) pertain to the sale of production at a fixed price and (b) have a maturity or expiry date of longer than six (6) months from the Effective Date or the date of disclosure to the Administrative Agent in writing, as applicable.
Section 3.21.    Swap Agreements.  Schedule 3.21, as of the Effective Date, and after the date hereof, each report required to be delivered by the Borrower pursuant to Section 5.01(e), sets forth a true and complete list of all Swap Agreements of the Borrower and its Restricted Subsidiaries, the type, term, effective date, termination date and notional amounts or volumes thereof, the net mark to market value thereof, all credit support agreements relating thereto (including any margin required or supplied) and the counterparty to each such agreement.

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Section 3.22.    Foreign Corrupt Practices.  No Loan Party, nor any director, officer, agent, employee or Affiliate of any Loan Party is aware of or has taken any action, directly or indirectly, that would result in a material violation by such Persons of the FCPA, including without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA; and, the Loan Parties and their Affiliates have conducted their business in material compliance with the FCPA and have instituted and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
Section 3.23.    OFAC.  No Loan Party, nor any director, officer, agent, employee or Affiliate of any Loan Party is currently subject to any material U.S. sanctions administered by OFAC, and the Borrower will not directly or indirectly use the proceeds from the Loans or lend, contribute or otherwise make available such proceeds to any Subsidiary, Affiliate, joint venture partner or other Person, for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.
Article IV     
 
Conditions
Section 4.01.    Effective Date.  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):
(b)    Credit Agreement and Loan Documents.  The Administrative Agent (or its counsel) shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include facsimile or other electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents.
(c)    Promissory Notes.  The Administrative Agent shall have received promissory notes duly executed by the Borrower for each Lender that has requested the delivery of a promissory note pursuant to and in accordance with Section 2.10(e).
(d)    Legal Opinions.  The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of (i) Haynes and Boone, L.L.P., counsel for the Loan Parties, in form and substance satisfactory to the Administrative Agent, and (ii) local counsel for the Loan Parties in Louisiana, in form and substance satisfactory to the Administrative Agent, and, in each case, covering such other matters 

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relating to the Loan Parties, this Agreement or the Transactions as the Administrative Agent shall reasonably request.  The Loan Parties hereby request such counsels to deliver such opinions.
(e)    Pro Forma Balance Sheet; Projections and Initial Reserve Report.  The Lenders shall have received (i) a pro forma consolidated balance sheet of E/H MLP and its Subsidiaries as of the Effective Date adjusted to give effect to the consummation of the Transactions and the financings contemplated hereby as if such transactions had occurred on such date and consistent in all material respects with information previously provided by EXCO and HGI, (ii) satisfactory projections through September 30, 2017 (which projections shall be quarterly for the first fiscal year following the Effective Date and annually thereafter through the Maturity Date) and (iii) the Initial Reserve Report. 
(f)    Officer’s Certificates; Certified Formation Documents; Good Standing Certificates.  The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary or Assistant Secretary or other Responsible Officer, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the Responsible Officers and any other officers of such Loan Party authorized to sign the Loan Documents to which it is a party, and (C) contain appropriate attachments, including the certificate or articles of incorporation or organization of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its by‐laws or operating, management or partnership agreement, and (ii) good standing certificates for each Loan Party from its jurisdiction of organization and each jurisdiction in which such Loan Party is qualified to do business.
(g)    No Default Certificate.  The Administrative Agent shall have received a certificate, dated the Effective Date and signed by a Responsible Officer of the Borrower certifying (i) that no Default has occurred and is continuing, (ii) that the representations and warranties contained in this Agreement and the other Loan Documents are true and correct as of such date, (iii) that true and correct copies of all of the Contribution Documents have been delivered to the Administrative Agent and the Lenders, (iv) that the Reorganization has been (or substantially simultaneous with the initial funding of the Loans will be) consummated in accordance with the Contribution Agreement and the other transactions contemplated to occur under the Contribution Documents for “Closing” (as defined in the Contribution Agreement) have been (or substantially simultaneous with the initial funding of the Loans will be) consummated, in each case in accordance with applicable law, without waiver or amendment of any material term or condition of the Contribution Documents not otherwise consented to by the Administrative Agent, (v) that E/H MLP has received (or substantially simultaneous with the initial funding of the Loans will receive) a cash equity contribution of not less than $372,500,000 (as such amount may be adjusted upward or downward based on purchase price adjustments pursuant to the terms of the Contribution Agreement, but in any event not less than $340,000,000), and (vi) any other factual matters as may be reasonably requested by the Administrative Agent.
(h)    Fees.  The Administrative Agent, the Lenders and the Arranger shall have received all fees and other amounts due and payable on or prior to the Effective Date, and, to the extent 

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invoiced, reimbursement or payment of all out‐of‐pocket expenses required to be reimbursed or paid by the Borrower hereunder, including all fees, expenses and disbursements of counsel for the Administrative Agent to the extent invoiced on or prior to the Effective Date, together with such additional amounts as shall constitute such counsel’s reasonable estimate of expenses and disbursements to be incurred by such counsel in connection with the recording and filing of Mortgages and Uniform Commercial Code financing statements; provided, that, such estimate shall not thereafter preclude further settling of accounts between the Borrower and the Administrative Agent.
(i)    Lien Searches.  The Administrative Agent shall have received the results of a Lien search, in form and substance reasonably satisfactory thereto, made against the Loan Parties under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in all assets of such Loan Party, indicating among other things that the assets of each such Loan Party are free and clear of any Lien (except for Liens permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off letter or other documentation satisfactory to the Administrative Agent).
(j)    Solvency.  The Administrative Agent shall have received a solvency certificate executed by a Financial Officer of E/H MLP and the Borrower certifying that after giving effect to the Transactions and any contribution provisions contained in any Loan Document, the Loan Parties, taken as a whole, are Solvent.
(k)    Closing Availability.  After giving effect to all Borrowings to be made on the Effective Date and the application of the proceeds thereof and the issuance of any Letters of Credit on the Effective Date, the Aggregate Credit Exposure shall not exceed $230,000,000.
(l)    Pledged Stock; Stock Powers; Pledged Notes.  The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to the Pledge Agreement, together with an undated stock power for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof. 
(m)    Filings, Registrations and Recordings.  Each document (including any UCC financing statement) required by the Security Instruments or under law or reasonably requested by the Administrative Agent to be filed, registered or recorded in order to create in favor of the Administrative Agent, for the benefit of the Secured Parties, a perfected Lien on the Collateral described therein, prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing, registration or recordation.
(n)    Mortgages.  The Administrative Agent shall have received Mortgages, duly executed by the Loan Parties creating Liens prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02), on at least 80% of the total Engineered Value of the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries evaluated in the Initial Reserve Report.

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(o)    Security Agreement.  The Administrative Agent shall have received the Security Agreement, duly executed by all the Loan Parties, creating Liens prior and superior in right to any other Person (other than with respect to Liens expressly permitted by Section 6.02) in all or substantially all of the assets of each Loan Party.
(p)    Pledge Agreement.  The Administrative Agent shall have received the Pledge Agreement, duly executed by all the Loan Parties, creating Liens prior and superior in right to any other Person (other than with respect to Permitted Encumbrances) in (i) all of the Equity Interests of E/H MLP owned by the General Partner and (ii) all of the Equity Interests of the Borrower and each Restricted Subsidiary.
(q)    Title Information.  The Administrative Agent shall have received title information in form and substance satisfactory to the Administrative Agent setting forth the status of title to at least 90% of the Minimum Mortgaged Value of the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries evaluated in the Initial Reserve Report.  
(r)    Collateral Assignments.  The Loan Parties shall have executed and delivered collateral assignments of any Loan Party’s right, title and interest in and to any gathering, handling, storing, processing, transportation, pipeline, marketing, operating or services agreement with any Affiliate that is not a Loan Party (each, a “Contract Party”), and each Contract Party shall have delivered an executed consent acknowledging such collateral assignment, in each case, in form and substance satisfactory to the Administrative Agent. 
(s)    Insurance.  The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and otherwise in compliance with the terms of Section 5.06.
(t)    Tax Withholding.  The Administrative Agent shall have received a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.
(u)    Releases.  The Administrative Agent shall have received recordable releases of any pledges, trusts, mortgages, financing statements, fixture filing and security agreements made by EXCO and its Affiliates relating to the EXCO Credit Agreement and affecting the Assets (as defined in the Contribution Agreement), the Equity Interests of Vernon and the Borrower together with a release of any Guarantee of Vernon and/or the Borrower of all obligations under the EXCO Credit Agreement and the EXCO Indenture (it being understood that all such releases shall be delivered in escrow pending the substantially simultaneous closing of the Transactions).
(v)    Other Documents.  The Administrative Agent shall have received such other instruments and documents incidental and appropriate to the transactions provided for herein as the Administrative Agent or their special counsel may reasonably request prior to the Effective Date, and all such documents shall be in form and substance satisfactory to the Administrative Agent.
The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding.  

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Section 4.02.    Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:
(a)    The representations and warranties of each Loan Party set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein) with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except to the extent that any representation or warranty which by its terms is made as of a specified date shall be true and correct in all material respects (without duplication of any materiality qualifier contained therein) only as of such specified date.
(b)    At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
(c)    At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Borrowing Base Deficiency shall exist.
(d)    The receipt by the Administrative Agent of a Borrowing Request in accordance with Section 2.03 or a request for a Letter of Credit in accordance with Section 2.05(b).
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in clauses (a), (b) and (c) of this Section.
Article V     
 
Affirmative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements have been reimbursed, each Loan Party executing this Agreement (or deemed to have executed pursuant to a Joinder Agreement) covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:
Section 5.01.    Financial Statements; Other Information.  E/H MLP or the Borrower will furnish to the Administrative Agent and each Lender:
(e)    Annual Financial Statements.  Within 90 days after the end of each fiscal year of E/H MLP, E/H MLP’s audited consolidated balance sheet and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG, LLP or other independent public accountants reasonably acceptable to Administrative Agent (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope 

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of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of E/H MLP and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants.
(f)    Quarterly Financial Statements.  Within 45 days after the end of each fiscal quarter of E/H MLP, E/H MLP’s consolidated (and unaudited consolidating) balance sheet and related statements of operations, stockholders’ equity and cash flows of E/H MLP  and its Consolidated Subsidiaries as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the E/H MLP and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes.
(g)    Certificate of Financial Officer – Compliance.  Concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of E/H MLP and the Borrower in substantially the form of Exhibit E  certifying, in the case of such financial statements, as presenting fairly in all material respects the financial condition and results of operations of E/H MLP and its Consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.18 and (iv) stating whether any change in GAAP or in the application thereof has occurred since September 30, 2012 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate.
(h)    Certificate of Financial Officer; Consolidating Information.  If, at any time, all of the Consolidated Subsidiaries of the Borrower are not Consolidated Restricted Subsidiaries, then concurrently with any delivery of financial statements under Section 5.01(a) or Section 5.01(b), a certificate of a Financial Officer setting forth consolidating spreadsheets that show all Consolidated Unrestricted Subsidiaries and the eliminating entries, in such form as would be presentable to the auditors of the E/H MLP.
(i)    Certificate of Financial Officer – Swap Agreements.  Concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Borrower, in form and substance reasonably satisfactory to the Administrative Agent, setting forth as of the last day of such fiscal quarter or fiscal year, a true and complete list of all Swap Agreements of the Borrower and its Restricted Subsidiaries, the type, term, effective date, termination date and notional amounts or volumes thereof, the net mark-to-market value thereof (as of the last day of such fiscal quarter or fiscal year), any new credit support agreements relating thereto not listed on Schedule 3.21, any margin required or supplied under any credit support agreement, and the counterparty to each such Swap Agreement.

