Document:

10.2 - 10th Amendment of Construction Loan Agreement

TENTH AMENDMENT OF
CONSTRUCTION LOAN AGREEMENT

THIS TENTH AMENDMENT OF CONSTRUCTION LOAN AGREEMENT ("Amendment") is made this 14th day of February, 2012 between FIRST NATIONAL BANK OF OMAHA, a national banking association ("Bank") and CARDINAL ETHANOL, LLC, an Indiana limited liability company ("Borrower"). This Amendment amends that certain Construction Loan Agreement dated December 19, 2006 between Bank and Borrower (as amended, the "Loan Agreement").

WHEREAS, pursuant to the Loan Agreement and the other Loan Documents, Bank extended the Construction Loan, Revolving Loan and other financial accommodations and extensions of credit described in the Loan Agreement to Borrower, all as more fully described in the Loan Agreement;

WHEREAS, pursuant to that certain that certain First Amendment of Construction Loan Agreement dated August 22, 2007, a revised Total Project Cost Statement was attached to the Loan Agreement as Exhibit G and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Second Amendment of Construction Loan Agreement dated December 18, 2007, the Loan Termination Date applicable to the Revolving Note was extended to December 17, 2008 and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Third Amendment of Construction Loan Agreement dated July 31, 2008 (the "Third Amendment"), Bank extended to Borrower the Corn Oil Extraction Loan in the principal amount of $3,600,000.00 and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Fourth Amendment of Construction Loan Agreement dated December 17, 2008, the Loan Termination Date of the Revolving Loan was extended to December 16, 2009, the Borrowing Base was modified, the interest rate on certain Loans was modified and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Fifth Amendment of Construction Loan Agreement dated October 30, 2009, the limitations on Borrower's capital expenditures for Borrower's 2010 fiscal year was increased, the Excess Cash Flow payment application was modified, the financial covenants were modified and the Loan Agreement was otherwise amended as provided for therein; and

WHEREAS, pursuant to that certain Sixth Amendment of Construction Loan Agreement dated December 16, 2009, the Loan Termination Date of the Revolving Loan was extended to February 16, 2010 and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Seventh Amendment of Construction Loan Agreement dated February 14, 2010, the Loan Termination Date applicable to the Revolving Note was extended from February 16, 2010 to February 15, 2011, the interest rate charged on the Revolving Loan was modified, the capital expenditures covenant was modified and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, pursuant to that certain Eighth Amendment of Construction Loan Agreement dated February 15, 2011, the Loan Termination Date applicable to the Revolving Note was extended to February 14, 2012, the interest rate and definitions relating to the interest rate on the Loans were modified, the Borrowing Base was modified and the Loan Agreement was otherwise amended as provided for therein; 

and

WHEREAS, pursuant to that certain Ninth Amendment of Construction Loan Agreement dated May 25, 2011, the maximum principal amount of the Revolving Loan was increased from $10,000,000.00 to $15,000,000.00 and the Loan Agreement was otherwise amended as provided for therein;

WHEREAS, the Borrower has requested, and under the terms of this Amendment Bank has agreed, to extend the Loan Termination Date applicable to the Revolving Note from February 14, 2012 to February 12, 2013, to modify the interest rate charged on the Revolving Loan and Long Term Revolving Loan, to modify the financial covenants and Tax Distribution covenant provided for in the Loan Agreement and to otherwise amend the Loan Agreement as provided for in this Amendment.

NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which is hereby acknowledged, the parties agree to amend the Loan Agreement as follows:

1.Capitalized terms used herein shall have the meaning given to such terms in the Loan Agreement, unless specifically defined herein.

2.Section 1.21 of the Loan Agreement is hereby amended to delete the reference to February 14, 2012 as the Loan Termination Date of the Revolving Note and inserting in lieu thereof February 12, 2013. To further evidence such extension, Borrower shall execute and deliver to Bank a Seventh Amended and Restated Revolving Promissory Note dated of even date with this Amendment. From and after the date of this Amendment, any reference to the Revolving Note in the Loan Agreement and the other Loan Documents shall be amended to refer to such Seventh Amended and Restated Revolving Promissory Note.

