exh102.htm


    
       

      EXHIBIT
        10.2

       

      FIRST
        AMENDMENT TO THE

      AMENDED
        AND RESTATED CREDIT AGREEMENT

       

      THIS
        FIRST AMENDMENT TO THE AMENDED AND RESTATED CREDIT AGREEMENT (this
        "First Amendment"), dated
        and effective as of July 25, 2007 (the "First Amendment Effective
        Date"), which amends that certain Amended and Restated Credit
        Agreement dated as of April 2, 2007 by and among TXCO
        RESOURCES, INC. (formerly named THE
        EXPLORATION COMPANY OF DELAWARE, INC.), a Delaware corporation (the
        "Company"), OUTPUT
        ACQUISITION CORP., a Texas corporation ("Merger
        Sub"), TXCO
        ENERGY CORP., a Texas corporation ("TXCOE"),
TEXAS
        TAR SANDS INC., a Texas corporation ("TTSI"
        and, together with Merger Sub, TXCOE,
        the "Original Guarantors"), each of the Lenders party
        thereto, BANK
        OF MONTREAL, a Canadian chartered bank acting through certain of its
        United States branches and agencies, including its Chicago, Illinois branch,
        as
        administrative agent for the Lenders (in such capacity, together with its
        successors in such capacity, the "Administrative
        Agent"), and BMO
        CAPITAL MARKETS CORP., as arranger (as in effect immediately prior to the
        First Amendment Effective Date, the "Credit
        Agreement"), is by and among the Company, each of the Original
        Guarantors, OPEX
        ENERGY, LLC, a Texas limited liability company
        ("OPEX" and, together with the Original Guarantors,
        the "Guarantors"), each of the Lenders party hereto
        and the Administrative Agent.

       

      WHEREAS,
        the Company has advised the Administrative Agent and the Lenders that the
        Company has requested that the Second Lien Term Loan Agreement be amended
        and
        restated to provide for certain amendments, including an increase of the
        amount
        of the term loans to be made available to the Company by $20,000,000 to a
        total
        aggregate principal amount of $100,000,000 under an Amended and Restated
        Term
        Loan Agreement, substantially in the form of Exhibit A attached hereto,
        subject to effectiveness of this First Amendment and the other conditions
        precedent provided for in such agreement;

       

      WHEREAS,
        the Company has requested that the Credit Agreement be amended to
        allow each of GUARANTY BANK, AMEGY BANK NATIONAL
        ASSOCIATION, NATIXIS, ALLIED IRISH BANKS P.L.C. and CIT ENERGY USA INC. (the
        "New Lenders") to become "Lenders" party to the Credit
        Agreement, as set forth herein;

       

      WHEREAS,
        the Company has requested that the Credit Agreement be amended to make certain
        other changes to the Credit Agreement on the terms and conditions set forth
        in
        this First Amendment;

       

      WHEREAS,
        as used herein, the term "Current Lenders" means the
        Lenders identified as the Current Lenders on Schedule I hereto;
        capitalized terms used but not otherwise defined herein shall have the meanings
        assigned such terms in the Credit Agreement; and the rules of interpretation
        set
        forth in Section 1.2 of the Credit Agreement are incorporated in this First
        Amendment as if set forth herein; and

       


      
        
          
          

        

        
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      WHEREAS,
        all of the Lenders (including the New Lenders) have agreed to such amendments
        subject to the terms and conditions set forth in this First
        Amendment.

       

      NOW
        THEREFORE, in consideration of the mutual agreements, provisions and
        covenants contained herein and other good and valuable consideration, the
        receipt and adequacy of which are hereby acknowledged, the parties hereto,
        intending to be legally bound, hereby agree as follows.

       

      Section
        1.                      Lender
        Transactions.