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(j)    Annual Projections.  Concurrently with the delivery of any Reserve Report pursuant to Section 5.11, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow statement) of E/H MLP for each month of the upcoming fiscal year in form reasonably satisfactory to the Administrative Agent.
(k)    SEC and Other Filings.  Promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, as the case may be.
(l)    Notices Under Material Instruments.  Promptly after the furnishing thereof, copies of any financial statement, report or notice furnished to or by any Person pursuant to the terms of any preferred stock designation, indenture, loan or credit or other similar agreement, other than this Agreement and not otherwise required to be furnished to the Lenders pursuant to any other provision of this Section 5.01.
(m)    List of Purchasers.  In connection with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 5.11, a list of (i) the purchasers that accounted for at least 75% of the aggregate volume of Hydrocarbons purchased from the Loan Parties in the six-month period prior to the “as of” date of such Reserve Report (in descending order based on volumes purchased) and (ii) to the extent not included in the group of purchasers described in clause (i), each purchaser that accounted for at least 15% of the aggregate volume of Hydrocarbons purchased from the Loan Parties in such six-month period.
(n)    Notice of Dispositions of Oil and Gas Properties.  In connection with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 5.11, a list of all Oil and Gas Properties evaluated in the immediately preceding Reserve Report that have been Disposed of since the date of the last Borrowing Base determination, together with any other details thereof reasonably requested by the Administrative Agent or any Lender.
(o)    Notice of Swap Liquidations.  Within three (3) Business Days after any Swap Liquidation, written notice of such Swap Liquidation, setting forth in reasonable detail, the terms of such Swap Liquidation and any other details thereof reasonably requested by the Administrative Agent or any Lender.
(p)    Notice of Casualty Event.  Prompt written notice, and in any event within five Business Days, of the occurrence of any Casualty Event or the commencement of any action or proceeding that could reasonably be expected to result in a Casualty Event.
(q)    Information Regarding Loan Parties.  Prompt written notice (and in any event within thirty (30) days prior thereto) of any change (i) in any Loan Parties’ corporate, partnership or limited liability company name, (ii) in the location of any Loan Parties’ chief executive office or principal place of business, (iii) in any Loan Parties’ identity or corporate structure, (iv) in any Loan Parties’ jurisdiction of organization or such Person’s organizational identification number in such jurisdiction of organization, and (v) in any Loan Parties’ federal taxpayer identification number.

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(r)    Production Report and Lease Operating Statements.  In connection with the delivery of any Reserve Report to the Administrative Agent pursuant to Section 5.11, a report setting forth, for each calendar month during the then current fiscal year to date, the volume of production and sales attributable to production (and the prices at which such sales were made and the revenues derived from such sales) for each such calendar month from the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries, and setting forth the related ad valorem, severance and production taxes and lease operating expenses attributable thereto and incurred for each such calendar month.
(s)    Notices of Certain Changes. Promptly, but in any event within five (5) Business Days after the execution thereof, copies of any amendment, modification or supplement to the certificate or articles of incorporation, by-laws, any preferred stock designation or any other Organizational Document of any Loan Party.
(t)    Notices under Senior Notes.  Promptly after receipt, a copy of any notice of default received from any holder or holders of any Senior Notes or any trustee or agent on its or their behalf, to the extent such notice has not otherwise been delivered to the Administrative Agent hereunder.
(u)    Issuance of Senior Notes.  In the event the Borrower or any Restricted Subsidiary intends to issue Senior Notes or refinance any existing Senior Notes with the proceeds of any Permitted Refinancing, prior written notice of the intended offering of such Senior Notes or such Permitted Refinancing, the amount thereof, the anticipated date of closing and a statement that such Senior Notes will be issued in accordance with this Agreement, and upon request of the Administrative Agent or any Lender, copies of the preliminary offering memorandum (if any), the final offering memorandum (if any) and the Indenture relating to such Senior Notes or Permitted Refinancing, as the case may be.
(v)    Other Requested Information.  Promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of any Loan Party, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.
Section 5.02.    Notices of Material Events.  The Borrower will furnish to the Administrative Agent and each Lender prompt (but in any event within any time period that may be specified below) written notice of the following:
(m)    the occurrence of any Default;
(n)    the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Loan Party that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(o)    the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties in an aggregate amount exceeding $5,000,000;

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(p)    any written notice or written claim to the effect that any Loan Party is or may be liable to any Person as a result of the release by any Loan Party, or any other Person of any Hazardous Materials into the environment, which could reasonably be expected to have a Material Adverse Effect;
(q)    any written notice alleging any violation of any Environmental Law by any Loan Party, which could reasonably be expected to have a Material Adverse Effect;
(r)    the occurrence of any breach or default under, or repudiation or termination of, any Material Sales Contract, which could reasonably be expected to have a Material Adverse Effect;
(s)    the receipt by E/H MLP, the Borrower or any Restricted Subsidiary of any management letter or comparable analysis prepared by the auditors for E/H MLP, the Borrower or any such Restricted Subsidiary; 
(t)    the occurrence of any material breach or default under, or repudiation or termination of, or notice of any material dispute or claim arising under or in connection with the Contribution Documents by any party thereto; and
(u)    any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
Section 5.03.    Existence; Conduct of Business.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, franchises, governmental authorizations and intellectual property rights material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted, provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.
Section 5.04.    Payment of Obligations.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, pay its liabilities and obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect; provided, however, each Loan Party will, and will cause each of its Restricted Subsidiaries to, remit withholding taxes and other payroll taxes to appropriate Governmental Authorities as and when claimed to be due, notwithstanding the foregoing exceptions.

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Section 5.05.    Operation and Maintenance of Properties.  The Borrower will, and will cause each of its Restricted Subsidiaries to: 
(d)    operate its Oil and Gas Properties and other material Properties or cause such Oil and Gas Properties and other material Properties to be operated in a careful and efficient manner in accordance with the practices of the industry and in compliance with all applicable contracts and agreements and in compliance with all Governmental Requirements, including, without limitation, applicable pro ration requirements and Environmental Laws, and all applicable laws, rules and regulations of every other Governmental Authority from time to time constituted to regulate the development and operation of its Oil and Gas Properties and the production and sale of Hydrocarbons and other minerals therefrom, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect; 
(e)    keep and maintain all Property material to the conduct of its business in good working order and condition (ordinary wear and tear excepted); preserve, maintain and keep in good repair, working order and efficiency (ordinary wear and tear and obsolescence excepted) all of its material Oil and Gas Properties and other material Properties, including, without limitation, all equipment, machinery and facilities; 
(f)    promptly pay and discharge, or make reasonable and customary efforts to cause to be paid and discharged, all delay rentals, royalties, expenses and indebtedness accruing under the leases or other agreements affecting or pertaining to its Oil and Gas Properties and will do all other things necessary to keep materially unimpaired its rights with respect thereto and prevent any forfeiture thereof or default thereunder, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect; 
(g)    promptly perform, or make reasonable and customary efforts to cause to be performed, in accordance with industry standards, the obligations required by each and all of the assignments, deeds, leases, sub-leases, contracts and agreements affecting its interests in its Oil and Gas Properties and other material Properties, except, in each case, where the failure to comply could not reasonably be expected to have a Material Adverse Effect; 
(h)    operate its Oil and Gas Properties and other material Properties or cause or make reasonable and customary efforts to cause such Oil and Gas Properties and other material Properties to be operated in accordance with the practices of the industry and in material compliance with all applicable contracts and agreements and in compliance in all material respects with all Governmental Requirements; and 
(i)    to the extent that a Loan Party is not the operator of any Property, the Borrower shall use commerically reasonable efforts to cause the operator to comply with this Section 5.05. 
Section 5.06.    Insurance.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations.  The loss payable clauses or provisions in said insurance policy or policies insuring any of the Collateral for the Loans shall 

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be endorsed in favor of and made payable to the Administrative Agent as its interests may appear and such policies shall name the Administrative Agent as “additional insured” and provide that the insurer will give at least thirty (30) days prior written notice to the Administrative Agent of any cancellation (or ten (10) days prior written notice in the event of cancellation for nonpayment of provisions).
Section 5.07.     Books and Records; Inspection Rights.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and, provided a Financial Officer has the reasonable opportunity to participate, its independent accountants, all at such reasonable times and as often as reasonably requested.
Section 5.08.    Compliance with Laws.  Each Loan Party will, and will cause each of its Restricted Subsidiaries to, comply with all Requirements of Law applicable to it or its Property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
Section 5.09.    Use of Proceeds and Letters of Credit.  The proceeds of the Loans will be used only (a) to pay the fees, expenses and transaction costs of the Transactions, (b) to satisfy reimbursement obligations with respect to Letters of Credit, (c) to make Restricted Payments permitted under Section 6.07, including, without limitation, up to $225,000,000 for purposes of making the Restricted Payment permitted under Section 6.07(d), (d) to finance the working capital needs of the Borrower and its Subsidiaries, including capital expenditures, and (e) for general corporate purposes of the Borrower and its Subsidiaries, in the ordinary course of business, including the exploration, acquisition and development of Oil and Gas Properties.  No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.  Letters of Credit will be issued only to support general corporate purposes of the Borrower and its Restricted Subsidiaries.
Section 5.10.    Further Assurances.  
(f)    Each Loan Party at its sole expense will, and will cause each of its Restricted Subsidiaries to, promptly execute and deliver to the Administrative Agent all such other documents, agreements and instruments reasonably requested by the Administrative Agent to comply with, cure any defects or accomplish the conditions precedent, covenants and agreements of the Borrower or any other Loan Party, as the case may be, in the Loan Documents, including the Notes, or to further evidence and more fully describe the Collateral intended as security for the Secured Obligations, or to correct any omissions in this Agreement or the Security Instruments, or to state more fully the obligations secured therein, or to perfect, protect or preserve any Liens created pursuant to this Agreement or any of the Security Instruments or the priority thereof, or to make any recordings, 

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file any notices or obtain any consents, all as may be reasonably necessary or appropriate, in the reasonable discretion of the Administrative Agent, in connection therewith. 
(g)    Each Loan Party hereby authorizes the Administrative Agent to file one or more financing or continuation statements, and amendments thereto, relative to all or any part of the Collateral without the signature of such Loan Party or any other Loan Party where permitted by law. A carbon, photographic or other reproduction of the Security Instruments or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. Each Loan Party acknowledges and agrees that any such financing statement may describe the collateral as “all assets” of the applicable Loan Party or words of similar effect as may be required by the Administrative Agent.
Section 5.11.    Reserve Reports. 
(c)    On or before December 1 and June 1 of each year, commencing June 1, 2013, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report evaluating the Oil and Gas Properties of the Borrower and the other Loan Parties as of the immediately preceding September 30 and March 31.  The Reserve Report as of September 30 of each year shall be prepared by one or more Approved Petroleum Engineers.  The Reserve Report as of March 31 of each year shall be prepared either by Approved Petroleum Engineers or by the Borrower’s or EXCO’s internal reserve engineering staff, which shall certify such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately preceding September 30 Reserve Report, or prior to the initial September 30 Reserve Report, the Initial Reserve Report.
(d)    In the event of an Interim Redetermination, the Borrower shall furnish to the Administrative Agent and the Lenders a Reserve Report prepared by the Borrower’s or EXCO’s internal reserve engineering staff, which shall certify such Reserve Report to be true and accurate and to have been prepared in accordance with the procedures used in the immediately preceding September 30 Reserve Report, or prior to the initial September 30 Reserve Report, the Initial Reserve Report.  For any Interim Redetermination requested by the Administrative Agent or the Borrower pursuant to Section 2.09(b), the Borrower shall provide such Reserve Report with an “as of” date as required by the Administrative Agent as soon as possible, but in no event later than 30 days following the receipt of such request.
Section 5.12.    Title Data. 
(e)    Within 30 days (or such longer time period as acceptable to the Administrative Agent in its sole discretion) after the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section 5.11, the Borrower will deliver title information in form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, satisfactory title information on at least ninety percent (90%) of the Minimum Mortgaged Value of the Oil and Gas Properties evaluated by such Reserve Report.