3.    The definition of the term "LIBOR RATE" in Section 1.19 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

1.19    "LIBOR RATE" means, an independent index which is the London Interbank Offered Rate for U.S. Dollar deposits published in The Wall Street Journal as the Three (3) Month LIBOR RATE with respect to the FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE and as the One (1) Month LIBOR RATE with respect to the REVOLVING NOTE. The LIBOR RATE will be adjusted and determined without notice to BORROWER on the INTEREST RATE CHANGE DATE applicable to each LOAN as set forth in this AGREEMENT. The published LIBOR RATE will be rounded upwards to the next higher one one hundredth (1/100th) of one percent (1%). If the initial Advance under the REVOLVING NOTE or the initial funding of the FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE occurs on any day other than the first London Banking Day of a month, the initial LIBOR RATE to be in effect until the beginning of the next succeeding month shall be that Three (3) Month LIBOR RATE or One (1) Month LIBOR RATE, as applicable, in effect on the date that is two London Banking Days prior to the first day of the month in which the REVOLVING NOTE and FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE are dated. If for any reason the LIBOR RATE published by The Wall Street Journal is no longer available and/or BANK is unable to determine the LIBOR RATE for any INTEREST RATE CHANGE DATE, BANK may, in its sole discretion, select an alternate source to determine the LIBOR RATE and will provide notice to BORROWER of the source selected. The LIBOR RATE determined as set forth above shall be referred to herein as (the "Index"). The Index is not necessarily the lowest rate charged by BANK on its loans. 

If the Index becomes unavailable during the term of the LOANS, BANK may designate a substitute index after notifying BORROWER. BANK will tell BORROWER the current Index rate upon BORROWER'S request. BORROWER understands that BANK may make loans based on other rates as well. The Index with respect to the One Month LIBOR Rate currently is .26% per annum and the Index with respect to the Three Month LIBOR Rate currently is .51% per annum.

4.    The definition of the term "INTEREST PERIOD" in Section 1.18 of the AGREEMENT is hereby deleted in its entirety and the following is inserted in lieu thereof:

1.18 "INTEREST PERIOD" means for the FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE a period of three (3) months and for the REVOLVING NOTE a period of one (1) month; provided that no INTEREST PERIOD shall extend beyond the LOAN TERMINATION DATE applicable to each such NOTE.

5.    Section 1.45 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

1.45    "INTEREST RATE CHANGE DATE" means, the date on which the Index will initially be set, which is the date of the applicable NOTE evidencing each LOAN, and thereafter adjusted and determined, which, with respect to the FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE, is the eighth (8th) calendar day of each July, October, January and April fiscal quarter thereafter on which the Index applicable to the FIXED RATE NOTE, VARIABLE RATE NOTE, CORN OIL EXTRACTION TERM NOTE and LONG TERM REVOLVING NOTE will adjust to the Three (3) Month LIBOR RATE which is published in The Wall Street Journal as the reported rate for the date that is two LONDON BANKING DAYS prior to each such INTEREST RATE CHANGE DATE, and which, with respect to the REVOLVING NOTE, is the first (1st) calendar day of each month on which the Index applicable to the REVOLVING NOTE will adjust to the One (1) Month LIBOR RATE which is published in The Wall Street Journal as the reported rate for the date that is two LONDON BANKING DAYS prior to each such INTEREST RATE CHANGE DATE.

6.    Section 2.10 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

2.10    INTEREST ON THE REVOLVING NOTE. The interest rate on the REVOLVING NOTE is subject to change from time to time based on changes in the Index. Prior to the LOAN TERMINATION DATE of the REVOLVING NOTE, the interest rate to be applied to the unpaid principal balance of the REVOLVING NOTE will be calculated using a rate of three and one half percent (3'/2%) over the Index, adjusted if necessary for any minimum and maximum rate limitations described in this AGREEMENT, based on a year of 360 days. Interest on the REVOLVING NOTE is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under the REVOLVING NOTE is computed using this method. NOTICE: Under no circumstances will the interest rate on the REVOLVING NOTE be more than the maximum rate allowed by applicable law. The interest rate on the REVOLVING NOTE shall initially be set and will be adjusted on each INTEREST RATE CHANGE DATE applicable to the REVOLVING NOTE. Interest on the REVOLVING NOTE shall be paid monthly, in arrears, on the first (1st) day of each month. The unpaid principal balance together with all accrued and unpaid interest on the REVOLVING NOTE will be due and payable in full on the LOAN TERMINATION DATE applicable 

to the REVOLVING NOTE. The principal balance of the REVOLVING NOTE will bear interest after maturity and after the occurrence and during the continuance of an EVENT OF DEFAULT at a variable per annum rate equal to the Index plus nine percent (9%), but not to exceed the maximum rate allowed by law.

