Exhibit 10.36

Execution Version

AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
EXCO/HGI PRODUCTION PARTNERS, LP

TABLE OF CONTENTS
Page

ARTICLE I

DEFINITIONS
Section 1.1
Definitions    1

ARTICLE II

ORGANIZATION
Section 2.1
Formation    25

Section 2.2
Name    25

Section 2.3
Registered Office; Registered Agent; Principal Office; Other Offices    25

Section 2.4
Purpose and Business    26

Section 2.5
Powers    26

Section 2.6
Term    26

Section 2.7
Title to Partnership Assets    26

Section 2.8
Foreign Qualification    27

ARTICLE III

RIGHTS OF LIMITED PARTNERS
Section 3.1
Limitation of Liability    27

Section 3.2
Management of Business    27

Section 3.3
Rights of Limited Partners    27

ARTICLE IV

CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
Section 4.1
Certificates    29

Section 4.2
Record Holders    30

Section 4.3
Registration and Transfer of Limited Partner Interests    30

Section 4.4
Transfer of the General Partner’s General Partner Interest    31

Section 4.5
Restrictions on Transfers    31

Section 4.6
Right of First Refusal    32

Section 4.7
Tag-Along Rights    35

Section 4.8
Preemptive Rights    37

Section 4.9
Drag-Along Rights    38

Section 4.10
Change of Control    41

Section 4.11
Expenses    41

Section 4.12
Closing Date    42

Section 4.13
Effect of Incapacity    42

Section 4.14
No Appraisal Rights    42

Section 4.15
Effect of Non-Compliance    42

ARTICLE V

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 5.1
Organizational Contributions    43

Section 5.2
Contributions by the General Partner and Its Affiliates    43

Section 5.3
Contributions, Distributions and Issuances of Partnership Interests    43

Section 5.4
Interest and Withdrawal    44

Section 5.5
Capital Accounts    44

Section 5.6
Issuances of Additional Partnership Interests and Derivative Instruments    47

Section 5.7
Splits and Combinations    47

Section 5.8
Fully Paid and Non-Assessable Nature of Limited Partner Interests    48

Section 5.9
Capital Contribution Events    48

Section 5.10
Failure to Contribute.    49

Section 5.11
Impact of an Initial Public Offering    50

ARTICLE VI

ALLOCATIONS AND DISTRIBUTIONS
Section 6.1
Allocations for Capital Account Purposes    51

Section 6.2
Allocations for Tax Purposes    56

Section 6.3
Distributions of Available Cash    57

Section 6.4
Adjustment of Threshold Amount    59

ARTICLE VII

MANAGEMENT AND OPERATION OF BUSINESS
Section 7.1
Management    59

Section 7.2
Replacement of Fiduciary Duties    61

Section 7.3
Certificate of Limited Partnership    61

Section 7.4
Reimbursement of the General Partner    62

Section 7.5
Outside Activities    62

Section 7.6
Performance of Duties; No Liability of Indemnitees    63

Section 7.7
Right to Indemnification    64

Section 7.8
Advance Payment    65

Section 7.9
Indemnification of Employees and Agents    65

Section 7.10
Appearance as a Witness    65

Section 7.11
Nonexclusivity of Rights    65

Section 7.12
Insurance    65

Section 7.13
Other Indemnification Agreements    65

Section 7.14
Savings Clause    66

Section 7.15
Standards of Conduct and Modification of Duties    67

Section 7.16
Other Matters Concerning the General Partner and Indemnitees    68

Section 7.17
Purchase or Sale of Partnership Interests    68

Section 7.18
Reliance by Third Parties    69

ARTICLE VIII

BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 8.1
Records and Accounting; Auditors.    69

Section 8.2
Fiscal Year    70

Section 8.3
Reports    70

ARTICLE IX

TAX MATTERS
Section 9.1
Tax Returns and Information    70

Section 9.2
Accounting Methods; Tax Elections    71

Section 9.3
Tax Controversies    71

Section 9.4
Withholding; Tax Payments    72

Section 9.5
Texas Margin Tax Sharing Agreement    72

ARTICLE X

ADMISSION OF PARTNERS
Section 10.1
Admission of Limited Partners    73

Section 10.2
Admission of Successor General Partner    74

Section 10.3
Amendment of Agreement and Certificate of Limited Partnership    74

Section 10.4
Representations and Warranties    74

ARTICLE XI

WITHDRAWAL OR REMOVAL OF PARTNERS
Section 11.1
Withdrawal of the General Partner    75

Section 11.2
Removal of the General Partner    76

Section 11.3
Interest of Departing General Partner and Successor General Partner    77

Section 11.4
Withdrawal of Limited Partners    77

ARTICLE XII

DISSOLUTION AND LIQUIDATION
Section 12.1
Dissolution    77

Section 12.2
Continuation of the Business of the Partnership After Dissolution    78

Section 12.3
Liquidator    78

Section 12.4
Liquidation    79

Section 12.5
Cancellation of Certificate of Limited Partnership    79

Section 12.6
Return of Contributions    80

Section 12.7
Waiver of Partition    80

Section 12.8
Capital Account Restoration    80

ARTICLE XIII

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 13.1
Amendments to be Adopted Solely by the General Partner    80

Section 13.2
Amendment Procedures    81

Section 13.3
Amendment Requirements    82

Section 13.4
Special Meetings    83

Section 13.5
Notice of a Meeting    83

Section 13.6
Record Date    83

Section 13.7
Adjournment    83

Section 13.8
Waiver of Notice; Approval of Meeting; Approval of Minutes    84

Section 13.9
Quorum and Voting    84

Section 13.10
Conduct of a Meeting    84

Section 13.11
Action Without a Meeting    85

Section 13.12
Right to Vote and Related Matters    85

ARTICLE XIV

MERGER OR CONSOLIDATION
Section 14.1
Authority    86

Section 14.2
Procedure for Merger or Consolidation    86

Section 14.3
Approval by Limited Partners    87

Section 14.4
Certificate of Merger    88

Section 14.5
Effect of Merger or Consolidation    88

Section 14.6
Savings Clause    89

ARTICLE XV

GENERAL PROVISIONS
Section 15.1
Addresses and Notices; Written Communications    89

Section 15.2
Confidential Information    89

Section 15.3
Entire Agreement    90

Section 15.4
Effect of Waiver or Consent    90

Section 15.5
Binding Effect    90

Section 15.6
Governing Law    91

Section 15.7
Consent to Jurisdiction and Service of Process; Appointment of Agent for Service
of Process    91

Section 15.8
Waiver of Jury Trial    91

Section 15.9
Further Assurances    92

Section 15.10
Waiver of Certain Rights    92

Section 15.11
Notice to Partners of Provisions    92

Section 15.12
Counterparts    92

Section 15.13
Headings    92

Section 15.14
Construction    93

Section 15.15
Remedies    93

Section 15.16
Severability    94

Section 15.17
Creditors    94

Section 15.18
Third-Party Beneficiaries    94

Section 15.19
Consent of Partners    94

Section 15.20
Facsimile Signatures    94

Exhibits
Exhibit A - Capital Contributions

AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF EXCO/HGI PRODUCTION PARTNERS, LP
This AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF EXCO/HGI
PRODUCTION PARTNERS, LP, a Delaware limited partnership (the “Partnership”),
effective as of February 14, 2013, is entered into by and among EXCO/HGI GP,
LLC, a Delaware limited liability company, as the General Partner, EXCO Holding
MLP, Inc., a Texas corporation (“EXCO Holding”), as an Initial Limited Partner
and in its capacity as the Organizational Limited Partner, and HGI ENERGY
HOLDINGS, LLC, a Delaware limited liability company (“HGI Energy”), as an
Initial Limited Partner, together with any other Persons who become Partners in
the Partnership or parties hereto as provided herein. Unless the context
otherwise requires, capitalized terms shall have the respective meanings
ascribed to them in Article I.
R E C I T A L S
WHEREAS, the Partnership was formed as a limited partnership under the Delaware
Act, pursuant to the Certificate of Limited Partnership filed with the Secretary
of State of the State of Delaware (the “Secretary of State”) on January 9, 2013;
WHEREAS, prior to the Closing Date, the Partnership was governed by the
Agreement of Limited Partnership of the Partnership, dated January 4, 2013 (the
“Original Partnership Agreement”), entered into by the General Partner and the
Organizational Limited Partner; and
WHEREAS, the parties desire that the Original Partnership Agreement be amended
and restated in its entirety by this Agreement and the Partnership be governed
by the Delaware Act and this Agreement.
A G R E E M E N T
NOW, THEREFORE, in consideration of the promises and the covenants hereinafter
contained and to induce the parties hereto to enter into this Agreement, it is
agreed as followed:
Article I