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(f)    If title information for additional Properties has been provided under Section 5.12(a), the Borrower shall, within 60 days of notice from the Administrative Agent that title defects or exceptions exist with respect to such additional Properties that are not permitted by Section 6.02, either (i) cure any such title defects or exceptions (including defects or exceptions as to priority), (ii) substitute acceptable Mortgaged Properties with no title defects or exceptions (other than Liens which are permitted by Section 6.02) having an equivalent value or (iii) deliver title information in form and substance reasonably acceptable to the Administrative Agent so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, satisfactory title information on at least ninety percent (90%) of the Minimum Mortgaged Value of the Oil and Gas Properties evaluated by such Reserve Report.
(g)    If any title defect or exception identified by the Administrative Agent pursuant to a notice to the Borrower as described in Section 5.12(b) cannot be cured or the Borrower does not substitute acceptable Mortgaged Properties or the Borrower does not comply with the requirement to provide acceptable title information covering at least ninety percent (90%) of the Minimum Mortgaged Value of the Oil and Gas Properties evaluated in the most recent Reserve Report, in each case within the 60-day period described in Section 5.12(b), such default shall not be a Default, but instead the Administrative Agent and/or the Required Lenders shall have the right to exercise the remedy described in the immediately succeeding sentence in their sole discretion from time to time, and any failure to so exercise such remedy at any time shall not be a waiver as to any future exercise of such remedy by the Administrative Agent or the Lenders.  To the extent that the Administrative Agent or the Required Lenders are not satisfied with title to any Mortgaged Property after the 60-day period described in Section 5.12(b) has elapsed, such Mortgaged Property shall not count towards the percentage of the Minimum Mortgaged Value for satisfactory title information and shall be deemed not to have been included in the most recently delivered Reserve Report, and the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding Borrowing Base shall be reduced by an amount as determined by the Required Lenders to cause the Borrower to be in compliance with the requirement to provide satisfactory title information on ninety percent (90%) of the Minimum Mortgaged Value of the Oil and Gas Properties evaluated by the most recently delivered Reserve Report.  This new Borrowing Base shall become effective immediately after receipt of such notice.
Section 5.13.    Mortgages; Additional Collateral; Additional Guarantors.  
(d)    In connection with each redetermination of the Borrowing Base, the Borrower shall review the Reserve Report delivered in connection therewith and the list of current Mortgaged Properties to ascertain whether the Mortgaged Properties represent at least eighty percent (80%) of the total Engineered Value of the Oil and Gas Properties evaluated in such Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production (the “Minimum Mortgaged Value”). In the event that the Mortgaged Properties do not represent at least the Minimum Mortgaged Value, then the Borrower shall, and shall cause its Restricted Subsidiaries to, grant, within thirty (30) days (or such longer time period as acceptable to the Administrative Agent in its sole discretion) of delivery of the applicable Reserve Report, to the Administrative Agent as security for the Secured Obligations a first-priority Lien interest on additional Oil and Gas Properties not already subject to a Lien of the Security Instruments such that after giving effect 

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thereto, the Mortgaged Properties will represent at least the Minimum Mortgaged Value.  All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably satisfactory to the Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes.  In addition, promptly after entering into any such agreement, the Loan Parties shall, and shall cause each of its Restricted Subsidiaries to (i) execute and deliver to the Administrative Agent, for the benefit of the Secured Parties, collateral assignments of all gathering, handling, storing, processing, transportation, supply, pipeline, marketing, operating or services agreement with any Affiliate that is not a Loan Party, and (ii) cause each Affiliate to execute and deliver a consent acknowledging such collateral assignments, in each case, in form and substance satisfactory to the Administrative Agent.
(e)    If the Borrower shall form or acquire a Restricted Subsidiary or otherwise determines that any Person is a Restricted Subsidiary, then, unless such Restricted Subsidiary is designated an Unrestricted Subsidiary pursuant to the terms of Section 6.17, the Borrower shall promptly cause such Restricted Subsidiary to (i) become a party to this Agreement by executing and delivering to the Administrative Agent a Joinder Agreement, (ii) absolutely and unconditionally guarantee the payment and performance of the Guaranteed Obligations pursuant to the Loan Guaranty, and (iii) grant to the Administrative Agent, for the benefit of the Security Parties, a perfected, first-priority security interest in and Lien on all or substantially all of the assets of such Restricted Subsidiary, including all of the Equity Interests of each Restricted Subsidiary now or hereafter owned by such Restricted Subsidiary.  In connection therewith, the Borrower shall, or shall cause the relevant Restricted Subsidiary, if applicable, to, (A) execute and deliver a supplement to the Security Agreement and Pledge Agreement executed by such Restricted Subsidiary, (B) pledge all of the Equity Interests of such new Restricted Subsidiary (including, without limitation, delivery of original stock certificates, if any, evidencing the Equity Interests of such Subsidiary, together with an appropriate undated stock power for each certificate duly executed in blank by the registered owner thereof) and (C) execute and deliver such other additional closing documents, certificates and legal opinions as shall reasonably be requested by the Administrative Agent in connection therewith.  Upon delivery of any such Joinder Agreement to the Administrative Agent pursuant to the terms of this Section 5.13(b), notice of which is hereby waived by each Loan Party, such Restricted Subsidiary shall be a Loan Guarantor and shall be as fully a party hereto as if such Restricted Subsidiary were an original signatory hereto.  Each Loan Party expressly agrees that its obligations arising hereunder shall not be affected or diminished by the addition or release of any other Loan Party hereunder.  This Agreement shall be fully effective as to any Loan Party that is or becomes a party hereto regardless of whether any other Person becomes or fails to become or ceases to be a Loan Party hereunder.  
Section 5.14.    Swap Agreements.  The Borrower shall maintain the hedge positions established by the Swap Agreements required under Section 5.16 for the periods specified therein and shall not enter into any Swap Liquidations if the effect of such action (when taken together with any other Swap Agreements executed contemporaneously with the taking of such action) would have the effect of canceling its positions under such Swap Agreements required hereby, except as permitted in Section 6.06(c).  Upon the request of the Majority Lenders, each Loan Party 

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shall, and shall cause each of its Restricted Subsidiaries to, take any additional actions required, if any, to cause all of its right, title and interest in each Swap Agreement to which it is a party to be collaterally assigned to the Administrative Agent, for the benefit of the Secured Parties, and shall, if requested by the Administrative Agent or the Majority Lenders, use its commercially reasonable efforts to cause each such agreement or contract to (a) expressly permit such assignment and (b) upon the occurrence of any default or event of default under such agreement or contract, (i) to permit the Lenders to cure such default or event of default and assume the obligations of such Loan Party or such Restricted Subsidiary under such agreement or contract and (ii) to prohibit the termination of such agreement or contract by the counterparty thereto if the Lenders assume the obligations of such Loan Party or such Restricted Subsidiary under such agreement or contract and the Lenders take the actions required under the foregoing clause (i).  Upon the request of the Administrative Agent or any Lender, the Borrower shall, within ten (10) days of such request, provide to the Administrative Agent or such Lender copies of all agreements, documents and instruments evidencing the Swap Agreements of the Borrower and its Restricted Subsidiaries not previously delivered to the Administrative Agent and the Lenders, certified as true and correct by a Responsible Officer of the Borrower, and such other information regarding such Swap Agreements as the Administrative Agent and the Lenders may reasonably request. 
Section 5.15.    Unrestricted Subsidiaries.  The Borrower will cause the management, business and affairs of each of the Borrower and its Restricted Subsidiaries to be conducted in such a manner (including, without limitation, by keeping separate books of account, furnishing separate financial statements of Unrestricted Subsidiaries to creditors and potential creditors thereof and by not permitting Properties of the Borrower and its respective Restricted Subsidiaries to be commingled with those of Unrestricted Subsidiaries) so that each Unrestricted Subsidiary that is a corporation, limited liability company or partnership will be treated as an entity separate and distinct from the Borrower and its Restricted Subsidiaries.
Section 5.16.    Post-Closing Swap Agreements.  Within sixty (60) days following the Effective Date, the Administrative Agent shall have received evidence reasonably satisfactory to it that the Borrower shall have entered into Swap Agreements permitted under Section 6.06 for notional volumes per month that are, in the aggregate, not less than (i) seventy-five percent 75% of forecasted production from total proved developed producing reserves of crude oil and natural gas for each month during the calendar year ending 2013 and (ii) fifty percent (50%) of forecasted production from total proved developed producing reserves of crude oil and natural gas for each month during the calendar year ending 2014.
Article VI     
 
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements have been reimbursed, each Loan Party executing this Agreement (or deemed to have executed pursuant to a Joinder Agreement) covenants and agrees, jointly and severally with all other Loan Parties, with the Lenders that:

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Section 6.01.    Indebtedness.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, create, incur, assume or permit to exist any Indebtedness, except:
(v)    the Secured Obligations;
(w)    Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof;
(x)    Indebtedness of the Borrower to any Restricted Subsidiary of the Borrower and of any Restricted Subsidiary of the Borrower to the Borrower or any other Restricted Subsidiary of the Borrower, provided that (i) all such Indebtedness shall be unsecured and subordinated to the Secured Obligations in a manner and on terms and conditions reasonably satisfactory to the Administrative Agent and (ii) all such Indebtedness is evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent and such promissory notes are subject to a first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties on terms and conditions reasonably satisfactory to the Administrative Agent;
(y)    Guarantees by the Borrower or any of its Restricted Subsidiaries of Indebtedness of the Borrower or any of the Restricted Subsidiaries permitted under this Section 6.01; provided that Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;
(z)    Indebtedness of the Borrower and the Restricted Subsidiaries incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) shall not exceed $10,000,000 at any time outstanding;
(aa)    Indebtedness incurred or deposits made by the Borrower or any Restricted Subsidiary (i) under worker’s compensation laws, unemployment insurance laws or similar legislation, or (ii) in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Loan Party is a party, (iii) to secure public or statutory obligations of such Loan Party, and (iv) of cash or securities qualifying as Permitted Investments made to secure the performance of statutory obligations, surety, stay, customs and appeal bonds to which such Loan Party is a party in connection with the operation of the Oil and Gas Properties, in each case in the ordinary course of business;
(bb)    Indebtedness of the Borrower or any Restricted Subsidiary under (i) Swap Agreements to the extent permitted under Section 6.06 and (ii) Advance Payment Contracts to the extent permitted under Section 6.12;