7.    Section 2.6(c) of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:

(c)    LONG TERM REVOLVING NOTE. The interest rate on the LONG TERM REVOLVING NOTE is subject to change from time to time based on changes in the Index. Prior to the LOAN TERMINATION DATE of the LONG TERM REVOLVING NOTE, the interest rate to be applied to the unpaid principal balance of the LONG TERM REVOLVING NOTE will be calculated using a rate of three and one half percent (3'/2%) over the Index, adjusted if necessary for any minimum and maximum rate limitations described in this AGREEMENT, based on a year of 360 days. Interest on the LONG TERM REVOLVING NOTE is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. All interest payable under the LONG TERM REVOLVING NOTE is computed using this method. NOTICE: Under no circumstances will the interest rate on the LONG TERM REVOLVING NOTE be more than the maximum rate allowed by applicable law. The interest rate on the LONG TERM REVOLVING NOTE shall initially be set and will be adjusted on each INTEREST RATE CHANGE DATE applicable to the LONG TERM REVOLVING NOTE. Interest on the LONG TERM REVOLVING NOTE shall be paid quarterly, in arrears, on the same days that principal payments are due as provided for above. The unpaid principal balance together with all accrued and unpaid interest on the LONG TERM REVOLVING NOTE will be due and payable in full on the LOAN TERMINATION DATE applicable to the LONG TERM REVOLVING NOTE. The principal balance of the LONG TERM REVOLVING NOTE will bear interest after maturity and after the occurrence and during the continuance of an EVENT OF DEFAULT at a variable per annum rate equal to the Index plus nine percent (9%), but not to exceed the maximum rate allowed by law.

8.    The first paragraph of Section 2.12 of the Loan Agreement is hereby amended by inserting the following at the end of such paragraph:

With respect to any payment due on any LOAN which is 10 days or more late, in addition to any rights and remedies BANK may have BORROWER will be charged a late fee equal to 3.000% of the regularly scheduled payment or $25.00 whichever is greater.

9.    Section 2.15 of the Loan Agreement is hereby deleted in its entirety.

10.    Section 6.2.1 of the Loan Agreement is hereby amended by deleting the reference to 1.25:1.0 as the minimum FIXED CHARGE COVERAGE RATIO and inserting in lieu thereof 1.15:1.0.

11.    Section 6.2.2 of the Loan Agreement regarding minimum NET WORTH is hereby deleted in its entirety.

12.    Section 6.2.4 of the Loan Agreement is hereby deleted in its entirety and the following is inserted in lieu thereof:
6.2.4    BORROWER shall maintain at all times WORKING CAPITAL of not
less than $15,000,000.00.

13.    Section 6.4.11 of the Loan Agreement is hereby amended by deleting the reference to $1,000,000.00 as the maximum aggregate capital expenditures in any fiscal year of Borrower and inserting in lieu thereof $4,000,000.00.

14.    Sections 6.4.12(i) and (ii) of the Loan Agreement are hereby deleted in their entirety and the following is inserted in lieu thereof:

6.4.12 Make or pay, without the prior written consent of BANK, which written consent will not be unreasonably withheld, in and for any fiscal year, distributions to members or shareholders of BORROWER in excess of the TAX DISTRIBUTIONS permitted below and distributions permitted in Section 6.4.12(iii) below based on BORROWER's previous fiscal year's net    income.

(i)TAX DISTRIBUTIONS. So long as no EVENT OF DEFAULT has occurred and continuing, BORROWER may make TAX DISTRIBUTIONS to its members within thirty (30) day prior to each April 15, June 15, September 15, and January 15, each in an amount equal to the estimated income tax liability to be incurred for such year by BORROWER's members by reason of their membership interest in BORROWER, based upon the most recent financial information available, times 1/4 for the April 15 TAX DISTRIBUTION, times 'A for the June 15 TAX DISTRIBUTION, less the April 15 TAX DISTRIBUTION, times % for the September 15 TAX DISTRIBUTION less the sum of the April 15 and June 15 TAX DISTRIBUTIONS and the January 15 TAX DISTRIBUTION will be the total estimated tax liability less the April 15, June 15 and September TAX DISTRIBUTIONS.

