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Exhibit 10.1  






 

FORM OF

THIRD AMENDED AND RESTATED CREDIT AGREEMENT 


dated as of

[            ], 2008 


among 


EXCO PARTNERS OPERATING MLP, LP

as Borrower 


CERTAIN SUBSIDIARIES OF BORROWER,

as Guarantors 


The Lenders Party Hereto 


JPMORGAN CHASE BANK, N.A.,

as Administrative Agent 


J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Lead Arranger 


$300,000,000 Senior Secured Credit Facility 




  






 







  



 
 

TABLE OF CONTENTS    




	 
	 	 
	 	Page

	ARTICLE I        DEFINITIONS	 	1
	 	
 Section 1.01.	
 	

Defined Terms	
 	

1
	 	Section 1.02.	 	Classification of Loans and Borrowings	 	21
	 	Section 1.03.	 	Terms Generally	 	21
	 	Section 1.04.	 	Accounting Terms; GAAP	 	22
	 	Section 1.05.	 	Oil and Gas Definitions	 	22
	 	Section 1.06.	 	Time of Day	 	22
	

ARTICLE II        THE CREDITS	
 	

22
	 	
 Section 2.01.	
 	

Commitments	
 	

22
	 	Section 2.02.	 	Termination and Reduction of the Aggregate Commitment	 	22
	 	Section 2.03.	 	Increase in Aggregate Commitment	 	23
	 	Section 2.04.	 	Loans and Borrowings	 	23
	 	Section 2.05.	 	Requests for Revolving Borrowings	 	24
	 	Section 2.06.	 	Swingline Loans	 	24
	 	Section 2.07.	 	Letters of Credit	 	25
	 	Section 2.08.	 	Funding of Borrowings	 	29
	 	Section 2.09.	 	Interest Elections	 	29
	 	Section 2.10.	 	Repayment of Loans; Evidence of Debt	 	30
	 	Section 2.11.	 	Optional Prepayment of Loans	 	31
	 	Section 2.12.	 	Mandatory Prepayment of Loans	 	32
	 	Section 2.13.	 	Fees	 	32
	 	Section 2.14.	 	Interest	 	33
	 	Section 2.15.	 	Alternate Rate of Interest	 	34
	 	Section 2.16.	 	Increased Costs	 	34
	 	Section 2.17.	 	Break Funding Payments	 	35
	 	Section 2.18.	 	Taxes	 	36
	 	Section 2.19.	 	Payments Generally; Pro Rata Treatment; Sharing of Set-offs	 	37
	 	Section 2.20.	 	Mitigation Obligations; Replacement of Lenders	 	38
	

ARTICLE III        BORROWING BASE	
 	

39
	 	
 Section 3.01.	
 	

Reserve Report; Proposed Borrowing Base	
 	

39
	 	Section 3.02.	 	Scheduled Redeterminations of the Borrowing Base; Procedures and Standards	 	40
	 	Section 3.03.	 	Special Redeterminations	 	41
	 	Section 3.04.	 	Notice of Redetermination	 	41
	

ARTICLE IV        REPRESENTATIONS AND WARRANTIES	
 	

41
	 	
 Section 4.01.	
 	

Organization; Powers	
 	

42
	 	Section 4.02.	 	Authorization; Enforceability	 	42
	 	Section 4.03.	 	Governmental Approvals; No Conflicts	 	42
	 	Section 4.04.	 	Financial Condition; No Material Adverse Change	 	42
	 	Section 4.05.	 	Properties	 	42
	 	Section 4.06.	 	Litigation and Environmental Matters	 	43
	 	Section 4.07.	 	Compliance with Laws and Agreements	 	43
	 	Section 4.08.	 	Investment Company Status	 	43
	 	Section 4.09.	 	Taxes	 	43
	 	 	 	 	 





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	 	Section 4.10.	 	ERISA	 	43
	 	Section 4.11.	 	Disclosure	 	44
	 	Section 4.12.	 	Labor Matters	 	44
	 	Section 4.13.	 	Capitalization and Credit Party Information	 	44
	 	Section 4.14.	 	Margin Stock	 	44
	 	Section 4.15.	 	Oil and Gas Interests	 	44
	 	Section 4.16.	 	Insurance	 	45
	 	Section 4.17.	 	Solvency	 	45
	

ARTICLE V        CONDITIONS	
 	

45
	 	
 Section 5.01.	
 	

Effective Date	
 	

45
	 	Section 5.02.	 	Each Credit Event	 	48
	

ARTICLE VI        AFFIRMATIVE COVENANTS	
 	

49
	 	
 Section 6.01.	
 	

Financial Statements; Other Information	
 	

49
	 	Section 6.02.	 	Notices of Material Events	 	51
	 	Section 6.03.	 	Existence; Conduct of Business	 	52
	 	Section 6.04.	 	Payment of Obligations	 	52
	 	Section 6.05.	 	Maintenance of Properties; Insurance	 	52
	 	Section 6.06.	 	Books and Records; Inspection Rights	 	52
	 	Section 6.07.	 	Compliance with Laws	 	52
	 	Section 6.08.	 	Use of Proceeds and Letters of Credit	 	52
	 	Section 6.09.	 	Mortgages	 	53
	 	Section 6.10.	 	Title Data	 	53
	 	Section 6.11.	 	Swap Agreements	 	53
	 	Section 6.12.	 	Operation of Oil and Gas Interests	 	54
	 	Section 6.13.	 	Restricted Subsidiaries	 	54
	 	Section 6.14.	 	Pledged Equity Interests	 	54
	

ARTICLE VII        NEGATIVE COVENANTS	
 	

55
	 	
 Section 7.01.	
 	

Indebtedness	
 	

55
	 	Section 7.02.	 	Liens	 	55
	 	Section 7.03.	 	Fundamental Changes	 	56
	 	Section 7.04.	 	Investments, Loans, Advances, Guarantees and Acquisitions	 	57
	 	Section 7.05.	 	Swap Agreements	 	57
	 	Section 7.06.	 	Restricted Payments	 	58
	 	Section 7.07.	 	Transactions with Affiliates	 	58
	 	Section 7.08.	 	Restrictive Agreements	 	58
	 	Section 7.09.	 	Disqualified Stock and Fiscal Year	 	59
	 	Section 7.10.	 	Amendments of Organizational Documents; Certain Agreements	 	59
	 	Section 7.11.	 	Financial Covenants	 	59
	 	Section 7.12.	 	Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities	 	60
	

ARTICLE VIII        GUARANTEE OF OBLIGATIONS	
 	

61
	 	
 Section 8.01.	
 	

Guarantee of Payment	
 	

61
	 	Section 8.02.	 	Guarantee Absolute	 	61
	 	Section 8.03.	 	Guarantee Irrevocable	 	61
	 	Section 8.04.	 	Reinstatement	 	61
	 	Section 8.05.	 	Subrogation	 	62
	 	Section 8.06.	 	Subordination	 	62
	 	 	 	 	 



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	 	Section 8.07.	 	Payments Generally	 	62
	 	Section 8.08.	 	Setoff	 	62
	 	Section 8.09.	 	Formalities	 	63
	 	Section 8.10.	 	Limitations on Guarantee	 	63
	

ARTICLE IX        EVENTS OF DEFAULT	
 	

63
	

ARTICLE X        THE ADMINISTRATIVE AGENT	
 	

65
	

ARTICLE XI        MISCELLANEOUS	
 	

66
	 	
 Section 11.01.	
 	

Notices	
 	

66
	 	Section 11.02.	 	Waivers; Amendments	 	67
	 	Section 11.03.	 	Expenses; Indemnity; Damage Waiver	 	68
	 	Section 11.04.	 	Successors and Assigns	 	70
	 	Section 11.05.	 	Survival	 	72
	 	Section 11.06.	 	Counterparts; Integration; Effectiveness	 	72
	 	Section 11.07.	 	Severability	 	73
	 	Section 11.08.	 	Right of Setoff	 	73
	 	Section 11.09.	 	GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS	 	73
	 	Section 11.10.	 	WAIVER OF JURY TRIAL	 	74
	 	Section 11.11.	 	Headings	 	74
	 	Section 11.12.	 	Confidentiality	 	74
	 	Section 11.13.	 	Interest Rate Limitation	 	74
	 	Section 11.14.	 	USA PATRIOT Act	 	75
	 	Section 11.15.	 	Procedure for Increases and Addition of New Lenders	 	75
	 	Section 11.16.	 	Original Credit Agreement	 	75
	 	Section 11.17.	 	Reaffirmation and Grant of Security Interest	 	75
	 	Section 11.18.	 	Reallocation of Aggregate Commitment	 	76





	
SCHEDULES:	
 	

 
	Schedule 2.01	 	—	 	Applicable Percentages and Initial Commitments
	Schedule 4.06	 	—	 	Disclosed Matters
	Schedule 4.13	 	—	 	Capitalization and Credit Party Information
	Schedule 7.01	 	—	 	Existing Indebtedness
	Schedule 7.02	 	—	 	Existing Liens
	Schedule 7.07	 	—	 	Transactions with Affiliates
	Schedule 7.08	 	—	 	Existing Restrictions
	
EXHIBITS:	
 	

 
	Exhibit A	 	—	 	Form of Assignment and Assumption
	Exhibit B	 	—	 	Form of Opinion of Borrower's Counsel
	Exhibit C	 	—	 	Form of Counterpart Agreement
	Exhibit D	 	—	 	Form of Solvency Certificate
	Exhibit E	 	—	 	Form of Note
	Exhibit F	 	—	 	Form of Amendment for an Increased or New Commitment




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THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of [            ], 2008, among EXCO PARTNERS OPERATING MLP, LP, as Borrower, CERTAIN SUBSIDIARIES OF BORROWER, as
Guarantors, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent. 


The
parties hereto agree as follows: 


 
 

Article I
  
    Definitions    
    


        Section 1.01.    Defined Terms.    As used in this Agreement, the following terms have the meanings specified
below: 



        "ABR", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate. 


        "Acquisition" means, the acquisition by the Borrower or any Restricted Subsidiary, whether by purchase, merger (and, in the case of a
merger with any such Person, with such Person being the surviving corporation) or otherwise, of all or substantially all of the Equity Interest of, or the business, property or fixed assets of or
business line or unit or a division of, any other Person primarily engaged in the business of producing oil or natural gas or the acquisition by the Borrower or any Restricted Subsidiary of property
or assets consisting of Oil and Gas Interests. 


        "Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate. 


        "Administrative Agent" means JPMorgan Chase Bank, N.A., in its capacity as contractual representative of the Lenders hereunder pursuant to
Article X and not in its individual capacity as a Lender, and any successor agent appointed pursuant to Article X. 


        "Administrative Questionnaire" means an Administrative Questionnaire in a form supplied by the Administrative Agent. 


        "Advance Payment Contract" means any contract whereby any Credit Party either (a) receives or becomes entitled to receive (either
directly or indirectly) any payment (an "Advance Payment") to be applied toward payment of the purchase price of Hydrocarbons produced or to be produced
from Oil and Gas Interests owned by any Credit Party and which Advance Payment is, or is to be, paid in advance of actual delivery of such production to or for the account of the purchaser regardless
of such production, or (b) grants an option or right of refusal to the purchaser to take delivery of such production in lieu of payment, and, in either of the foregoing instances, the Advance
Payment is, or is to be, applied as payment in full for such production when sold and delivered or is, or is to be, applied as payment for a portion only of the purchase price thereof or of a
percentage or share of such production; provided that inclusion of the standard "take or pay" provision in any gas sales or purchase contract or any
other similar contract shall not, in and of itself, constitute such contract as an Advance Payment Contract for the purposes hereof. 


        "Affiliate" means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person specified. 


        "Aggregate Commitment" means the amount equal to the lesser of (i) the Maximum Facility Amount and (ii) $300,000,000; as
such Aggregate Commitment may be reduced or increased pursuant to Section 2.02 and Section 2.03; provided that in no event shall the Aggregate 



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Commitment
exceed the Borrowing Base and if at any time the Borrowing Base is less than the Aggregate Commitment, the Aggregate Commitment shall be automatically reduced to the amount of the Borrowing
Base in effect at such time. 


        "Aggregate Credit Exposure" means, as of any date of determination, the sum of the Credit Exposure of all of the Lenders as of such date. 


        "Agreement" means this Third Amended and Restated Credit Agreement, dated as of [            ], 2008 as it may
be amended, supplemented or otherwise modified from time to time. 


        "Alternate Base Rate" means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, and
(b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively. 


        "Appalachian Properties" means, at any time, the Mortgaged Properties located in Kentucky, Ohio, Pennsylvania, West Virginia or any other
state, or portion thereof, in the Appalachian region of the United States of America specified by the Borrower and acceptable to the Administrative Agent. 



        "Applicable Percentage" means, with respect to any Lender at any time, the percentage of the Aggregate Commitment represented by such
Lender's Commitment at such time. The initial amount of each Lender's Applicable Percentage is as set forth on Schedule 2.01. If the Aggregate Commitment has terminated or expired, the
Applicable Percentages shall be determined based upon the Aggregate Commitment most recently in effect, giving effect to any subsequent assignments. 


        "Applicable Rate" means, for any day, with respect to any Eurodollar Loan or ABR Loan, or with respect to the Unused Commitment Fees
payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption "Eurodollar Spread", "ABR Spread" or "Unused Commitment Fee Rate", as the case may be, based upon
the Borrowing Base Usage applicable on such date: 



	Borrowing Base

Usage
	 	Eurodollar

Spread
	 	ABR Spread
	 	Unused

Commitment

Fee Rate

	> 90%	 	175 b.p.	 	75 b.p.	 	37.5 b.p.
	> 75% and < 90%	 	150 b.p.	 	50 b.p.	 	37.5 b.p.
	> 50% and < 75%	 	125 b.p.	 	25 b.p.	 	30 b.p.
	< 50%	 	100 b.p.	 	0 b.p.	 	25 b.p.






Each
change in the Applicable Rate shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next change. 


        "Approved Counterparty" means, at any time and from time to time, (i) any Person engaged in the business of writing Swap Agreements
for commodity, interest rate or currency risk that is acceptable to the Administrative Agent and has (or the credit support provider of such Person has), at the time Borrower or any Restricted
Subsidiary enters into a Swap Agreement with such Person, a long term senior unsecured debt credit rating of BBB+ or better from S&P or Baa1 or better from Moody's and (ii) any Lender
Counterparty. 


        "Approved Fund" has the meaning assigned to such term in Section 11.04. 



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        "Approved Petroleum Engineer" means Lee Keeling & Associates or any other reputable firm of independent petroleum engineers
selected by the Borrower and approved by the Administrative Agent and the Required Lenders which approval shall not be unreasonably withheld. 


        "Arranger" means J.P. Morgan Securities Inc. in its capacity as sole bookrunner and lead arranger. 


        "Assignment and Assumption" means an assignment and assumption entered into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent. 



        "Availability Period" means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the
date of termination of the Aggregate Commitment. 


        "Board" means the Board of Governors of the Federal Reserve System of the United States of America. 


        "Board of Directors" means (1) with respect to a corporation, the Board of Directors of the corporation or any committee thereof
duly authorized to act on behalf of such board; (2) with respect to a partnership, the Board of Directors of the general partner of the partnership or, in the event the general partner is
limited partnership or limited liability company, the Person acting on behalf of such general partner; (3) with respect to a limited liability company, the managing member or managers or any
controlling committee of managing members or managers thereof; and (4) with respect to any other Person, the board or committee of such Person serving a similar function. 


        "Borrower" means EXCO Partners Operating MLP, LP, a Delaware limited partnership, and its successors and permitted assigns. 


        "Borrower Materials" has the meaning assigned to such term in Section 6.01. 



        "Borrowing" means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of
Eurodollar Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan. 


        "Borrowing Base" means, at any time an amount equal to the amount determined in accordance with Section 3.01, as the same may be
redetermined, adjusted or reduced from time to time pursuant to Section 3.02 and Section 3.03. 


        "Borrowing Base Deficiency" means, as of any date, the amount, if any, by which Aggregate Credit Exposure on such date exceeds the
Borrowing Base in effect on such date; provided, that, for purposes of determining the existence and amount of any Borrowing Base Deficiency,
obligations under any Letter of Credit will not be deemed to be outstanding to the extent such obligations are secured by cash in the manner contemplated by Section 2.07(j). 


        "Borrowing Base Properties" means all Oil and Gas Interests of the Borrower and the Restricted Subsidiaries evaluated by the Lenders for
purposes of establishing the Borrowing Base. 


        "Borrowing Base Usage" means, as of any date and for all purposes, the quotient, expressed as a percentage, of (i) the Aggregate
Credit Exposure as of such date, divided by (ii) the Borrowing Base as of such date. 


        "Borrowing Request" means a request by the Borrower for a Revolving Borrowing in accordance with Section 2.05. 


        "Business Day" means any day that is not a Saturday, Sunday or other day on which commercial banks in New York, New York or Dallas, Texas
are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term
"Business  



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 Day" shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market. 


        "Capital Lease Obligations" of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of
such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP. 


        "Cash Management Obligations" means, with respect to any Credit Party or the MLP, any obligations of such Credit Party or the MLP owed to
JPMorgan Chase Bank, N.A. (or any of its affiliates) in respect of treasury management arrangements, depositary or other cash management services. 



        "Change in Law" means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in
any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or the Issuing Bank
(or, for purposes of Section 2.16(b), by any lending office of such Lender or by such Lender's or the Issuing Bank's holding company, if any) with any request, guideline or directive (whether
or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement. 



        "Change of Control" means (a) the acquisition of greater than 50% of the voting or economic interest in the General Partner by any
Person other than the MLP or any other wholly owned subsidiary of MLP; (b) the General Partner shall cease to own and control, of record, beneficially and directly, 100% of the general
partnership interest of the Borrower or cease to be the sole managing partner of the Borrower; (c) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) under the Exchange
Act), other than EXCO, shall become, or obtain rights (whether by means or warrants, options or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act) directly or indirectly, of Equity Interests of the MLP that would entitle such person or group entitled to vote such Equity Interests representing, in the
aggregate, more than 35% of the total amount of outstanding Equity Interests of the MLP at any annual meeting of the partners of the MLP or otherwise in the election of the Board of Directors of the
General Partner or the MLP General Partner; (d) the failure, for any reason, of EXCO to own and control, directly or indirectly more than 50% of the voting and economic interests of the MLP
General Partner; (e) the MLP General Partner shall cease to own and control, of record, beneficially and directly, 100% of the general partnership interest in the MLP or cease to be the sole
[general] partner of the MLP; (f) EXCO GP LP shall cease to own and control, of record, beneficially and directly, 100% of the general partnership interest in the MLP
General Partner or cease to be the sole general partner of the MLP General Partner; or (g) the occurrence of a "Change of Control" as such term is defined in the Resources Credit Agreement. 



        "Charges" has the meaning assigned to such term in Section 11.13. 


        "Class" where used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
Revolving Loans or Swingline Loans. 


        "Code" means the Internal Revenue Code of 1986, as amended from time to time. 


        "Collateral" means all assets, whether now owned or hereafter acquired by any Borrower or any other Credit Party, in which a Lien is
granted or purported to be granted to any Secured Party as security for any Obligation. 



4







 




        "Commitment" means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of
Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lender's Credit Exposure hereunder, as such commitment may be (a) reduced or
increased from time to time pursuant to Section 2.02 and Section 2.03, (b) reduced from time to time as a result of reductions in the Borrowing Base pursuant to Article III
or Section 2.02(d) and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 11.04. The amount of each Lender's Commitment
(which amount is such Lender's Applicable Percentage of the initial Aggregate Commitment) is set forth in Schedule 2.01, or in the Assignment and Assumption pursuant to which such Lender shall
have assumed its Commitment, as applicable. 


        "Consolidated Current Assets" means, as of any date of determination, the total of (i) the consolidated current assets of the
Borrower and the Restricted Subsidiaries determined in accordance with GAAP as of such date and calculated on a combined basis, plus, all Unused
Commitments as of such date, (ii) less any non-cash assets required to be included in consolidated current assets of the Borrower and
the Restricted Subsidiaries as a result of the application of FASB Statement 133 as of such date. 


        "Consolidated Current Liabilities" means, as of any date of determination, the total of (i) consolidated current liabilities of the
Borrower and the Restricted Subsidiaries, as determined in accordance with GAAP as of such date, (ii) less current maturities of the Loans,
(iii) less any non-cash obligations required to be included in consolidated current liabilities of the Borrower and the Restricted
Subsidiaries as a result of the application of FASB Statement 133 as of such date. 


        "Consolidated Current Ratio" means, as of any date of determination, the ratio of Consolidated Current Assets to Consolidated Current
Liabilities as of such date. 


        "Consolidated EBITDAX" means, with respect to the Borrower and its Restricted Subsidiaries for any period, Consolidated Net Income for
such period; plus, without duplication and to the extent deducted in the calculation of Consolidated Net Income for such period, the sum of
(a) income or franchise Taxes paid or accrued; (b) Consolidated Interest Expense; (c) amortization, depletion and depreciation expense; (d) any non-cash losses
or charges on any Swap Agreement resulting from the requirements of FASB Statement 133 for that period; (e) oil and gas exploration expenses (including all drilling, completion, geological and
geophysical costs) for such period; (f) losses from sales or other dispositions of assets (other than Hydrocarbons produced in the ordinary course of business) and other extraordinary or
non-recurring losses; (g) workover expenses for such period; (h) cash payments made during such period as a result of the early termination of any Swap Agreement (giving
effect to any netting agreements); and (i) other non-cash charges (excluding accruals for cash expenses made in the ordinary course of business); minus, to the extent included in
the calculation of Consolidated Net Income for such period; (j) the sum of (1) any non-cash gains on any Swap Agreements resulting from the requirements of FASB Statement 133
for that period; (2) extraordinary or non-recurring gains; and (3) gains from sales or other dispositions of assets (other than Hydrocarbons produced in the ordinary course
of business); provided that, with respect to the determination of Borrower's compliance with the leverage ratio set forth in Section 7.11(b) for
any period, Consolidated EBITDAX shall be adjusted to give effect, on a pro forma basis, to any Acquisitions made during such period as if such Acquisitions were made at the beginning of such period. 



        "Consolidated Funded Indebtedness" means, as of any date and without duplication, Indebtedness of the Borrower and the Restricted
Subsidiaries of the type described in clauses (a), (b), (c), (d), (e), (f), (g) or (h) of the definition of Indebtedness, minus Surplus
Cash. 


        "Consolidated Interest Expense" means for any period, without duplication, the aggregate of all interest paid or accrued by the Borrower
and its Restricted Subsidiaries, on a consolidated basis, in 



5







 




respect
of Indebtedness of any such Person, on a consolidated basis, including all interest, fees and costs payable with respect to the obligations related to such Indebtedness (other than fees and
costs which may be capitalized as transaction costs in accordance with GAAP) and the interest component of Capitalized Lease Obligations, all as determined in accordance with GAAP. For the avoidance
of doubt, cash distributions to the holders of the Equity Interests of the Borrower permitted under Section 7.06 to enable the MLP to pay dividends on its Equity Interests shall not be included
in Consolidated Interest Expense. 


        "Consolidated Net Income" means for any period, the consolidated net income (or loss) of the Borrower and its Consolidated Subsidiaries,
as applicable, determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a
Consolidated Subsidiary of the Borrower, or is merged into or consolidated with the Borrower or any of its Consolidated Subsidiaries, as applicable, (b) the income (or deficit) of any Person in
which any other Person (other than the Borrower or any of its Restricted Subsidiaries) has an Equity Interest, except to the extent of the amount of dividends or other distributions actually paid to
the Borrower or any of its Restricted Subsidiaries during such period and (c) the undistributed earnings of any Consolidated Subsidiary of the Borrower, to the extent that the declaration or
payment of dividends or similar distributions by such Consolidated Subsidiary is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or by any law
applicable to such Consolidated Subsidiary. 


        "Consolidated Subsidiaries" means, for any Person, any Subsidiary or other entity the accounts of which would be consolidated with those
of such Person in its consolidated financial statements in accordance with GAAP. 



        "Control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. 


        "Counterpart Agreement" means a Counterpart Agreement substantially in the form of Exhibit C delivered by a Guarantor pursuant to
Section 6.13. 


        "Credit Exposure" means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender's Loans and
its LC Exposure and its Swingline Exposure at such time. 


        "Credit Parties" means collectively, Borrower, and each Guarantor and each individually, a "Credit
Party". 


        "Crude Oil" means all crude oil and condensate. 



        "Default" means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default. 


        "Defaulting Lender" means any Lender that (a) has failed to fund any portion of the Revolving Loans, participations in LC
Disbursements or participations in Swingline Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to
pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or insolvency proceeding. 


        "Disclosed Matters" means the actions, suits and proceedings and the environmental matters disclosed in Schedule 4.06. 