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(cc)    Indebtedness of the Borrower or any Restricted Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business; 
(dd)    unsecured Indebtedness under the Senior Notes (and any Permitted Refinancing thereof), including any Indebtedness constituting Guarantees thereof by any Loan Party (other than General Partner); in an aggregate principal amount not to exceed the sum of $300,000,000; provided that (i) at the time of and immediately after giving effect to each issuance of Senior Notes (and any Permitted Refinancing thereof), no Default shall have occurred and be continuing and (ii) at the time of each issuance of Senior Notes, the Borrowing Base is automatically reduced pursuant to Section 2.09(g) and the Borrower shall prepay the Loans and/or deposit cash collateral to the extent required pursuant to Section 2.11(c) after giving effect to such reduction in the Borrowing Base;
(ee)    Indebtedness of any Person that becomes a Restricted Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Restricted Subsidiary and is not created in contemplation of or in connection with such Person becoming a Restricted Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (j) shall not exceed $10,000,000 at any time outstanding; and
(ff)    Other unsecured Indebtedness of the Loan Parties; provided that the aggregate principal amount of Indebtedness permitted by this clause (k) shall not exceed $25,000,000 at any time outstanding;
Section 6.02.    Liens.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, create, incur, assume or permit to exist any Lien on any Property now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(h)    any Lien created pursuant to this Agreement or any other Loan Document;
(i)    Permitted Encumbrances; 
(j)    any Lien on any Property of any Loan Party existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other Property of such Loan Party and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(k)    any Lien existing on any Property prior to the acquisition thereof by the Borrower or any of its Restricted Subsidiaries or existing on any Property of any Person that becomes a Restricted Subsidiary after the date hereof prior to the time such Person becomes a Restricted Subsidiary; provided that (i) such Lien secures Indebtedness permitted by clause (e) or (j) of Section 6.01, (ii) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Restricted Subsidiary, as the case may be, (iii) such Lien shall not apply to any other Property of any Loan Party and (iv) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary, as 

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the case may be and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof; 
(l)    Liens on fixed or capital assets (including office equipment, data processing equipment and motor vehicles) acquired, constructed or improved by the Borrower or any of its Restricted Subsidiaries; provided that (i) such Liens, secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such Liens shall not apply to any other Property of any Loan Party; and
(m)    Liens on the Equity Interests in any Unrestricted Subsidiary securing the payment of Non-Recourse Debt.
Section 6.03.    Fundamental Changes.
(i)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or Dispose of (in one transaction or in a series of transactions) all or substantially all of its Property to any other Person, or liquidate or dissolve, except that, at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:
(iv)    any Restricted Subsidiary of the Borrower may merge into the Borrower in a transaction in which the Borrower is the surviving entity;
(v)    any Restricted Subsidiary of the Borrower may merge into any other Restricted Subsidiary of the Borrower in a transaction in which the surviving entity is a Restricted Subsidiary (provided that if one of such Restricted Subsidiaries is a wholly-owned Subsidiary, then the surviving entity shall be a wholly-owned Subsidiary); and
(vi)    any Restricted Subsidiary of the Borrower may Dispose of all or substantially all of its Property to the Borrower or to another Restricted Subsidiary of the Borrower.
(j)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, (i) engage to any material extent in any business other than businesses of the type conducted by the Loan Parties and the Restricted Subsidiaries on the date hereof (after giving effect to the consummation of the Transactions on the Effective Date) and businesses reasonably related thereto or (ii) acquire or make any other expenditure (whether such expenditure is capital, operating or otherwise) in or related to, any Oil and Gas Properties not located within the geographical boundaries of the United States.
Section 6.04.    Investments, Loans, Advances, Guarantees and Acquisitions.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly-owned Restricted Subsidiary prior to such merger) any evidences of Indebtedness or Equity Interests or other 

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securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any Indebtedness of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through the purchase of assets, merger or otherwise), except:
(j)    Permitted Investments;
(k)    investments in existence on the date hereof and described in Schedule 6.04;
(l)    investments (i) made by the General Partner and E/H MLP in or to the Borrower, including the investments contemplated by the Contribution Documents, (ii) made by the Borrower in or to any Restricted Subsidiary of the Borrower that is a Loan Guarantor (or any Person that becomes a Restricted Subsidiary of the Borrower and a Loan Guarantor upon the making of such investment so long as such investment is not made in connection with the acquisition of such Person); and (iii) made by any Restricted Subsidiary of the Borrower that is a Loan Guarantor in or to any other Restricted Subsidiary of the Borrower that is a Loan Guarantor (or any Person that becomes a Restricted Subsidiary of the Borrower and a Loan Guarantor upon the making of such investment so long as such investment is not made in connection with the acquisition of such Person);
(m)    loans or advances made by the Borrower to any of its Restricted Subsidiaries and made by any Restricted Subsidiaries of the Borrower to the Borrower or any other Restricted Subsidiary of the Borrower, provided that any such loans and advances made by the Borrower or any of its Restricted Subsidiaries shall be evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent and such promissory notes shall be subject to a first priority security interest in favor of the Administrative Agent for the benefit of the Secured Parties on terms and conditions reasonably satisfactory to the Administrative Agent;
(n)    Guarantees constituting Indebtedness permitted by Section 6.01;
(o)    subject to the limits in Section 6.03(b), investments by the Borrower and its Restricted Subsidiaries that are (i) customary in the oil and gas exploration and production business, (ii) made in the ordinary course of the Borrower’s or such Restricted Subsidiary’s business, and (iii) made in the form of, or pursuant to, oil, gas and mineral leases, operating agreements, farm-in agreements, farm-out agreements, development agreements, unitization agreements, joint bidding agreements, services contracts and other similar agreements that a reasonable and prudent oil and gas industry owner or operator would find acceptable;
(p)    investments consisting of Swap Agreements to the extent permitted under Section 6.06;
(q)    loans or advances to employees, officers and directors of E/H MLP or the Borrower or any of its Restricted Subsidiaries on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $1,000,000 in the aggregate for all such Persons at any one time outstanding; 

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(r)    investments representing the non-cash portion of the consideration received for any Disposition of any assets permitted under Section 6.05(e) so long as at least 75% of the consideration received in respect of any such Disposition is cash or cash equivalents;
(s)    accounts receivable arising in the ordinary course of business; and 
(t)    Other investments (including investments in Unrestricted Subsidiaries) in an aggregate amount not to exceed $25,000,000.
Section 6.05.    Asset Dispositions.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, Dispose of any Property (including any Equity Interests owned by it) except:
(h)    the sale of Hydrocarbons produced from its Oil and Gas Properties in the ordinary course of business;
(i)    Dispositions of Property to the Borrower or any of its Restricted Subsidiaries;
(j)    Dispositions of equipment and related items in the ordinary course of business that are obsolete or no longer necessary in the business of the Borrower or any of its Restricted Subsidiaries or that is being replaced by equipment of comparable value and utility;
(k)    the Disposition of Equity Interests in Unrestricted Subsidiaries;
(l)    subject to Section 2.11(c), Dispositions (including Casualty Events) of any Oil and Gas Property or any interest therein or any Restricted Subsidiary of the Borrower owning Oil and Gas Properties; provided that (i) unless otherwise waived by the Required Lenders and subject to Section 9.02(b)(x), after giving effect to such Disposition, the aggregate Engineered Value of all Oil and Gas Properties Disposed of (whether pursuant to a Disposition of Equity Interests of a Restricted Subsidiary or otherwise) between Scheduled Redeterminations of the Borrowing Base (as assigned by the Administrative Agent to such Oil and Gas Properties) is less than five percent (5%) of the Borrowing Base then in effect and (ii) if any such Disposition is of a Restricted Subsidiary owning Oil and Gas Properties, such Disposition shall include all the Equity Interests of such Restricted Subsidiary;
(m)    Dispositions of Property permitted under Section 6.03; and
(n)    Dispositions of Properties (other than Oil and Gas Properties) between Scheduled Redeterminations of the Borrowing Base not otherwise permitted hereunder having a fair market value not to exceed $10,000,000 in the aggregate.
Section 6.06.    Swap Agreements.  
(f)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, enter into any Swap Agreement, except Swap Agreements entered into by the Borrower and its Restricted Subsidiaries with an Approved Counterparty in the ordinary course of business and not for speculative purposes to:

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(vii)    hedge or mitigate crude oil, natural gas and natural gas liquids price risks to which the Borrower or any of its Restricted Subsidiaries has actual exposure (whether or not treated as a hedge for accounting purposes under GAAP); provided that at the time the Borrower or any Restricted Subsidiary enters into any such Swap Agreement and at any time thereafter, such Swap Agreement (A) does not have a term greater than sixty (60) months from the date such Swap Agreement is entered into, and (B) when aggregated and netted with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect would not cause the aggregate notional volume per month for each of crude oil, natural gas and natural gas liquids, calculated separately, under all Swap Agreements then in effect (other than Excluded Swap Agreements) to exceed (1) for any month during the first two years of the forthcoming five year period, one hundred percent (100%) of the “forecasted production from proved developed producing reserves” (as defined below) of the Borrower and its  Restricted Subsidiaries, taken as a whole, (2) for any month during the third year of the forthcoming five year period, ninety percent (90%) of the “forecasted production from proved developed producing reserves” (as defined below) of the Borrower and its Restricted Subsidiaries taken as a whole and (3) for any month during the fourth and fifth year of the forthcoming five year period, eighty-five percent (85%) of the “forecasted production from proved developed producing reserves” (as defined below) of the Borrower and its Restricted Subsidiaries taken as a whole; 
(viii)    notwithstanding the limitations set forth in clauses (i) above, in contemplation of a Material Acquisition of Oil and Gas Properties, hedge or mitigate crude oil, natural gas and natural gas liquids price risks in respect of the Oil and Gas Properties subject to such Material Acquisition; provided that the aggregate notional volumes for each of crude oil, natural gas and natural gas liquids, calculated separately, for each month in the applicable period covered by Swap Agreements (other than Excluded Swap Agreements) do not exceed the lesser of (A) 150% of the notional volumes otherwise permitted in such clause (i) and (B) the notional volumes which would otherwise be permitted in such clause (i) after giving pro forma effect to the estimated increase in “forecasted production from proved developed producing reserves” to be acquired in such Material Acquisition; provided that any such additional Swap Agreements are entered into (x) after the execution of a definitive agreement with respect to a proposed Material Acquisition, but in any event no earlier than 60 days prior to the proposed closing date of such Material Acquisition and (y) in the event such agreement is terminated or such Material Acquisition is otherwise not consummated within 60 days after such initial additional Swap Agreements have been entered into (or such longer period as may be reasonably acceptable to the Administrative Agent in the event the proposed closing of such Material Acquisition has been delayed beyond what the Borrower originally expected), then within 15 days after such termination or the end of such 60 day (or longer) period, as applicable, the Borrower shall and shall cause its Restricted Subsidiaries to novate, unwind or otherwise dispose of Swap Agreements (other than Excluded Swap Agreements) to the extent necessary to be in compliance with the limitations set forth in the immediately preceding clause (i); provided further, that any such additional Swap Agreement does not have a term greater than sixty (60) months from the date such Swap Agreement is entered into;