       

      (a)           Each
        Current Lender hereby sells, transfers and assigns to the other Current Lenders
        and the New Lenders, and each other Current Lender and each New Lender hereby
        purchases, assumes and undertakes from such Current Lender, without recourse
        and
        without representation or warranty (except as provided in this Section 1)
        a
        percentage equal to the percentage set forth opposite such Lender's name
        on
        Schedule I hereto under the column "Pro Rata Shares Purchased on the First
        Amendment Effective Date" of (i) the Maximum Loan Amount of such Current
        Lender
        and (ii) all related rights, benefits, obligations, liabilities and indemnities
        of such Current Lender under and in connection with the Credit Agreement,
        as
        amended hereby, each Guaranty, the Mortgages, each other Security Document
        and
        the other Loan Documents and all Collateral and other security for the
        Obligations.

       

      (b)           Upon
        the effectiveness of this First Amendment and by its execution and delivery
        hereof, each of the New Lenders shall be  a party to the Credit
        Agreement, as amended hereby, shall have all the rights and obligations of
        a
        "Lender" under the Credit Agreement, as amended hereby, and the other Loan
        Documents as if each were a signatory thereto, and shall agree, and does
        hereby
        agree, to be bound by the terms and conditions set forth in the Credit
        Agreement, as amended hereby, and the other Loan Documents to which the Lenders
        are a party, in each case, as if each were a signatory thereto.

       

      (c)           Each
        of the New Lenders hereby represents and warrants as follows:  (i)
        such New Lender has fully reviewed the terms of the Credit Agreement, this
        First
        Amendment and the other Loan Documents, copies of which, together with copies
        of
        the documents which were required to be delivered as a condition to the making
        of the initial Loans thereunder, have been delivered to such New Lender by
        the
        Administrative Agent, and such New Lender has independently and without reliance
        upon any other Lender or the Administrative Agent, and based on such information
        as such New Lender has deemed appropriate, made its own credit analysis and
        decision to enter into this First Amendment and (ii) if such New Lender is
        not
        incorporated, formed or organized under the laws of the United States of
        America
        or a state thereof, such New Lender has contemporaneously herewith delivered
        to
        the Administrative Agent and the Company such documents as are required by
        the
        Credit Agreement, including Section 10.10 of the Credit
        Agreement.  Each of the New Lenders hereby (x) appoints and
        authorizes the Administrative Agent to take such action as agent on its behalf
        and to exercise such powers and discretion under the Loan Documents as are
        delegated to the Administrative Agent by the terms thereof, together with
        such
        powers and discretion as are reasonably incidental thereto; and (y) agrees
        that
        it will perform in accordance with their terms all of the obligations that
        by
        the terms of the Credit Agreement, as amended hereby, or any other Loan
        Document are required to be performed by it as a Lender.

       


      
        
          
          

        

        
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      (d)           Each
        of the New Lenders and each of the Current Lenders hereby advise each other
        party hereto that its respective address for notices and its respective Lending
        Office(s) shall be as set forth below its name on its respective signature
        page
        hereto.

       

      (e)           In
        furtherance of the foregoing transactions, the Company agrees that upon the
        request to the Administrative Agent by any Lender, the Company will promptly
        execute and deliver to such Lender a Note evidencing the Loans of such Lender
        with appropriate insertions as to date and principal amount; provided, however,
        that delivery of Notes shall not be a condition precedent to the occurrence
        of
        the First Amendment Effective Date.  The amount of principal owning on
        any Lender's Note, if any, at any given time shall be the aggregate amount
        of
        all Loans theretofore made by such Lender minus all payments of principal
        theretofore received by such Lender on such Note.  Any Note shall be
        issued in renewal, modification and extension but not novation and discharge
        of
        indebtedness of the Company under, and evidenced by, that certain promissory
        note dated April 2, 2007 in the principal amount of $125,000,000 executed
        by the
        Company payable to Bank of Montreal.

       

      (f)           As
        a result of the transactions effected by this Section 1, upon effectiveness
        of
        this First Amendment, for purposes of Section 2.1(a) of the Credit Agreement,
        as
        amended hereby, and for all other purposes of the Credit Agreement, as amended
        hereby, each Lender's Maximum Loan Amount and Pro Rata Share shall be as
        set
        forth in Schedule I hereto.