6







 




        "Disqualified Stock" means any Equity Interest which, by its terms (or by the terms of any security into which it is convertible or for
which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable for any consideration other than Equity Interests (which would not constitute Disqualified Stock),
pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Indebtedness or redeemable for any consideration other than other Equity Interests (which would not constitute
Disqualified Stock) at the sole option of the holder thereof (other than solely as a result of a change of control or asset sale), in whole or in part, on or prior to the Maturity Date. 



        "Dollars" or "$" refers to lawful money of the United States of America. 


        "Domestic Subsidiary" means, with respect to any Person, a subsidiary of such Person that is incorporated or formed under the laws of the
United States of America, any state thereof or the District of Columbia. 


        "Effective Date" means the date on which the conditions specified in Section 5.01 are satisfied (or waived in accordance with
Section 11.02). 


        "Eligible Assignee" means any Person that qualifies as an assignee pursuant to Section 11.04(b)(i); provided that notwithstanding
the foregoing, "Eligible Assignee" shall not include the Borrower or any of the Borrower's Affiliates or Subsidiaries. 


        "Engineered Value" means, the value attributed to the Borrowing Base Properties for purposes of the most recent Redetermination of the
Borrowing Base pursuant to Article III (or for purposes of determining the Initial Borrowing Base in the event no such Redetermination has occurred), based upon the discounted present value of
the estimated net cash flow to be realized from the production of Hydrocarbons from the Borrowing Base Properties as set forth in the Reserve Report. 


        "Environmental Laws" means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or
threatened release of any Hazardous Material or to health and safety matters. 


        "Environmental Liability" means any liability, contingent or otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Credit Party directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing. 


        "EPOP" means EXCO Partners Operating Partnership, LP, a Delaware limited partnership, and its successors and assigns. 



        "EPOP Credit Agreement" means that certain Amended and Restated Credit Agreement, dated as of March 30, 2007, among, EPOP, as
borrower, certain Subsidiaries of EPOP, as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, as amended, supplemented and otherwise modified from time to time. 


        ["EPOP Hedges" means [to be defined].]



        "EPOP Loans" means the loans and other extensions of credit outstanding under the EPOP Credit Agreement as of the Effective Date. 



7









  



        "EPOP MLP" means EPOP MLP LLC, a Texas limited liability company. 


        "Equity Interests" means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest. 


        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended from time to time. 


        "ERISA Affiliate" means any trade or business (whether or not incorporated) that, together with any Credit Party, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code. 


        "ERISA Event" means (a) any "reportable event", as defined in Section 4043 of ERISA or the regulations issued thereunder
with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA
of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by any Credit Party or any of its ERISA Affiliates of any liability under Title IV of
ERISA with respect to the termination of any Plan; (e) the receipt by any Credit Party or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by any Credit Party or any of its ERISA Affiliates of any liability with respect to the withdrawal
or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by any Credit Party or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from any Credit
Party or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA. 


        "Eurodollar", when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate. 


        "Event of Default" has the meaning assigned to such term in Article IX. 


        "Excluded Taxes" means, with respect to the Administrative Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located,
(b) any branch profits taxes imposed by the United States of America or any similar tax imposed by any other jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower under Section 2.20(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Foreign Lender's failure to comply with Section 2.18(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Borrower with respect
to such withholding tax pursuant to Section 2.18(a). 


        "EXCO" means EXCO Resources, Inc., a Texas corporation and its successors and assigns. 



8







 




        "EXCO GPLP" means EXCO Partners GP LP, LLC, a Delaware limited liability company. 


        "EXCO Midcon MLP" means EXCO Midcon MLP LLC, a Texas limited liability company. 


        ["Existing Swap Agreements" means, collectively, (i) any Swap Agreement entered into between
any Credit Party and any Lender Counterparty (including any Lender Counterparty under and as defined in the Original Credit Agreement) prior to the Effective Date that remains in effect with respect
to such Credit Party on and after the Effective Date and (ii) any of the [EPOP Hedges] assigned to any Credit Party on the Effective Date and to which any Lender
Counterparty is a party.]


        "FASB" means Financial Accounting Standards Board. 


        "Federal Funds Effective Rate" means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average (rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it. 


        "Federal Reserve Board" means the Board of Governors of the Federal Reserve System. 


        "Foreign Lender" means any Lender that is organized under the laws of a jurisdiction other than that in which any Credit Party is located.
For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction. 



        "GAAP" means generally accepted accounting principles in the United States of America. 


        "Gas Balancing Agreement" means any agreement or arrangement whereby the Borrower or any Restricted Subsidiary, or any other party having
an interest in any Hydrocarbons to be produced from Oil and Gas Interests in which the Borrower or any Restricted Subsidiary owns an interest, has a right to take more than its proportionate share of
production therefrom. 


        "General Partner" means EXCO Partners Operating GP, LLC, a Delaware limited liability company, and its successors and permitted assigns. 



        "Governmental Authority" means the government of the United States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity properly exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government. 


        "Guarantee" of or by any Person (in this definition, the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for
the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty 



9







 




issued
to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. 


        "Guaranteed Liabilities" has the meaning assigned to such term in Section 8.01. 



        "Guarantor" means each Restricted Subsidiary that is a party hereto or hereafter executes and delivers to the Administrative Agent and the
Lenders, a Counterpart Agreement pursuant to Section 6.13 or otherwise. 


        "Hazardous Materials" means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law. 


        "Hydrocarbons" means all Crude Oil and Natural Gas produced from or attributable to the Oil and Gas Interests of the Credit Parties. 


        "Increase" has the meaning assigned to such term in Section 2.03. 


        "Indebtedness" of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest
charges are paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such
Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured
by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such
Person as an account party in respect of letters of credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor. 


        "Indemnified Taxes" means Taxes other than Excluded Taxes. 


        "Indemnitee" has the meaning assigned to such term in Section 11.03. 



        "Indenture" means that certain Indenture dated as of January 20, 2004, by and among EXCO, certain Subsidiaries of EXCO and
Wilimington Trust Company, in its capacity as trustee, as amended, modified, supplemented or restated from time to time. 


        "Information" has the meaning assigned to such term in Section 11.12. 


        "Initial Borrowing Base" has the meaning assigned to such term in Section 3.01. 



        "Interest Election Request" means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.09. 


        "Interest Payment Date" means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each calendar
quarter, (b) with respect to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of 



10







 




a
Eurodollar Borrowing with an Interest Period of more than three months' duration, each day prior to the last day of such Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid. 


        "Interest Period" means with respect to any Eurodollar Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided, that
(i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of
such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the
effective date of the most recent conversion or continuation of such Borrowing. 


        "Issuing Bank" means JPMorgan Chase Bank, in its capacity as the issuer of Letters of Credit hereunder, and its successors in such
capacity as provided in Section 2.07(i). The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which case the
term "Issuing Bank" shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. 


        "JPMorgan Chase Bank" and "JPMorgan Chase Bank, N.A." means JPMorgan Chase Bank, N.A.
(successor by merger to Bank One, N.A. Illinois) and its successors. 


        "LC Disbursement" means a payment made by the Issuing Bank pursuant to a Letter of Credit. 


        "LC Exposure" means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time
plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time. 


        "Lender Counterparty" means any Lender or any Affiliate of a Lender counterparty to a Swap Agreement with any Credit Party. 


        "Lenders" means the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an
Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term "Lenders" includes the
Swingline Lender. 


        "Letter of Credit" means any letter of credit issued pursuant to this Agreement and, to the extent outstanding on and after the Effective
Date, any letter of credit issued under the Original Credit Agreement and any renewals thereof after the Effective Date. 


        "LIBO Rate" means, with respect to any Eurodollar Borrowing for any Interest Period, the rate appearing on Page 3750 of the Moneyline
Telerate Service (or on any successor or substitute page of such Service, or any successor to or substitute for such Service, providing rate quotations comparable to those currently provided on such
page of such Service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, as the rate for 



11







 




dollar
deposits with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the "LIBO
Rate" with respect to such Eurodollar Borrowing for such Interest Period shall be the rate at which dollar deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two
(2) Business Days prior to the commencement of such Interest Period. 


        "Lien" means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with
respect to such securities. 


        "Loan Documents" means this Agreement, any promissory notes executed in connection herewith, Security Instruments, the Letters of Credit
(and any applications therefore and reimbursement agreements related thereto), the Fee Letter and any other agreements executed in connection with this Agreement. 


        "Loans" means the loans made by the Lenders to the Borrower pursuant to this Agreement. 


        "Majority Lenders" means, at any time, Lenders having Credit Exposures and Unused Commitments representing more than fifty percent (50%)
of the sum of the Aggregate Credit Exposure and all Unused Commitments at such time or, if the Aggregate Commitment has been terminated, Lenders having Credit Exposures representing more than fifty
percent (50%) of the Aggregate Credit Exposure at such time; provided that the Unused Commitment and the Credit Exposures held or deemed held by any Defaulting Lender shall be excluded for purposes of
making a determination of the Majority Lenders. 


        "Material Adverse Effect" means a material adverse effect on (a) the assets or properties, financial condition, businesses or
operations of the Borrower and the Restricted Subsidiaries taken as a whole, (b) the ability of any Credit Party to carry out its business as of the date of this Agreement or as proposed at the
date of this Agreement to be conducted, (c) the ability of any Credit Party to perform fully and on a timely basis its respective obligations under any of the Loan Documents to which it is a
party, or (d) the validity or enforceability of any of the Loan Documents or the rights and remedies of the Administrative Agent or the Lenders under this Agreement and the other Loan
Documents. 


        "Material Domestic Subsidiary" means any Domestic Subsidiary that owns or holds assets, properties or interests (including Oil and Gas
Interests) with an aggregate fair market value, on a consolidated basis, greater than five percent (5%) of the aggregate fair market value of all of the assets, properties and interests (including Oil
and Gas Interests) of the Borrower and the Restricted Subsidiaries, on a consolidated basis. 



        "Material Gas Imbalance" means, with respect to all Gas Balancing Agreements to which Borrower or any Restricted Subsidiary is a party or
by which any Oil and Gas Interests owned by Borrower or a Restricted Subsidiary is bound, a net overproduced gas imbalance to Borrower and the Restricted Subsidiaries, taken as a whole, in excess of
$10,000,000. 


        "Material Indebtedness" means any Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of the Borrower or any one or more of the Restricted Subsidiaries in an aggregate principal amount exceeding $10,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Guarantor in respect of any Swap Agreement at any time shall be the maximum aggregate 



12







 




amount
(giving effect to any netting agreements) that the Borrower or such Guarantor would be required to pay if such Swap Agreement were terminated at such time. 


        "Material Sales Contract" means, as of any date of determination, any agreement for the sale of Hydrocarbons from the Borrowing Base
Properties to which the Borrower or any Restricted Subsidiary is a party if the aggregate volume of Hydrocarbons sold pursuant to such agreement during the twelve months immediately preceding such
date equals or exceeds 10% of the aggregate volume of Hydrocarbons sold by the Borrower and the Restricted Subsidiaries, on a consolidated basis, from the Borrowing Base Properties during the twelve
months immediately preceding such date. 


        "Maturity Date" means March 30, 2012. 


        "Maximum Facility Amount" means $1,000,000,000. 


        "Maximum Liability" has the meaning assigned to such term in Section 8.10. 


        "Maximum Rate" has the meaning assigned to such term in Section 11.13. 


        "MLP" means EXCO Partners, LP, a Delaware limited partnership, and its successors and assigns. 


        "MLP Agreements" [means, collectively, (i) that certain Administrative Services Agreement,
dated as of [                        ], 2008 by and among the Borrower, the MLP General Partner and certain of the MLP
Subsidiaries, (ii) [that certain
Farm-out Agreement to be entered into by and between North Coast and EXCO Appalachia, LLC in connection with the farm-out of certain deep rights to 190,000 acres of Appalachian
Properties] (iii) that certain Master Operating Agreement, dated as of [                        ], 2008 by and among Borrower
and certain of the MLP Subsidiaries, and
(iv) the other agreements, certificates and instruments executed and delivered in connection with the agreements described in the foregoing clauses (i) through (iii), all as amended,
supplemented or modified from time to time as permitted by this Agreement.]


        "MLP Contribution" means collectively, (i) the transfer by EXCO of certain proved developed producing oil and natural gas well
bores from its Mid-Continent and Permian operating areas to EXCO Midcon MLP, (ii) the contribution by EXCO of all of the issued and outstanding Equity Interests of EXCO Midcon MLP
to Borrower, (iii) the transfer by EPOP and certain of its Subsidiaries of certain proved developed producing oil and natural gas well bores from their East Texas/North Louisiana operating area
to EPOP MLP and Winchester MLP, (iv) the distribution by EPOP of all of the issued and outstanding Equity Interests of EPOP MLP and Winchester MLP to Borrower, (v) the contribution by
EXCO of all of the issued and outstanding Equity Interests of EXCO Midcon MLP, EPOP MLP, Winchester MLP, North Coast and the General Partner to the MLP and (vi) the contribution by EXCO of all
of the issued and outstanding limited partnership interests of Borrower to the MLP, in each case with respect to the foregoing clauses (i) through (vi), pursuant to the MLP Contribution
Documents and (vii) the assignment of certain [EPOP Hedges] on terms and conditions satisfactory to the Administrative
Agent. 


        "MLP Contribution Agreement" means that certain]Contribution, Conveyance and Assumption Agreement], dated as of  
[                        ], 2008, among the Borrower, the MLP General Partner, the MLP and certain other
parties, together with the
additional conveyance documents and instruments contemplated or referenced thereunder and pursuant to which the Borrower and the Restricted Subsidiaries (or their predecessors) were contributed to the
MLP. 


        "MLP Contribution Documents" means, collectively, (i) the MLP Contribution Agreement, (ii) the MLP Agreements and
(iii) the other agreements, certificates and instruments executed and delivered in connection with the agreements described in the foregoing clauses (i) and (ii), all as amended,
supplemented or modified from time to time as permitted by this Agreement. 



13









  



        "MLP General Partner" means EXCO GP Partners, LP, a Delaware limited partnership and its successors and permitted assigns that are
admitted to the MLP as general partner of the MLP. 


        "MLP Interests" means the limited partnership interests in the MLP. 



        "MLP Public Offering" means a sale by the MLP of MLP Interests in an underwritten (firm commitment) initial public offering registered
under the Securities Act of 1933, generating not less than $1,000,000,000 in cash proceeds net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses and resulting in the listing of MLP Interests on a nationally recognized stock exchange, including without limitation, the NASDAQ National Market System or
the New York Stock Exchange. 


        "[MLP Subsidiaries" means, collectively, the MLP and its Subsidiaries.] 


        "Moody's" means Moody's Investors Service, Inc. 


        "Mortgaged Properties" means the Oil and Gas Interests described in one or more duly executed, delivered and filed Mortgages evidencing a
Lien prior and superior in right to any other Person in favor of the Administrative Agent for the benefit of the Secured Parties and subject only to the Liens permitted pursuant to
Section 7.02. 


        "Mortgages" means all mortgages, deeds of trust, amendments to mortgages, security agreements, assignments of production, pledge
agreements, collateral mortgages, collateral chattel mortgages, collateral assignments, financing statements and other documents, instruments and agreements evidencing, creating, perfecting or
otherwise establishing the Liens required by Section 6.09. All Mortgages shall be in form and substance satisfactory to Administrative Agent in its sole discretion 


        "Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3) of ERISA. 



        "Natural Gas" means all natural gas, distillate or sulphur, natural gas liquids and all products recovered in the processing of natural
gas (other than condensate) including, without limitation, natural gasoline, coalbed methane gas, casinghead gas, iso-butane, normal butane, propane and ethane (including such methane
allowable in commercial ethane). 


        "Net Cash Proceeds" means, with respect to any sale, transfer, assignment or other disposition of any Borrowing Base Properties by the
Borrower or any Restricted Subsidiary, the excess, if any, of (a) the sum of cash and cash equivalents received in connection with such disposition, but only as and when so received, over
(b) the sum of (i) the principal amount of any Indebtedness that is secured by such asset and that is required to be repaid in connection with such disposition (other than the Loans),
(ii) the out-of-pocket expenses incurred by the Borrower or such Restricted Subsidiary in connection with such disposition, (iii) all legal, title and recording
tax expense and all federal, state, provincial, foreign and local taxes required to be accrued as a liability under GAAP as a consequence of such disposition, (iv) all distributions and other
payments required to be made to minority interest holders in Restricted Subsidiaries as a result of such disposition, (v) 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 of in such disposition and retained by the Borrower or any Restricted Subsidiary after
such sale, (vi) cash payments made to satisfy obligations resulting from early terminations of Swap Agreements in connection with or as a result of any such disposition of Borrowing Base
Properties, and (vii) any portion of the purchase price from such disposition placed in escrow, whether as a reserve for adjustment of the purchase price, for satisfaction of indemnities in
respect of such sale or otherwise in connection with such sale or other disposition; provided however, that upon the termination of that escrow, Net
Cash Proceeds will be increased by any portion of funds in the escrow that are released to the Borrower or any Restricted Subsidiary. 



14







 




        "Net Working Capital" means, on any date of determination, the sum of (a) Consolidated Current Assets as of such date (calculated
without including Unused Commitments as of such date) minus (b) Consolidated Current Liabilities as of such date. 


        "Non-Consenting Lender" has the meaning assigned to such term in Section 2.20(c). 



        "North Coast" means, North Coast Energy, L.L.C., a Delaware limited liability company and successor by merger of North Coast
Energy, Inc., a Delaware corporation, and its successors and permitted assigns. 


        "Obligations" means any and all obligations of every nature, contingent or otherwise, whether now existing or hereafter arising, of any
Credit Party from time to time owed to the Administrative Agent, the Issuing Bank, the Lenders or any of them or any Lender Counterparty arising under or in connection with any Loan Document or Swap
Agreement (including, any and all Cash Management
Obligations and any and all obligations, contingent or otherwise, whether now existing or hereafter arising, of any Credit Party under any Existing Swap Agreement and any and all obligations,
contingent or otherwise, whether now existing or hereafter arising, of any Credit Party with respect to any transactions under any Swap Agreement with any Person that was a Lender Counterparty at the
time such Credit Party entered into such transactions regardless of whether such Person is no longer a Lender Counterparty), whether for principal, interest, reimbursement of amounts drawn under any
Letter of Credit, payments for early termination of Swap Agreements, funding indemnification amounts, fees, expenses, indemnification or otherwise. 



        "Off-Balance Sheet Liability" of a Person means (i) any repurchase obligation or liability of such Person with respect
to accounts or notes receivable sold by such Person, (ii) any liability under any Sale and Leaseback Transaction which is not a Capital Lease Obligation, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, (iv) any Material Gas Imbalance, (v) any Advance Payment Contract, or (vi) any obligation arising
with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but
excluding from the foregoing clauses (iii) through (vi) operating leases and usual and customary oil, gas and mineral leases. 



        "Oil and Gas Interest(s)" means: (a) direct and indirect interests in and rights with respect to oil, gas, mineral and related
properties and assets of any kind and nature, direct or indirect, including, without limitation, wellbore interests, working, royalty and overriding royalty interests, mineral interests, leasehold
interests, production payments, operating rights, net profits interests, other non-working interests, contractual interests, non-operating interests and rights in any pooled,
unitized or communitized acreage by virtue of such interest being a part thereof; (b) interests in and rights with respect to Hydrocarbons other minerals or revenues therefrom and contracts and
agreements in connection therewith and claims and rights thereto (including oil and gas leases, operating agreements, unitization, communitization and pooling agreements and orders, division orders,
transfer orders, mineral deeds, royalty deeds, oil and gas sales, exchange and processing contracts and agreements and, in each case, interests thereunder), and surface interests, fee interests,
reversionary interests, reservations and concessions related to any of the foregoing; (c) easements, rights-of-way, licenses, permits, leases, and other interests
associated with, appurtenant to, or necessary for the operation of any of the foregoing; (d) interests in oil, gas, water, disposal and injection wells, equipment and machinery (including well
equipment and machinery), oil and gas production, gathering, transmission, compression, treating, processing and storage facilities (including tanks, tank batteries, pipelines and gathering systems),
pumps, water plants, electric plants, gasoline and gas processing plants, refineries and other tangible or intangible, movable or immovable, real or personal property and fixtures located on,
associated with, appurtenant to, or necessary for the operation of any of the foregoing; and (e) all seismic, 



15







 




geological,
geophysical and engineering records, data, information, maps, licenses and interpretations. 


        "Organizational Documents" means (a) with respect to any corporation, its certificate or articles of incorporation or organization,
as amended, and its by-laws, as amended, (b) with respect to any limited partnership, its certificate of limited partnership, as amended, and its partnership
agreement, as amended, (c) with respect to any general partnership, its partnership agreement, as amended, and (d) with respect to any limited liability company, its certificate of
formation or articles of organization, as amended, and its limited liability company agreement or operating agreement, as amended. 


        "Original Credit Agreement" means that certain Second Amended and Restated Credit Agreement, dated as of May 2, 2007, among
Borrower, (as assignee of EXCO) as borrower, certain Subsidiaries of EXCO, as guarantors, the lenders party thereto, JPMorgan Chase Bank, N.A. as Administrative Agent, as amended, supplemented and
otherwise modified from time to time prior to the Effective Date. 


        "Original Letters of Credit" means (i) the "Letters of Credit" issued under and as defined in the Original Credit Agreement and
outstanding on the Effective Date and (ii) the Letters of Credit set forth on Schedule [            ].



        "Original Loans" means the loans and other extensions of credit outstanding under the Original Credit Agreement as of the Effective Date. 


        "Other Taxes" means any and all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement. 


        "Participant" has the meaning assigned to such term in Section 11.04. 



        "Partnership Agreement" means the Agreement of Limited Partnership of Borrower dated [            ], 2007 as
the same may be amended, modified, supplemented or restated from time to time as permitted under this Agreement. 


        "Payment Currency" has the meaning assigned to such term in Section 8.07. 


        "PBGC" means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar
functions. 


        "Permitted Encumbrances" means: 


        (a)   Liens
imposed by law for Taxes that are not yet due or are being contested in compliance with Section 6.04; 


        (b)   carriers',
warehousemen's, mechanics', materialmen's, repairmen's and other like Liens imposed by law, and contractual Liens granted to operators and
non-operators under oil and gas operating agreements, in each case, arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil
and Gas Interests and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 6.04; 


        (c)   pledges
and deposits made in the ordinary course of business in compliance with workers' compensation, unemployment insurance and other social security laws or
regulations; 


        (d)   deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature, in each case in the ordinary course of business; 



16







 




        (e)   judgment
liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article IX; 


        (f)    easements,
zoning restrictions, rights-of-way, servitudes, permits, surface leases, and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of
business of any Credit Party; 


        (g)   royalties,
overriding royalties, reversionary interests and similar burdens with respect to the Oil and Gas Interests owned by the Borrower or such Restricted
Subsidiary, as the case may be, if the net cumulative effect of such burdens does not operate to deprive the Borrower or any Restricted Subsidiary of any material right in respect of its assets or
properties (except for rights customarily granted with respect to such interests); 



        (h)   Liens
arising from Uniform Commercial Code financing statement filings regarding operating leases entered into by the Borrower or any Restricted Subsidiary in the
ordinary course of business covering the property under the lease; and 


        (i)    preferential
rights to purchase, and provisions requiring a third party's consent prior to assignment and similar restraints on alienation, in each case, granted
pursuant to an oil and gas operating agreement and arising in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Interests; provided
such right, requirement or restraint does not material affect the value of such Oil and Gas Interests; 




provided that the term "Permitted Encumbrances" shall not include any Lien securing Indebtedness (other than contractual Liens described in the
foregoing clause (b) granted to operators and non-operators under oil and gas operating agreements to the extent the obligations secured by such Liens constitute Indebtedness). 



        "Permitted Investments" means: 


        (a)   U.S.
Government Securities; 


        (b)   investments
in demand and time deposit accounts, certificates of deposit and money market deposits maturing within one hundred eighty (180) days of the date of
acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any State thereof or any foreign country recognized by the United States of
America, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is
rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Securities Act of 1933, as
amended) or any money-market fund sponsored by a registered broker dealer or mutual fund distributor; 



        (c)   investments
in deposits available for withdrawal on demand with any commercial bank that is organized under the laws of any country in which the Borrower or any
Restricted Subsidiary maintains an office or is engaged in the oil and gas business; provided, however,
that (i) all such deposits have been made in such accounts in the ordinary course of business and (ii) such deposits do not at any one time exceed $10,000,000 in the aggregate; 


        (d)   repurchase
obligations with a term of not more than thirty (30) days for underlying securities of the types described in clause (a) above entered into with
a bank meeting the qualifications described in clause (b) above; 



        (e)   investments
in commercial paper, maturing not more than ninety (90) days after the date of acquisition, issued by a corporation (other than an Affiliate of the
Borrower) organized and in existence under the laws of the United States of America or any foreign country recognized by the 



17







 




United
States of America with a rating at the time as of which any investment therein is made of "P-1" (or higher) according to Moody's or "A-l" (or higher) according to S&P; 



        (f)    investments
in securities with maturities of six months or less from the date of acquisition issued or fully guaranteed by any state, commonwealth or territory of the
United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by S&P or "A" by Moody's; and 


        (g)   investments
in money market funds that invest substantially all their assets in securities of the types described in clauses (a) through (f) above 



        "Person" means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity. 