(ii)Final TAX DISTRIBUTION. BORROWER may make a final TAX DISTRIBUTION to its members within thirty (30) days prior to each March 1, so long as (a) no EVENT OF DEFAULT has occurred and is continuing or would occur after giving effect to the payment of such final TAX DISTRIBUTION described herein and the distributions permitted in Subsection 6.4.12(iii) below, (b) BORROWER has delivered to BANK BORROWER's annual audited financial statements and compliance statements as required in this AGREEMENT and (c) BORROWER is in compliance with all of the financial and other covenants provided for in this AGREEMENT and will remain so after giving effect to the payment of such final TAX DISTRIBUTION described herein and the distributions permitted in Subsection 6.4.12(iii) below, in an amount not to exceed the positive difference between the total tax liability of BORROWER's members incurred by reason of their membership interest in BORROWER and the amounts previously distributed to such members pursuant to Subsection 6.4.12(i) above, provided, that if the difference between the total tax liability of BORROWER's members incurred by reason of their membership interest in BORROWER and the amounts previously distributed to such members pursuant to Subsection 6.4.12(i) above is zero or a negative number, then no final TAX DISTRIBUTION may be made by BORROWER under this Subsection 6.4.12(ii).

15.    Section 8 of the Loan Agreement is hereby amended by inserting new Section 8.16 immediately after Section 8.15 as follows:

8.16    USA Patriot Act Notice. IMPORTANT NOTICE: to help the government
fight the funding of terrorism and money laundering activities, the USA Patriot Act requires all banks to obtain and verify the identity of each person or business that opens an account. When BORROWER 

opens an account BANK will ask BORROWER for information that will allow BANK to properly identify BORROWER and BANK will verify that information. If BANK cannot properly verify identity within 30 calendar days, BANK reserves the right to deem all of the balance and accrued interest on the LOANS due and payable immediately.

16.    This Amendment shall not be effective until Bank shall have received each of the following (each in form and substance acceptable to Bank) or the following conditions have been satisfied:

		
	(a).
	This Amendment, duly executed by Borrower.

		
	(b).
	The Seventh Amended and Restated Revolving Note duly executed by Borrower.

		
	(c).
	A First Amended and Restated Security Agreement duly executed by Borrower.

		
	(d).
	A Secretary Certificate and appropriate resolutions authorizing the transactions contemplated in this Amendment.

(e).    Such other matters as Bank may reasonably require.

17.    Except as modified and amended herein, all other terms, provisions, conditions and obligations imposed under the terms of the Loan Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and affirmed by Borrower. To the extent necessary, the other provisions of the Loan Agreement and the other Loan Documents are hereby amended to be consistent with the terms of this Amendment.

18.    Borrower certifies and reaffirms by its execution hereof that the representations and warranties set forth in the Loan Agreement and the other Loan Documents are true as of this date, and that no Event of Default under the Loan Agreement or any other Loan Document, and no event which, with the giving of notices or passage of time or both, would become such an Event of Default, has occurred as of execution hereof

19.    This Amendment may be executed simultaneously in several counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed and delivered this Amendment on the date first written above.

	
		
	 
	FIRST NATIONAL BANK OF OMAHA,

	 
	a national banking association

	 
	 

	 
	By: /s/ Fallon Savage

	 
	Title: Vice President

	 
	 

	 
	CARDINAL ETHANOL, LLC, an

	 
	Indiana limited liability company

	 
	 

	 
	By: /s/ Jeffrey Painter

	 
	Jeff Painter, President

	 
	 

	 
	By: /s/ Dale Schwieterman

	 
	Title: DirectorLGCY 3.31.2012 EX 10.1

Exhibit 10.1

SECOND AMENDMENT

TO

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

AMONG

LEGACY RESERVES LP,
as Borrower,

THE GUARANTORS,

BNP PARIBAS,
as Administrative Agent,

and

THE LENDERS SIGNATORY HERETO

DATED AS OF MARCH 30, 2012

    

Second Amendment to 
Second Amended and Restated Credit Agreement

This Second Amendment to Second Amended and Restated Credit Agreement (this “Second Amendment”) dated as of March 30, 2012, among Legacy Reserves LP, a limited partnership duly formed under the laws of the State of Delaware (the “Borrower”); each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”); BNP Paribas, as administrative agent for the Lenders (in such capacity, together with its successors, the “Administrative Agent”); and the Lenders signatory hereto.

Recitals

A.    The Borrower, the Administrative Agent and the Lenders are parties to that certain Second Amended and Restated Credit Agreement dated as of March 10, 2011 (as amended by the First Amendment to Second Amended and Restated Credit Agreement dated as of September 30, 2011, the “Credit Agreement”), pursuant to which the Lenders have made certain credit available to and on behalf of the Borrower.

B.    The Guarantors are parties to that certain Second Amended and Restated Guaranty Agreement dated as of March 10, 2011 made by each of the Guarantors (as defined therein) in favor of the Administrative Agent (the “Guaranty”).

