Document:

exv10w9

Exhibit 10.9

Execution Version

 

Swap Agreement

dated as of

July 7, 2010

between

ENERGY CORPORATION OF AMERICA

and

ECA MARCELLUS TRUST I

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I

	DEFINITIONS; TERMS GENERALLY

	 
	 	 	 	 
	Section 1.01 Definitions
	 	 	1	 
	Section 1.02 Terms Generally
	 	 	3	 
	 
	 	 	 	 
	ARTICLE II

	PAYMENTS

	 
	 	 	 	 
	Section 2.01 Payments
	 	 	4	 
	Section 2.02 Netting of Payments
	 	 	5	 
	Section 2.03 General Conditions
	 	 	5	 
	Section 2.04 Certain Notices
	 	 	5	 
	 
	 	 	 	 
	ARTICLE III

	MISCELLANEOUS

	 
	 	 	 	 
	Section 3.01 Amendments
	 	 	5	 
	Section 3.02 No Waiver
	 	 	5	 
	Section 3.03 Remedies Cumulative; Non-Exclusive; Etc.
	 	 	5	 
	Section 3.04 Successors and Assigns
	 	 	5	 
	Section 3.05 Severability
	 	 	6	 
	Section 3.06 Survival; Revival; Restatement
	 	 	6	 
	Section 3.07 Acknowledgments
	 	 	6	 
	Section 3.08 No Agency Relationship; No Assignment of Trades
	 	 	7	 
	Section 3.09 Governing Law
	 	 	7	 
	Section 3.10 Counterparts
	 	 	7	 
	Section 3.11 ENTIRE AGREEMENT
	 	 	7	 
	Section 3.12 No Third Party Beneficiaries
	 	 	7	 
	Section 3.13 Tax Hedge Designation
	 	 	7	 
	 
	 	 	 	 
	Exhibit A — Confirmations
	 	 	 	 

i

 

Swap Agreement

     This SWAP AGREEMENT, dated as of July 7, 2010, is between ENERGY CORPORATION OF AMERICA,
a West Virginia corporation (“ECA”), and ECA MARCELLUS TRUST I, a Delaware statutory trust
(the “Trust”).

R E C I T A L S

     WHEREAS, the Trust was created pursuant to that certain Amended and Restated Trust Agreement
by and among ECA, as trustor, Corporation Trust Company, as Delaware trustee, and The Bank of New
York Mellon Trust Company, N.A., as trustee;

     WHEREAS, ECA has entered into commodity derivatives transactions with certain counterparties;

     WHEREAS, the parties hereto desire to allocate among themselves certain of the economic
benefits and costs associated with certain of these transactions;

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

ARTICLE I

DEFINITIONS; TERMS GENERALLY

     Section 1.01 Definitions. As used herein, terms defined above have the meanings given
such terms above and the following terms have the following meanings:

     “Agreement” means this Swap Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

     “BP Trade Documents” means the ISDA Master Agreement dated as of March 12, 2004
between ECA and BP Energy Company, including the Schedule thereto and each Confirmation entered
into thereunder, in each case as in effect on the date hereof.

     “Business Day” means a day that is not a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to remain closed.

     “Confirmations” means the collective reference to each Confirmation attached hereto as
Exhibit A.

     “Counterparties” means the collective reference to BP Energy Company and Wells Fargo
Foothill, Inc.

     “Defaulting Party” means, with respect to any Trade on any date of determination, any
Person: (a) that is a “Defaulting Party” or an “Affected Party” with respect to such Trade on such
date under the applicable Trade Documents (as such terms are defined therein) or (b) in respect of
which a “Potential Event of Default” or an “Event of Default” has occurred and is

1

 

continuing on such date under the applicable Trade Documents (as such terms are defined
therein).

     “ECA Gross Up Amount” means, in relation to any Scheduled Payments or any Illegality
Termination Payments required to be made by the Counterparties during any Quarterly Period, an
amount equal to the sum of all such Scheduled Payments or Illegality Termination Payments, as the
case may be, that were due and payable by the Counterparties but not paid by the Counterparties to
ECA during such Quarterly Period (a) on account of the exercise of any right of netting or set-off
against (i) obligations owed by ECA or its affiliates to the Counterparties or their affiliates
under agreements or instruments other than the Trade Documents or (ii) any obligation of ECA to pay
an Excluded Amount pursuant to the Trade Documents; or (b) to the extent that any Counterparty (i)
set-off any such Scheduled Payments or Illegality Termination Payments, as the case may be, against
any posted collateral held by ECA (or any obligation of ECA to transfer that posted collateral) or
(ii) withheld payment of any such Scheduled Payments or Illegality Termination Payments, as the
case may be, up to the value of any posted collateral held by ECA.

     “Excluded Amount” means any amount payable by one party to another party pursuant to
any Trade Documents on account of indemnity or reimbursement obligations (including additional
amounts owing in respect of tax gross up obligations), costs, fees, expenses (including, without
limitation, attorneys fees) or default interest.

     “Illegality” has the meaning specified in the applicable Trade Documents; provided
that the term “Illegality” when used herein in reference to any Trade will only be deemed to have
occurred with respect to such Trade if either (a) the Counterparty is an “Affected Party” (as
defined in the applicable Trade Documents) with respect to such Illegality; or (b) both (i) ECA is
an “Affected Party” (as defined in the applicable Trade Documents) with respect to such Illegality
and (ii) the Trust would have been an “Affected Party” (as defined in the applicable Trade
Documents) with respect to such Illegality if it were a party to such Trade.

     “Illegality Termination Payment” means any Termination Payment that becomes due and
payable as the result of the termination of any Trade prior to the stated termination date thereof
based on the occurrence of an Illegality.

     “Period End Date” means March 31, June 30, September 30 and December 31 of each
calendar year.

     “Person” means any natural person, corporation, limited liability company, trust,
joint venture, association, company, partnership, governmental authority or other entity.

     “Quarterly Payment Date” means, with respect to any Quarterly Period, the date that is
thirty days after the last day of such Quarterly Period.

     “Quarterly Period” means each period from but excluding one Period End Date to and
including the next Period End Date.

     “Scheduled Payment” means, with respect to any Trade, the net payment required to be
made by one party thereto to the other party thereto on a “Payment Date” or a “Settlement

2

 

Payment Date” pursuant to the related Confirmation, without giving effect to the existence of
any “Potential Event of Default”, “Event of Default” or the designation of an “Early Termination
Date” (as such terms are defined in the applicable Trade Documents) or any right of setoff,
counterclaim or defense, and excluding, for the avoidance of doubt: (a) any obligation to transfer
cash collateral or other collateral, (b) any Termination Payment and (c) any Excluded Amount.

     “Termination Payment” means, with respect to any Trade or group of Trades: (a) the
net amount which is due and payable by one party thereto to the other party thereto in respect of
the early termination of such Trade or group of Trades, as determined pursuant to the applicable
Trade Documents (including, for the avoidance of doubt, any unpaid amounts), but (b)
without giving effect to any right of set-off and/or right to apply any margin, collateral,
guarantees or other credit support delivered or held in connection with such Trade, and (c)
excluding any Scheduled Payments (other than unpaid amounts) and any Excluded Amounts.

     “Trades” means the collective reference to each transaction evidenced by the
Confirmations.

     “Trade Documents” means the collective reference to the BP Trade Documents and the
Wells Trade Documents.

     “Trust Gross Up Amount” means, in relation to any Scheduled Payments or any Illegality
Termination Payments required to be made by ECA during any Quarterly Period, an amount equal to the
sum of all such Scheduled Payments or Illegality Termination Payments, as the case may be, that
were due and payable by ECA but not paid by ECA to the Counterparties during such Quarterly Period
to the extent that ECA (i) set-off any such Scheduled Payments or Illegality Termination Payments,
as the case may be, against any posted collateral held by the Counterparties (or any obligation of
the Counterparties to transfer that posted collateral) or (ii) withheld payment of any such
Scheduled Payments or Illegality Termination Payments, as the case may be, up to the value of any
posted collateral held by the Counterparties.

     “Wells Trade Documents” means the ISDA Master Agreement dated as of June 30, 2004
between ECA and Wells Fargo Foothill, Inc., including the Schedule thereto and each Confirmation
entered into thereunder, in each case as in effect on the date hereof.

     Section 1.02 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. 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 reference herein to any law shall be construed as referring to such
law as amended, modified, codified or reenacted, in whole or in part, and in effect from time to
time; (b) any reference herein to any Person shall be construed to include such Person’s successors
and assigns (subject to the restrictions contained in this Agreement); (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 and (d) any reference herein
to Sections or Exhibits shall be construed to refer to Sections of, or Exhibits to, this Agreement.