DEFINITIONS
Section 1.1    Definitions. The following definitions shall be for all purposes,
unless otherwise clearly indicated to the contrary, applied to the terms used in
this Agreement.
“100% Affiliate” means (a) with respect to any Person, another Person that has
beneficial ownership of all of the outstanding Equity Interests of such first
Person, has all of its outstanding Equity Interests beneficially owned by such
first Person or has all of its outstanding Equity Interests beneficially owned
by the same Person who has beneficial ownership of all of the outstanding Equity
Interests of such first Person (including for these purposes where the relevant
outstanding Equity Interests are held through a chain of ownership in which each
Person owns all of the outstanding Equity Interests the next relevant Person) or
(b) with respect to any investment fund or similar vehicle, a Person who
Controls, is Controlled by, or is under common Control with, such investment
fund or similar vehicle.
“Accredited Investor” is defined in Section 10.4(h).
“Additional Units” is defined in Section 5.2(b).
“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each taxable period of the Partnership, (a) increased by any
amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed obligated to
restore under Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5)) and (b)
decreased by (i) the amount of all losses and deductions that, as of the end of
such taxable period, are reasonably expected to be allocated to such Partner in
subsequent taxable periods under Sections 704(e)(2) and 706(d) of the Code and
Treasury Regulation Section 1.751-1(b)(2)(ii), and (ii) the amount of all
distributions that, as of the end of such taxable period, are reasonably
expected to be made to such Partner in subsequent taxable periods in accordance
with the terms of this Agreement or otherwise to the extent they exceed
offsetting increases to such Partner’s Capital Account that are reasonably
expected to occur during (or prior to) the taxable period in which such
distributions are reasonably expected to be made (other than increases as a
result of a minimum gain chargeback pursuant to Section 6.1(d)(i) or Section
6.1(d)(ii)). The foregoing definition of Adjusted Capital Account is intended to
comply with the provisions of Treasury Regulation Section 1.704-1(b)(2)(ii)(d)
and shall be interpreted consistently therewith. The “Adjusted Capital Account”
of a Partner in respect of any Partnership Interest shall be the amount that
such Adjusted Capital Account would be if such Partnership Interest were the
only interest in the Partnership held by such Partner from and after the date on
which such Partnership Interest was first issued.
“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Section 5.5(d).
“Administrative Services Agreement” means the Administrative Services Agreement,
dated as of the date hereof, by and among the Operating Company, Vernon
Gathering, the General Partner, the Partnership and EXCO.
“Affiliate” means any Person that is a Subsidiary of, or directly or indirectly,
through one or more intermediaries, Controls, is Controlled by or is under
common Control with, the Person in question; provided, that notwithstanding the
foregoing, (i) each Partner and its Affiliates will be deemed not to be
Affiliates of the Partnership or any of its Subsidiaries and (ii) each Partner
and its Affiliates will be deemed not to be an Affiliate of any other Partner or
its Affiliates unless there is a basis for such Affiliation independent of such
Partners’ respective ownership or Control of the Partnership.
“Affiliate Transfer” means a Transfer by a Limited Partner of Limited Partner
Interests to a 100% Affiliate of such Limited Partner that remains a 100%
Affiliate of the Transferor at all times following such Transfer; it being
understood and agreed that if and when such 100% Affiliate ceases to be a 100%
Affiliate of such Limited Partner, it will be deemed to be a new Transfer of the
Limited Partner Interests held by such 100% Affiliate, which would be subject to
Section 4.5(c).
“Agreed Allocation” means any allocation, other than a Required Allocation, of
an item of income, gain, loss or deduction pursuant to the provisions of Section
6.1, including a Curative Allocation (if appropriate to the context in which the
term “Agreed Allocation” is used).
“Agreed Value” of any Contributed Property means the Fair Market Value of such
property at the time of contribution and in the case of an Adjusted Property,
the Fair Market Value of such Adjusted Property on the date of the revaluation
event as described in Section 5.5(d).
“Agreement” means this Amended and Restated Agreement of Limited Partnership of
EXCO/HGI Production Partners, LP, as executed and as it may be amended,
modified, supplemented or restated from time to time, as the context requires.
“Amended Drag-Along Notice” is defined in Section 4.9(c).
“Annual Plan” means the annual operating budget and business plan, which shall
include hedging plans, on a quarterly basis established by the General Partner
for the Partnership Group, including the “Annual Plan” and the “Interim Annual
Plan,” as such terms are defined in Section 5.8 of the GP LLC Agreement.
“Available Cash” means, as of the date of determination with respect to any cash
distribution to be made to the Partners prior to the Liquidation Date, the
following, without duplication:
(a) the sum of (i) all cash and cash equivalents of the Partnership Group (or
the Partnership’s proportionate share of cash and cash equivalents in the case
of Subsidiaries that are not wholly owned) on hand at the end of such Quarter
(and, in the case of cash held at Subsidiaries, distributable to the
Partnership) collected or received from all sources (other than Capital
Contributions) and (ii) all cash and cash equivalents on hand on the date of
determination of Available Cash resulting from cash distributions received after
the end of such Quarter from any Group Member’s equity interest in any Person
(other than a Subsidiary), which distributions are paid by such Person in
respect of operations conducted by such Person during such Quarter, less;
(a) the amount of any cash reserves (or the Partnership’s proportionate share of
cash reserves in the case of Subsidiaries that are not wholly owned) established
by the General Partner to (i) provide for the proper conduct of the business,
and the satisfaction of anticipated obligations, of the Partnership Group
(including reserves for future Budgeted Capital Expenditures and any other
maintenance capital expenditures and for anticipated future credit needs of the
Partnership Group) subsequent to such Quarter, or (ii) comply with applicable
Law or any loan agreement, security agreement, mortgage, debt instrument or
other agreement or obligation to which any Group Member is a party or by which
it is bound or its assets are subject, or (iii) provide funds for distributions
under Section 6.3 in respect of any one or more of the next four Quarters;
provided, that disbursements made by a Group Member or cash reserves
established, increased or reduced after the end of any such Quarter but on or
before the date of determination of Available Cash with respect to such Quarter
shall be deemed to have been made, established, increased or reduced, for
purposes of determining Available Cash, within such Quarter if the General
Partner so determines.
“BG” means BG US Production Company, LLC, a Delaware limited liability company,
and its Affiliates.
“Board” means the board of directors of the General Partner.
“Bona Fide Pledge” is defined in Section 4.5(c).
“Book Fiscal Year” is defined in Section 8.2.
“Book-Tax Disparity” means with respect to any item of Contributed Property or
Adjusted Property, as of the date of any determination, the difference between
the Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for U.S. federal income tax purposes as of such date. A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to Section
5.5 and the hypothetical balance of such Partner’s Capital Account computed as
if it had been maintained strictly in accordance with U.S. federal income tax
accounting principles.
“Budgeted Capital Expenditures” means, as of the date of any determination, the
capital expenditures approved pursuant to the then applicable Annual Plan that
are reasonably required to maintain the then current production level over the
long term of the Partnership Group’s oil and natural gas properties or to
maintain the then current operating capacity of the Partnership Group’s other
capital assets, including capital expenditures to bring nonproducing reserves
into production (such as drilling and completion costs, enhanced recovery costs
and other construction costs, costs to acquire reserves that replace the
reserves that the Partnership Group expects to produce in the future, well
plugging and abandonment costs and site restoration and similar costs).
“Business Day” means a day other than a Saturday, Sunday or other day on which
banks in the State of New York or Texas are required or authorized to close.
“Call Notice” is defined in Section 5.9(a).
“Capital Account” means the capital account maintained for a Partner pursuant to
Section 5.5. The “Capital Account” of a Partner in respect of any Partnership
Interest shall be the amount that such Capital Account would be if such
Partnership Interest were the only interest in the Partnership held by such
Partner from and after the date on which such Partnership Interest was first
issued.
“Capital Amount” means, as of any date of determination and with respect to each
Unit, an amount equal the sum of (x) the Initial Unit Price plus (y) the
aggregate amount of Capital Contributions made in respect of such Unit following
the date hereof and prior to such date of determination, as appropriately
adjusted for any distribution, subdivision or combination of Units.
“Capital Contribution” means any cash, cash equivalents or the Net Agreed Value
of Contributed Property that a Partner contributes to the Partnership or that is
contributed or deemed contributed to the Partnership on behalf of a Partner
(including, in the case of an underwritten primary offering of Units, the amount
of any underwriting discounts or commissions).
“Capital Contribution Event” is defined in Section 5.9(a).
“Capital Stock” of any Person means any and all shares, interests (including
partnership interests), rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
“Capital Transaction” means any transaction or series of transactions involving
the sale of any capital assets of the Partnership or any of its Subsidiaries
that is outside the ordinary course of business, whether structured as a sale of
assets, sale of Equity Interests, or otherwise.
“Carrying Value” means (a) with respect to a Contributed Property or an Adjusted
Property, the Agreed Value of such property reduced (but not below zero) by all
depreciation, amortization and cost recovery deductions charged to the Partners’
Capital Accounts in respect of such property, and (b) with respect to any other
Partnership property, the adjusted basis of such property for U.S. federal
income tax purposes, all as of the time of determination. The Carrying Value of
any property shall be adjusted from time to time in accordance with Section
5.5(d) and to reflect changes, additions or other adjustments to the Carrying
Value for dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.
“Certificate” is defined in Section 4.1(a).
“Certificate of Limited Partnership” means the Certificate of Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware as referenced in Section 7.3, as such Certificate of Limited
Partnership may be amended, supplemented or restated from time to time.
“Change of Control” means, with respect to EXCO, a Change of Control of EXCO,
with respect to Harbinger, a Change of Control of Harbinger, and with respect to
any other Person, the direct or indirect (a) sale of all or substantially all of
such Person’s assets in one transaction or series of related transactions, (b) a
merger, consolidation, refinancing or recapitalization as a result of which the
holders of such Person’s issued and outstanding Voting Stock immediately before
such transaction own or Control less than 50% of the Voting Stock of the
continuing or surviving entity immediately after such transaction and/or (c)
acquisition (in one or more transactions) by any Person or Persons acting
together or constituting a “group” under Section 13(d) of the Exchange Act
together with any Affiliates thereof (other than equity holders of such Person
as of the date hereof and their respective Affiliates) of beneficial ownership
(as defined in Rule 13d-3 under the Exchange Act) or Control, directly or
indirectly, of at least 50% of the total voting power of all classes of
securities entitled to vote generally in the election of such Person’s board of
directors or similar governing body.
“Change of Control of EXCO” means the occurrence of any of the following events:
(1)    any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) (including, for the avoidance of doubt, any “group”), is or
becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that for purposes of this clause (1) such person shall be
deemed to have “beneficial ownership” of all shares that any such person has the
right to acquire, whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of more than 50% of the total
voting power of the Voting Stock of EXCO;
(2)    individuals who on the Closing Date constituted the board of directors of
EXCO (together with any new directors whose election by such board of directors
of EXCO or whose nomination for election by the shareholders of EXCO was
approved by a vote of a majority of the directors of EXCO then still in office
who were either directors on the Closing Date or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of the board of directors of EXCO then in office;
(3)    the adoption of a plan relating to the liquidation or dissolution of
EXCO; or
(4)    the merger or consolidation of EXCO with or into another Person or the
merger of another Person with or into EXCO, or the sale of all or substantially
all the assets of EXCO (determined on a consolidated basis) to another Person
other than a transaction following which (i) in the case of a merger or
consolidation transaction, holders of securities that represented 100% of the
Voting Stock of EXCO immediately prior to such transaction (or other securities
into which such securities are converted as part of such merger or consolidation
transaction) own directly or indirectly at least a majority of the voting power
of the Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and (ii) in the case of a sale of
assets transaction, each Transferee becomes a Subsidiary of the Transferor of
such assets.
Notwithstanding the foregoing, a Change of Control of EXCO shall not occur
solely as a result of EXCO undergoing a management-led buyout of the public
share ownership of such party resulting in the conversion of EXCO to a
privately-held company, provided, that following such management-led buyout, (i)
Doug Miller is, and remains for a period of not less than 12 months (or, in the
case of a management-led buyout that is not sponsored by a financial buyer, 24
months), chief executive officer or executive chairman of the board of directors
of EXCO or the surviving company and (ii) EXCO or the surviving company shall
have the operational capability at all times during the ninety (90) days
following a Change of Control of EXCO to conduct activities as a reasonably
prudent operator, in a good and workmanlike manner, with due diligence and
dispatch in accordance with good oilfield practice.
“Change of Control of Harbinger” means the occurrence of any of the following
events:
(1)    (x) the failure of Harbinger Capital Partners Master Fund I, Ltd.,
Harbinger Capital Partners Special Situations Fund, L.P., Global Opportunities
Breakaway Ltd., Harbinger Holdings, LLC and/or Harbinger Capital Partners LLC
(collectively, “HCP”) or any of their affiliates or any other Person, investment
fund, managed account or special purpose entity which is directly or indirectly
controlled or managed by, or is under common control with, or controls, HCP
and/or each of its affiliates and/or subsidiaries, or any successor thereto, or
is otherwise controlled or managed, directly or indirectly, by Philip A. Falcone
(collectively, “HCP Holders”) to own 20% or greater of the outstanding Voting
Stock of Harbinger or any successor thereto, and (y) any “person” (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act) (including, for the
avoidance of doubt, any “group”) acquires an aggregate interest in Harbinger,
greater than the aggregate interest held by HCP Holders; or
(2)    the adoption of a plan relating to the liquidation or dissolution of
Harbinger.
“Claims” means any pending or threatened claims, investigations or inquiries by
any Governmental Authority or third party that may reasonably be expected to
result in any dispute, litigation or liability.
“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
Any reference herein to a specific section or sections of the Code shall be
deemed to include a reference to any corresponding provision of any successor
law.
“Commission” means the United States Securities and Exchange Commission.
“Common Unit” means a Partnership Interest representing a fractional part of the
Partnership Interests of all Limited Partners and having the rights and
obligations specified with respect to Common Units in this Agreement, or any
similar equity interests in the IPO Issuer issued in connection with the Initial
Public Offering which equity interests entitle the holder(s) thereof to
quarterly cash distributions of the IPO Issuer.
“Confidential Information” means information disclosed to a Partner or known by
a Partner as a consequence of or through his or its relationship with the
Partnership and its Subsidiaries (including information relating to the
customers, employees, business methods, public relations methods, organization,
procedures and techniques or finances of the Partnership and its Subsidiaries)
and including in the case of any EXCO Partner, any information disclosed to or
known by such EXCO Partner or any of its Affiliates as a consequence of or
through its or its Affiliates’ relationship with the Partnership or its
Subsidiaries (or any of their respective businesses or assets) prior to the
Closing Date. Notwithstanding the foregoing, information will not constitute
Confidential Information for the purpose of this Agreement if such information
is shown by a Partner to have been (a) in the possession of such Partner (or any
of its Affiliates) at the time of its disclosure or becoming known as a
consequence of or through his or its relationship with the Partnership and its
Subsidiaries as provided in the preceding sentence, independent of such
relationship, (b) in the public domain or otherwise generally known to the
industry (either prior to or after the furnishing of such information hereunder)
through no fault of such Partner (or any of its Affiliates) or (c) later
acquired by such Partner from another source not Affiliated with such Partner if
such source is not under an obligation to another party, including the
Partnership, to keep such information confidential.
“Contributed Property” means each property, in such form as may be permitted by
the Delaware Act, but excluding cash, contributed to the Partnership. Once the
Carrying Value of a Contributed Property is adjusted pursuant to Section 5.5(d),
such property shall no longer constitute a Contributed Property, but shall be
deemed an Adjusted Property.
“Contribution Agreement” means that Unit Purchase and Contribution Agreement,
dated as of November 5, 2012, by and among EXCO, EOC, the Operating Company and
HGI Energy, as the same may be amended, revised, supplemented or otherwise
modified from time to time.
“Control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through ownership of Voting Stock, by contract or otherwise.
“Curative Allocation” means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(ix).
“Default Interest Amount” is defined in Section 5.10(c).
“Default Interest Rate” means the lesser of (a) eight percent (8%) per annum and
(b) the maximum rate of interest permitted by applicable Law.
“Delaware Act” means the Delaware Revised Uniform Limited Partnership Act, 6 Del
C. Section 17-101, et seq., as amended, supplemented or restated from time to
time, and any successor to such statute.
“Delinquent Partner” is defined in Section 5.10(a).
“Departing General Partner” means a former General Partner from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or Section 11.2.
“Depletable Property” means an oil and gas property (as defined in Section 614
of the Code).
“Derivative Instruments” means options, rights, warrants, appreciation rights,
tracking, profit and phantom interests and other derivative instruments relating
to, convertible into or exchangeable for Partnership Interests.
“Dilution Percentage” means 11%.
“Distribution Period” means, with respect to any Quarter, the period beginning
on the first day of the Book Fiscal Year including such Quarter and ending on
the last day of such Quarter.
“Drag-Along Investor Group” means any Investor Group that is seeking to exercise
Drag-Along Rights in accordance with Section 4.9.
“Drag-Along Notice” is defined in Section 4.9(c).
“Drag-Along Right” is defined in Section 4.9(a).
“Drag-Along Sale” is defined in Section 4.9(a)(i).
“Drag-Along Transferee” is defined in Section 4.9(a).
“Economic Interest” means a Person’s right to share in the Net Income, Net Loss
or similar items of, and to receive distributions from, the Partnership, but
does not include any other rights of a Partner including the right to vote,
consent or otherwise participate in the management of the Partnership or, except
as specifically provided in this Agreement or required under the Delaware Act,
any right to information concerning the business and affairs of the Partnership.
“Economic Risk of Loss” has the meaning set forth in Treasury Regulation Section
1.752-2(a).
“EOC” means EXCO Operating Company, LP, a Delaware limited partnership.
“Equity Interests” means all shares, participations, capital stock, partnership
or limited liability company interests, units, participations or similar equity
interests issued by any Person, however designated.
“Event of Withdrawal” is defined in Section 11.1(a).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“EXCO” means EXCO Resources, Inc., a Texas corporation.
“EXCO Group” means the EXCO Partner and its Affiliates, other than the General
Partner, the Partnership and their respective Subsidiaries.
“EXCO Holding” is defined in the preamble.
“EXCO Partner” means EXCO Holding, together with its Permitted Transferees that
hold Limited Partner Interests.
“Fair Market Value” means with respect to any assets, the fair market value of
such assets on an arm’s length basis between a willing buyer and willing seller,
as agreed to by (i) each Investor Group, or (ii) if either the EXCO Group or
Harbinger Group no longer owns at least 20% of the limited liability company
membership interests in the General Partner, by the Board. If the Investor
Groups are unable to agree on such a determination of fair market value, or if
any Limited Partner or group of Limited Partners holding at least 20% of the
limited liability company membership interests in the General Partner objects to
such determination by the Board, each of the Investor Groups or the Board and
the objecting Limited Partner or group of Limited Partners, as applicable, will
use their commercially reasonable efforts to agree on the selection of one
Valuation Firm to complete, within 21 days of selection, a determination of such
fair market value. If the Investor Groups or the Board and the objecting Limited
Partner or group of Limited Partners, as applicable, are unable to agree on the
selection of one Valuation Firm, then each of the Investor Groups or the Board,
as applicable, will select one Valuation Firm to complete, within 21 days of
selection, a determination of fair market value, and such two valuations will be
delivered to such Investor Groups or the objecting Limited Partner or group of
Limited Partners, as applicable, and the Partnership at the same time. If the
higher of the resulting valuations as determined by the Valuation Firms in the
preceding sentence is not more than 20% greater than the lower of such resulting
valuations, then such fair market value shall equal the average of the two
valuations, and if such valuations are more than 20% apart as determined by the
preceding sentence, then a third Valuation Firm will be selected by the first
two Valuation Firms to come up with its own valuation on the basis described
above (within a corresponding 21-day deadline), and such fair market value will
be the average of the two of the three valuations that are the closest in value
(on a dollar basis). The determination of “Fair Market Value” in accordance with
this definition shall be final and binding on the Limited Partners.
“First Refusal Interests” is defined in Section 4.6(b).
“First Refusal Notice” is defined in Section 4.6(c).
“First Refusal Notice Deadline” is defined in Section 4.6(c).
“First Refusal Period” is defined in Section 4.6(b).
“Foreclosure” is defined in Section 4.5(c).
“GAAP” means the United States generally accepted accounting principles.
“Gas Marketing Agreement” means that certain Marketing Agreement, dated as of
the Closing Date, by and between EOC and the Operating Company.
“General Partner” means EXCO/HGI GP, LLC, a Delaware limited liability company,
and its successors and permitted assigns that are admitted to the Partnership as
general partner of the Partnership, in their capacities as general partner of
the Partnership (except as the context otherwise requires).
“General Partner Interest” means the management and ownership interest of the
General Partner in the Partnership (in its capacity as a general partner and
without reference to any Limited Partner Interest held by it), which is
evidenced in part by Notional General Partner Units and includes any and all
rights, powers and benefits to which the General Partner is entitled as provided
in this Agreement, together with all obligations of the General Partner to
comply with the terms and provisions of this Agreement.
“Governmental Authority” means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency or
instrumentality or political subdivision thereof or any entity or officer
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States of America, the United States of
America or a foreign entity or government.
“GP LLC Agreement” means that certain Amended and Restated Limited Liability
Company Agreement of the General Partner, dated as of the Closing Date, by and
between EXCO Holding and HGI Energy, as amended from time to time.
“Gross Liability Value” means, with respect to any Liability of the Partnership
described in Treasury Regulation Section 1.752-7(b)(3)(i), the amount of cash
that a willing assignor would pay to a willing assignee to assume such Liability
in an arm’s-length transaction.
“Group” has the meaning set forth in Section 13(d)(3) of the Exchange Act.
“Group Member” means a member of the Partnership Group.
“Group Member Agreement” means the partnership agreement of any Group Member,
other than the Partnership, that is a limited or general partnership, the
limited liability company agreement of any Group Member that is a limited
liability company, the certificate of incorporation and bylaws or similar
organizational documents of any Group Member that is a corporation, the joint
venture agreement or similar governing document of any Group Member that is a
joint venture and the governing or organizational or similar documents of any
other Group Member that is a Person other than a limited or general partnership,
limited liability company, corporation or joint venture, as such may be amended,
supplemented or restated from time to time.
“Harbinger” means Harbinger Group Inc., a Delaware corporation.
“Harbinger Director” means any director designated to the Board by the Harbinger
Group pursuant to the GP LLC Agreement.
“Harbinger Group” means the Harbinger Partner and its Affiliates, other than the
General Partner, the Partnership and their respective Subsidiaries.
“Harbinger Partner” means HGI Energy, together with its Permitted Transferees
that hold Limited Partner Interests.
“HGI Energy” is defined in the preamble.
“Hydrocarbons” means oil and gas and other hydrocarbons produced or processed in
association therewith (whether or not any such item is in liquid or gaseous
form), or any combination thereof, and any minerals produced in association
therewith.
“Incapacity” means with respect to any Person, the bankruptcy, liquidation,
dissolution or termination of such Person.
“Incentive Distribution Right” means a Limited Partner Interest having the
rights and obligations specified with respect to “Incentive Distribution Rights”
in this Agreement, or any similar equity interest in the IPO Issuer issued in
connection with the Initial Public Offering, which equity interest entitles the
holder(s) thereof to an increasing percentage of cash distributions of the IPO
Issuer as per unit distributions increase.
“Incentive Distributions” means any amount of cash distributed to the holders of
the Incentive Distribution Rights pursuant to Section 6.3(a).
“Indemnitee” means (a) any General Partner, (b) any Departing General Partner,
(c) any Person who is or was an Affiliate of the General Partner or any
Departing General Partner, (d) any Person who is or was a manager, managing
member, general partner, director, officer, employee, agent, fiduciary or
trustee of any Group Member, a General Partner, any Departing General Partner or
any of their respective Affiliates, (e) any Person who is or was serving at the
request of a General Partner, any Departing General Partner or any of their
respective Affiliates as an officer, director, manager, managing member, general
partner, employee, agent, fiduciary or trustee of another Person owing a
fiduciary or similar duty to any Group Member; provided that a Person shall not
be an Indemnitee by reason of providing, on a fee-for-services basis, trustee,
fiduciary or custodial services, (f) any Person who Controls a General Partner
or Departing General Partner and (g) any Person the General Partner designates
as an “Indemnitee” for purposes of this Agreement because such Person’s service,
status or relationship exposes such Person to potential Claims, demands,
actions, suits or proceedings relating to the Partnership Group’s business and
affairs.
“Indemnitee-Related Entities” is defined in Section 7.13(a).
“Initial Limited Partners” means the Investors, upon being admitted to the
Partnership in accordance with Section 10.1 and the General Partner (solely with
respect to the Incentive Distribution Rights issued to the General Partner
pursuant to Section 5.2(a)).
“Initial Public Offering” means any underwritten initial public offering by the
IPO Issuer of Common Units pursuant to an effective registration statement under
the Securities Act and pursuant to which the Common Units will be listed on a
National Securities Exchange and the aggregate net proceeds to the IPO Issuer
(after deducting underwriting discounts and commissions) is at least 20% of the
total then-outstanding Equity Interests in the Partnership or any successor
hereto; provided, that an Initial Public Offering shall not include an offering
made in connection with a business acquisition or combination pursuant to a
registration statement on Form S-4 or any similar form, or an employee benefit
plan pursuant to a registration statement on Form S-8 or any similar form.
“Initial Unit Price” means with respect to the Common Units, the Specified
Amount per Unit, as appropriately adjusted for any distribution, subdivision or
combination of Common Units.
“Initiating Holder” is defined in Section 4.7(a).
“Investor Group” means, as the context requires, either the EXCO Group or the
Harbinger Group, and “Investor Groups” means both the EXCO Group and the
Harbinger Group.
“Investor” means, as the context requires, either the EXCO Partner or the
Harbinger Partner, and “Investors” means both the EXCO Partner and the Harbinger
Partner.
“IPO Issuer” means (i) the Partnership or (ii) an Affiliate of the Partnership
or a Subsidiary of the Partnership that will be a successor to the Partnership
and the issuer in an Initial Public Offering.
“Laws” means all federal, state and local statutes, laws (including common law
and the Delaware Act), rules, regulations, codes, orders, ordinances, licenses,
writs, injunctions, judgments, awards (including awards of any arbitrator) and
decrees and other legally enforceable requirements enacted, adopted, issued or
promulgated by any Governmental Authority.
“Lender” is defined in Section 4.5(c)
“Liability” means any liability or obligation of any nature, whether accrued,
contingent or otherwise.
“Limited Partner” means, unless the context otherwise requires, each Initial
Limited Partner, each additional Person that becomes a Limited Partner pursuant
to the terms of this Agreement and any Departing General Partner upon the change
of its status from General Partner to Limited Partner pursuant to Section 11.3,
in each case, in such Person’s capacity as a limited partner of the Partnership;
provided, however, that when the term “Limited Partner” is used herein in the
context of any vote or other approval, including Article XIII and Article XIV,
such term shall not, solely for such purpose, include any holder of Incentive
Distribution Rights (solely with respect to its Incentive Distribution Rights
and not with respect to any other Limited Partner Interest held by such Person)
except as may be required by Law.
“Limited Partner Interest” means the ownership interest of a Limited Partner in
the Partnership, which may be evidenced by Common Units, Incentive Distribution
Rights or other Partnership Interests or a combination thereof or interest
therein, and includes any and all benefits to which such Limited Partner is
entitled as provided in this Agreement, together with all obligations of such
Limited Partner to comply with the terms and provisions of this Agreement.
“Liquidation Date” means (a) in the case of an event giving rise to the
dissolution of the Partnership of the type described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which the holders of Outstanding Units have the right to elect to
continue the business of the Partnership has expired without such an election
being made, and (b) in the case of any other event giving rise to the
dissolution of the Partnership, the date on which such event occurs.
“Liquidator” means one or more Persons selected pursuant to Section 12.3 to
perform the functions described in Section 12.4 as liquidating trustee of the
Partnership within the meaning of the Delaware Act.
“Loss” is defined in Section 7.7.
“Make-Up Contribution” is defined in Section 5.10(c).
“Merger Agreement” is defined in Section 14.1.
“National Securities Exchange” means an exchange registered with the Commission
under Section 6(a) of the Exchange Act (or any successor to such section).
“NDM Amount” is defined in Section 5.10(b).
“NDM Capital Account” is defined in Section 5.10(b)(ii).
“NDM Interest” is defined in Section 5.10(b)(ii).
“Net Agreed Value” means, (a) in the case of any Contributed Property, the
Agreed Value of such property reduced by any Liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed and (b) in the case of any property distributed to a Partner by the
Partnership, the Partnership’s Carrying Value of such property (as adjusted
pursuant to Section 5.5(d)(ii)) at the time such property is distributed,
reduced by any Liabilities either assumed by such Partner upon such distribution
or to which such property is subject at the time of distribution.
“Net Cash Proceeds” from a Capital Transaction means cash payments received
therefrom, including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or otherwise and cash
proceeds from the sale or other disposition of any non-cash consideration
received as consideration, but only as and when received as cash, but excluding
any other consideration received in the form of assumption by the acquiring
Person of indebtedness or other obligations relating to such properties, in each
case net of (without duplication):
(a) all legal, title and recording tax expenses, commissions and other fees and
expenses incurred, including without limitation, all attorneys’ fees,
accountants’ fees, advisors’ or other consultants’ fees and other fees actually
incurred in connection therewith, and all federal, state, provincial, foreign
and local taxes required to be accrued as a liability under GAAP, as a
consequence of such Capital Transaction;
(b) all payments made on any indebtedness which is secured by any assets subject
to such Capital Transaction, in accordance with the terms of any lien upon or
other security agreement of any kind with respect to such assets, or which must
by its terms, or in order to obtain a necessary consent to such Capital
Transaction, or by applicable Law, be repaid out of the proceeds from such
Capital Transaction;
(c) all distributions and other payments required to be made to minority
interest holders in Subsidiaries of the Partnership as a result of such Capital
Transaction;
(d) the deduction of appropriate amounts provided by the seller as a reserve, in
accordance with GAAP, against any liabilities associated with the property or
other assets disposed in such Capital Transaction and retained by the
Partnership or any of its Subsidiaries after such Capital Transaction; and
(e) any portion of the purchase price from an Capital Transaction placed in
escrow, whether as a reserve for adjustment of the purchase price, for
satisfaction of indemnities in respect of such Capital Transaction or otherwise
in connection with that Capital Transaction; 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 Partnership or any of its
Subsidiaries.
“Net Income” and “Net Loss” mean, for each Tax Fiscal Year or other relevant
period, an amount equal to the Partnership’s taxable income or loss for such Tax
Fiscal Year or relevant period, determined in accordance with Code Section
703(a) (for this purpose, all items of income, gain, loss, or deduction required
to be stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a)    Income of the Partnership that is exempt from federal income tax and not
otherwise taken into account in computing Net Income or Net Loss pursuant to
this definition shall be added to such taxable income or loss;
(b)    Any expenditures of the Partnership described in Code Section
705(a)(2)(B), or treated as Code Section 705(a)(2)(B) expenditures pursuant to
Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Net Income or Net Loss pursuant to this definition shall be
subtracted from such taxable income or loss;
(c)    If the Gross Asset Value of any Partnership asset is adjusted pursuant to
clause (b) or (c) of the definition of Gross Asset Value, the amount of such
adjustment shall be taken into account in the taxable year of such adjustment as
gain (if the adjustment increases the Gross Asset Value of the asset) or loss
(if the adjustment decreases the Gross Asset Value of the asset) from the
disposition of such asset for purposes of computing Net Income or Net Loss;
(d)    Gain or loss resulting from any disposition of Partnership assets (other
than a Depletable Property) with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of the Partnership assets disposed of, notwithstanding that the adjusted
tax basis of such Partnership assets differs from its Gross Asset Value;
(e)    Gain or loss resulting from any disposition of a Depletable Property with
respect to which gain or loss is recognized for federal income tax purposes
shall be treated as being equal to the corresponding Simulated Gain or Simulated
Loss;
(f)    In lieu of the deduction for depreciation, cost recovery, or amortization
taken into account in computing such taxable income or loss, there shall be
taken into account Depreciation for such Tax Fiscal Year;
(g)    To the extent an adjustment to the adjusted tax basis of any asset
included in Partnership assets pursuant to Code Section 734(b) or Section 743(b)
is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner’s Units, the amount of such adjustment will be
treated as an item of gain (if the adjustment includes the basis of the asset)
or loss (if the adjustment decreases the basis of the asset) from the
disposition of such asset and shall be taken into account for purposes of
computing Net Income and Net Loss; and
(h)    Notwithstanding any other provision of this definition, any items of
Partnership income, gain, loss or deduction that are specially allocated
pursuant to Section 6.1(d) shall not be taken into account in computing Net
Income or Net Loss.
The amount of the items of Partnership income, gain, loss or deduction available
to be specially allocated pursuant to Section 6.1(d) shall be determined
pursuant to rules analogous to those set forth in this definition.
“Net Termination Gain” means, for any taxable year, the sum, if positive, of all
items of income, gain, loss or deduction recognized by the Partnership (i) after
the Liquidation Date and (ii) upon the sale, exchange or other disposition of
all or substantially all of the assets of the Partnership in a single
transaction or a series of related transactions. The items included in the
determination of Net Termination Gain shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially
allocated under Section 6.1(d).
“Net Termination Loss” means, for any taxable year, the sum, if negative, of all
items of income, gain, loss or deduction recognized by the Partnership (i) after
the Liquidation Date and (ii) upon the sale, exchange or other disposition of
all or substantially all of the assets of the Partnership in a single
transaction or a series of related transactions. The items included in the
determination of Net Termination Gain shall be determined in accordance with
Section 5.5(b) and shall not include any items of income, gain or loss specially
allocated under Section 6.1(d).
“New Interests” means Additional Units and Derivative Instruments issued or to
be issued by the Partnership after the Closing Date; provided, that the term
“New Interests” shall not include Additional Units or Derivative Instruments (to
the extent approved by the General Partner, as applicable) issued or to be
issued (i) in connection with any merger, consolidation, acquisition or any
similar transaction; (ii) in connection with any reorganization or
recapitalization, in each case, in which such Additional Units or Derivative
Instruments are issued for or in respect of previously outstanding Units and the
Percentage Interests of holders of such Additional Units issued upon completion
of the transaction is the same as the Percentage Interests of such holders of
previously outstanding Units prior to the completion of the transaction; (iii)
to the selling Persons in connection with the acquisition by the Partnership of
a Person or other assets; provided, that such Units or other equity securities
are issued as consideration for such acquisition (including issuances to
management of such Person in connection with such acquisition); (iv) in any
underwritten public offering registered under the Securities Act pursuant to an
effective registration statement; (v) as compensation to employees, officers or
consultants of the General Partner, the Partnership or any Subsidiary; or (vi)
to any unaffiliated debt holders of the Partnership in connection with financing
transactions in which the Units or other equity securities issued do not exceed
five percent (5%) of the aggregate Units held by all Partners; provided, that
any such transaction described in the foregoing clauses (i) through (vi) is
approved in accordance with this Agreement.
“New Interests Notice” is defined in Section 4.8(c).
“Non-Subscribing Member” is defined in Section 4.8(e).
“Non-Transferable Provisions” is defined in Section 4.5(e).
“Nonrecourse Built-in Gain” means with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Section 6.2(a) if such properties were disposed of in a
taxable transaction in full satisfaction of such liabilities and for no other
consideration.
“Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the
Code) that, in accordance with the principles of Treasury Regulation Section
1.704-2(b), are attributable to a Nonrecourse Liability.
“Nonrecourse Liability” has the meaning set forth in Treasury Regulation Section
1.752-1(a)(2).
“Notional General Partner Unit” means a notional unit used solely to calculate
the General Partner’s Percentage Interest. Notional General Partner Units shall
not constitute “Units” for any other purpose of this Agreement. There shall
initially be 1,000,000 Notional General Partner Units (resulting in the General
Partner’s Percentage Interest being 2%). If the General Partner makes additional
Capital Contributions pursuant to Section 5.2(b) to maintain its Percentage
Interest, the number of Notional General Partner Units shall be increased
proportionally to reflect the maintenance of such Percentage Interest.
“Oil and Gas Properties” means all or any of the following:
(a)    oil, gas and/or mineral leases, subleases, fee interests, fee mineral
interests, mineral servitudes, royalties, overriding royalties, production
payments, net profits interests, carried interests, reversionary interests and
other interests in oil, gas and/or minerals in place (collectively, “Oil and Gas
Interests”), the leasehold estates created by Oil and Gas Interests, lands
covered by Oil and Gas Interests (“Lands”), and interests in any pooled acreage,
communitized acreage or units arising on account of Oil and Gas Interests or
Lands pooled, communitized or unitized into such units (“O&G Units”);
(b)    oil and gas wells and injection wells located on Oil and Gas Interests,
Lands or Units (“Wells”), and all Hydrocarbons produced therefrom or allocated
thereto (Oil and Gas Interests, Lands, O&G Units and Wells being collectively
referred to hereinafter as “Properties”);
(c)    equipment, machinery, fixtures, and other real, immovable, personal,
movable and mixed property primarily used or held for use in connection with
Properties, including saltwater disposal wells, water sourcing and disposal
facilities and systems, well equipment, casing, rods, tanks, boilers, buildings,
tubing, pumps, motors, fixtures, machinery, compression equipment, flow lines,
and separation facilities, structures, materials, and other items used or held
for use in the operation thereof and located upstream of the outlet flange of
the relevant custody transfer meter (or, in the case of Hydrocarbon liquids,
upstream of the outlet flange in the tanks);
(d)    surface fee interests, surface leases, easements, rights-of-way, permits,
licenses, servitudes, and other surface rights relating to the Properties;
(e)    water withdrawal and disposal and other permits, licenses, orders,
approvals, variances, waivers, franchises, rights and other authorizations
issued by any Governmental Authority relating to the Properties;
(f)    contracts primarily relating to any of the other items identified in this
definition;
(g)    files, records, maps, information, and data, whether written or
electronically stored, relating to any of the other items identified in this
definition, including: (i) land and title records (including abstracts of title,
title opinions, and title curative documents); (ii) contract files; (iii)
correspondence; (iv) operations, environmental, production, and accounting
records and (v) production, facility and well records and data (including logs
and cores);
(h)    geophysical and other seismic and related technical data and information
relating to the Properties; and/or
(i)    rights, Claims and causes of action to the extent, and only to the
extent, that such rights, Claims or causes of action are associated with other
items identified in this definition.
“Operating Agreements” means the EXCO Parent Operating Agreement, dated as of
the Closing Date, by and between EXCO and the Operating Company, and the EOC
Operating Agreement, dated as of the Closing Date, between EOC and the Operating
Company.
“Operating Company” means EXCO/HGI JV Assets, LLC, a Delaware limited liability
company.
“Opinion of Counsel” means a written opinion of counsel (who may be regular
counsel to the Partnership or the General Partner or any of its Affiliates)
acceptable to the General Partner.
“Organizational Limited Partner” means EXCO Holding, in its capacity as the
organizational limited partner of the Partnership pursuant to this Agreement.
“Original Partnership Agreement” is defined in the recitals.
“Other Indemnification Agreement” means one or more certificates or articles of
incorporation, by-laws, limited liability company operating agreement, limited
partnership agreement and any other organizational document, and insurance
policies maintained by the General Partner, director of the Board or Affiliate
thereof providing for, among other things, indemnification of and advancement of
expenses for any Indemnitee for, among other things, the same matters that are
subject to indemnification and advancement of expenses under this Agreement.
“Outstanding” means, with respect to Partnership Interests, all Partnership
Interests that are issued by the Partnership and reflected as outstanding on the
Partnership’s books and records as of the date of determination.
“Participating Holder” is defined in Section 4.7(i)(i).
“Partner Nonrecourse Debt” has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).
“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Treasury
Regulation Section 1.704-2(i)(2).
“Partner Nonrecourse Deductions” means any and all items of loss, deduction or
expenditure (including any expenditure described in Section 705(a)(2)(B) of the
Code) that, in accordance with the principles of Treasury Regulation Section
1.704-2(i), are attributable to a Partner Nonrecourse Debt.
“Partners” means the General Partner and the Limited Partners.
“Partnership” is defined in the preamble.
“Partnership Appropriate Oil and Gas Properties” means any of the following: (a)
the interests of BG in any of the Oil and Gas Properties located in East Texas
and North Louisiana that were contributed to the Partnership or its Subsidiaries
pursuant to the Contribution Agreement (to the extent covering the same depths
and underlying assets) and/or (b) Oil and Gas Properties meeting all of the
following criteria: (i) such Oil and Gas Properties are located onshore in the
United States of America, (ii) the proved developed reserves of such Oil and Gas
Properties comprise at least 65% of proved reserves and have a projected decline
rate of 12.5% or less on an annualized basis in the three calendar years
post-acquisition, (iii) undeveloped acreage contributes less than 30% of the
value of such Oil and Gas Properties, (iv) substantially all of the future
development opportunities on such Oil and Gas Properties could economically
occur through drilling vertical wells, (v) the cash flow from such Oil and Gas
Properties in the aggregate are reasonably estimated to be sufficient to cover
the cost of future development and (vi) such Oil and Gas Properties are valued
at an amount equal to or less than the aggregate amount of the available
borrowing capacity under the any then-existing credit facility (pro forma for
the acquisition), cash on hand and other sources of secured debt financing
reasonably available to the Partnership or its Subsidiaries.
“Partnership Group” means, collectively, the Partnership and its Subsidiaries.
“Partnership Interest” means any class or series of Equity Interest in the
Partnership, which shall include any General Partner Interest and Limited
Partner Interests, but shall exclude Derivative Instruments.
“Partnership Minimum Gain” means that amount determined in accordance with the
principles of Treasury Regulation Sections 1.704-2(b)(2) and 1.704-2(d).
“Percentage Interest” means as of the date of determination (a) as to the
General Partner with respect to Notional General Partner Units and as to any
Unitholders with respect to Units, the product obtained by multiplying (i) 100%
less the percentage applicable to clause (b) below by (ii) the quotient obtained
by dividing (A) the number of Notional General Partner Units held by the General
Partner or the number of Units held by such Unitholder, as the case may be, by
(B) the total number of all Outstanding Units as of such date of determination
and all Notional General Partner Units, and (b) as to the holders of additional
Partnership Interests issued by the Partnership pursuant to Section 5.6, the
percentage of each Partnership Interest as determined by the General Partner as
a part of such issuance. The Percentage Interest with respect to an Incentive
Distribution Right shall at all times be zero.
“Permitted Transfer” means Affiliate Transfers.
“Permitted Transferee” means any Person that has received Partnership Interests
pursuant to a Permitted Transfer.
“Person” means an individual or a corporation, partnership, limited liability
company, trust, estate, unincorporated organization, association, “group” (as
such term is defined in Section 13(d) of the Exchange Act) or other entity.
“Pledged Interests” is defined in Section 4.5(c)
“PR Holder” is defined in Section 4.8(b).
“Preemptive Rights” is defined in Section 4.8(b).
“Preference Amount” means, as of any date of determination and with respect to
each Unit, the then-applicable Capital Amount multiplied by 110%.
“Preferred Stock” as applied to the Capital Stock of any Person, means Capital
Stock of any class or classes (however designated) which is preferred as to the
payment of dividends or distributions, or as to the distribution of assets upon
any voluntary or involuntary liquidation or dissolution of such Person, over
shares of Capital Stock of any other class of such Person.
“Proceeding” is defined in Section 7.7.
“Proposed Transferee” is defined in Section 4.6(b).
“pro rata” means (a) when used with respect to Units or any class thereof,
apportioned equally among all designated Units in accordance with their relative
Percentage Interests, (b) when used with respect to Partners or Record Holders,
apportioned among all Partners or Record Holders in accordance with their
relative Percentage Interests, and (c) when used with respect to holders of
Incentive Distribution Rights, apportioned equally among all holders of such
Incentive Distribution Rights in accordance with the relative number or
percentage of such Incentive Distribution Rights held by each such holder.
“Quarter” means, unless the context requires otherwise, a fiscal quarter of the
Partnership, or, with respect to the fiscal quarter of the Partnership in which
the Closing Date occurs, the portion of such fiscal quarter after the Closing
Date.
“Qualified Public Offering” means the completion of an underwritten public
offering of Equity Interests in the Partnership or any successor thereto
pursuant to an effective registration statement filed by the Partnership or any
successor thereto with the Commission (other than (a) a registration relating
solely to an employee benefit plan or employee stock plan, a dividend
reinvestment plan, or a merger or a consolidation, (b) a registration incidental
to an issuance of securities under Rule 144A of the Securities Act, (c) a
registration on Form S-4 under the Securities Act or any successor form under
the Securities Act, or (d) a registration on Form S-8 under the Securities Act
or any successor form under the Securities Act), pursuant to which the aggregate
amount of such Equity Interests for which a registration filing is made
(together with the aggregate amount of such Equity Interests registered from any
prior such offerings) is at least 35% of the total then-outstanding Equity
Interests in the Partnership or any successor thereto, as applicable.
“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.
“Record Date” means the date established by the General Partner or otherwise in
accordance with this Agreement for determining (a) the identity of the Record
Holders entitled to notice of, or to vote at, any meeting of Limited Partners or
entitled to vote by ballot or give approval of Partnership action in writing
without a meeting or entitled to exercise rights in respect of any lawful action
of Limited Partners or (b) the identity of Record Holders entitled to receive
any report or distribution or to participate in any offer.
“Record Holder” is defined in Section 4.2.
“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the date hereof, by and among the Partnership, HGI Energy and EXCO
Holding.
“Regulations” means the proposed, temporary and final Treasury Regulations
promulgated under the Code, as such regulations may be amended from time to time
(including corresponding provisions of succeeding Treasury Regulations).
“Remaining New Interests” is defined in Section 4.8(e).
“Required Allocations” means any allocation of an item of income, gain, loss or
deduction pursuant to Section 6.1(d)(i), Section 6.1(d)(ii), Section
6.1(d)(iii), Section 6.1(d)(iv), Section 6.1(d)(v), Section 6.1(d)(vi) or
Section 6.1(d)(viii).
“Required Contribution” is defined in Section 5.9(a).
“ROFR Holders” is defined in Section 4.6(b).
“Sale Price” is defined in Section 4.6(b).
“Secretary of State” is defined in the recitals.
“Securities Act” means the Securities Act of 1933, as amended.
“Seller’s Notice” is defined in Section 4.6(b).
“Shared Assets Agreement” means, collectively, (a) that certain Shared
Assets/Use Agreement, dated as of even date herewith, by and among the Operating
Company, EXCO and EOC, as amended, and (b) that certain Shared Assets Agreement,
dated as of even date herewith, by and among the Operating Company, EOC and BG
US Production Company, LLC, a Delaware limited liability company, as amended.
“Significant Transaction” means any Capital Transaction or series of Capital
Transactions (whether related or unrelated) resulting in aggregate net proceeds
paid to the Partnership Group exceeding fifty million dollars ($50,000,000.00).
“Simulated Basis” means the Carrying Value of any Depletable Property.
“Simulated Depletion” means, with respect to each separate Depletable Property,
a depletion allowance computed in accordance with federal income tax principles
(as if the Simulated Basis of the property was its adjusted tax basis) and in
the manner specified in Regulation Section 1.704-1(b)(4)(iv)(k)(2). For purposes
of computing Simulated Depletion with respect to any property, the Simulated
Basis of such property shall be deemed to be the Carrying Value of such
property, and in no event shall such allowance for Simulated Depletion, in the
aggregate, exceed such Simulated Basis.
“Simulated Gain” means the excess, if any, of the amount realized from the sale
or other disposition of a Depletable Property over the Carrying Value of such
property.
“Simulated Loss” means the excess, if any, of the Carrying Value of an oil and
gas property over the amount realized from the sale or other disposition of such
property.
“Specified Amount” means the quotient of the Cash Contribution (as defined in
the Contribution Agreement) divided by the Investor Issued Units (as defined in
the Contribution Agreement).
“Subscribing Member” is defined in Section 4.8(e).
“Subsidiary” means, with respect to any Person at any date, any other Person of
which the parent, directly or indirectly, owns Equity Interests that (a)
represent more than 50% of the total number of outstanding common or other
residual Equity Interests (however denominated) of such Person, (b) represent
more than 50% of the total voting power of all outstanding Equity Interests of
such Person which are entitled to vote in the election of directors, managers or
other Persons performing similar functions for and on behalf of such Person, (c)
are entitled to more than 50% of the dividends paid and other distributions made
by such Person prior to liquidation or (d) are entitled to more than 50% of the
assets of such Person or proceeds from the sale thereof upon liquidation.
“Surviving Business Entity” is defined in Section 14.2(b)(ii).
“Tag-Along Notice” is defined in Section 4.7(a).
“Tag-Along Notice Period” is defined in Section 4.7(c).
“Tag-Along Response Notice” is defined in Section 4.7(c).
“Tag-Along Right” is defined in Section 4.7(c).
“Tag-Along Sale” is defined in Section 4.7(a).
“Tagging Holder” is defined in Section 4.7(a).
“Tax Fiscal Year” is defined in Section 8.2.
“Tax Matter” is defined in Section 9.3.
“Threshold Amount” means $1.00 per Unit per Book Fiscal Year (or for the period
commencing on the date hereof and ending on September 30, 2013, it means the
product of such amount multiplied by a fraction of which the numerator is the
number of days in such period and the denominator is the total number of days in
such Book Fiscal Year), subject to adjustment in accordance with Section 6.4.
“Threshold Base Amount” means, as of any date of determination and with respect
to each Unit, the excess, if any, of (x) the Capital Amount over (y) the
aggregate amount (or the Net Agreed Value of any distribution in kind) of
distributions of proceeds (as identified by the Board) from a Significant
Transaction made pursuant to Section 6.3(b) in respect of a Unit following the
date hereof and prior to such date of determination, as adjusted for any
distributions, subdivision or combination of Units.
“Transfer” means any direct or indirect transfer, sale, assignment, exchange,
gift, conveyance or other disposition, and any direct (but, for the avoidance of
doubt, excluding any indirect) pledge or grant of a security interest, in each
case, whether voluntary, by operation of law or otherwise of all or any portion
of a Partner’s Partnership Interest (including through a direct or indirect
transfer, sale, assignment, exchange, gift, conveyance or other disposition, but
excluding any indirect pledge of or grant of a security interest, in beneficial
ownership of Equity Interests or of Control of any Person which owns or Controls
a Partner’s Partnership Interest, or another Person in any chain of ownership of
Equity Interests or chain of Control of such Person). Any reference to a
“Transfer” by a Partner of its Partnership Interest will include any direct or
indirect transfer, sale, assignment, exchange, gift, conveyance or other
disposition of beneficial ownership of Equity Interests or of Control of such
Partner or of another Person in any chain of ownership of Equity Interests or
chain of Control of such Partner, including through direct or indirect transfer,
sale, assignment, exchange, gift, conveyance or other disposition of beneficial
ownership of Equity Interests or of Control of one or more other Persons
directly or indirectly Controlling or beneficially owning any Equity Interests
in such Partner; provided, that neither (i) a transfer of securities, or a
Change of Control, of the ultimate parent entity of a Partner nor (ii) the
pledge or grant of a security interest in one or more other Persons directly or
indirectly Controlling such Partner (as opposed to the direct pledge of or grant
of a security interest in such Partner’s Partnership Interests) shall constitute
a “Transfer” of a Partner’s Partnership Interest. For the avoidance of doubt,
the parties acknowledge that Harbinger Group Inc. is the ultimate parent entity
of HGI Energy for purposes of the definition of “Transfer.”
“Transfer Agent” means such bank, trust company or other Person (including the
General Partner or one of its Affiliates) as may be appointed from time to time
by the Partnership to act as registrar and transfer agent for any class of
Partnership Interests; provided, that if no Transfer Agent is specifically
designated for any class of Partnership Interests, the General Partner shall act
in such capacity.
“Transferee” means a Person that acquires all or any portion of a Partner’s
Partnership Interest as a result of a Transfer.
“Transferor” means a Person that Transfers all or any portion of such Person’s
Partnership Interest.
“Transferring Partner” is defined in Section 4.6(a).
“Unilateral Capital Contribution Event” is defined in Section 5.9(b).
“Unit” means a Partnership Interest that is designated as a “Unit” and shall
include the Common Units, but shall not include the Notional General Partner
Units (or the General Partner Interest represented thereby) or the Incentive
Distribution Rights.
“Unit Majority” means at least a majority of the Outstanding Common Units.
“Unitholders” means the holders of Units.
“Unrealized Gain” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the Fair Market Value of
such property as of such date (as determined under Section 5.5(d)) over (b) the
Carrying Value of such property as of such date (prior to any adjustment to be
made pursuant to Section 5.5(d) as of such date).
“Unrealized Loss” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (a) the Carrying Value of such
property as of such date (prior to any adjustment to be made pursuant to Section
5.5(d) as of such date) over (b) the Fair Market Value of such property as of
such date (as determined under Section 5.5(d)).
“Unrecovered Preference Amount” means, as of any date of determination and with
respect to each Unit, the excess, if any, of (x) the Preference Amount over (y)
the aggregate amount (or the Net Agreed Value of any distribution in kind) of
all distributions made in respect of a Unit following the date hereof and prior
to such date of determination, as appropriately adjusted for any distribution,
subdivision or combination of Units.
“Unrestricted Person” means (a) each Indemnitee, (b) each Partner, (c) each
Person who is or was a member, partner, director, officer, employee or agent of
any Group Member, a General Partner or any Departing General Partner or any
Affiliate of any Group Member, a General Partner or any Departing General
Partner and (d) any Person the General Partner designates as an “Unrestricted
Person” for purposes of this Agreement.
“Valuation Firm” means a nationally recognized independent investment banking or
valuation firm with expertise in the oil and gas sector.
“Vernon Gathering” means Vernon Gathering, LLC, a Delaware limited liability
company.
“Voting Stock” of a Person means all classes of Capital Stock of such Person
then outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.
ARTICLE IV    