C.    The Borrower and each of the other Pledgors (as defined therein) are parties to that certain Second Amended and Restated Pledge Agreement dated as of March 10, 2011 made by the Borrower and each of the other Pledgors in favor of the Administrative Agent (the “Pledge Agreement”).

D.    The Borrower, the Guarantors, the Administrative Agent and the Lenders have agreed to amend certain provisions of the Credit Agreement and the Pledge Agreement as more fully set forth herein.

E.    NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1.    Defined Terms.  Each capitalized term which is defined in the Credit Agreement, but which is not defined in this Second Amendment, shall have the meaning ascribed such term in the Credit Agreement.  Unless otherwise indicated, all section references in this Second Amendment refer to sections of the Credit Agreement.

Section 2.    Amendments to Credit Agreement.

2.1    Amendments to Section 1.02.  
(a)    The definition of “Agreement” is hereby amended in its entirety to read as follows:
“Agreement” means this Second Amended and Restated Credit Agreement, as amended by the First Amendment and the Second Amendment, as the same may from time to time be amended, modified, supplemented or restated.

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(b)    The following definition is hereby added where alphabetically appropriate to read as follows:
“Second Amendment” means that certain Second Amendment to Second Amended and Restated Credit Agreement, dated as of March 30, 2012, among the Borrower, the Guarantors, the Administrative Agent and the Lenders party thereto.
2.2    Amendment to Section 9.18(a)(ii).    The second parenthetical clause contained in Section 9.18(a)(ii) is hereby amended and restated in its entirety to read as follows:
(for purposes of the foregoing, natural gas liquids volumes may he hedged     directly or for crude oil volumes in a 2:1 ratio)
2.3    Amendment to Section 10.02(c).  Clause “fourth” of Section 10.02(c) is hereby amended and restated in its entirety to read as follows:
fourth, pro rata to payment of principal outstanding on the Loans and payment of Indebtedness referred to in clause (b) of the definition of Indebtedness;
2.4    Amendments to Section 12.02(b)(viii).  Section 12.02(b)(viii) is hereby amended by adding the following at the end thereof after the words “waiver or amendment;” and  immediately  before the words “provided further that no such agreement”:
; provided further that any amendment or modification to any Security Instrument that results in Indebtedness referred to in clause (b) of the definition of Indebtedness secured by such Security Instrument no longer being secured thereby on an equal and ratable basis with the principal of the Loans, shall also require the written consent of each Person that is adversely affected thereby and a party to a Swap Agreement secured by such Security Instrument which is not a Lender (or an Affiliate of a Lender) at the time of such amendment or modification; 
2.5    Amendment to Section 12.14.   The last sentence of Section 12.14 is hereby amended and restated to read as follows:
Except as set forth in Section 12.02(b), no Lender, or Lender (as defined in the Existing Credit Agreement), or any of their respective Affiliates, or any counterparty to any Swap Agreement with the Borrower or any of its Subsidiaries that was a Lender (or Affiliate of a Lender) when it entered into such Swap Agreement but is no longer a Lender (or and Affiliate of a Lender) shall have any voting rights under any Loan Document as a result of the existence of obligations owed to it under any such Swap Agreements.
Section 3.    Amendments to Pledge Agreement.

3.1    Amendments to Section 1.01(b).  
(a)    The definition of “Borrower Obligations” contained in Section 1.01(b) of the Pledge Agreement is hereby amended and restated in its entirety to read as follows:

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“Borrower Obligations” means the collective reference to the payment and performance of all Indebtedness and all obligations of the Borrower and its Subsidiaries under the Secured Documents, including, without limitation, the unpaid principal of and interest on the Loans and the LC Exposure and all other obligations and liabilities of the Borrower and its Subsidiaries (including, without limitation, interest accruing at the then applicable rate provided in the Credit Agreement after the maturity of the Loans and LC Exposure and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) to the Secured Creditors, whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Secured Documents, whether on account of principal, interest, reimbursement obligations, payments in respect of an early termination date, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to the Secured Creditors that are required to be paid by the Borrower or any of its Subsidiaries pursuant to the terms of any Secured Documents).
(b)    Section 1.01(b) of the Pledge Agreement is hereby amended by adding the following definitions where alphabetically appropriate to read as follows:
“Secured Creditors” means the collective reference to the Administrative Agent, the Issuing Bank, the Lenders and the Affiliates of Lenders that are parties to Secured Swap Agreements and those counterparties to Secured Swap Agreements that were entered into while such Person or its Affiliate was a Lender regardless of whether such Person is a Lender or an Affiliate of a Lender thereafter.
“Secured Documents” means the collective reference to the Credit Agreement, the other Loan Documents, each Secured Swap Agreement and any other document made, delivered or given in connection with any of the foregoing.
3.2    Amendments to Section 2.01.  Section 2.01 of the Pledge Agreement is hereby amended and restated in its entirety to read as follows:
Section 2.01  Grant of Security Interest. Each Pledgor hereby pledges, assigns and transfers to the Administrative Agent, and hereby grants to the Administrative Agent, for the ratable benefit of the Secured Creditors, a security interest in all of the following property now owned or at any time hereafter acquired by such Pledgor or in which such Pledgor now has or at any time in the future may acquire any right, title or interest (collectively, the “Collateral”), as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Borrower Obligations:
(1)    all Pledged Securities;
(2)    all books and records pertaining to the Collateral; and