3

 

ARTICLE II

PAYMENTS

     Section 2.01 Payments. On the Quarterly Payment Date for each Quarterly Period,
commencing with the Quarterly Period ending June 30, 2010:

     (a) ECA will pay to the Trust an amount equal to the sum of the following (without
duplication): (i) all Scheduled Payments received by ECA from the Counterparties under all Trades
during such Quarterly Period plus (ii) the ECA Gross Up Amount, if any, related to
Scheduled Payments required to be made by the Counterparties to ECA under all Trades during such
Quarterly Period plus (iii) the amount of any Scheduled Payment required to be made by any
Counterparty to ECA under any Trade during such Quarterly Period that was not received by ECA from
such Counterparty, but only if ECA was a Defaulting Party on the date such Scheduled Payment was
required to be made by such Counterparty;

     (b) the Trust will pay to ECA an amount equal to the sum of the following: (i) all Scheduled
Payments made by ECA to the Counterparties under all Trades during such Quarterly Period
plus (ii) the Trust Gross Up Amount, if any, related to Scheduled Payments required to be
made by ECA to the Counterparties under all Trades during such Quarterly Period, excluding,
in the case of both clauses (i) and (ii) of this subsection (b), any Scheduled Payment made by ECA
to any Counterparty under any Trade with respect to which ECA (x) was a Defaulting Party on the
date such Scheduled Payment was required to be made by ECA and (y) continues to be a
Defaulting Party on the Quarterly Payment Date;

     (c) ECA will pay to the Trust an amount equal to the sum of the following: (i) all Illegality
Termination Payments received by ECA from the Counterparties under all Trades during such Quarterly
Period plus (ii) the ECA Gross Up Amount, if any, related to Illegality Termination
Payments required to be made by the Counterparties to ECA under all Trades during such Quarterly
Period;

     (d) the Trust will pay to ECA an amount equal to the sum of the following: (i) all Illegality
Termination Payments made by ECA to the Counterparties under all Trades during such Quarterly
Period plus (ii) the Trust Gross Up Amount, if any, related to Illegality Termination
Payments required to be made by ECA to the Counterparties under all Trades during such Quarterly
Period;

     (e) if any Trade has been terminated prior to its stated termination date other than as the
result of the occurrence of an Illegality, then notwithstanding the termination of such Trade, ECA
will pay to the Trust an amount equal to the sum of each Scheduled Payment that would have become
due and payable by the relevant Counterparty to ECA during such Quarterly Period if such Trade had
not been so terminated; and

     (f) if any Trade has been terminated prior to its stated termination date other than as the
result of the occurrence of an Illegality, then notwithstanding the termination of such Trade, the
Trust will pay to ECA an amount equal to the sum of each Scheduled Payment that would have become
due and payable by ECA to the relevant Counterparty during such Quarterly Period if such Trade had
not been so terminated.

4

 

     Section 2.02 Netting of Payments. If on any Quarterly Payment Date amounts would
otherwise be payable by each party to the other pursuant to Section 2.01, then, on such date, each
party’s obligation to make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds
the aggregate amount that would otherwise have been payable by the other party, replaced by an
obligation upon the party by whom the larger aggregate amount would have been payable to pay to the
other party the excess of the larger aggregate amount over the smaller aggregate amount.

     Section 2.03 General Conditions. All payments made hereunder shall be made in
immediately available funds to the account or accounts from time to time specified by the relevant
payee. 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.

     Section 2.04 Certain Notices. ECA shall promptly notify the Trust of the
designation of an “Early Termination Date” pursuant to any Trade Document and the termination of
any Trade, and shall provide the Trust with any documentation or other information related thereto
as the Trust may reasonably request from time to time.

ARTICLE III

MISCELLANEOUS

     Section 3.01 Amendments. Any amendment, modification or waiver in respect of this
Agreement will only be effective if in writing (including a writing evidenced by a facsimile
transmission) and executed by each of the parties hereto.

     Section 3.02 No Waiver. No failure on the part of any party to exercise and no delay
in exercising, and no course of dealing with respect to, any right, power or privilege, or any
abandonment or discontinuance of steps to enforce such right, power or privilege, under this
Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right,
power or privilege under this Agreement preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.

     Section 3.03 Remedies Cumulative; Non-Exclusive; Etc. All rights, powers, privileges,
remedies, and recourses granted in this Agreement or otherwise available at law or equity: (a)
shall be cumulative and concurrent; (b) may be pursued separately, successively, or concurrently;
(c) may be exercised as often as occasion therefor shall arise, it being agreed that the exercise
or failure to exercise or the beginning, or the abandonment, or the delay of any of same, shall in
no event be construed as a waiver or release thereof or of any other right, remedy, or recourse and
(d) are intended to be, and shall be, nonexclusive.

     Section 3.04 Successors and Assigns. The provisions of this Agreement shall be
binding upon each party and its successors and permitted assigns and shall inure, together with all
the rights and remedies hereunder, to the benefit of such party and its respective successors and
assigns; provided that no party may assign, transfer or delegate any of its rights or

5

 

obligations under this Agreement without the prior written consent of the other parties, and
any such purported assignment, transfer or delegation shall be null and void.

     Section 3.05 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 or thereof; and the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

     Section 3.06 Survival; Revival; Restatement. To the extent that any payments made
hereunder are subsequently invalidated, declared to be fraudulent or preferential, set aside or
required to be repaid to a trustee, debtor in possession, receiver or other Person or entity under
any bankruptcy law, common law or equitable cause, then to such extent, the obligations so
satisfied shall be revived and continue as if such payment had not been received and the rights,
powers and remedies under this Agreement shall continue in full force and effect. In such event,
this Agreement shall be automatically reinstated and each party shall take such action as may be
reasonably requested by any other party to effect such reinstatement.

     Section 3.07 Acknowledgments.

     (a) Each party hereby acknowledges that (i) no party has any fiduciary relationship with or
duty to any other party arising out of or in connection with this Agreement; (ii) no joint venture
is created hereby or otherwise exists by virtue of the transactions contemplated hereby among the
parties hereto; (iii) no other party is acting as a fiduciary or financial or investment advisor
for it; (iv) it is not relying upon any representations (whether written or oral) of any other
party; (v) no other party has given to it (directly or indirectly through any other Person) any
advice, counsel, assurance; guarantee, or representation whatsoever as to the expected or projected
success, profitability, return, performance, result, effect, consequence, or benefit (either legal,
regulatory, tax, financial, accounting, or otherwise) of this Agreement; (vi) it has made its own
investment, hedging, and trading decisions based upon its own judgment and upon any advice from
such advisors as it has deemed necessary, and not upon any view expressed by the other party; (vii)
all trading decisions have been the result of arm’s length negotiations between the parties; (viii)
it has a duty to read the Trade Documents and agrees that it is charged with notice and knowledge
of the terms of the Trade Documents; that it has in fact read the Trade Documents and is fully
informed and has full notice and knowledge of the terms, conditions and effects thereof and (ix) it
is entering into this Agreement with a full understanding of all of the risks hereof (economic and
otherwise) and it is capable of assuming and willing to assume (financially and otherwise) those
risks.

     (b) Without limiting the applicability of any other provision of the U.S. Bankruptcy Code as
amended (the “Bankruptcy Code”) (including, without limitation, Sections 362, 546, 556, and
560 thereof and the applicable definitions in Section 101 thereof), the parties intend that the
transactions contemplated by this Agreement will constitute “forward contracts” or “swap
agreements” as defined in Section 101 of the Bankruptcy Code, and that the parties are entitled to
the rights under, and protections afforded by, Sections 362, 546, 556, and 560 of the Bankruptcy
Code.

6

 

     (c) Each party represents to the other party that it is an “eligible contract participant”
within the meaning of the Commodity Exchange Act, Section 1a(12).

     Section 3.08 No Agency Relationship; No Assignment of Trades. Each of the parties
hereto acknowledges and agrees that no agency relationship is created hereby or otherwise exists by
virtue of the transactions contemplated hereby among the parties hereto, it being expressly
understood and agreed that ECA has entered into the Trades and the Trade Documents related thereto
as principal on its own behalf, and ECA is not acting as an agent of the Trust with respect to any
Trade nor is ECA acting in any other capacity on behalf of the Trust, fiduciary or otherwise.
Nothing contained herein shall be interpreted to create or operate as an assignment, transfer or
novation of any Trade, any Trading Document or any interest or obligation therein or thereunder.

     Section 3.09 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

     Section 3.10 Counterparts. 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. In making proof of this
Agreement, it shall not be necessary to produce or account for any counterpart other than one
signed by the party against which enforcement is sought. Delivery of an executed counterpart of a
signature page of this Agreement by facsimile shall be effective as delivery of a manually executed
counterpart of this Agreement.

     Section 3.11 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT
BETWEEN THE PARTIES AS TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.

     Section 3.12 No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto and no other Person (including, without limitation, any Counterparty) shall
have any rights, claims, remedies or privileges hereunder against any party hereto for any reason
whatsoever. There are no third party beneficiaries.

     Section 3.13 Tax Hedge Designation. Unless otherwise specifically identified, the
Trust hereby identifies and designates this Agreement and the economic benefits and costs
associated with the underlying commodity derivatives transactions as a hedging transaction for tax
purposes under Section 1221(a)(7) of the Internal Revenue Code of 1986, as amended and Section
1.1221-2 of the Treasury regulations promulgated under the Internal Revenue Code. The transactions
being hedged are the sale of approximately 7,500 MMBtu per day of the natural gas production by ECA
attributable to the Trust from April 1, 2010 through June 30, 2012. The risk being hedged is the
price movement for natural gas production in the market where ECA sells the gas.

7

 

     IN WITNESS WHEREOF, intending to be legally bound, each of the parties hereto has caused this
Agreement to be duly executed as of the date first above written.