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(ix)    effectively convert interest rates from fixed to floating, the notional amounts of which (when aggregated and netted with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from fixed to floating) do not exceed 100% of the then outstanding principal amount of the Borrower’s Indebtedness for borrowed money which bears interest at a fixed rate; and
(x)    effectively convert interest rates from floating to fixed, the notional amounts of which (when aggregated and netted with all other Swap Agreements of the Borrower and its Restricted Subsidiaries then in effect effectively converting interest rates from floating to fixed) do not exceed 100% of the then outstanding principal amount of the Borrower’s Indebtedness for borrowed money which bears interest at a floating rate.
As used in this Section 6.06, “forecasted production from proved developed producing reserves” means the forecasted production from proved developed producing reserves of each of crude oil, natural gas and natural gas liquids as reflected in the most recent Reserve Report delivered to the Administrative Agent pursuant to Section 5.11, after deducting forecasted proved developed production from any Oil and Gas Properties sold or under contract for sale that had been included in such Reserve Report and after adding forecasted proved developed production from any Oil and Gas Properties that had not been reflected in such Reserve Report but that are reflected in a separate or supplemental Reserve Report delivered to the Administrative Agent and otherwise are satisfactory to the Administrative Agent.
(g)    In no event shall any Swap Agreement entered into by the Borrower or any Restricted Subsidiary contain any requirement, agreement or covenant for the Borrower or any other Loan Party to post collateral or margin to secure their obligations under such Swap Agreement or to cover market exposures; provided that this sentence shall not prevent a Secured Swap Provider from requiring the obligations under any Swap Agreement with the Borrower or any Restricted Subsidiary to be secured by the Liens granted to the Administrative Agent pursuant to the Security Instruments.
(h)    In no event shall the Borrower or any Restricted Subsidiary enter into any Swap Liquidation without the prior written consent of the Required Lenders; provided that, for purposes of this Section 6.06(c), a Swap Liquidation shall not be deemed to have occurred if such Swap Agreement is novated from the existing counterparty to an Approved Counterparty, with the Borrower or the applicable Restricted Subsidiary being the “remaining party” for purposes of such novation; provided further that, notwithstanding the foregoing, Borrower and any of its Restricted Subsidiaries may enter into a Swap Liquidation so long as (i) within three (3) Business Days thereafter, the Borrower provides written notice to the Administrative Agent of the terms of such Swap Liquidation, setting forth in reasonable detail, (x) the effect of such Swap Liquidation on the aggregate notional volume of crude oil, natural gas and natural gas liquids, subject to the Borrower’s and its Restricted Subsidiaries’ Swap Agreements and (y) the amount of Net Cash Proceeds received by such Loan Party as a result of such Swap Liquidation, (ii) the aggregate notional volume of crude oil, natural gas and natural gas liquids affected by such Swap Liquidation, together with all other Swap Liquidations consummated since the most recent Redetermination Date, does not exceed five percent (5%) of the aggregate notional volume of crude oil, natural gas and natural gas liquids 

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subject to the Borrower’s and its Restricted Subsidiaries’ Swap Agreements in effect as of the most recent Redetermination Date, and (iii) the Borrower applies the Net Cash Proceeds received by Borrower or any of its Restricted Subsidiaries as a result of such Swap Liquidation within two (2) Business Days of the date such Net Cash Proceeds are received to prepay the Loans and if all Loans have been prepaid, to cash collateralize outstanding Letters of Credit. 
Section 6.07.    Restricted Payments.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except that (a) the General Partner, E/H MLP and the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional Equity Interests (other than Disqualified Capital Stock), (b) the Borrower may make Restricted Payments to E/H MLP to fund Restricted Payments by E/H MLP to the participants in the MLP Incentive Plan or to reimburse EXCO for the amounts paid to participants in the MLP Incentive Plan that are employees of EXCO, in each case, in accordance with the terms of the MLP Incentive Plan and in an aggregate amount for all such Restricted Payments not to exceed $4,000,000 in any fiscal year, (c) any Restricted Subsidiary of the Borrower may declare and pay dividends and distributions ratably with respect to its Equity Interests, (d) on the Effective Date, the Borrower may make a cash distribution to E/H MLP in an aggregate amount not to exceed $597,500,000, and E/H MLP may make a cash distribution in such amount to EXCO, (e) so long as the Borrower, E/H MLP and the General Partner are partnerships for United States federal income tax purposes, Borrower may make cash distributions to E/H MLP and E/H MLP and the General Partner may make cash distributions to the holders of its Equity Interests, in each case no more frequently than quarterly, equal to the product of (i) the United States federal income tax attributable to the income of the Borrower and its Consolidated Subsidiaries (but only to the extent such taxable income is in excess of income tax losses for the taxable year or prior taxable years) multiplied by (ii) the highest marginal combined rate of federal, state, and local income taxes to which any holder of the Equity Interests of E/H MLP would be subject, (f) the Borrower may make distributions to E/H MLP for purposes of E/H MLP and the General Partner making distributions of Available Cash (as defined in the E/H MLP Partnership Agreement and the GP LLC Agreement as in effect on the date hereof, as applicable) in accordance with this clause (f), and E/H MLP and the General Partner may declare and pay cash dividends to the holders of its Equity Interests to the extent of Available Cash (as defined in the E/H MLP Partnership Agreement and the GP LLC Agreement as in effect on the date hereof, as applicable) so long as, in each case, on the date of and after giving effect to such distributions with respect to this clause (f), (i) no Default exists, (ii) Borrowing Base Usage is not greater than ninety percent (90%), and (iii) E/H MLP is in compliance with the financial covenants set forth in Section 6.18 after giving pro forma effect to such distribution as if it was made on the last day of the immediately preceding calendar quarter for which the financial statements for E/H MLP have been delivered to the Administrative Agent and the Lenders pursuant to Section 5.01(b), and (g) the Borrower may reimburse and pay EXCO and its Subsidiaries for the performance of their respective obligations to the Loan Parties in accordance with the Contribution Documents.
Section 6.08.    Transactions with Affiliates.  No Loan Party will, nor will any Loan Party  permit any of its Restricted Subsidiaries to, sell, lease or otherwise transfer any Property, or purchase, lease or otherwise acquire any Property from, or otherwise engage in any other 

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transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to the Borrower or such Restricted Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) transactions described on Schedule 6.08, (d) any Restricted Payment permitted by Section 6.07, and (e) investments permitted by Section 6.04(h).
Section 6.09.    Restrictive Agreements.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of any Loan Party to create, incur or permit to exist any Lien upon any of its Property, (b) the ability of the Borrower or any Restricted Subsidiary to pay dividends or other distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any Restricted Subsidiary or (c) the ability of E/H MLP, the Borrower or any Restricted Subsidiary to Guarantee Indebtedness of the Borrower or any Restricted Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions set forth in the Loan Documents and the Senior Note Documents (or any documents evidencing or relating to any Permitted Refinancing thereof), (iii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.09 (but shall apply to any extension or renewal of, or any amendment or modification expanding the scope of, any such restriction or condition), (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the Property securing such Indebtedness, and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.  
Section 6.10.    Activities of E/H MLP and the General Partner.  
(e)    Neither the General Partner nor E/H MLP shall (a) conduct, transact or otherwise engage in any business or operations other than those incidental to its direct ownership of the Equity Interests of the Borrower or E/H MLP, as the case may be, or the issuance and registration under federal securities laws of securities and other matters incidental thereto, (b) incur, create, assume or suffer to exist any Indebtedness except (i) nonconsensual obligations imposed by operation of law, (ii) in the case of E/H MLP, obligations under this Agreement with respect to its Guarantee of the Guaranteed Obligations, (iii) obligations with respect to its Equity Interests, and (iv) liabilities reasonably incurred in connection with the maintenance of its existence, (c) create, assume or permit to exist any Lien to secure Indebtedness upon the Equity Interests of the Borrower or E/H MLP (other than the limited partner common units of E/H MLP), as the case may be, or any of their other Properties, respectively, other than Liens under the Loan Documents, (d) own, lease, manage or otherwise operate any Property other than (x) the direct ownership of the Equity Interests of the Borrower or E/H MLP, as the case may be, and other interests incidental thereto, and (y) the cash proceeds of any Restricted Payments permitted by Section 6.07, or (e) create, organize or acquire any Subsidiary, other than the Borrower or E/H MLP, as the case may be, and any Subsidiary created, organized or acquired by the Borrower in accordance with this Agreement.

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(f)    E/H MLP shall not at any time directly own any Oil and Gas Properties or have any Subsidiaries other than the Borrower and its Subsidiaries.
Section 6.11.    [Reserved].
Section 6.12.    Gas Imbalances, Take-or-Pay or Other Prepayments.  The Borrower will not, nor will it permit any Restricted Subsidiary to, allow gas imbalances, take-or-pay or other prepayments (including pursuant to an Advance Payment Contract) with respect to the Oil and Gas Properties of the Borrower or any Restricted Subsidiary that would require the Borrower or such Restricted Subsidiary to deliver Hydrocarbons at some future time without then or thereafter receiving full payment therefor to exceed a volume equal to one (1) bcf of gas (on an mcf equivalent basis) in the aggregate.
Section 6.13.    Marketing Activities.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, engage in marketing activities for any Hydrocarbons or enter into any contracts related thereto other than (i) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from their proved Oil and Gas Properties during the period of such contract, (ii) contracts for the sale of Hydrocarbons scheduled or reasonably estimated to be produced from proved Oil and Gas Properties of third parties during the period of such contract associated with the Oil and Gas Properties of the Borrower and its Restricted Subsidiaries that the Borrower or one of its Restricted Subsidiaries has the right to market pursuant to joint operating agreements, unitization agreements or other similar contracts that are usual and customary in the oil and gas business and (iii) other contracts for the purchase and/or sale of Hydrocarbons of third parties (A) which have generally offsetting provisions (i.e. corresponding pricing mechanics, delivery dates and points and volumes) such that no “position” is taken and (B) for which appropriate credit support has been taken to alleviate the material credit risks of the counterparty thereto. 
Section 6.14.    Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, enter into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other transaction pursuant to which it incurs or has incurred Off-Balance Sheet Liabilities, except for (x) Swap Agreements to the extent permitted under the terms of Section 6.06 and (y) Advance Payment Contracts to the extent permitted under the terms of Section 6.12.
Section 6.15.    Disqualified Capital Stock.  No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, issue any Disqualified Capital Stock.  
Section 6.16.    Amendments to Organizational Documents and Contribution Documents; Changes in Fiscal Year End; Foreign Subsidiaries; Accounting Changes.
(g)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, enter into or permit any modification or amendment of, or waive any material right or obligation of any Person under its Organizational Documents or Contribution Documents if the effect thereof would be materially adverse to the Administrative Agent or any Lender or violate Section 6.09.