        "Plan" means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which any Credit Party or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA. 


        "Platform" has the meaning assigned to such term in Section 6.01. 


        "Pledge Agreement" means a Pledge and Security Agreement in favor of the Administrative Agent for the benefit of the Secured Parties
covering, among other things, the rights and interests of Borrower or any Restricted Subsidiary in the Equity Interest of each Restricted Subsidiary and otherwise in form and substance satisfactory to
the Administrative Agent. 


        "Prime Rate" means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank as its prime rate in effect
at its principal office in New York City, each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective. THE PRIME RATE IS A
REFERENCE RATE AND MAY NOT BE JPMORGAN CHASE BANK N.A.'S LOWEST RATE. 


        "Projections" means the Borrower's forecasted (a) balance sheets, (b) profit and loss statements, and (c) cash flow
statements, all prepared on a basis consistent with the historical financial statements of EXCO and its Consolidated Subsidiaries and from acquired entities from which the Borrowing Base Properties
were derived and after giving effect to the Transactions in each case in form and substance satisfactory to the Lenders and for the period from the Effective Date through December 31, 2012. 


        "Public Lender" has the meaning assigned to such term in Section 6.01. 


        "Redetermination" means any Scheduled Redetermination or Special Redetermination. 


        "Redetermination Date" means (a) with respect to any Scheduled Redetermination, each April 1 and October 1 of each
year, commencing April 1, 2008, and (b) with respect to any Special Redetermination, the first day of the first month which is not less than twenty (20) Business Days following
the date of a request for a Special Redetermination. 


        "Register" has the meaning assigned to such term in Section 11.04. 


        "Related Parties" means, with respect to any specified Person, such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates. 


        "Required Lenders" means, at any time, Lenders having Credit Exposures and Unused Commitments representing at least sixty-six
and two-thirds percent (662/3%) (or if there are less than four Lenders, at least seventy-five percent (75%)) of the sum of the Aggregate Credit Exposure and all
Unused Commitments of all Lenders at such time or, if the Aggregate 



18







 




Commitment
has been terminated, Lenders having Credit Exposures representing at least sixty-six and two-thirds percent (662/3%) (or if there are less than four
Lenders, at least seventy-fiver percent (75%)) of the Aggregate Credit Exposure of all Lenders at such time; provided that the Unused Commitment of and the Credit Exposures held or deemed held by any
Defaulting Lender shall be excluded for purposes of making a determination of the Required Lenders. 


        "Reserve Report" means an unsuperseded engineering analysis of the Borrowing Base Properties, in form and substance reasonably acceptable
to the Administrative Agent, prepared in accordance with customary and prudent practices in the petroleum engineering industry. 



        "Resources Credit Agreement" means that certain Second Amended and Restated Credit Agreement dated
[            ], 2008, among EXCO, as borrower, certain subsidiaries of EXCO as guarantors, the financial institutions from time to time a party thereto as lenders and
JPMorgan Chase Bank, N.A., as administrative agent, as amended, modified, supplemented or restated from time to time which credit agreement is an amendment and restatement of that certain Amended and
Restated Credit Agreement dated March 30, 2007 among EXCO Partners Operating Partnership, LP, as borrower, certain of its subsidiaries as guarantors, the lenders party thereto and J.P.Morgan
Chase Bank, N.A., as administrative agent. 


        "Responsible Officer" means the chief executive officer, president, vice president, chief financial officer, principal accounting officer,
treasurer or assistant treasurer of a Credit Party. Any document delivered hereunder that is signed by a Responsible Officer of a Credit Party shall be conclusively presumed to have been authorized by
all necessary corporate, partnership and/or other action on the part of such Credit Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Credit Party. 


        "Restricted Payment" means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity
Interests in any Credit Party, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in any Credit Party or any option, warrant or other right to acquire any such Equity Interests in any Credit Party. 


        "Restricted Subsidiary" means any Subsidiary that is not an Unrestricted Subsidiary. 


        "Revolving Loan" means a Loan made pursuant to Section 2.05. 



        "S-1" means the Form S-1 of the MLP filed with the United States Securities and Exchange Commission as of
September 13, 2007, as amended through the Effective Date. 


        "S&P" means Standard & Poor's Ratings Group, a division of The McGraw Hill Corporation. 


        "Sale and Leaseback Transaction" means any sale or other transfer of any property by any Person with the intent to lease such property as
lessee. 


        "Scheduled Redetermination" means any redetermination of the Borrowing Base pursuant to Section 3.02. 


        "Secured Party" means the Administrative Agent, any Lender and any Lender Counterparty and shall include any Lender Counterparty to the
extent that any Obligations owing to such Lender Counterparty arise under hedging transactions entered into at the time such Person was a Lender Counterparty, regardless of whether such Person or such
Person's Affiliate is no longer a Lender. 


        "Security Instruments" means collectively, all Guarantees of the Obligations evidenced by the Loan Documents and all mortgages, security
agreements, pledge agreements, collateral assignments and other collateral documents covering the Oil and Gas Interests of the Borrower and the Restricted Subsidiaries and the Equity Interests of the
Restricted Subsidiaries and other personal property, equipment, oil and gas inventory and proceeds of the foregoing, all such documents to be in form and substance reasonably satisfactory to the
Administrative Agent. 



19









  




        "Special Redetermination" means any redetermination of the Borrowing Base made pursuant to Section 3.03. 


        "Statutory Reserve Rate" means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Board to which
the Administrative Agent is subject for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve percentage. 



        "Subsidiary" means, with respect to any Person (the "parent") at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent's consolidated financial statements
if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of
which securities or other ownership interests representing more than fifty percent (50%) of the equity or more than fifty percent (50%) of the ordinary voting power or, in the case of a partnership,
more than fifty percent (50%) of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent. Unless the context otherwise clearly requires, references herein to a "Subsidiary" refer to a Subsidiary
of the Borrower. 


        "Surplus Cash" means the lesser of (i) cash and cash equivalents of the Borrower and its Restricted Subsidiaries, on a consolidated
basis, that constitute Permitted Investments and (ii) the amount by which Net Working Capital exceeds zero ($0.00). 



        "Swap Agreement" means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan
providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Credit Parties shall be a Swap Agreement. 



        "Swingline Exposure" means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline
Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time. 


        "Swingline Lender" means JPMorgan Chase Bank, N.A., in its capacity as lender of Swingline Loans hereunder. 


        "Swingline Loan" means a Loan made pursuant to Section 2.06. 



        "Taxes" means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority. 


        "Transactions" means (i) the execution, delivery and performance by the Credit Parties of this Agreement and the Loan Documents,
(ii) the borrowing of Loans, if any, on the Effective Date (iii) the use of the proceeds thereof, (iv) the issuance of Letters of Credit hereunder, (v) the 



20







 




execution,
delivery and performance of the MLP Contribution Documents, (vi) the consummation of the MLP Public Offering, (vii) the repayment of at least $1,000,000,000 of the loans
outstanding under the Original Credit Agreement and the EPOP Credit Agreement on the Effective Date, (viii) the consummation of the USA Merger, and (ix) the assignment of the EPOP Hedges
to one or more Credit Parties on terms and conditions reasonably satisfactory to the Administrative Agent. 


        "Type", when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate. 



        "Unrestricted Subsidiary" means (a) any Subsidiary that at the time of determination shall be designated an Unrestricted Subsidiary
by the Board of Directors of the Borrower in the manner provided below and (b) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Borrower may designate any Subsidiary
(including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary or any of its Subsidiaries is a Material Domestic Subsidiary, a Subsidiary owning Oil
and Gas Interests included in the Borrowing Base Properties. 



        "Unused Commitment" means, with respect to each Lender at any time, such Lender's Commitment at such time minus such Lender's Credit
Exposure (other than such Lender's Swingline Exposure) at such time. 


        "Unused Commitment Fee" has the meaning assigned to such term in Section 2.13(a). 


        "USA" means EXCO Operating USA, LP, a Delaware limited partnership. 



        "USA Merger" means the merger of EXCO Midcon MLP, EPOP MLP and Winchester MLP with and into USA pursuant to the [USA Merger
Agreement]. 


        "USA Merger Agreement" means that certain [Merger Agreement] dated [            ],
2008, by and among USA, EXCO Midcon MLP, EPOP MLP and Winchester MLP, as amended, modified, supplemented or restated from time to time as permitted under this Agreement. 


        "U.S. Government Securities" means direct obligations of, or obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing
within one year from the date of acquisition thereof. 


        "Winchester MLP" means Winchester MLP LLC, a Texas limited liability company. 


        "Withdrawal Liability" means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA. 




        Section 1.02.    Classification of Loans and Borrowings.    For purposes of this Agreement, Loans may be
classified and referred to by Class (e.g., a "Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or
by Class and Type (e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and referred to by Class
(e.g., a "Revolving Borrowing" or an "ABR Borrowing") or by Type (e.g., a "Eurodollar Borrowing") or by
Class and Type (e.g., a "Eurodollar Revolving Borrowing"). 



        Section 1.03.    Terms Generally.    The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word "will" shall be construed to have the same meaning and effect as the word "shall." Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other document herein 


21







 



shall
be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person's successors and assigns, (c) the words "herein",
"hereof" and "hereunder", and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights. 


        Section 1.04.    Accounting Terms; GAAP.    Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the
Administrative Agent that the Borrower request an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Borrower that the Majority Lenders request an amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such
change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. 


        Section 1.05.    Oil and Gas Definitions.    For purposes of this Agreement, the terms "proved
[or] proven reserves," "proved developed reserves," "proved [or] proven undeveloped reserves," "proved [or] proven developed
nonproducing reserves" and "proved [or] proven developed producing reserves," have the meaning given such terms from time to time and at the time in question by the Society of
Petroleum Engineers of the American Institute of Mining Engineers. 


        Section 1.06.    Time of Day.    Unless otherwise specified, all references to times of day shall be references
to Central time (daylight or standard, as applicable). 


 
 

Article II
  
    The Credits    
    


        Section 2.01.    Commitments.    Subject to the terms and conditions set forth herein, each Lender that was a
Lender under and as defined in the Original Credit Agreement agrees to continue the Original Loans and each Lender agrees to make Revolving Loans to the Borrower from time to time during the
Availability Period in an aggregate principal amount that will not result in (a) such Lender's Credit Exposure exceeding such Lender's Commitment or (b) the Aggregate Credit Exposure
exceeding the Aggregate Commitment. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Loans. 


        Section 2.02.    Termination and Reduction of the Aggregate Commitment.    


        (a)   Unless
previously terminated, the Aggregate Commitment shall terminate on the Maturity Date. 



        (b)   The
Borrower may at any time terminate, or from time to time reduce, the Aggregate Commitment; provided that
(i) each reduction of the Aggregate Commitment shall be in an amount that is an integral multiple of $5,000,000 and not less than $10,000,000 and (ii) the Borrower shall not terminate or
reduce the Aggregate Commitment if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11 and Section 2.12, the Aggregate Credit Exposure would
exceed the Aggregate Commitment. 


22







 



        (c)   The
Borrower shall notify the Administrative Agent of any election to terminate or reduce the Aggregate Commitment under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided  that a notice of termination of the Aggregate
Commitment delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities,
in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination of the
Aggregate Commitment shall be permanent. Each reduction of the Aggregate Commitment shall be made ratably among the Lenders in accordance with their respective Commitment. 


        (d)   With
respect to any sale, transfer or disposition of Borrowing Base Properties (other than sales, transfers or dispositions permitted under Section 7.03(a)(vi)),
the Borrowing Base shall be automatically reduced by an amount equal to the value assigned to such Borrowing Base Properties by the Administrative Agent in connection with the most recent
Redetermination of the Borrowing Base preceding the date of such sale (or in connection with the determination of the Initial Borrowing Base with respect to any sale occurring prior to the first
Redetermination of the Borrowing Base). 


        Section 2.03.    Increase in Aggregate Commitment.    So long as no Default has occurred and is continuing, the
Borrower may increase the Aggregate Commitment by obtaining additional commitments (the amount of such increase is herein called the "Increase"), either
from one or more of the Lenders or one or more Eligible Assignees provided that (i) each Increase of the Aggregate Commitment shall be in an amount that is an integral multiple of $5,000,000
and not less than $10,000,000, (ii) Borrower shall have notified Administrative Agent of the amount of the Increase, (iii) each Lender shall have had the option to increase its
Commitment by the proportion that its Applicable Percentage of the Increase bears to the Applicable Percentage of all Lenders electing to participate in such Increase, but no Lender shall have any
obligation to do so, (iv) the Administrative Agent and Arranger shall have identified such new Lender (if any), in consultation with the Borrower, (v) any such new Lender shall have
assumed all of the rights and obligations of a "Lender" hereunder, (vi) the procedure described in Section 11.15 shall have been complied
with, (vii) the Borrower shall have complied with Section 6.09 on the effective date of the Increase or by such later date as agreed to in writing by the Required Lenders with respect to
such Increase, (viii) the Borrower shall have paid to the Administrative Agent and the Arranger any fees payable in the amounts and at the time separately agreed upon among the Borrower, the
Arranger and the Administrative Agent in connection with each Increase, and (ix) after giving effect to the Increase, the Aggregate Commitment shall not exceed the lesser of the Maximum
Facility Amount and the Borrowing Base. 


        Section 2.04.    Loans and Borrowings.    


        (a)   Each
Revolving Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance with their respective Commitments. The failure of
any Lender to make any Revolving Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for any other Lender's failure to make Revolving Loans as required. 


        (b)   Subject
to Section 2.15, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request in accordance herewith.
Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan;  provided that
any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this
Agreement. 


23







 

        (c)   At
the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of
$1,000,000 and not less than $1,000,000. At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $1,000,000 and not less
than $1,000,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate
Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.07(e). Each Swingline Loan shall be in an amount that is not less than $500,000.
Borrowings of more than one Type may be outstanding at the same time; provided that there shall not at any time be more than a total of four
(4) Eurodollar Revolving Borrowings outstanding. 


        (d)   Notwithstanding
any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Eurodollar Borrowing if the
Interest Period requested with respect thereto would end after the Maturity Date. 



        Section 2.05.    Requests for Revolving Borrowings.    To request a Revolving Borrowing, the Borrower shall
notify the Administrative Agent of such request by telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., three Business Days before the date of the proposed
Eurodollar Borrowing or (b) in the case of an ABR Revolving Borrowing, not later than 11:00 a.m., one Business Day before the date of the proposed Borrowing;  provided that any such notice of
an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.07(e)
may be given not later than 10:00 a.m., on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each such telephonic and written Borrowing Request shall
specify the following information in compliance with Section 2.04: 



          (i)  the
aggregate amount of the requested Borrowing; 



         (ii)  the
date of such Borrowing, which shall be a Business Day; 


        (iii)  whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; 


        (iv)  in
the case of a Eurodollar Revolving Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the
term "Interest Period"; and 


         (v)  the
location and number of the Borrower's account to which funds are to be disbursed, which shall comply with the requirements of Section 2.08. 




If
no election as to the Type of Revolving Borrowing is specified, then the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one month's duration. Promptly following receipt of a Borrowing Request in accordance with this
Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender's Loan to be made as part of the requested Borrowing. 


        Section 2.06.    Swingline Loans.    



        (a)   Subject
to the terms and conditions set forth herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time during the Availability
Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000 or
(ii) the Aggregate Credit Exposure exceeding the Aggregate Commitment, provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans. 


24







 



        (b)   To
request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request by telephone (confirmed by telecopy), not later than 11:00 a.m.,
on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means of
a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.07(e), by remittance to the Issuing Bank) by 3:00 p.m., on the requested date of such Swingline Loan. 


        (c)   The
Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lender's Applicable Percentage of such Swingline Loan or Loans.
Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender's
Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and
unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in
the same manner as provided in Section 2.08 with respect to Loans made by such Lender (and Section 2.08 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any amounts
received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of
participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the
Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to the
Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason. The purchase of participations in a
Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof. 


        Section 2.07.    Letters of Credit.    


        (a)   General.    Subject to the terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own or the account of the General Partner or any Restricted Subsidiary in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from
time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall
control. 


        (b)   Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.    To request the issuance of a Letter
of Credit (or the amendment, renewal or extension of an outstanding Letter of 


25







 



Credit),
the Borrower shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the Issuing Bank, the Borrower also shall submit a letter of credit application on the Issuing Bank's standard form in connection
with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed $50,000,000 and
(ii) the Aggregate Credit Exposure shall not exceed the Aggregate Commitment. 



        (c)   Expiration Date.    Each Letter of Credit shall expire at or prior to the close of business on the earlier of
(i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the
date that is five (5) Business Days prior to the Maturity Date. 


        (d)   Participations.    By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the
amount thereof) and without any further action on the part of the Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Aggregate Commitment, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. 


        (e)   Reimbursement.    If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the
Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 12:00 noon on the date that such LC Disbursement is made, if
the Borrower shall have received notice of such LC Disbursement prior to 10:00 a.m. on such date, or, if such notice has not been received by the Borrower prior to such time on such date, then
not later than 12:00 noon on (i) the Business Day that the Borrower receives such notice, if such notice is received prior to 10:00 a.m. on the day of receipt, or (ii) the
Business Day immediately following the day that the Borrower receives such notice, if such notice is not received prior to such time on the day of receipt;  provided that the Borrower may, subject to the
conditions to borrowing set forth herein, request in accordance with Section 2.05 that such
payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of the applicable LC
Disbursement, the payment then due from the Borrower in respect thereof and such Lender's Applicable Percentage 


26







 



thereof.
Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.08 with respect to Loans made by such Lender (and Section 2.08 shall apply, mutatis mutandis, to the payment
obligations of the Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent
of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to
this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Loans or Swingline Loans as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement. 


        (f)    Obligations Absolute.    The Borrower's obligation to reimburse LC Disbursements as provided in
paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document
presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the Issuing
Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever,
whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower's
obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection
with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make
a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank;  provided that the foregoing shall not be construed to
excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages (as
opposed to consequential damages, claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable law) suffered by the Borrower that are caused by the Issuing Bank's
failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such
Letter of Credit. 


27









   
        (g)   Disbursement Procedures.    The Issuing Bank shall, promptly following its receipt thereof, examine all
documents purporting to represent a demand for payment under a Letter of Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay
in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Lenders with respect to any such LC Disbursement. 


        (h)   Interim Interest.    If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall
reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to
but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to ABR Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.14(c) shall apply. Interest accrued pursuant to this paragraph shall
be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall
be for the account of such Lender to the extent of such payment. 


        (i)    Replacement of the Issuing Bank.    The Issuing Bank may be replaced at any time by written agreement among the
Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of the Issuing Bank. At the time
any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.13(b). From and after the
effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing
Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations
of an Issuing Bank under this Agreement with respect to Letters of Credit issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit. 



        (j)    Cash Collateralization.    If any Event of Default shall occur and be continuing, on the Business Day that the
Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than
sixty-six and two-thirds percent (662/3%) of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall
deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal to the LC Exposure as of such date plus any
accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit
shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or
(i) of Article IX. Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account. Other than any interest earned on the investment of such deposits and
interest at the rate per annum in effect for accounts of the same type maintained with the Administrative Agent at such time, which investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower's risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been 


28







 



reimbursed
and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has
been accelerated (but subject to the consent of Lenders with LC Exposure representing sixty-six and two thirds percent (662/3%) or more of the total LC Exposure), be applied
to satisfy other obligations of the Borrower under this Agreement and Borrower hereby grants a security interest in such cash and each deposit account into which such cash is deposited to secure the
Obligations. If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid)
shall be returned to the Borrower within three (3) Business Days after all Events of Default have been cured or waived. 


        Section 2.08.    Funding of Borrowings.    



        (a)   Each
Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds by 12:00 noon to the account of
the Administrative Agent most recently designated by it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made as provided in Section 2.06. The Administrative
Agent will make such Loans available to the Borrower by promptly crediting the amounts so received, in like funds, to an account of the Borrower designated by the Borrower in the applicable Borrowing
Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.07(e) shall be
remitted by the Administrative Agent to the Issuing Bank. 


        (b)   Unless
the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the
Administrative Agent such Lender's share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of
this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing
available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest
thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such
Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case
of the Borrower, the interest rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender's Loan included in such
Borrowing. 


        Section 2.09.    Interest Elections.    



        (a)   Each
Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request; provided that all Revolving Borrowings on the Effective Date shall be ABR Borrowings. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such
Borrowing, and the Loans comprising each such portion shall be considered a separate Revolving Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued. 


        (b)   To
make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election by telephone by the time that a Borrowing Request would
be required under Section 2.05 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent 


29







 



of
a written Interest Election Request in a form approved by the Administrative Agent and signed by the Borrower. 


        (c)   Each
telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.04: 



          (i)  the
Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting
Borrowing); 


         (ii)  the
effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day; 


        (iii)  whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing; and 



        (iv)  if
the resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be applicable thereto after giving effect to such election, which shall be a period
contemplated by the definition of the term "Interest Period". 




If
any such Interest Election Request requests a Eurodollar Borrowing but does not specify an Interest Period, then the Borrower shall be deemed to have selected an Interest Period of one month's
duration. 


        (d)   Promptly
following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lender's portion of each
resulting Borrowing. 


        (e)   If
the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Majority Lenders, so notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar Revolving Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall
be converted to an ABR Borrowing at the end of the Interest Period applicable thereto. 


        Section 2.10.    Repayment of Loans; Evidence of Debt.    


        (a)   The
Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each
Revolving Loan on the Maturity Date and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date and the first date after such
Swingline Loan is made that is the fifteenth (15th) or last day of any calendar month and is at least two (2) Business Days after such Swingline Loan is made; provided that each
date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then outstanding. 


        (b)   Borrower
and each surety, endorser, guarantor and other party ever liable for payment of any sums of money payable under this Agreement, jointly and severally waive
presentment and demand for payment, notice of intention to accelerate the maturity, protest, notice of protest and nonpayment, as to the payments due under this Agreement or any other Loan Document
and as to each and all installments hereunder and thereunder, and agree that their liability under this Agreement or any other Loan Document shall not be affected by any renewal or extension in the
time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of the Obligations, and hereby consent to any and all such renewals, extensions, indulgences,
releases or changes. 


30







 



        (c)   Each
Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrower to such Lender resulting from each
Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder. 



        (d)   The
Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender's share thereof. 


        (e)   The
entries made in the accounts maintained pursuant to paragraph (d) or (e) of this Section shall be prima facie  evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement. 


        (f)    Any
Lender or Participant may request that Loans made by it be evidenced by a promissory note. In such event, the Borrower shall prepare, execute and deliver to such
Lender or Participant a promissory note payable to the order of such Lender or Participant (or, if requested by such Lender or Participant, to such Lender or Participant and its registered assigns)
and in the form attached hereto as Exhibit E. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to
Section 11.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if such promissory note is a registered note, to such payee and
its registered assigns). 


        Section 2.11.    Optional Prepayment of Loans.    


        (a)   The
Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole and or in part, subject to prior notice in accordance with
paragraph (b) of this Section; provided that any prepayment made at any time a Borrowing Base Deficiency exists shall be applied ratably to the prepayment of Revolving Borrowings to the extent
required to eliminate such Borrowing Base Deficiency. 


        (b)   The
Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m. three (3) Business Days before the date of prepayment, (ii) in the
case of prepayment of an ABR Borrowing, not later than 11:00 a.m. one (1) Business Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Lender, not
later than 12:00 noon on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination or reduction of the Aggregate
Commitment as contemplated by Section 2.02, then such notice of prepayment may be revoked if such notice of termination or reduction is revoked in accordance with Section 2.02. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Borrowing shall be in
an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.04. Each prepayment of a Revolving Borrowing shall be applied ratably to the
Revolving Loans included in the prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.14. 


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        Section 2.12.    Mandatory Prepayment of Loans.    