	 	 	 	 	 

	 	 	ENERGY CORPORATION OF AMERICA
	 
	 	 	 	 
	

	 	By:	 	/s/
Donald C. Supcoe
	 

	 	 	 	 
	 

	 	Name:	 	Donald C. Supcoe
	 

	 	 	 	 
	 

	 	Title:	 	Senior Vice President
	 

	 	 	 	
	 
	 	 	 	 
	 	 	ECA MARCELLUS TRUST I
	 
	 	 	 	 
	 

	 	By:	 	/s/ Michael J. Ulrich
	 

	 	 	 	 
	 

	 	Name:	 	Michael J. Ulrich
	 

	 	 	 	 
	 

	 	Title:	 	Authorized Signatory
	 

	 	 	 	 

Signature Page to Swap Agreement

 

EXHIBIT A

CONFIRMATIONS

Exhibit A-1

 

[BP LOGO]

SWAP CONFIRMATION

	 	 	 

	Buyer:

	 	Seller:
	 
	 	 
	Rep:Dominic Sung

	 	Attn: Confirmation Dept.
	BP Energy Company

	 	Eastern American Energy Corporation
	501 WestLake Park Blvd.

	 	Fax #: (304)926-8264
	Houston, TX 77079
	 	 

The purpose of this facsimile is to confirm the terms and conditions of the Swap
Transaction entered into between BP Energy Company and Counterparty on the Trade Date specified
below (the “Transaction”). This facsimile constitutes a “Confirmation” as referred to in the
ISDA Master Agreement specified below.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement
dated as of 03/12/2004, as
amended and supplemented from time to time (the “Agreement”), between you and us. All
provisions contained in the Agreement govern this Confirmation except as expressly modified
below.

The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 

	
BP (Nucleus) ID:

	 	 4261886 
	 	 BP (ET) ID:	 	 	 	 
	Commodity:

	
 	 NATURAL GAS
	 	 Units:
	 	 MMBTUs/Day	 
	Broker:

	
 	 * None *	 	 	 	 	 	 	 
	Trade Date:

	
 	 08/05/2009	 	 	 	 	 	 	 
	Effective Date:

	
 	 07/01/2010	 	 	 	 	 	 	 
	Termination Date:

	
 	 06/30/2011	 	 	 	 	 	 	 
	Price BP Pays:

	
 	 07/01/2010 to 06/30/2011
	 	 6.59 	 	 	 	 
	Price Counterparty Pays:

	
 	 07/01/2010 to 06/30/2011
	 	 NYMEX Final Settlement	 	 	 	 
	Currency:

	
 	 US$	 	 	 	 	 	 	 
	Quantity per
Calculation Period:

	
 	 1,500 MMBTUs/Day
	 	 Total Notional Quantity:
	 	 547,500 MMBTUs	 
	Calculation Period:	
 	 Each calendar Month beginning with 07/01/2010 and ending on 06/30/2011
	 
	Payment Date:	
 	
 5 Business Days after the last price necessary for settlement is determined for each applicable Calculation Period.
	 
	 

Please confirm the foregoing correctly sets forth the terms of our agreement. If counterparty
agrees to this confirmation, no action is necessary and this confirmation will be final and
binding. If this Confirmation does not correctly set forth the material terms of the Transaction,
you may object in writing by either making notations on this Confirmation, signing it, and faxing
it to us at (281) 366-4934, or delivering to us a written objection in any other reasonable form
within 5 New York Business Days of receipt or deemed receipt. If you have any questions, please
contact the Confirmation Department at 281-366-1866.

	 	 	 	 	 	 	 	 	 	 	 

	BP Energy Company
	 	 	 	Eastern American Energy Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	/s/ Dominic Sung
 

	 	 
	 	Name:
	 	/s/ Randall C. Farkosh
 

	 	 

	 	 	 

	BP (NUCLEUS) ID:4261886	 	Page 1 of 2

 

 

[BP LOGO]

SWAP CONFIRMATION

	 	 	 

	Buyer: 
	 	Seller:
	 
	 	 
	Rep:Dominic Sung

	 	Attn: Confirmation Dept.
	BP Energy Company

	 	Eastern American Energy Corporation
	501 WestLake Park Blvd.

	 	Fax #: (304)926-8264
	Houston, TX 77079
	 	 

The purpose of this facsimile is to confirm the terms and conditions of the Swap Transaction
entered into between BP Energy Company and Counterparty on the Trade Date specified below (the
“Transaction”). This facsimile constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as
of 03/12/2004, as amended and supplemented from time to time (the “Agreement”), between you and us.
All provisions contained in the Agreement govern this Confirmation except as expressly modified
below.

The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 

	BP (Nucleus) ID:

	
 	 4261885 
	 	 BP (ET) ID:	 	 	 	 
	Commodity:

	
 	 NATURAL GAS
	 	 Units:
	 	 MMBTUs/Day	 
	Broker:

	
 	 * None *	 	 	 	 	 	 	 
	Trade Date:

	
 	 08/05/2009	 	 	 	 	 	 	 
	Effective Date:

	
 	 07/01/2011	 	 	 	 	 	 	 
	Termination Date:

	
 	 06/30/2012	 	 	 	 	 	 	 
	Price BP Pays:

	
 	 07/01/2011 to 06/30/2012
	 	 6.94 	 	 	 	 
	Price Counterparty Pays:

	
 	 07/01/2011 to 06/30/2012
	 	 NYMEX Final Settlement	 	 	 	 
	Currency:

	
 	 US$	 	 	 	 	 	 	 
	Quantity per
Calculation Period:

	
 	 1,500 MMBTUs/Day
	 	 Total Notional Quantity:
	 	 549,000 MMBTUs	 
	Calculation Period:	
 	 Each calendar Month beginning with 07/01/2011 and ending on 06/30/2012
	 
	Payment Date:	
 	
 5 Business Days after the last price necessary for settlement is determined for each applicable Calculation Period.
	 
	 

Please confirm the foregoing correctly sets forth the terms of our agreement. If counterparty
agrees to this confirmation, no action is necessary and this confirmation will be final and
binding. If this Confirmation does not correctly set forth the material terms of the Transaction,
you may object in writing by either making notations on this Confirmation, signing it, and faxing
it to us at (281) 366-4934, or delivering to us a written objection in any other reasonable form
within 5 New York Business Days of receipt or deemed receipt. If you have any questions, please
contact the Confirmation Department at 281-366-1866.

	 	 	 	 	 	 	 	 	 	 	 

	BP Energy Company
	 	 	 	Eastern American Energy Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	/s/ Dominic Sung
 

	 	 
	 	Name:
	 	/s/ Randall C. Farkosh
 

	 	 

	 	 	 

	BP (NUCLEUS) ID:4261885	 	Page 1 of 2

 

 

[BP LOGO]

SWAP CONFIRMATION

	 	 	 
	Buyer:

	 	Seller:
	 
	 	 
	Rep:Jacob Johnson

	 	Attn: Confirmation Dept.
	BP Energy Company

	 	Eastern American Energy Corporation
	501 WestLake Park Blvd.

	 	Fax #: (304)926-8264
	Houston, TX 77079
	 	 

The purpose of this facsimile is to confirm the terms and conditions of the Swap Transaction
entered into between BP Energy Company and Counterparty on the Trade Date specified below (the
“Transaction”). This facsimile constitutes a “Confirmation” as referred to in the ISDA Master
Agreement specified below.

This Confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated as
of 03/12/2004, as amended and supplemented from time to time (the “Agreement”), between you and us.
All provisions contained in the Agreement govern this Confirmation except as expressly modified
below.

The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 	 	 	 	 	 	 	 	 	 

	BP (Nucleus) ID:

	
 	 4380558 
	 	 BP (ET) ID:	 	 	 	 
	Commodity:

	
 	 NATURAL GAS
	 	 Units:
	 	 MMBTUs/Day	 
	Broker:

	
 	 * None *	 	 	 	 	 	 	 
	Trade Date:

	
 	 09/17/2009	 	 	 	 	 	 	 
	Effective Date:

	
 	 07/01/2010	 	 	 	 	 	 	 
	Termination Date:

	
 	 06/30/2012	 	 	 	 	 	 	 
	Price BP Pays:

	
 	 07/01/2010 to 06/30/2012
	 	 6.54 	 	 	 	 
	Price Counterparty Pays:

	
 	 07/01/2010 to 06/30/2012
	 	 NYMEX Final Settlement	 	 	 	 
	Currency:

	
 	 US$	 	 	 	 	 	 	 
	Quantity per
Calculation Period:

	
 	 3,000 MMBTUs/Day
	 	 Total Notional Quantity:
	 	 2,193,000 MMBTUs	 
	Calculation Period:	
 	 Each calendar Month beginning with 07/01/2010 and ending on 06/30/2012
	 
	Payment Date:	
 	
 5 Business Days after the last price necessary for settlement is determined for each applicable Calculation Period.
	 
	 

Please confirm the foregoing correctly sets forth the terms of our agreement. If counterparty
agrees to this confirmation, no action is necessary and this confirmation will be final and
binding. If this Confirmation does not correctly set forth the material terms of the Transaction,
you may object in writing by either making notations on this Confirmation, signing it, and faxing
it to us at (281) 366-4934, or delivering to us a written objection in any other reasonable form
within 5 New York Business Days of receipt or deemed receipt. If you have any questions, please
contact the Confirmation Department at 281-366-1866.

	 	 	 	 	 	 	 	 	 	 	 

	BP Energy Company
	 	 	 	Eastern American Energy Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	/s/ Jacob Johnson
 

	 	 
	 	Name:
	 	/s/ Randall C. Farkosh
 

	 	 

	 	 	 

	BP (NUCLEUS) ID:4380558	 	Page 1 of 2

 

 

[WELLS FARGO LOGO]

Wells Fargo Foothill, Inc.