       

      Section
        2.                      Amendments.  The
        Credit Agreement is hereby amended as follows:

       

      (a)           The
        following definition of "First Amendment Effective Date" is hereby added
        in its
        proper alphabetical order:

       

      "First
        Amendment Effective Date" means, July 25, 2007.

       

      (b)           The
        definition of "Commitment Letter" is hereby amended and restated to read
        in its
        entirety as follows:

       

      "Commitment
        Letter" means, collectively, (i) the commitment letter dated
        February 13, 2007 by and among the Company, BMO Capital Markets Corp. and
        Bank
        of Montreal and (ii) the Supplemental Commitment Letter dated July 19, 2007
        by
        and among the Company, BMO, Capital Markets Corp. and Bank of
        Montreal.

       

      (c)           The
        definition of "Second Lien Term Loan Agreement" is hereby amended and restated
        to read in its entirety as follows:

       

      "'Second
        Lien Term Loan
        Agreement' means the Amended and Restated Term Loan Agreement,
        dated as of July 25, 2007, among the Company, the guarantors party thereto,
        the
        several lenders from time to time party thereto, Bank of Montreal, as
        Administrative Agent, and BMO Capital Markets Corp., as Arranger, which amends
        and restates that certain Term Loan Agreement dated as of April 2, 2007,
        as the
        same may be further amended, amended and restated, supplemented or otherwise
        modified in accordance with the terms hereof."

       


      
        
          
          

        

        
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      (d)           Section
        2.6(a) is hereby amended and restated to read in its entirety as
        follows:

       

      "(a)
Scheduled
        Borrowing Base
        Determinations.  At all times prior to the Termination Date the
        Company shall not permit the Effective Amount to exceed the Borrowing Base
        then
        in effect and shall, in accordance with Section 2.7(f), cure any Deficiency.
        The
        Initial Borrowing Base hereunder shall be $50,000,000 (the "Initial
        Borrowing Base")."

       

      (e)           The
        following new section for "Hedging Program" is hereby inserted into the Credit
        Agreement as Section 7.16 thereof:

       

      "7.16                      Hedging
        Program

       

      .  Not
        later than the fifteenth (15th) day
        following the
        First Amendment Effective Date, the Company shall, and shall cause its
        Subsidiaries to, enter into, and shall maintain at all times thereafter during
        the relevant period, Derivative Contracts for the purpose of hedging prices
        on
        the Oil and Gas thereafter expected to be produced by the Company or any
        of its
        Subsidiaries, which contracts shall (a) at all times through the third
        anniversary of the First Amendment Effective Date cover not less than 50%
        of the
        Company's and its Subsidiaries' aggregate Projected Oil and Gas Production
        anticipated to be sold in the ordinary course of such Persons' business during
        such three-year period, (b) thereafter, roll forward on a basis in order
        to
        cover not less than 50% of the Company's and its Subsidiaries' aggregate
        Projected Oil and Gas Production anticipated to be sold in the ordinary course
        of such Persons' business during the ensuing twelve (12) fiscal quarters
        and (c)
        otherwise be in form and substance reasonably acceptable to the Administrative
        Agent.  The Company shall provide copies to the Administrative Agent
        of all Derivative Contracts then in effect not later than the fifteenth (15th) day
        following the
        First Amendment Effective Date, and thereafter contemporaneously with the
        delivery of each Reserve Report as prescribed by Section 7.2(c)(i) beginning
        with the delivery of the Reserve Report required to be delivered on or before
        October 1, 2007.  Delivery of such copies at such times shall be
        accompanied by delivery of a certificate of a Responsible Officer, certifying
        that the Company is in compliance with the requirements of this Section
        7.16."