ORGANIZATION
Section 4.1    Formation. The General Partner and the Organizational Limited
Partner have previously formed the Partnership as a limited partnership pursuant
to the provisions of the Delaware Act. This amendment and restatement shall
become effective on the date of this Agreement. Except as expressly provided to
the contrary in this Agreement, the rights, duties (including fiduciary duties),
liabilities and obligations of the Partners and the administration, dissolution
and termination of the Partnership shall be governed by the Delaware Act.
Section 4.2    Name. The name of the Partnership shall be “EXCO/HGI Production
Partners, LP”. The Partnership’s business may be conducted under any other name
or names as determined by the General Partner, including the name of the General
Partner. The words “Limited Partnership,” the letters “LP,” “L.P.” or “Ltd.” or
similar words or letters shall be included in the Partnership’s name where
necessary for the purpose of complying with the laws of any jurisdiction that so
requires. The General Partner may change the name of the Partnership at any time
and from time to time and shall notify the Limited Partners of such change in
the next regular communication to the Limited Partners.
Section 4.3    Registered Office; Registered Agent; Principal Office; Other
Offices. Unless and until changed by the General Partner, the registered office
of the Partnership in the State of Delaware shall be located at that location
reflected in the Certificate of Limited Partnership, and the registered agent
for service of process on the Partnership in the State of Delaware at such
registered office shall be that Person reflected in the Certificate of Limited
Partnership. The principal office of the Partnership shall be located at 12377
Merit Drive, Suite 1700, Dallas, Texas 75251, or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner determines to be necessary or
appropriate. The address of the General Partner shall be 12377 Merit Drive,
Suite 1700, Dallas, Texas 75251, or such other place as the General Partner may
from time to time designate by notice to the Limited Partners.
Section 4.4    Purpose and Business. The purpose and nature of the business to
be conducted by the Partnership shall be to (a) engage directly in, or enter
into or form, hold and dispose of any corporation, partnership, joint venture,
limited liability company or other arrangement to engage indirectly in, any
business activity that is approved by the General Partner, in its sole
discretion, and that lawfully may be conducted by a limited partnership
organized pursuant to the Delaware Act and, in connection therewith, to exercise
all of the powers now or hereafter conferred upon the Partnership pursuant to
the agreements relating to such business activity, and (b) do anything necessary
or appropriate to the foregoing, including the making of capital contributions
or loans to a Group Member; provided, however, that the General Partner shall
not cause the Partnership to engage, directly or indirectly, in any business
activity that the General Partner determines would be reasonably likely to cause
the Partnership to be treated as an association taxable as a corporation or
otherwise taxable as an entity for U.S. federal income tax purposes (determined
as if the Partnership Interests were at all times publicly traded). To the
fullest extent permitted by Law, the General Partner shall have no duty or
obligation to propose or approve, and may, in its sole discretion, decline to
propose or approve, the conduct by the Partnership of any business.
Section 4.5    Powers. The Partnership shall be empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described in Section 2.4 and for the protection and benefit of the Partnership.
Section 4.6    Term. The term of the Partnership commenced upon the filing of
the Certificate of Limited Partnership in accordance with the Delaware Act and
shall continue in existence until the dissolution of the Partnership in
accordance with the provisions of Article XII. The existence of the Partnership
as a separate legal entity shall continue until the cancellation of the
Certificate of Limited Partnership as provided in the Delaware Act.
Section 4.7    Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner, one or more of its
Affiliates or one or more nominees, as the General Partner may determine. The
General Partner hereby declares and warrants that any Partnership assets for
which record title is held in the name of the General Partner or one or more of
its Affiliates or one or more nominees shall be held by the General Partner or
such Affiliate or nominee for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided, however, that the
General Partner shall use reasonable efforts to cause record title to such
assets (other than those assets in respect of which the General Partner
determines that the expense and difficulty of conveyancing makes transfer of
record title to the Partnership impracticable) to be vested in the Partnership
or one or more of the Partnership’s designated Affiliates (excluding the
Investor Groups) as soon as reasonably practicable; provided, further, that
prior to the withdrawal or removal of the General Partner or as soon thereafter
as practicable, the General Partner shall use reasonable efforts to effect the
transfer of record title to the Partnership and, prior to any such transfer,
will provide for the use of such assets in a manner satisfactory to the General
Partner. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which record
title to such Partnership assets is held.
Section 4.8    Foreign Qualification. The General Partner is authorized to cause
the Partnership to comply, to the extent procedures are available, with all
requirements necessary to qualify the Partnership as a foreign limited
partnership in any jurisdiction in which the Partnership owns property or
transacts business or elsewhere where such qualification may be necessary or
advisable for the protection of the limited liability of the Limited Partners or
to permit the Partnership to lawfully own property or transact business, and to
obtain similar qualifications for the Partnership’s Subsidiaries. Each officer
of the General Partner is authorized, on behalf of the Partnership, to execute,
acknowledge and deliver all certificates and other instruments as may be
necessary or appropriate in connection with the foregoing qualifications.
Further, upon request of the General Partner, each Limited Partner will execute,
acknowledge and deliver all certificates and other instruments that are
reasonably necessary or appropriate to obtain, continue, modify or terminate
such qualifications.
ARTICLE V    

RIGHTS OF LIMITED PARTNERS
Section 5.1    Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in this Agreement or
the Delaware Act.
Section 5.2    Management of Business. No Limited Partner, in its capacity as
such, shall participate in the operation, management or control (within the
meaning of the Delaware Act) of the Partnership’s business, transact any
business in the Partnership’s name or have the power to sign documents for or
otherwise bind the Partnership. All actions taken by any Affiliate of the
General Partner or any officer, director, employee, manager, member, general
partner, agent or trustee of the General Partner or any of its Affiliates, or
any officer, director, employee, manager, member, general partner, agent or
trustee of a Group Member, in its capacity as such, shall not be deemed to be
participating in the control of the business of the Partnership by a limited
partner of the Partnership (within the meaning of Section 17-303(a) of the
Delaware Act) and shall not affect, impair or eliminate the limitations on the
liability of the Limited Partners under this Agreement.
Section 5.3    Rights of Limited Partners.
(a)    Subject to Section 3.3(c), each Limited Partner shall have the right, for
a purpose that is reasonably related, as determined by the General Partner, to
such Limited Partner’s interest as a Limited Partner in the Partnership, upon
reasonable written demand stating the purpose of such demand and at such Limited
Partner’s own expense, to obtain:
(i)    true and full information regarding the status of the business and
financial condition of the Partnership (provided that the requirements of this
Section 3.3(a)(i) shall be satisfied if the Limited Partner is furnished the
reports described in Section 8.3);
(ii)    a current list of the name and last known business, residence or mailing
address of each Record Holder; and
(iii)    a copy of this Agreement and the Certificate of Limited Partnership and
all amendments thereto, together with copies of all executed powers of attorney
pursuant to which this Agreement, the Certificate of Limited Partnership and all
amendments thereto have been executed.
(b)    The rights to information granted the Limited Partners pursuant to
Section 3.3(a) replace in their entirety any rights to information provided for
in Section 17-305(a) of the Delaware Act, and each of the Partners and each
other Person or Group who acquires an interest in Partnership Interests hereby
agrees to the fullest extent permitted by Law that they do not have any rights
as Partners to receive any information either pursuant to Section 17-305(a) of
the Delaware Act or otherwise except for the information identified in Section
3.3(a).
(c)    The General Partner may keep confidential from the Limited Partners, for
such period of time as the General Partner deems reasonable, (i) any information
that the General Partner reasonably believes to be in the nature of trade
secrets or (ii) other information the disclosure of which the General Partner
believes (A) is not in the best interests of the Partnership Group, (B) could
damage the Partnership Group or its business or (C) that any Group Member is
required by Law or by agreement with any third party to keep confidential (other
than agreements with Affiliates of the Partnership the primary purpose of which
is to circumvent the obligations set forth in this Section 3.3).
(d)    Notwithstanding any other provision of this Agreement or Section 17-305
of the Delaware Act, each of the Partners, each other Person who acquires an
interest in a Partnership Interest and each other Person bound by this Agreement
hereby agrees to the fullest extent permitted by Law that they do not have
rights to receive information from the Partnership or any Indemnitee for the
purpose of determining whether to pursue litigation or assist in pending
litigation against the Partnership or any Indemnitee relating to the affairs of
the Partnership except pursuant to the applicable rules of discovery relating to
litigation commenced by such Person.
(e)    Notwithstanding anything to the contrary herein, none of the rights that
a Limited Partner may have in respect of its limited liability company equity
interests in the General Partner pursuant to the GP LLC Agreement shall be
limited by this Agreement.
ARTICLE VI    

CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
Section 6.1    Certificates.
(a)    Notwithstanding anything to the contrary herein, unless the General
Partner shall determine and authorize otherwise in respect of some or all of any
classes of Partnership Interests, Partnership Interests shall not be evidenced
by certificates and shall be recorded on the books and records of the
Partnership (including Exhibit A). Partnership Interests may be evidenced by
certificates in a form approved by the General Partner (“Certificates”) but
there shall be no requirement that the Partnership issue Certificates to
evidence Partnership Interests. If at any time the General Partner determines to
issue any Certificates, such Certificates shall on the face thereof bear the
following legend reflecting the restrictions on the Transfer of such securities:
“TRANSFER IS SUBJECT TO RESTRICTIVE LEGEND ON THE BACK HEREOF”
Such Certificate shall also bear a legend on the reverse side thereof
substantially in the following form:
“THE PARTNERSHIP INTERESTS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE LAWS OF ANY STATE OR
FOREIGN JURISDICTION, AND MAY NOT BE OFFERED OR SOLD, UNLESS THEY HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE (AND, IN SUCH CASE, AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE GENERAL PARTNER SHALL HAVE BEEN DELIVERED TO THE PARTNERSHIP TO THE EFFECT
THAT SUCH OFFER OR SALE IS NOT REQUIRED TO BE REGISTERED UNDER THE SECURITIES
ACT). THE PARTNERSHIP INTERESTS ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER
AND OTHER TERMS AND CONDITIONS SET FORTH IN THE AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP OF THE PARTNERSHIP, DATED AS OF FEBRUARY 14, 2013, AS
AMENDED FROM TIME TO TIME, COPIES OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP
AT ITS PRINCIPAL EXECUTIVE OFFICES.
EACH PARTNERSHIP INTEREST SHALL CONSTITUTE A “SECURITY” WITHIN THE MEANING OF,
AND SHALL BE GOVERNED BY, (I) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE
(INCLUDING SECTION 8-102(A)(15) THEREOF) AS IN EFFECT FROM TIME TO TIME IN THE
STATE OF DELAWARE, AND (II) ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE OF ANY
OTHER APPLICABLE JURISDICTION THAT NOW OR HEREAFTER SUBSTANTIALLY INCLUDES THE
1994 REVISIONS TO ARTICLE 8 THEREOF AS ADOPTED BY THE AMERICAN LAW INSTITUTE AND
THE NATIONAL CONFERENCE OF COMMISSIONERS ON UNIFORM STATE LAWS AND APPROVED BY
THE AMERICAN BAR ASSOCIATION ON FEBRUARY 14, 1995. NOTWITHSTANDING ANY PROVISION
OF THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP TO THE CONTRARY, TO
THE EXTENT THAT ANY PROVISION OF THE AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP IS INCONSISTENT WITH ANY NON-WAIVABLE PROVISION OF ARTICLE 8 OF THE
UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF DELAWARE (6 DEL. C. SECTION
8-101, ET SEQ.) (THE “UCC”), SUCH PROVISION OF ARTICLE 8 OF THE UCC SHALL
CONTROL.”
(b)    If Partnership Interests are certificated, upon any Transfer of all or a
portion of Partnership Interests hereunder, the Transferor shall surrender the
Certificate(s) representing the Partnership Interests so Transferred to the
Transfer Agent for cancellation. If a Certificate represents a greater portion
of the Transferor’s Partnership Interests than that intended for Transfer, upon
surrender of such Certificate for cancellation the Transfer Agent shall issue to
the Transferor a new Certificate which represents the Partnership Interests
being retained by such Transferor. If Partnership Interests are certificated,
the Transfer Agent shall issue to each Transferee who is Transferred Partnership
Interests pursuant to this Agreement and who is admitted to the Partnership as a
Partner in accordance with Article X, a Certificate evidencing the Partnership
Interests held by such Transferee. Such Certificate shall indicate the
Partnership Interests then owned by such Transferee and shall represent the
Partnership Interests owned by such Transferee from time to time thereafter as
set forth in the books and records of the Partnership, regardless of the
Partnership Interests indicated in the Certificate. Upon receipt of written
notice or other evidence reasonably satisfactory to the Partnership of the loss,
theft, destruction or mutilation of any Certificate and, in the case of any such
loss, theft or destruction upon receipt of the Partner’s unsecured indemnity
agreement, or in the case of any other holder of a Certificate or Certificates,
other indemnity reasonably satisfactory to the General Partner or in the case of
any such mutilation upon surrender or cancellation of such Certificate, the
Partnership will make and deliver a new Certificate, of like tenor, in lieu of
the lost, stolen, destroyed or mutilated Certificate.
Section 6.2    Record Holders. The Partnership shall keep a register or other
records which reflect the Partnership Interests and any Certificates. Except as
otherwise required by law, the Partnership shall be entitled to, and shall only,
recognize the exclusive right of a Person registered on its books as the record
holder of a Partnership Interest (the “Record Holder”), whether or not
represented by a Certificate, to receive distributions in respect of such
Partnership Interest, to vote as the owner of such Partnership Interest and to
be entitled to the benefits, and subject to the obligations, of this Agreement
with respect to such Partnership Interest.
Section 6.3    Registration and Transfer of Limited Partner Interests.
(a)    The General Partner shall keep or cause to be kept on behalf of the
Partnership a register in which, subject to such reasonable regulations as it
may prescribe, the Partnership will provide for the registration and Transfer of
Limited Partner Interests.
(b)    By acceptance of the Transfer of any Limited Partner Interests in
accordance with this Section 4.3, each Transferee of a Limited Partner Interest
(including any nominee holder or an agent or representative acquiring such
Limited Partner Interests for the account of another Person) acknowledges and
agrees to the provisions of Section 10.1.
Section 6.4    Transfer of the General Partner’s General Partner Interest.
(a)    Subject to Section 4.5, the General Partner may at its option Transfer
all or any part of its General Partner Interest without the approval of any
Limited Partner.
(b)    Notwithstanding anything herein to the contrary, no Transfer by the
General Partner of all or any part of its General Partner Interest to another
Person shall be permitted unless the Transferee agrees to assume the rights and
duties of the General Partner under this Agreement and to be bound by the
provisions of this Agreement. In a Transfer pursuant to and in compliance with
this Section 4.4, the Transferee or successor (as the case may be) shall,
subject to compliance with the terms of Section 10.2, be admitted to the
Partnership as the General Partner effective immediately prior to the Transfer
of the General Partner Interest, and the business of the Partnership shall
continue without dissolution.
Section 6.5    Restrictions on Transfers.
(a)    Notwithstanding the other provisions of this Article IV, no Transfer of
any Partnership Interests shall be made if such Transfer would (i) violate the
then applicable Laws or rules and regulations of the Commission, any state
securities commission or any other Governmental Authority with jurisdiction over
such Transfer, (ii) terminate the existence or qualification of the Partnership
under the laws of the jurisdiction of its formation, (iii) cause the Partnership
to be treated as an association taxable as a corporation or otherwise to be
taxed as an entity for U.S. federal income tax purposes (if not already so
treated or taxed) or (iv) cause the Partnership to be required to register as an
investment company under the Investment Company Act of 1940 or subject the
Partnership or its Subsidiaries to the Investment Advisers Act of 1940 or the
Employee Retirement Income Security Act of 1974, each as amended.
(b)    The General Partner may impose restrictions on the Transfer of
Partnership Interests if it determines, with the advice of counsel, that such
restrictions are necessary or advisable to (f) avoid a significant risk of the
Partnership becoming taxable as a corporation or otherwise becoming taxable as
an entity for U.S. federal income tax purposes or (c) preserve the uniformity of
the Limited Partner Interests (or any class or classes thereof). The General
Partner may impose such restrictions by amending this Agreement.
(d)    Except for transfers made pursuant to and in compliance with (x) Section
4.6, Section 4.7 and Section 4.9, or (y) the exercise of any demand or piggyback
registration rights pursuant to the Registration Rights Agreement, any Transfer
of Limited Partner Interests by any Partner or any of its Affiliates shall be
consummated only in accordance with this Section 4.5(c). Prior to a Qualified
Public Offering, no Limited Partner shall Transfer all or any portion of its
Limited Partner Interests without the prior written consent (which such consent
shall not be unreasonably withheld, delayed or conditioned) of the General
Partner; provided, that such consent shall not be required for (A) a Permitted
Transfer, (B) a bona fide pledge by a Limited Partner of its Limited Partner
Interests (the “Pledged Interests”) to a lender of such Limited Partner or an
agent for such lender (in such capacity, together with its successors and
assigns, in such capacity, a “Lender”) if such Limited Partner provides at least
ten (10) days advance written notice of such pledge to the non-pledging Limited
Partners and such pledging arrangement provides that the non-pledging Limited
Partners will have thirty (30) days to cure any default of the pledging Limited
Partner prior to such Lender initiating foreclosure proceedings on the Limited
Partner Interests (a “Bona Fide Pledge”) or (C) foreclosure upon Pledged
Interests by a Lender (a “Foreclosure”). In the event of (1) a Foreclosure by a
Lender on either (x) a pledge of a Limited Partner’s Limited Partner Interests
or (y) an indirect pledge of Equity Interests of such Member by one or more
Persons directly or indirectly Controlling any Equity Interests in such Member
(other than a Member’s ultimate public parent company) or (2) a Transfer of
Pledged Interests by a Lender to another Person, then the proportionate amount
of such Limited Partner Interests subject to such Foreclosure shall, for
purposes of any rights or obligations set forth herein, be treated as having
been Transferred by such Limited Partner to a third party that is not an
Affiliate of such Limited Partner.
(e)    In the event that a Transfer of Limited Partner Interests under this
Agreement subject to Section 4.6, Section 4.7 or Section 4.9 occurs in
connection with a Transfer of limited liability company equity interests in the
General Partner subject to similar rights of first refusal, tag-along rights or
drag-along rights under the GP LLC Agreement, such rights shall be exercised
substantially concurrently with the rights under the foregoing sections of this
Agreement.
(f)    Notwithstanding anything to the contrary contained herein, the rights and
obligations of this Agreement that refer specifically to any Investor Group or
member of an Investor Group (the “Non-Transferable Provisions”) shall be
personal to such Investor Group or member of an Investor Group and may not be
Transferred without the written consent of each Investor Group other than
pursuant to Affiliate Transfers. Immediately following any Transfer of a
Partnership Interest by a member of an Investor Group in a manner pursuant to
which the Non-Transferable Provisions are not Transferred, the Non-Transferable
Provisions shall continue to apply solely with respect to that portion, if any,
of such Investor Group’s Partnership Interests retained by such Investor Group.
For the avoidance of doubt, Non-Transferable Provisions include, but are not
limited to, the rights and obligations set forth in Section 4.6, Section 4.7,
Section 4.8, Section 4.9 and Section 4.10.
Section 8.2    Right of First Refusal.
(c)    Prior to a Qualified Public Offering, any Limited Partner seeking to
Transfer Limited Partner Interests (a “Transferring Partner”), other than in a
Permitted Transfer, Bona Fide Pledge or Foreclosure pursuant to Section 4.5(c),
shall be subject to the provisions of Section 4.6(b) through Section 4.6(i) in
connection with the Transfer of such Limited Partner Interests.
(d)    If a Transferring Partner subject to this Section 4.6(b) desires to
Transfer all or any portion of its Limited Partner Interests to any Person
(other than pursuant to a Permitted Transfer, Bona Fide Pledge or Foreclosure),
the Transferring Partner shall give written notice (the “Seller’s Notice”) to
the Investor Groups that own a Percentage Interest of at least 25% of the
outstanding Limited Partner Interests (except, if the Transferring Partner is a
member of one of the Investor Groups, its own Investor Group) (the “ROFR
Holders”) at least thirty (30) days prior to the closing of the Transfer (such
period herein referred to as the “First Refusal Period”), stating that the
Transferring Partner intends to make such proposed Transfer, identifying the
material terms and conditions of such Transfer, including the name and address
of the prospective purchaser or transferee (the “Proposed Transferee”), the
number of Limited Partner Interests proposed to be sold or acquired pursuant to
the offer (the “First Refusal Interests”) and the per Limited Partner Interest
purchase price which the Proposed Transferee has offered to pay for the First
Refusal Interests (the “Sale Price”). A copy of the offer, if available, shall
be attached to the Seller’s Notice.
(e)    Each ROFR Holder shall have the irrevocable right and option to purchase
all but not less than all of the First Refusal Interests at the Sale Price and
on terms no less favorable to the Transferring Partner than those set forth in
the Seller’s Notice prior to the expiration of the First Refusal Period. Within
twenty (20) days following delivery of the Seller’s Notice (the “First Refusal
Notice Deadline”), each ROFR Holder shall have the right to deliver a written
notice (“First Refusal Notice”) to the Transferring Partner stating whether it
elects to exercise its option under this Section 4.6, and such notice shall
constitute an irrevocable commitment to purchase the First Refusal Interests on
the terms set forth in the Seller’s Notice.
(f)    If the ROFR Holders do not elect to purchase all of the First Refusal
Interests prior to the expiration of the First Refusal Notice Deadline or notify
the Transferring Partner that they do not wish to purchase all of the First
Refusal Interests pursuant to Section 4.6(c), then, subject to this Article IV,
the Transferring Partner shall be free, for a period of ninety (90) calendar
days from the date of the expiration of the First Refusal Period, to Transfer
all such First Refusal Interests to the Proposed Transferee (i) at a price per
Unit equal to or greater than the Sale Price and upon terms no more favorable to
the Proposed Transferee than those specified in the Seller’s Notice and (ii)
subject to the terms and restrictions of this Agreement, including as set forth
in this Article IV. Any proposed Transfer of such First Refusal Interests by the
Transferring Partner after the end of such 90-day period or any change in the
terms of the proposed Transfer as set forth in the Seller’s Notice that are more
favorable to the Proposed Transferee shall require a new Seller’s Notice to be
delivered to the ROFR Holders and shall give rise anew to the rights provided in
the preceding paragraphs in this Section 4.6.
(g)    If the ROFR Holders elect to purchase all of the First Refusal Interests
set forth in the Seller’s Notice, such ROFR Holders shall have the right to
purchase all, but not less than all, of the First Refusal Interests for cash
consideration whether or not part or all of the consideration specified in the
Seller’s Notice is other than cash. If part or all of the consideration to be
paid for the First Refusal Interests as stated in the Seller’s Notice is other
than cash, the price stated in such Seller’s Notice shall be deemed to be the
sum of the cash consideration, if any, specified in such Seller’s Notice, plus
the fair market value of the non-cash consideration. The fair market value of
the non-cash consideration shall be determined by the Board; provided, that if
the Board does not or is unable to make such a determination of fair market
value, such determination of fair market value shall be made by a Valuation Firm
selected by the Board, and such firm shall be engaged and paid by the
Partnership. The determination of fair market value by such Valuation Firm (or,
if such firm determines a range of fair market values, the mid-point of such
range) shall be final and binding on the Transferring Partner and the ROFR
Holders; provided, that, in the event of a disagreement with the determination
of such Valuation Firm (but not any determination of the Board), the
Transferring Partner may elect to withdraw the Transfer of the First Refusal
Interests, in which case the Transferring Partner may not Transfer (including
pursuant to a new First Refusal Notice) any First Refusal Interests during the
ninety (90) day period immediately following the date of such withdrawal.
(h)    If the Transferring Partner receives a First Refusal Notice from more
than one ROFR Holder entitled to purchase the First Refusal Interests, each such
ROFR Holder shall be allocated its pro rata portion (based on the Percentage
Interest of Limited Partner Interests) of the First Refusal Interests that would
have been Transferred to the Proposed Transferee, unless otherwise agreed to by
such ROFR Holders and the Transferring Partner.
(i)    The closing of the Transfer of the First Refusal Interests under this
Section 4.6 will be held at any location agreed to by the Transferring Partner
and the ROFR Holder(s) purchasing the First Refusal Interests and on a mutually
acceptable date not more than ninety (90) days after a ROFR Holder delivers a
First Refusal Notice (or if more than one ROFR Holder is purchasing the First
Refusal Interests, a date not more than ninety (90) days following the latest of
the dates that the last electing ROFR Holder delivered its First Refusal
Notice). At any closing contemplated by this Section 4.6, in consideration of
the receipt of the purchase price in immediately available funds, the
Transferring Partner shall Transfer to the ROFR Holder(s) all right, title and
interest in and to the First Refusal Interests, free and clear of all liens,
and, at the request of the ROFR Holder(s), shall execute all other documents and
take other actions as may be reasonably necessary or desirable to effectuate the
Transfer of the First Refusal Interests and to carry out the purposes of this
Agreement.
(j)    Notwithstanding the foregoing paragraphs in this Section 4.6, in the
event that the Harbinger Partner exercises its Drag-Along Rights as provided in
Section 4.9, the EXCO Partner may only exercise its rights under this Section
4.6 if the EXCO Partner offers to purchase all of the Units (as defined in the
GP LLC Agreement) and Common Units and other Limited Partner Interests held in
the aggregate by the Harbinger Group at a price no less than 2% higher than the
price offered by the Drag-Along Transferee for such securities and upon terms no
less favorable than those offered by the Drag-Along Transferee.
(k)    Notwithstanding anything contained in this Section 4.6 to the contrary,
there shall be no liability on the part of the Transferring Partner to the
Investor Groups entitled to a Seller’s Notice if the Transfer of First Refusal
Interests pursuant to this Section 4.6 is not consummated for any reason.
Whether to effect a Transfer of First Refusal Interests by the Transferring
Partner to a Proposed Transferee is in the sole and absolute discretion of such
Transferring Partner.
Section 8.3    Tag-Along Rights.
(c)    If, prior to the occurrence of a Qualified Public Offering, any Limited
Partner proposes to Transfer all or any portion of its Limited Partner Interests
to any Person other than through a Permitted Transfer, Bona Fide Pledge or
Foreclosure (a “Tag-Along Sale”), such Limited Partner (the “Initiating Holder”)
shall provide to each Investor Group holding the same class of Limited Partner
Interests of the Partnership that are subject to the Tag-Along Sale (except, if
the Initiating Holder is a member of one of the Investor Groups, its own
Investor Group) notice of the terms and conditions of such proposed Transfer
(the “Tag-Along Notice”) (which notice may also be given concurrent with any
Seller’s Notice) and offer such other Investor Groups the opportunity to
participate in such Transfer with respect to their Limited Partner Interests of
the same class of Limited Partner Interests that are subject to the Tag-Along
Sale, in accordance with this Section 4.7 (each such electing Investor Group, a
“Tagging Holder”) by including in the proposed Transfer a number of the Tagging
Holder’s Limited Partner Interests not to exceed the Tagging Holder’s pro rata
portion (based on the Percentage Interest of Limited Partner Interests that are
subject to the Tag-Along Sale) of the Limited Partner Interests being
Transferred in the Tag-Along Sale. No Tagging Holder may (i) Transfer a greater
percentage of its Limited Partner Interests than the Initiating Holder is
Transferring or (ii) Transfer a class of Limited Partner Interests of the
Partnership different than the Initiating Holder.
(d)    The Tag-Along Notice shall identify the consideration for which the
Transfer is proposed to be made, and all other material terms and conditions of
the Tag-Along Sale, including the form of the proposed agreement, if any.
(e)    From the date of its receipt of the Tag-Along Notice, each Tagging Holder
shall have the right (a “Tag-Along Right”), exercisable by written notice (the
“Tag-Along Response Notice”) given to the Initiating Holder within (i) ten (10)
days after the end of the First Refusal Period, if the Tag-Along Notice is given
during the First Refusal Period, or (ii) ten (10) days after its receipt of the
Tag-Along Notice (the “Tag-Along Notice Period”), to request that the Initiating
Holder include in the proposed Transfer such number of Limited Partner Interests
held by such Tagging Holder as permitted by this Section 4.7.
(f)    Each Tag-Along Response Notice shall include wire transfer instructions
for payment of the purchase price for the Limited Partner Interests to be
Transferred in such Tag-Along Sale and a limited power-of-attorney authorizing
the Initiating Holder to Transfer such Tagging Holder’s Limited Partner
Interests that are subject to the Tag-Along Sale at a price and on terms set
forth in the Tag-Along Notice. Delivery of the Tag-Along Response Notice to the
Initiating Holder shall constitute an irrevocable exercise and acceptance of the
Tag-Along Right by such Tagging Holder. If any Tagging Holder accepts the terms
of the Tag-Along Notice, the Initiating Holder shall, to the extent necessary,
reduce the number of Limited Partner Interests it otherwise would have included
in such proposed Tag-Along Sale so as to permit the Tagging Holders to include
in the Tag Along Sale a number of Limited Partner Interests that they are
entitled to include pursuant to this Section 4.7. Each Tagging Holder shall
promptly execute all other documents required to be executed in connection with
such Tag-Along Sale.
(g)    If, within ninety (90) days after delivery of the Tag-Along Response
Notice, the Initiating Holder has not completed the Transfer of its Limited
Partner Interests on substantially the same terms and conditions set forth in
the Tag-Along Notice, the Initiating Holder shall (i) return to each Tagging
Holder any documents in the possession of the Initiating Holder executed by the
Tagging Holders in connection with the proposed Tag-Along Sale and (ii) not
conduct any Transfer of its Limited Partner Interests without again complying
with this Section 4.7.
(h)    Concurrently with the consummation of the Tag-Along Sale, the Initiating
Holder shall (i) notify the Tagging Holders of the consummation of such
Tag-Along Sale, (ii) remit to each Tagging Holder the total consideration for
the Limited Partner Interests that such Tagging Holder Transferred pursuant to
the Tag-Along Sale and (iii) promptly after the consummation of the Tag-Along
Sale, furnish such other evidence of the completion and the date of completion
of such Transfer and the terms thereof as may be reasonably requested by the
Tagging Holders.
(i)    If at the termination of the Tag-Along Notice Period any Limited Partner
has not elected to participate in the Tag-Along Sale, such Limited Partner shall
be deemed to have waived its rights under this Section 4.7 with respect to the
Transfer of its Limited Partner Interests pursuant to such Tag-Along Sale.
(j)    Notwithstanding anything contained in this Section 4.7 to the contrary,
there shall be no liability on the part of the Initiating Holder to the Tagging
Holders if the Transfer of Limited Partner Interests pursuant to this Section
4.7 is not consummated for any reason. Whether to effect a Transfer of Limited
Partner Interests by the Initiating Holder is in the sole and absolute
discretion of such Initiating Holder.
(k)    In connection with a Tag-Along Sale, each Tagging Holder who exercises
Tag-Along Rights will execute such documents, and make such representations,
warranties, covenants and indemnities, as are (and when) executed and made by
the Initiating Holder, provided that any such indemnification or similar
obligations will be apportioned pro rata among the Limited Partners
participating in the Tag-Along Sale based on the net proceeds received by them,
other than with respect to representations made individually by a Limited
Partner (e.g., as to such Limited Partner’s title to the applicable securities
and the Transfer of such securities free and clear of all liens, and with
respect to such Limited Partner’s existence, power and authority to effect such
Transfer, the due execution and enforceability of the relevant documents against
such Limited Partner, the absence of conflicts or required consents, absence of
litigation with respect to such Limited Partner relating to such transaction and
absence of obligations with respect to brokers’ fees). In connection with a
Tag-Along Sale, each participating Limited Partner will also (A) consent to and
raise no objections against the Tag-Along Sale or the process pursuant to which
the Tag-Along Sale was arranged, (B) waive any dissenter’s rights and other
similar rights, (C) take all actions reasonably required or desirable or
requested by the Initiating Holder to consummate such Tag-Along Sale and (D)
comply with the terms of the documentation relating to such Tag-Along Sale. In
connection with a Tag-Along Sale, the General Partner will use commercially
reasonable efforts to, and cause any Officer to, take all actions reasonably
necessary and appropriate to facilitate such Tag-Along Sale. Notwithstanding
anything contained in this Section 4.7 to the contrary, the rights and
obligations of the Limited Partners to participate in a Tag-Along Sale are
subject to the following conditions:
(i)    upon the consummation of such Tag-Along Sale, all of the Limited Partners
participating therein will receive the same form and amount of consideration per
Common Unit or Limited Partner Interest, as the case may be, and, except for
such consideration, no Initiating Holder or Tagging Holder (each, a
“Participating Holder”) will receive any other payments of any nature whatsoever
from the Transferee in connection with or arising from the Tag-Along Sale; and
(ii)    no Participating Holder (other than the Initiating Holder) shall be
obligated to pay any expenses incurred in connection with any unconsummated
Tag-Along Sale, and each Participating Holder shall be obligated to pay only its
pro rata share (based on the number of Limited Partner Interests Transferred) of
expenses incurred in connection with a consummated Tag-Along Sale to the extent
such expenses are incurred for the benefit of all such Participating Holders and
are not otherwise paid by the Partnership.
Section 8.4    Preemptive Rights.
(a)    Except as provided in this Section 4.8 or as otherwise provided in a
separate agreement by the Partnership, no Person shall have any preemptive,
preferential or other similar right with respect to the issuance of any
Partnership Interest, whether unissued, held in the treasury or hereafter
created. The General Partner shall have the right, which it may from time to
time assign in whole or in part to any of its Affiliates, to purchase
Partnership Interests from the Partnership whenever, and on the same terms that,
the Partnership issues Partnership Interests to Persons other than the General
Partner and its Affiliates, to the extent necessary to maintain the Percentage
Interests of the General Partner and its Affiliates equal to that which existed
immediately prior to the issuance of such Partnership Interests.
(b)    Subject to and without limiting Section 4.8(a), the Partnership grants to
each Limited Partner who is part of an Investor Group (a “PR Holder”), and each
PR Holder shall have the right to purchase, in accordance with the procedures
set forth herein, up to such PR Holder’s pro rata portion (based on Percentage
Interest of Limited Partner Interests immediately prior to the time of sale) of
any New Interests that the Partnership may, from time to time, propose to issue
and sell (hereinafter referred to as the “Preemptive Rights”).
(c)    If the Partnership proposes to issue and sell New Interests, the
Partnership shall notify each PR Holder in writing with respect to the proposed
New Interests to be issued and sold (the “New Interests Notice”). Each New
Interests Notice shall set forth: (i) the number of New Interests proposed to be
issued and sold by the Partnership and their purchase price; (ii) each PR
Holder’s pro rata portion of New Interests and (iii) any other material terms
and conditions, including any applicable regulatory requirements, and, if known,
the expected date of consummation of the issuance and sale of the New Interests
(which date, in any event shall be no earlier than forty-five (45) days
following the date of delivery of the New Interests Notice).
(d)    Each PR Holder shall be entitled to exercise its Preemptive Right to
purchase such New Interests by delivering an irrevocable written notice to the
Partnership within thirty (30) days from the date of receipt of any New
Interests Notice specifying the number of New Interests to be subscribed, which
in any event can be no greater than such PR Holder’s pro rata portion of such
New Interests, at the price and on the terms and conditions specified in the New
Interests Notice.
(e)    Each PR Holder exercising its right to purchase its entire pro rata
portion of New Interests being issued (each, a “Subscribing Member”) shall have
a right of over-allotment such that if another PR Holder fails to exercise its
Preemptive Right to purchase its entire pro rata portion of New Interests (each,
a “Non-Subscribing Member,” including any PR Holder that fails to exercise its
right to purchase its entire pro rata share of Remaining New Interests, as
described below), such Subscribing Member may purchase its pro rata share, based
on the relative Percentage Interest of Limited Partner Interests then owned by
the Subscribing Members, of those New Interests in respect to which the
Non-Subscribing Members have not exercised their Preemptive Right (the
“Remaining New Interests”) by giving written notice to the Partnership within
three (3) Business Days from the date that the Partnership provides written
notice of the amount of New Interests as to which such Non-Subscribing Members
have failed to exercise their rights thereunder.
(f)    If no PR Holder elects within the applicable notice periods described
above to exercise its Preemptive Rights with respect to any of the New Interests
proposed to be issued and sold by the Partnership, the Partnership shall have
ninety (90) days after the expiration of all such notice periods to issue and
sell or to enter into an agreement to issue and sell such unsubscribed New
Interests proposed to be sold by the Partnership, at a price and on terms no
more favorable to the purchaser than those offered to the PR Holders pursuant to
this Section 4.8.
(g)    No PR Holder will be required to take up and pay for any New Interests
pursuant to its Preemptive Right unless all New Interests (other than those to
be taken up by such PR Holder) are sold, whether to the other PR Holders or
pursuant to Section 4.8(f).
(h)    Each PR Holder may assign its rights to acquire New Interests under this
Section 4.8 to, and such rights may be exercised on behalf of such PR Holder by,
any 100% Affiliate of such PR Holder to whom such PR Holder would have been
permitted to Transfer such New Interests immediately following such PR Holder’s
acquisition thereof.
(i)    This Section 4.8 shall terminate upon a Qualified Public Offering.
Section 8.5    Drag-Along Rights.
(a)    Subject to prior compliance with Section 4.5 and Section 4.6, after the
third anniversary of the Closing Date, prior to the occurrence of a Qualified
Public Offering, if any Drag-Along Investor Group elects to consummate a
Transfer of Limited Partner Interests to any Person or Persons (except pursuant
to a Permitted Transfer, Bona Fide Pledge or Foreclosure) (collectively, a
“Drag-Along Transferee”) in a bona fide arm’s-length transaction or series of
related transactions (including by way of a purchase agreement, tender offer,
merger or other business combination transaction or otherwise) pursuant to which
all, but not less than all, of the Limited Partner Interests and limited
liability company equity interests in the General Partner, if any, held in the
aggregate by such Drag-Along Investor Group would be Transferred to such
Drag-Along Transferee (subject to allowance for “rollover” transactions in which
the Drag-Along Investor Group and its Affiliates continue to hold no more than
20% of the equity in the General Partner and the Partnership, or their successor
entity or entities, following completion of such transactions), such Drag-Along
Investor Group shall have the right (a “Drag-Along Right”), upon the terms and
subject to the conditions of this Section 4.9, to require all other Limited
Partners to Transfer all, but not less than all, of the Limited Partner
Interests held by such other Limited Partners to such Drag-Along Transferee;
provided, however, that the Drag-Along Investor Group must hold at least 25% of
the Units (as defined in the GP LLC Agreement) in the General Partner and at
least at least 60% of the Outstanding Limited Partner Interests to exercise its
Drag-Along Rights; provided, further, that such Drag-Along Investor Group must
also exercise its drag-along rights under the GP LLC Agreement; and provided,
further, that if all or a portion of the consideration to be received in
connection with the Drag-Along Sale consists of securities of the Drag-Along
Transferee or another Person, such securities must be listed on a National
Securities Exchange and be (x) issued pursuant to an effective registration
statement under the Securities Act or (y) subject to a demand registration
rights agreement with all Limited Partners receiving such securities, on
reasonable and customary terms (including mutual indemnities and piggyback
registration rights) and providing for the issuer to use commercially reasonable
efforts to register (upon the request of any Limited Partner) under the
Securities Act the resale of all such securities received by all Limited
Partners.
(i)    Subject to Section 4.9(b), each Limited Partner will Transfer all of the
Limited Partner Interests it is required to Transfer in connection with the
valid exercise of Drag-Along Rights by a Drag-Along Investor Group on the same
terms (other than aggregate price) and conditions applicable to, and for the
same type of consideration payable to, each member of the Drag-Along Investor
Group, at the price calculated in accordance with Section 4.9(a)(ii) (a
“Drag-Along Sale”); and
(ii)    The aggregate purchase price payable for the Limited Partner Interests
purchased by a Drag-Along Transferee will be allocated, paid and distributed
among the Limited Partners participating in such Drag-Along Sale based on the
Percentage Interest of each such Limited Partner. The aggregate net purchase
price payable in respect of Partnership Interests and Units in the General
Partner in a Drag-Along Sale pursuant to this Section 4.9 and pursuant to the GP
LLC Agreement shall be allocated among such securities in the same manner as
such amount would be distributed among the holders of such securities in a
liquidation of the Partnership followed by a liquidation of the General Partner.
(b)    In connection with a Drag-Along Sale, each Limited Partner subject
thereto will execute such documents, and make such representations, warranties,
covenants and indemnities with respect to the matters set forth below, as are
(and when) executed and made by the applicable Drag-Along Investor Group, and
will take and cause its Affiliates to take, and cause any director designated to
the Board by such Limited Partner, if applicable, to take, any and all other
actions as may be reasonably necessary or advisable to consummate the Drag-Along
Sale; provided, that any indemnification or similar obligations will be
apportioned pro rata among the Limited Partners participating in the Drag-Along
Sale based on the net proceeds received by them, other than with respect to
representations and covenants made individually by a Limited Partner. In
connection with a Drag-Along Sale, each Limited Partner subject thereto will
also (A) consent to and raise no objections against the Drag-Along Sale or the
process pursuant to which the Drag-Along Sale was arranged, (B) waive any
dissenter’s rights and other similar rights, (C) take all actions reasonably
required or desirable or requested by the Drag-Along Investor Group to
consummate such Drag-Along Sale, (D) comply with the terms of the documentation
relating to such Drag-Along Sale and (E) use commercially reasonable efforts to
cause any director designated to the Board by such Limited Partner, if
applicable, to facilitate and take, and cause the General Partner to facilitate
and take, the actions described in the foregoing clauses (A) through (D). In
connection with any Drag-Along Sale, no Limited Partner required to participate
in such Drag-Along Sale shall be required to make any representations or
warranties in connection with such Transfer, other than representations or
warranties made individually by such Limited Partner as to such Limited
Partner’s title to the applicable securities and the Transfer of such securities
free and clear of all liens, and with respect to such Limited Partner’s
existence, power and authority to effect such Transfer, the due execution and
enforceability of the relevant documents against such Limited Partner, the
absence of conflicts or required consents, absence of litigation with respect to
such Limited Partner relating to such transaction and absence of obligations
with respect to brokers’ fees.
(c)    The rights set forth in this Section 4.9 will be exercised by the
Drag-Along Investor Group giving written notice (the “Drag-Along Notice”) to the
other Limited Partners at least thirty (30) Business Days prior to the date on
which the Drag-Along Investor Group expects to consummate the Drag-Along Sale.
In the event that the terms and/or conditions set forth in the Drag-Along Notice
are thereafter amended in any material respect, such Drag-Along Investor Group
will promptly give written notice (an “Amended Drag-Along Notice”) of the
amended terms and conditions of the proposed Transfer to each of the other
Limited Partners. The Drag-Along Investor Group shall cause each Drag-Along
Notice and Amended Drag-Along Notice to set forth: (i) the name and address of
the Drag-Along Transferee, (ii) the proposed amount and form of consideration
and terms and conditions of payment offered by the Drag-Along Transferee and
(iii) all other material terms of the proposed transaction, including the
expected closing date of the transaction, and the Drag-Along Investor Group
shall provide copies of the definitive documents and agreements relating to the
Drag-Along Sale to the other Limited Partners reasonably in advance of the
consummation of such Drag-Along Sale; provided, that any such document or
agreement to which the other Limited Partners are not a party may be redacted to
exclude provisions not directly relevant, in the Drag-Along Investor Group’s
reasonable discretion, to the other Limited Partners.
(d)    Notwithstanding anything to the contrary in this Section 4.9, if the
consideration in a Drag-Along Sale includes securities with respect to which no
registration statement covering the issuance of such securities has been
declared effective under the Securities Act and which may not be resold pursuant
to Rule 144 (or are subject to volume limitations thereunder), each Limited
Partner that is not then an Accredited Investor (without regard to Rule
501(a)(4) under the Securities Act) may be required (notwithstanding Section
4.9(a)(i)), at the request and election of the Drag-Along Investor Group, to (i)
appoint a purchaser representative (as such term is defined in Rule 501 under
the Securities Act) reasonably acceptable to such Limited Partners or (ii)
accept cash in lieu of any securities such non-Accredited Investor would
otherwise receive in an amount equal to the fair market value of such securities
as determined by the Board in its reasonable judgment.
(e)    If some or all of the consideration received in connection with a
Drag-Along Sale is other than cash, then such consideration shall be deemed to
have a dollar value equal to the fair market value of such consideration as
determined by the Board; provided, that if the Board does not or is unable to
make such a determination of fair market value, such determination of fair
market value shall be made by a Valuation Firm selected by the Board, and such
firm shall be engaged and paid by the Partnership. The determination of fair
market value by such Valuation Firm (or, if such firm determines a range of fair
market values, the mid-point of such range) shall be final and binding on all
parties.
Section 8.6    Change of Control.
(a)    Change of Control of EXCO. Upon a Change of Control of EXCO, the
Harbinger Partner shall have the right, exercisable until the expiration of six
months following notice to the Harbinger Partner by the EXCO Partner of the
Change of Control of EXCO, to acquire all, but not less than all, of the Limited
Partner Interests of the EXCO Partner for Fair Market Value.
(b)    Change of Control of Harbinger. If, within a twelve-month period
following a Change of Control of Harbinger, the Harbinger Directors on the Board
cause the Partnership to reject each opportunity relating to Partnership
Appropriate Oil and Gas Properties presented to the Partnership by the EXCO
Partner pursuant to the GP LLC Agreement reasonably and in good faith and
substantially consistent with past practice and (i) such opportunity is
reasonably expected to be accretive to the Partnership on a per Unit basis and
(ii) the Partnership has available borrowing capacity under any then-existing
credit facility, cash on hand and other sources of secured debt financing
reasonably available to consummate such opportunity, the EXCO Partner shall have
the right, exercisable until the expiration of six months following the
twelve-month anniversary of the Change of Control of Harbinger, to acquire all,
but not less than all, of the Limited Partner Interests held by the Harbinger
Partner for Fair Market Value.
(c)    Change of Control of Other Limited Partners. Upon a Change of Control of
any Limited Partner other than the Harbinger Partner or the EXCO Partner, the
Harbinger Partner and the EXCO Partner shall each have the right, exercisable
until the expiration of six months following notice to the General Partner of
the Change of Control of such Limited Partner, to acquire all, but not less than
all, of the Limited Partner Interests of such Limited Partner for Fair Market
Value.
Section 8.7    Expenses. Each Partner shall bear its own expenses incurred in
connection with this Article IV, and any Partner effecting a Transfer pursuant
to this Article IV shall reimburse the General Partner or the Partnership, as
the case may be, for any expenses incurred by the General Partner or the
Partnership in connection therewith.
Section 8.8    Closing Date. Any Transfer and any related admission of a Person
as a Partner in compliance with this Article IV shall be deemed effective on
such date that the Transferee or successor in interest complies with the
requirements of this Agreement.
Section 8.9    Effect of Incapacity. Except as otherwise provided herein, the
Incapacity of a Partner shall not dissolve or terminate the Partnership. In the
event of such Incapacity, the executor, administrator, guardian, trustee or
other personal representative of the Partner that has experienced such
Incapacity shall be deemed to be the assignee of such Partner’s Economic
Interest and may, subject to the terms and conditions set forth in this Article
IV, become a Partner.
Section 8.10    No Appraisal Rights. No Partner shall be entitled to any
valuation, appraisal or similar rights with respect to such Partner’s
Partnership Interests, whether individually or as part of any class or group of
Partners, in the event of a merger, consolidation, sale of the Partnership or
other transaction involving the Partnership or its securities unless such rights
are expressly provided by the agreement of merger, agreement of consolidation or
other document effectuating such transaction.
Section 8.11    Effect of Non-Compliance.
(a)    Improper Transfers Void. ANY ATTEMPTED TRANSFER NOT STRICTLY IN
ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE IV WILL BE VOID AB INITIO AND OF
NO FORCE OR EFFECT WHATSOEVER, PROVIDED, THAT ANY SUCH ATTEMPTED TRANSFER MAY BE
A BREACH OF THIS AGREEMENT, NOTWITHSTANDING THAT SUCH ATTEMPTED TRANSFER IS
VOID.
(b)    Other Consequences. Without limiting the foregoing, if any Partnership
Interest or Certificate representing a Partnership Interest is purported to be
Transferred in whole or in part in contravention of this Article IV, the Person
to whom such purported Transfer was made shall not be entitled to any rights as
a Partner whatsoever, including any of the following rights:
(i)    (A) with respect to a purported Transfer of a Limited Partner Interest,
to vote at a meeting of Limited Partners or to give approvals without a meeting
as provided in Section 13.11 or (B) with respect to a purported Transfer of a
General Partner Interest, to participate in the management, business or affairs
of the Partnership;
(ii)    to receive any reports pursuant to Section 8.3 or obtain information
concerning the Partnership pursuant to any other provision hereof;
(iii)    to inspect or copy the Partnership’s books or records;
(iv)    to receive any Economic Interest in the Partnership; or
(v)    to receive upon the dissolution and winding up of the Partnership the net
amount otherwise distributable to the Transferor pursuant to Section 12.4.
ARTICLE IX    