Financial Products

Telephone: (310) 453-7260

ISDA CONFIRMATION

			
	To:	 	Energy Corporation of America

4643 South Ulster Street, Suite 1100

Denver, CO 80237

Attention: Michael Fletcher

Telephone: (303) 694-2667

Fax: (303) 694-2763
	 
	From:	 	Wells Fargo Foothill, Inc.

2450 Colorado Avenue, Suite 3000 West

Santa Monica, CA 90404

Attention: Paz Hernandez

Telephone: (310) 453-7260

Fax: (865) 350-3684
	 
	Re:	 	Commodity Swap Transaction (525253)
	 
	Date:	 	May 11, 2009

Ladies and Gentlemen:

The
purpose of this letter agreement is to confirm the terms and conditions of the Transaction
entered into between Wells Fargo Foothill, Inc. (“Party A”) and Energy Corporation of America, a
West Virginia corporation
(“Party B”) on the Trade Date specified below (the
“Transaction”). This communication constitutes a
“Confirmation” as referred to in the Master Agreement specified below.

The
definitions and provisions contained in the 1993 ISDA Commodity
Derivatives Definitions (as published by
the International Swaps and Derivatives Association, Inc.
(“ISDA”) including the 2000 Supplement to
the 1993 ISDA Commodity Derivatives Definitions, are incorporated
into this Confirmation. In the
event of any inconsistency between those definitions and provisions
and this Confirmation, this Confirmation will
govern.

1. This confirmation supplements, forms part of, and is subject to, the ISDA Master Agreement dated
as of June 30, 2004, (as the same may be amended, modified or supplemented from time to time, the
“Agreement”) between Party A and Party B. This communication itself constitutes a binding agreement
setting forth the essential terms of the Transaction described herein. All provisions contained in
the Agreement shall govern this Confirmation except as expressly modified below.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 

	Trade Date:

	 	May 8, 2009
	Effective Date:

	 	July 1, 2010
	Termination Date:

	 	June 30, 2012
	Commodity:

	 	Natural Gas
	Transaction Type:

	 	Swap
	Total Notional Quantity:

	 	2,193,000 MMBTU(s)

page # 1 of 3

 

	 	 	 

	Notional Quantity per Calculation Period:

	 	Please refer to the attached Schedule.
	Calculation Period(s):

	 	Each calendar month from and including the Effective Date to and including
the Termination Date including the first and last calendar days of each month
	Settlement Method:

	 	Cash
	Settlement Payment Date(s):

	 	Please refer to attached Schedule
	 
	 	 
	Business Day Convention:

	 	Following
	Business Day:

	 	New York City
	 
	 	 
	Fixed Amount Details:
	 	 
	     Fixed Price Payer:

	 	Party A
	     Fixed Price:

	 	USD 7 03 per MMBTU
	 
	 	 
	Floating Amount Details:
	 	 
	     Floating Price Payer:

	 	Party B
	     Commodity Reference Price:

	 	NATURAL GAS - HENRY HUB - NYMEX
	     Spread:

	 	None
	     Specified Price:

	 	Closing Price
	     Delivery Date:

	 	First Nearby Month
	     Pricing Date:

	 	The last Commodity Business Day on which the Commodity Reference Price is published
for the relevant Calculation Period
	     Method of Averaging:

	 	Not applicable
	 
	 	 
	Account Details:
	 	 
	     Payments due to Party A:

	 	Party A will change payment(s) to the following
Loan account: 

Loan Number:
ECO000
	 
	 	 
	     Payments due to Party B:

	 	Party A will credit payment(s) to
the following Loan account:

Loan Number: ECO000
	 
	 	 
	Calculation Agent:

	 	Party A

3. Please confirm that the foregoing correctly sets forth the terms of our agreement by
having an authorized officer sign one copy of this Confirmation and returning to us by
facsimile to:

Wells Fargo Foothill, Inc.

Attention: Paz Hernandez

Fax: (866) 350-3684

4. Each party represents to the other party hereto that (i) it is not acting as a
fiduciary or a financial or investment advisor for the other party; (ii) it is not relying
upon any advice, counsel representations (whether written or oral) of the other party other
than the representations expressly set forth in the Master Agreement, any Credit Support
Document and herein; (iii) the other party hereto has not given to it any

page # 2 of 3

 

advice or
counsel as to the expected or projected success, return, performance,
result, consequence or benefit
(either legal, regulatory, tax, financial, accounting, or otherwise)
of this Transaction; (iv) it
has consulted with its own legal, regulatory, tax, business, investment financial and accounting
advisors to the extent it has deemed necessary and has made its own
investment, hedging, and
trading decisions (including decisions regarding the suitability of this Transaction) based upon
its own judgment and upon any advice from such advisors as it has deemed necessary and not upon
any view expressed by the other party hereto; (v) it has
determined that the rates, prices, or
amounts and other terms of this Transaction in the indicative quotations (if any) provided by
the other party hereto reflect those in the relevant market for
similar transactions, and all
trading decisions have been the result of arms length negotiations
between the parties;
(vi) it is entering into this Transaction with a full understanding
of all of the terms, conditions and risks thereof
(economic and otherwise), and it is capable of assuming and willing to assume (financially and
otherwise) those risks; and (vii) it is a sophisticated investor.

Yours
sincerely,

Wells Fargo Foothill, Inc.

	 	 	 	 	 

	By: 

Name:

	 	/s/ Paz Hernandez
 

Paz Hernandez
	 	 
	Its:

	 	Senior Vice President	 	 

Accepted and confirmed as of the Trade Date:

ENERGY CORPORATION OF AMERICA,

A West Virginia corporation

	 	 	 	 	 

	By: 

Name:

	 	/s/ Michael S. Fletcher
 

Michael S. Fletcher
	 	 
	Its:

	 	Chief Financial Officer	 	 

Schedule
I for Transaction # 525253

Combined Flows

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Start Date	 	 	End Date	 	 	Fixing Date	 	 	Payment Date	 	 	Notional     
	07/01/2010
	 	 	07/31/2010	 	 	 	06/28/2010	 	 	 	07/06/2010	 	 	 	93,000.00	 
	08/01/2010
	 	 	08/31/2010	 	 	 	07/28/2010	 	 	 	08/04/2010	 	 	 	93,000.00	 
	09/01/2010
	 	 	09/30/2010	 	 	 	08/27/2010	 	 	 	09/03/2010	 	 	 	90,000.00	 
	10/01/2010
	 	 	10/31/2010	 	 	 	09/28/2010	 	 	 	10/05/2010	 	 	 	93,000.00	 
	11/01/2010
	 	 	11/30/2010	 	 	 	10/27/2010	 	 	 	11/03/2010	 	 	 	90,000.00	 
	12/01/2010
	 	 	12/31/2010	 	 	 	11/24/2010	 	 	 	12/02/2010	 	 	 	93,000.00	 
	01/01/2011
	 	 	01/31/2011	 	 	 	12/28/2010	 	 	 	01/04/2011	 	 	 	93,000.00	 
	02/01/2011
	 	 	02/28/2011	 	 	 	01/27/2011	 	 	 	02/03/2011	 	 	 	84,000.00	 
	03/01/2011
	 	 	03/31/2011	 	 	 	02/24/2011	 	 	 	03/03/2011	 	 	 	93,000.00	 
	04/01/2011
	 	 	04/30/2011	 	 	 	03/29/2011	 	 	 	04/05/2011	 	 	 	90,000.00	 
	05/01/2011
	 	 	05/31/2011	 	 	 	04/27/2011	 	 	 	05/04/2011	 	 	 	93,000.00	 
	06/01/2011
	 	 	06/30/2011	 	 	 	05/26/2011	 	 	 	06/03/2011	 	 	 	90,000.00	 
	07/01/2011
	 	 	07/31/2011	 	 	 	06/28/2011	 	 	 	07/06/2011	 	 	 	93,000.00	 
	08/01/2011
	 	 	08/31/2011	 	 	 	07/27/2011	 	 	 	08/03/2011	 	 	 	93,000.00	 
	09/01/2011
	 	 	09/30/2011	 	 	 	08/29/2011	 	 	 	09/06/2011	 	 	 	90,000.00	 
	10/01/2011
	 	 	10/31/2011	 	 	 	09/28/2011	 	 	 	10/05/2011	 	 	 	93,000.00	 
	11/01/2011
	 	 	11/30/2011	 	 	 	10/27/2011	 	 	 	11/03/2011	 	 	 	90,000.00	 
	12/01/2011
	 	 	12/31/2011	 	 	 	11/28/2011	 	 	 	12/05/2011	 	 	 	93,000.00	 
	01/01/2012
	 	 	01/31/2012	 	 	 	12/28/2011	 	 	 	01/05/2012	 	 	 	93,000.00	 
	02/01/2012
	 	 	02/29/2012	 	 	 	01/27/2012	 	 	 	02/03/2012	 	 	 	87,000.00	 
	03/01/2012
	 	 	03/31/2012	 	 	 	02/27/2012	 	 	 	03/05/2012	 	 	 	93,000.00	 
	04/01/2012
	 	 	04/30/2012	 	 	 	03/28/2012	 	 	 	04/04/2012	 	 	 	90,000.00	 
	05/01/2012
	 	 	05/31/2012	 	 	 	04/26/2012	 	 	 	05/03/2012	 	 	 	93,000.00	 
	06/01/2012
	 	 	06/30/2012	 	 	 	05/29/2012	 	 	 	06/05/2012	 	 	 	90,000.00	 

page # 3 of 3exv10w10

Exhibit 10.10

Execution Version

WHEN RECORDED OR FILED,

PLEASE RETURN TO:

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 2500

Houston, Texas 77002

Attention: Linda Daugherty

	 	 	 

	 

	 	 
	 

	 	Space above for County Recorder’s Use

MORTGAGE, ASSIGNMENT OF LEASES,

SECURITY AGREEMENT, FIXTURE FILING

AND FINANCING STATEMENT

FROM

ENERGY CORPORATION OF AMERICA,

as MORTGAGOR

TO

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

AS TRUSTEE OF ECA MARCELLUS TRUST I,

as MORTGAGEE

Dated as of July 7, 2010

A CARBON, PHOTOGRAPHIC, FACSIMILE, OR OTHER REPRODUCTION OF

THIS INSTRUMENT IS SUFFICIENT AS A FINANCING STATEMENT.