       

      (f)           Section
        8.1(e) is hereby amended and restated in its entirety to read as
        follows:

       

      "(e)
        Liens consisting of (i) pledges or deposits required in the ordinary course
        of
        business in connection with workers' compensation, unemployment insurance
        and
        other social security legislation; (ii) pledges and deposits in the
        ordinary course of business not exceeding $500,000 in the aggregate securing
        insurance premiums or reimbursement obligations under insurance policies,
        in
        each case payable to insurance carriers that provide insurance to the Company
        or
        any of its Subsidiaries; or

       


      
        
          
          

        

        
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      (iii) obligations
        in respect of letters of credit or bank guarantees that have been posted
        by the
        Company or any of its Subsidiaries to support the payments of the items set
        forth in clauses (i) and (ii) of this Section 8.1(e);"

       

      (g)           Section
        8.5(b) is hereby amended and restated in its entirety to read as
        follows:

       

      "(b)  Indebtedness
        incurred pursuant to the Second Lien Term Loan Agreement in an aggregate
        principal amount not to exceed $100,000,000;"

       

      (h)           Section
        8.10(a)(i) is hereby amended by replacing clause (ii) thereof with the
        following:

       

      "(ii)
        as
        of any date (the "Calculation Date") no such contract,
        when aggregated with all Derivative Contracts permitted under this Section
        8.10(a)(i), but excluding Derivative Contracts described in clause (v) of
        this
        Section 8.10(a)(i), shall cover a notional volume in excess of the Applicable
        Percentage of the total Projected Oil and Gas Production to be produced in
        any
        month from the Proved Developed Producing Reserves reflected in the most
        recent
        Reserve Report (unless and solely to the extent such an
        excess occurs in a month falling within a period covered by a Derivative
        Contract entered into by the Company to maintain compliance with Section
        7.16);"


       

      (i)           Section
        11.27 (b) is hereby amended by replacing the first sentence thereof with
        the
        following:

       

      "Notwithstanding
        anything to the contrary contained herein or any other Loan Document, when
        all
        Obligations have been paid or otherwise satisfied in full and all Commitments
        have terminated or expired, but subject to Sections 5.1(e) and 5.4(e) of
        the
        Intercreditor Agreement, upon request of the Company, the Administrative
        Agent
        shall (without notice to, or vote or consent of, any Lender, or any Qualified
        Derivative Contract Counterparty) take such actions as shall be required
        to
        release its security interest in all Collateral, and to release all Guaranty
        Obligations provided for in any Loan Document; provided, however, that in
        lieu
        of terminating and repaying any such Obligations arising under any Qualified
        Derivative Contract, the Company may provide substitute credit support under
        a
        standard form ISDA Credit Support Annex or other credit support documents
        reasonably acceptable to such Qualified Derivative Contract Counterparty
        to
        cover its then current exposure under such Qualified Derivative Contract
        and
        such Qualified Derivative Contract Counterparty shall have provided written
        notice to the Administrative Agent to the effect that such substitute credit
        support has been provided to it and that such Qualified Derivative Contract
        Counterparty no longer claims any right, title or interest in any Collateral
        arising under the Loan Documents to secure any Obligations and Indebtedness
        of
        the Company or any of

       


      
        
          
          

        

        
          -
            5
            -

          
            

          

        

         

      


      its
        Subsidiaries arising under or related to such Qualified Derivative Contract,
        whether then existing or thereafter arising."

       

      Section
        3.                      Amendment
        and Ratification.  Upon the effectiveness hereof as provided in Section 4 of this First Amendment, this First
        Amendment shall be deemed to be an amendment to the Credit Agreement, and
        the
        Credit Agreement, as modified hereby, is hereby ratified, approved and confirmed
        to be in full force and effect in each and every respect.  Except as
        expressly provided by the amendments set forth in Section 2 of this First
        Amendment, the execution, delivery and effectiveness of this First Amendment
        shall neither operate as a waiver of any right, power or remedy of any Lender
        or
        any Agent, nor constitute a waiver of any provision of any of the Loan
        Documents.  All references to the Credit Agreement in any other
        document, instrument, agreement or writing shall hereafter be deemed to refer
        to
        the Credit Agreement, as amended hereby.