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
Section 9.1    Organizational Contributions. In connection with the formation of
the Partnership under the Delaware Act, the General Partner made an initial
contribution to the Partnership in the amount of $20.00 in exchange for a
General Partner Interest equal to a 2% Percentage Interest and was admitted as
the General Partner of the Partnership. The Organizational Limited Partner made
an initial Capital Contribution to the Partnership in the amount of $980.00 in
exchange for a Limited Partner Interest equal to a 98% Percentage Interest and
has been admitted as a Limited Partner of the Partnership. As of the Closing
Date, and effective with the admission of another Limited Partner to the
Partnership, the interests of the Organizational Limited Partner will be
redeemed as provided in the Contribution Agreement and the initial Capital
Contribution of the Organizational Limited Partner will be refunded. One-hundred
percent of any interest or other profit that may have resulted from the
investment or other use of such initial Capital Contribution will be allocated
and distributed to the Organizational Limited Partner.
Section 9.2    Contributions by the General Partner and Its Affiliates.
(l)    On the Closing Date and pursuant to the Contribution Agreement, the
1,000,000 Common Units held by the General Partner shall be automatically
cancelled and the General Partner’s interests in the Partnership shall be
converted into 1,000,000 Notional General Partner Units, representing a General
Partner Interest with a 2% Percentage Interest, subject to all of the rights,
privileges and duties of the General Partner under this Agreement, and the
Incentive Distribution Rights.
(m)    Upon the issuance of any additional Limited Partner Interests by the
Partnership (other than the Common Units issued pursuant to Section 5.3(a)) (any
of which for purposes of this Agreement shall be “Additional Units”), the
General Partner may, in order to maintain the Percentage Interest with respect
to its General Partner Interest, make additional Capital Contributions in an
amount equal to the product obtained by multiplying (i) the quotient determined
by dividing (A) the Percentage Interest with respect to the Notional General
Partner Units immediately prior to the issuance of such additional Limited
Partner Interests by the Partnership by (B) 100% less the Percentage Interest
with respect to the Notional General Partner Units immediately prior to the
issuance of such additional Limited Partner Interests by the Partnership times
(ii) the gross amount contributed to the Partnership by the Limited Partners
(before deduction of underwriting discounts and commissions) in exchange for
such additional Limited Partner Interests. Any Capital Contribution pursuant to
this Section 5.2(b) shall be evidenced by the issuance to the General Partner of
a proportionate number of additional Notional General Partner Units.
Section 9.3    Contributions, Distributions and Issuances of Partnership
Interests.
(j)    On the Closing Date, the EXCO Partner, the Harbinger Partner and the
General Partner, as applicable, shall make the contributions, be issued the
Partnership Interests and receive the distributions, and the Partnership shall
take the other actions of the Partnership, contemplated by Section 2.1 of the
Contribution Agreement.
(k)    The Partnership shall, at the request of the General Partner, take the
actions required of the Partnership as set forth on Annex A to the Contribution
Agreement in accordance with the terms and provisions thereof.
(l)    No Initial Limited Partner shall be required to make any Capital
Contributions to the Partnership, except as set forth in Section 5.9 or unless
otherwise agreed to in writing by such Initial Limited Partner.
(m)    Subject to Section 5.6, additional Capital Contributions may be made to
the Partnership pursuant to the issuance by the Partnership of additional
Partnership Interests.
Section 9.4    Interest and Withdrawal. No interest shall be paid by the
Partnership on Capital Contributions. No Partner shall be entitled to the
withdrawal or return of its Capital Contribution, except to the extent, if any,
that distributions made pursuant to this Agreement or upon liquidation of the
Partnership may be considered as such by Law and then only to the extent
provided for in this Agreement. Unless expressly provided in this Agreement, no
Partner shall have priority over any other Partner either as to the return of
Capital Contributions or as to profits, losses or distributions. Any such return
shall be a compromise to which all Partners agree within the meaning of Section
17-502(b) of the Delaware Act.
Section 9.5    Capital Accounts.
(d)    For purposes of computing the amount of any item of income, gain, loss,
deduction, Simulated Depletion, Simulated Gain or Simulated Loss that is to be
allocated pursuant to Article VI and is to be reflected in the Partners’ Capital
Accounts, the determination, recognition and classification of any such item
shall be the same as its determination, recognition and classification for U.S.
federal income tax purposes (including any method of depreciation, cost recovery
or amortization used for that purpose), provided, that:
(i)    Solely for purposes of this Section 5.5, the Partnership shall be treated
as owning directly its proportionate share (as determined by the General Partner
based upon the provisions of the applicable Group Member Agreement) of all
property owned by (x) any other Group Member that is classified as a partnership
for U.S. federal income tax purposes and (y) any other partnership, limited
liability company, unincorporated business or other entity classified as a
partnership for U.S. federal income tax purposes of which a Group Member is,
directly or indirectly, a partner, member or other equity holder.
(ii)    All fees and other expenses incurred by the Partnership to promote the
sale of (or to sell) a Partnership Interest that can neither be deducted nor
amortized under Section 709 of the Code, if any, shall, for purposes of Capital
Account maintenance, be treated as an item of deduction at the time such fees
and other expenses are incurred and shall be allocated among the Partners
pursuant to Section 6.1.
(iii)    Except as otherwise provided in Treasury Regulation Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss,
deduction, Simulated Depletion, Simulated Gain and Simulated Loss shall be made
without regard to any election under Section 754 of the Code that may be made by
the Partnership and, as to those items described in Section 705(a)(1)(B) or
705(a)(2)(B) of the Code, without regard to the fact that such items are not
includable in gross income or are neither currently deductible nor capitalized
for U.S. federal income tax purposes. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment in the Capital Accounts shall be treated as an
item of gain or loss.
(iv)    Any income, gain, loss, Simulated Gain or Simulated Loss attributable to
the taxable disposition of any Partnership property shall be determined as if
the adjusted basis of such property as of such date of disposition were equal in
amount to the property’s Carrying Value as of such date.
(v)    In accordance with the requirements of Section 704(b) of the Code, any
deductions for depreciation, cost recovery, amortization or Simulated Depletion
attributable to any Contributed Property shall be determined as if the adjusted
basis of such property were equal to the Agreed Value of such property. Upon an
adjustment pursuant to Section 5.5(d) to the Carrying Value of any Partnership
property subject to depreciation, cost recovery, amortization or Simulated
Depletion, any further deductions for such depreciation, cost recovery,
amortization or Simulated Depletion attributable to such property shall be
determined under the rules prescribed in Treasury Regulation Section
1.704-3(d)(2) as if the adjusted basis of such property were equal to the
Carrying Value of such property immediately following such adjustment.
(vi)    The Gross Liability Value of each Liability of the Partnership described
in Treasury Regulation Section 1.752-7(b)(3)(i) shall be adjusted at such times
as provided in this Agreement for an adjustment to Carrying Values. The amount
of any such adjustment shall be treated for purposes hereof as an item of loss
(if the adjustment increases the Carrying Value of such Liability of the
Partnership) or an item of gain (if the adjustment decreases the Carrying Value
of such Liability of the Partnership).
(e)    A Transferee of a Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the Transferor relating to the Partnership
Interest so Transferred.
(f)    (n) Consistent with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on
an issuance of additional Partnership Interests for cash or Contributed
Property, or the issuance of Partnership Interests as consideration for the
provision of services, the Carrying Value of each Partnership property
immediately prior to such issuance shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such Partnership
property, and any such Unrealized Gain or Unrealized Loss shall be treated, for
purposes of maintaining Capital Accounts, as if it had been recognized on an
actual sale of each such property for an amount equal to its Fair Market Value
immediately prior to such issuance and had been allocated among the Partners at
such time pursuant to Section 6.1(c) in the same manner as any item of gain,
loss, Simulated Gain or Simulated Loss actually recognized following an event
giving rise to the dissolution of the Partnership would have been allocated;
provided, however, that in the event of an issuance of Partnership Interests for
a de minimis amount of cash or Contributed Property, or in the event of an
issuance of a de minimis amount of Partnership Interests as consideration for
the provision of services, the General Partner may determine that such
adjustments are unnecessary for the proper administration of the Partnership. In
determining such Unrealized Gain or Unrealized Loss, the aggregate Fair Market
Value of all Partnership property (including cash or cash equivalents)
immediately prior to the issuance of additional Partnership Interests shall be
determined by the General Partner using such method of valuation as it may
adopt. In making its determination of the Fair Market Values of individual
properties, the General Partner may determine that it is appropriate to first
determine an aggregate value for the Partnership and then allocate such
aggregate value among the individual properties of the Partnership (in such
manner as it determines appropriate).
(i)    In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior to any actual or deemed distribution to a Partner of any
Partnership property (other than a distribution of cash that is not in
redemption or retirement of a Partnership Interest), the Carrying Value of all
Partnership property shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property,
and any such Unrealized Gain or Unrealized Loss shall be treated, for purposes
of maintaining Capital Accounts, as if it had been recognized on an actual sale
of each such property immediately prior to such distribution for an amount equal
to its fair market value, and had been allocated among the Partners, at such
time, pursuant to Section 6.1 in the same manner as any item of gain, loss,
Simulated Gain or Simulated Loss actually recognized following an event giving
rise to the dissolution of the Partnership would have been allocated. In
determining such Unrealized Gain or Unrealized Loss the aggregate fair market
value of all Partnership property (including cash or cash equivalents)
immediately prior to a distribution shall (A) in the case of an actual or deemed
distribution other than a distribution made pursuant to Section 12.4, be
determined in the same manner as that provided in Section 5.5(d) or (B) in the
case of a liquidating distribution pursuant to Section 12.4, be determined by
the Liquidator using such method of valuation as it may adopt.
(o)    All Partners acknowledge and agree that the initial Capital Contributions
set forth on Exhibit A as of the Closing Date represent the amount of money and
the Agreed Value of all property (other than money) contributed by the Partners.
The Partners acknowledge and agree that the Capital Account of each Partner as
of the date hereof is equal to the amount set forth on Exhibit A as of the date
hereof.
Section 10.2    Issuances of Additional Partnership Interests and Derivative
Instruments.
(n)    Subject to Section 4.8, the Partnership may issue additional Partnership
Interests and Derivative Instruments for any Partnership purpose at any time and
from time to time to such Persons for such consideration and on such terms and
conditions as the General Partner shall determine, all without the approval of
any Limited Partners.
(o)    Each additional Partnership Interest authorized to be issued by the
Partnership pursuant to Section 5.6(a) may be issued in one or more classes, or
one or more series of any such classes, with such designations, preferences,
rights, powers and duties (which may be senior to existing classes and series of
Partnership Interests), as shall be fixed by the General Partner, including (i)
the right to share in Partnership profits and losses or items thereof; (ii) the
right to share in Partnership distributions; (iii) the rights upon dissolution
and liquidation of the Partnership; (iv) whether, and the terms and conditions
upon which, the Partnership may or shall be required to redeem the Partnership
Interest (including sinking fund provisions); (v) whether such Partnership
Interest is issued with the privilege of conversion or exchange and, if so, the
terms and conditions of such conversion or exchange; (vi) the terms and
conditions upon which each Partnership Interest will be issued, evidenced by
certificates and assigned or Transferred; (vii) the method for determining the
Percentage Interest as to such Partnership Interest; and (viii) the right, if
any, of each such Partnership Interest to vote on Partnership matters, including
matters relating to the relative rights, preferences and privileges of such
Partnership Interest.
(p)    The General Partner shall take all actions that it determines to be
necessary or appropriate in connection with (i) each issuance of Partnership
Interests and Derivative Instruments pursuant to this Section 5.6, (ii)
reflecting admission of additional Limited Partners in the books and records of
the Partnership as the Record Holders of Limited Partner Interests and (iii) all
additional issuances of Partnership Interests. The General Partner shall
determine the relative rights, powers and duties of the holders of the Units or
other Partnership Interests being so issued.
(q)    The Partnership may issue fractional Units.
(r)    Immediately prior to the closing of the Initial Public Offering, the
Partnership may issue Partnership Interests in the manner described in Section
5.11.
Section 10.3    Splits and Combinations.
(f)    The Partnership may make a pro rata distribution of Partnership Interests
to all Record Holders or may effect a subdivision or combination of Partnership
Interests so long as, after any such event, each Partner shall have the same
Percentage Interest in the Partnership as before such event, and any amounts
calculated on a per Unit basis or stated as a number of Units are
proportionately adjusted retroactive to the beginning of the Partnership.
(g)    Promptly following any such distribution, subdivision or combination, the
Partnership may issue Certificates to the Record Holders of Partnership
Interests as of the applicable Record Date representing the new number of
Partnership Interests held by such Record Holders, or the General Partner may
adopt such other procedures that it determines to be necessary or appropriate to
reflect such changes. If any such combination results in a smaller total number
of Partnership Interests Outstanding, the Partnership shall require, as a
condition to the delivery to a Record Holder of such new Certificate, the
surrender of any Certificate held by such Record Holder immediately prior to
such Record Date.
Section 10.4    Fully Paid and Non-Assessable Nature of Limited Partner
Interests. All Limited Partner Interests issued pursuant to, and in accordance
with the requirements of, this Article V shall be fully paid and non-assessable
Limited Partner Interests in the Partnership, except as such non-assessability
may be affected by Section 17-607 or 17-804 of the Delaware Act.
Section 10.5    Capital Contribution Events.
(a)    Notwithstanding anything in Section 5.3(c) to the contrary, in the event
the Board determines in good faith that additional Capital Contributions from
the Limited Partners are necessary to fund the Partnership’s operations (a
“Capital Contribution Event”), the Board may issue a notice to each Limited
Partner (such notice, together with a notice under Section 5.9(b) for a
Unilateral Capital Contribution Event, a “Call Notice”) for an additional
Capital Contribution by each Limited Partner (together with a Unilateral Capital
Contribution Event under Section 5.9(b), a “Required Contribution”) in an amount
equal to such Limited Partner’s pro rata portion (based on Percentage Interest
of Units) of the additional Capital Contribution determined to be necessary by
the Board not less than fifteen (15) days prior to the date the Board determines
such additional Capital Contributions shall be made by the Limited Partners.
(b)    Notwithstanding anything in Section 5.9(a) to the contrary, in the event
that the Harbinger Directors determine in good faith that the Partnership’s
gross receipts are not anticipated to be sufficient to equal or exceed the
estimated expenditures contemplated in the Annual Plan for any six-month period,
after considering available bank borrowing capacity of the Partnership or its
Subsidiaries, and the Board is unable to reach a decision for a period of thirty
(30) or more days regarding the approval of additional Capital Contributions or
the incurrence of additional indebtedness to fund the difference between the
estimated expenditures and the anticipated gross receipts, then the Harbinger
Directors may, in their sole discretion, issue a Call Notice for an additional
Capital Contribution (a “Unilateral Capital Contribution Event”) in an amount
equal to each Limited Partner’s pro rata portion (based on Percentage Interest
of Units) of the difference between such estimated expenditures and anticipated
gross receipts. In lieu of issuing all or a portion of a Call Notice, and
notwithstanding anything in this Agreement to the contrary, the Harbinger
Directors acting alone may authorize and cause the Partnership to incur, in
connection with a Unilateral Capital Contribution Event, additional indebtedness
that is on terms satisfactory to the Harbinger Directors and non-recourse to the
Limited Partners to fund the difference between estimated expenditures and
anticipated gross receipts.
(c)    All Call Notices shall be expressed in U.S. dollars and shall state the
date on which payment is due and the bank(s) or account(s) to which payment is
to be made. Each Call Notice shall specify in reasonable detail the purpose(s)
for which such additional Capital Contribution(s) are required, and the amount
of the Capital Contribution(s) to be made by each Limited Partner pursuant to
such Call Notice. Each Limited Partner shall contribute any additional Capital
Contribution within five (5) Business Days of the date of delivery of the
relevant Call Notice. The Partnership shall use the proceeds of such additional
Capital Contributions exclusively for the purpose specified in the relevant Call
Notice.
Section 10.6    Failure to Contribute.If a Limited Partner fails to contribute
all or any portion of a Required Contribution that such Limited Partner (a
“Delinquent Partner”) is required to make as provided in this Agreement, then,
while such Limited Partner is a Delinquent Partner, each non-Delinquent Partner
may (but shall have no obligation to) elect to fund or arrange for a Permitted
Transferee to fund (or, if all other non-Delinquent Partners waive their rights
under this Section 5.10, to arrange for any other Person who agrees to become a
Limited Partner to fund) all or any portion of the Delinquent Partner’s Required
Contribution as a Capital Contribution pursuant to this Section 5.10. If a
non-Delinquent Partner so desires to fund such amount, such non-Delinquent
Partner shall so notify each of the other non-Delinquent Partners, who shall
have five (5) days thereafter to elect to participate in such funding.
(a)    The portion that each participating non-Delinquent Partner may fund as a
Capital Contribution pursuant to this Section 5.10 (the “NDM Amount”) shall be
equal to the product of (x) the delinquent amount of such Required Contribution
multiplied by (y) a fraction, the numerator of which shall be the Percentage
Interest then held by such participating non-Delinquent Partner and the
denominator of which shall be the aggregate Percentage Interest held by all such
participating non-Delinquent Partners; provided, that if any participating
non-Delinquent Partner elects to fund less than its full allocation of such
amount, the fully participating non-Delinquent Partners shall be entitled to
take up such shortfall (allocated, as necessary, based on their respective
Percentage Interests). Upon such funding as a Capital Contribution, at the
election of the participating non-Delinquent Partners holding a majority of the
aggregate Percentage Interests of all participating non-Delinquent Partners,
either:
(i)    the Limited Partner Interest, Percentage Interest and Units of each
Partner shall be appropriately adjusted to reflect all such funding (based on
total Capital Contributions); provided, however, that if (A) such funding is in
connection with a Unilateral Capital Contribution Event or a Capital
Contribution Event in which at least one director designated by EXCO and one
director designated by Harbinger voted in favor thereof and (B) the Harbinger
Member (as defined in the GP LLC Agreement) has not exercised the Full Special
Committee Control Rights (as defined in the GP LLC Agreement), then in addition
to the dilutive effect caused by one or more Limited Partners funding the
Delinquent Partner’s portion of such Required Contribution as set forth in this
Section 5.10, (1) the Percentage Interest and Units of such Delinquent Partner
shall also be decreased by the Dilution Percentage, and (2) the aggregate
Percentage Interest and Units of the participating non-Delinquent Partner(s) who
funded such Required Contribution on behalf of such Delinquent Partner shall be
increased by the same amount on the same pro rata basis as such participating
non-Delinquent Partner(s) funded such Required Contribution; or
(ii)    the Partnership shall issue to each participating non-Delinquent Partner
newly created, non-voting preferred Additional Interests (the “NDM Interests”).
The NDM Interests received by each funding non-Delinquent Partner shall (A) have
an aggregate capital account (an “NDM Capital Account”) equal to such
non-Delinquent Partner’s NDM Amount and (B) be entitled to receive distributions
prior to all other Equity Interests in the Partnership until the related NDM
Capital Account has been reduced to zero. For the avoidance of doubt, an NDM
Interest shall not entitle the holder thereof to any distributions (whether
operating, special, liquidating or otherwise) from the Partnership after the
related NDM Capital Account has been reduced to zero. NDM Interests shall be
non-voting Equity Interests in the Partnership.
(b)    Notwithstanding anything in this Section 5.10 to the contrary, the
Delinquent Partner may cure such delinquency (i) by contributing its Required
Contribution prior to the Capital Contribution being made by another Partner or
(ii) on or before the sixtieth (60th) day following the date that the
participating non-Delinquent Partner(s) satisfied the Required Contribution, by
making a Capital Contribution to the Partnership in an amount equal to the
Required Contribution (a “Make-Up Contribution”) and paying to each
participating non-Delinquent Partner an amount equal to its NDM Amount
multiplied by the Default Interest Rate for the period from the date such
participating non-Delinquent Partner funded its NDM Amount to the date that the
Delinquent Member makes its Make-Up Contribution (the “Default Interest
Amount”). If a Delinquent Partner cures its delinquency pursuant to Section
5.10(c)(ii) by making a Make-Up Contribution and paying the Default Interest
Amount, then (A) first, the Partnership shall distribute to each existing
Partner that is a participating non-Delinquent Partner the NDM Amount that such
participating non-Delinquent Partner funded pursuant to Section 5.10(b), (B)
second, the respective Capital Accounts, Percentage Interests and Units of the
Partners, and any issuances or Transfers of Units of the Partners, shall be
adjusted with all necessary increases or decreases (in the case of any issuances
or Transfers of Units, at the initial price of issuance of such Units) to return
the Partners’ Capital Accounts and Percentage Interests status quo ante
application of Section 5.10(b), (C) third, all NDM Interests, if any, issued
pursuant to Section 5.10(b)(ii) shall be cancelled and (D) fourth, the
Percentage Interest and Units of each Partner shall be appropriately adjusted to
reflect the Make-Up Contribution (based on total Capital Contributions). If the
delinquency is remedied by the Delinquent Partner making its Required
Contribution or Make-Up Contribution as required above, the Delinquent Partner
shall no longer be deemed to be in default with respect to the unfunded Required
Contribution. If the default is remedied by funding by the non-Delinquent
Partner(s) as a Capital Contribution as set forth above, the Delinquent Partner
shall no longer be deemed to be in default with respect to the unfunded Required
Contribution.
Section 10.7    Impact of an Initial Public Offering.
(a)    In connection with an Initial Public Offering where the Partnership is
the IPO Issuer, concurrent with the closing of the Initial Public Offering, all
equity interests of the IPO Issuer (other than equity interests issued and sold
to the public in the Initial Public Offering and the Incentive Distribution
Rights, if any) will be allocated among the holders of equity in the IPO Issuer
immediately prior to the Initial Public Offering based upon the amount of cash
each such equityholder would receive if cash in an amount equal to the aggregate
value of such equity interests were distributed pursuant to Section 6.3(b). If
multiple classes of equity securities are issued in connection with the Initial
Public Offering, all equity securities issued in connection with the Initial
Public Offering shall be deemed to have the value of the equity securities
issued and sold to the public in the Initial Public Offering and each class of
outstanding equity securities prior to the Initial Public Offering shall receive
a pro rata portion of each class of equity securities. Concurrent with the
closing of the Initial Public Offering, the General Partner may, in its sole
discretion, cause the Partnership to issue Incentive Distribution Rights to the
General Partner.
(b)    In connection with an Initial Public Offering where the Partnership is
not the IPO Issuer, (i) any equity of the IPO Issuer issued (other than those
issued and sold to the public in the Initial Public Offering and any Incentive
Distribution Rights) shall be issued to the Partnership and (ii) the General
Partner may, in its sole discretion, cause the IPO Issuer to issue Incentive
Distribution Rights of the IPO Issuer to the General Partner.
(c)    The General Partner shall have the sole authority, free of any fiduciary
duty or obligation whatsoever to the Limited Partners, to establish the rights
and obligations of the Common Units, subordinated units, if any, and Incentive
Distribution Rights issued in connection with any Initial Public Offering,
including, without limitation:
(i)    the minimum quarterly distribution of the IPO Issuer;
(ii)    the period for which subordinated units, if any, will be subordinated in
right to participate in cash distributions of the IPO Issuer and other events
that would result in the subordinated units converting to Common Units;
(iii)    the “target distributions” of the IPO Issuer as they relate to the
right of the holder(s) of Incentive Distribution Rights to participate in
increasing cash distributions of the IPO Issuer;
(iv)    the right of the General Partner to require a successor general partner
to purchase any Incentive Distribution Rights that it then holds upon the
removal of the General Partner under certain circumstances; and
(v)    the voting rights attributable to Incentive Distribution Rights and the
treatment thereof as they pertain to certain matters submitted to vote
(including matters requiring a Unit Majority).
ARTICLE XI    