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(h)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, change the last day of its fiscal year from September 30 of each year, or the last days of the first three fiscal quarters in each of its fiscal years from December 31, March 31 and June 30 of each year, respectively.
(i)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to have any Foreign Subsidiaries.
(j)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, make any material change in its accounting treatment and reporting practices except as required by GAAP.
Section 6.17.    Designation and Conversion of Restricted and Unrestricted Subsidiaries.
(a)    Unless designated as an Unrestricted Subsidiary on Schedule 3.14 as of the Effective Date or thereafter, assuming compliance with Section 6.17(b), any Person that becomes a Subsidiary of the Borrower or any of its Restricted Subsidiaries shall be classified as a Restricted Subsidiary.  The Borrower will not, and will not permit any Restricted Subsidiary to, create or acquire any additional Subsidiary unless the Borrower gives written notice to the Administrative Agent of such creation or acquisition and complies with Section 5.13.
(b)    The Borrower may designate by prior written notice thereof to the Administrative Agent, any Restricted Subsidiary, including a newly formed or newly acquired Subsidiary, as an Unrestricted Subsidiary if (i) immediately prior, and after giving effect, to such designation, (A) the representations and warranties of the Borrower and its Restricted Subsidiaries contained in each of the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of such date as if made on and as of the date of such redesignation (or, if stated to have been made expressly as of an earlier date, are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date), and (B) no Default or Borrowing Base Deficiency exists or would result therefrom (and E/H MLP shall be in compliance, on a pro forma basis, with the covenants set forth in Section 6.18); (ii) such Subsidiary (A) is not a Material Domestic Subsidiary, (B) is not the owner or the operator, by contract or otherwise, of any Oil and Gas Properties included in the Borrowing Base, (C) does not provide gathering, transporting, processing, marketing or other midstream services in respect of the Oil and Gas Properties included in the Borrowing Base and (D) is not a guarantor or the primary obligor with respect to any indebtedness, liabilities or other obligations under any Senior Notes (or any Permitted Refinancing thereof); and (iii) the investment deemed to be made in such Subsidiary pursuant to the next sentence would be permitted to be made at the time of such designation under Section 6.04.  The designation of any Restricted Subsidiary as an Unrestricted Subsidiary shall constitute an investment in an Unrestricted Subsidiary in an amount equal to the aggregate amount of the Loan Parties’ investments previously made in or to such Subsidiary.  Except as provided in this Section 6.17(b), no Restricted Subsidiary may be redesignated as an Unrestricted Subsidiary.
(c)    The Borrower may designate by prior written notice thereof to the Administrative Agent any Unrestricted Subsidiary to be a Restricted Subsidiary if (i) immediately prior, and after 

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giving effect to such designation, the representations and warranties of the Borrower and its Restricted Subsidiaries contained in each of the Loan Documents are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of such date as if made on and as of the date of such redesignation (or, if stated to have been made expressly as of an earlier date, are true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date), (ii) no Default exists or would result therefrom (and E/H MLP shall be in compliance, on a pro forma basis, with the covenants set forth in Section 6.18) and (iii) the Borrower complies with the requirements of Section 5.13 and Section 5.15.  Any such designation shall be treated as a cash dividend in an amount equal to the lesser of the fair market value of the Borrower’s direct and indirect ownership interest in such Subsidiary or the amount of the Borrower’s cash investment previously made for purposes of limitations on investments under Section 6.04.
(d)    No Loan Party will, nor will any Loan Party permit any of its Restricted Subsidiaries to, (i) incur, assume, guarantee or be or become liable for any Indebtedness of any of the Unrestricted Subsidiaries, (ii) grant any Lien on any of its Property to secure any Indebtedness of, or provide any other form of credit support to, any of the Unrestricted Subsidiaries, or (iii) permit any Unrestricted Subsidiary to hold any Equity Interest in, or any Indebtedness of, the Borrower or any Restricted Subsidiary.
Section 6.18.    Financial Covenants.  
(a)    Consolidated Current Ratio.  E/H MLP will not permit the Consolidated Current Ratio as of the end of any fiscal quarter ending on or after March 31, 2013, to be less than 1.00 to 1.00.
(b)    Consolidated Leverage Ratio.  E/H MLP will not permit the Consolidated Leverage Ratio, determined as of the end of any fiscal quarter ending on or after March 31, 2013 to be greater than 4.50 to 1.00; provided that, with respect to the fiscal quarter ending as of (a) March 31, 2013, Consolidated EBITDAX shall be Consolidated EBITDAX for the fiscal quarter ending on such date multiplied by four (4), (b) June 30, 2013, Consolidated EBITDAX shall be Consolidated EBITDAX for the two consecutive fiscal quarters ending on such date multiplied by two (2) and (c) September 30, 2013, Consolidated EBITDAX shall be Consolidated EBITDAX for the three consecutive fiscal quarters ending on such date multiplied by 4/3; provided, further, that for purposes of calculating the Consolidated Leverage Ratio and determining compliance with this Section 6.18(b), Consolidated EBITDAX for the fiscal quarter ending March 31, 2013 shall equal Consolidated EBITDAX for the period from the Closing Date to and including March 31, 2013 multiplied by a fraction, the numerator of which is 90 and the denominator of which represents the number of days from the Closing Date to and including March 31, 2013.
Section 6.19.    Senior Notes Restrictions.  
(a)    No Loan Party will, nor will it permit any Restricted Subsidiary to, except for regularly scheduled payments of interest required under the Senior Notes, directly or indirectly, retire, redeem, defease, repurchase or prepay prior to the scheduled due date thereof any part of the principal of, or interest on, the Senior Notes (or any Permitted Refinancing thereof); provided that 

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so long as no Default has occurred and is continuing or would be caused thereby, the Loan Parties may retire, redeem, defease, repurchase or prepay the Senior Notes with the proceeds of any Permitted Refinancing permitted pursuant to Section 6.01(i).  
(b)    No Loan Party will, nor will it permit any Restricted Subsidiary to, enter into or permit any modification or amendment of the Senior Note Documents the effect of which is to (a) increase the maximum principal amount of the Senior Notes or the rate of interest on any of the Senior Notes (other than as a result of the imposition of a default rate of interest in accordance with the terms of the Senior Note Documents), (b) change or add any event of default or any covenant with respect to the Senior Note Documents if the effect of such change or addition is to cause any one or more of the Senior Note Documents to be more restrictive on any Loan Party or any of the Restricted Subsidiaries than such Senior Note Documents were prior to such change or addition, (c) change the dates upon which payments of principal or interest on the Senior Notes are due, (d) change any redemption or prepayment provisions of the Senior Notes, (e) alter the subordination provisions, if any, with respect to any of the Senior Note Documents, (f) grant any Liens in any assets of any Loan Party or any of its Subsidiaries, or (g) permit any Subsidiary of any Loan Party to Guarantee the Senior Notes unless such Subsidiary is (or concurrently with any such Guarantee becomes) a Loan Guarantor hereunder.
Article VII     
 
Events of Default
If any of the following events (each an “Event of Default”) shall occur:
(n)    the Borrower shall fail to pay any principal of any Loan (including any payments required under Section 2.11) or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 
(o)    the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) days;
(p)    any representation or warranty made or deemed made by or on behalf of any Loan Party in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made;
(q)    any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Section 2.11, Section 5.02, Section 5.03 (with respect to any Loan Party’s existence), Section 5.06, Section 5.09, Section 5.15 or in Article VI;

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(r)    any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those which constitute a default under another clause of this Article) or any Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after the earlier to occur of (i) written notice thereof from the Administrative Agent to the Borrower (which notice will be given at the request of any Lender) or (ii) a Responsible Officer otherwise becoming aware of such default;
(s)    any Loan Party shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable and such failure shall continue beyond the applicable grace period, if any;
(t)    any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the Property securing such Indebtedness (so long as such sale or transfer is permitted hereunder);
(u)    an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the General Partner, E/H MLP, the Borrower or any Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the General Partner, E/H MLP, the Borrower or any Restricted Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;
(v)    any Loan Party shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(w)    any Loan Party shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(x)    one or more judgments for the payment of money in an aggregate amount in excess of $10,000,000 or any one or more non-monetary judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, shall be rendered 

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against any Loan Party or any combination thereof and the same shall remain undischarged or unsatisfied for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party to enforce any such judgment;
(y)    an ERISA Event shall have occurred that, in the opinion of the Majority Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(z)    the Loan Documents after delivery thereof shall for any reason cease to be in full force and effect and valid, binding and enforceable in accordance with their terms against any Loan Party party thereto or shall be repudiated by any of them, or cease to create a valid and perfected Lien of the priority required thereby on any material portion of the Collateral purported to be covered thereby, any Loan Party shall so state in writing; 
(aa)    sixty (60) days have elapsed since the occurrence of a Change in Control; or
(bb)    a “Change in Control” or “Fundamental Change” (as each such term is defined in the Indenture) or any other similar event, however denominated, under any Indenture occurs.
then, and in every such event (other than an event with respect to any Loan Party described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Majority Lenders shall, by notice to the Borrower, take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to any Loan Party described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.  Without limiting the foregoing, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may, and at the request of the Majority Lenders shall, exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the Uniform Commercial Code. 
Article VIII     
 
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, 

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including execution of other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Loan Party or any Subsidiary of a Loan Party or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Majority Lenders, the Required Lenders or the Supermajority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity.  The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Majority Lenders, the Required Lenders or the Supermajority Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the creation, perfection or priority of Liens on the Collateral or the existence of the Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.  
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person.  The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon.  The Administrative Agent may consult with legal counsel (who may be counsel for E/H MLP or 

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the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties.  The exculpatory provisions of the preceding clauses shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as provided in this clause, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the Majority Lenders shall have the right, in consultation with the Borrower, to appoint a successor.  If no successor shall have been so appointed by the Majority Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a commercial bank or an Affiliate of any such commercial bank.  Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder.  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the Administrative Agent’s resignation hereunder, the provisions of this Article, Section 2.17(d) and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub‐agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or related agreement or any document furnished hereunder or thereunder.
The Arranger, the Co-Syndication Agents and the Co-Documentation Agents shall not have any right, power, obligation, liability, responsibility or duty under this Agreement and the other Loan Documents other than those applicable to all Lenders as such.
Article IX     
 
Miscellaneous

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Section 9.01.    Notices.
(u)    Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:
(i)    if to any Loan Party, to the Borrower, at:
12377 Merit Drive, Suite 1700
Dallas, Texas  75251
Attention: Chief Financial Officer
Facsimile No: 214-706-3409


with a copy to:
12377 Merit Drive, Suite 1700
Dallas, Texas  75251
Attention: General Counsel
Facsimile No: 214-706-3409
with a copy to:
HGI Energy
450 Park Ave., 27th Floor 
New York, New York 10022
Attention: Philip A. Falcone
Omar Asali
Legal Department
Facsimile No: 212-906-8559


(ii)    if to the Administrative Agent or the Issuing Bank, to JPMorgan Chase Bank, N.A., at:
383 Madison Avenue, 27th Floor
New York, New York  10179
Attention: Yumi Okabe
Facsimile No: 917-546-2580


with a copy to:
712 Main Street, Floor 12N
Houston, Texas  77002
Attention: Robert L. Mendoza
Facsimile No: 713-216-8870



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(iii)    if to the Arranger, any Co-Syndication Agent, any Co-Documentation Agent, or any Lender, to it at its address (or facsimile number) set forth in its Administrative Questionnaire.
All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received or (ii) sent by facsimile shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient.
(v)    Notices and other communications to the Lenders hereunder may be delivered or furnished by electronic communications (including e-mail and internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender.  The Administrative Agent or the Borrower (on behalf of the Loan Parties) may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications. All such notices and other communications (i) sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if not given during the normal business hours of the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (b)(i) of notification that such notice or communication is available and identifying the website address therefor.
(w)    Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.  
Section 9.02.    Waivers; Amendments.
(o)    No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by clause (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