       

      Section
        4.                      Conditions
        to Effectiveness.  The effectiveness of this First Amendment is
        subject to the condition that, on or before the First Amendment Effective
        Date,
        the Administrative Agent shall have received all of the following, in form
        and
        substance satisfactory to the Administrative Agent:

       

      (a)           Amendment.  This
        First Amendment, duly executed and delivered by the Company and each of the
        Guarantors; and

       

      (b)           Payment
        of Fees.  Evidence of payment by the Company of all accrued and
        unpaid fees, costs and expenses owed pursuant to the Credit Agreement, as
        amended hereby, or this First Amendment, including the Fee Letter Agreement,
        in
        each case to the extent then due and payable at the First Amendment Effective
        Date, including any such costs, fees and expenses arising under or referenced
        in
        Sections 2.8 and 11.4 of the Credit Agreement.

       

      Section
        5.                      Representations
        and Warranties.  The Company and each Guarantor hereby represents
        and warrants that, as of the First Amendment Effective Date, after giving
        effect
        to this First Amendment:

       

      (a)           Bring-Down
        of Representations and Warranties.  The representations and warranties
        of the Company and each Guarantor contained in Article VI and Section 4.5(b)
        of
        the Credit Agreement are true and correct in all material respects on and
        as of
        the First Amendment Effective Date, as though made on and as of such date
        (except to the extent such representations and warranties expressly refer
        to an
        earlier date, in which case they shall be true and correct as of such earlier
        date).

       

      (b)           No
        Default or Event of Default.  No event has occurred and is
        continuing which constitutes a Default, an Event of Default or
        both.

       

      Section
        6.                      Governing
        Law.  THIS FIRST AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
        PARTIES UNDER THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
        INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

       


      
        
          
          

        

        
          - 6
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      Section
        7.                      Costs
        and Expenses.  The Company shall pay all reasonable costs and
        expenses incurred by the Administrative Agent, the Arranger or any of their
        Affiliates in connection with the development, preparation, administration
        and
        execution of this First Amendment, including Attorney Costs incurred by any
        such
        Person with respect thereto, in each case in accordance with Section 11.4
        of the
        Credit Agreement.

       

      Section
        8.                      Counterparts.  This
        First Amendment may be executed in any number of separate counterparts, no
        one
        of which need be signed by all parties; each of which, when so executed,
        shall
        be deemed an original, and all of such counterparts taken together shall
        be
        deemed to constitute but one and the same instrument.  A fully
        executed counterpart of this First Amendment by facsimile signatures shall
        be
        binding upon the parties hereto.

       

      Section
        9.                      Facsimile
        Transmission of Signature.  Any party to this First Amendment may
        indicate its intention to be bound by its execution and delivery of this
        First
        Amendment by its signature to the signature page hereof and the delivery
        of the
        signature page hereof to the other parties or their respective representatives
        by facsimile transmission or telecopy.  The delivery of a party's
        signature on the signature page by facsimile transmission or telecopy shall
        have
        the same force and effect as if such party signed and delivered this First
        Amendment in person.

       

      [Signature
        Pages Follow]


      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
        duly
        executed and delivered by their respective duly authorized officers as of
        the
        date first set forth above, to be effective as of the First Amendment Effective
        Date.

       

      
        
          	 	
                  COMPANY:

                
	 	 
	 	
                  TXCO
                    RESOURCES INC.

                
	 	 
	 	
                  By:    /s/
                    James E.
                    Sigmon                                                

                
	 	
                  Name:   James
                    E. Sigmon

                
	 	
                  Title:     President
                    and Chief Executive Officer

                
	 	 
	 	
                  GUARANTORS:

                
	 	 
	 	
                  OUTPUT
                    ACQUISITION CORP.

                
	 	 
	 	
                  By:   /s/
                    M. Frank
                    Russell                                     

                
	 	
                  Name:  M.
                    Frank
                    Russell         

                
	 	
                  Title:    Vice
                    President and General Counsel

                
	 	 
	 	
                  TXCO
                    ENERGY CORP.

                
	 	 
	 	
                  By:   /s/
                    P. Mark
                    Stark                                                    

                
	 	
                  Name:  P.
                    Mark
                    Stark           

                
	 	
                  Title:    Vice
                    President, Treasurer and Chief Financial Officer

                
	 	 
	 	
                  TEXAS
                    TAR SANDS INC.

