Agreement regarding Loan Documents. (a) Except as expressly set forth herein, each Party agrees that it shall be responsible for the performance of the obligations and liabilities agreed to be performed by such Party under the Loan Documents. The Party requesting an Advance or Letter of Credit as among the Parties (the “Requesting Party”) pursuant to the terms of the Credit Agreement shall be responsible for, and agrees to pay or repay to Lender, all principal, interest (including default interest), and fees and expenses directly incurred by or on behalf of such Party in respect of any such Advance or Letter of Credit (including fees pursuant to Section 2.08(b) of the Credit Agreement and reimbursements of Lender’s expenses pursuant to Section 10.04 of the Credit Agreement) notwithstanding the fact that all Parties may be required to sign a Notice of Borrowing. The use of proceeds of any such Advance and the benefit of any such Letter of Credit shall be utilized solely by and for the benefit of the Requesting Party. The Parties agree and acknowledge that any prepayments or payments by a Party of its Obligations shall reduce the liability of such Party for such Obligations by the amount of such prepayment or payment. Engineering fees and expenses incurred from time to time in furnishing Engineering Reports prepared by an Independent Engineer pursuant to the Loan Documents shall be paid by the Party providing such Engineering Report; provided, that if one or more Parties jointly provides an Engineering Report prepared by an Independent Engineer, such Parties shall agree upon an allocation of the fees and expenses incurred in furnishing such Engineering Report; provided, further, that if such Parties are unable to agree upon an allocation of such fees and expenses following negotiations among such Parties, such fees and expenses shall be allocated among such Parties in the ratio of the value assigned to each such Party’s Proved Reserves for purposes of the calculation of the Borrowing Base to the total Proved Reserves of such Parties for purposes of the calculation of the Borrowing Base, unless otherwise approved by the Boards of Directors of Red Mountain and Cross Border. The costs of preparing and furnishing pursuant to the Loan Documents any Engineering Reports which are prepared by internal staff engineers will be allocated based on the shared corporate services agreement between the Parties.