 

 

THIS INSTRUMENT CONTAINS AFTER-ACQUIRED PROPERTY PROVISIONS.

THIS INSTRUMENT SECURES PAYMENT OF FUTURE ADVANCES PURSUANT TO 42 PA.C.S. § 8144.

THIS INSTRUMENT COVERS MINERALS AND OTHER SUBSTANCES OF VALUE WHICH MAY BE EXTRACTED FROM THE EARTH
(INCLUDING WITHOUT LIMITATION OIL AND GAS) AND THE ACCOUNTS RELATED THERETO. THIS FINANCING
STATEMENT IS TO BE FILED OR FILED FOR RECORD, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR
SIMILAR RECORDS OF THE RECORDERS OF THE COUNTIES LISTED ON THE EXHIBITS HERETO. THE MORTGAGOR HAS
AN INTEREST OF RECORD IN THE REAL ESTATE AND IMMOVABLE PROPERTY CONCERNED, WHICH INTEREST IS
DESCRIBED IN THE EXHIBITS ATTACHED HERETO.

PORTIONS OF THE MORTGAGED PROPERTIES ARE GOODS WHICH ARE OR ARE TO BECOME AFFIXED TO OR FIXTURES ON
THE LAND DESCRIBED IN OR REFERRED TO IN THE EXHIBITS HERETO. THIS FINANCING STATEMENT IS TO BE
FILED FOR RECORD OR RECORDED, AMONG OTHER PLACES, IN THE REAL ESTATE RECORDS OR SIMILAR RECORDS OF
EACH COUNTY IN WHICH SAID LAND OR ANY PORTION THEREOF IS LOCATED. THE MORTGAGOR IS THE OWNER OF
RECORD INTEREST IN THE REAL ESTATE CONCERNED. THIS INSTRUMENT IS ALSO TO BE INDEXED IN THE INDEX
OF FINANCING STATEMENTS OR THE UCC RECORDS.

- ii -

 

MORTGAGE, ASSIGNMENT OF LEASES,

SECURITY AGREEMENT, FIXTURE FILING

AND FINANCING STATEMENT

     THIS MORTGAGE, ASSIGNMENT OF LEASES, SECURITY AGREEMENT, FIXTURE FILING AND FINANCING
STATEMENT (this “Mortgage”) is entered into as of July 7, 2010 by Energy Corporation of America, a
West Virginia corporation (herein called “Mortgagor”), whose address for notice is 4643 South
Ulster Street, Suite 1100, Denver, CO 80237, and The Bank of New York Mellon Trust Company, N.A.,
acting not in its individual capacity but solely as trustee of ECA Marcellus Trust I, a Delaware
statutory trust, as mortgagee (“Mortgagee”) whose address for notice is c/o The Bank of New York
Mellon Trust Company, N.A., 919 Congress Avenue, Suite 500, Austin Texas 78701.

R E C I T A L S:

     A. By means of (1) a Term Overriding Royalty Interest Conveyance (PUD) dated as of July 7,
2010 (the “Term Conveyance (PUD)”) from Mortgagor to Eastern Marketing Corporation, a true and
correct copy of which is annexed hereto as Annex A-1 and made a part hereof and (2) a Perpetual
Overriding Royalty Interest Conveyance (PUD) dated as of July 7, 2010 (the “Perpetual Conveyance
(PUD)” and together with the Term Conveyance (PUD) collectively the “Conveyances”) from Mortgagor
to Mortgagee, a true and correct copy of which is annexed hereto as Annex A-2 and made a part
hereof, Mortgagor has conveyed and assigned to Mortgagee or Eastern Marketing Corporation, as
applicable, the “Royalty Interest”, as defined therein and herein so called. Reference is made to
the Conveyances for the meaning of capitalized terms that are defined therein (and not otherwise
defined herein), which terms shall have the same meanings when used herein.

     B. Eastern Marketing Corporation has assigned the Term Conveyance (PUD) and all rights
thereunder to the Mortgagee, and consequently the Mortgagee holds all of the Royalty Interest
described above.

     C. Mortgagor is executing and delivering this Mortgage in order to secure the drilling
obligations of the Mortgagor under that certain Development Agreement dated as of July 7, 2010 (the
“Development Agreement”) between Mortgagor and Mortgagee.

     D. Each Royalty Interest is carved out of the applicable Subject Interests.

     E. The Mortgaged Properties (as hereinafter defined) include (but are not limited to)
interests in the Subject Lands described on Exhibit A to each of the Conveyances attached hereto,
which Exhibits A are incorporated herein by reference for all purposes. This Mortgage is to be
recorded in Greene County, Pennsylvania.

     F. Mortgagee has conditioned its execution and delivery of the Conveyances and the Development
Agreement upon the execution and delivery by Mortgagor of this Mortgage, and Mortgagor has agreed
to enter into this Mortgage.

 - 1 - 

 

     NOW, THEREFORE, in order to comply with the terms and conditions of the Conveyances and the
Development Agreement and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Mortgagor hereby agrees with Mortgagee as follows:

ARTICLE I.

Granting Clauses; Secured Obligations

     Section 1.1 Grant and Mortgage. Mortgagor, in order to secure the payment and
performance of the secured obligations hereinafter referred to and the performance of the
obligations, covenants, agreements, warranties and undertakings of Mortgagor hereinafter described,
does hereby GRANT, BARGAIN, SELL, ALIEN, CONVEY, TRANSFER, MORTGAGE, ASSIGN, WARRANT, PLEDGE,
HYPOTHECATE and CONFIRM to Mortgagee, its successors and assigns, for the benefit of Mortgagee,
with mortgage covenants, and upon the statutory mortgage condition for the breach of which this
Mortgage may be subject to foreclosure as provided by applicable law, all of the following
described rights, interests and properties which are located in Greene County, Pennsylvania (the
“Mortgaged Properties”):

     (a) All of Mortgagor’s right, title, interest and estate now owned or hereafter
acquired in and to those certain oil, gas or other mineral leases (the “Gas Leases”) in the
Subject Lands more particularly described on Exhibit “A” to the Conveyances attached hereto
and Additional Leases (as defined in the Conveyances) within the Target Formation within the
AMI Area (the “Retained Mineral Interests”);

     (b) All easements, servitudes, rights-of-way, surface leases and other surface rights
on and over the Subject Lands (the “Surface Rights”) which are now or hereafter used, or
held for use, in connection with the Retained Mineral Interest;

     (c) All licenses, permits and other regulatory approvals held by Mortgagor to the
extent relating to the Retained Mineral Interests;

     (d) All proceeds of all of the rights, titles and interests of Mortgagor described in
the foregoing paragraphs (a) through (c) (exclusive of rents, revenues, royalties and
profits arising under the Gas Leases) whether such proceeds or payments are goods, money,
documents, instruments, chattel paper, securities, accounts, payment intangibles, general
intangibles, fixtures, real, personal or other assets; and

     (e) Any and all liens, security interests, financing statements or similar interests of
Mortgagor attributable to the Retained Mineral Interests arising under or created by any
statutory provision, judicial decision or otherwise.

     TO HAVE AND TO HOLD the Mortgaged Properties unto Mortgagee, and Mortgagee’s successor and
assigns, for the benefit of the Mortgagee, upon the terms, provisions and conditions herein set
forth.

 - 2 - 

 

     Section 1.2 Grant of Security Interest; Fixture Filing. In order to further secure
the payment of the secured obligations hereinafter referred to and the performance of the
obligations, covenants, agreements, warranties, indemnities and undertakings of Mortgagor
hereinafter described, Mortgagor does hereby grant to Mortgagee a security interest in and to the
Mortgaged Properties (whether now owned or hereafter acquired by operation of law or otherwise)
insofar as the Mortgaged Properties consists of personal property of any kind or character defined
in and subject to the provisions of Article 9 of the Uniform Commercial Code as in effect from time
to time as part of the laws applicable to this Mortgage (the “Applicable UCC”), (such personal
property being the “Collateral”). Except as otherwise expressly provided in this Mortgage, all
terms in this Mortgage relating to the Mortgaged Properties and the grant of the foregoing security
interest which are defined in the Applicable UCC shall have the meanings assigned to them in
Article 9 (or, absent definition in Article 9, in any other Article) of the Applicable UCC, as
those meanings may be amended, revised or replaced from time to time. Notwithstanding the
foregoing, the parties intend that the terms used herein which are defined in the Applicable UCC
have, at all times, the broadest and most inclusive meanings possible. If the Applicable UCC shall
in the future be amended or held by a court to define any term used herein more narrowly, or less
inclusively, than the UCC in effect on the date of this Mortgage, such amendment or holding shall
be disregarded in defining terms used in this Mortgage.