                
	 	 
	 	
                  By:   /s/
                    M. Frank
                    Russell                                                

                
	 	
                  Name:  M.
                    Frank
                    Russell     

                
	 	
                  Title:  Vice
                    President and General Counsel

                
	 	 
	 	
                  OPEX
                    ENERGY, LLC

                
	 	 
	 	
                  By:   /s/
                    P. Mark
                    Stark                                                     

                
	 	
                  Name:  P.
                    Mark
                    Stark         

                
	 	
                  Title:    Vice
                    President, Treasurer and Chief Financial Officer

                
	 	
                   

                  Address
                    for Notice:

                  Principal
                    Place of Business

                  and
                    Chief Executive Office:

                  777
                    E. Sonterra Blvd., Suite 350

                  San
                    Antonio, Texas 78258

                  Attention:  Chief
                    Financial Officer

                  Facsimile
                    No.:  (210)
                    496-3232

                


        



      
        
          
          

        

        
          Signature
            Page to First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      ADMINISTRATIVE
        AGENT AND

      A
        LENDER:

       

      
        	
                 

              	
                BANK
                  OF MONTREAL, acting through its U.S. branches and agencies,
                  including its Chicago, Illinois branch, as Administrative Agent
                  and as a
                  Lender

              


      

      


      
        	
                 

              	
                By:  
                  

              	
                /s/
                  Joseph A. Bliss

                Joseph A. Bliss

                Managing Director

              


      

       

       

      Address:        115
        South LaSalle Street

      11th
        Floor West

      Chicago,
        Illinois  60603

      


      Facsimile
        No.:  (312) 765-8078

      


      Attention:        Terri
        Perez-Ford, Specialist

      


      with
        copy
        to:

      


      Bank
        of
        Montreal

      Houston
        Agency

      700
        Louisiana Street

      4400
        Bank
        of America Center

      Houston,
        Texas  77002

      


      Facsimile
        No.:  (713) 223-4007

      


      Attention:         Joseph
        A. Bliss

      


      Applicable
        Lending Office

      for
        Base
        Rate Loans and

      LIBO
        Rate
        Loans:

      


      Address:        115
        South LaSalle Street,

      11th
        Floor
        West

      Chicago,
        Illinois 60603

      


      Facsimile
        No.:   (312) 765-8078

      


      Attention:          Terri
        Perez-Ford, Specialist


      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      A
        LENDER:

      


      GUARANTY
        BANK

      


      By:   /s/
        David
        Butler                                                                        

            Name:David
        Butler  

            Title: 
        Vice President

      


      By:                                                                           

            Name:

            Title:

      


      


      Address
        for Notices:

      


      Address:                        333
        Clay Suite 4400

      Houston,
        TX 77002

      


      


      Facsimile
        No.:                (713)
        890-8868

      


      Attention:                       David
        Butler

      


      


      with
        a
        copy to:

      


      Address:                        8333
        Douglas

      Dallas,
        TX 75225

      


      


      Facsimile
        No.:                (214)
        360-1938

      


      Attention:                       Robert
        Lyons


       


      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      A
        LENDER:

      


      AMEGY
        BANK NATIONAL ASSOCIATION

      


      By:   /s/
        Mark A.
        Serice                                                                       

            Name:
        Mark A. Serice   

            Title:  
        Vice President

      


      By:                                                                           

            Name:

            Title:

      


      


      Address
        for Notices:

      


      Address:                    4400
        Post Oak Parkway, 4th Floor

      Houston,
        TX  77027

      


      Facsimile
        No.:            (713)
        561-0345

      


      Attention:                   Mark
        A. Serice

      


      


      with
        a
        copy to:

      


      Address:                    1801
        Main Street

      Houston,
        TX 77002

      


      Facsimile
        No.:            (713)
        693-7467

      


      Attention:                   Dana
        Chargois


       


      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      A
        LENDER:

      


      NATIXIS

      