        (a)   In
the event Aggregate Credit Exposure exceeds the Aggregate Commitment at any time, the Borrower shall, subject to the payment of any funding indemnification amounts
required by Section 2.17 but without premium or penalty, immediately prepay the principal amount of the Loans in an amount sufficient to eliminate such excess. Except as otherwise provided in
Section 2.12(b), in the event a Borrowing Base Deficiency exists, the Borrower shall either (a) within fifteen (15) days after written notice from the Administrative Agent to the
Borrower of such Borrowing Base Deficiency, by instruments satisfactory in form and substance to the Required Lenders, provide the Lenders with additional security consisting of Oil and Gas Interests
with value and quality satisfactory to the Required Lenders in their sole discretion to eliminate such Borrowing Base Deficiency, or prepay, without premium or penalty, the principal amount of the
Loans in an amount sufficient to eliminate such Borrowing Base Deficiency (or by a combination of such additional security and such prepayment eliminate such Borrowing Base Deficiency), or
(b) within fifteen (15) days after written notice from the Administrative Agent to the Borrower of such Borrowing Base Deficiency, elect to prepay, subject to the payment of any funding
indemnification amounts required by Section 2.17 but without premium or penalty, the principal amount of such Borrowing Base Deficiency in not more than six (6) equal monthly
installments plus accrued interest thereon with the first such monthly payment being due upon the 30th day after the Borrower's receipt of notice of such Borrowing Base Deficiency. 


        (b)   If
the Borrower or any Restricted Subsidiary sells, transfers or otherwise disposes of any Borrowing Base Properties at any time a Borrowing Base Deficiency exists or
would exist after giving effect to such sale, transfer or other disposition, the Borrower shall prepay the Revolving Borrowings to the extent necessary to eliminate any Borrowing Base Deficiency that
may exist or that may have occurred as a result of such sale, transfer or other disposition on the date it or any Restricted Subsidiary receives the Net Cash Proceeds from such sale, transfer or other
disposition. 


        (c)   Amounts
applied to the prepayment of Borrowings pursuant to this Section 2.12 shall be first applied to Swingline Borrowings then outstanding and upon payment in
full of all outstanding Swingline Borrowings, second, ratably to ABR Borrowings then outstanding and, upon payment in full of all outstanding ABR Borrowings, third, to Eurodollar Borrowings then
outstanding, and if more than one Eurodollar Borrowing is then outstanding, to each such Eurodollar Borrowing beginning with the Eurodollar Borrowing with the least number of days remaining in the
Interest Period applicable thereto and ending with the Eurodollar Borrowing with the most number of days remaining in the Interest Period applicable thereto, subject to the payment of any funding
indemnification amounts required by Section 2.17 but without penalty or premium. Amounts applied to the payment of Revolving Borrowings pursuant to this Section may be reborrowed subject to and
in accordance with the terms of this Agreement. 


        Section 2.13.    Fees.    



        (a)   The
Borrower agrees to pay to the Administrative Agent, for the account of each Lender, an unused commitment fee (the "Unused Commitment
Fee") equivalent to the Applicable Rate times the daily average of the total Unused Commitments. Such Unused Commitment Fee shall be calculated on the basis of a year
consisting of 360 days. The Unused Commitment Fee shall be payable in arrears on the last day of March, June, September and December of each year, commencing with the first such date to occur
after the Effective Date, and on the Maturity Date for any period then ending for which the Unused Commitment Fee shall not have been theretofore paid. In the event the Aggregate Commitment terminates
on any date other than the last day of March, June, September or December of any year, the Borrower agrees to pay to the Administrative Agent, for the account of each Lender, on the date of such
termination, the total Unused Commitment Fee due for the period from the last day of the immediately preceding March, June, September or December, as the case may be, to the date such termination
occurs. 


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        (b)   The
Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of
Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Loans on the average daily amount of such Lender's LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender's Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum separately agreed
upon between the Borrower and the Issuing Bank on the average daily amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of termination of the Aggregate Commitment and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank's
standard fees with respect to the issuance, amendment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Participation fees and fronting fees accrued through and
including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first such date to occur after the
Effective Date; provided that all such fees shall be payable on the date on which the Aggregate Commitment terminates and any such fees accruing after
the date on which the Aggregate Commitment terminates shall be payable on demand. Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days
after demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). 


        (c)   Borrower
agrees to pay to the Administrative Agent, for its own account, and the Arranger, for its own account, fees payable in the amounts and at the times separately
agreed upon among the Borrower, the Administrative Agent and the Arranger, including fees payable upon any increase in the Aggregate Commitment pursuant to Section 2.03. 


        (d)   All
fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees
payable to it) for distribution, in the case of Unused Commitment Fees and participation fees, to the Lenders. Subject to Section 11.13, fees paid shall not be refundable under any
circumstances. 


        Section 2.14.    Interest.    


        (a)   The
Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate. 


        (b)   The
Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable
Rate. 


        (c)   Notwithstanding
the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of
any Loan, two percent (2%) plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, two percent (2%) plus
the rate applicable to ABR Loans as provided in paragraph (a) of this Section. 



        (d)   Accrued
interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and upon termination of the Aggregate Commitment and on the
Maturity Date; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the
event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Loan prior to the end of the Availability Period at a time when no Borrowing Base Deficiency exists), 


33







 



accrued
interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to
the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion. 


        (e)   All
interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the Alternate Base Rate at times when
the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and
such determination shall be conclusive absent manifest error. 


        Section 2.15.    Alternate Rate of Interest.    If prior to the commencement of any Interest Period for a
Eurodollar Borrowing: 


        (a)   the
Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or 



        (b)   the
Administrative Agent is advised by the Majority Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period; 


then
the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or continuation
of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR Borrowing. 


        Section 2.16.    Increased Costs.    


34









  





        (a)   If any Change in Law shall: 



          (i)  impose,
modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any
Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or 


         (ii)  impose
on any Lender or the Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurodollar Loans made by such Lender or any
Letter of Credit or participation therein; 


and
the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to increase
the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or the Issuing
Bank hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate
such Lender or the Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered. 




        (b)   If
any Lender or the Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such
Lender's or the Issuing Bank's capital or on the capital of such Lender's or the Issuing Bank's holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender's or the Issuing Bank's holding
company could have achieved but for such Change in Law (taking into consideration such Lender's or the Issuing Bank's policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender
or the Issuing Bank or such Lender's or the Issuing Bank's holding company for any such reduction suffered. 


        (c)   A
certificate of a Lender or the Issuing Bank setting forth (i) the amount or amounts reasonably necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of this Section, (ii) the factual basis for such compensation and (iii) the manner in which such
amount or amounts were calculated shall be delivered to the Borrower. Such certificate shall be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the case
may be, the amount shown as due on any such certificate within 10 days after receipt thereof. 


        (d)   Failure
or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender's or the
Issuing Bank's right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant
to this Section for any increased costs or reductions incurred more than one hundred eighty (180) days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the Issuing Bank's intention to claim compensation therefor; provided
further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof. 


        Section 2.17.    Break Funding Payments.    In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other than on the
last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto
(regardless of whether 


35







 



such
notice may be revoked under Section 2.11(b) and is revoked in accordance therewith), (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by the Borrower pursuant to Section 2.20, then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for
the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been
the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid,
at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay such Lender the amount shown
as due on any such certificate within ten (10) days after receipt thereof. 


        Section 2.18.    Taxes.    


        (a)   Any
and all payments by or on account of any obligation of the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if the Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum
payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law. 


        (b)   In
addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority in accordance with applicable law. 



        (c)   The
Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of the
Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate delivered to
the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or the Issuing Bank, setting forth (i) the amount of such payment or
liability reasonably necessary to compensate the Administrative Agent, such Lender or the Issuing Bank, as the case may be, (ii) the factual basis for such compensation and (iii) the
manner in which such amount or amounts were calculated, shall be conclusive absent manifest error. 


        (d)   As
soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent. 


36







 



        (e)   Any
Foreign Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is located, or any
treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by the Borrower as will permit such payments to be made without withholding or
at a reduced rate. 


        (f)    If
the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified
by the Borrower or with respect to which the Borrower have paid additional amounts pursuant to this Section 2.18, it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.18 with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such
refund); provided, that the Borrower, upon the request of the Administrative Agent, the Swingline Lender or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to the Borrower or any other Person. 


        Section 2.19.    Payments Generally; Pro Rata Treatment; Sharing of Set-offs.    


        (a)   The
Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.16, Section 2.17 or Section 2.18, or otherwise) prior to 12:00 noon on the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the Administrative Agent at its offices at JPMorgan Loan Services, 10 South Dearborn St., 7th Floor, Chicago, Illinois
60603-2003, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Section 2.16,
Section 2.17, Section 2.18 and Section 11.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments received by it for
the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall
be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be
made in Dollars. 


        (b)   If
at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements,
interest, fees and other Obligations then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties; provided that in the event such funds are received by and
available to the Administrative Agent as a result of the exercise of any rights and remedies with respect to any collateral under the Security Instruments, the parties entitled to a ratable share of
such funds pursuant to the foregoing clause (ii) and the determination of each parties' ratable share shall include, on a pari passu basis, the
Lender Counterparties and the actual aggregate amounts then due and owing to each Lender Counterparty by 


37







 



the
Borrower or any Guarantor as a result of the early termination of any transactions under any Swap Agreements included in the Obligations (after giving effect to any netting agreements). 



        (c)   If
any Lender shall, by exercising any right of set-off or counterclaim or otherwise (including any right of set-off exercised with respect to a
Swap Agreement), obtain payment in respect of any principal of or interest on any of its Loans, participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and participations in LC Disbursements or Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans
and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of
this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply). The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of set-off and counterclaim with respect to such participation as fully as
if such Lender were a direct creditor of the Borrower in the amount of such participation. 


        (d)   Unless
the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of
the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith
and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due. In such event, if the Borrower have not in fact made such payment, then
each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with
interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation. 


        (e)   If
any Lender shall fail to make any payment required to be made by it pursuant to Section 2.07(d) or Section 2.07(e), Section 2.08(b),
Section 2.19(d) or Section 11.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's obligations under such Sections until all such unsatisfied obligations are fully paid. 


        Section 2.20.    Mitigation Obligations; Replacement of Lenders.    


        (a)   If
any Lender requests compensation under Section 2.16, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.18, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to
assign its rights and obligations hereunder to another of its offices, branches or Affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.16 or Section 2.18, as 


38







 



the
case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees
to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 


        (b)   If
any Lender requests compensation under Section 2.16, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 2.18, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 11.04), all
its interests, rights and obligations under this Agreement to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment);  provided that
(i) the Borrower shall have received the prior written consent of the Administrative Agent (and if a Commitment is being assigned,
the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans, participations in
LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.16 or payments
required to be made pursuant to Section 2.18, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply. 


        (c)   If
in connection with any proposed amendment, modification, termination, waiver or consent with respect to any of the provisions of this Agreement or any other Loan
Document as contemplated by Section 11.02, the consent of Majority Lenders or Required Lenders, as the case may be, shall have been obtained but the consent of one or more of such other Lenders
(each a "Non-Consenting Lender") whose consent is required has not been obtained or if Lender is a Defaulting Lender; then, the Borrower may
elect to replace such Non-Consenting Lender or Defaulting Lender, as the case may be, as a Lender party to this Agreement in accordance with and subject to the restrictions contained in,
and consents required by Section 11.04; provided that (i) the Borrower shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, the Issuing Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation
under Section 2.16 or payments required to be made pursuant to Section 2.18, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation
cease to apply or, in the case of a Defaulting Lender, such Lender is no longer a Defaulting Lender. 


 
 

Article III    
    


 
  Borrowing Base    
    


        Section 3.01.    Reserve Report; Proposed Borrowing Base.    During the period from the Effective Date until
the first Redetermination after the Effective Date, the Borrowing Base shall be $1,000,000,000 (the "Initial Borrowing Base"). As soon as available and
in any event by March 1 and September 1 of each year, beginning March 1, 2008, the Borrower shall deliver to the Administrative 


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Agent
and each Lender a Reserve Report, prepared as of the immediately preceding December 31 and June 30, respectively, in form and substance reasonably satisfactory to the
Administrative Agent and prepared by an Approved Petroleum Engineer (or, in the case of the Reserve Report due on September 1 of each year, by petroleum engineers employed by the Borrower),
said Reserve Report to utilize economic and pricing parameters established from time to time by the Administrative Agent, together with such other information, reports and data concerning the value of
the Borrowing Base Properties as the Administrative Agent shall deem reasonably necessary to determine the value of such Borrowing Base Properties. Simultaneously with the delivery to the
Administrative Agent and the Lenders of each Reserve Report, the Borrower shall submit to the Administrative Agent and each Lender the Borrower's requested amount of the Borrowing Base as of the next
Redetermination Date. Promptly after the receipt by the Administrative Agent of such Reserve Report and Borrower's requested amount for the Borrowing Base, the Administrative Agent shall submit to the
Lenders a recommended amount of the Borrowing Base to become effective for the period commencing on the next Redetermination Date. 



        Section 3.02.    Scheduled Redeterminations of the Borrowing Base; Procedures and Standards.    Based in part
on the Reserve Reports made available to the Administrative Agent and the Lenders pursuant to Section 3.01, the Lenders shall redetermine the Borrowing Base on or prior to the next
Redetermination Date (or such date promptly thereafter as reasonably possible based on the engineering and other information available to the Lenders). Any Borrowing Base which becomes effective as a
result of any Redetermination shall be subject to the following restrictions: (a) such Borrowing Base shall not exceed the Maximum Facility Amount, (b) to the extent such Borrowing Base
represents an increase in the Borrowing Base in effect prior to such Redetermination, such Borrowing Base must be approved by all Lenders, and (c) to the extent such Borrowing Base represents a
decrease in the Borrowing Base in effect prior to such Redetermination or a reaffirmation of such prior Borrowing Base, such Borrowing Base must be approved by the Administrative Agent and Required
Lenders. If a redetermined Borrowing Base is not approved by the Administrative Agent and Required Lenders within twenty (20) days after the submission to the Lenders by the Administrative
Agent of its recommended Borrowing Base pursuant to Section 3.01, or by all Lenders within such twenty (20) day period in the case of any increase in the Borrowing Base, the
Administrative Agent shall notify each Lender that the recommended Borrowing Base, as the case may be, has not been approved and request that each Lender submit to the Administrative Agent within ten
(10) days thereafter its proposed Borrowing Base. Promptly following the 10th day after the Administrative Agent's request for each Lender's proposed Borrowing Base, the
Administrative Agent shall determine the Borrowing Base for such Redetermination by calculating the highest Borrowing Base then acceptable to the Administrative Agent and a number of Lenders
sufficient to constitute Required Lenders (or all Lenders in the case of an increase in the Borrowing Base). Each Redetermination shall be made by the Lenders in their sole discretion, but based on
the Administrative Agent's and such Lender's usual and customary procedures for evaluating Oil and Gas Interests as such exist at the time of such Redetermination, and including adjustments to reflect
the effect of any Swap Agreements of the Borrower and the Restricted Subsidiaries as such exist at the time of such Redetermination. The Borrower acknowledges and agrees that each Redetermination
shall be based upon the loan collateral value which the Administrative Agent and each Lender in its sole discretion (using such methodology, assumptions and discount rates as the Administrative Agent
and such Lender customarily uses in assigning collateral value to Oil and Gas Interests) assigns to the Borrowing Base Properties at the time in question and based upon such other credit factors
consistently applied (including, without limitation, the assets, liabilities, cash flow, business, properties, prospects, management and ownership of the Credit Parties) as the Administrative Agent
and such Lender customarily considers in evaluating similar oil and gas credits. It is expressly understood that the Administrative Agent and Lenders have no obligation to designate the Borrowing Base
at any particular amount, except in the exercise of their discretion, whether in relation to the Aggregate Commitment or otherwise. If the Borrower does not furnish all information, reports and 


40







 



data
required to be delivered by any date specified in this Article III, unless such failure is not the fault of the Borrower, the Administrative Agent and Lenders may nonetheless designate the
Borrowing Base at any amounts which the Administrative Agent and all Lenders or Required Lenders, as the case may be, in their reasonable discretion determine and may redesignate the Borrowing Base
from time to time thereafter until the Administrative Agent and the Lenders receive all such information, reports and data, whereupon the Administrative Agent and all Lenders or Required Lenders, as
the case may be, shall designate a new Borrowing Base, as described above. 


        Section 3.03.    Special Redeterminations.    In addition to Scheduled Redeterminations, the Borrower shall be
permitted to request a Special Redetermination of the Borrowing Base once between each Scheduled Redetermination and the Required Lenders shall be permitted to request a Special Redetermination at
any time. Any request by Borrower pursuant to this Section 3.03 shall be submitted to the Administrative Agent and each Lender and at the time of such request (or within twenty (20) days
thereafter in the case of the Reserve Report) Borrower shall (1) deliver to the Administrative Agent and each Lender a Reserve Report prepared as of a date prior to the date of such request
that is reasonably acceptable to the Administrative Agent and such other information which the Administrative Agent shall reasonably request, and (2) notify the Administrative Agent and each
Lender of the Borrowing Base requested by Borrower in connection with such Special Redetermination. Any request by Required Lenders for a Special Redetermination pursuant to this Section 3.03
shall be submitted to the Administrative Agent and the Borrower. Any Special Redetermination shall be made by the Administrative Agent and Lenders in accordance with the procedures and standards set
forth in Section 3.02; provided that no Reserve Report is required to be delivered to the Administrative Agent or the Lenders in connection with any Special Redetermination requested by the
Required Lenders pursuant to this Section 3.03. 


        Section 3.04.    Notice of Redetermination.    Promptly following any Redetermination of the Borrowing Base,
the Administrative Agent shall notify the Borrower of the amount of the redetermined Borrowing Base, which Borrowing Base shall be effective as of the date specified in such notice, and such Borrowing
Base shall remain in effect for all purposes of this Agreement until the next Redetermination. 


 
 

Article IV    
    


 
  Representations and Warranties    
    


        Each Credit Party represents and warrants to the Lenders that (it being understood and agreed that with respect to the Effective Date such representations and
warranties are deemed to be made concurrently with and after giving effect to the consummation of the Transactions): 


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        Section 4.01.    Organization; Powers.    Each Credit Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or
in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is
required. 


        Section 4.02.    Authorization; Enforceability.    The Transactions are within each Credit Party's corporate,
limited liability company or partnership powers and have been duly authorized by all necessary corporate, limited liability company or partnership and, if required, stockholder action. This Agreement
has been duly executed and delivered by each Credit Party and constitutes a legal, valid and binding obligation of each Credit Party, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in
equity or at law. 


        Section 4.03.    Governmental Approvals; No Conflicts.    The Transactions (a) do not require any
consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and, after the
Effective Date, the filing of this Agreement and related Loan Documents by the Borrower with, and other required disclosures required by, the Securities and Exchange Commission pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, (b) will not violate any applicable law or regulation or the charter, by-laws or other Organizational Documents of
the Borrower or any Restricted Subsidiary or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, agreement or other instrument evidencing
Material Indebtedness or a Material Sales Contract binding upon the Borrower or any Restricted Subsidiary or any of their respective assets, or give rise to a right thereunder to require any payment
to be made by the Borrower or any Restricted Subsidiary, and (d) will not result in the creation or imposition of any Lien on any asset of the Borrower or any Restricted Subsidiary not
otherwise permitted under Section 7.02. 


        Section 4.04.    Financial Condition; No Material Adverse Change.    


        (a)   [TO BE DISCUSSED - The Borrower has heretofore furnished to the Lenders (i) the consolidated balance sheet and related
statements of income and cash flows of EXCO and its Consolidated Subsidiaries as of and for each of the fiscal years ended December 31, 2005, reported on by PricewaterhouseCoopers LLP, and
December 31, 2006, reported on by KPMG LLP, independent public accountants, and (ii) the consolidated balance sheet and related statements of income, stockholders equity and cash flows
of the MLP as of and for the fiscal quarter ended June 30, 2007, unaudited and pro forma after giving effect to the restructuring transactions contemplated by the S-1. Such
financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Borrower and its Consolidated Subsidiaries as of such dates and
for such periods in accordance with GAAP, subject to year-end audit adjustments and the absences of footnotes, in the case of the statements referred to in
clause (ii).]


        (b)   Since  [June 30, 2007], there has been no material adverse change in the business, assets,
operations, prospects or condition, financial or otherwise, of the Borrower and its Restricted Subsidiaries, taken as a whole (it being understood that neither (i) the MLP Contribution, nor the
MLP Public Offering nor the USA Merger, nor (ii) changes in commodity prices for Hydrocarbons affecting the oil and gas industry as a whole constitute a material adverse change). 


        Section 4.05.    Properties.    



        (a)   Except
as otherwise provided in Section 4.15 with respect to Oil and Gas Interests, the Borrower and each Restricted Subsidiary has good title to, or valid
leasehold interests in, all such real 


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and
personal property material to its business, except for minor defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties
for their intended purposes. 


        (b)   The
Borrower and each Restricted Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Borrower and such Restricted Subsidiaries, as the case may be, does not infringe upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. 


        Section 4.06.    Litigation and Environmental Matters.    



        (a)   There
are no actions, suits, investigations or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Restricted Subsidiary, (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or the Transactions. 


        (b)   Except
for the Disclosed Matters and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a
Material Adverse Effect, neither the Borrower nor any Restricted Subsidiary to the Borrower's knowledge (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with
any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental Liability. 


        (c)   Since
the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially
increased the likelihood of, a Material Adverse Effect. 


        Section 4.07.    Compliance with Laws and Agreements.    The Borrower and each Restricted Subsidiary is in
compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing. 


        Section 4.08.    Investment Company Status.    Neither the Borrower nor any Restricted Subsidiary is an
"investment company" as defined in, or subject to regulation under, the Investment Company Act of 1940. 


        Section 4.09.    Taxes.    The Borrower and each Restricted Subsidiary has timely filed or caused to be filed
all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Restricted Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect. 


        Section 4.10.    ERISA.    No ERISA Event has occurred or is reasonably expected to occur that, when taken
together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes of FASB Statement 87) did not, as of the date of the most recent financial statements reflecting such amounts,
exceed by more than $5,000,000 the fair market value of the assets of such Plan, and the present value of all accumulated benefit obligations of all underfunded Plans (based on the assumptions used
for 


43







 



purposes
of FASB Statement 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed by more than $5,000,000 the fair market value of the assets of all
such underfunded Plans. 


        Section 4.11.    Disclosure.    The Borrower has disclosed to the Lenders all agreements, instruments and
corporate or other restrictions to which it or any Restricted Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the other reports, financial statements, certificates or other information furnished by or on behalf of the Borrower or any Restricted Subsidiary to the
Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;  provided that, with
respect to the Projections, the Borrower represents only that such information was prepared in good faith based on assumptions
believed to be reasonable at the time. 


        Section 4.12.    Labor Matters.    There are no strikes, lockouts or slowdowns against the Borrower or any of
its Restricted Subsidiaries pending or, to the knowledge of the Borrower, threatened that could reasonably be expected to have a Material Adverse Effect. The hours worked by and payments made to
employees of the Borrower and its Restricted Subsidiaries have not been in violation of the Fair Labor Standards Act or any other Law dealing with such matters to the extent that such violation could
reasonably be expected to have a Material Adverse Effect. 


        Section 4.13.    Capitalization and Credit Party Information.    Schedule 4.13 lists, as of the
Effective Date (a) each Subsidiary that is an Unrestricted Subsidiary, (b) for the Borrower, its full legal name, its jurisdiction of organization and its federal tax identification
number, and (c) for each Restricted Subsidiary its full legal name, its jurisdiction of organization, its federal tax identification number, the number of shares of capital stock or other
Equity Interests outstanding and the owner(s) of such Equity Interests. 



        Section 4.14.    Margin Stock.    Neither the Borrower nor any Restricted Subsidiary is engaged principally, or
as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U issued by the Federal Reserve
Board), and
no part of the proceeds of any Loan will be used to purchase or carry any margin stock or to extend credit to others for the purpose of purchasing or carrying margin stock. 


        Section 4.15.    Oil and Gas Interests.    Each Credit Party has good and defensible title to all proved
reserves included in the Oil and Gas Interests (for purposes of this Section 4.15, "proved Oil and Gas Interests") described in the most recent Reserve Report provided to the Administrative
Agent, free and clear of all Liens except Liens permitted pursuant to Section 7.02. All such proved Oil and Gas Interests are valid, subsisting, and in full force and effect, and all rentals,
royalties, and other amounts due and payable in respect thereof have been duly paid. Without regard to any consent or non-consent provisions of any joint operating agreement covering any
Credit Party's proved Oil and Gas Interests, such Credit Party's share of (a) the costs for each proved Oil and Gas Interest described in the Reserve Report is not materially greater than the
decimal fraction set forth in the Reserve Report, before and after payout, as the case may be, and described therein by the respective designations "working interests," "WI," "gross working interest,"
"GWI," or similar terms (except in such cases where there is a corresponding increase in the net revenue interest), and (b) production from, allocated to, or attributed to each such proved Oil
and Gas Interest is not materially less than the decimal fraction set forth in the Reserve Report, before and after payout, as the case may be, and described therein by the designations "net revenue
interest," "NRI," or similar terms. Each well drilled in respect of proved producing Oil and Gas Interests described in the Reserve Report (1) is capable of, and is presently, either producing
Hydrocarbons in commercially profitable quantities or in the process of being worked 


44







 



over
or enhanced, and the Credit Party that owns such proved producing Oil and Gas Interests is currently receiving payments for its share of production, with no funds in respect of any thereof being
presently held in suspense, other than any such funds being held in suspense pending delivery of appropriate division orders, and (2) has been drilled, bottomed, completed, and operated in
compliance with all applicable laws, in the case of clauses (1) and (2), except where any failure to satisfy clause (1) or to comply with clause (2) would not have a Material
Adverse Effect, and no such well which is currently producing Hydrocarbons is subject to any penalty in production by reason of such well having produced in excess of its allowable production. 