     This Mortgage constitutes a security agreement, fixture filing and financing statement as
those terms are used in the Uniform Commercial Code of the State in which the Mortgaged Property is
located (the “PA UCC”). For purposes of this Section 1.2, this Mortgage is to be filed and
recorded in, among other places, the real estate records of the County in which the Mortgaged
Properties are is located and the following information is included: (1) Mortgagor shall be deemed
the “Debtor” with the address set forth for Mortgagor on the first page of this Mortgage which
Mortgagor certifies is accurate; (2) Mortgagee shall be deemed to be the “Secured Party” with the
address set forth for Mortgagee on the first page of this Mortgage and shall have all of the rights
of a secured party under the PA UCC; (3) this Mortgage covers goods which are or are to become
fixtures; (4) the name of the record owner of the Gas Leases and Surface Rights is Energy
Corporation of America, the Debtor; (5) the organizational identification number of the Debtor is
none; (6) the Debtor is a corporation organized under the laws of the State of West Virginia; and
(7) the legal name of the Debtor is Energy Corporation of America. The Debtor hereby authorizes
Mortgagee to file any financing statements and terminations thereof or amendments or modifications
thereto without the signature of the Debtor, where permitted by law; provided, however, this
authorization does not release Mortgagor from its general duty under this Mortgage, the Development
Agreement or the Conveyances to take all actions necessary to perfect and maintain the perfected
interest of Mortgagee in the Mortgaged Properties.

     Section 1.3 Assignment of Leases.

     (a) This Mortgage is also an absolute and unconditional assignment to Mortgagee of the
Gas Leases, whether now in existence or hereafter arising, for the purpose of vesting in
Mortgagee, subject to the Permitted Encumbrances (as defined in the Conveyances attached
hereto as Annex A-1 and Annex A-2), a, perfected security interest in the Gas Leases.
Mortgagor hereby assigns, transfers and sets over to Mortgagee all

 - 3 - 

 

of the Gas Leases.

     (b) So long as no default (as hereinafter defined) has occurred and is then continuing,
Mortgagor shall have a license, revocable at the will of Mortgagee following the occurrence
and continuation of a default, to enforce the Gas Leases and exercise Mortgagor’s rights
thereunder.

     (c) Notwithstanding any legal presumption to the contrary, Mortgagee shall not be
obligated by reason of its acceptance of this assignment to perform any obligation of
Mortgagor as lessee under any Gas Lease. The acceptance of this assignment shall not
constitute a waiver of any rights of Mortgagee under the Development Agreement or the
Conveyances or constitute a cure of any default by Mortgagor thereunder.

     Section 1.4 Development Agreement and Other Obligations. This Mortgage is made to
secure and enforce the payment and performance of the following, obligations, indebtedness and
liabilities:

     (a) The full performance of all obligations, covenants, agreements and undertakings of
and by Mortgagor from time to time owing to Mortgagee under Article II of the Development
Agreement;

     (b) Any sums advanced or expenses or costs incurred by the Mortgagee (or any receiver
appointed hereunder) which are made or incurred pursuant to, or permitted by, the terms
hereof, plus interest thereon at the Applicable Rate (as defined hereinafter) or otherwise
agreed upon, from the date of the advances or the incurring of such expenses or costs until
reimbursed; and

     (c) Without limiting the generality of the foregoing, all post-petition interest,
expenses, and other duties, damages and liabilities with respect to indebtedness or other
obligations described above in this Section 1.4, which would be owed but for the
fact that they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization, or similar proceeding.

     Section 1.5 Secured Obligations. The obligations referred to in Section 1.4,
and all renewals, extensions and modifications thereof, and all substitutions therefor, in whole or
in part, are herein sometimes referred to as the “secured obligations” or the “obligations secured
hereby”. It is contemplated and acknowledged that the secured obligations may include obligations
hereafter arising and that this Mortgage shall have effect, as of the date hereof, to secure all
secured obligations, regardless of whether any amounts exist on the date hereof or arise on a later
date or, whether having arisen or been advanced, are later repaid in part or in whole and further
obligations arise or advances are made at a later date.

     Section 1.6 Limitation on Obligations. The Mortgagor and Mortgagee hereby agree and
acknowledge that, as of the date hereof, the maximum value of such drilling obligations secured by
this Mortgage is $91,000,000, provided that such amount will be adjusted downward, from time to
time, pursuant to Section 2.08 of the Development Agreement. Mortgagor and
Mortgagee further agree and acknowledge that as the value of the drilling obligations secured

 - 4 - 

 

hereby reduces pursuant to the Development Agreement, the lien and security interest created by
this Mortgage shall be released as to each Development Well as the same is completed in accordance
with the Development Agreement. Upon Mortgagor’s request and at Mortgagor’s expense, Mortgagee
shall execute and deliver a partial release, which will release in full any lien and/or security
interest created by this Mortgage with respect to such Development Well and the proration unit
related to such Development Well.

     Section 1.7 Maturity Date. The obligations, covenants, agreements and undertakings of
and by Mortgagor from time to time owing to Mortgagee are due to be performed on and before the
Drilling Obligation Completion Date (as defined in the Development Agreement), which is 7:00 a.m.,
Eastern Time, on March 31, 2013, unless extended pursuant to the terms of the Development Agreement
to March 31, 2014. The Drilling Obligation Completion Date (as defined in the Development
Agreement) shall be the maturity date of this Mortgage, provided that the Total Drilling Target (as
defined in the Development Agreement) has been met. If the Total Drilling Target (as defined in
the Development Agreement) has not been met by such date, this Mortgage shall continue in full
force and effect.

ARTICLE II.

Covenants

     Section 2.1 Mortgagor warrants, represents, covenants and agrees that the Mortgaged Properties
are free and clear of all liens, security interests and other Encumbrances, subject only to the
Permitted Encumbrances and that, to Mortgagor’s knowledge, Mortgagor is lawfully seized of the
estates and interests granted to Mortgagor under the Gas Leases and any instruments evidencing
Surface Rights. This Mortgage is subject to (but in no event shall this Mortgage be an assumption
of) the Permitted Encumbrances, in each case to the extent and only for so long as the same are
valid and subsisting and affect title to the Mortgaged Properties; provided that, the foregoing is
not intended to, and shall not, subordinate the first priority lien created hereby.

     Section 2.2 Mortgagor hereby covenants with the Mortgagee as follows:

     (a) Further Assurance. Mortgagor will, on request of Mortgagee, (i) promptly
correct any defect, error or omission which may be discovered in the contents of this
Mortgage, or in the execution or acknowledgment of this Mortgage; (ii) execute,
acknowledge, deliver and record or file such further instruments (including further
mortgages, security agreements, financing statements, continuation statements, and
assignments of accounts, funds, contract rights, and general intangibles) and do such
further acts as may be necessary, desirable or proper to carry out more effectively the
purposes of this Mortgage; and (iii) execute, acknowledge, deliver, and file or record any
document or instrument (including specifically any financing statement) reasonably requested
by Mortgagee to protect the lien or the security interest hereunder against the rights or
interests of third persons. Mortgagor shall pay all reasonable costs connected with any of
the foregoing.

     (b) Name and Place of Business. Mortgagor will not cause or permit any change
to be made in its name, identity, limited liability company structure, federal

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employer
identification number or state of organization (whether by merger or otherwise) unless
Mortgagor shall have notified Mortgagee of such change at least ten (10) days prior to the
effective date of such change, and shall have first taken all action required by Mortgagee
for the purpose of further perfecting or protecting the liens and security interests in the
Mortgaged Properties created hereby. Mortgagor’s exact name is the name set forth in this
Mortgage. Mortgagor is a corporation organized under the laws of the State of West
Virginia.

     Section 2.3 Except as permitted in Section 11.02 of the applicable Conveyance, Mortgagor will
not Transfer any of the Mortgaged Properties without the prior written consent of the Trustee. If
any Mortgaged Property is permitted to be Transferred pursuant to Section 11.02 of the applicable
Conveyance, the Trustee will execute, acknowledge and deliver a release of this Mortgage to the
extent applicable to such Mortgaged Properties proposed to be Transferred pursuant to Section 11.02
of the applicable Conveyance.

ARTICLE III.

Remedies Upon Default

     Section 3.1 Default. The term “default” as used in this Mortgage means:

     (a) the failure by Mortgagor to perform or pay when due any obligation of Mortgagor
under Article II of the Development Agreement or this Mortgage, which failure continues for
thirty days after receipt by Mortgagor of written notice from Mortgagee demanding such
payment or performance;

     (b) failure by the Mortgagor, within thirty (30) days after notice thereof from the
Mortgagee, to cure a breach in the due performance or observance of any covenant or
agreement contained in this instrument or in Article II of the Development Agreement and not
constituting a failure to pay any obligation secured hereby; or

     (c) this Mortgage shall fail to constitute a lien on and prior perfected security
interest in any part of the Mortgaged Properties (subject only to Permitted Encumbrances),
and such failure is not cured within thirty (30) days after written notice to Mortgagor or
Mortgagor otherwise obtains knowledge thereof.

     Section 3.2 Remedies.