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(p)    Neither this Agreement nor any other Loan Document nor any other provision hereof or thereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Loan Party or Loan Parties that are party thereto and the Majority Lenders or by the Loan Party or Loan Parties that are party thereto and the Administrative Agent with the consent of the Majority Lenders; provided that no such agreement shall:
(i)    increase the Commitment or the Maximum Credit Amount of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender);
(ii)    increase the Borrowing Base without the consent of each Lender (other than any Defaulting Lender; provided that the Commitment of any Defaulting Lender (i.e. such Defaulting Lender’s Applicable Percentage of the Borrowing Base) may not be increased without the consent of such Defaulting Lender);
(iii)    reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby;
(iv)    postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) affected thereby (it being understood that waiver of a mandatory prepayment of the Loans shall not constitute a postponement or waiver of a scheduled payment or date of expiration);
(v)    change Section 2.18(b) or Section 2.18(c) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (including any such Lender that is a Defaulting Lender);
(vi)    change clause (b) of the definition of Secured Obligations, Section 2.18(b), Section 9.02(b)(vi) or Section 9.18 without the consent of each Lender adversely affected thereby (including any such Lender that is a Defaulting Lender) and the consent of each Person that is adversely affected thereby and a party to a Swap Agreement secured by the Security Instruments which is not a Lender (or an Affiliate of a Lender) at the time of such agreement;
(vii)    change any of the provisions of this Section 9.02(b) or the definition of “Majority Lender”, “Required Lenders”, “Supermajority Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby; 

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(viii)    change the definition of “Change in Control” without the written consent of each Lender (other than any Defaulting Lender);
(ix)    release any Loan Guarantor from its obligation under its Loan Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender); or
(x)    except as provided in clause (c) of this Section or in any Security Instrument, release all or substantially all of the Collateral, without the written consent of each Lender (other than any Defaulting Lender); 
provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent or the Issuing Bank hereunder without the prior written consent of the Administrative Agent or the Issuing Bank, as the case may be (it being understood that any change to Section 2.20 shall require the consent of the Administrative Agent and the Issuing Bank).  The Administrative Agent may also amend Annex I to reflect assignments entered into pursuant to Section 9.04.
(q)    Each Lender, the Issuing Bank and each other Secured Party (by its acceptance of the benefits of any Lien encumbering the Mortgaged Properties or any other Collateral) hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to (A) release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the termination of the Commitments, payment and satisfaction in full in cash of all Secured Obligations (other than Unliquidated Obligations), and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) that is permitted to be Disposed of pursuant to the terms of the Loan Documents, and to the extent that the Property being Disposed of constitutes 100% of the Equity Interest of a Restricted Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty provided by such Restricted Subsidiary, or (iii) as required to effect any Disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII, (B) subordinate Liens on any Property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such Property that is permitted by Section 6.02(e), and (C) release any Loan Guarantor from its obligations under the Loan Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted hereunder.  Any such release shall not in any manner discharge, affect or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.  Each Lender, the Issuing Bank and each other Secured Party (by its acceptance of the benefits of any Lien encumbering the Mortgaged Properties or any other Collateral) hereby authorizes the Administrative Agent to execute and deliver to the Borrower, at the Borrower’s sole cost and expense, any and all releases of Liens, termination statements, assignments, subordination agreements or other documents reasonably requested by the Borrower in connection with any release or subordination permitted hereunder.  Upon the request of the Administrative Agent at any time, the Secured Parties will confirm in writing the Administrative Agent’s authority to release or subordinate, as the case may be, particular types or 

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items of Collateral, or to release any Loan Guarantor from its obligations under the Loan Guaranty pursuant to this clause.
(r)    If, in connection with any proposed amendment, modification, termination, waiver or consent (including any consent to any increase in the Borrowing Base) requiring the consent of “all Lenders”, “each Lender” or “each Lender affected or directly affected thereby,” the consent of the Supermajority Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but not obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is satisfactory to the Borrower and the Administrative Agent shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.
Section 9.03.    Expenses; Indemnity; Damage Waiver.
(i)    The Borrower shall pay (i) all reasonable and documented out‐of‐pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable and documented fees, charges and disbursements of counsel for the Administrative Agent and its Affiliates, but limited to (1) one law firm acting as counsel for the Administrative Agent and its Affiliates, taken as a whole, and (2) if necessary, a single local law firm acting as counsel for the Administrative Agent and its Affiliates, taken as a whole, in each relevant jurisdiction) in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of‐pocket expenses incurred during  any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. 

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(j)    THE LOAN PARTIES SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ARRANGER, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING PERSONS (EACH SUCH PERSON BEING CALLED AN “INDEMNITEE”) AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, INCREMENTAL TAXES, LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THE LOAN DOCUMENTS OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED THEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS THEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED HEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY RESTRICTED SUBSIDIARY, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY RESTRICTED SUBSIDIARY, (IV) THE FAILURE OF THE BORROWER TO DELIVER TO THE ADMINISTRATIVE AGENT THE REQUIRED RECEIPTS OR OTHER REQUIRED DOCUMENTARY EVIDENCE WITH RESPECT TO A PAYMENT MADE BY THE BORROWER FOR TAXES PURSUANT TO SECTION 2.17, OR (V) ANY ACTUAL OR PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES OR RELATED EXPENSES ARISE (1) AS A RESULT OF SUCH INDEMNITIES’ GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NONAPPEALABLE JUDGMENT, (2) AS A RESULT OF A MATERIAL BREACH IN BAD FAITH BY SUCH INDEMNITEE OF ITS OBLIGATIONS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AS DETERMINED BY A COURT OF COMPETENT JURISDICTION IN A FINAL AND NONAPPEALABLE JUDGMENT, OR (3) AS A RESULT OF DISPUTES ARISING SOLELY BETWEEN INDEMNITEES AND NEITHER (A) INVOLVING ANY ACTION OR INACTION BY ANY LOAN PARTY OR ANY SUBSIDIARY THEREOF NOR (B) RELATING TO ANY ACTION OF SUCH INDEMNITEE IN ITS CAPACITY AS ADMINISTRATIVE AGENT, ISSUING BANK OR ARRANGER.  WITHOUT LIMITATION OF THE FOREGOING, IT IS THE INTENTION OF THE LOAN PARTIES AND EACH LOAN PARTY AGREES THAT THE FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNITEE WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, LIABILITIES AND RELATED EXPENSES 

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(INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF SUCH (AND/OR ANY OTHER) INDEMNITEE.  THIS SECTION 9.03(B) SHALL NOT APPLY WITH RESPECT TO TAXES OTHER THAN TAXES THAT REPRESENT LOSSES OR DAMAGES ARISING FROM ANY NON-TAX CLAIM.
(k)    To the extent that any Loan Party fails to pay any amount required to be paid by it to the Administrative Agent or the Issuing Bank under clause (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent or the Issuing Bank, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount; provided that the unreimbursed expense or indemnified loss, claim, damage, penalty, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent or the Issuing Bank in its capacity as such.
(l)    To the extent permitted by applicable law, no Loan Party shall assert, and each hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement or any agreement or instrument contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(m)    All amounts due under this Section shall be payable not later than ten (10) days after written demand therefor.
Section 9.04.    Successors and Assigns.
(d)    The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) no Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by such Loan Party without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in clause (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(e)    
(xi)    Subject to the conditions set forth in clause (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

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(A)    the Borrower, provided that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof and provided further that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; 
(B)    the Administrative Agent; provided that no consent of the Administrative Agent shall be required for an assignment to a Lender, an Affiliate of a Lender or an Approved Fund; and
(C)    the Issuing Bank.
(xii)    Assignments shall be subject to the following additional conditions: 
(A)    except in the case of an assignment to a Lender or an Affiliate of a Lender, or an assignment of the entire remaining amount of the assigning Lender’s Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;
(B)    each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement;
(C)    the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500; and
(D)    the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.
For the purposes of this Section 9.04(b)(i), the term “Approved Fund” has the following meaning:
“Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
(xiii)    Subject to acceptance and recording thereof pursuant to clause (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption the 

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assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Section 2.15, Section 2.16, Section 2.17 and Section 9.03).  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (c) of this Section except that any attempted assignment or transfer by any Lender that does not comply with clause (C) of Section 9.04(b)(ii) shall be null and void.
(xiv)    The Administrative Agent, acting solely for this purpose as an agent of the Borrower for tax purposes, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment, Maximum Credit Amount and Applicable Percentage of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Loan Parties, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Loan Parties, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(xv)    Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in clause (b) of this Section and any written consent to such assignment required by clause (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(d) or Section 2.05(e), Section 2.06(b), Section 2.18(c) or Section 2.18(d) or Section 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this clause.
(f)    Any Lender may, without the consent of the Borrower, the Administrative Agent or the Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) in all or a portion of such Lender’s rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lender’s obligations under 

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this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Section 2.17(f) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under clause (b) of this Section; and (B) shall not be entitled to receive any greater payment under Section 2.15 or 2.17, with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.
To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant's interest in any Commitments, Loans, Letters of Credit or its other obligations under any Loan Document) except to the extent that such disclosure is necessary to establish that such Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.
(g)    Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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Section 9.05.    Survival.  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments  delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated.  The provisions of Section 2.15, Section 2.16, Section 2.17 and Section 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any provision hereof.
Section 9.06.    Counterparts; Integration; Effectiveness.  This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  Delivery of an executed counterpart of a signature page of this Agreement by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Agreement.
Section 9.07.    Severability.  Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 9.08.    Right of Setoff.  If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held and other obligations (of whatsoever kind, 

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including, without limitation, obligations under Swap Agreements) at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower or any Loan Guarantor against any of and all the Secured Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured.  The applicable Lender shall notify the Borrower and the Administrative Agent of such set-off or application, provided that any failure to give or any delay in giving such notice shall not affect the validity of any such set-off or application under this Section.  The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
Section 9.09.    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.
(f)    THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. 
(g)    EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(h)    EACH LOAN PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN CLAUSE (B) OF THIS SECTION.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE 

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DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(i)    EACH PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 9.01.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 9.10.    WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 9.11.    Headings.  Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
Section 9.12.    Confidentiality.  Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority (including any self-regulatory authority), (c) to the extent required by Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations, (g) with the consent of the Borrower, (h) to holders of Equity Interests in the Borrower or E/H MLP or (i) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than a Loan Party.  For the purposes of this Section, “Information” means all information received from any Loan Party relating to any Loan Party or its business, other than any such information that is available to the Administrative 

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Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by any Loan Party; provided that, in the case of information received from any Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING E/H MLP, THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.  
ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE OTHER LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.
Section 9.13.    Several Obligations; Nonreliance; Violation of Law.  The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. Each Lender hereby represents that it is not relying on or looking to any margin stock for the repayment of the Borrowings provided for herein.  Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.
Section 9.14.    USA PATRIOT Act.  Each Lender that is subject to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies each Loan Party, which information includes the name and address of each Loan Party and other information that will allow such Lender to identify each Loan Party in accordance with the Act.