      By:   /s/
        Timothy L.
        Polvado                                                                        

            Name:   
        Timothy L. Polvado 

            Title:      Managing
        Director

      


      By: 
        /s/ Louis P. Laville, III

            Name:  
        Louis P. Laville, III

            Title:     Managing
        Director

      


      


      Address
        for Notices:

      


      
        	
                 

              	
                Address:  
                  

              	
                Natural
                  Resources & Related Industries

              


      

      333
        Clay Street, Suite
        4340

      Houston,
        TX 77002

      


      Facsimile
        No.:            (713)
        583-7745

      


      Attention:                   Honi
        Gregory

      


      


      with
        a
        copy to:

      


      Address:                    Houston
        Energy Group

      333
        Clay Street, Suite
        4340

      Houston,
        TX 77002

      


      Facsimile
        No.:            (713)
        571-6167

      


      Attention:                   Donovan
        Broussard

       

      


       


      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      A
        LENDER:

      


      ALLIED
        IRISH BANKS P.L.C.

      


      By:    /s/
        Edward M.
        Fenk                                                                      

            Name:
        Edward M. Fenk

            Title:  
        Vice President

      


      By:   /s/
        Aidan
        Lanigan                                                                  

            Name:
        Aidan Lanigan  

            Title:  
        Vice President

      


      


      Address
        for Notices:

      


      Address:                       Bankcentre,

      Ballsbridge,
        Dublin 4,
        Ireland

      


      Facsimile
        No.:              353
        1 608-9815

      


      Attention:                     Eimear
        O'Meara / Peter Garvey

      


      


      with
        a
        copy to:

      


      Address:                       Allied
        Irish Bank

      -
        Corporate Operations

      2nd
        Floor, Iona House,

      Shelbourne
        Road

      Ballsbridge,
        Dublin 4,
        Ireland

      


      Facsimile
        No.:               353
        1 641 6668

      


      Attention:                      Eimear
        O'Meara / Peter Garvey


       


      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      A
        LENDER:

      


      CIT CAPITAL
        USA INC.

      


      By:   /s/
        Harold J.
        Schroeder                                                                

            Name:
        Harold J. Schroeder  

            Title:  
        Senior Vice President

      


      By:                                                                           

            Name:

            Title:

      


      


      Address
        for Notices:

      


      Address:                        505
        Fifth Avenue, 10th Floor

      New
        York, NY 10017

      


      Facsimile
        No.:                (212)
        771-9675

      


      Attention:                       Peggy
        Dolan

      


      


      with
        a
        copy to:

      


      Address:                        11
        West 42nd
        Street

      New
        York, NY 10036

      


      Facsimile
        No.:                (212)
        461-7852

      


      Attention:                       Maria
        McClung

       

       

      
        
          
          

        

        
          Signature
            Page to
            First Amendment to Amended and Restated Credit Agreement

          
            

          

        

         

      


      SCHEDULE
        I

       

      
        	
                Lender

              	 	
                Pro
                  Rata Shares on the First Amendment Effective Date

              	
                Maximum
                  Loan Amount

              
	
                CURRENT
                  LENDER:

              	 	 	 
	 	 	 	 
	
                BANK
                  OF MONTREAL

              	 	
                30%

              	
                $37,500,000

              
	 	 	 	 
	 	 	 	 
	
                NEW
                  LENDERS:

              	 	 	 
	 	 	 	 
	
                GUARANTY
                  BANK

              	 	
                20%

              	
                $25,000,000

              
	 	 	 	 
	
                AMEGY
                  BANK NATIONAL ASSOCIATION

              	 	
                20%

              	
                $25,000,000

              
	 	 	 	 
	
                NATIXIS

              	 	
                10%

              	
                $12,500,000

              
	 	 	 	 
	
                ALLIED
                  IRISH BANKS P.L.C.

              	 	
                10%

              	
                $12,500,000

              
	 	 	 	 
	
                CIT
                  ENERGY USA INC.

              	 	
                10%

              	
                $12,500,000

              
	 	 	 	 
	
                TOTAL:

              	 	
                100%

              	
                $125,000,000