     (a) If a default shall occur and be continuing, to the extent provided by applicable
law, the Mortgagee shall have the right and option to (i) proceed with an action in mortgage
foreclosure and to sell all or any portion of such Mortgaged Properties at one or more
sales, as an entirety or in parcels, at such place or places in otherwise such manner and
upon such notice as may be required by law, or, in the absence of any such requirement, as
the Mortgagee may deem appropriate, and to make conveyance to the purchaser or
purchasers; or (ii) obtain a judgment for the secured obligations (including amounts
advanced by Mortgagee hereunder to protect the Mortgaged Properties or the liens and
security interests in the Mortgaged Properties created hereby, all costs and expenses of

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collection and suit, including any bankruptcy or insolvency proceeding affecting Mortgagor,
and reasonable attorneys’ fees incurred in connection with the foregoing) together with
interest on such judgment until payment in full is received by Mortgagee. Mortgagee shall
have the authority while so in possession to insure (at Mortgagor’s expense) against all
risks by reason of having taken such possession and Mortgagor will transfer and deliver to
the Mortgagee all policies of insurance upon the Mortgaged Properties not theretofore
transferred and delivered to Mortgagee and Mortgagee shall have the right to obtain
execution upon the Mortgaged Properties on account of such judgment. Where the Mortgaged
Properties are situated in more than one jurisdiction, notice as above provided shall be
posted and filed in all such jurisdictions (if such notices are required by applicable law),
and all such Mortgaged Properties may be sold in any such jurisdiction and any such notice
shall designate the jurisdiction where such Mortgaged Properties are to be sold. Nothing
contained in this Section 3.2 shall be construed so as to limit in any way any
rights to sell the Mortgaged Properties or any portion thereof by private sale if and to the
extent that such private sale is permitted under the applicable law of the applicable
jurisdiction or by public or private sale after entry of a judgment by any court of
competent jurisdiction so ordering. The Mortgagor hereby irrevocably appoints, effective
upon the occurrence and during the continuance of a default, the Mortgagee, with full power
of substitution, to be the attorney-in-fact of the Mortgagor and in the name and on behalf
of the Mortgagor to execute and deliver any deeds, transfers, conveyances, assignments,
assurances and notices which the Mortgagor ought to execute and deliver and do and perform
any and all such acts and things which the Mortgagor ought to do and perform under the
covenants herein contained and generally, to use the name of the Mortgagor in the exercise
of all or any of the powers hereby conferred on the Mortgagee. At any such sale: (1) it
shall not be necessary for the Mortgagee to have physical or constructive possession of the
Mortgaged Properties (the Mortgagor hereby covenanting and agreeing to deliver any portion
of the Mortgaged Properties not actually or constructively possessed by the Mortgagee
immediately upon the Mortgagee’s demand) and the title to and right of possession of any
such property shall pass to the purchaser thereof as completely as if the same had been
actually present and delivered to purchaser at such sale, (2) each instrument of conveyance
executed by the Mortgagee shall contain a special warranty of title, binding upon the
Mortgagor and its successors and assigns, (3) each and every recital contained in any
instrument of conveyance made by the Mortgagee shall conclusively establish the truth and
accuracy of the matters recited therein, including, without limitation, nonpayment or
nonperformance of the secured obligations, advertisement and conduct of such sale in
accordance with applicable law, (4) any and all prerequisites to the validity thereof shall
be conclusively presumed to have been performed, (5) the receipt of the Mortgagee or of such
other party or officer making the sale shall be a sufficient discharge to the purchaser or
purchasers for its purchase money and no such purchaser or purchasers, or its assigns or
personal representatives, shall thereafter be obligated to see to the application of such
purchase money, or be in any way answerable for any loss, misapplication or nonapplication
thereof, (6) to the fullest extent permitted by
applicable law, the Mortgagor shall be completely and irrevocably divested of all of
its right, title, interest, claim and demand whatsoever, either at law or in equity, in and
to the Mortgaged Property sold and such sale shall be a perpetual bar both at law and in
equity against the Mortgagor, and against any and all other persons claiming or to claim the

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property sold or any part thereof, by, through or under the Mortgagor, and (7) to the extent
and under such circumstances as are permitted by law, the Mortgagee may be a purchaser at
any such sale, and shall have the right, after paying or accounting for all costs of said
sale or sales, to credit the amount of the bid upon the amount of the secured obligations
(in the order of priority set forth in Section 3.4) in lieu of cash payment.

     (b) If a default shall occur and be continuing, Mortgagee may exercise its rights of
enforcement with respect to the Collateral under the Applicable UCC, or under any other
statute in force in any state to the extent the same is applicable law. Cumulative of the
foregoing and the other provisions of this Section 3.2, to the extent permitted by
applicable law:

     (i) upon the occurrence and during the continuance of a default Mortgagee may
enter upon the Mortgaged Properties or otherwise upon Mortgagor’s premises to take
possession of, assemble and collect the Collateral or to render it unusable;

     (ii) upon the occurrence and during the continuance of a default Mortgagee may
require Mortgagor to assemble the Collateral and make it available at a place
Mortgagee designates which is mutually convenient to allow Mortgagee to take
possession or dispose of the Collateral;

     (iii) written notice mailed to Mortgagor as provided herein at least ten (10)
days prior to the date of public sale of the Collateral or prior to the date after
which private sale of the Collateral will be made shall constitute reasonable
notice;

     (iv) in the event of a foreclosure of the liens, privileges or security
interests evidenced hereby, the Collateral, or any part thereof, and the Mortgaged
Properties, or any part thereof, may, at the option of Mortgagee, be sold, as a
whole or in parts, together or separately (including, without limitation, where a
portion of the Mortgaged Properties is sold, the Collateral related thereto may be
sold in connection therewith);

     (v) the expenses of sale provided for in clause FIRST of Section 3.4
shall include the reasonable expenses of retaking the Collateral, or any part
thereof, holding the same and preparing the same for sale or other disposition;

     (vi) should, under this subsection, the Collateral be disposed of other than by
sale, any proceeds of such disposition shall be treated as if the same were sales
proceeds; and

     (vii) upon the occurrence and during the continuance of a default, Mortgagee
may, to the extent permitted under applicable law, elect to treat the fixtures
included in the Collateral either as real property or as personal property, or both,
and proceed to exercise such rights as apply thereto. With respect to any sale of
real property included in the Mortgaged Properties made under the powers of sale
herein granted and conferred, Mortgagee may, to the extent permitted by

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applicable
law, include in such sale any personal property and fixtures included in the
Collateral and relating to such real property.

     (c) To the extent permitted by applicable law, the sale hereunder of less than the
whole of the Mortgaged Properties shall not exhaust the right to judicial foreclosure, and
one or more successive sales may be made until the whole of the Mortgaged Properties shall
be sold, and, if the proceeds of such sale of less than the whole of the Mortgaged
Properties shall be less than the aggregate of the obligations secured hereby and the
expense of conducting such sale, this Mortgage and the liens, privileges and security
interests hereof shall remain in full force and effect as to the unsold portion of the
Mortgaged Properties just as though no sale had been made; provided, however, that Mortgagor
shall never have any right to require the sale of less than the whole of the Mortgaged
Properties. In the event any sale hereunder is not completed or is defective in the opinion
of Mortgagee, such sale shall not exhaust the right to judicial foreclosure, and Mortgagee
shall have the right to cause a subsequent sale or sales to be made. Any sale may be
adjourned by announcement at the time and place appointed for such sale without further
notice except as may be required by applicable law. Any and all statements of fact or other
recitals made in any deed or deeds, or other instruments of transfer, given in connection
with a sale as to nonpayment of the secured obligations or as to the occurrence of any
default, or as all of the secured obligations having been declared to be due and payable, or
as to the request to sell, or as to notice of time, place and terms of sale and the
properties to be sold having been duly given, or as to any other act or thing having been
duly done, shall be taken as rebuttably presumptive evidence of the truth of the facts so
stated and recited. Notwithstanding any reference herein to the Development Agreement, all
persons dealing with the Mortgaged Properties shall be entitled to rely on any document, or
certificate, of Mortgagee as to the occurrence of an event, such as a default, and shall not
be charged with or forced to review any provision of any other document to determine the
accuracy thereof. With respect to any sale held in foreclosure of the liens or security
interests covered hereby, it shall not be necessary for the Mortgagee, any public officer
acting under execution or order of the court or any other party to have physically present
or constructively in his/her or its possession, either at the time of or prior to such sale,
the Mortgaged Properties or any part thereof.

     Section 3.3 Receiver. In addition to all other remedies herein provided for,
Mortgagor agrees that, during the continuance of a default, Mortgagee shall as a matter of right be
entitled to the appointment of a receiver or receivers for all or any part of the Mortgaged
Properties, whether such receivership be incident to a proposed sale (or sales) of such property or
otherwise, and without regard to the value of the Mortgaged Properties or the solvency of any
person or persons liable for the payment of the obligations secured hereby, and Mortgagor does
hereby consent to the appointment of such receiver or receivers, waives any and all defenses to
such appointment, and
agrees not to oppose any application therefor by Mortgagee. Mortgagor expressly waives the
necessity for bond or an accounting by the receiver. Nothing herein is to be construed to deprive
Mortgagee of any other right, remedy or privilege it may now or hereafter have under the law to
have a receiver appointed. Any money advanced by Mortgagee in connection with any such
receivership shall be a demand obligation (which obligation Mortgagor hereby expressly promises to
pay) owing by Mortgagor to Mortgagee and shall bear interest (the “Applicable Rate”), from the

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date
of making such advancement by Mortgagee until paid, provided, however, that in no instance will the
Applicable Rate be greater than the highest rate of interest that Mortgagee may charge to Mortgagor
under applicable law.