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(3)    to the extent not otherwise included, all Proceeds and products of any and all of the foregoing and all collateral security and guarantees given by any Person with respect to any of the foregoing.
Section 4.    Assignments and Reallocation of Commitments and Loans.  The Lenders have agreed among themselves, in consultation with the Borrower, to reallocate their respective Maximum Credit Amounts and Commitments and to, among other things, allow BMO Harris Financing, Inc. and Citibank, N.A. to become parties to the Credit Agreement as Lenders, (the “New Lenders”) by acquiring an interest in the total Maximum Credit Amounts and Commitments.  The Administrative Agent and the Borrower hereby consent to such reallocation and the New Lenders' acquisition of an interest in the Maximum Credit Amounts and Commitments.  On the Second Amendment Effective Date (as defined below) and after giving effect to such reallocations, (a) the Maximum Credit Amounts and Commitment of each Lender shall be as set forth on Annex I of this Second Amendment, which Annex I supersedes and replaces Annex I to the Credit Agreement (and Annex I to the Credit Agreement is hereby amended and restated in its entirety to read as set forth on Annex I attached hereto) and (b) each New Lender is hereby added as a Lender with the Maximum Credit Amount specified for it in the attached Annex I, and the New Lenders shall become parties to the Credit Agreement as “Lenders” and have all of the rights and obligations of a Lender under the Credit Agreement, as amended by this Second Amendment, and the other Loan Documents.  With respect to such reallocation, each New Lender and each other Lender shall be deemed to have acquired the Maximum Credit Amount and Commitment allocated to it from each of the other Lenders pursuant to the terms of the Assignment and Assumption attached as Exhibit D to the Credit Agreement as if the New Lenders and the other Lenders had executed an Assignment and Assumption with respect to such allocation.  On the Second Amendment Effective Date, the Administrative Agent shall take the actions specified in Section 12.04(b)(v), including recording the assignments described herein in the Register, and such assignments shall be effective for purposes of the Credit Agreement.  

Section 5.    Borrowing Base Redetermination.  For the period from and including the Second Amendment Effective Date to but excluding the next Redetermination Date, the amount of the Borrowing Base shall be equal to $565,000,000.  Notwithstanding the foregoing, the Borrowing Base may be subject to further adjustments from time to time pursuant to Section 2.07(e), Section 2.07(f), Section 8.13(c) or Section 9.12(d) of the Credit Agreement.  For the avoidance of doubt, the redetermination herein shall constitute the April 1, 2012 Scheduled Redetermination.

Section 6.    Limited Waiver.   The Borrower has informed the Administrative Agent and the Lenders that the Borrower has heretofore entered into Swap Agreements in respect of interest rates exceeding 100% of the outstanding principal amount of the Borrower's Debt for borrowed money which bears interest at a floating rate, in violation of Section 9.18(b) (the “Interest Rate Hedging Covenant”).  Therefore, the Borrower has requested that the Lenders waive, and the Lenders do hereby waive, during the period from and including the Second Amendment Effective Date (as defined below) through and including October 1, 2012 (the “Waiver Period”), the Borrower's compliance with the Interest Rate Hedging Covenant; provided that during the Waiver Period the Borrower shall not enter into any additional interest rate Swap Agreements (or increase the principal notional amount of any existing interest rate Swap Agreements).  The foregoing waiver is hereby granted to the extent and only to the extent specifically stated herein and for the Waiver Period only and for no other purpose or period and 

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shall not be deemed to (a) be a consent or agreement to, or waiver or modification of, any other term or condition of the Credit Agreement, any other Loan Document or any of the documents referred to therein, or (b) except as expressly set forth herein, prejudice any right or rights which the Administrative Agent or the Lenders may now have or may have in the future under or in connection with the Credit Agreement, any other Loan Document or any of the documents referred to therein.  Granting the waiver set forth herein does not and should not be construed to be an assurance or promise that waivers will be granted in the future.