ALLOCATIONS AND DISTRIBUTIONS
Section 11.1    Allocations for Capital Account Purposes. For purposes of
maintaining the Capital Accounts and in determining the rights of the Partners
among themselves, the Partnership’s items of income, gain, loss, deduction,
Simulated Depletion, Simulated Gain and Simulated Loss (computed in accordance
with Section 5.5(b)) for each taxable period shall be allocated among the
Partners as provided herein below.
(s)    Net Income. After giving effect to the special allocations set forth in
Section 6.1(d) and any allocations to other Partnership Interests, Net Income
for each taxable period and all items of income, gain, loss, deduction,
Simulated Depletion, Simulated Gain and Simulated Loss taken into account in
determining Net Income for such taxable year shall be allocated as follows:
(i)    First, 100% to the General Partner, in an amount equal to the aggregate
Net Losses allocated to the General Partner pursuant to Section 6.1(b)(ii) for
all previous taxable years until the aggregate Net Income allocated to the
General Partner pursuant to this Section 6.1(a)(i) for the current and all
previous taxable years is equal to the aggregate Net Loss allocated to the
General Partner pursuant to Section 6.1(b)(ii) for all previous taxable years;
(ii)    Second, to the General Partner and the Unitholders, in accordance with
their respective Percentage Interests, in an amount equal to the aggregate Net
Losses allocated to the General Partner and the Unitholders pursuant to Section
6.1(b)(i) for all previous taxable years until the aggregate Net Income
allocated to the General Partner and the Unitholders pursuant to this Section
6.1(a)(ii) for the current and all previous taxable years is equal to the
aggregate Net Losses allocated to the General Partner and the Unitholders
pursuant to Section 6.1(b)(i) for all previous taxable years; and
(iii)    Third, the balance, if any, 100% to the General Partner and Unitholders
in accordance with their respective Percentage Interests.
(t)    Net Losses. After giving effect to the special allocations set forth in
Section 6.1(d) and any allocations to other Partnership Interests, Net Losses
for each taxable period and all items of income, gain, loss, deduction,
Simulated Depletion, Simulated Gain and Simulated Loss taken into account in
determining Net Losses for such taxable year shall be allocated as follows:
(i)    First, 100% to the General Partner and the Unitholders in accordance with
their respective Percentage Interests; provided that the Net Losses shall not be
allocated pursuant to this Section 6.1(b)(i) to the extent such allocation would
cause any Unitholder to have a deficit balance in its Adjusted Capital Account
at the end of such taxable year (or increase any existing deficit balance in its
Adjusted Capital Account);
(ii)    Second, the balance, if any, 100% to the General Partner.
(u)    Net Termination Gains and Losses. Net Termination Gain or Net Termination
Loss (including a pro rata part of each item of income, gain, loss, deduction,
and Simulated Gain taken into account in computing Net Termination Gain or Net
Termination Loss) for such taxable period and amounts distributed pursuant to
Section 12.4 shall be allocated so that, to the maximum extent possible, each
such Person’s Capital Account is equal to (i) the amount that would be
distributed to such Person if the net proceeds from such Capital Transactions or
amounts distributed pursuant to Section 12.4, as applicable, were distributed in
the manner set forth in Section 6.3(b) minus (ii) such Person’s share of
Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain. All
allocations under this Section 6.1(c) shall be made after Capital Account
balances have been adjusted by all other allocations provided under this Section
6.1 and after all distributions of Available Cash provided under Section
6.3(a)(i) or Section 6.3(a)(ii) have been made.
(v)    Special Allocations. Notwithstanding any other provision of this Section
6.1, the following special allocations shall be made for each taxable period:
(i)    Partnership Minimum Gain Chargeback. Notwithstanding any other provision
of this Section 6.1, if there is a net decrease in Partnership Minimum Gain
during any Partnership taxable period, each Partner shall be allocated items of
Partnership income and gain for such period (and, if necessary, subsequent
periods) in the manner and amounts provided in Treasury Regulation Sections
1.704-2(f)(6), 1.704-2(g)(2) and 1.704-2(j)(2)(i), or any successor provision.
For purposes of this Section 6.1(d)(i), each Partner’s Adjusted Capital Account
balance shall be determined, and the allocation of income or gain required
hereunder shall be effected, prior to the application of any other allocations
pursuant to this Section 6.1(d) with respect to such taxable period (other than
an allocation pursuant to Section 6.1(d)(v) and Section 6.1(d)(vi)). This
Section 6.1(d)(i) is intended to comply with the Partnership Minimum Gain
chargeback requirement in Treasury Regulation Section 1.704-2(f) and shall be
interpreted consistently therewith.
(ii)    Chargeback of Partner Nonrecourse Debt Minimum Gain. Notwithstanding the
other provisions of this Section 6.1 (other than Section 6.1(d)(i)), except as
provided in Treasury Regulation Section 1.704-2(i)(4), if there is a net
decrease in Partner Nonrecourse Debt Minimum Gain during any Partnership taxable
period, any Partner with a share of Partner Nonrecourse Debt Minimum Gain at the
beginning of such taxable period shall be allocated items of Partnership income,
gain and Simulated Gain for such period (and, if necessary, subsequent periods)
in the manner and amounts provided in Treasury Regulation Sections 1.704-2(i)(4)
and 1.704-2(j)(2)(ii), or any successor provisions. For purposes of this Section
6.1(d), each Partner’s Adjusted Capital Account balance shall be determined, and
the allocation of income, gain or Simulated Gain required hereunder shall be
effected, prior to the application of any other allocations pursuant to this
Section 6.1(d), other than Section 6.1(d)(i) and other than an allocation
pursuant to Section 6.1(d)(v) and Section 6.1(d)(vi), with respect to such
taxable period. This Section 6.1(d)(ii) is intended to comply with the
chargeback of items of income and gain requirement in Treasury Regulation
Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
(iii)    Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Treasury Regulation
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), items of Partnership gross income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Treasury Regulations promulgated under
Section 704(b) of the Code, the deficit balance, if any, in its Adjusted Capital
Account created by such adjustments, allocations or distributions as quickly as
possible; provided, that an allocation pursuant to this Section 6.1(d)(iii)
shall be made only if and to the extent that such Partner would have a deficit
balance in its Adjusted Capital Account after all other allocations provided for
in this Section 6.1 have been tentatively made as if this Section 6.1(d)(iii)
were not in this Agreement.
(iv)    Gross Income Allocation. In the event any Partner has a deficit balance
in its Capital Account at the end of any taxable period in excess of the sum of
(A) the amount such Partner is required to restore pursuant to the provisions of
this Agreement and (B) the amount such Partner is deemed obligated to restore
pursuant to Treasury Regulation Sections 1.704-2(g) and 1.704-2(i)(5), such
Partner shall be specially allocated items of Partnership gross income, gain and
Simulated Gain in the amount of such excess as quickly as possible; provided,
that an allocation pursuant to this Section 6.1(d)(iv) shall be made only if and
to the extent that such Partner would have a deficit balance in its Capital
Account after all other allocations provided for in this Section 6.1 have been
tentatively made as if Section 6.1(d)(iii) and this Section 6.1(d)(iv) were not
in this Agreement.
(v)    Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners pro rata. If the General Partner determines
that the Partnership’s Nonrecourse Deductions should be allocated in a different
ratio to satisfy the safe harbor requirements of the Treasury Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized
to revise the prescribed ratio to the numerically closest ratio that does
satisfy such requirements.
(vi)    Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any
taxable period shall be allocated 100% to the Partner that bears the Economic
Risk of Loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable in accordance with Treasury Regulation
Section 1.704-2(i). If more than one Partner bears the Economic Risk of Loss
with respect to a Partner Nonrecourse Debt, the Partner Nonrecourse Deductions
attributable thereto shall be allocated between or among such Partners in
accordance with the ratios in which they share such Economic Risk of Loss.
(vii)    Nonrecourse Liabilities. For purposes of Treasury Regulation Section
1.752-3(a)(3), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (A) the amount of Partnership Minimum Gain
and (B) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Partners pro rata.
(viii)    Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or 743(b)
of the Code is required, pursuant to Treasury Regulation Section
1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts
as a result of a distribution to a Partner in complete liquidation of such
Partner’s interest in the Partnership, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain or Simulated Loss (if the
adjustment increases the basis of the asset) or loss or Simulated Loss (if the
adjustment decreases such basis) taken into account pursuant to Section 5.5, and
such item of gain, loss, Simulated Gain or Simulated Loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Treasury Regulations.
(ix)    Curative Allocation.
(1)    Notwithstanding any other provision of this Section 6.1, other than the
Required Allocations, the Required Allocations shall be taken into account in
making the Agreed Allocations so that, to the extent possible, the net amount of
items of gross income, gain, loss, deduction, Simulated Depletion, Simulated
Gain and Simulated Loss allocated to each Partner pursuant to the Required
Allocations and the Agreed Allocations, together, shall be equal to the net
amount of such items that would have been allocated to each such Partner under
the Agreed Allocations had the Required Allocations and the related Curative
Allocation not otherwise been provided in this Section 6.1 and Simulated
Depletion and Simulated Loss had been included in the definition of Net Income
and Net Loss. In exercising its discretion under this Section 6.1(d)(ix)(1), the
General Partner may take into account future Required Allocations that, although
not yet made, are likely to offset other Required Allocations previously made.
Allocations pursuant to this Section 6.1(d)(ix)(1) shall only be made with
respect to Required Allocations to the extent the General Partner determines
that such allocations will otherwise be inconsistent with the economic agreement
among the Partners.
(2)    The General Partner shall, with respect to each taxable period, (1) apply
the provisions of Section 6.1(d)(ix)(1) in whatever order is most likely to
minimize the economic distortions that might otherwise result from the Required
Allocations, and (2) divide all allocations pursuant to Section 6.1(d)(ix)(1)
among the Partners in a manner that is likely to minimize such economic
distortions.
(x)    Priority Allocations. Items of Partnership gross income or gain for the
taxable year, if any, shall be allocated (1) to the holders of Incentive
Distribution Rights, pro rata, until the aggregate amount of such items
allocated to the holders of Incentive Distribution Rights pursuant to this
Section 6.1(d)(x) for the current taxable year and all previous taxable years is
equal to the aggregate amount of Incentive Distributions made to the holders of
Incentive Distribution Rights from the Closing Date to a date 45 days after the
end of the current taxable period; and (2) to the General Partner an amount
equal to the product of (A) an amount equal to the quotient determined by
dividing (y) the General Partner’s Percentage Interest by (z) the sum of 100
less the General Partner’s Percentage Interest times (B) the sum of the amounts
allocated in clause (1) above.
(w)    Simulated Depletion and Simulated Loss.
(i)    In accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(k),
Simulated Depletion with respect to each oil and gas property shall be allocated
among the General Partner and the Unitholders in accordance with their
respective Percentage Interests.
(ii)    Simulated Loss with respect to the disposition of an oil and gas
property shall be allocated among the Partners in proportion to their allocable
share of total amount realized from such disposition under Section 6.2(c)(i).
Section 11.2    Allocations for Tax Purposes.
(h)    The deduction for depletion with respect to each separate Depletable
Property shall be computed for federal income tax purposes separately by the
Partners rather than by the Partnership in accordance with Section 613A(c)(7)(D)
of the Code. Except as provided in Section 6.2(c), for purposes of such
computation (before taking into account any adjustments resulting from an
election made by the Partnership under Section 754 of the Code), the adjusted
tax basis of each Depletable Property shall be allocated among the Partners pro
rata. Each Partner shall separately keep records of his share of the adjusted
tax basis in each oil and gas property, allocated as provided above, adjust such
share of the adjusted tax basis for any cost or percentage depletion allowable
with respect to such property, and use such adjusted tax basis in the
computation of its cost depletion or in the computation of his gain or loss on
the disposition of such property by the Partnership.
(i)    For the purposes of the separate computation of gain or loss by each
Partner on the sale or disposition of each separate Depletable Property, the
Partnership’s allocable share of the “amount realized” (as such term is defined
in Section 1001(b) of the Code) from such sale or disposition shall be allocated
for federal income tax purposes among the Partners as follows:
(iii)    first, to the extent such amount realized constitutes a recovery of the
Simulated Basis of the property, to the Partners in the same proportion as the
depletable basis of such property was allocated to the Partners pursuant to
Section 6.2(b); and
(iv)    second, the remainder of such amount realized, if any, to the Partners
so that, to the maximum extent possible, the amount realized allocated to each
Partner under this Section 6.2(c)(ii) will equal such Partner’s share of the
Simulated Gain recognized by the Partnership from such sale or disposition.
The Partners recognize that with respect to Contributed Property and Adjusted
Property there will be a difference between the Carrying Value of such property
at the time of contribution or revaluation, as the case may be, and the adjusted
tax basis of such property at that time. All items of tax depreciation, cost
recovery, amortization, adjusted tax basis of depletable properties, amount
realized and gain or loss with respect to such Contributed Property and Adjusted
Property shall be allocated among the Partners to take into account the
disparities between the Carrying Values and the adjusted tax basis with respect
to such properties in accordance with the principles of Treasury Regulation
Section 1.704-3(d).
(j)    In an attempt to eliminate Book-Tax Disparities attributable to a
Contributed Property or Adjusted Property, items of income, gain, loss,
depreciation, amortization and cost recovery deductions shall be allocated for
U.S. federal income tax purposes among the Partners in the manner provided under
Section 704(c) of the Code, and the Treasury Regulations promulgated under
Section 704(b) and 704(c) of the Code, as determined appropriate by the General
Partner; provided, that the General Partner shall apply the principles of
Treasury Regulation Section 1.704-3(d) in all events.
(k)    The General Partner may determine to depreciate or amortize the portion
of an adjustment under Section 743(b) of the Code attributable to unrealized
appreciation in any Adjusted Property (to the extent of the unamortized Book-Tax
Disparity) using a predetermined rate derived from the depreciation or
amortization method and useful life applied to the unamortized Book-Tax
Disparity of such property, despite any inconsistency of such approach with
Treasury Regulation Section 1.167(c)-l(a)(6) or any successor regulations
thereto. If the General Partner determines that such reporting position cannot
reasonably be taken, the General Partner may adopt depreciation and amortization
conventions under which all purchasers acquiring Limited Partner Interests in
the same month would receive depreciation and amortization deductions, based
upon the same applicable rate as if they had purchased a direct interest in the
Partnership’s property. If the General Partner chooses not to utilize such
aggregate method, the General Partner may use any other depreciation and
amortization conventions to preserve the uniformity of the intrinsic tax
characteristics of any Limited Partner Interests, so long as such conventions
would not have a material adverse effect on the Limited Partners or the Record
Holders of any class or classes of Limited Partner Interests.
(l)    In accordance with Treasury Regulation Sections 1.1245-1(e) and
1.1250-1(f), any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 6.2, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners (or their predecessors in interest) have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.
(m)    All items of income, gain, loss, deduction and credit recognized by the
Partnership for U.S. federal income tax purposes and allocated to the Partners
in accordance with the provisions hereof shall be determined without regard to
any election under Section 754 of the Code that may be made by the Partnership;
provided, however, that such allocations, once made, shall be adjusted (in the
manner determined by the General Partner) to take into account those adjustments
permitted or required by Sections 734 and 743 of the Code.
(n)    Allocations that would otherwise be made to a Limited Partner under the
provisions of this Article VI shall instead be made to the beneficial owner of
Limited Partner Interests held by a nominee in any case in which the nominee has
furnished the identity of such owner to the Partnership in accordance with
Section 6031(c) of the Code or any other method determined by the General
Partner.
Section 11.3    Distributions of Available Cash.
(vi)    first, 100% to the General Partner and the Unitholders in accordance
with their respective Percentage Interests until there has been distributed
pursuant to this Section 6.3(a)(i) for the then-current Distribution Period in
respect of each Common Unit then Outstanding an amount equal to the Threshold
Amount; and
(vii)    second, the balance, if any, (x) to the General Partner in accordance
with its Percentage Interest with respect to its Notional General Partner Units,
(y) 23% to the holders of Incentive Distribution Rights, pro rata, and (z) to
all Unitholders, pro rata, a percentage equal to 100% less the sum of the
percentages applicable to subclauses (x) and (y) of this clause (ii).
(g)    In the event of a Capital Transaction and to the extent that an amount
equal to the Net Cash Proceeds from such transaction are not otherwise
designated by the Board to be reinvested in the replacement of capital assets by
the Partnership or applied to the repayment of a Group Member’s debt or
otherwise reserved to provide for the reasonably anticipated obligations of the
Company, such Net Cash Proceeds shall be distributed as follows:
(vi)    first, to the General Partner and the Unitholders, pro rata, until the
amount distributed in respect of each Unit equals the Unrecovered Preference
Amount; and
(vii)    second, the balance, if any, (x) to the General Partner in accordance
with its Percentage Interest with respect to its Notional General Partner Units,
(y) 23% to the holders of the Incentive Distribution Rights, pro rata, and (z)
to all Unitholders, pro rata, a percentage equal to 100% less the sum of the
percentages applicable to subclauses (x) and (y) of this clause (ii).
(h)    In the event of the dissolution and liquidation of the Partnership, all
Partnership assets shall be applied and distributed solely in accordance with,
and subject to the terms and conditions of, Section 12.4.
(i)    Each distribution in respect of a Partnership Interest shall be paid by
the Partnership, directly or through any Transfer Agent or through any other
Person or agent, only to the Record Holder of such Partnership Interest as of
the Record Date set for such distribution. Such payment shall constitute full
payment and satisfaction of the Partnership’s liability in respect of such
payment, regardless of any claim of any Person who may have an interest in such
payment by reason of an assignment or otherwise.
(j)    Notwithstanding any provision to the contrary contained in this
Agreement, the Partnership shall not be required or permitted to make a
distribution to any Person in violation of the Delaware Act or other applicable
Law. Any distributions pursuant to this Section 6.3 made in error or in
violation of applicable Law, will, upon demand by the General Partner, be
returned to the Partnership.
Section 11.4    Adjustment of Threshold Amount. In the event of a distribution
of net proceeds pursuant to Section 6.3(b) in connection with a Significant
Transaction, following such distribution the then-applicable Threshold Amount
shall be reduced by an amount equal to the product of (x) the Threshold Amount
as in effect immediately prior to such adjustment multiplied by (y) a fraction,
the numerator of which is the Threshold Base Amount immediately after giving
effect to such distribution and of which the denominator is the Threshold Base
Amount immediately prior to giving effect to such distribution. In the event of
any Capital Contributions after the Closing Date (other than adjustments made
pursuant to the Contribution Agreement) in which additional Partnership
Interests are not issued, the Threshold Amount shall be increased by an amount
equal to the product of (x) the Threshold Amount as in effect immediately prior
to such adjustment multiplied by (y) a fraction, the numerator of which is the
Threshold Base Amount immediately after giving effect to such Capital
Contribution and of which the denominator is the Threshold Base Amount
immediately prior to giving effect to such Capital Contribution.
ARTICLE XII    