        Section 4.16.    Insurance.    The certificate signed by the Responsible Officer that attests to the existence
and adequacy of, and summarizes, the property and casualty insurance program maintained by the Credit Parties that has been furnished by the Borrower to the Administrative Agent and the Lenders as of
the Effective Date, is complete and accurate in all material respects as of the Effective Date and demonstrates the Borrower's and the Restricted Subsidiaries' compliance with Section 6.05. 


        Section 4.17.    Solvency.    



        (a)   Immediately
after the consummation of the Transactions and immediately following the making of the initial Borrowing made on the Effective Date and after giving effect
to the application of the proceeds thereof, (1) the fair value of the assets of the Credit Parties on a consolidated basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Credit Parties on a consolidated basis; (2) the present fair saleable value of the real and personal property of the Credit Parties on a
consolidated basis will be greater than the amount that will be required to pay the probable liability of the Credit Parties on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and matured; (3) the Credit Parties on a consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (4) the Credit Parties on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such businesses are now conducted and are proposed to be conducted after the date hereof. 


        (b)   The
Credit Parties do not intend to, and do not believe that they will, incur debts beyond their ability to pay such debts as they mature, taking into account the timing
of and amounts of cash to be received by it and the timing of the amounts of cash to be payable on or in respect of its Indebtedness. 


 
 

Article V    
    


 
  Conditions    
    


        Section 5.01.    Effective Date.    The obligations of the Lenders, the Issuing Lender and the Lender
Counterparties to continue the Original Loans, [the Original Letters of Credit] and the Existing Swap Agreements and the
obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 11.02): 


        (a)   The
Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Agreement) that such party has signed a counterpart of
this Agreement. 


        (b)   The
Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of Haynes
and Boone, L.L.P., and Vinson & Elkins LLP, counsel for the Credit Parties, substantially in the form of Exhibit B, and covering such other matters relating to the Credit Parties, this
Agreement or the Transactions as the 


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Majority
Lenders shall reasonably request and (ii) if agreed by opining counsel, opinions delivered in connection with the MLP Contribution and the USA Merger, if any, addressed to the Lenders
or accompanied by reliance letters in favor of the Lenders stating that the Lenders may rely on such opinions as though they were addressed to them. The Credit Parties hereby request such counsel to
deliver such opinions. 


        (c)   The
Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Credit Party, the authorization of the Transactions and any other legal matters relating to the Credit Parties, this Agreement or the Transactions,
all in form and substance satisfactory to the Administrative Agent and its counsel. 



        (d)   The
Administrative Agent shall have received a certificate, dated the Effective Date and signed by a Responsible Officer of the Borrower, confirming that the Credit
Parties have (i) complied with the conditions set forth in paragraphs (a) and (b) of Section 5.02, (ii) complied with the covenants set forth in Section 6.05
(and demonstrating such compliance by the attachment of an insurance summary and insurance certificates evidencing the coverage described in such summary) (iii) complied with the requirements
of Section 6.09 and Section 6.10, and (iv) in accordance with applicable law, consummated (or caused one or more of the Restricted Subsidiaries to consummate) (x) the MLP
Contribution without waiver or amendment of any material term or condition of the MLP Contribution Documents (not otherwise consented to by the Administrative Agent), (y) the MLP Public
Offering and received at least $1,000,000,000 in cash proceeds from the MLP Public Offering net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses and (z) the USA Merger without waiver or amendment of any material term or condition of the USA Merger Agreement (not otherwise consented to by the
Administrative Agent). 


        (e)   The
Administrative Agent, the Lenders and the Arranger shall have received all fees and other amounts due and payable on or prior to the Effective Date, and, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder, including all fees, expenses and
disbursements of counsel for the Administrative Agent to the extent invoiced on or prior to the Effective Date, together with such additional amounts as shall constitute such counsel's reasonable
estimate of expenses and disbursements to be incurred by such counsel in connection with the recording and filing of Mortgages and financing statements;  provided, that, such estimate shall not thereafter preclude further settling of accounts between the
Borrower and the Administrative Agent. 


        (f)    The
Administrative Agent shall have received the Mortgages (and amendments of Mortgages previously filed in connection with the Original Credit Agreement) to be executed
on the Effective Date pursuant to Section 6.09 of this Agreement, duly executed and delivered by the appropriate Credit Party, together with such other assignments, conveyances, amendments,
agreements and other writings, including, without limitation, UCC-1 financing statements, tax affidavits and applicable department of revenue documentation, creating Liens prior and
superior in right to any other Person, subject to Permitted Encumbrances, in Oil and Gas Interests having an Engineered Value equal to or greater than the Engineered Value required under
Section 6.09. 


        (g)   The
Administrative Agent shall have received title information reasonably satisfactory to the Administrative Agent with respect to the Mortgaged Properties, or the
portion thereof, required by Section 6.10 on the Effective Date. 


        (h)   The
Administrative Agent shall have received the Pledge Agreement (or an amendment of the Pledge Agreement under and as defined in the Original Credit Agreement) to be
executed on the Effective Date pursuant to Section 6.14 of this Agreement, duly executed and delivered by the appropriate Credit Party, together with such other assignments, conveyances,
amendments, agreements 


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and
other writings, including, without limitation, UCC-1 financing statements and control agreements, creating Liens prior and superior in right to any other Person, subject to the Liens
permitted under Section 7.02, in all Equity Interests of each Restricted Subsidiary now or hereafter owned by Borrower or any Restricted Subsidiary. 


        (i)    On
or prior to the Effective Date, the Administrative Agent shall have received a Borrowing Request acceptable to the Administrative Agent setting forth the Loans, if
any, requested by the Borrower on the Effective Date, the Type and amount of each Loan and the accounts to which such Loans are to be funded; provided that all Borrowings on the Effective Date shall
be ABR Borrowings. 


        (j)    If
the initial Borrowing includes the issuance of a Letter of Credit, the Administrative Agent shall have received a written request in accordance with
Section 2.07 of this Agreement. 


        (k)   The
Administrative Agent shall have received such financing statements (including, without limitation, the financing statements referenced in subclause (f) and
(h) above) as Administrative Agent shall specify to fully evidence and perfect all Liens contemplated by the Loan Documents, all of which shall be filed of record in such jurisdictions as the
Administrative Agent shall require in its sole discretion. 


        (l)    The
Administrative Agent shall have received reasonably satisfactory evidence that after giving effect to the Transactions, (i) each Credit Party is an
"Unrestricted Subsidiary" as such term is defined in the Indenture, (ii) no Credit Party is a "Subsidiary Guarantor" as such term is defined in the Indenture and (iii) the outstanding
principal balance of the Revolving Loans on the Effective Date does not exceed $100,000. 



        (m)  The
Administrative Agent shall have received a Solvency Certificate in the form attached hereto as Exhibit D, dated the Effective Date, and signed by a
Responsible Officer of the Borrower. 


        (n)   The
Lenders shall have received from the Borrower (i) a pro forma consolidated balance sheet of the Borrower and its Consolidated Subsidiaries as of the Effective
Date, and reflecting the consummation of the Transactions, the related financings and other transactions contemplated by the Loan Documents to occur on or prior to the Effective Date, which pro forma
balance sheet shall be prepared consistent in all respects with the information previously provided by the Borrower to the Administrative Agent and the Lenders and in form and substance satisfactory
to the Administrative Agent, (ii) a pro forma statement of operations of the Borrower and its Consolidated Subsidiaries for the twelve month period ending as of the date of the pro forma
balance sheet described in the immediately preceding clause (i), and (iii) the Projections. 


        (o)   Each
Credit Party shall have obtained all approvals required from any Governmental Authority and all consents of other Persons, in each case that are necessary or
advisable in connection with the Transactions and each of the foregoing shall be in full force and effect and in form and substance reasonably satisfactory to the Administrative Agent. All applicable
waiting periods shall have expired without any action being taken or threatened by any competent authority which would restrain, prevent or otherwise impose adverse conditions on the transactions
contemplated by the Loan Documents, the MLP Contribution Documents, the USA Merger Agreement or the financing thereof and no action, request for stay, petition for review or rehearing,
reconsideration, or appeal with respect to any of the foregoing shall be pending, and the time for any applicable agency to take action to set aside its consent on its own motion shall have expired. 


        (p)   There
shall not exist any action, suit, investigation, litigation or proceeding or other legal or regulatory developments, pending or threatened in any court or before
any arbitrator or Governmental Authority that, in the reasonable opinion of Administrative Agent, singly or in the aggregate, materially impairs the Transactions, the financing thereof or any of the
other transactions contemplated by the Loan Documents, the MLP Contribution Documents or the USA Merger Agreement or that could have a Material Adverse Effect. 


47







 



        (q)   All
partnership, corporate and other proceedings taken or to be taken in connection with the Transactions and all documents incidental thereto shall be reasonably
satisfactory in form and substance to Administrative Agent and its counsel, and Administrative Agent and such counsel shall have received all such counterpart originals or certified copies of such
documents as Administrative Agent may reasonably request. 


        (r)   The
Administrative Agent shall have received a list of all Swap Agreements to which the Borrower or any Restricted Subsidiary is a party as of the Effective Date (and
after giving effect to the Transactions) demonstrating that the aggregate notional amount of Hydrocarbons under such Swap Agreements is at least (i) 80% of the forecasted production from total
proved reserves (as defined in Section 7.05) of Borrower and the Restricted Subsidiaries for the period from the Effective Date to and including December 31, 2008, (ii) 65% of the
forecasted production from total proved reserves of Borrower and the Restricted Subsidiaries for the calendar year ending December 31, 2009 and (iii) 20% of the forecasted production
from total proved reserves of Borrower and the Restricted Subsidiaries for the calendar year ending December 31, 2010. [TO BE
DISCUSSED.]


        (s)   The
Administrative Agent shall have received reasonably satisfactory evidence that (i) a portion of the net proceeds of the MLP Public Offering shall have been
applied to reduce the outstanding principal amount of the Original Loans outstanding to not more than $100,000 on the Effective Date, (ii) a sufficient portion of the outstanding principal
amount of the EPOP Loans shall have been repaid on the Effective Date with net proceeds of the MLP Public Offering to cause all assets and properties, including the Borrowing Base Properties, owned by
Winchester MLP and EPOP MLP prior to the USA Merger to be released from any and all Liens securing the liabilities, obligations and indebtedness under the EPOP Credit Agreement and (iii) all
rights, duties and obligations EXCO, as "Borrower" under and as defined in the Original Credit Agreement shall have been assigned to and assumed by Borrower and EXCO shall have been released from all
liabilities, obligations and indebtedness under the Original Credit Agreement. 


        (t)    The
Borrower shall have delivered to the Administrative Agent a description of the sources and uses of funding for the Transactions that is consistent with the terms of
the Loan Documents and otherwise satisfactory to the Administrative Agent and the Arranger and the capitalization, structure and equity ownership of the Borrower after the Transactions shall be
satisfactory to the Lenders in all respects. 


The
Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 11.02)
at or prior to 3:00 p.m. on [                        ], 2008 (and, in the
event such conditions are not so satisfied or waived,
the Aggregate Commitment shall terminate at such time). 


        Section 5.02.    Each Credit Event.    The obligation of each Lender to make a Loan on the occasion of any
Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions: 


        (a)   The
representations and warranties of each Credit Party set forth in the Loan Documents shall be true and correct in all material respects on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable except to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier date. 


        (b)   At
the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default
shall have occurred and be continuing. 


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        (c)   At
the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no
Borrowing Base Deficiency exists or would be caused thereby. 


Each
Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a), (b) and (c) of this Section. 


 
 

Article VI    
    


 
  Affirmative Covenants    
    


        Until the Aggregate Commitment has expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid
in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, each Credit Party covenants and agrees with the Lenders that: 



        Section 6.01.    Financial Statements; Other Information.    The Borrower will furnish to the Administrative
Agent and each Lender: 


        (a)   within
ninety (90) days after the end of each fiscal year of the Borrower, the audited consolidated (and unaudited consolidating) balance sheet and related
consolidated (and with respect to statements of operations, consolidating) statements of operations, stockholders' equity and cash flows of the MLP and its Consolidated Subsidiaries as of the end of
and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by a firm of independent public accountants reasonably acceptable to
Administrative Agent (without a "going concern" or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated and
consolidating financial statements present fairly in all material respects the financial condition and results of operations of the MLP and its Consolidated Subsidiaries on a consolidated and
consolidating basis in accordance with GAAP consistently applied; 


        (b)   within
forty-five (45) days after the end of each fiscal quarter of the Borrower, the consolidated (and unaudited consolidating) balance sheet and
related consolidated (and with respect to statements of operations, consolidating) statements of operations and cash flows of the MLP and its Consolidated Subsidiaries as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by a Responsible Officer as presenting fairly in all material respects the financial condition and results of operations of the MLP and
its Consolidated Subsidiaries on a consolidated and consolidating basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of
footnotes; 


        (c)   concurrently
with any delivery of financial statements under clause (a) or (b) above, a certificate in a form reasonably acceptable to Administrative Agent
signed by a Responsible Officer of the Borrower (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, and (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 7.11; 


        (d)   promptly
after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by MLP or any of its Subsidiaries
with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; 


49







 



        (e)   as
soon as available, and in any event no later than March 1 and September 1 of each year, the Reserve Reports required on such dates pursuant to
Section 3.01 together with a certificate in a form reasonably acceptable to Administrative Agent signed by a Responsible Officer of the Borrower certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto; 



        (f)    together
with the Reserve Reports required under clause (e) above, a report, in reasonable detail, setting forth the Swap Agreements then in effect, the notional
volumes of and prices for, on a monthly basis and in the aggregate, the Crude Oil and Natural Gas for each such Swap Agreement and the term of each such Swap Agreement; 


        (g)   if
requested by Majority Lenders and within thirty (30) days of such request, a monthly report, in form and substance satisfactory to the Administrative Agent,
indicating the next preceding month's sales volumes, sales revenues, production taxes, operating expenses and net operating income from the Borrowing Base Properties, with detail, calculations and
worksheets, all in form and substance reasonably satisfactory to the Administrative Agent; and 


        (h)   promptly
following any request therefor, such other information regarding the operations, business affairs and financial condition of any Credit Party, or compliance
with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request. 


Documents
required to be delivered pursuant to Section 6.01(a) or Section 6.01(b) or Section 6.01(d) may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date (i) on which the Borrower or MLP, as applicable posts such documents, or provides a link thereto on the Borrower's or MLP's website on the Internet at the website
address identified in Section 11.01 on which such documents are posted on the Borrower's or MLP's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative
Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Borrower
shall deliver paper copies of such documents to the Administrative Agent or any Lender that requests the Borrower to deliver such paper copies until a written request to cease delivering paper copies
is given by the Administrative Agent or such Lender and (ii) the Borrower shall notify the Administrative Agent and each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide paper copies of the Compliance Certificates required by Section 6.01(c) to the Administrative Agent. Except for
such Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no
responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such
documents. 


        The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arrangers will make available to the Lenders and the Issuing Bank materials and/or information
provided by or on behalf of the Borrower or the MLP hereunder (collectively, "Borrower Materials") by posting the Borrower Materials on IntraLinks or
another similar electronic system (the "Platform") and (b) certain of the Lenders may be "public-side" Lenders
(i.e., Lenders that do not wish to receive material non-public information with respect to the Borrower or its securities) (each, a
"Public Lender"). The Borrower hereby agrees that (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and
conspicuously marked "PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear prominently on the first page thereof; (x) by marking Borrower Materials "PUBLIC," the Borrower
shall be deemed to have authorized the Administrative Agent, the Arrangers, the Issuing Bank and the Lenders to treat such Borrower Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with 


50







 



respect
to the Borrower or its securities for purposes of United States Federal and state securities laws; (y) all Borrower Materials marked "PUBLIC" are permitted to be made available through
a portion of the Platform designated "Public Investor;" and (z) the Administrative Agent and the Arrangers shall be entitled to treat Borrower's Materials that are not marked "PUBLIC" as being
suitable only for posting on a portion of the Platform not designated "Public Investor." 


        Section 6.02.    Notices of Material Events.    The Borrower will furnish to the Administrative Agent and each
Lender prompt written notice of the following: 


        (a)   the
occurrence of any Default; 


        (b)   the
filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting any Credit Party or any Affiliate
thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect; 


        (c)   the
occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the
Borrower and the Restricted Subsidiaries in an aggregate amount exceeding $5,000,000; 



        (d)   any
written notice or written claim to the effect that any Credit Party is or may be liable to any Person as a result of the release by any Credit Party, or any other
Person of any Hazardous Materials into the environment, which could reasonably be expected to have a Material Adverse Effect; 


        (e)   any
written notice alleging any violation of any Environmental Law by any Credit Party, which could reasonably be expected to have a Material Adverse Effect; 


        (f)    the
occurrence of any material breach or default under, or repudiation or termination of, any Material Sales Contract that results in, or could reasonably be expected to
result in, a Material Adverse Effect; 


        (g)   the
occurrence of any material breach or default under a repudiation or termination of, any MLP Agreement; 


        (h)   the
receipt by the Borrower or any Restricted Subsidiary of any management letter or comparable analysis prepared by the auditors for the Borrower or any such Restricted
Subsidiary; and 


        (i)    any
other development that results in, or could reasonably be expected to result in, a Material Adverse Effect. 


51









  





Each notice delivered under this Section shall be accompanied by a statement of a Responsible Officer or other executive officer of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect thereto. 



        Section 6.03.    Existence; Conduct of Business.    The Borrower will, and will cause each Restricted
Subsidiary to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of its business; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 7.03. 


        Section 6.04.    Payment of Obligations.    The Borrower will, and will cause each Restricted Subsidiary to,
pay its obligations, including Tax liabilities, that, if not paid, could result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity
or amount thereof is being contested in good faith by appropriate proceedings, (b) the Borrower or such Restricted Subsidiary has set aside on its books adequate reserves with respect thereto
in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect. 


        Section 6.05.    Maintenance of Properties; Insurance.    The Borrower will, and will cause each Restricted
Subsidiary and use commercially reasonable efforts to cause each operator of Borrowing Base Properties to, (a) keep and maintain all property material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations. On or prior to the Effective Date and thereafter, upon request of the
Administrative Agent, the Borrower will furnish or cause to be furnished to the Administrative Agent from time to time a summary of the respective insurance coverage of the Borrower and its Restricted
Subsidiaries in form and substance reasonably satisfactory to the Administrative Agent, and, if requested, will furnish the Administrative Agent copies of the applicable policies. Upon demand by
Administrative Agent, the Borrower will cause any insurance policies covering any such property to be endorsed (a) to provide that such policies may not be cancelled, reduced or affected in any
manner for any reason without fifteen (15) days prior notice to Administrative Agent, and (b) to provide for such other matters as the Lenders may reasonably require. 


        Section 6.06.    Books and Records; Inspection Rights.    The Borrower will, and will cause each Restricted
Subsidiary to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Borrower will,
and will cause each Restricted Subsidiary to, permit any representatives designated by the Administrative Agent
or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its
officers and, provided an officer of the Borrower has the reasonable opportunity to participate, its independent accountants, all at such reasonable times and as often as reasonably requested. 


        Section 6.07.    Compliance with Laws.    The Borrower will, and will cause each Restricted Subsidiary to,
comply with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. 


        Section 6.08.    Use of Proceeds and Letters of Credit.    The proceeds of the Loans will be used only to
(a) pay the fees, expenses and transaction costs of the Transactions, (b) satisfy reimbursement obligations with respect to Letters of Credit, (c) make Restricted Payments
permitted under Section 7.06, and (d) finance the working capital needs of the Borrower, including capital expenditures, and for general corporate purposes of the Borrower and the
Guarantors, in the ordinary course of business, including the exploration, acquisition and development of Oil and Gas Interests. No part of 


52







 



the
proceeds of any Loan will be used, whether directly or indirectly, to purchase or carry any margin stock (as defined in Regulation U issued by the Board). Letters of Credit will be issued
only to support general corporate purposes of the General Partner, the Borrower and the Restricted Subsidiaries. 



        Section 6.09.    Mortgages.    Each Borrower will, and will cause each Guarantor to, execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, Mortgages in form and substance acceptable to the Administrative Agent together with such other assignments, conveyances, amendments,
agreements and other writings, including, without limitation, UCC-1 financing statements (each duly authorized and executed, as applicable) as the Administrative Agent shall deem necessary
or appropriate to grant, evidence, perfect and maintain Liens in favor of the Secured Parties in Borrowing Base Properties having an Engineered Value equal to or greater than 125% of the Aggregate
Commitment. Administrative Agent and each Lender hereby acknowledges that, as of the Effective Date, the Borrower is in compliance with Section 6.09; provided that, (a) none of the
Mortgaged Properties securing the Original Credit Agreement and not otherwise released prior to the Effective Date shall be released solely because the Engineered Value of the Mortgaged Properties on
or after the Effective Date exceeds 125% of the Aggregate Commitment and (b) on the Effective Date and thereafter, the Borrower will, and will cause each Guarantor to, execute and deliver to
the Administrative Agent (i) amendments of, or amendments and restatements of, the Mortgages filed pursuant to the Original Credit Agreement to the extent requested by, and in form and
substance satisfactory to, the Administrative Agent and (ii) Mortgages covering certain Borrowing Base Properties included in the MLP Contribution that were not collateral for the obligations
under the Original Credit Agreement to the extent requested by, and in form and substance satisfactory to, the Administrative Agent. 


        Section 6.10.    Title Data.    The Borrower will, and will cause each Guarantor to, deliver to the
Administrative Agent such opinions of counsel or other evidence of title as the Administrative Agent shall deem reasonably necessary or appropriate to verify (a) at all times from and after the
Effective Date, not less than (i) ninety percent (90%) of the Engineered Value of the Mortgaged Properties of the Borrower and the Guarantors taken as a whole (other than Mortgaged Properties
that are Appalachian Properties) and (ii) forty-five percent (45%) of the Engineered Value of the Mortgaged Properties that are Appalachian Properties, and (b) the validity,
perfection and priority of the Liens created by such Mortgages and such other matters regarding such Mortgages as Administrative Agent shall reasonably request. 


        Section 6.11.    Swap Agreements.    The Borrower will, and will cause each Restricted Subsidiary to, maintain
the Existing Swap Agreements and the EPOP Hedges and none of the Existing Swap Agreements or EPOP Hedges may be amended, modified or cancelled without the prior written consent of the Majority
Lenders. Upon the request of the Majority Lenders, the Borrower and each Restricted Subsidiary shall use their commercially reasonable efforts to cause each Swap Agreement to which the Borrower or any
Restricted Subsidiary is a party to (a) be collaterally assigned to the Administrative Agent, for the benefit of the Secured Parties and (b) upon the occurrence of any default or event
of default under such agreement or contract, (i) to permit the Lenders to cure such default or event of default and assume the obligations of such Credit Party under such agreement or contract
and (ii) to prohibit the termination of such agreement or contract by the counterparty thereto if the Lenders assume the obligations of such Credit Party under such agreement or contract and
the Lenders take the actions required under the foregoing clause (i). Upon the request of the Administrative Agent, the Borrower shall, within thirty (30) days of such request, provide
to the Administrative Agent and each Lender copies of all agreements, documents and instruments evidencing the Swap Agreements not previously delivered to the Administrative Agent and Lenders,
certified as true and correct by a Responsible Officer of the Borrower, and such other information regarding such Swap Agreements as the Administrative Agent and Lenders may reasonably request. 


53







 



        Section 6.12.    Operation of Oil and Gas Interests.    



        (a)   Each
Borrower will, and will cause each Restricted Subsidiary to, maintain, develop and operate its Oil and Gas Interests in a good and workmanlike manner, and observe
and comply with all of the terms and provisions, express or implied, of all oil and gas leases relating to such Oil and Gas Interests so long as such Oil and Gas Interests are capable of producing
Hydrocarbons and accompanying elements in paying quantities, except where such failure to comply could not reasonably be expected to have a Material Adverse Effect. 