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Section 9.15.    Disclosure.  Each Loan Party and each Lender hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with any of the Loan Parties and their respective Affiliates.
Section 9.16.    Appointment for Perfection.  Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession.  Should any Lender (other than the Administrative Agent) obtain possession of any such Collateral, such Lender shall notify the Administrative Agent thereof and, promptly upon the Administrative Agent’s request therefor, shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.
Section 9.17.    Interest Rate Limitation.  Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.  To the extent that Chapter 303 of the Texas Finance Code (as amended, the “Texas Finance Code”) is relevant for the purpose of determining the Maximum Rate applicable to a Lender, such Lender elects to determine the applicable rate ceiling under such Chapter by the “weekly ceiling” as defined in the Texas Finance Code and from time to time in effect.  Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15)) shall not apply to this Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or be subject to the provisions of such Chapter 346 in any manner whatsoever.
Section 9.18.    Collateral Matters; Swap Agreements.  The benefit of the Security Instruments and of the provisions of this Agreement relating to any Collateral securing the Secured Obligations shall also extend to and be available to Secured Swap Providers and Banking Services Providers in respect of Secured Swap Obligations and Banking Services Obligations.  Except as set forth in Section 9.02(b)(vi), no Person shall have any voting rights under any Loan Document as a result of the existence of any Secured Swap Obligations or any Banking Services Obligations.
Section 9.19.    Flood Insurance.  Notwithstanding any provision in this Agreement or any other Loan Document to the contrary, in no event is any Building (as defined in the applicable Flood Insurance Regulation) or Manufactured (Mobile) Home (as defined in the applicable Flood Insurance Regulation) located on the Mortgaged Properties within an area having special flood 

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hazards and in which flood insurance is available under the National Flood Insurance Act of 1968 included in the definition of “Mortgaged Properties” under the Mortgages and no Building or Manufactured (Mobile) Home shall be encumbered by the Security Instruments.  As used herein, “Flood Insurance Regulations” shall mean (i) the National Flood Insurance Act of 1968 as now or hereafter in effect or any successor statute thereto, (ii) the Flood Disaster Protection Act of 1973 as now or hereafter in effect or any successor statue thereto, (iii) the National Flood Insurance Reform Act of 1994 (amending 42 USC 4001, et seq.), as the same may be amended or recodified from time to time, and (iv) the Flood Insurance Reform Act of 2004 and any regulations promulgated thereunder.
Section 9.20.    No Fiduciary Duty.  Each Lender and their Affiliates (collectively, solely for purposes of this Section 9.20, the “Lenders”), may have economic interests that conflict with those of the Loan Parties and their respective Subsidiaries and their stockholders and/or their affiliates. Each Loan Party, for itself and on behalf of its Subsidiaries, agrees that nothing in this Agreement or the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and any Loan Party or its Subsidiaries, their stockholders or their affiliates, on the other.  Each Loan Party, for itself and on behalf of its Subsidiaries, acknowledges and agrees that (i) the transactions contemplated by the Loan Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s-length commercial transactions between the Lenders, on the one hand, and the Loan Parties and their Subsidiaries, on the other, and (ii) in connection therewith and with the process leading thereto, (x) no Lender has assumed an advisory or fiduciary responsibility in favor of any Loan Party or its Subsidiaries, their stockholders or their affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise any Loan Party or its Subsidiaries, their stockholders or their affiliates on other matters) or any other obligation to any Loan Party or any of its Subsidiaries except the obligations expressly set forth in the Loan Documents and (y) each Lender is acting solely as principal and not as the agent or fiduciary of any Loan Party or any of its Subsidiaries, their management, stockholders, creditors or any other Person.  Each Loan Party, for itself and its Subsidiaries, acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Each Loan Party, for itself and its Subsidiaries, agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to such Loan Party or Subsidiary, in connection with such transaction or the process leading thereto.
Article X     
 
Loan Guaranty
Section 10.01.    Guaranty.  Each Loan Guarantor (other than those that have delivered a separate Guarantee) hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to the Lenders, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses, including, without limitation, all court costs and attorneys’ and 

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paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.
Section 10.02.    Guaranty of Payment.  This Loan Guaranty is a guaranty of payment and not of collection.  Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.
Section 10.03.    No Discharge or Diminishment of Loan Guaranty.  
(h)    Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender or any other person, whether in connection herewith or in any unrelated transactions.  
(i)    The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.  
(j)    Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the 

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Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).  
Section 10.04.    Defenses Waived.  To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of the Borrower or any Loan Guarantor, other than the indefeasible payment in full in cash of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person.  Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder.  The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty except to the extent the Guaranteed Obligations have been fully and indefeasibly paid in cash.  To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.
Section 10.05.    Rights of Subrogation.  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification, that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders. 
Section 10.06.    Reinstatement; Stay of Acceleration.  If at any time any payment of any portion of the Guaranteed Obligations is rescinded or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party or otherwise, each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party, all such amounts 

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otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.
Section 10.07.    Information.  Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s and the other Loan Parties’ financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that neither the Administrative Agent, the Issuing Bank nor any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.
Section 10.08.    Termination.  Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrower based on this Loan Guaranty until five days after it receives written notice of termination from any Loan Guarantor.  Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations.
Section 10.09.    Taxes.  Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.
Section 10.10.    Maximum Liability.  The provisions of this Loan Guaranty are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors generally, if the obligations of any Loan Guarantor under this Loan Guaranty would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Loan Guarantor’s liability under this Loan Guaranty, then, notwithstanding any other provision of this Loan Guaranty to the contrary, the amount of such liability shall, without any further action by the Loan Guarantors or the Administrative Agent, the Issuing Bank or any Lender, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such highest amount determined hereunder being the relevant Loan Guarantor’s “Maximum Liability”.  This Section with respect to the Maximum Liability of each Loan Guarantor is intended solely to preserve the rights of the Administrative Agent, the Issuing Bank and the Lenders to the maximum extent not subject to avoidance under applicable law, and no Loan Guarantor nor any other Person shall have any right or claim under this Section with 

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respect to such Maximum Liability, except to the extent necessary so that the obligations of any Loan Guarantor hereunder shall not be rendered voidable under applicable law.  Each Loan Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the Maximum Liability of each Loan Guarantor without impairing this Loan Guaranty or affecting the rights and remedies of the Administrative Agent, the Issuing Bank or the Lenders hereunder, provided that, nothing in this sentence shall be construed to increase any Loan Guarantor’s obligations hereunder beyond its Maximum Liability.
Section 10.11.    Contribution.  In the event any Loan Guarantor (a “Paying Guarantor”) shall make any payment or payments under this Loan Guaranty or shall suffer any loss as a result of any realization upon any collateral granted by it to secure its obligations under this Loan Guaranty, each other Loan Guarantor (each a “Non-Paying Guarantor”) shall contribute to such Paying Guarantor an amount equal to such Non-Paying Guarantor’s “Applicable Percentage” of such payment or payments made, or losses suffered, by such Paying Guarantor.  For purposes of this Article X, each Non-Paying Guarantor’s “Applicable Percentage” with respect to any such payment or loss by a Paying Guarantor shall be determined as of the date on which such payment or loss was made by reference to the ratio of (i) such Non-Paying Guarantor’s Maximum Liability as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder) or, if such Non-Paying Guarantor’s Maximum Liability has not been determined, the aggregate amount of all monies received by such Non-Paying Guarantor from the Borrower after the date hereof (whether by loan, capital infusion or by other means) to (ii) the aggregate Maximum Liability of all Loan Guarantors hereunder (including such Paying Guarantor) as of such date (without giving effect to any right to receive, or obligation to make, any contribution hereunder), or to the extent that a Maximum Liability has not been determined for any Loan Guarantor, the aggregate amount of all monies received by such Loan Guarantors from the Borrower after the date hereof (whether by loan, capital infusion or by other means).  Nothing in this provision shall affect any Loan Guarantor’s several liability for the entire amount of the Guaranteed Obligations (up to such Loan Guarantor’s Maximum Liability).  Each of the Loan Guarantors covenants and agrees that its right to receive any contribution under this Loan Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations.  This provision is for the benefit of all of the Administrative Agent, the Issuing Bank, the Lenders and the Loan Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
Section 10.12.    Liability Cumulative.  The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.
Section 10.13.    Subordination.  Without limiting the rights of the Administrative Agent, the Issuing Bank and the Lenders under any other agreement, any indebtedness of Borrower or any other Loan Party now or hereafter held by any Loan Guarantor is hereby subordinated in right of payment to the prior indefeasible payment in full in cash of the Guaranteed Obligations.  

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Notwithstanding the foregoing, prior to the occurrence of an Event of Default, the Borrower or any other Loan Party may make payments to any Loan Guarantor on account of any such indebtedness to the extent not prohibited under the Credit Agreement.  After the occurrence and during the continuance of an Event of Default, none of the Loan Guarantors will demand, sue for, or otherwise attempt to collect any such indebtedness until (i) the Commitments have expired or been terminated, (ii) all of the Guaranteed Obligations have been indefeasible paid in full in cash or otherwise satisfied, (iii) the LC Exposure has been reduced to zero (or fully cash collateralized in a manner reasonably satisfactory to the Issuing Bank and the Administrative Agent), and (iv) the Issuing Bank has no further obligation to issue Letters of Credit under the Credit Agreement.  If any amount shall erroneously be paid to any Loan Guarantor on account of any such indebtedness of Borrower or any other Loan Party, such amount shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Administrative Agent to be credited against the payment of the Guaranteed Obligations, whether matured or unmatured, in accordance with the terms of the Credit Agreement.
[Signature Page Follows]



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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
BORROWER:
EXCO/HGI JV ASSETS, LLC 
By: /s/ Richard L. Hodges          
Name:    Richard L. Hodges
Title:    Vice President - Land
GENERAL PARTNER:
EXCO/HGI GP, LLC
By: /s/ Richard L. Hodges    
Name:    Richard L. Hodges
Title:    Vice President - Land
LOAN GUARANTORS:
EXCO/HGI PRODUCTION PARTNERS, LP
By:  EXCO/HGI GP, LLC, its sole general partner
By: /s/ Richard L. Hodges    
Name: Richard L. Hodges
Title: Vice President - Land
VERNON GATHERING, LLC
By: /s/ Richard L. Hodges    
Name:    Richard L. Hodges 
Title:    Vice President - Land

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JPMORGAN CHASE BANK, N.A., as Administrative Agent, Issuing Bank, and a Lender
By: /s/ Robert L. Mendoza    
Name: Robert L. Mendoza
Title:  Vice President

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BANK OF AMERICA, N.A., 
as a Lender and as a Co-Syndication Agent
By: /s/ Sandra M. Serie    
Name:    Sandra M. Serie
Title: Vice President

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DEUTSCHE BANK TRUST COMPANY AMERICAS, as a Lender and as a Co-Syndication Agent
By:/s/ Kevin Chichester    
Name:    Kevin Chichester
Title: Director
By: /s/ David A. Reid    
Name:    David A. Reid
Title:    Director



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UBS LOAN FINANCE LLC,  
as a Lender 
By: /s/ Lana Gifas     
Name:    Lana Gifas
Title: Director
By: /s/ David Urban    
Name:    David Urban
Title: Associate Director





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BMO HARRIS FINANCING, INC.,  
as a Lender and as a Co-Documentation Agent
By: /s/ Kevin Utsey    
Name:    Kevin Utsey
Title:    Director

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BRANCH BANKING AND TRUST COMPANY, as a Lender
By: /s/ Paul June    
Name:    Paul June
Title:    Vice President

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FIFTH THIRD BANK, as a Lender
By: /s/ Richard Butler    
Name:    Richard Butler
Title:    Senior Vice President





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