MANAGEMENT AND OPERATION OF BUSINESS
Section 12.1    Management.
(o)    The General Partner shall conduct, direct and manage all activities of
the Partnership. Except as otherwise expressly provided in this Agreement, but
without limitation on the ability of the General Partner to delegate its rights
and power to other Persons, all management powers over the business and affairs
of the Partnership shall be exclusively vested in the General Partner, and no
other Partner shall have any management power over the business and affairs of
the Partnership. In addition to the powers now or hereafter granted to a general
partner of a limited partnership under applicable Law or that are granted to the
General Partner under any other provision of this Agreement, the General Partner
shall have full power and authority to do all things and on such terms as it
determines to be necessary or appropriate to conduct the business of the
Partnership, to exercise all powers set forth in Section 2.5 and to effectuate
the purposes set forth in Section 2.4, including the following:
(i)    the making of any expenditures, the lending or borrowing of money, the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness, including indebtedness
that is convertible or exchangeable into Partnership Interests, and the
incurring of any other obligations;
(ii)    the making of tax, regulatory and other filings, or rendering of
periodic or other reports to governmental or other agencies having jurisdiction
over the business or assets of the Partnership;
(iii)    the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the Partnership or the
merger or other combination of the Partnership with or into another Person (the
matters described in this clause (iii) being subject, however, to any prior
approval that may be required by Article XIV);
(iv)    the use of the assets of the Partnership (including cash on hand) for
any purpose consistent with the terms of this Agreement, including the financing
of the conduct of the operations of the Partnership Group; the lending of funds
to other Persons (including other Group Members); the repayment or guarantee of
obligations of any Group Member; and the making of capital contributions to any
Group Member;
(v)    the negotiation, execution and performance of any contracts, conveyances
or other instruments (including instruments that limit the liability of the
Partnership under contractual arrangements to all or particular assets of the
Partnership, with the other party to the contract to have no recourse against
the General Partner or its assets other than its interest in the Partnership,
even if it results in the terms of the transaction being less favorable to the
Partnership than would otherwise be the case);
(vi)    the distribution of cash or cash equivalents by the Partnership;
(vii)    the selection, employment, retention and dismissal of employees
(including employees having titles such as “president,” “vice president,”
“secretary” and “treasurer”) and agents, outside attorneys, accountants,
consultants and contractors of the General Partner or the Partnership Group and
the determination of their compensation and other terms of employment or hiring;
(viii)    the maintenance of insurance for the benefit of the Partnership Group,
the Partners and Indemnitees;
(ix)    the formation of, or acquisition of an interest in, and the contribution
of property and the making of loans to, any further limited or general
partnerships, joint ventures, corporations, limited liability companies or other
Persons (including the acquisition of interests in, and the contributions of
property to, any Group Member from time to time);
(x)    the control of any matters affecting the rights and obligations of the
Partnership, including the bringing and defending of actions at Law or in equity
and otherwise engaging in the conduct of litigation, arbitration or mediation
and the incurring of legal expense and the settlement of Claims and litigation;
(xi)    the indemnification of any Person against liabilities and contingencies
to the extent permitted by Law;
(xii)    the entering into of listing agreements with any National Securities
Exchange and the delisting of some or all of the Limited Partner Interests from,
or requesting that trading be suspended on, any such exchange;
(xiii)    the purchase, sale or other acquisition or disposition of Partnership
Interests, or the issuance of Derivative Instruments;
(xiv)    the undertaking of any action in connection with the Partnership’s
participation in the management of any Group Member; and
(xv)    the entering into of agreements with any of its Affiliates to render
services to a Group Member or to itself in the discharge of its duties as
General Partner of the Partnership.
(p)    Each of the Partners and each other Person who acquires an interest in a
Partnership Interest and each other Person who is otherwise bound by this
Agreement hereby (i) approves, ratifies and confirms the execution, delivery and
performance by the Partnership and its Subsidiaries of all agreements,
instruments, certificates and other documents contemplated by the Contribution
Agreement to which the Partnership or its Subsidiaries is or is to be made a
party in accordance therewith, including the Administrative Services Agreement,
the Operating Agreements, the Gas Marketing Agreement and the Shared Assets
Agreement and (ii) agrees that the Partnership (on its own behalf or on behalf
of its Subsidiaries) is authorized to execute, deliver and perform the
agreements referred to in clause (i) of this sentence on behalf of itself and on
behalf of its Subsidiaries from and after the closing of the transactions
contemplated by the Contribution Agreement, in each case in accordance with the
terms thereof.
(q)    As used in the following provisions of this Article VII, the term
Partnership Interest shall include any Derivative Instruments.
Section 12.2    Replacement of Fiduciary Duties. Notwithstanding any other
provision of this Agreement, to the extent that any provision of this Agreement
purports or is interpreted (a) to have the effect of replacing, restricting or
eliminating the duties that might otherwise, as a result of Delaware or other
applicable Law, be owed by the General Partner or any other Indemnitee to the
Partnership, the Limited Partners, any other Person who acquires an interest in
a Partnership Interest or any other Person who is bound by this Agreement, or
(b) to constitute a waiver or consent by the Partnership, the Limited Partners,
any other Person who acquires an interest in a Partnership Interest or any other
Person who is bound by this Agreement to any such replacement or restriction,
such provision shall be deemed to have been approved by the Partnership, all the
Partners, each other Person who acquires an interest in a Partnership Interest
and each other Person who is bound by this Agreement.
Section 12.3    Certificate of Limited Partnership. The General Partner has
caused the Certificate of Limited Partnership to be filed with the Secretary of
State of the State of Delaware as required by the Delaware Act. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents that the General Partner determines to be necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the Partnership
may elect to do business or own property. If the General Partner determines such
action to be necessary or appropriate, the General Partner shall file amendments
to and restatements of the Certificate of Limited Partnership and do all things
to maintain the Partnership as a limited partnership (or a partnership or other
entity in which the limited partners have limited liability) under the laws of
the State of Delaware or of any other state in which the Partnership may elect
to do business or own property. Subject to the terms of Section 3.3(a), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Partner.
Section 12.4    Reimbursement of the General Partner.
(c)    The General Partner shall be reimbursed by the Partnership Group on a
monthly basis, or such other basis as the General Partner may determine, for (i)
all direct and indirect expenses it incurs or payments it makes on behalf of the
Partnership Group (including salary, bonus, incentive compensation and other
amounts paid to any Person (including Affiliates of the General Partner), to
perform services for the Partnership Group or for the General Partner in the
discharge of its duties to the Partnership Group), and (ii) all other expenses
allocable to the Partnership Group or otherwise incurred by the General Partner
in connection with operating the Partnership Group’s business (including
expenses allocated to the General Partner by its Affiliates). The General
Partner shall determine the expenses that are allocable to the General Partner
or any member of the Partnership Group. Reimbursements pursuant to this Section
7.4 shall be in addition to any reimbursement to the General Partner as a result
of indemnification pursuant to Section 7.7. The General Partner and its
Affiliates may charge any member of the Partnership Group a management fee to
the extent necessary to allow the Partnership Group to reduce the amount of any
state franchise or income tax or any tax based upon revenues or gross margin of
any member of the Partnership Group if the tax benefit produced by the payment
for such management fee exceeds the amount of such fee.
(d)    The General Partner, without the approval of the Limited Partners (who
shall have no right to vote in respect thereof), may propose and adopt on behalf
of the Partnership benefit plans, programs and practices (including plans,
programs and practices involving the issuance of Partnership Interests), or
cause the Partnership to issue Partnership Interests in connection with, or
pursuant to, any benefit plan, program or practice maintained or sponsored by
the General Partner or any of its Affiliates, in each case for the benefit of
employees, officers, consultants and directors of the General Partner or its
Affiliates, in respect of services performed, directly or indirectly, for the
benefit of the Partnership Group. The Partnership agrees to issue and sell to
the General Partner or any of its Affiliates any Partnership Interests that the
General Partner or such Affiliates are obligated to provide to any employees,
officers, consultants and directors pursuant to any such benefit plans, programs
or practices. Expenses incurred by the General Partner in connection with any
such plans, programs and practices (including the net cost to the General
Partner or such Affiliates of Partnership Interests purchased by the General
Partner or such Affiliates, from the Partnership or otherwise, to fulfill awards
under such plans, programs and practices) shall be reimbursed in accordance with
Section 7.4(a). Any and all obligations of the General Partner under any benefit
plans, programs or practices adopted by the General Partner as permitted by this
Section 7.4(b) shall constitute obligations of the General Partner hereunder and
shall be assumed by any successor General Partner approved pursuant to Section
11.1 or Section 11.2 or the Transferee of or successor to all of the General
Partner’s General Partner Interest pursuant to Section 4.4.
Section 12.5    Outside Activities.
(d)    The General Partner, for so long as it is the General Partner of the
Partnership, shall not engage in any business or activity or incur any debts or
liabilities except in connection with or incidental to (A) its performance as
general partner or managing member, if any, of one or more Group Members, (B)
the acquiring, owning or disposing of debt securities or equity interests in any
Group Member or (C) the direct or indirect provision of management, advisory and
administrative services to its Affiliates or to other Persons.
(e)    Each Unrestricted Person (other than the General Partner) shall have the
right to engage in businesses of every type and description and other activities
for profit and to engage in and possess an interest in other business ventures
of any and every type or description, whether in businesses engaged in or
anticipated to be engaged in by any Group Member, independently or with others,
including business interests and activities in direct competition with the
business and activities of any Group Member. No such business interest or
activity shall constitute a breach of this Agreement, any fiduciary or other
duty existing at Law, in equity or otherwise, or obligation of any type
whatsoever to the Partnership or other Group Member, any Partner, any Person who
acquires an interest in a Partnership Interest or any Person who is otherwise
bound by this Agreement.
(f)    Notwithstanding anything to the contrary in this Agreement, the doctrine
of corporate opportunity, or any analogous doctrine, shall not apply to any
Unrestricted Person (including the General Partner). No Unrestricted Person
(including the General Partner) who acquires knowledge of a potential
transaction, agreement, arrangement or other matter that may be an opportunity
for the Partnership, shall have any duty to communicate or offer such
opportunity to any Group Member, and such Unrestricted Person (including the
General Partner) shall not be liable to the Partnership or any other Group
Member, any Partner, any person who acquires a Partnership Interest or any other
Person who is otherwise bound by this Agreement for breach of any fiduciary or
other duty existing at Law, in equity or otherwise by reason of the fact that
such Unrestricted Person (including the General Partner) pursues or acquires
such opportunity for itself, directs such opportunity to another Person or does
not communicate such opportunity or information to any Group Member; provided,
that such Unrestricted Person does not engage in such other business venture or
activity as a result of or using Confidential Information.
(g)    The General Partner and each of its Affiliates may acquire Units or other
Partnership Interests in addition to those acquired on the Closing Date and,
except as otherwise expressly provided in this Agreement, shall be entitled to
exercise, at their option, all rights relating to all Units or other Partnership
Interests acquired by them. The term “Affiliates” when used in this Section
7.5(d) with respect to the General Partner shall not include any Group Member.
Section 12.6    Performance of Duties; No Liability of Indemnitees. No
Indemnitee (in its capacity as such) shall have any duty to the Partnership or
any Partner of the Partnership except as expressly set forth herein or in other
agreements to which such Persons are party or as required by applicable Law. No
Indemnitee shall be liable to the Partnership, and no Indemnitee (in its
capacity as such) shall be liable to any Partner, for any loss or damage
sustained by the Partnership or such Partner (as applicable), unless such loss
or damage shall (as finally determined by a court of competent jurisdiction)
have resulted from such Person’s fraud or willful misconduct or, in the case of
any Partner, willful breach of this Agreement. In performing such Person’s
duties, each such Person shall be entitled to rely in good faith on the
provisions of this Agreement and on information, opinions, reports or statements
(including financial statements and information, opinions, reports or statements
as to the value or amount of the assets, liabilities, profits or losses of the
Partnership or any facts pertinent to the existence and amount of assets from
which distributions to Partners might properly be paid) of the following other
Persons or groups: one or more officers or employees of the Partnership or the
General Partner, any attorney, independent accountant, appraiser or other expert
or professional employed or engaged by or on behalf of the Partnership, or any
other Person who has been selected with reasonable care by or on behalf of the
Partnership, in each case as to matters which such relying Person reasonably
believes to be within such other Person’s competence. The preceding sentence
shall in no way limit any Person’s right to rely on information to the extent
provided in Section 17-407 of the Delaware Act. No Indemnitee (in its capacity
as such) shall be personally liable under any judgment of a court, or in any
other manner, for any debt, obligation or liability of the Partnership, whether
that liability or obligation arises in contract, tort or otherwise, solely by
reason of being an Indemnitee. Nothing in this Agreement shall limit the
liabilities and obligations of the Indemnitees, or entitle any Indemnitee to
indemnification hereunder from the Partnership with respect to any Claims made
under, when acting in any capacity for or on behalf of the Partnership other
than those expressly described above. For the avoidance of doubt, nothing in
this Agreement shall limit the liability of any Partner to any other Partner for
breach of this Agreement.
Section 12.7    Right to Indemnification. Subject to the limitations and
conditions as provided in this Section 7.7, each Person who was or is made a
party or is threatened to be made a party to or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or arbitrative or in the nature of an alternative dispute
resolution in lieu of any of the foregoing (“Proceeding”), or any appeal in such
a Proceeding or any inquiry or investigation that could lead to such a
Proceeding, by reason of the fact that such Person, or a Person of which such
Person is the legal representative, is or was an Indemnitee or, in each case, a
representative thereof shall be indemnified by the Partnership to the fullest
extent permitted by applicable Law, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the extent that such
amendment permits the Partnership to provide broader indemnification rights than
said Law permitted the Partnership to provide prior to such amendment) against
judgments, penalties (including excise and similar taxes and punitive damages),
fines, settlements and reasonable expenses (including reasonable attorneys’ and
experts’ fees) actually incurred by such Person in connection with such
Proceeding, appeal, inquiry or investigation (“Loss”), unless (a) such Loss
shall have been finally determined by a court of competent jurisdiction to have
resulted from such Person’s fraud, willful misconduct or, in the case of any
Partner, willful breach of this Agreement. Indemnification under this Section
7.7 shall continue as to a Person who has ceased to serve in the capacity which
initially entitled such Person to indemnity hereunder. The rights granted
pursuant to this Section 7.7, including the rights to advancement granted under
Section 7.8, shall be deemed contract rights, and no amendment, modification or
repeal of this Section 7.7 shall have the effect of limiting or denying any such
rights with respect to actions taken or Proceedings, appeals, inquiries or
investigations arising prior to any amendment, modification or repeal. The
foregoing indemnification is for the benefit of the Persons identified above
acting in the capacities described above and not in any other capacity. For the
avoidance of doubt and notwithstanding anything in this Section 7.7 to the
contrary, nothing in this Agreement shall provide for any indemnification of any
Partner or any legal representative thereof in respect of any Proceeding by any
other Partner against such Partner for breach of this Agreement or any Affiliate
Contract (as defined in the GP LLC Agreement).
Section 12.8    Advance Payment. The right to indemnification conferred in
Section 7.7 shall include the right to be paid or reimbursed by the Partnership
for the reasonable out-of-pocket expenses incurred by a Person entitled to be
indemnified under Section 7.7 who was, or is threatened to be made, a named
defendant or respondent in a Proceeding in advance of the final disposition of
the Proceeding and without any determination as to the Person’s ultimate
entitlement to indemnification; provided, however, that the payment of such
expenses incurred by any such Person in advance of the final disposition of a
Proceeding shall be made only upon delivery to the Partnership of a written
affirmation by such Person of its good faith belief that it has met the standard
of conduct necessary for indemnification under Section 7.7 and a written
undertaking, by or on behalf of such Person, to repay all amounts so advanced if
it shall ultimately be determined that such Person is not entitled to be
indemnified under Section 7.7 or otherwise.
Section 12.9    Indemnification of Employees and Agents. The Partnership, at the
direction of the General Partner, may indemnify and advance expenses to an
employee or agent of the Partnership to the same extent and subject to the same
conditions under which it may indemnify and advance expenses under Section 7.7
and Section 7.8.
Section 12.10    Appearance as a Witness. Notwithstanding any other provision of
this Article VII, the Partnership, at the sole discretion of the General
Partner, may pay or reimburse reasonable out-of-pocket expenses incurred by an
Indemnitee, employee or agent in connection with his appearance as a witness or
other participation in a Proceeding at a time when he is not a named defendant
or respondent in the Proceeding.
Section 12.11    Nonexclusivity of Rights. The right to indemnification and the
advancement and payment of expenses conferred in Section 7.7 and Section 7.8
shall not be exclusive of any other right that an Indemnitee may have or
hereafter acquire under any Law (common or statutory) or provision of this
Agreement.
Section 12.12    Insurance. The General Partner may obtain and maintain, at the
Partnership’s or a member of the Partnership Group’s expense, insurance to
protect the Indemnitees, employees and agents from any expense, liability or
loss arising out of or in connection with such Person’s status and actions as an
Indemnitee, employee or agent. In addition, the General Partner may cause the
Partnership to purchase and maintain insurance, at the Partnership’s expense, to
protect the Partnership and any other Indemnitee, employee or agent of the
Partnership who is or was serving at the request of the Partnership as a
manager, director, officer, partner, venturer, proprietor, trustee, employee,
agent or similar functionary of a foreign or domestic limited liability company,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan or other enterprise against any expense, liability or loss, whether
or not the Partnership would have the power to indemnify such Person against
such expense, liability or loss under this Article VII.
Section 12.13    Other Indemnification Agreements.
(a)    The Partnership hereby agrees that (i) the obligation of the Partnership
under this Agreement to indemnify or advance expenses to any Indemnitee for the
matters covered thereby shall be the primary source of indemnification and
advancement of such Indemnitee in connection therewith and any obligation on the
part of any Indemnitee under any Other Indemnification Agreement to indemnify or
advance expenses to such Indemnitee shall be secondary to the Partnership’s
obligation and shall be reduced by any amount that the Indemnitee may collect as
indemnification or advancement from the Partnership, (ii) the Partnership shall
be required to advance the full amount of expenses incurred by such Indemnitee
and shall be liable for the full amount of all expenses, judgments, penalties,
fines and amounts paid in settlement to the extent not prohibited by (and not
merely to the extent affirmatively permitted by) applicable Law and as required
by the terms of this Agreement and any Other Indemnification Agreement, without
regard to any rights an Indemnitee may have against the Persons other than
Subsidiaries of the Partnership which have agreed to indemnify or advance
expenses to such Indemnitee (“Indemnitee-Related Entities”), and (iii) the
Partnership irrevocably waives, relinquishes and releases the Indemnitee-Related
Entities from any and all claims against the Indemnitee-Related Entities for
contribution, subrogation or any other recovery of any kind in respect thereof.
In the event that any of the Indemnitee-Related Entities shall make any
advancement or payment on behalf of an Indemnitee with respect to any claim for
which such Indemnitee has sought indemnification from the Partnership, the
Indemnitee-Related Entity making such payment shall have a right of contribution
and/or be subrogated to the extent of such advancement or payment to all of the
rights of recovery of such Indemnitee against the Partnership, and such
Indemnitee shall execute all papers reasonably required and take all action
reasonably necessary to secure such rights, including the execution of such
documents as are necessary to enable the Indemnitee-Related Entities to bring
suit to enforce such rights. The Partnership and each Indemnitee agree that the
Indemnitee-Related Entities are express third party beneficiaries of the terms
of this Section 7.13(a), entitled to enforce this Section 7.13(a) as though each
of the Indemnitee-Related Entities were a party to this Agreement.
(b)    Except as provided in Section 7.13(a), the Partnership shall not be
liable under this Agreement to make any payment of amounts otherwise
indemnifiable hereunder (or for which advancement is provided hereunder) if and
to the extent that an Indemnitee has otherwise actually received such payment
under any insurance policy, contract, agreement or otherwise.
(c)    Except as provided in Section 7.13(a), the Partnership’s obligation to
indemnify or advance expenses hereunder to an Indemnitee who is or was serving
at the request of the Partnership as a director, officer, trustee, partner,
managing member, fiduciary, employee or agent of any Subsidiary shall be reduced
by any amount such Indemnitee has actually received as indemnification payments
or advancement of expenses from such Subsidiary. Notwithstanding any other
provision of this Agreement to the contrary, (i) an Indemnitee shall have no
obligation to reduce, offset, allocate, pursue or apportion any indemnification
advancement, contribution or insurance coverage among multiple parties
possessing such duties to such Indemnitee prior to the Partnership’s
satisfaction and performance of all its obligations under this Agreement and
(ii) the Partnership shall perform fully its obligations under this Agreement
without regard to whether such Indemnitee holds, may pursue or has pursued any
indemnification, advancement, contribution or insurance coverage rights against
any Person other than the Partnership.
Section 12.14    Savings Clause. If this Article VII or any portion hereof shall
be invalidated on any ground by any court or other Governmental Authority of
competent jurisdiction, then the Partnership shall nevertheless indemnify and
hold harmless each Person indemnified pursuant to this Article VII as to costs,
charges and expenses (including reasonable attorneys’ fees), judgments, fines
and amounts paid in settlement with respect to any such Proceeding, appeal,
inquiry or investigation to the fullest extent permitted by any applicable
portion of this Article VII that shall not have been invalidated and to the
fullest extent permitted by applicable Law.
Section 12.15    Standards of Conduct and Modification of Duties.
(a)    Whenever the General Partner makes a determination or takes or declines
to take any other action in its capacity as the general partner of the
Partnership as opposed to in its individual capacity, whether under this
Agreement, any Group Member Agreement or any other agreement contemplated hereby
or otherwise, then, unless another express standard is provided for in this
Agreement, the General Partner shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any higher
standard contemplated hereby or under the Delaware Act or any other Law, rule or
regulation or at equity. A determination, other action or failure to act by the
General Partner will be deemed to be in good faith unless the General Partner
believed such determination, other action or failure to act was adverse to the
interests of the Partnership. In any proceeding brought by the Partnership, any
Limited Partner, any Person who acquires an interest in a Partnership Interest
or any other Person who is bound by this Agreement challenging such action,
determination or failure to act, the Person bringing or prosecuting such
proceeding shall have the burden of proving that such determination, action or
failure to act was not in good faith.
(b)    Whenever the General Partner makes a determination or takes or declines
to take any other action, or any of its Affiliates causes it to do so, in its
individual capacity as opposed to in its capacity as the general partner of the
Partnership, whether under this Agreement or any other agreement contemplated
hereby or otherwise, then the General Partner, or such Affiliates causing it to
do so, are entitled, to the fullest extent permitted by Law, to make such
determination or to take or decline to take such other action free of any
fiduciary duty or other duty existing at Law, in equity or otherwise or
obligation whatsoever to the Partnership, any Limited Partner, any other Person
who acquires an interest in a Partnership Interest or any other Person who
otherwise is bound by this Agreement, and the General Partner, or such
Affiliates causing it to do so, shall not, to the fullest extent permitted by
Law, be required to act in good faith or pursuant to any other standard imposed
by this Agreement or any other agreement contemplated hereby or under the
Delaware Act or any other Law, rule or regulation or at equity. By way of
illustration and not of limitation, whenever the phrases “at the option of the
General Partner,” “in its sole discretion” or some variation of those phrases
are used in this Agreement, it indicates that the General Partner is acting in
its individual capacity. For the avoidance of doubt, whenever the General
Partner votes or transfers its Partnership Interests, or refrains from voting or
transferring its Partnership Interests, it shall be acting in its individual
capacity.
(c)    Each of the Partnership and the Partners acknowledges and agrees that the
General Partner shall be governed in accordance with the GP LLC Agreement and
that, pursuant to the GP LLC Agreement, each member of the Board may decide or
determine any matter subject to the Board’s approval in the sole and absolute
discretion of such member, and that such member of the Board shall have the
right to make such determination solely on the basis of the interests of the
member of the General Partner that designated such member of the Board. Each of
the Partnership and the Partners hereby agrees that any Claims against, actions,
rights to sue, other remedies or other recourse to or against any member of the
Board for or in connection with any such decision or determination, in each case
whether arising in common law or equity or created by rule of law, statute,
constitution, contract (including this Agreement) or otherwise, are in each case
expressly released and waived by the Partnership and each Partner, to the
fullest extent permitted by Law, as a condition of, and as part of the
consideration for, the execution of this Agreement and any related agreement,
and the incurring by the Partners of the obligations provided in such
agreements.
(d)    Notwithstanding anything to the contrary in this Agreement, the General
Partner and its Affiliates or any other Indemnitee shall have no duty or
obligation, express or implied, to (i) sell or otherwise dispose of any asset of
the Partnership Group or (ii) permit any Group Member to use any facilities or
assets of the General Partner and its Affiliates, except as may be provided in
contracts entered into from time to time specifically dealing with such use. Any
determination by the General Partner or any of its Affiliates to enter into such
contracts shall be in its sole discretion.
(e)    The Partners, each Person who acquires an interest in a Partnership
Interest or is otherwise bound by this Agreement hereby authorize the General
Partner, on behalf of the Partnership as a partner or member of a Group Member,
to approve actions by the general partner or managing member of such Group
Member similar to those actions permitted to be taken by the General Partner
pursuant to this Section 7.15.
Section 12.16    Other Matters Concerning the General Partner and Indemnitees.
(a)    The General Partner and any other Indemnitee may rely upon, and shall be
protected in acting or refraining from acting upon, any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(b)    The General Partner and any other Indemnitee may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers and
other consultants and advisers selected by it, and any act taken or omitted in
reliance upon the advice or opinion (including an Opinion of Counsel) of such
Persons as to matters that the General Partner reasonably believes to be within
such Person’s professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such advice or
opinion.
(c)    The General Partner shall have the right, in respect of any of its powers
or obligations hereunder, to act through any of its duly authorized officers, a
duly appointed attorney or attorneys-in-fact or the duly authorized officers of
any Group Member.
Section 12.17    Purchase or Sale of Partnership Interests. The General Partner
may cause the Partnership to purchase or otherwise acquire Partnership
Interests. As long as Partnership Interests are held by any Group Member, such
Partnership Interests shall not be considered Outstanding for any purpose,
except as otherwise provided herein. The General Partner or any Affiliate of the
General Partner may also purchase or otherwise acquire and sell or otherwise
dispose of Partnership Interests for its own account, subject to the provisions
of Article IV and Article X.
Section 12.18    Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner and any officer of the General
Partner authorized by the General Partner to act on behalf of and in the name of
the Partnership has full power and authority to encumber, sell or otherwise use
in any manner any and all assets of the Partnership and to enter into any
authorized contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner or any such officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives, to the fullest extent permitted by Law, any and
all defenses or other remedies that may be available against such Person to
contest, negate or disaffirm any action of the General Partner or any such
officer in connection with any such dealing. In no event shall any Person
dealing with the General Partner or any such officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with
or to inquire into the necessity or expedience of any act or action of the
General Partner or any such officer or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and (c)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
ARTICLE XIII    

BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 13.1    Records and Accounting; Auditors.
(k)    The General Partner shall keep or cause to be kept at the principal
office of the Partnership appropriate books and records with respect to the
Partnership’s business, including all books and records necessary to provide to
the Limited Partners any information required to be provided pursuant to Section
3.3(a). The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with GAAP. The Partnership
shall not be required to keep books maintained on a cash basis, and the General
Partner shall be permitted to calculate cash-based measures by making such
adjustments to its accrual basis books to account for non-cash items and other
adjustments as the General Partner determines to be necessary or appropriate.
(l)    The independent registered public accounting firm and the external audit
service provider of the Partnership shall initially be KPMG, LLP, until such
firm resigns or is removed by the Board. Thereafter, the Board shall select the
independent registered public accounting firm and the external audit service
provider of the Partnership.
Section 13.2    Fiscal Year. The fiscal year of the Partnership for financial
statement purposes (the “Book Fiscal Year”) and federal and applicable state and
local income tax purposes (the “Tax Fiscal Year”) will be as determined by the
General Partner or required under the Code; provided, that, for so long as the
Harbinger Partner consolidates the financial statements of the Partnership with
any Affiliate of the Harbinger Partner for accounting purposes, the Book Fiscal
Year end shall be the book fiscal year end of the Harbinger Partner (for the
avoidance of doubt, initially September 30) unless otherwise determined by the
Harbinger Partner.
Section 13.3    Reports.
(e)    As soon as practicable, but in no event later than fifty (50) days
following the close of each Book Fiscal Year of the Partnership, the General
Partner shall cause to be delivered, by any reasonable means, to each Record
Holder of a Unit or other Partnership Interest as of a date selected by the
General Partner, an annual report containing financial statements of the
Partnership for such Book Fiscal Year of the Partnership, presented in
accordance with GAAP, including a balance sheet, a statement of income and
comprehensive income, a statement of Partners’ equity and a statement of cash
flows, such statements to be audited by a firm of independent public accountants
selected by the General Partner, and such other information, if any, as may be
required by applicable Law or regulation or as the General Partner determines to
be necessary or appropriate.
(f)    As soon as practicable, but in no event later than thirty (30) days after
the close of each Quarter except the last Quarter of each Book Fiscal Year, the
General Partner shall cause to be delivered, by any reasonable means to each
Record Holder of a Unit or other Partnership Interest, as of a date selected by
the General Partner, a report containing unaudited financial statements of the
Partnership for such Quarter prepared in accordance with GAAP for interim
reporting, including a balance sheet, a statement of income and comprehensive
income, a statement of Partners’ equity and a statement of cash flows and such
other information, if any, as may be required by applicable Law or regulation or
as the General Partner determines to be necessary or appropriate.
ARTICLE XIV    