Section 7.    Conditions Precedent.  This Second Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (the “Second Amendment Effective Date”): 

7.1    The Administrative Agent shall have received from all the Lenders, the Borrower and the Guarantors, counterparts (in such number as may be requested by the Administrative Agent) of this Second Amendment signed on behalf of such Person.
7.2    The Administrative Agent and the Lenders shall have received all fees and other amounts due and payable on or prior to the date hereof.
7.3    No Default shall have occurred and be continuing as of the Second Amendment Effective Date.
7.4    The Administrative Agent shall have received such other documents as the Administrative Agent or its special counsel may reasonably require.
The Administrative Agent is hereby authorized and directed to declare this Second Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the Administrative Agent, compliance with the conditions set forth in this Section 7 or the waiver of such conditions as permitted in Section 12.02 of the Credit Agreement.  Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.
Section 8.    Miscellaneous.
8.1    Confirmation.  The provisions of the Credit Agreement and the Pledge Agreement, as amended by this Second Amendment, shall remain in full force and effect following the effectiveness of this Second Amendment.
8.2    Ratification and Affirmation; Representations and Warranties.  Each Obligor hereby (a) acknowledges the terms of this Second Amendment; (b) ratifies and affirms its obligations under, and acknowledges its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect as expressly amended hereby; (c) represents and warrants to the Lenders that as of the date hereof, after giving effect to the terms of this Second Amendment:  (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date, (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate 

Page 5

could reasonably be expected to have a Material Adverse Effect; and (d) agrees that from and after the Second Amendment Effective Date each reference to the Credit Agreement and the Pledge Agreement in the other Loan Documents shall be deemed to be a reference to the Credit Agreement and the Pledge Agreement, as amended by this Second Amendment.

8.3    Counterparts.  This Second Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this Second Amendment by telecopy, facsimile, email or other electronic means shall be effective as delivery of a manually executed counterpart hereof.

8.4    No Oral Agreement.  This Second Amendment, the Credit Agreement and the other Loan Documents executed in connection herewith and therewith represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or unwritten oral agreements of the parties.  There are no subsequent oral agreements between the parties.
8.5    GOVERNING LAW.  THIS SECOND AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
8.6    Payment of Expenses.  In accordance with Section 12.03 of the Credit Agreement, the Borrower agrees to pay or reimburse the Administrative Agent for all of its reasonable out-of-pocket costs and reasonable expenses incurred in connection with this Second Amendment, any other documents prepared in connection herewith and the transactions contemplated hereby, including, without limitation, the reasonable fees and disbursements of counsel to the Administrative Agent.
8.7    Severability.  Any provision of this Second Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
8.8    Successors and Assigns.  This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[SIGNATURES BEGIN NEXT PAGE]

Page 6

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed as of the date first written above.

	
					
	BORROWER:
	LEGACY RESERVES LP
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	Legacy Reserves GP, LLC
	 

	 
	 
	 
	its general partner
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James R. Lawrence
	 

	 
	 
	 
	James R. Lawrence
	 

	 
	 
	 
	Interim Chief Financial Officer, Vice President - Finance and Treasurer
	 

	 
	 
	 
	 
	 

	GUARANTORS:
	LEGACY RESERVES OPERATING LP
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	Legacy Reserves Operating GP LLC, its general partner
	 

	 
	 
	By:
	Legacy Reserves LP, its sole member
	 

	 
	 
	By:
	Legacy Reserves GP, LLC, its general partner
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James R. Lawrence
	 

	 
	 
	 
	James R. Lawrence
	 

	 
	 
	 
	Interim Chief Financial Officer, Vice President - Finance and Treasurer
	 

	 
	 
	 
	 
	 

	 
	LEGACY RESERVES OPERATING GP LLC
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	Legacy Reserves LP, its sole member
	 

	 
	 
	By:
	Legacy Reserves GP, LLC, its general partner
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James R. Lawrence
	 

	 
	 
	 
	James R. Lawrence
	 

	 
	 
	 
	Interim Chief Financial Officer, Vice President - Finance and Treasurer
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	 
	LEGACY RESERVES SERVICES, INC.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ James R. Lawrence
	 

	 
	 
	 
	James R. Lawrence
	 

	 
	 
	 
	Interim Chief Financial Officer, Vice President - Finance and Treasurer
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

    

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	ADMINISTRATIVE AGENT:
	BNP PARIBAS,
	 

	 
	as Administrative Agent and a Lender
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Brian Malone
	 