        (b)   Borrower
will, and will cause each Restricted Subsidiary to, comply in all respects with all contracts and agreements applicable to or relating to its Oil and Gas
Interests or the production and sale of Hydrocarbons and accompanying elements therefrom, except to the extent a failure to so comply could not reasonably be expected to have a Material Adverse
Effect. 


        Section 6.13.    Restricted Subsidiaries.    In the event any Person is or becomes a Restricted Subsidiary,
Borrower will (a) promptly take all action necessary to comply with Section 6.14, (b) promptly take all such action and execute and deliver, or cause to be executed and delivered,
to the Administrative Agent all such documents, opinions, instruments, agreements, and certificates similar to those described in Section 5.01(b) and Section 5.01(c) that the
Administrative Agent may request, and (c) promptly cause such Restricted Subsidiary to (i) become a party to this Agreement and Guarantee the Obligations by executing and delivering to
the Administrative Agent a Counterpart Agreement in the form of Exhibit C, and (ii) to the extent required to comply with Section 6.09 or as requested by the Administrative Agent,
execute and deliver Mortgages and other Security Instruments creating Liens prior and superior in right to any other Person, subject to Permitted Encumbrances, in such Restricted Subsidiary's Oil and
Gas Interests and other assets. Upon delivery of any such Counterpart Agreement to the Administrative Agent, notice of which is hereby waived by each Credit Party, such Restricted Subsidiary shall be
a Guarantor and shall be as fully a party hereto as if such Restricted Subsidiary were an original signatory hereto. Each Credit Party expressly agrees that its obligations arising hereunder shall not
be affected or diminished by the addition or release of any other Credit Party hereunder. This Agreement shall be fully effective as to any Credit Party that is or becomes a party hereto regardless of
whether any other Person becomes or fails to become or ceases to be a Credit Party hereunder. With respect to each such Restricted Subsidiary, the Borrower shall promptly send to the Administrative
Agent written notice setting forth with respect to such Person the date on which such Person became a Restricted Subsidiary of the Borrower, and supplement the data required to be set forth in the
Schedules to this Agreement as a result of the acquisition or creation of such Restricted Subsidiary; provided that such supplemental data must be reasonably acceptable to the Administrative Agent and
Majority Lenders. 


        Section 6.14.    Pledged Equity Interests.    On the date hereof and at the time hereafter that any Restricted
Subsidiary of the Borrower is created or acquired or any Unrestricted Subsidiary becomes a Restricted Subsidiary, the Borrower and the Subsidiaries (as applicable) shall execute and deliver to the
Administrative Agent for the benefit of the Secured Parties, a Pledge Agreement, in form and substance acceptable to the Administrative Agent, from the Borrower and/or the Subsidiaries (as applicable)
covering all Equity Interests owned by the Borrower or such Restricted Subsidiaries in such Restricted Subsidiaries, together with all certificates (or other evidence acceptable to Administrative
Agent) evidencing the issued and outstanding Equity Interests of each such Restricted Subsidiary of every class owned by such Credit Party (as applicable) which, if certificated, shall be duly
endorsed or accompanied by stock powers executed in blank (as applicable), as Administrative Agent shall deem necessary or appropriate to grant, evidence and perfect a security interest in the issued
and outstanding Equity Interests owned by Borrower or any Restricted Subsidiary in each Restricted Subsidiary prior and superior in right to any other Person. 


54







 


 
 

Article VII    
    


 
  Negative Covenants    
    


        Until the Aggregate Commitment has expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, each Credit Party covenants and agrees with the Lenders that: 



        Section 7.01.    Indebtedness.    The Borrower will not, nor will it permit any of its Restricted Subsidiaries
to, create, incur, assume or permit to exist any Indebtedness, except: 


        (a)   The
Obligations; 


        (b)   Indebtedness
existing on the date hereof and set forth in Schedule 7.01 and extensions, renewals and replacements of any such Indebtedness that do not increase
the outstanding principal amount thereof; 


        (c)   Indebtedness
of the Borrower to any Guarantor and of any Guarantor to the Borrower or any other Guarantor; provided, that
(i) all such Indebtedness shall be unsecured and subordinated in right of payment to the payment in full of all of the Obligations as provided in Section 8.06 and (ii) all such
Indebtedness is evidenced by promissory notes in form and substance reasonably satisfactory to the Administrative Agent, and such promissory notes are subject to a security interest in favor of the
Administrative Agent for the benefit of the Secured Parties on terms and conditions reasonably satisfactory to the Administrative Agent prior and superior in right to any other Person; 


        (d)   Guarantees
of the Obligations; 


        (e)   Indebtedness
of the Borrower and the Restricted Subsidiaries incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including
Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such
Indebtedness is incurred prior to or within 90 days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness
permitted by this clause (e) shall not exceed $10,000,000 at any time outstanding; 


        (f)    Indebtedness
incurred or deposits made by the Borrower and any Restricted Subsidiary (i) under worker's compensation laws, unemployment insurance laws or similar
legislation, or (ii) in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases to which such Credit Party is a party, (iii) to secure public or
statutory obligations of such Credit Party, and (iv) of cash or U.S. Government Securities made to secure the performance of statutory obligations, surety, stay, customs and appeal bonds to
which such Credit Party is a party in connection with the operation of the Oil and Gas Interests, in each case in the ordinary course of business; 


        (g)   Indebtedness
of any Borrower or any Restricted Subsidiary under Swap Agreements to the extent permitted under Section 7.05; and 


        (h)   Other
unsecured Indebtedness of the Credit Parties in an aggregate principal amount not exceeding $25,000,000 at any time outstanding. 


        Section 7.02.    Liens.    The Borrower will not, nor will it permit any of its Restricted Subsidiaries to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except: 


        (a)   any
Lien created pursuant to this Agreement or the Security Instruments; 


55







 



        (b)   Permitted
Encumbrances; 


        (c)   any
Lien on any property or asset of the Borrower or any Restricted Subsidiary existing on the date hereof and set forth in Schedule 7.02;  provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any other Restricted Subsidiary and
(ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount
thereof; 


        (d)   any
Lien existing on any property or asset prior to the acquisition thereof by the Borrower or any Restricted Subsidiary or existing on any property or asset of any
Person that becomes a Restricted Subsidiary after the date hereof prior to the time such Person becomes a Restricted Subsidiary; provided that
(i) such Lien secures Indebtedness permitted by Section 7.01(e), (ii) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a
Restricted Subsidiary, as the case may be, (iii) such Lien shall not apply to any other property or assets of the Borrower or any other Restricted Subsidiary and (iv) such Lien shall
secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Restricted Subsidiary, as the case may be and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof; and 



        (e)   Liens
on fixed or capital assets acquired, constructed or improved by the Borrower or any Restricted Subsidiary; provided
that (i) such Liens, secure Indebtedness permitted by Section 7.01, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within ninety
(90) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or
improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Borrower or any other Restricted Subsidiaries. 



        Section 7.03.    Fundamental Changes.    


        (a)   The
Borrower will not, nor will it permit any of its Restricted Subsidiaries to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) all or any substantial part of its assets, or any of its Borrowing
Base Properties or any of the Equity Interests of any Restricted Subsidiary (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, the Borrower or any
Restricted Subsidiary may sell Hydrocarbons produced from its Oil and Gas Interests in the ordinary course of business, and if at the time thereof and immediately after giving effect thereto no
Default shall have occurred and be continuing, (i) any Restricted Subsidiary may merge into the Borrower in a transaction in which the Borrower is the surviving entity, (ii) any
Restricted Subsidiary may merge into any other Restricted Subsidiary in a transaction in which the surviving entity is a Restricted Subsidiary, (iii) any Restricted Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Borrower or to another Restricted Subsidiary, (iv) any Restricted Subsidiary may liquidate or dissolve if the Borrower determines in
good faith that such liquidation or dissolution is in the best interests of the Borrower and is not materially disadvantageous to the Lenders, (v) the Borrower or any Restricted Subsidiary may
sell, transfer, lease or otherwise dispose of equipment and related items in the ordinary course of business, that are obsolete or no longer necessary in the business of the Borrower or any of its
Restricted Subsidiaries or that is being replaced by equipment of comparable value and utility, (vi) subject to Section 2.12(b), the Borrower or any Restricted Subsidiary may sell,
transfer, lease, exchange, abandon or otherwise dispose of Borrowing Base Properties with a value not exceeding, in the aggregate for the Borrower and its Restricted Subsidiaries taken as a whole,
five percent (5%) of the Borrowing Base between Scheduled Redeterminations and (vii) with the prior written consent of Required Lenders and subject to Section 2.02(d) and
Section 2.12(b), the Borrower or any Restricted Subsidiary may sell, transfer, lease, exchange, abandon or otherwise dispose of Borrowing Base Properties not otherwise permitted 


56







 



pursuant
to the foregoing clause (vi). For purposes of the foregoing clause (vi), the value of any Oil and Gas Interests included in the Borrowing Base Properties shall be the Engineered
Value of such Oil and Gas Interests and the value of all other Oil and Gas Interests shall be the value which would be assigned to such Oil and Gas Interests using the same methodology, assumptions
and discount rates used to determine the Engineered Value of the Borrowing Base Properties as of the most recent Redetermination. In addition, for purposes of determining compliance with
clause (vi) of this Section with respect to any exchange of Oil and Gas Interests, the value of such exchange shall be the net reduction, if any, in Engineered Value realized or resulting from
such exchange. 


        (b)   The
Borrower will not, nor will it permit any of its Restricted Subsidiaries to, engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Restricted Subsidiaries on the date of execution of this Agreement and after giving effect to the Transactions and businesses reasonably related thereto. 


        Section 7.04.    Investments, Loans, Advances, Guarantees and Acquisitions.    The Borrower will not, nor will
it permit any of its Restricted Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Restricted Subsidiary prior to such merger) any
capital stock, evidences of Indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any Indebtedness of, or make or permit to exist any investment or any other interest in, any other Person,
or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit, except: 



        (a)   Permitted
Investments; 


        (b)   investments
by the Borrower in the Equity Interests of any Restricted Subsidiary; 


        (c)   investments
by the Borrower or Guarantor consisting of intercompany Indebtedness permitted under Section 7.01(c) 


        (d)   Guarantees
constituting Indebtedness permitted by Section 7.01; 


        (e)   investments
by the Borrower and its Restricted Subsidiaries that are (1) customary in the oil and gas business, (2) made in the ordinary course of the
Borrower's or such Restricted Subsidiary's business, and (3) made in the form of, or pursuant to, oil, gas and mineral leases, operating agreements, farm-in agreements,
farm-out agreements, development agreements, unitization agreements, joint bidding agreements, services contracts and other similar agreements that a reasonable and prudent oil and gas
industry owner or operator would find acceptable; 


        (f)    investments
consisting of Swap Agreements to the extent permitted under Section 7.05; and 



        (g)   other
investments by the Borrower and the Restricted Subsidiaries; provided that, on the date any such other investment
is made, the amount of such investment, together with all other investments made pursuant to this clause (g) of Section 7.04 (in each case determined based on the cost of such
investment) since the Effective Date, does not exceed in the aggregate, $10,000,000. 


        Section 7.05.    Swap Agreements.    The Borrower will not, nor will it permit any of its Restricted
Subsidiaries to, enter into or maintain any Swap Agreement, except the Existing Swap Agreements, and Swap Agreements entered into in the ordinary course of business with Approved Counterparties and
not for speculative purposes to (a) hedge or mitigate Crude Oil and Natural Gas price risks to which the Borrower or any Restricted Subsidiary has actual exposure, and (b) effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of any
Credit Party; provided that such Swap Agreements (at the time each transaction under such Swap Agreement is entered into) would not cause the aggregate
notional volumes of Hydrocarbons under all Swap Agreements then in effect (including the Existing Swap Agreements) to exceed (i) at any time, ninety percent (90%) of the 


57







 



"forecasted
production from total proved reserves" (as defined below) of the Borrower and the Restricted Subsidiaries for each month of the first three years of the forthcoming five year period and
(ii) at any time, eighty percent (80%) of the forecasted production from total proved reserves of the Borrower and the Restricted Subsidiaries for each month of the fourth and fifth years of
the forthcoming five year period. As used in this Section, "forecasted production from total proved reserves" means the forecasted production of Crude Oil and Natural Gas as reflected in the most
recent Reserve Report delivered to the Administrative Agent pursuant to Section 6.01, after giving effect to any pro forma adjustments for the consummation of any acquisitions or dispositions
since the effective date of such Reserve Report. Once the Borrower or any Restricted Subsidiaries enters into a Swap Agreement or any hedge transaction pursuant to any Swap Agreement, the terms and
conditions of such Swap Agreement and such hedge transaction may not be amended or modified, nor may such Swap Agreement or hedge transaction be cancelled without the prior written consent of Majority
Lenders. Each Credit Party and each Lender agrees and acknowledges that (i) the Existing Swap Agreements are Swap Agreements permitted under this Section 7.05, (ii) as of the
Effective Date, the counterparty to each Existing Swap Agreement is a Lender Counterparty, and (iii) the obligations of the Credit Parties under the Existing Swap Agreements are included in the
defined term "Obligations" and such obligations are entitled to the benefits of, and are secured by the Liens granted under, the Security Instruments.  [Notwithstanding the foregoing, in the event the actual volume of
Hydrocarbon production of the Borrower and its Restricted Subsidiaries in any month is materially
less than the aggregate notional volume of Hydrocarbons under all Swap Agreements of the Borrower and its Restricted Subsidiaries for such month, the Borrower shall, in good faith and based on the
exercise of its reasonable business judgment, terminate, assign or unwind a portion of such Swap Agreements sufficient to reduce the likelihood that the actual volume of Hydrocarbon production of the
Borrower and its Restricted Subsidiaries in any future month will be less than the notional volume of Hydrocarbon under such Swap Agreements for such month.]


        Section 7.06.    Restricted Payments.    The Borrower will not, nor will it permit any of its Restricted
Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Borrower may declare and make Restricted Payments with respect to its
Equity Interests payable solely in its Equity Interests (other than Disqualified Stock), (b) so long as no Default has occurred and is continuing or would result therefrom, any Restricted
Subsidiary may make Restricted Payments ratably with respect to its Equity Interests, (c) so long as no Borrowing Base Deficiency or Default has occurred and is continuing or would result
therefrom and after giving effect to such cash dividend or distribution, the Aggregate Commitment exceeds Aggregate Credit Exposure by an amount equal to or greater than ten percent (10%) of the
Aggregate Commitment, the Borrower may declare and pay quarterly cash dividends and distributions to the holders of its Equity Interests in accordance with the Partnership Agreement. 



        Section 7.07.    Transactions with Affiliates.    The Borrower will not, nor will it permit any of its
Restricted Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Borrower or such Restricted Subsidiary
than could be obtained on an arm's-length basis from unrelated third parties, (b) transactions between or among the Borrower and its Restricted Subsidiaries not involving any other Affiliate,
(c) transactions described on Schedule 7.07, (d) any Restricted Payment permitted by Section 7.06, (e) the investments permitted under Section 7.04 and
(f) the transactions contemplated by the MLP Contribution Documents and the USA Merger Agreement. 


        Section 7.08.    Restrictive Agreements.    The Borrower will not, nor will it permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the 


58







 



Borrower
or any Restricted Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Restricted Subsidiary to pay dividends or other
distributions with respect to any of its Equity Interests or to make or repay loans or advances to the Borrower or any Restricted Subsidiary or to Guarantee Indebtedness of the Borrower or any
Restricted Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by this Agreement,
(ii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 7.08 (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or condition), (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and
(v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof. 


        Section 7.09.    Disqualified Stock and Fiscal Year.    The Borrower will not, nor will it permit any of its
Restricted Subsidiaries to, issue any Disqualified Stock or change its fiscal year. 



        Section 7.10.    Amendments of Organizational Documents; Certain Agreements.    The Borrower will not, nor will
it permit any of its Restricted Subsidiaries to, enter into or permit any material modification or amendment of, or waive any material right or obligation of any Person under its Organizational
Documents, or the MLP Agreements. 


        Section 7.11.    Financial Covenants.    


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        (a)   Consolidated Current Ratio. The Borrower will not permit the Consolidated Current Ratio as of the end of any fiscal
quarter ending on or after September 30, 2007 to be less than 1.00 to 1.00. 


        (b)    Leverage Ratio.    



          (i)  The
Borrower will not permit the ratio, determined as of the end of the fiscal quarter ending June 30, 2008, of (A) Consolidated Funded Indebtedness as of
the end of such fiscal quarter, to (B) Consolidated EBITDAX for such fiscal quarter multiplied by four (4) to be greater than 3.50 to 1.00. 


         (ii)  The
Borrower will not permit the ratio, determined as of the end of any fiscal quarter ending after June 30, 2008 and on or before September 30, 2008, of
(A) Consolidated Funded Indebtedness as of the end of such fiscal quarter, to (B) Consolidated EBITDAX for the period from  
[                        ] to the end of such fiscal quarter multiplied by a fraction, the numerator of
which is four (4) and the
denominator of which is the number of fiscal quarters ended since [                        ]
, including the then ending fiscal quarter,
to be greater than 3.50 to 1.00. 


        (iii)  The
Borrower will not permit the ratio, determined as of the end of the fiscal quarter ending on or after  
[                        ], of (A) Consolidated Funded Indebtedness as of the end of such fiscal
quarter to
(B) Consolidated EBITDAX for the trailing four fiscal quarter period ending on such date, to be greater than 3.50 to 1.00. 




        (c)    Interest Coverage Ratio.    



          (i)  The
Borrower will not permit the ratio, determined as of June 30, 2008, of (A) Consolidated EBITDAX for such fiscal quarter multiplied by four
(4) to (B) Consolidated Interest Expense for such fiscal quarter multiplied by four (4) to be less than 2.50 to 1.00. 



         (ii)  The
Borrower will not permit the ratio, determined as of the end of any fiscal quarter ending after June 30, 2008 and on or before September 30, 2008, of
(A) Consolidated EBITDAX for the period from [                        ], 2008
to the end of such fiscal quarter multiplied by a
fraction, the numerator of which is four (4) and the denominator of which is the number of fiscal quarters ended
since [                        ], 2008, including the then ending fiscal quarter,
to (B) Consolidated Interest Expense for the
period from [                        ], 2008 to the end of such fiscal quarter
multiplied by a fraction, the numerator of which is four
(4) and the denominator of which is the number of fiscal quarters ended since 
[                        ], 2008, including the then
ending fiscal quarter, to be less than 2.50 to 1.00. 


        (iii)  The
Borrower will not permit the ratio, determined as of the end of the fiscal quarter ending on or after  
[                        ], 2008, of (A) Consolidated EBITDAX for the trailing four fiscal quarter
period ending on such date, to
(B) Consolidated Interest Expense for such four fiscal quarter period to be less than 2.50 to 1.00. 




        Section 7.12.    Sale and Leaseback Transactions and other Off-Balance Sheet Liabilities.    The
Borrower will not, nor will it permit any Restricted Subsidiary to, enter into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other transaction pursuant to which
it incurs or has incurred Off-Balance Sheet Liabilities, except for Swap Agreements permitted under the terms of Section 7.05 and Advance Payment Contracts;  provided, that the aggregate amount of all Advance Payments received by any Credit Party that have not
been satisfied by delivery of production at any time does not exceed, in the aggregate $5,000,000. 


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Article VIII    
    


 
  Guarantee of Obligations    
    


        Section 8.01.    Guarantee of Payment.    Each Guarantor unconditionally and irrevocably guarantees to the
Administrative Agent for the benefit of the Secured Parties, the punctual payment of all Obligations now or which may in the future be owing by the Borrower under the Loan Documents and all
Obligations which may now or which may in the future be owing by the Borrower or any other Guarantor to any Secured Party under any Swap Agreement (the "Guaranteed
Liabilities"). This Guarantee is a guaranty of payment and not of collection only. The Administrative Agent shall not be required to exhaust any right or remedy or take any
action against the Borrower or any other Person or any collateral. The Guaranteed Liabilities include interest accruing after the commencement of a
proceeding under bankruptcy, insolvency or similar laws of any jurisdiction at the rate or rates provided in the Loan Documents, or the Swap Agreements between any Credit Party and any Secured Party,
as the case may be, regardless of whether such interest is an allowed claim. Each Guarantor agrees that, as between the Guarantor and the Administrative Agent, the Guaranteed Liabilities may be
declared to be due and payable for the purposes of this Guarantee notwithstanding any stay, injunction or other prohibition which may prevent, delay or vitiate any declaration as regards the Borrower
or any other Guarantor and that in the event of a declaration or attempted declaration, the Guaranteed Liabilities shall immediately become due and payable by each Guarantor for the purposes of this
Guarantee. 


        Section 8.02.    Guarantee Absolute.    Each Guarantor guarantees that the Guaranteed Liabilities shall be paid
strictly in accordance with the terms of this Agreement and the Swap Agreements to which any Secured Party is a party. The liability of each Guarantor hereunder is absolute and unconditional
irrespective of: (a) any change in the time, manner or place of payment of, or in any other term of, all or any of the Loan Documents or the Guaranteed Liabilities, or any other amendment or
waiver of or any consent to departure from any of the terms of any Loan Document or Guaranteed Liability, including any increase or decrease in the rate of interest thereon; (b) any release or
amendment or waiver of, or consent to departure from, any other guaranty or support document, or any exchange, release or non-perfection of any collateral, for all or any of the Loan
Documents or Guaranteed Liabilities; (c) any present or future law, regulation or order of any jurisdiction (whether of right or in fact) or of any agency thereof purporting to reduce, amend,
restructure or otherwise affect any term of any Loan Document or Guaranteed Liability; (d) without being limited by the foregoing, any lack of validity or enforceability of any Loan Document or
Guaranteed Liability; and (e) any other setoff, defense or counterclaim whatsoever (in any case, whether based on contract, tort or any other theory) with respect to the Loan Documents or the
transactions contemplated thereby which might constitute a legal or equitable defense available to, or discharge of, the Borrower or a Guarantor. 


        Section 8.03.    Guarantee Irrevocable.    This Guarantee is a continuing guaranty of the payment of all
Guaranteed Liabilities now or hereafter existing under this Agreement and such Swap Agreements to which any Secured Party is a party and shall remain in full force and effect until payment in full of
all Guaranteed Liabilities and other amounts payable hereunder and until this Agreement and the Swap Agreements are no longer in effect or, if earlier, when the Guarantor has given the Administrative
Agent written notice that this Guarantee has been revoked; provided that any notice under this Section shall not release the revoking Guarantor from any
Guaranteed Liability, absolute or contingent, existing prior to the Administrative Agent's actual receipt of the notice at its branches or departments responsible for this Agreement and such Swap
Agreements and reasonable opportunity to act upon such notice. 


        Section 8.04.    Reinstatement.    This Guarantee shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Liabilities is rescinded or must otherwise be returned by any Secured Party on the insolvency, bankruptcy or reorganization of the Borrower,
or any other Credit Party, or otherwise, all as though the payment had not been made. 


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        Section 8.05.    Subrogation.    No Guarantor shall exercise any rights which it may acquire by way of
subrogation, by any payment made under this Guarantee or otherwise, until all the Guaranteed Liabilities have been paid in full and this Agreement and the Swap Agreements to which any Lender
Counterparty is a party are no longer in effect. If any amount is paid to the Guarantor on account of subrogation rights under this Guarantee at any time when all the Guaranteed Liabilities have not
been paid in full, the amount shall be held in trust for the benefit of the Lenders and the Lender Counterparties and shall be promptly paid to the Administrative Agent to be credited and applied to
the Guaranteed Liabilities, whether matured or unmatured or absolute or contingent, in accordance with the terms of this Agreement and such Swap Agreements. If any Guarantor makes payment to the
Administrative Agent, Lenders, or any Lender Counterparties of all or any part of the Guaranteed Liabilities and all the Guaranteed Liabilities are paid in full and this Agreement and such Swap
Agreements are no longer in effect, the Administrative Agent, Lenders and Lender Counterparties shall, at such Guarantor's request, execute and deliver to such Guarantor appropriate documents, without
recourse and without representation or warranty, necessary to evidence the transfer by subrogation to such Guarantor of an interest in the Guaranteed Liabilities resulting from the payment. 


        Section 8.06.    Subordination.    Without limiting the rights of the Administrative Agent, the Lenders and the
Lender Counterparties under any other agreement, any liabilities owed by the Borrower to any Guarantor in connection with any extension of credit or financial accommodation by any Guarantor to or for
the account of the Borrower, including but not limited to interest accruing at the agreed contract rate after the commencement of a bankruptcy or similar proceeding, are hereby subordinated to the
Guaranteed Liabilities, and such liabilities of the Borrower to such Guarantor, if the Administrative Agent so requests, shall be collected, enforced and received by any Guarantor as trustee for the
Administrative Agent and shall be paid over to the Administrative Agent on account of the Guaranteed Liabilities but without reducing or affecting in any manner the liability of the Guarantor under
the other provisions of this Guarantee. 