TAX MATTERS
Section 14.1    Tax Returns and Information. The General Partner shall cause the
Partnership to prepare and timely file, or cause to be prepared and timely
filed, all tax returns of the Partnership that are required for federal, state
and local income tax and other applicable tax purposes; provided, that, no later
than ten Business Days prior to the due date for filing any member of the
Partnership Group’s federal and state income tax returns (including information
returns), the General Partner shall provide a written or electronic copy of such
tax returns (and relevant supporting workpapers) to the Harbinger Partner for
review and comment and the General Partner shall make revisions to such tax
returns as are reasonably requested by the Harbinger Partner within five
Business Days following the Harbinger Partner’s receipt of such tax returns from
the General Partner; provided further, that if the Harbinger Partner has not so
requested such revisions within such five Business Day period, then the
Harbinger Partner shall be deemed to have no comments to any such tax returns.
The Partnership shall furnish to each Record Holder the tax information
reasonably required for federal, state and local income tax reporting purposes
with respect to a taxable period within 90 days of the close of the calendar
year in which the Partnership’s taxable period ends.
Section 14.2    Accounting Methods; Tax Elections.
(g)    The classification, realization and recognition of income, gains, losses
and deductions and other items shall be on the accrual method of accounting for
U.S. federal income tax purposes; provided, that, subject to the other
provisions of this Section 9.2, the Partnership may change the method of
accounting used for federal income tax purposes, should a change be possible and
desirable (as determined by the General Partner in its sole discretion).
(h)    The Partnership shall make an election under Section 754 of the Code in
accordance with applicable Regulations promulgated thereunder, for the first
taxable year in which there is a transfer or Partnership distribution to which
such election would apply.
(i)    Except as otherwise provided herein, the General Partner shall determine
whether the Partnership should make any other available tax elections and select
any other appropriate tax accounting methods and conventions for any purpose
under this Agreement; provided, that no material tax election (other than an
election under Section 754 of the Code) or selection of a material tax
accounting method or convention shall be made without the prior written consent
of each of the Harbinger Partner and the EXCO Partner, which consent shall not
be unreasonably withheld. Notwithstanding the foregoing, the election under
Section 6231(a)(1)(B)(ii) of the Code shall not be made with respect to the
Partnership without the prior written consent of each Record Holder.
Section 14.3    Tax Controversies. Subject to the provisions hereof, the General
Partner is designated as the Tax Matters Partner (as defined in Code Section
6231) as of the date hereof, and is authorized and required to represent the
Partnership (at the Partnership’s expense) in connection with all examinations
of the Partnership’s affairs by tax authorities, including resulting
administrative and judicial proceedings, and to expend Partnership funds that
have been approved for such purposes by the General Partner for professional
services and costs associated therewith. On or before the fifth Business Day
after becoming aware of any significant federal and state income tax matters
with respect to the Partnership, including any tax audit, examination or
proceeding with respect to the federal and state income tax matters of any
member of the Partnership Group (any such matter, a “Tax Matter”), the General
Partner shall inform the Harbinger Partner of such Tax Matter and shall deliver
to the Harbinger Partner copies of all written communications it may receive
with respect to such Tax Matter. The General Partner shall allow the Harbinger
Partner to participate in any decisions relating to such Tax Matter and shall
not settle any such Tax Matter without the Harbinger Partner’s prior written
consent not to be unreasonably withheld. Without the consent of the Harbinger
Partner, which consent shall not be unreasonably withheld, the General Partner
shall not extend the statute of limitations with respect to any federal or state
income tax liability of any member of the Partnership Group, meet with or
initiate contact with any federal or state tax authorities, file a request for
administrative adjustment on behalf of any member of the Partnership Group with
respect to any federal or state income tax matter, file suit on behalf of any
member of the Partnership Group concerning any federal or state income tax
refund or deficiency or take any action contemplated by Sections 6222 through
6231 of the Code. In the event the “TEFRA audit provisions” of Code Section 6221
et seq. apply by their terms, the Tax Matters Partner shall ensure that each
Record Holder is a notice partner within the meaning of Section 6231(a)(8) of
the Code. Each Partner agrees to cooperate with the Tax Matters Partner and to
do or refrain from doing any or all things reasonably required by the Tax
Matters Partner to conduct such proceedings.
Section 14.4    Withholding; Tax Payments.
(a)    The General Partner may treat taxes paid by the Partnership on behalf of,
all or less than all of the Partners, either as a distribution of cash to such
Partners or as a general expense of the Partnership, as determined appropriate
under the circumstances by the General Partner.
(b)    Notwithstanding any other provision of this Agreement, the General
Partner is authorized to take any action that may be required to cause the
Partnership and other Group Members to comply with any withholding requirements
established under the Code or any other federal, state or local Law including
pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that
the Partnership is required or elects to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income or
from a distribution to any Partner (including by reason of Section 1446 of the
Code), the General Partner may treat the amount withheld as a distribution of
cash pursuant to Section 6.3 in the amount of such withholding from such
Partner.
Section 14.5    Texas Margin Tax Sharing Agreement. If Texas Law allows or
requires any Partner and the Partnership to participate in the filing of a Texas
margin tax combined group report and such a combined group report is filed by
such Partner and such Partner pays the Texas margin tax liability due in
connection with such report, the Partners agree that the Partnership shall
promptly reimburse the filing Partner for the margin tax paid on behalf of the
Partnership as a combined group member. The margin tax paid on behalf of the
Partnership shall be equal to the margin tax that the Partnership would have
paid if it had computed its margin tax liability for the report period on a
separate entity basis rather than as a member of the combined group. The
Partners agree that the filing Partner may deduct for federal income tax
purposes 100% of the Texas margin tax attributable to the Partnership and paid
by Harbinger and that the Partnership’s reimbursement obligation shall be
limited to the after-tax cost of the Texas margin tax attributable to the
Partnership and paid by the filing Partner, computed based on the highest
marginal federal tax rate applicable to corporations.
ARTICLE XV    

ADMISSION OF PARTNERS
Section 15.1    Admission of Limited Partners.
(j)    A Person shall be admitted as a Limited Partner and shall become bound by
the terms of this Agreement if such Person purchases or otherwise lawfully
acquires any Limited Partner Interest and becomes the Record Holder of such
Limited Partner Interests in accordance with the provisions of Article IV or
Article V hereof. Upon the issuance by the Partnership of Common Units and
Incentive Distribution Rights to the Initial Limited Partners as described in
Article V, such parties will be automatically admitted to the Partnership as
Initial Limited Partners in respect of the Common Units and Incentive
Distribution Rights issued to them.
(k)    By acceptance of the Transfer of any Limited Partner Interests in
accordance with Article IV or the acceptance of any Limited Partner Interests
issued pursuant to Article V or pursuant to a merger or consolidation or
conversion pursuant to Article XIV, each Transferee of, or other such Person
acquiring, Limited Partner Interests (including any nominee holder or an agent
or representative acquiring such Limited Partner Interests for the account of
another Person) (i) shall be admitted to the Partnership as a Limited Partner
with respect to the Limited Partner Interests so Transferred or issued to such
Person when any such Transfer or admission is reflected in the books and records
of the Partnership and such Limited Partner becomes the Record Holder of the
Limited Partner Interests so Transferred, (ii) shall become bound, and shall be
deemed to have agreed to be bound, by the terms of this Agreement, (iii)
represents that the Transferee or other recipient has the capacity, power and
authority to enter into this Agreement and (iv) makes the consents,
acknowledgements and waivers contained in this Agreement, all with or without
execution of this Agreement by such Person. The Transfer of any Limited Partner
Interests and the admission of any new Limited Partner shall not constitute an
amendment to this Agreement. A Person may become a Limited Partner or Record
Holder of a Limited Partner Interest without the consent or approval of any of
the Partners. A Person may not become a Limited Partner without acquiring a
Limited Partner Interest and until such Person is reflected in the books and
records of the Partnership as the Record Holder of such Limited Partner
Interest.
(l)    The name and mailing address of each Record Holder shall be listed on the
books and records of the Partnership maintained for such purpose by the
Partnership or the Transfer Agent. The General Partner shall update the books
and records of the Partnership from time to time as necessary to reflect
accurately the information therein (or shall cause the Transfer Agent to do so,
as applicable). A Limited Partner Interest may be represented by a Certificate,
as provided in Section 4.1.
(m)    Any Transfer of a Limited Partner Interest shall not entitle the
Transferee to share in the profits and losses, to receive distributions, to
receive allocations of income, gain, loss, deduction or credit or any similar
item or to any other rights to which the Transferor was entitled until the
Transferee becomes a Limited Partner pursuant to Section 10.1(b).
Section 15.2    Admission of Successor General Partner. A successor General
Partner approved pursuant to Section 11.1 or Section 11.2 or the Transferee of
or successor to all of the General Partner Interest pursuant to Section 4.4 who
is proposed to be admitted as a successor General Partner shall be admitted to
the Partnership as the General Partner, effective immediately prior to the
withdrawal or removal of the predecessor or transferring General Partner,
pursuant to Section 11.1 or Section 11.2 or the Transfer of the General Partner
Interest pursuant to Section 4.4; provided, however, that no such successor
shall be admitted to the Partnership until compliance with the terms of Section
4.4 has occurred and such successor has executed and delivered such other
documents or instruments as may be required to effect such admission. Any such
successor shall, subject to the terms hereof, carry on the business of the
members of the Partnership Group without dissolution.
Section 15.3    Amendment of Agreement and Certificate of Limited Partnership.
To effect the admission to the Partnership of any Partner, the General Partner
shall take all steps necessary or appropriate under the Delaware Act to amend
the records of the Partnership to reflect such admission and, if necessary, to
prepare as soon as practicable an amendment to this Agreement and, if required
by Law, the General Partner shall prepare and file an amendment to the
Certificate of Limited Partnership.
Section 15.4    Representations and Warranties. Each Partner hereby represents
and warrants to the Partnership and each other Partner that:
(c)    No Conflicts. None of the execution, delivery and performance of this
Agreement (i) constitutes or will constitute a violation of the organizational
documents of such Partner or (ii) constitutes or will constitute a breach or
violation of, or a default (or an event that, with notice or lapse of time or
both, would constitute such a default) under any agreement to which such Partner
is a party or by which it is or its assets are bound, except for any breaches,
violations or defaults, in the case of clause (ii), as would not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the financial condition, business, properties or results of operations of the
Partnership Group, taken as a whole;
(d)    Own Account. Such Partner has acquired or is acquiring its Partnership
Interest in the Partnership for investment purposes only for its own account and
not with a view to any distribution, reoffer, resale or other disposition that
is not in compliance with the Securities Act or any applicable state securities
laws;
(e)    Expertise. Such Partner alone, or together with its representatives,
possesses such expertise, knowledge and sophistication in financial and business
matters generally, and in the type of transactions in which the Partnership
proposes to engage in particular, that such Partner is capable of evaluating the
merits and economic risks of acquiring and holding Partnership Interests, and
that such Partner is able to bear all such economic risks now and in the future;
(f)    Awareness of Economic Risk. Such Partner is aware that it must bear the
economic risk of such Partner’s investment in the Partnership for an indefinite
period of time because Partnership Interests have not been registered under the
Securities Act or under the securities laws of any state, and, therefore, such
Partnership Interests cannot be sold unless they are subsequently registered
under the Securities Act and any applicable state securities laws or an
exemption from registration is available;
(g)    No Registration Rights. Such Partner is aware that only the Partnership
can take action to register Partnership Interests in the Partnership under the
Securities Act and that the Partnership is under no such obligation and does not
propose or intend to attempt to do so;
(h)    Transfer Restrictions. Such Partner is aware that this Agreement provides
restrictions on the ability of a Partner to Transfer Partnership Interests, and
such Partner will not seek to effect any Transfer of Partnership Interests other
than in accordance with such restrictions; and
(i)    Accredited Investor. Such Partner is, and at such time that it makes any
additional Capital Contributions to the Partnership will be, an “accredited
investor” within the meaning of Rule 501 under the Securities Act (an
“Accredited Investor”) unless such status as an Accredited Investor is not
required in order for the Transfer of Partnership Interests to such Partner to
be exempt from registration under the Securities Act.
ARTICLE XVI    

WITHDRAWAL OR REMOVAL OF PARTNERS
Section 16.1    Withdrawal of the General Partner.
(h)    The General Partner shall be deemed to have withdrawn from the
Partnership upon the occurrence of any one of the following events (each such
event herein referred to as an “Event of Withdrawal”);
(ii)    The General Partner voluntarily withdraws from the Partnership by giving
written notice to the other Partners;
(iii)    The General Partner transfers all of its General Partner Interest
pursuant to Section 4.4;
(iv)    The General Partner is removed pursuant to Section 11.2;
(v)    The General Partner (A) makes a general assignment for the benefit of
creditors; (B) files a voluntary bankruptcy petition for relief under Chapter 7
of the United States Bankruptcy Code; (C) files a petition or answer seeking for
itself a liquidation, dissolution or similar relief (but not a reorganization)
under any Law; (D) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against the General Partner
in a proceeding of the type described in clauses (A)-(C) of this Section
11.1(a)(iv); or (E) seeks, consents to or acquiesces in the appointment of a
trustee (but not a debtor-in-possession), receiver or liquidator of the General
Partner or of all or any substantial part of its properties;
(vi)    A final and non-appealable order of relief under Chapter 7 of the United
States Bankruptcy Code is entered by a court with appropriate jurisdiction
pursuant to a voluntary or involuntary petition by or against the General
Partner; or
(vii)     (A) if the General Partner is a corporation, a certificate of
dissolution or its equivalent is filed for the General Partner, or 90 days
expire after the date of notice to the General Partner of revocation of its
charter without a reinstatement of its charter, under the laws of its state of
incorporation; (B) if the General Partner is a partnership or a limited
liability company, the dissolution and commencement of winding up of the General
Partner; (C) if the General Partner is acting in such capacity by virtue of
being a trustee of a trust, the termination of the trust; (D) if the General
Partner is a natural person, his death or adjudication of incompetency; and (E)
otherwise upon the termination of the General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv), (v) or (vi)(A), (B),
(C) or (E) occurs, the withdrawing General Partner shall give notice to the
Limited Partners within 30 days after such occurrence. The Partners hereby agree
that only the Events of Withdrawal described in this Section 11.1 shall result
in the withdrawal of the General Partner from the Partnership.
(i)    Withdrawal of the General Partner from the Partnership upon the
occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances: (i) the General Partner voluntarily
withdraws by giving at least 90 days’ advance notice to the Unitholders, such
withdrawal to take effect on the date specified in such notice or (ii) at any
time that the General Partner ceases to be the General Partner pursuant to
Section 11.1(a)(ii) or is removed pursuant to Section 11.2. The withdrawal of
the General Partner from the Partnership upon the occurrence of an Event of
Withdrawal shall also constitute the withdrawal of the General Partner as
general partner or managing member, if applicable, of the other Group Members.
If the General Partner gives a notice of withdrawal pursuant to Section
11.1(a)(i), a Unit Majority, may, prior to the effective date of such
withdrawal, elect a successor General Partner. The Person so elected as
successor General Partner shall automatically become the successor general
partner or managing member, if applicable, of the other Group Members of which
the General Partner is a general partner or a managing member. If, prior to the
effective date of the General Partner’s withdrawal pursuant to Section
11.1(a)(i), a successor is not selected by the Unitholders as provided herein,
the Partnership shall be dissolved in accordance with Section 12.1 unless the
business of the Partnership is continued pursuant to Section 12.2. Any successor
General Partner elected in accordance with the terms of this Section 11.1(b)
shall be subject to the provisions of Section 10.2.
Section 16.2    Removal of the General Partner. The General Partner may be
removed if such removal is approved by the Unitholders holding at least 85% of
the Outstanding Units (including Units held by the General Partner and its
Affiliates) voting as a single class. Any such action by such holders for
removal of the General Partner must also provide for the election of a successor
General Partner by the Unitholders holding a majority of the Outstanding Common
Units, voting as a class (including Common Units held by the General Partner and
its Affiliates). Such removal shall be effective immediately following the
admission of a successor General Partner pursuant to Section 10.2. The removal
of the General Partner shall also automatically constitute the removal of the
General Partner as general partner or managing member, if applicable, of the
other Group Members of which the General Partner is a general partner or a
managing member. If a Person is elected as a successor General Partner in
accordance with the terms of this Section 11.2, such Person shall, upon
admission pursuant to Section 10.2, automatically become a successor general
partner or managing member, if applicable, of the other Group Members of which
the General Partner is a general partner or a managing member. The right of the
holders of Outstanding Units to remove the General Partner shall not exist or be
exercised unless the Partnership has received an Opinion of Counsel that such
removal (following the selection of a successor General Partner) would not
result in the loss of limited liability under the Delaware Act of any Limited
Partner or cause any Group Member to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for U.S. federal income tax
purposes to the extent not already so treated or taxed. Any successor General
Partner elected in accordance with the terms of this Section 11.2 shall be
subject to the provisions of Section 10.2.
Section 16.3    Interest of Departing General Partner and Successor General
Partner. The Departing General Partner shall be entitled to receive all
reimbursements due such Departing General Partner pursuant to Section 7.4,
including any employee-related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the
Departing General Partner or its Affiliates (other than any Group Member) for
the benefit of the Partnership or the other Group Members. In the event the
General Partner withdraws or is removed, upon the admission of a successor
General Partner, the General Partner Interest of the Departing General Partner
shall be cancelled.
Section 16.4    Withdrawal of Limited Partners. No Limited Partner shall have
any right to withdraw from the Partnership; provided, however, that when a
Transferee of a Limited Partner’s Limited Partner Interest becomes a Record
Holder of the Limited Partner Interest so Transferred, such transferring Limited
Partner shall cease to be a Limited Partner with respect to the Limited Partner
Interest so Transferred.
ARTICLE XVII    

DISSOLUTION AND LIQUIDATION
Section 17.1    Dissolution. The Partnership shall not be dissolved by the
admission of additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the removal
or withdrawal of the General Partner, if a successor General Partner is elected
pursuant to Section 11.1, Section 11.2 or Section 12.2, the Partnership shall
not be dissolved and such successor General Partner is hereby authorized to, and
shall, continue the business of the Partnership. Subject to Section 12.2, the
Partnership shall dissolve, and its affairs shall be wound up, upon:
(c)    an Event of Withdrawal of the General Partner as provided in Section
11.1(a) (other than Section 11.1(a)(ii)), unless a successor is elected and such
successor is admitted to the Partnership pursuant to this Agreement;
(d)    an election to dissolve the Partnership by the General Partner that is
approved by a Unit Majority;
(e)    the entry of a decree of judicial dissolution of the Partnership pursuant
to the provisions of the Delaware Act; or
(f)    at any time there are no Limited Partners, unless the Partnership is
continued without dissolution in accordance with the Delaware Act.
Section 17.2    Continuation of the Business of the Partnership After
Dissolution. Upon (a) an Event of Withdrawal caused by the withdrawal or removal
of the General Partner as provided in Section 11.1(a)(i) or Section 11.1(a)(iii)
and the failure of the Partners to select a successor to such Departing General
Partner pursuant to Section 11.1 or Section 11.2, then within 90 days
thereafter, or (b) an event constituting an Event of Withdrawal as defined in
Section 11.1(a)(iv), (v) or (vi), then, to the maximum extent permitted by Law,
within 180 days thereafter, a Unit Majority may elect to continue the business
of the Partnership on the same terms and conditions set forth in this Agreement
by appointing as a successor General Partner a Person approved by a Unit
Majority. Unless such an election is made within the applicable time period as
set forth above, the Partnership shall conduct only activities necessary to wind
up its affairs. If such an election is so made, then:
(xvi)    the Partnership shall continue without dissolution unless earlier
dissolved in accordance with this Article XII;
(xvii)    if the successor General Partner is not the former General Partner,
then the interest of the former General Partner shall be treated in the manner
provided in Section 11.3; and
(xviii)    the successor General Partner shall be admitted to the Partnership as
General Partner, effective as of the Event of Withdrawal, by agreeing in writing
to be bound by this Agreement; provided, that the right of a Unit Majority to
approve a successor General Partner and to continue the business of the
Partnership shall not exist and may not be exercised unless the Partnership has
received an Opinion of Counsel that (x) the exercise of the right would not
result in the loss of limited liability under the Delaware Act of any Limited
Partner and (y) neither the Partnership nor any Group Member would be treated as
an association taxable as a corporation or otherwise be taxable as an entity for
U.S. federal income tax purposes upon the exercise of such right to continue (if
not already so treated or taxed).
Section 17.3    Liquidator. Upon dissolution of the Partnership, unless the
business of the Partnership is continued pursuant to Section 12.2, the General
Partner shall select one or more Persons to act as Liquidator. The Liquidator
(if other than the General Partner) shall be entitled to receive such
compensation for its services as may be approved by holders of at least a
majority of the Outstanding Units, voting as a single class. The Liquidator (if
other than the General Partner) shall agree not to resign at any time without 15
days’ prior notice and may be removed at any time, with or without cause, by
notice of removal approved by holders of at least a majority of the Outstanding
Units, voting as a single class. Upon dissolution, removal or resignation of the
Liquidator, a successor and substitute Liquidator (who shall have and succeed to
all rights, powers and duties of the original Liquidator) shall within 30 days
thereafter be approved by holders of at least a majority of the Outstanding
Units, voting as a single class. The right to approve a successor or substitute
Liquidator in the manner provided herein shall be deemed to refer also to any
such successor or substitute Liquidator approved in the manner herein provided.
Except as expressly provided in this Article XII, the Liquidator approved in the
manner provided herein shall have and may exercise, without further
authorization or consent of any of the parties hereto, all of the powers
conferred upon the General Partner under the terms of this Agreement (but
subject to all of the applicable limitations, contractual and otherwise, upon
the exercise of such powers) necessary or appropriate to carry out the duties
and functions of the Liquidator hereunder for and during the period of time
required to complete the winding up and liquidation of the Partnership as
provided for herein.
Liquidation
(a)    The assets may be disposed of by public or private sale or by
distribution in kind to one or more Partners on such terms as the Liquidator and
such Partner or Partners may agree. If any property is distributed in kind, the
Partner receiving the property shall be deemed for purposes of this Section 12.4
to have received cash equal to its Fair Market Value; and contemporaneously
therewith, appropriate cash distributions must be made to the other Partners.
The Liquidator may defer liquidation or distribution of the Partnership’s assets
for a reasonable time if it determines that an immediate sale or distribution of
all or some of the Partnership’s assets would be impractical or would cause
undue loss to the Partners. The Liquidator may distribute the Partnership’s
assets, in whole or in part, in kind if it determines that a sale would be
impractical or would cause undue loss to the Partners.
(b)    Liabilities of the Partnership include amounts owed to the Liquidator as
compensation for serving in such capacity (subject to the terms of Section 12.3)
and amounts to Partners otherwise than in respect of their distribution rights
under Article VI. With respect to any liability that is contingent, conditional
or unmatured or is otherwise not yet due and payable, the Liquidator shall
either settle such claim for such amount as it thinks appropriate or establish a
reserve of cash or other assets to provide for its payment. When paid, any
unused portion of the reserve shall be distributed as additional liquidation
proceeds.
(c)    All property and all cash in excess of that required to discharge
liabilities as provided in Section 12.4(b) shall be distributed to the Partners
in the manner set forth in Section 6.3(b).
Section 17.4    Cancellation of Certificate of Limited Partnership. Upon the
completion of the distribution of Partnership cash and property as provided in
Section 12.4 in connection with the liquidation of the Partnership, the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 17.5    Return of Contributions. The General Partner shall not be
personally liable for, and shall have no obligation to contribute or loan any
monies or property to the Partnership to enable it to effectuate, the return of
the Capital Contributions of the Limited Partners or Unitholders, or any portion
thereof, it being expressly understood that any such return shall be made solely
from Partnership assets.
Section 17.6    Waiver of Partition. To the maximum extent permitted by Law,
each Partner hereby waives any right to partition of the Partnership property.
Section 17.7    Capital Account Restoration. No Limited Partner shall have any
obligation to restore any negative balance in its Capital Account upon
liquidation of the Partnership. The General Partner shall be obligated to
restore any negative balance in its Capital Account upon liquidation of its
interest in the Partnership by the end of the taxable period of the Partnership
during which such liquidation occurs, or, if later, within 90 days after the
date of such liquidation.
ARTICLE XVIII    