	 
	 
	 
	Brian Malone
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Michaela Braun
	 

	 
	 
	 
	Michaela Braun
	 

	 
	 
	 
	Director
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	LENDERS:
	WELLS FARGO BANK, N.A.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ David C. Brooks
	 

	 
	 
	 
	David C. Brooks
	 

	 
	 
	 
	Director
	 

	 
	 
	 
	 
	 

	 
	COMPASS BANK
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Dorothy Marchand
	 

	 
	 
	 
	Dorothy Marchand
	 

	 
	 
	 
	Senior Vice President
	 

	 
	 
	 
	 
	 

	 
	BANK OF AMERICA, N.A.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Jeff Rathkamp
	 

	 
	 
	 
	Jeff Rathkamp
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	THE BANK OF NOVA SCOTIA
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Mark Sparrow
	 

	 
	 
	 
	Mark Sparrow
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	ROYAL BANK OF CANADA
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Don J. McKinnerney
	 

	 
	 
	 
	Don J. McKinnerney
	 

	 
	 
	 
	Authorized Signatory
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	 
	U.S. BANK NATIONAL ASSOCIATION
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Justin M. Alexander
	 

	 
	 
	 
	Justin M. Alexander
	 

	 
	 
	 
	Vice President
	 

	 
	 
	 
	 
	 

	 
	KEYBANK, N.A.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Craig Hanselman
	 

	 
	 
	 
	Craig Hanselman
	 

	 
	 
	 
	Vice President
	 

	 
	 
	 
	 
	 

	 
	WEST TEXAS NATIONAL BANK
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Chris L. Whigham
	 

	 
	 
	 
	Chris L. Whigham
	 

	 
	 
	 
	Senior Vice President
	 

	 
	 
	 
	 
	 

	 
	SOCIETE GENERALE
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Christopher S. Parada
	 

	 
	 
	 
	Christopher S. Parada
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	UNION BANK, N.A.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Lara Sorokolit
	 

	 
	 
	 
	Lara Sorokolit
	 

	 
	 
	 
	Assistant Vice President
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	 
	CREDIT AGRICOLE CORPORATE AND INVESTMENT BANK
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Sharada Manne
	 

	 
	 
	 
	Sharada Manne
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Darrell Stanley
	 

	 
	 
	 
	Darrell Stanley
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	UBS AG, STAMFORD BRANCH
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Irja R. Otsa
	 

	 
	 
	 
	Irja R. Otsa
	 

	 
	 
	 
	Associate Director
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Mary E. Evans
	 

	 
	 
	 
	Mary E. Evans
	 

	 
	 
	 
	Associate Director
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

	
					
	 
	BMO HARRIS FINANCING, INC.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ Joseph A. Bliss
	 

	 
	 
	 
	Joseph A. Bliss
	 

	 
	 
	 
	Managing Director
	 

	 
	 
	 
	 
	 

	 
	CITIBANK, N.A.
	 

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ John Miller
	 

	 
	 
	 
	John Miller
	 

	 
	 
	 
	Vice President
	 

	 
	 
	 
	 
	 

SIGNATURE PAGE
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Title:Annex I

ANNEX I
LIST OF MAXIMUM CREDIT AMOUNTS
Aggregate Maximum Credit Amounts 
	
			
	Name of Lender
	Applicable Percentage
	Maximum Credit Amount

	BNP Paribas
	7.9646018%
	$79,646,018

	Wells Fargo Bank, N.A.
	7.0796460%
	$70,796,460

	Compass Bank
	9.7345133%
	$97,345,133

	UBS AG, Stamford Branch
	9.7345133%
	$97,345,133

	U.S. Bank National Association
	9.7345133%
	$97,345,133

	Bank of America, N.A.
	7.9646018%
	$79,646,018

	Royal Bank of Canada
	7.0796460%
	$70,796,460

	The Bank of Nova Scotia
	6.7256637%
	$67,256,637

	Credit Agricole Corporate and Investment Bank
	5.6637168%
	$56,637,168

	Union Bank, N.A.
	6.7256637%
	$67,256,637

	KeyBank N.A.
	6.7256637%
	$67,256,637

	Societe Generale
	2.8318584%
	$28,318,584

	West Texas National Bank
	1.4159292%
	$14,159,292

	BMO Harris Financing, Inc.
	5.3097345%
	$53,097,345

	Citibank, N.A.
	5.3097345%
	$53,097,345

	TOTAL
	100.0000000%
	$1,000,000,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00203-of-00352.parquet"}]]