        Section 8.07.    Payments Generally.    All payments by the Guarantors shall be made in the manner, at the
place and in the currency (the "Payment Currency") required by the Loan Documents and the Swap Agreement to which any Lender Counterparty is a party, as
the case may be; provided, however, that (if the Payment Currency is other than Dollars) any Guarantor
may, at its option (or, if for any reason whatsoever any Guarantor is unable to effect payments in the foregoing manner, such Guarantor shall be obligated to) pay to the Administrative Agent at its
principal office the equivalent amount in Dollars computed at the selling rate of the Administrative Agent or a selling rate chosen by the Administrative Agent, most recently in effect on or prior to
the date the Guaranteed Liability becomes due, for cable transfers of the Payment Currency to the place where the Guaranteed Liability is payable. In any case in which any Guarantor makes or is
obligated to make payment in Dollars, the Guarantor shall hold the Administrative Agent, the Lenders and the Lender Counterparties harmless from any loss incurred by the Administrative Agent, any
Lender or any Lender Counterparty arising from any change in the value of Dollars in relation to the Payment Currency between the date the Guaranteed Liability becomes due and the date the
Administrative Agent, such Lender or such Lender Counterparty is actually able, following the conversion of the Dollars paid by such Guarantor into the Payment Currency and remittance of such Payment
Currency to the place where such Guaranteed Liability is payable, to apply such Payment Currency to such Guaranteed Liability. 


        Section 8.08.    Setoff.    Each Guarantor agrees that, in addition to (and without limitation of) any right of
setoff, banker's lien or counterclaim the Administrative Agent, any Lender or any Lender Counterparty may otherwise have, the Administrative Agent, such Lender or such Lender Counterparty shall be
entitled, at its option, to offset balances (general or special, time or demand, provisional or final) held by it for the account of any Guarantor at any office of the Administrative Agent, such
Lender or such Lender Counterparty, in Dollars or in any other currency, against any amount payable by such Guarantor under this Guarantee which is not paid when due (regardless of whether such 


62







 



balances
are then due to such Guarantor), in which case it shall promptly notify such Guarantor thereof; provided that the failure of the Administrative
Agent, such Lender, or such Lender Counterparty to give such notice shall not affect the validity thereof. 


        Section 8.09.    Formalities.    Each Guarantor waives presentment, notice of dishonor, protest, notice of
acceptance of this Guarantee or incurrence of any Guaranteed Liability and any other formality with respect to any of the Guaranteed Liabilities or this Guarantee. 



        Section 8.10.    Limitations on Guarantee.    The provisions of the Guarantee under this Article VIII
are severable, and in any action or proceeding involving any state corporate law, or any state, federal or foreign bankruptcy, insolvency, reorganization or other law affecting the rights of creditors
generally, if the obligations of any Guarantor under this Guarantee would otherwise be held or determined to be avoidable, invalid or unenforceable on account of the amount of such Guarantor's
liability under this Guarantee, then, notwithstanding any other provision of this Guarantee to the contrary, the amount of such liability shall, without any further action by the Guarantors, the
Administrative Agent, any Lender or any Lender Counterparty, be automatically limited and reduced to the highest amount that is valid and enforceable as determined in such action or proceeding (such
highest amount determined hereunder being the relevant Guarantor's "Maximum Liability"). This Section 8.10, with respect to the Maximum Liability of the Guarantors, is intended solely to
preserve the rights of the Administrative Agent, Lenders and Lender Counterparties hereunder to the maximum extent not subject to avoidance under applicable law, and no Guarantor nor any other Person
shall have any right or claim under this Section 8.10 with respect to the Maximum Liability, except to the extent necessary so that none of the obligations of any Guarantor hereunder shall be
rendered voidable under applicable law. 


 
 

Article IX    
    


 
  Events of Default    
    


        If any of the following events ("Events of Default") shall occur: 



        (a)   the
Borrower shall fail to pay any principal of any Loan (including any payments required under Section 2.12) or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise; 


        (b)   the
Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable
under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three days; 



        (c)   any
representation or warranty made or deemed made by or on behalf of the Borrower or any Restricted Subsidiary in or in connection with this Agreement or any amendment
or modification hereof or waiver hereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder or in any Loan Document furnished pursuant to or in connection with this Agreement or any amendment or modification thereof or waiver hereunder, shall prove to
have been incorrect in any material respect when made or deemed made; 


        (d)   the
Borrower or any Restricted Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in Section 2.12,
Section 6.01, Section 6.02, Section 6.03 (with respect to the Borrower or any Restricted Subsidiary's existence),
Section 6.05 (with respect to insurance), Section 6.08, or in Article VII; 


        (e)   the
Borrower or any Restricted Subsidiary shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or 


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(d) of
this Article) or any Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Borrower
(which notice will be given at the request of any Lender); 


        (f)    the
Borrower or any Restricted Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable; 


        (g)   any
event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of
any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness; 


        (h)   an
involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of the
Borrower or any Restricted Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered; 


        (i)    the
Borrower or any Restricted Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief
under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Restricted Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing; 


        (j)    the
Borrower or any Restricted Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due; 



        (k)   one
or more judgments for the payment of money in an aggregate amount in excess of $5,000,000 shall be rendered against the Borrower or any Restricted Subsidiary or any
combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally
taken by a judgment creditor to attach or levy upon any assets of the Borrower or any Restricted Subsidiary to enforce any such judgment; 


        (l)    an
ERISA Event shall have occurred that, in the opinion of the Majority Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be
expected to result in a Material Adverse Effect; 


        (m)  the
delivery by any Guarantor to the Administrative Agent of written notice that its Guarantee under Article VIII has been revoked or is otherwise declared
invalid or unenforceable; 


        (n)   a
Change of Control shall occur; 


then,
and in every such event (other than an event with respect to the Borrower or any Restricted Subsidiary described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the request of the Majority Lenders 


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shall,
by notice to the Borrower, take either or both of the following actions, at the same or different times: (i) terminate the Aggregate Commitment, and thereupon the Aggregate Commitment
shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of
the Borrower accrued hereunder, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower; and in case
of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Aggregate Commitment shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the Borrower. 


 
 

Article X    
    


 
  The Administrative Agent    
    


        Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such
actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof, together with such actions and powers as are reasonably incidental thereto. 



        The
bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were
not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with any Credit Party or other Affiliate thereof as
if it were not the Administrative Agent hereunder. 


        The
Administrative Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, (a) the Administrative
Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Majority Lenders or the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 11.02), and
(c) except as expressly set forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any
Credit Party that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Majority Lenders or the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances
as provided in Section 11.02) or in the absence of its own gross negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement, (ii) the contents of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other
than to confirm receipt of items expressly required to be 


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delivered
to the Administrative Agent. None of the Syndication Agents, Documentation Agents or Managing Agents shall have any responsibility or liabilities as an agent hereunder. 


        The
Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or
other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 


        The
Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent.
The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions
of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 


        Subject
to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Majority Lenders shall have the right, in consultation with the Borrower, to appoint a successor. If no successor shall have been so
appointed by the Majority Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent which shall be a bank with an office in Chicago, Illinois or New York, New York, or an
Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the Administrative Agent's resignation
hereunder, the provisions of this Article and Section 11.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective
Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent. 


        Each
Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this
Agreement, any related agreement or any document furnished hereunder or thereunder. 


 
 

Article XI    
    


 
  Miscellaneous    
    


        Section 11.01.    Notices.    


        (a)   Except
in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other
communications provided for 


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herein
shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy, as follows: 



          (i)  if
to the Borrower, to EXCO Partners Operating MLP, LP, 12377 Merit Drive, Suite 1700, Dallas, Texas 75251, Attention: Douglas H. Miller, Chief Executive Officer and
Attention: J. Douglas Ramsey, Chief Financial Officer, Telecopy No. (214) 368-2087. For purposes of delivering the documents pursuant to Section 6.01(a),
Section 6.01(b) and Section 6.01(d), the website address is  [www.excoresources.com]; 


         (ii)  if
to the Administrative Agent or Issuing Bank, to JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 10 South Dearborn St., 7th Floor, Chicago, Illinois
60603-2003, Telecopy No.: (312) 385-7096, Attention: Claudia Kech, with a copy to JPMorgan Chase Bank, N.A., TX1-2448, 2200 Ross Avenue, 3rd
Floor, Dallas, Texas 75201, Telecopy No. (214) 965-3225, Attention: Wm. Mark Cranmer, Senior Vice President; 


        (iii)  if
to the Swingline Lender, JPMorgan Chase Bank, N.A., JPMorgan Loan Services, 21 South Clark St., 19th Floor, Chicago, Illinois 60603-2003, Telecopy No.:
(312) 385-7096, Attention: Claudia Kech, with a copy to JPMorgan Chase Bank, N.A., Mail Code TX1-2448, 2200 Ross Avenue, 3rd Floor, Dallas, Texas 75201,
Telecopy No. (214) 965-3225, Attention: Wm. Mark Cranmer, Senior Vice President; and 


        (iv)  if
to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire. 




        (b)   Notices
and other communications to the Lenders hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The
Administrative Agent or the Borrower may, in their discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices or communications. 


        (c)   Any
party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt. 



        Section 11.02.    Waivers; Amendments.    


        (a)   No
failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision of this Agreement or consent to any departure by the Borrower therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may
have had notice or knowledge of such Default at the time. 


        (b)   Except
as otherwise provided in Section 11.15 with respect to any Increase, neither this Agreement nor any provision hereof may be waived, amended or modified
except pursuant to an agreement or agreements in writing entered into by the Credit Parties and the Majority Lenders or by 


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the
Credit Parties and the Administrative Agent with the consent of the Majority Lenders; provided that no such agreement shall (1) increase the
Borrowing Base without the written consent of each Lender, (2) increase the Commitment of any Lender without the written consent of such Lender, (3) reduce the principal amount of any
Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender affected thereby, (4) postpone the scheduled
date of payment of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone
the scheduled date of expiration of the Aggregate Commitment, without the written consent of each Lender affected thereby, (5) change Section 2.19(b) or Section 2.19(c) in a
manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (6) except in connection with any sales, transfers, leases or other
dispositions permitted in Section 7.03, release any Credit Party from its obligations under the Loan Documents or release any of the Collateral without the written consent of each Lender, or
(7) change any of the provisions of this Section or the definition of "Majority Lenders" or "Required Lenders" or any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender; provided
further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be. Notwithstanding anything to the contrary herein, no Defaulting Lender shall
have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the consent of such Lender. 



        Section 11.03.    Expenses; Indemnity; Damage Waiver.    


        (a)   The
Borrower shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication of the credit facilities provided for herein, the preparation and administration
of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof (whether or not the transactions contemplated hereby or thereby shall be
consummated), (ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the
fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in connection with the Loan
Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit. 



        (b)   THE CREDIT PARTIES SHALL INDEMNIFY THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH LENDER, AND EACH RELATED PARTY OF ANY OF THE FOREGOING
PERSONS (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST, AND HOLD EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, PENALTIES,
LIABILITIES AND RELATED EXPENSES, INCLUDING THE FEES, CHARGES AND DISBURSEMENTS OF ANY COUNSEL FOR ANY INDEMNITEE, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF, IN CONNECTION WITH, OR
AS A RESULT OF (I) THE EXECUTION OR DELIVERY OF THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED HEREBY, THE PERFORMANCE BY THE PARTIES HERETO OF THEIR RESPECTIVE OBLIGATIONS
HEREUNDER OR THE CONSUMMATION OF THE TRANSACTIONS OR ANY OTHER TRANSACTIONS  


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 CONTEMPLATED HEREBY, (II) ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREFROM (INCLUDING ANY REFUSAL BY THE ISSUING BANK TO HONOR A DEMAND FOR PAYMENT UNDER A LETTER OF CREDIT IF
THE DOCUMENTS PRESENTED IN CONNECTION WITH SUCH DEMAND DO NOT STRICTLY COMPLY WITH THE TERMS OF SUCH LETTER OF CREDIT), (III) ANY ACTUAL OR ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON
OR FROM ANY PROPERTY OWNED OR OPERATED BY THE BORROWER OR ANY SUBSIDIARY, OR ANY ENVIRONMENTAL LIABILITY RELATED IN ANY WAY TO THE BORROWER OR ANY SUBSIDIARY, OR (IV) ANY ACTUAL OR PROSPECTIVE
CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO;  PROVIDED
THAT SUCH INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED
EXPENSES ARE DETERMINED BY A COURT OF COMPETENT JURISDICTION BY FINAL AND NONAPPEALABLE JUDGMENT TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH
INDEMNITEE.


        (c)   To
the extent that any Credit Party fails to pay any amount required to be paid by it to the Administrative Agent, the Issuing Bank or the Swingline Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the case may be, such Lender's
Applicable Percentage of such unpaid amount with respect to the amounts to be paid to the Issuing Bank or the Swingline Lender and such Lender's Applicable Percentage of such unpaid amount with
respect to amounts to be paid to the Administrative Agent (in each case, determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount;  provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such. 


        (d)   TO
THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, THE CREDIT PARTIES SHALL NOT ASSERT, AND HEREBY WAIVE, ANY CLAIM AGAINST ANY INDEMNITEE, ON ANY THEORY OF LIABILITY,
FOR SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) ARISING OUT OF, IN CONNECTION WITH, OR AS A RESULT OF, THIS AGREEMENT OR ANY AGREEMENT OR INSTRUMENT
CONTEMPLATED HEREBY, THE TRANSACTIONS, ANY LOAN OR LETTER OF CREDIT OR THE USE OF THE PROCEEDS THEREOF. 



        (e)   All
amounts due under this Section shall be payable not later than 10 days after written demand therefor. 


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        Section 11.04.    Successors and Assigns.    


        (a)   The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) no Credit Party may assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment or transfer by such Credit Party without such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in
paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement. 


        (b)   



          (i)  Subject
to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of: 



        (A)  the
Borrower, provided that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a
Lender, a Federal Reserve Bank, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee; 


        (B)  the
Administrative Agent; 


        (C)  the
Issuing Bank; and 


        (D)  the
Swingline Lender. 




         (ii)  Assignments
shall be subject to the following additional conditions: 



        (A)  except
in the case of an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or an assignment of the entire remaining amount of the assigning Lender's
Commitment or Loans, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such
assignment is delivered to the Administrative Agent) shall not be less than $5,000,000, unless each of the Borrower and the Administrative Agent otherwise consent,  provided that no such consent of the
Borrower shall be required if an Event of Default has occurred and is continuing; 



        (B)  each
partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations in respect of such Lender's
Commitment and such Lender's Loans under this Agreement; 


        (C)  the
parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of
$3,500; and 


        (D)  the
assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. 




        For
the purposes of this Section 11.04(b), the term "Approved Fund" has the following meaning: 


        "Approved Fund" means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans
and similar extensions of credit in the ordinary 



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course
of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages
a Lender. 


        (iii)  Subject
to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment
and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case
of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Section 2.16, Section 2.17, Section 2.18 and Section 11.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 11.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (c) of this Section except that any attempted assignment or transfer by any Lender that does not comply with clause (C) of
Section 11.04(b)(ii) shall be null and void. 


        (iv)  The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment and Applicable Percentage of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "Register"). The entries in the Register shall be conclusive, and the Credit Parties,
the Administrative Agent, the Issuing Bank and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Credit Parties, the Issuing Bank and any Lender, at any reasonable time and from time to time
upon reasonable prior notice. 


         (v)  Upon
its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignee's completed Administrative Questionnaire
(unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register;  provided that if either the
assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to
Section 2.07(d) or Section 2.07(e), Section 2.08, Section 2.19(d) or Section 11.03(c), the Administrative Agent shall have no obligation to accept such Assignment
and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph. 




        (c)   



          (i)  Any
Lender may, without the consent of the Borrower, the Administrative Agent or the Issuing Bank, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under this Agreement (including all or a portion of its Commitment and the
Loans owing to it); provided that (A) such Lender's obligations under this Agreement shall remain unchanged, (B) such Lender shall remain
solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that 



71







 

such
Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;  provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 11.02(b) that affects such Participant. Subject to paragraph (c)(ii) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Section 2.16, Section 2.17 and Section 2.18 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender,
provided such Participant agrees to be subject to Section 2.19(c) as though it were a Lender. 


         (ii)  A
Participant shall not be entitled to receive any greater payment under Section 2.16 or Section 2.18 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the prior written consent of the Borrower. A Participant
that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.18 unless the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section 2.18(e) as though it were a Lender. 




        (d)   Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including
without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest;  provided that no
such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such
pledgee or assignee for such Lender as a party hereto. 


        Section 11.05.    Survival.    All covenants, agreements, representations and warranties made by the Credit
Parties herein and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit
is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest
on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Aggregate Commitment has not expired or
terminated. The provisions of Section 2.16, Section 2.17, Section 2.18 and Section 11.03 and Article X shall survive and remain in full force and effect regardless
of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Aggregate Commitment or the termination of this
Agreement or any provision hereof. 


        Section 11.06.    Counterparts; Integration; Effectiveness.    This Agreement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject matter hereof. THIS WRITTEN CREDIT AND GUARANTY AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. Except as provided in Section 5.01, this Agreement shall become effective 


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when
it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the
other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement. 


        Section 11.07.    Severability.    Any provision of this Agreement held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the
remaining provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 


        Section 11.08.    Right of Setoff.    If an Event of Default shall have occurred and be continuing, each Lender
and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against any of and all the
obligations of any Credit Party now or hereafter existing under this Agreement held by such Lender, irrespective of whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The rights of each Lender under this Section and Section 8.08 are in addition to other rights and remedies (including other rights of setoff) which
such Lender may have. 


        Section 11.09.    GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS.    


        (a)   THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 



        (b)   EACH
CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK
STATE COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY
OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE ISSUING BANK OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT AGAINST ANY CREDIT PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION. 


        (c)   EACH
CREDIT PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT. 


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        (d)   EACH
PARTY TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN Section 11.01. NOTHING IN THIS AGREEMENT WILL AFFECT
THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. 



        Section 11.10.    WAIVER OF JURY TRIAL.    EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION. 


        Section 11.11.    Headings.    Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement. 


        Section 11.12.    Confidentiality.    Each of the Administrative Agent, the Issuing Bank and the Lenders agrees
to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority or any self-regulatory authority or agency possessing investigative powers
and the ability to sanction members for non-compliance, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as, or otherwise consistent with, those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Credit Parties and their obligations, (g) with the consent of the Borrower or (h) to the extent such Information (i) becomes publicly available other
than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis from a source other than a Credit
Party. For the purposes of this Section, "Information" means all information received from any Credit Party relating to any Credit Party or its
business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by any Credit Party;  provided that,
in the case of information received from any Credit Party after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 


        Section 11.13.    Interest Rate Limitation.    Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on such Loan under applicable law (collectively the
"Charges"), shall exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest 


74







 



payable
in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would
have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other
Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such Lender. Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Ann. Art. 5069, Ch. 15)) shall not
apply to this Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or be subject to the provisions of such Chapter 346 in any manner whatsoever. 


        Section 11.14.    USA PATRIOT Act.    Each Lender that is subject to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the "Act") hereby notifies each Credit Party that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender to
identify each Credit Party in accordance with the Act. The Borrower shall, upon the request of the Administrative Agent or any Lender, provide all documentation and other information that the
Administrative Agent or such Lender reasonably requires to comply with its ongoing obligations under applicable "know your customer" and anti-money laundering rules and regulations,
including the Act. 


        Section 11.15.    Procedure for Increases and Addition of New Lenders.    This Agreement permits certain
increases in a Lender's Commitment and the addition of Eligible Assignees as new Lenders providing new commitments, none of which require any consents or approvals from the other Lenders.
Notwithstanding Section 11.02(b), any amendment hereto for such an increase or addition shall be in the form attached hereto as Exhibit F and shall only require execution by the
Administrative Agent, the Borrower and each Lender that is increasing its Commitment and each Eligible Assignee that becomes a Lender, as the case may be. In addition, within a reasonable time after
the effective date of any Increase, the Administrative Agent shall, and is hereby authorized and directed to, revise Schedule 2.01 to reflect such Increase and shall distribute such revised
Schedule 2.01 to each Lender and each Borrower, whereupon such revised Schedule 2.01 shall supersede and replace the prior Schedule 2.01 and become part of this Agreement. On the
Business Day following any Increase, all outstanding Revolving Loans shall be reallocated among the Lenders (including any Eligible Assignees that have become Lenders) in accordance with the Lenders'
respective revised Applicable Percentages. The Borrower shall pay any funding indemnification amounts required by Section 2.17 in the event the payment of any principal of any Eurodollar Loan
or the conversion of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto is required in connection with any reallocation contemplated by this Section 11.15. 


        Section 11.16.    Original Credit Agreement.    Upon the Effective Date, this Agreement shall supersede and
replace in its entirety the Original Credit Agreement; provided, however, that (a) all loans, letters of credit, and other indebtedness, obligations and liabilities outstanding under the
Original Credit Agreement on such date shall continue to constitute Loans, Letters of Credit and other indebtedness, obligations and liabilities under this Agreement, (b) the execution and
delivery of this Agreement or any of the Loan Documents hereunder shall not constitute a novation, refinancing or any other fundamental change in the relationship among the parties and (c) the
Loans, Letters of Credit, and other indebtedness, obligations and liabilities outstanding hereunder, to the extent outstanding under the Original Credit Agreement immediately prior to the date hereof,
shall constitute the same loans, letters of credit, and other indebtedness, obligations and liabilities as were outstanding under the Original Credit Agreement. 


        Section 11.17.    Reaffirmation and Grant of Security Interest.    Each Credit Party hereby (i) confirms
that each Security Instrument (as defined in the Original Credit Agreement) to which it is a party or is 


75







 



otherwise
bound and all Collateral encumbered thereby, will continue to guarantee or secure, as the case may be, to the fullest extent possible in accordance with the Loan Documents, the payment and
performance of all Obligations and Guaranteed Liabilities under this Agreement and the Secured Obligations (as such term is defined in the Security Instruments) under the Security Instruments, as the
case may be, including without limitation the payment and performance of all such Obligations and Guaranteed Liabilities under this Agreement and the Secured Obligations under the Security
Instruments, and (ii) reaffirms its grant to the Administrative Agent for the benefit of the Secured Parties of a continuing Lien on and security interest in and to such Credit Party's right,
title and interest in, to and under all Collateral as collateral security for the prompt payment and performance in full when due of the Obligations and Guaranteed Liabilities under this Agreement and
the Secured Obligations under the Security Instruments (whether at stated maturity, by acceleration or otherwise) in accordance with the terms thereof. 



        Section 11.18.    Reallocation of Aggregate Commitment.    The Lenders (as defined in the Original Credit
Agreement) have agreed among themselves to reallocate the Aggregate Commitment (as defined in the Original Credit Agreement) as contemplated by this Agreement and to adjust their interests in the
Aggregate Commitment and the Revolving Loans (as defined in the Original Credit Agreement) accordingly. On the Effective Date and after giving effect to such reallocation and adjustment of such
Commitment and such Loans, the Lenders shall own the Applicable Percentages set forth on Schedule 2.01. The outstanding Revolving Loans (as defined in the Original Credit Agreement) and the
funds delivered to the Administrative Agent on the Effective Date by the Lenders shall be allocated such that after giving effect to such allocation each of the Lenders shall own the Applicable
Percentages of the Aggregate Commitment and the Commitments set forth on Schedule 2.01 and such Lenders shall own the Loans consistent with the Applicable Percentages set forth on
Schedule 2.01. The Borrower shall pay any funding indemnification amounts required by Section 2.17 of the Original Credit Agreement in the event the payment of any principal of any
Eurodollar Loan or the conversion of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto is required in connection with the reallocation contemplated by this
Section 11.18. 


76










        IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written. 



	 	 	BORROWER:
	

 	
 	
EXCO PARTNERS OPERATING MLP, LP
	

 	
 	

By:	

EXCO Partners Operating GP, LLC

its sole general partner
	

 	
 	

By:	

 
	 	 	 	
 Name:  J. Douglas Ramsey, Ph.D.

Title:    Vice President and Chief Financial Officer
	

 	
 	
GUARANTORS:
	

 	
 	
EXCO OPERATING USA, LP
	

 	
 	

By:	

EXCO USA GP, LLC,

its sole general partner
	

 	
 	

By:	

 
	 	 	 	
 Name:  J. Douglas Ramsey, Ph.D.