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
Section 18.1    Amendments to be Adopted Solely by the General Partner. Each
Partner agrees that the General Partner, without the approval of any other
Partner, may amend any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect:
(j)    a change in the name of the Partnership, the location of the principal
place of business of the Partnership, the registered agent of the Partnership or
the registered office of the Partnership;
(k)    admission, substitution, withdrawal or removal of Partners in accordance
with this Agreement;
(l)    a change that the General Partner determines to be necessary or
appropriate to qualify or continue the qualification of the Partnership as a
limited partnership or a partnership in which the Limited Partners have limited
liability under the laws of any state or to ensure that the Group Members will
not be treated as associations taxable as corporations or otherwise taxed as
entities for U.S. federal income tax purposes;
(m)    a change that the General Partner determines (d) does not adversely
affect the Limited Partners (including any particular class of Partnership
Interests as compared to other classes of Partnership Interests) in any material
respect, (a) to be necessary or appropriate to (A) satisfy any requirements,
conditions or guidelines contained in any opinion, directive, order, ruling or
regulation of any federal or state agency or judicial authority or contained in
any federal or state statute (including the Delaware Act) or (B) facilitate the
trading of the Units (including the division of any class or classes of
Outstanding Units into different classes to facilitate uniformity of tax
consequences within such classes of Units) or comply with any rule, regulation,
guideline or requirement of any National Securities Exchange on which the Units
are or will be listed or admitted to trading, (a) to be necessary or appropriate
in connection with action taken by the General Partner pursuant to Section 5.7
or (a) is required to effect the intent of the provisions of this Agreement or
is otherwise contemplated by this Agreement;
(b)    a change in the Book Fiscal Year, Tax Fiscal Year or taxable period of
the Partnership and any other changes that the General Partner determines to be
necessary or appropriate as a result of a change in the Book Fiscal Year, Tax
Fiscal Year or taxable period of the Partnership including, if the General
Partner shall so determine, a change in the definition of “Quarter” and the
dates on which distributions are to be made by the Partnership;
(c)    an amendment that is necessary, in the Opinion of Counsel, to prevent the
Partnership, or the General Partner or its directors, officers, trustees or
agents, from in any manner being subjected to the provisions of the Investment
Company Act of 1940, as amended, the Investment Advisers Act of 1940, as
amended, or “plan asset” regulations adopted under the Employee Retirement
Income Security Act of 1974, as amended, regardless of whether such are
substantially similar to plan asset regulations currently applied or proposed by
the United States Department of Labor;
(d)    an amendment that the General Partner determines to be necessary or
appropriate in connection with the creation, authorization or issuance of any
class or series of Partnership Interests or Derivative Instruments pursuant to
Section 5.6, including an amendment that, in connection with the Initial Public
Offering, is necessary or appropriate to carry out the intent of Section 5.11;
(e)    any amendment expressly permitted in this Agreement to be made by the
General Partner acting alone;
(f)    an amendment effected, necessitated or contemplated by a Merger Agreement
approved in accordance with Section 14.3;
(g)    an amendment that the General Partner determines to be necessary or
appropriate to reflect and account for the formation by the Partnership of, or
investment by the Partnership in, any corporation, partnership, joint venture,
limited liability company or other entity, in connection with the conduct by the
Partnership of activities permitted by the terms of Section 2.4 or Section
7.1(a);
(h)    a merger, conveyance or conversion pursuant to Section 14.3(d); or
(i)    any other amendments substantially similar to the foregoing.
Section 22.2    Amendment Procedures. Amendments to this Agreement may be
proposed only by the General Partner. To the fullest extent permitted by Law,
the General Partner shall have no duty or obligation to propose or approve any
amendment to this Agreement and may decline to do so in its sole discretion,
and, in declining to propose or approve an amendment, to the fullest extent
permitted by Law shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any Group Member Agreement, any other
agreement contemplated hereby or under the Delaware Act or any other Law, rule
or regulation or at equity. An amendment shall be effective upon its approval by
the General Partner and, except as otherwise provided by Section 13.1 or Section
13.3, a Unit Majority, unless a greater or different percentage is required
under this Agreement or by Delaware Law. Each proposed amendment that requires
the approval of the holders of a specified percentage of Outstanding Units shall
be set forth in a writing that contains the text of the proposed amendment. If
such an amendment is proposed, the General Partner shall seek the written
approval of the requisite percentage of Outstanding Units or call a meeting of
the Unitholders to consider and vote on such proposed amendment. The General
Partner shall notify all Record Holders upon final adoption of any amendments.
Section 22.3    Amendment Requirements.
(d)    Notwithstanding the provisions of Section 13.1 and Section 13.2, no
provision of this Agreement (other than Section 13.4) that establishes a
percentage of Outstanding Units (including Units deemed owned by the General
Partner) or requires a vote or approval of Partners (or a subset of Partners)
holding a specified Percentage Interest required to take any action shall be
amended, altered, changed, repealed or rescinded in any respect that would have
the effect of reducing or increasing such percentage, unless such amendment is
approved by the written consent or the affirmative vote of holders of
Outstanding Units whose aggregate Outstanding Units constitute not less than the
voting requirement sought to be reduced or increased, as applicable, or the
affirmative vote of Partners whose aggregate Percentage Interests constitute not
less than the voting requirement sought to be reduced, as applicable.
(e)    Notwithstanding the provisions of Section 13.1 and Section 13.2, no
amendment to this Agreement may (i) enlarge the obligations of (including
requiring any holder of a class of Partnership Interests to make additional
Capital Contributions to the Partnership) any Limited Partner without its
consent, unless such shall be deemed to have occurred as a result of an
amendment approved pursuant to Section 13.3(c), or (ii) enlarge the obligations
of, restrict, change or modify in any way any action by or rights of, or reduce
in any way the amounts distributable, reimbursable or otherwise payable to, the
General Partner or any of its Affiliates without its consent, which consent may
be given or withheld at its option.
(f)    Except as provided in Section 14.3 or Section 13.1, any amendment that
would have a material adverse effect on the rights or preferences of any class
of Partnership Interests in relation to other classes of Partnership Interests
must be approved by the holders of not less than a majority of the Outstanding
Partnership Interests of the class affected. If the General Partner determines
an amendment does not satisfy the requirements of Section 13.1(d)(i) because it
adversely affects one or more classes of Partnership Interests, as compared to
other classes of Partnership Interests, in any material respect, such amendment
shall only be required to be approved by the adversely affected class or
classes.
(g)     Notwithstanding any other provision of this Agreement, except for
amendments pursuant to Section 13.1 and except as otherwise provided by Section
14.3(b), no amendments shall become effective without the approval of the
holders of at least 80% of the Percentage Interests of all Limited Partners
voting as a single class unless the Partnership obtains an Opinion of Counsel to
the effect that such amendment will not affect the limited liability of any
Limited Partner under applicable partnership Law of the state under whose laws
the Partnership is organized.
(h)    Except as provided in Section 13.1, this Section 13.3 shall only be
amended with the approval of Partners (including the General Partner and its
Affiliates) holding at least 80% of the Percentage Interests of all Limited
Partners.
Section 22.4    Special Meetings. All acts of Limited Partners to be taken
pursuant to this Agreement shall be taken in the manner provided in this Article
XIII. Special meetings of the Limited Partners may be called by the General
Partner. A meeting shall be held at a time and place determined by the General
Partner on a date not less than 10 days nor more than 60 days after the time
notice of the meeting is given as provided in Section 15.1. Limited Partners
shall not vote on matters that would cause the Limited Partners to be deemed to
be taking part in the management and control of the business and affairs of the
Partnership so as to jeopardize the Limited Partners’ limited liability under
the Delaware Act or the Law of any other state in which the Partnership is
qualified to do business.
Section 22.5    Notice of a Meeting. Notice of a meeting called pursuant to
Section 13.4 shall be given to the Record Holders of the class or classes of
Units for which a meeting is proposed in writing by mail or other means of
written communication in accordance with Section 15.1. The notice shall be
deemed to have been given at the time when deposited in the mail or sent by
other means of written communication.
Section 22.6    Record Date. For purposes of determining the Limited Partners
entitled to notice of or to vote at a meeting of the Limited Partners or to give
approvals without a meeting as provided in Section 13.11 the General Partner may
set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any rule,
regulation, guideline or requirement of any National Securities Exchange on
which the Units are listed or admitted to trading or U.S. federal securities
laws, in which case the rule, regulation, guideline or requirement of such
National Securities Exchange or U.S. federal securities laws shall govern) or
(b) in the event that approvals are sought without a meeting, the date by which
Limited Partners are requested in writing by the General Partner to give such
approvals. If the General Partner does not set a Record Date, then (a) the
Record Date for determining the Limited Partners entitled to notice of or to
vote at a meeting of the Limited Partners shall be the close of business on the
day next preceding the day on which notice is given, and (b) the Record Date for
determining the Limited Partners entitled to give approvals without a meeting
shall be the date the first written approval is deposited with the Partnership
in care of the General Partner in accordance with Section 13.11.
Section 22.7    Adjournment. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting and a new Record Date
need not be fixed, if the time and place thereof are announced at the meeting at
which the adjournment is taken, unless such adjournment shall be for more than
45 days. At the adjourned meeting, the Partnership may transact any business
which might have been transacted at the original meeting. If the adjournment is
for more than 45 days or if a new Record Date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given in accordance with
this Article XIII.
Section 22.8    Waiver of Notice; Approval of Meeting; Approval of Minutes. The
transaction of business at any meeting of Limited Partners, however called and
noticed, and whenever held, shall be as valid as if it had occurred at a meeting
duly held after regular call and notice, if a quorum is present either in person
or by proxy. Attendance of a Limited Partner at a meeting shall constitute a
waiver of notice of the meeting, except when the Limited Partner attends the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened; and except that attendance at a meeting is not a waiver of any right
to disapprove the consideration of matters required to be included in the notice
of the meeting, but not so included, if the disapproval is expressly made at the
meeting.
Section 22.9    Quorum and Voting. The holders of a majority, by Percentage
Interest, of Partnership Interests of the class or classes for which a meeting
has been called (including Partnership Interests deemed owned by the General
Partner) represented in person or by proxy shall constitute a quorum at a
meeting of Partners of such class or classes unless any such action by the
Partners requires approval by holders of a greater Percentage Interest, in which
case the quorum shall be such greater Percentage Interest. At any meeting of the
Partners duly called and held in accordance with this Agreement at which a
quorum is present, the act of Partners holding Partnership Interests that, in
the aggregate, represent a majority of the Percentage Interest of those present
in person or by proxy at such meeting shall be deemed to constitute the act of
all Partners, unless a greater or different percentage is required with respect
to such action under the provisions of this Agreement, in which case the act of
the Partners holding Partnership Interests that in the aggregate represent at
least such greater or different percentage shall be required; provided, however,
that if, as a matter of Law or amendment to this Agreement, approval by
plurality vote of Partners (or any class thereof) is required to approve any
action, no minimum quorum shall be required. The Partners present at a duly
called or held meeting at which a quorum is present may continue to transact
business until adjournment, notwithstanding the withdrawal of enough Partners to
leave less than a quorum, if any action taken (other than adjournment) is
approved by Partners holding the required Percentage Interest specified in this
Agreement. In the absence of a quorum any meeting of Partners may be adjourned
from time to time by the affirmative vote of Partners with at least a majority,
by Percentage Interest, of the Partnership Interests entitled to vote at such
meeting (including Partnership Interests deemed owned by the General Partner)
represented either in person or by proxy, but no other business may be
transacted, except as provided in Section 13.7.
Section 22.10    Conduct of a Meeting. The General Partner shall have full power
and authority concerning the manner of conducting any meeting of the Limited
Partners or solicitation of approvals in writing, including the determination of
Persons entitled to vote, the existence of a quorum, the satisfaction of the
requirements of Section 13.4, the conduct of voting, the validity and effect of
any proxies and the determination of any controversies, votes or challenges
arising in connection with or during the meeting or voting. The General Partner
shall designate a Person to serve as chairman of any meeting and shall further
designate a Person to take the minutes of any meeting. All minutes shall be kept
with the records of the Partnership maintained by the General Partner. The
General Partner may make such other regulations consistent with applicable Law
and this Agreement as it may deem advisable concerning the conduct of any
meeting of the Limited Partners or solicitation of approvals in writing,
including regulations in regard to the appointment of proxies, the appointment
and duties of inspectors of votes and approvals, the submission and examination
of proxies and other evidence of the right to vote, and the revocation of
approvals in writing.
Section 22.11    Action Without a Meeting. If authorized by the General Partner,
any action that may be taken at a meeting of the Limited Partners may be taken
without a meeting, without a vote and without prior notice, if an approval in
writing setting forth the action so taken is signed by Limited Partners owning
not less than the minimum percentage, by Percentage Interest, of the Partnership
Interests of the class or classes for which a meeting has been called (including
Partnership Interests deemed owned by the General Partner), as the case may be,
that would be necessary to authorize or take such action at a meeting at which
all the Limited Partners entitled to vote at such meeting were present and
voted; provided, that so long as the EXCO Partner is a Limited Partner, such
approval in writing setting forth the action so taken is approved and signed by
the EXCO Partner. Prompt notice of the taking of action without a meeting shall
be given to the Limited Partners who have not approved in writing. The General
Partner may specify that any written ballot, if any, submitted to Limited
Partners for the purpose of taking any action without a meeting shall be
returned to the Partnership within the time period, which shall be not less than
20 days, specified by the General Partner. If a ballot returned to the
Partnership does not vote all of the Partnership Interests held by the Limited
Partners, the Partnership shall be deemed to have failed to receive a ballot for
the Partnership Interests that were not voted. If approval of the taking of any
action by the Limited Partners is solicited by any Person other than by or on
behalf of the General Partner, the written approvals shall have no force and
effect unless and until (a) they are deposited with the Partnership in care of
the General Partner and (b) an Opinion of Counsel is delivered to the General
Partner to the effect that the exercise of such right and the action proposed to
be taken with respect to any particular matter (i) will not cause the Limited
Partners to be deemed to be taking part in the management and control of the
business and affairs of the Partnership so as to jeopardize the Limited
Partners’ limited liability, and (ii) is otherwise permissible under the state
statutes then governing the rights, duties and liabilities of the Partnership
and the Partners. Nothing contained in this Section 13.11 shall be deemed to
require the General Partner to solicit all Limited Partners in connection with a
matter approved by the holders of the requisite percentage of Partnership
Interests acting by written consent without a meeting.
Section 22.12    Right to Vote and Related Matters.
(a)    Only those Record Holders of the Outstanding Partnership Interests on the
Record Date set pursuant to Section 13.6 shall be entitled to notice of, and to
vote at, a meeting of Limited Partners or to act with respect to matters as to
which the holders of the Outstanding Partnership Interests have the right to
vote or to act. All references in this Agreement to votes of, or other acts that
may be taken by, the Outstanding Partnership Interests shall be deemed to be
references to the votes or acts of the Record Holders of such Outstanding
Partnership Interests.
(b)    With respect to Partnership Interests that are held for a Person’s
account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing), in whose name such
Partnership Interests are registered, such other Person shall, in exercising the
voting rights in respect of such Partnership Interests on any matter, and unless
the arrangement between such Persons provides otherwise, vote such Partnership
Interests in favor of, and at the direction of, the Person who is the beneficial
owner, and the Partnership shall be entitled to assume it is so acting without
further inquiry. The provisions of this Section 13.12(b) (as well as all other
provisions of this Agreement) are subject to the provisions of Section 4.2.
ARTICLE XXIII    

MERGER OR CONSOLIDATION
Section 23.1    Authority. The Partnership may merge or consolidate with or into
one or more corporations, limited liability companies, statutory trusts or
associations, real estate investment trusts, common law trusts or unincorporated
businesses, including a partnership (whether general or limited (including a
limited liability partnership)) or convert into any such entity, whether such
entity is formed under the laws of the State of Delaware or any other state of
the United States of America, pursuant to a written plan of merger or
consolidation (“Merger Agreement”) in accordance with this Article XIV.
Section 23.2    Procedure for Merger or Consolidation.
(i)    Merger or consolidation of the Partnership pursuant to this Article XIV
requires the prior consent of the General Partner; provided, however, that, to
the fullest extent permitted by Law, the General Partner shall have no duty or
obligation to consent to any merger or consolidation of the Partnership and may
decline to do so free of any fiduciary duty or obligation whatsoever to the
Partnership, any Limited Partner and, in declining to consent to a merger or
consolidation, shall not be required to act in good faith or pursuant to any
other standard imposed by this Agreement, any other agreement contemplated
hereby or under the Delaware Act or any other Law, rule or regulation or at
equity.
(j)    If the General Partner shall determine to consent to the merger or
consolidation, the General Partner shall approve the Merger Agreement, which
shall set forth:
(iii)    the name and jurisdiction of formation or organization of each of the
business entities proposing to merge or consolidate;
(iv)    the name and jurisdiction of formation or organization of the business
entity that is to survive the proposed merger or consolidation (the “Surviving
Business Entity”);
(v)    the terms and conditions of the proposed merger or consolidation;
(vi)    the manner and basis of exchanging or converting the equity interests of
each constituent business entity for, or into, cash, property or interests,
rights, securities or obligations of the Surviving Business Entity; and (i) if
any interests, securities or rights of any constituent business entity are not
to be exchanged or converted solely for, or into, cash, property or interests,
rights, securities or obligations of the Surviving Business Entity, then the
cash, property or interests, rights, securities or obligations of any general or
limited partnership, corporation, trust, limited liability company,
unincorporated business or other entity (other than the Surviving Business
Entity) which the holders of such interests, securities or rights are to receive
in exchange for, or upon conversion of their interests, securities or rights,
and (ii) in the case of equity interests represented by certificates, upon the
surrender of such certificates, which cash, property or interests, rights,
securities or obligations of the Surviving Business Entity or any general or
limited partnership, corporation, trust, limited liability company,
unincorporated business or other entity (other than the Surviving Business
Entity), or evidences thereof, are to be delivered;
(vii)    a statement of any changes in the constituent documents or the adoption
of new constituent documents (the articles or certificate of incorporation,
articles of trust, declaration of trust, certificate or agreement of limited
partnership, certificate of formation or limited liability company agreement or
other similar charter or governing document) of the Surviving Business Entity to
be effected by such merger or consolidation;
(viii)    the effective time of the merger, which may be the date of the filing
of the certificate of merger pursuant to Section 14.4 or a later date specified
in or determinable in accordance with the Merger Agreement (provided, that if
the effective time of the merger is to be later than the date of the filing of
such certificate of merger, the effective time shall be fixed at a date or time
certain and stated in the certificate of merger); and
(ix)    such other provisions with respect to the proposed merger or
consolidation that the General Partner determines to be necessary or
appropriate.
Section 23.3    Approval by Limited Partners.
(a)    Except as provided in Section 14.3(d) the General Partner, upon its
approval of the Merger Agreement shall direct that the Merger Agreement and the
merger or consolidation contemplated thereby, as applicable, be submitted to a
vote of Limited Partners, whether at a special meeting or by written consent, in
either case in accordance with the requirements of Article XIII. A copy or a
summary of the Merger Agreement, as the case may be, shall be included in or
enclosed with the notice of a special meeting or the written consent.
(b)    Except as provided in Section 14.3(d) and Section 14.3(e), the Merger
Agreement shall be approved upon receiving the affirmative vote or consent of
the holders of a Unit Majority unless the Merger Agreement contains any
provision that, if contained in an amendment to this Agreement, the provisions
of this Agreement or the Delaware Act would require for its approval the vote or
consent of a greater percentage of the Outstanding Units or of any class of
Limited Partners, in which case such greater percentage vote or consent shall be
required for approval of the Merger Agreement.
(c)    Except as provided in Section 14.3(d) and Section 14.3(e), after such
approval by vote or consent of the Limited Partners, and at any time prior to
the filing of the certificate of merger pursuant to Section 14.4, the merger or
consolidation may be abandoned pursuant to provisions therefor, if any, set
forth in the Merger Agreement.
(d)    Notwithstanding anything else contained in this Article XIV or in this
Agreement, the General Partner is permitted, without Limited Partner approval,
to convert the Partnership or any Group Member into a new limited liability
entity, to merge the Partnership or any Group Member into, or convey all of the
Partnership’s assets to, another limited liability entity that shall be newly
formed and shall have no assets, liabilities or operations at the time of such
merger or conveyance other than those it receives from the Partnership or other
Group Member if (i) the General Partner has received an Opinion of Counsel that
the merger or conveyance, as the case may be, would not result in the loss of
the limited liability under the Delaware Act of any Limited Partner or cause the
Partnership or any Group Member to be treated as an association taxable as a
corporation or otherwise to be taxed as an entity for U.S. federal income tax
purposes (if not already treated as such), (ii) the sole purpose of such merger,
or conveyance is to effect a mere change in the legal form of the Partnership
into another limited liability entity and (iii) the governing instruments of the
new entity provide the Limited Partners and the General Partner with
substantially the same rights and obligations as are herein contained.
(e)    Additionally, notwithstanding anything else contained in this Article XIV
or in this Agreement, the General Partner is permitted, without Limited Partner
approval, to merge or consolidate the Partnership with or into another entity if
(A) the General Partner has received an Opinion of Counsel that the merger or
consolidation, as the case may be, would not result in the loss of the limited
liability under the Delaware Act of any Limited Partner or cause the Partnership
or any Group Member to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity for U.S. federal income tax purposes (if not
already treated as such), (B) the merger or consolidation would not result in an
amendment to this Agreement, other than any amendments that could be adopted
pursuant to Section 13.1, (C) the Partnership is the Surviving Business Entity
in such merger or consolidation, and (D) each Partnership Interest outstanding
immediately prior to the effective date of the merger or consolidation is to be
an identical Partnership Interest of the Partnership after the effective date of
the merger or consolidation.
(f)    Pursuant to Section 17-211(g) of the Delaware Act, an agreement of merger
or consolidation approved in accordance with this Article XIV may (a) effect any
amendment to this Agreement or (b) effect the adoption of a new partnership
agreement for the Partnership if it is the Surviving Business Entity. Any such
amendment or adoption made pursuant to this Section 14.3 shall be effective at
the effective time or date of the merger or consolidation.
Section 23.4    Certificate of Merger. Upon the required approval by the General
Partner and the Unitholders of a Merger Agreement, a certificate of merger shall
be executed and filed with the Secretary of State of the State of Delaware in
conformity with the requirements of the Delaware Act.
Section 23.5    Effect of Merger or Consolidation.
(d)    At the effective time of the certificate of merger:
(iii)    all of the rights, privileges and powers of each of the business
entities that has merged or consolidated, and all property, real, personal and
mixed, and all debts due to any of those business entities and all other things
and causes of action belonging to each of those business entities, shall be
vested in the Surviving Business Entity and after the merger or consolidation
shall be the property of the Surviving Business Entity to the extent they were
of each constituent business entity;
(iv)    the title to any real property vested by deed or otherwise in any of
those constituent business entities shall not revert and is not in any way
impaired because of the merger or consolidation;
(v)    all rights of creditors and all liens on or security interests in
property of any of those constituent business entities shall be preserved
unimpaired; and
(vi)    all debts, liabilities and duties of those constituent business entities
shall attach to the Surviving Business Entity and may be enforced against it to
the same extent as if the debts, liabilities and duties had been incurred or
contracted by it.
Section 23.6    Savings Clause. Nothing in this Article XIV shall limit or
modify the rights or obligations of any party pursuant to Section 4.10.
ARTICLE XXIV    

GENERAL PROVISIONS
Section 24.1    Addresses and Notices; Written Communications.
(k)    Except as expressly set forth to the contrary in this Agreement, all
notices, requests or consents provided for or permitted to be given under this
Agreement must be in writing and must be given either by (i) three (3) Business
Days after being sent by registered or certified mail, return receipt requested,
postage prepaid (ii) one (1) Business Day after being sent via a reputable
nationwide overnight courier service guaranteeing next business day delivery,
(iii) on the date of delivery if delivered personally, or (iv) if by facsimile,
upon written confirmation of receipt by facsimile, in each case to the intended
recipient as set forth below. All notices, requests and consents to be sent to a
Partner must be sent to or made at the address given for that Partner on Exhibit
A, or such other address as that Partner may specify by notice to the General
Partner. Any notice, request or consent to the Partnership or the General
Partner must be given to the General Partner or, if appointed, the secretary of
the General Partner at the General Partner’s principal executive offices.
Whenever any notice is required to be given by Law or this Agreement, a written
waiver thereof, signed by the Person entitled to notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of such
notice.
(l)    The terms “in writing,” “written communications,” “written notice” and
words of similar import shall be deemed satisfied under this Agreement by use of
e-mail and other forms of electronic communication.
Section 24.2    Confidential Information. No Partner shall, and each Partner
shall cause its Affiliates not to, disclose (except to such Partner’s attorneys,
accountants and representatives who agree to keep such information confidential
or are bound by fiduciary or other existing obligations of confidentiality), to
any third party, either during his or its association with the Partnership or
thereafter, any Confidential Information of which the Partner is or becomes
aware. Each Partner in possession of Confidential Information shall, and each
Partner shall cause its Affiliates that are in possession of Confidential
Information to, take all appropriate steps to safeguard such information and to
protect it against disclosure, misuse, espionage, loss and theft.
Notwithstanding the above, a Partner may disclose Confidential Information to
its Affiliates who are made aware of the provisions of this Section 15.2 or to
the extent (a) the disclosure is necessary for the Partner and/or the
Partnership’s agents, representatives, and advisors to fulfill their duties to
the Partnership pursuant to this Agreement and/or other written agreements, (b)
the disclosure is required by Law, Governmental Authority or the rules of any
securities exchange on which securities of the Partner or any of its Affiliates
is listed (including information required in any filings under the Exchange Act,
or the Securities Act in connection with any securities offerings), or (c) such
disclosure is made to a Person in connection with a proposed Transfer permitted
by this Agreement who has signed an agreement imposing upon such Person
restrictions on use and disclosure of the Confidential Information. No Partner
shall, and each Partner shall cause its Affiliates not to, make or issue any
press release or public announcement with respect to the Partnership or Investor
Group without the prior written approval of each other Partner, unless required
by Law, Governmental Authority or the rules of any securities exchange on which
securities of the Partner or any of its Subsidiaries are listed, in which case
the Partner issuing such press release or public announcement shall provide
written notice and a copy of such required press release or public announcement
to each other Partner not less than two (2) Business Days prior to the date of
such press release or public announcement; provided, further, that the Harbinger
Group, the EXCO Group and their respective Affiliates and authorized
representatives shall be permitted to disclose such information regarding such
Partner’s investment in the Partnership and its Subsidiaries, the financial
performance of the Partnership and its Subsidiaries, operations of the
Partnership and its Subsidiaries and such other information relevant to such
Partner’s investment in the Partnership (but excluding any information
concerning another Partner that is not in the public domain and excluding any
trade secrets or other proprietary information relating to intellectual property
of the Partnership or another Partner) to the equityholders and prospective
investors of such Partner and its Affiliates who are under duties or obligations
of confidentiality.
Section 24.3    Entire Agreement. This Agreement constitutes the entire
agreement among the Partners relating to the Partnership and supersedes all
prior contracts or agreements with respect to the Partnership and the matters
addressed or governed hereby, whether oral or written.
Section 24.4    Effect of Waiver or Consent. A waiver or consent, express or
implied, to or of any breach or default by any Person in the performance by that
Person of its obligations hereunder or with respect to the Partnership is not a
consent or waiver to or of any other breach or default in the performance by
that Person of the same or any other obligations of that Person hereunder or
with respect to the Partnership. Failure on the part of a Person to complain of
any act of any Person or to declare any Person in default hereunder or with
respect to the Partnership, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with respect to that
default until the applicable statute-of-limitations period has run.
Section 24.5    Binding Effect. Subject to the restrictions on Transfers set
forth in this Agreement, this Agreement is binding on and shall inure to the
benefit of the Partners and their respective heirs, legal representatives,
successors and permitted assigns and all other Persons hereafter holding, having
or receiving an interest in the Partnership, whether as Transferees, or
otherwise. The terms and provisions of this Agreement are intended solely for
the benefit of each party hereto and their respective successors or permitted
assigns, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person.
Section 24.6    Governing Law. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of Delaware, without regard
to the principles of conflicts of law (whether of the State of Delaware or
otherwise) that would result in the application of the laws of any other
jurisdiction. In the event of a direct conflict between the provisions of this
Agreement and any provision of the Certificate of Limited Partnership or any
mandatory provision of the Delaware Act, the applicable provision of the
Certificate of Limited Partnership or the Delaware Act shall control.
Section 24.7    Consent to Jurisdiction and Service of Process; Appointment of
Agent for Service of Process. EACH PARTY TO THIS AGREEMENT HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES DISTRICT COURT LOCATED IN
WILMINGTON, DELAWARE OR DELAWARE CHANCERY COURT LOCATED IN WILMINGTON, DELAWARE
AND IRREVOCABLY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER SUCH
ACTIONS OR PROCEEDINGS ARE BASED IN STATUTE, TORT, CONTRACT OR OTHERWISE), SHALL
BE LITIGATED IN SUCH COURTS. EACH PARTY (i) CONSENTS TO SUBMIT ITSELF TO THE
PERSONAL JURISDICTION OF SUCH COURTS FOR SUCH ACTIONS OR PROCEEDINGS, (ii)
AGREES THAT IT WILL NOT ATTEMPT TO DENY OR DEFEAT SUCH PERSONAL JURISDICTION BY
MOTION OR OTHER REQUEST FOR LEAVE FROM ANY SUCH COURT, AND (iii) AGREES THAT IT
WILL NOT BRING ANY SUCH ACTION OR PROCEEDING IN ANY COURT OTHER THAN SUCH
COURTS. EACH PARTY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE EXCLUSIVE AND IRREVOCABLE JURISDICTION AND
VENUE OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS,
AND IRREVOCABLY AGREES TO BE BOUND BY ANY NON-APPEALABLE JUDGMENT RENDERED
THEREBY IN CONNECTION WITH SUCH ACTIONS OR PROCEEDINGS. A COPY OF ANY SERVICE OF
PROCESS SERVED UPON THE PARTIES SHALL BE MAILED BY REGISTERED MAIL TO THE
RESPECTIVE PARTY EXCEPT THAT, UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY
FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS.
IF ANY AGENT APPOINTED BY A PARTY REFUSES TO ACCEPT SERVICE, EACH PARTY AGREES
THAT SERVICE UPON THE APPROPRIATE PARTY BY REGISTERED MAIL SHALL CONSTITUTE
SUFFICIENT SERVICE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF A PARTY TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
Section 24.8    Waiver of Jury Trial. TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS AGREEMENT AND THE RELATIONSHIP THAT IS BEING ESTABLISHED.
EACH PARTY ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH BOND WHICH
MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF ANY OF THE OTHER PARTIES. THE SCOPE
OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
AGREEMENT, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS
RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THE WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE TRANSACTION CONTEMPLATED HEREBY. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAYBE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
Section 24.9    Further Assurances. In connection with this Agreement and the
transactions contemplated hereby, each Partner shall execute and deliver any
additional documents and instruments and perform any additional acts that may be
necessary or appropriate to effectuate and perform the provisions of this
Agreement and those transactions.
Section 24.10    Waiver of Certain Rights. Each Partner irrevocably waives any
right it may have to demand any distributions or withdrawal of property from the
Partnership except as provided herein or to maintain any action for dissolution
(whether pursuant to Section 17-802 of the Delaware Act or otherwise) of the
Partnership or for partition of the property of the Partnership and confirms
that such waivers are a material term of this Agreement.
Section 24.11    Notice to Partners of Provisions. By executing this Agreement,
each Partner acknowledges that it has actual notice of (a) all of the provisions
hereof (including the restrictions on the transfer set forth in Article IV) and
(b) all of the provisions of the Certificate of Limited Partnership.
Section 24.12    Counterparts. This Agreement may be executed in multiple
counterparts, any of which may be delivered via facsimile or PDF, with the same
effect as if all signing parties had signed the same document. All counterparts
shall be construed together and constitute the same instrument.
Section 24.13    Headings. The headings used in this Agreement are for the
purpose of reference only and will not otherwise affect the meaning or
interpretation of any provision of this Agreement.
Section 24.14    Construction. Whenever the context requires, (a) the gender of
all words used in this Agreement includes the masculine, feminine, and neuter
and (b) terms “hereof,” “herein,” “hereby” and derivative or similar words refer
to this Agreement, and such words do not refer to the Delaware Act or any
particular section, clause or provision of this Agreement. All references to a
Person include such Person’s successors and, except as otherwise set forth in
this Agreement, permitted assigns. All references to Articles and Sections refer
to articles and sections of this Agreement, and all references to Exhibits are
to exhibits attached hereto, each of which is made a part hereof for all
purposes. The use herein of the word “include” or “including,” when following
any general statement, term or matter, will not be construed to limit such
statement, term or matter to the specific items or matters set forth following
such word or to similar items or matters, whether or not non-limiting language
(such as “without limitation” or “but not limited to” or words of similar
import) is used with reference thereto, but rather will be deemed to refer to
all other items or matters that fall within the broadest possible scope of such
general statement, term or matter. The term “or” is not exclusive. The
definitions set forth or referred to in Article I will apply equally to both the
singular and plural forms of the terms defined and derivative forms of defined
terms will have correlative meanings. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision will be applicable whether such action is taken
directly or indirectly by such Person, including actions taken by or on behalf
of any Affiliate of such Person. All accounting terms used herein and not
otherwise defined herein will have the meanings accorded them in accordance with
GAAP and, except as expressly provided herein, all accounting determinations
will be made in accordance with GAAP. The parties acknowledge that this
Agreement has been negotiated by such parties with the benefit of counsel and,
accordingly, any principle of law that provides that any ambiguity in a contract
or agreement shall be construed against the party that drafted such contract or
agreement shall be disregarded and is expressly waived by all of the parties
hereto.
Section 24.15    Remedies. The Partnership and the Partners shall be entitled to
enforce their rights under this Agreement specifically, to recover damages by
reason of any breach of any provision of this Agreement (including costs of
enforcement) and to exercise any and all other rights existing in their favor.
The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Partnership or any Partners may in its or his sole discretion apply to any court
of law or equity of competent jurisdiction for specific performance or
injunctive relief (without posting a bond or other security) in order to enforce
or prevent any violation or threatened violation of the provisions of this
Agreement. In addition, any successful Partner is entitled to costs related to
enforcing this Agreement, including reasonable and documented attorneys’ fees
and court costs. THE PARTIES WAIVE ANY AND ALL RIGHTS, CLAIMS OR CAUSES OF
ACTION AGAINST ONE ANOTHER ARISING UNDER THIS AGREEMENT FOR ANY LOST PROFITS,
EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, CONSEQUENTIAL,
REMOTE OR SPECULATIVE DAMAGES; PROVIDED, HOWEVER, THAT A PARTY MAY RECOVER FROM
ANY OTHER PARTY ALL COSTS, EXPENSES OR DAMAGES, INCLUDING LOST PROFITS,
EXEMPLARY, PUNITIVE, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, CONSEQUENTIAL,
REMOTE OR SPECULATIVE DAMAGES PAID OR OWED TO ANY THIRD PERSON FOR WHICH SUCH
PARTY HAS A RIGHT TO RECOVER FROM SUCH OTHER PARTY UNDER THE TERMS HEREOF.
Section 24.16    Severability. To the maximum extent permitted under applicable
Law, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable Law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
applicable Law in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or any other jurisdiction,
but this Agreement shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.
Section 24.17    Creditors. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 24.18    Third-Party Beneficiaries. Each Partner agrees that (a) any
Indemnitee shall be entitled to assert rights and remedies hereunder as a
third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Indemnitee and (b) any
Unrestricted Person shall be entitled to assert rights and remedies hereunder as
a third-party beneficiary hereto with respect to those provisions of this
Agreement affording a right, benefit or privilege to such Unrestricted Person.
Section 24.19    Consent of Partners. Each Partner hereby expressly consents and
agrees that, whenever in this Agreement it is specified that an action may be
taken upon the affirmative vote or consent of less than all of the Partners,
such action may be so taken upon the concurrence of less than all of the
Partners and each Partner shall be bound by the results of such action.
Section 24.20    Facsimile Signatures. The use of facsimile signatures affixed
in the name and on behalf of the transfer agent and registrar of the Partnership
on Certificates representing Units is expressly permitted by this Agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
GENERAL PARTNER:

EXCO/HGI GP, LLC

By:    /s/ R. L. Hodges    
Name:
R. L. Hodges

Title:
Vice President - Land

ORGANIZATIONAL LIMITED PARTNER:

EXCO HOLDING MLP, INC.

By:    /s/ William L. Boeing    
Name:
William L. Boeing

Title:
Vice President, General Counsel and Secretary

INITIAL LIMITED PARTNERS:

EXCO HOLDING MLP, INC.

By:     /s/ William L. Boeing    
Name:
William L. Boeing

Title:
Vice President, General Counsel and Secretary

HGI ENERGY HOLDINGS, LLC

By:     /s/ Ehsan Zargar    
Name:
Ehsan Zargar

Title:
Vice President, Counsel and Corporate Secretary

HN\952132.5