Title:    Vice President and Chief Financial Officer
	

 	
 	
EXCO USA GP, LLC

NORTH COAST ENERGY, L.L.C.

NORTH COAST ENERGY EASTERN, L.L.C.

PINESTONE RESOURCES, LLC

POWER GAS MARKETING & TRANSMISSION, L.L.C.
	

 	
 	

By:	

 
	 	 	 	
 Name:  J. Douglas Ramsey, Ph.D.

Title:    Vice President and Chief Financial Officer of the Credit

            Parties listed above
	 	 	 	 









	

 	
 	
JPMORGAN CHASE BANK, N.A.,

as a Lender and as Administrative Agent,
	

 	
 	

By:	

 
	 	 	 	
 Name:  Wm. Mark Cranmer

Title:    Senior Vice President









[Signature Pages to be attached.]









	 	 	

	 	 	
 as a Lender
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:    










  



EXHIBIT A  


 
  ASSIGNMENT AND ASSUMPTION    
    


        This Assignment and Assumption (the "Assignment and Assumption") is dated as of the Effective Date set forth below
and is entered into by and between [Insert name of Assignor] (the "Assignor") and [Insert name of
Assignee] (the "Assignee"). Capitalized terms used but not defined herein shall have the meanings given to them in the Third Amended and
Restated Credit Agreement identified below (as amended, the "Credit Agreement"), receipt of a copy of which is hereby acknowledged by the Assignee. The
Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in
full. 


        For
an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor's
rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit, guarantees and swingline
loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity
as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in
equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above
being referred to herein collectively as the "Assigned Interest"). Such sale and assignment is without 


1







 



recourse
to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor. 



	1.	 	 	 	Assignor:
	

2.	
 	

Assignee:	
 	

 [and is an Affiliate/Approved Fund of [identify Lender]]
	

3.	
 	

Borrower(s):	
 	


	

 	
 	

 	
 	


	

4.	
 	

Administrative Agent:	
 	

JPMorgan Chase Bank, N.A. (as the administrative agent under the Credit Agreement)
	

5.	
 	

Credit Agreement:	
 	

Third Amended and Restated Credit Agreement dated as of                        , 2008 among EXCO Partners Operating MLP, LP, as
Borrower, Certain Subsidiaries of Borrower, as Guarantors, the Lenders parties thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent
	

6.	
 	

Assigned Interest:	
 	

 





	Facility Assigned
 
	 	Aggregate

Commitment/Loans

for all Lenders
	 	Amount of

Commitment/Loans

Assigned
	 	Applicable

Percentage of

Commitment/Loans
	 
	Commitment	 	$	 	 	$	 	 	 	%
	 	 	$	 	 	$	 	 	 	%
	 	 	$	 	 	$	 	 	 	%






Effective
Date:                            ,
20            


2







 



        The
terms set forth in this Assignment and Assumption are hereby agreed to: 



	 	 	ASSIGNOR
	

 	
 	

[NAME OF ASSIGNOR]
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Title:	 	 
	

 	
 	

 	
 	
ASSIGNEE
	

 	
 	

 	
 	

[NAME OF ASSIGNEE]
	

 	
 	

By:	
 	

 	
 	

 
	 	 	 	 	

	 	 	 	 	Title:	 	 




3







 


	[Consented to and] Accepted:	 	 
	

JPMORGAN CHASE BANK, N.A.,

as Administrative Agent	
 	

 
	By:	 	
	 	 
	 	 	Title:	 	 	 	 
	

[Consented to:]	
 	

 
	

EXCO PARTNERS OPERATING, LP	
 	

 
	

By: EXCO Partners Operating GP, LLC its sole general partner	
 	

 
	By:	 	
	 	 
	 	 	Name:	 	 	 	 
	 	 	Title:	 	 	 	 




4







 

Third
Amended and Restated Credit Agreement dated [                        ], 2008 among
EXCO Partners Operating MLP, LP, as Borrower,
Certain Subsidiaries of Borrower, as Guarantors, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent. 


 
 

STANDARD TERMS AND CONDITIONS FOR
  ASSIGNMENT AND ASSUMPTION    
    


        1.    Representations and Warranties.    



        1.1    Assignor.    The Assignor (a) represents and warrants that (i) it is the legal and beneficial
owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or Affiliates or any other Person obligated in respect of
any Loan Document or (iv) the performance or observance by the Borrower, any Subsidiary or Affiliates or any other Person of any of their respective obligations under any Loan Document. 



        1.2.    Assignee.    The Assignee (a) represents and warrants that (i) it has full power and authority,
and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement,
(ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 6.01
thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase
the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender. 




        2.    Payments.    From and after the Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date. 



        3.    General Provisions.    This Assignment and Assumption shall be binding upon, and inure to the benefit of, the
parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This
Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York. 


5








  



EXHIBIT B  


 
  OPINION OF COUNSEL FOR THE BORROWER    
    


        [Form consistent with opinion delivered in connection with existing EXCO credit facility]


1








  



EXHIBIT C  


 
  COUNTERPART AGREEMENT    
    


        This COUNTERPART AGREEMENT, dated  
[                        ] (this "Counterpart Agreement")
is delivered pursuant to that
certain Third Amended and Restated Credit Agreement, dated as of [                        ], 2008 (as it may be amended, supplemented or
otherwise modified, the "Credit Agreement"; the terms defined therein and not otherwise defined herein being used herein as therein defined), by and
among EXCO PARTNERS OPERATING, LP, as Borrower, CERTAIN SUBSIDIARIES OF BORROWER, as Guarantors, the LENDERS party thereto, and  JPMORGAN CHASE BANK, N.A.
(successor by merger to Bank One, N.A. (Illinois)), as Administrative Agent (the "Administrative
Agent"). 


        Section 1.    Pursuant to Section 6.13 of the Credit Agreement, the undersigned hereby: 



        (a)   agrees
that this Counterpart Agreement may be attached to the Credit Agreement and that by the execution and delivery hereof, the undersigned becomes a Guarantor under
the Credit Agreement and agrees to be bound by all of the terms thereof; 


        (b)   represents
and warrants that each of the representations and warranties set forth in the Credit Agreement and each other Loan Document and applicable to the undersigned
is true and correct both before and after giving effect to this Counterpart Agreement, except to the extent that any such representation and warranty relates solely to any earlier date, in which case
such representation and warranty is true and correct as of such earlier date; 



        (c)   no
event has occurred or is continuing as of the date hereof, or will result from the transactions contemplated hereby on the date hereof, that would constitute an Event
of Default or a Default; 


        (d)   agrees
to irrevocably and unconditionally guaranty the due and punctual payment in full of all Obligations when the same shall become due, whether at stated maturity, by
required prepayment, declaration, acceleration, demand or otherwise (including amounts that would become due but for the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code, 11 U.S.C. § 362(a)) and in accordance with Section 8 of the Credit Agreement; 



        (e)   the
undersigned hereby (i) agrees that this counterpart may also be attached to the Pledge Agreement, (ii) agrees that the undersigned will comply with all
the terms and conditions of the Pledge Agreement as if it were an original signatory thereto, (iii) grants to Secured Party (as such term is defined in the Pledge Agreement) a security interest
in all of the undersigned's right, title and interest in and to all "Collateral" (as such term is defined in the Pledge Agreement) of the undersigned, in each case whether now or hereafter existing or
in which the undersigned now has or hereafter acquires an interest and wherever the same may be located and (iv) delivers to Agent supplements to all schedules attached to the Pledge Agreement.
All such Collateral shall be deemed to be part of the "Collateral" and hereafter subject to each of the terms and conditions of the Pledge Agreement. 



1







 

        Section 2.    The undersigned agrees from time to time, upon request of Administrative Agent, to take such additional
actions and to execute and deliver such additional documents and instruments as Administrative Agent may request to effect the transactions contemplated by, and to carry out the intent of, this
Agreement. Neither this Agreement nor any term hereof may be changed, waived, discharged or terminated, except by an instrument in writing signed by the party (including, if applicable, any party
required to evidence its consent to or acceptance of this Agreement) against whom enforcement of such change, waiver, discharge or termination is sought. Any notice or other communication herein
required or permitted to be given shall be given pursuant to Section 11.01 of the Credit Agreement, and for all purposes thereof, the notice address of the undersigned shall be the address as
set forth on the signature page hereof. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby. 



        THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES
THEREOF. 


2







 

        IN WITNESS WHEREOF, the undersigned has caused this Counterpart Agreement to be duly executed and delivered by its duly authorized officer
as of the date above first written. 



	 	 	[NAME OF SUBSIDIARY]
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:





	Address for Notices:	 	 
	 	

	
 	

 
	 	

	
 	

 
	 	

 Attention:

Telecopier:	
 	

 
	

with a copy to:	 	 
	 	

	
 	

 
	 	

	
 	

 
	 	

 Attention:

Telecopier:	
 	

 
	

ACKNOWLEDGED AND ACCEPTED,

as of the date above first written:	
 	

 
	
JPMORGAN CHASE BANK, N.A.,

as Administrative Agent	
 	

 





	By:	 	 	 
	 	
 Name:

Title:	 	 




3








  



EXHIBIT D  


 
 

CERTIFICATE REGARDING SOLVENCY    
    


        The undersigned, as Chief Financial Officer of EXCO Partners Operating MLP, LP, a Delaware limited partnership (the
"Borrower"), hereby gives this Certificate Regarding Solvency to induce JPMorgan Chase Bank, N.A., as Administrative Agent for the Lenders (defined
below) (the "Administrative Agent") to consummate certain financial accommodations pursuant to the terms and conditions of that certain Third Amended
and Restated Credit Agreement dated the date hereof (the "Credit Agreement") among the Borrower, the lenders signatory thereto
("Lenders"), and Agent. Capitalized terms used in this certificate are defined in the Credit Agreement, unless otherwise stated. 


        The
undersigned hereby certifies to the Administrative Agent that: 



        1.     The
undersigned is familiar with the business and financial affairs of the Borrower, including, without limitation, the Transactions and the matters hereinafter
described. 


        2.     The
undersigned has reviewed the pro-forma balance sheet of the Borrower, as of the date thereof and after giving effect to the Transactions (the
"Pro-Forma Balance Sheet"), the pro-forma operating statement, as of the date thereof (the
"Pro-Forma Operating Statement" and the Projections, all of which are attached hereto as Exhibit
"A" and Exhibit "B", and Exhibit "C", respectively, and incorporated herein by
reference for all purposes. The undersigned is familiar with the process through which the Pro-Forma Balance Sheet, the Pro-Forma Operating Statement and the Projections were
generated. 


        3.     The
Pro-Forma Balance Sheet fairly presents in all material respects the financial position of the Borrower as of the date thereof after giving effect to the
Transactions. The Pro Forma Operating Statement fairly presents in all material respects the estimated operating income and expenses of the Borrower and its Subsidiaries for the period covered
thereby. The Projections are reasonable projections of the balance sheet, income statement and source and application of funds for the periods covered thereby, based upon the assumptions set forth
therein. The Borrower believes that such assumptions set forth therein are reasonable in light of current business conditions existing at the time of preparation thereof. The Projections and the
Pro-Forma Operating Statement represent the Borrower's good faith estimate as of the date thereof of the Borrower's future financial performance, it being recognized by the Administrative
Agent that such financial information as it relates to future events is not to be viewed as fact and that actual results during the period or periods covered thereby may differ from the projected
results set forth therein. 


        4.     Immediately
following the consummation of, and after giving effect to, the Transactions contemplated by the Loan Documents, the MLP Contribution Documents, the USA Merger
Agreement and the application of the proceeds from the fundings, if any, being made on the Effective Date, the Borrower is solvent. 


1







 



        5.     The
Borrower does not intend to incur, or believe it will incur, debts beyond its ability to pay as they mature. 



	

 	
 	

DATED: [                        ], 200  
	

 	
 	

EXCO PARTNERS OPERATING, LP

a Delaware limited partnership
	

 	
 	

By:	
 	

EXCO Partners OLP, GP, LLC

its sole general partner
	

 	
 	

By:	
 	


	 	 	 	 	Name:
	 	 	 	 	Title:




2







 
 
 

EXHIBIT "A"
Pro-Forma Balance Sheet
  
    (see attached)    



3







 
 
 

EXHIBIT "B"
Pro-Forma Operating Statement
  
    (see attached)    



4







 
 
 

EXHIBIT "C"
Projections
  
    (see attached)    



5








  



EXHIBIT E  


 
  NOTE    
    



	New York, New York	 	                        ,
            





        FOR
VALUE RECEIVED, the undersigned EXCO PARTNERS OPERATING, LP, a Delaware limited partnership ("Borrower") hereby unconditionally promises to pay to the order
of                        (the
"Lender") the principal amount of the Loans advanced by Lender and outstanding at any time or from time to time pursuant to the Credit Agreement (as hereinafter defined) in lawful money of the United
States of America together with interest from the date hereof until paid at the rates specified in the Credit Agreement (as hereinafter defined). All payments of principal and interest due hereunder
are payable at the offices of at the offices of Administrative Agent under the Credit Agreement, JPMorgan Loan Services, 21 South Clark St., 19th Floor, Chicago, Illinois
60603-2003, Attention: Claudia Kech, Facsimile: (312) 385-7096, claudia.kech@jpmchase.com, with a copy to JPMorgan Chase
Bank, N.A., Mail Code TX1-2448, 2200 Ross Avenue, 3rd Floor, Dallas, Texas 75201, Attention: Wm. Mark Cranmer, Senior Vice President, Facsimile:
(214) 965-3225, mark.cranmer@chase.com, or at such other place, as from time to time may be designated by Administrative Agent in accordance with the Credit Agreement. 


        The
principal and all accrued interest on this Note shall be due and payable in accordance with the terms and provisions of the Credit Agreement. 


        This
Note is executed pursuant to that certain Third Amended and Restated Credit Agreement dated  
[                        ], 2008 between Borrower, certain Subsidiaries of the Borrower, as Guarantors,
the Administrative Agent and
Lenders (as amended, modified, supplemented or restated from time to time, the "Credit Agreement"), and is one of the Notes referred to therein. Reference is made to the Credit Agreement and the Loan
Documents (as that term is defined in the Credit Agreement) for a statement of prepayment rights and obligations of Borrower, for a statement of the terms and conditions under which the due date of
this Note may be accelerated and for statements regarding other matters affecting this Note (including without limitation the obligations of the holder hereof to advance funds hereunder, principal and
interest payment due dates, voluntary and mandatory prepayments, exercise of rights and remedies, payment of attorneys' fees, court costs and other costs of collection and certain waivers by Borrower
and others now or hereafter obligated for payment of any sums due hereunder). Upon the occurrence of an Event of Default (as that term is defined in the Credit Agreement and Loan Documents) the
Administrative Agent may declare forthwith to be entirely and immediately due and payable the principal balance hereof and the interest accrued hereon, and the Lender shall have all rights and
remedies of the Lender under the Credit Agreement and Loan Documents. This Note may be prepaid in accordance with the terms and provisions of the Credit Agreement. 



        Regardless
of any provision contained in this Note, the holder hereof shall never be entitled to receive, collect or apply, as interest on this Note, any amount in excess of the Maximum
Rate (as such term is defined in the Credit Agreement), and, if the holder hereof ever receives, collects, or applies as interest, any such amount which would be excessive interest, it shall be deemed
a partial prepayment of principal and treated hereunder as such; and, if the indebtedness evidenced hereby is paid in full, any remaining excess shall forthwith be paid to Borrower. In determining
whether or not the interest paid or payable, under any specific contingency, exceeds the Maximum Rate, Borrower and the holder hereof shall, to the maximum extent permitted under applicable law
(i) characterize any non-principal payment as an expense, fee or premium rather than as interest, (ii) exclude voluntary prepayments and the effects thereof, and
(iii) spread the total amount of interest throughout the entire contemplated term of the obligations evidenced by this Note and/or referred to in the Credit Agreement so that the interest rate
is uniform throughout the entire term of this Note; provided that, if this Note is paid and performed in full prior to the end of the full contemplated term thereof; and if the interest received for 


1







 



the
actual period of existence thereof exceeds the Maximum Rate, the holder hereof shall refund to Borrower the amount of such excess or credit the amount of such excess against the indebtedness
evidenced hereby, and, in such event, the holder hereof shall not be subject to any penalties provided by any laws for contracting for, charging, taking, reserving or receiving interest in excess of
the Maximum Rate. 


        If
any payment of principal or interest on this Note shall become due on a day other than a Business Day (as such term is defined in the Credit Agreement), such payment shall be made on
the next
succeeding Business Day and such extension of time shall in such case be included in computing interest in connection with such payment. 


        If
this Note is placed in the hands of an attorney for collection, or if it is collected through any legal proceeding at law or in equity or in bankruptcy, receivership or other court
proceedings, Borrower agrees to pay all costs of collection, including, but not limited to, court costs and reasonable attorneys' fees. 


        Borrower
and each surety, endorser, guarantor and other party ever liable for payment of any sums of money payable on this Note, jointly and severally waive presentment and demand for
payment, notice of intention to accelerate the maturity, protest, notice of protest and nonpayment, as to this Note and as to each and all installments hereof, and agree that their liability under
this Note shall not be affected by any renewal or extension in the time of payment hereof, or in any indulgences, or by any release or change in any security for the payment of this Note, and hereby
consent to any and all such renewals, extensions, indulgences, releases or changes. 


        This
Note shall be governed by and construed in accordance with the applicable laws of the United States of America and the laws of the State of New York. 


        THIS
WRITTEN NOTE, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENTS BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. 



	 	 	BORROWER:
	

 	
 	

EXCO PARTNERS OPERATING, LP

a Texas corporation
	

 	
 	

By:	

EXCO Partners Operating GP, LLC

its sole general partner
	

 	
 	

By:	

 
	 	 	 	
 Name:

Title:    




2








  



EXHIBIT F  


 
 

FORM OF AMENDMENT FOR AN INCREASED OR NEW COMMITMENT    
    


        This AMENDMENT is made as of the            day
of                        , 200  by and among EXCO Partners Operating MLP, LP, a Delaware limited
partnership ("Borrower"), JPMorgan Chase Bank, N.A., as administrative agent under the "Credit Agreement" (as defined below) (the "Administrative Agent"),
and                        (the "Supplemental
Lender"). 


        The
Borrower, the Administrative Agent and certain other Lenders, as described therein, are parties to the Third Amended and Restated Credit Agreement dated as of
[            ], 2008 (as amended, supplemented, or restated, the "Credit Agreement"). All terms used herein and not otherwise defined shall have the same meaning given to
them in the Credit Agreement. 


        Pursuant
to Section 2.03 of the Credit Agreement, the Borrower has the right to increase the Aggregate Commitment by obtaining additional Commitments upon satisfaction of certain
conditions. This Amendment requires only the signature of each Borrower, the Administrative Agent and the Supplemental Lender so long as the Aggregate Commitment is not increased above the amount
permitted by the Credit Agreement. 


        The
Supplemental Lender is either (a) an existing Lender which is increasing its Commitment or (b) a new Lender which is a Eligible Assignee whose identity the
Administrative Agent will approve by its signature below. 


        In
consideration of the foregoing, such Supplemental Lender, from and after the date hereof shall have a **[Commitment of
$                        and if it is a new Lender, the
Supplemental Lender hereby assumes all of the rights and obligations of a Lender under the Credit Agreement.]** 


        If
the Supplemental Lender is a new Lender, the Borrower has executed and delivered to the Supplemental Lender as of the date hereof, if requested by the Supplemental Lender, a Note in
the form attached to the Credit Agreement as Exhibit E to evidence the new Commitment of the Supplemental Lender. 


1









 
 

SCHEDULE 2.01    



 
 

APPLICABLE PERCENTAGES
  AND INITIAL COMMITMENTS



	Lender
 
	 	Title
	 	Applicable

Revolving

Percentage
	 	Initial Revolving

Commitment

	JPMorgan Chase Bank, N.A.	 	Administrative Agent	 	 	 	 
	JPMorgan Loan Services	 	 	 	 	 	 
	21 South Clark St., 19th Floor	 	 	 	 	 	 
	Chicago, Illinois 60603-2003	 	 	 	 	 	 
	Attention: Claudia Kech	 	 	 	 	 	 
	Telephone: (312) 385-7041	 	 	 	 	 	 
	Facsimile: (312) 385-7096	 	 	 	 	 	 
	claudia.kech@jpmchase.com	 	 	 	 	 	 
	

With a copy to:	
 	

 	
 	

 	
 	

 
	

JPMorgan Chase Bank, N.A.	
 	

 	
 	

 	
 	

 
	Mail Code TX1-2448	 	 	 	 	 	 
	1717 Main Street	 	 	 	 	 	 
	Dallas, TX 75201	 	 	 	 	 	 
	Attention: Wm. Mark Cranmer	 	 	 	 	 	 
	Telephone: (214) 290-2212	 	 	 	 	 	 
	Facsimile: (214) 290-2332	 	 	 	 	 	 
	mark.cranmer@chase.com	 	 	 	 	 	 
	

Other Lenders TBD	
 	

 	
 	

 	
 	

 









 
 

SCHEDULE 4.06    



 
 

DISCLOSED MATTERS


        None. 







 
 

SCHEDULE 4.13    



 
 

CAPITALIZATION AND CREDIT PARTY INFORMATION


Unrestricted Subsidiaries:


[None]


Borrower:


EXCO
Partners Operating MLP, LP, a Delaware limited partnership 


Tax
Identification Number: [                        ]


EXCO
Partners Operating GP, LLC, a Delaware limited liability company, is the sole general partner of Borrower and EXCO Partners, LP, a Delaware limited partnership, is the sole limited partner of
Borrower 


Restricted Subsidiaries:  


EXCO USA GP, LLC, a Delaware limited liability company  


Tax
Identification Number: [                        ]



Exco
Partners Operating, LP owns 100% of the member interests of EXCO USA GP LLC 


North Coast Energy, L.L.C., a Delaware limited liability company  


Tax
Identification Number: [34-1594000]


EXCO
Partners Operating MLP, LP owns 100% of the member interests of North Coast Energy, L.L.C. 



EXCO Operating USA, LP, a Delaware limited partnership  


Tax
Identification Number: [                        ]


EXCO
USA GP, LLC is the sole General Partner of EXCO Operating USA, LP. EXCO Partners Operating MLP, LP is the sole Limited Partner of EXCO Operating USA, LP. 



North Coast Energy Eastern, L.L.C., a Delaware limited liability company  


Tax
Identification Number: [94-1710907]


North
Coast Energy, L.L.C. owns 100% of the member interests of North Coast Energy Eastern, L.L.C 


Pinestone Resources, LLC, a Delaware limited liability company  



Tax
Identification Number: 20-1832094 


North
Coast Energy, L.L.C. owns 100% of the member interests of Pinestone Resources, LLC. 


Power Gas Marketing & Transmission, LLC, a Delaware limited liability company 


Tax
Identification Number: [13-3563008]


North
Coast Energy, L.L.C. owns 100% of the member interests of Power Gas Marketing & Transmission, LLC. 









 
 

SCHEDULE 7.01    



 
 

EXISTING INDEBTEDNESS    
    


        None. 









 
 

SCHEDULE 7.02    



 
 

EXISTING LIENS    
    


        None. 









 
 

SCHEDULE 7.07    



 
 

TRANSACTIONS WITH AFFILIATES    
    


        None. 









 
 

SCHEDULE 7.08    



 
 

EXISTING RESTRICTIONS    
    


        None. 











QuickLinks


TABLE OF CONTENTS


Article I Definitions


Article II The Credits


Article III

Borrowing Base

Article IV

Representations and Warranties


Article V

Conditions

Article VI

Affirmative Covenants


Article VII

Negative Covenants


Article VIII

Guarantee of Obligations

Article IX

Events of Default

Article X

The Administrative Agent

Article XI

Miscellaneous



ASSIGNMENT AND ASSUMPTION

STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT AND ASSUMPTION



OPINION OF COUNSEL FOR THE BORROWER


COUNTERPART AGREEMENT


CERTIFICATE REGARDING SOLVENCY

EXHIBIT "A" Pro-Forma Balance Sheet (see attached)

EXHIBIT "B" Pro-Forma Operating Statement (see attached)

EXHIBIT "C" Projections (see attached)


NOTE


FORM OF AMENDMENT FOR AN INCREASED OR NEW COMMITMENT


SCHEDULE 2.01

APPLICABLE PERCENTAGES AND INITIAL COMMITMENTS

SCHEDULE 4.06

DISCLOSED MATTERS

SCHEDULE 4.13

CAPITALIZATION AND CREDIT PARTY INFORMATION


SCHEDULE 7.01

EXISTING INDEBTEDNESS


SCHEDULE 7.02

EXISTING LIENS



SCHEDULE 7.07

TRANSACTIONS WITH AFFILIATES


SCHEDULE 7.08

EXISTING RESTRICTIONS