     Section 3.4 Proceeds of Foreclosure. The proceeds of any sale held in foreclosure of
the liens or security interests evidenced hereby shall be applied as follows, except as otherwise
required by applicable law:

     FIRST, to the payment of all necessary costs and expenses incident to such
foreclosure sale, including but not limited to reasonable attorney’s fees, all court costs
and charges of every character in the event foreclosed by suit or any judicial proceeding,
if any;

     SECOND, to be applied to the secured obligations as provided in the Development
Agreement; and

     THIRD, the remainder, if any there shall be, shall be paid to Mortgagor, or to
Mortgagor’s successors or assigns, or such other persons as may be entitled thereto by law.

     Section 3.5 Foreclosure as to Matured Debt. If a default shall occur and be
continuing, Mortgagee shall have the right to proceed with foreclosure of the liens, privileges or
security interests evidenced hereby without any requirement that the entire secured obligations
have become due, and in such event, any such foreclosure sale may be made subject to the unmatured
part of the secured obligations, in which event such foreclosure sale shall not in any manner
affect the unmatured part of the secured obligations but, as to such unmatured part, this Mortgage
shall remain in full force and effect as though no sale had been made. The proceeds of such sale
shall be applied as provided in Section 3.4. Several sales may be made hereunder without
exhausting the right of sale for any unmatured part of the secured obligations.

     Section 3.6 Remedies Cumulative. All remedies herein provided for are cumulative of
each other and of all other remedies existing at law or in equity and are cumulative of any and all
other remedies provided for in the Development Agreement, and, in addition to the remedies herein
provided, there shall continue to be available all such other remedies as may now or hereafter
exist at law or in equity for the collection of the secured obligations and the enforcement of the
covenants herein and the foreclosure of the liens or security interests evidenced hereby, and the
resort to any remedy provided for hereunder or under the Development Agreement or provided for by
applicable law shall not prevent the concurrent or subsequent employment of any other appropriate
remedy or remedies.

     Section 3.7 Discretion as to Security. Mortgagee may resort to any security given by
this Mortgage or to any guaranty of the obligations secured hereby, in whole or in part, and in
such
portions and in such order as may seem best to Mortgagee in its sole and uncontrolled
discretion, and any such action shall not in any way be considered as a waiver of any of the
rights, benefits, liens or security interests evidenced by this Mortgage.

     Section 3.8 Mortgagor’s Waiver of Certain Rights. To the full extent Mortgagor may do
so, Mortgagor agrees that Mortgagor will not at any time insist upon, plead, claim or take the
benefit or advantage of any law now or hereafter in force providing for any appraisement,

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valuation, stay, extension or redemption, and Mortgagor, for Mortgagor, Mortgagor’s successors and
assigns, and for any and all persons ever claiming any interest in the Mortgaged Properties, to the
extent permitted by applicable law, hereby waives and releases all rights of appraisement,
valuation, stay of execution, redemption, notice of intention to mature or declare due the whole of
the secured obligations, notice of election to mature or declare due the whole of the secured
obligations and all rights to a marshaling of assets of Mortgagor, including the Mortgaged
Properties, or to a sale in inverse order of alienation in the event of foreclosure of the liens or
security interests hereby created. Mortgagor shall not have or assert any right under any statute
or rule of law pertaining to the marshaling of assets, sale in inverse order of alienation, the
exemption of homestead, the administration of estates of decedents, or other matters whatever to
defeat, reduce or affect the right under the terms of this Mortgage to a sale of the Mortgaged
Properties for the collection of the secured obligations without any prior or different resort for
collection, or the right under the terms of this Mortgage to the payment of the secured obligations
out of the proceeds of sale of the Mortgaged Properties in preference to every other claimant
whatever. If any law referred to in this section and now in force, of which Mortgagor or
Mortgagor’s successors or assigns or any other persons claiming any interest in the Mortgaged
Properties or the Collateral might take advantage despite this section, shall hereafter be repealed
or cease to be in force, such law shall not thereafter be deemed to preclude the application of
this section.

     Section 3.9 No Release of Obligations. Neither Mortgagor nor any other Person
hereafter obligated for payment of all or any part of the secured obligations shall be relieved of
such secured obligations by reason of (i) the failure of Mortgagee or any other Person so obligated
to foreclose the lien of this Mortgage or to enforce any provision hereunder or under the
Development Agreement; or (ii) the release, regardless of consideration, of the Mortgaged
Properties or any portion thereof or interest therein or the addition of any other property to the
Mortgaged Properties. Mortgagee may release, regardless of consideration, any part of the
Mortgaged Properties without, as to the remainder, in any way impairing, affecting, subordinating
or releasing the lien or security interest created in or evidenced by this Mortgage or its stature
as a first and prior lien and security interest in and to the Mortgaged Properties, and without in
any way releasing or diminishing the liability of any person or entity liable for the repayment or
performance of the secured obligations. For payment of the secured obligations, Mortgagee may
resort to any other security therefor held by Mortgagee in such order and manner as Mortgagee may
elect.

     Section 3.10 Discontinuance of Proceedings. In case Mortgagee shall have proceeded to
invoke any right, remedy or recourse permitted hereunder or under the Development Agreement and
shall thereafter elect to discontinue or abandon same for any reason, Mortgagee shall have the
unqualified right to do so and, in such an event, Mortgagor and Mortgagee shall be restored to
their former positions with respect to the secured obligations, this Mortgage, the Development
Agreement, the Mortgaged Properties and otherwise, and the rights, remedies, recourses and
powers of Mortgagee shall continue as if same had never been invoked.

ARTICLE IV.

Miscellaneous

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     Section 4.1 Effective as a Financing Statement. This Mortgage, among other things,
covers goods which are or are to become fixtures on the real property described herein and covers
as-extracted collateral related to the real property described herein. This Mortgage shall be
effective as a financing statement (i) filed as a fixture filing with respect to all fixtures
included within the Mortgaged Properties, and (ii) covering all other Mortgaged Properties. This
Mortgage is to be filed for record in the real property records of each county where any part of
the Mortgaged Properties is situated and may also be filed in the offices of the Bureau of Land
Management or any relevant state agency (or any successor agencies). The mailing address of
Mortgagor is the address of Mortgagor set forth at the end of this Mortgage and the address of
Mortgagee from which information concerning the security interests hereunder may be obtained is the
address of Mortgagee set forth at the end of this Mortgage. Nothing contained in this paragraph
shall be construed to limit the scope of this Mortgage nor its effectiveness as a financing
statement covering any type of Mortgaged Properties.

     Section 4.2 Reproduction of Mortgage as Financing Statement; Authorization to File. A
carbon, photographic, facsimile or other reproduction of this Mortgage or of any financing
statement relating to this Mortgage shall be sufficient as a financing statement for any of the
purposes referred to in Section 4.1. Without limiting any other provision herein,
Mortgagor hereby authorizes Mortgagee to file, in any filing or recording office, one or more
financing statements describing the Collateral and any renewal or continuation statements thereof.

     Section 4.3 Notice to Account Debtors. In addition to, but without limitation of, the
rights granted in Article III hereof, Mortgagee may, at any time after a default has a occurred
that is continuing, notify the account debtors or obligors of any accounts, chattel paper,
negotiable instruments or other evidences of obligations included in the Collateral to pay
Mortgagee directly.

     Section 4.4 Waivers. Mortgagee may at any time and from time to time in writing waive
compliance by Mortgagor with any covenant herein made by Mortgagor to the extent and in the manner
specified in such writing, or consent to Mortgagor’s doing any act which hereunder Mortgagor is
prohibited from doing, or to Mortgagor’s failing to do any act which hereunder Mortgagor is
required to do, to the extent and in the manner specified in such writing, or release any part of
the Mortgaged Properties or any interest therein from the lien and security interest of this
Mortgage. Any party liable, either directly or indirectly, for the secured obligations or for any
covenant herein or in the Development Agreement may be released from all or any part of such
obligations without impairing or releasing the liability of any other party. No such act shall in
any way impair any rights or powers hereunder except to the extent specifically agreed to in such
writing.

     Section 4.5 No Impairment of Security. To the extent allowed by applicable law, the
lien, privilege, security interest and other security rights hereunder shall not be impaired by any
indulgence, moratorium or release which may be granted including, but not limited to, any renewal,
extension or modification which may be granted with respect to any secured obligations, or any
surrender, compromise, release, renewal, extension, exchange or substitution which may be granted
in respect of the Mortgaged Properties, or any part thereof or any interest therein, or any release
or indulgence granted to any endorser, guarantor or surety of any secured obligations.

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     Section 4.6 Acts Not Constituting Waiver. Any default may be waived without waiving
any other prior or subsequent default. Any default may be remedied without waiving the default
remedied. Neither failure to exercise, nor delay in exercising, any right, power or remedy upon
any default shall be construed as a waiver of such default or as a waiver of the right to exercise
any such right, power or remedy at a later date. No single or partial exercise of any right, power
or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof,
and every such right, power or remedy hereunder may be exercised at any time and from time to time.
No modification or waiver of any provision hereof nor consent to any departure by Mortgagor
therefrom shall in any event be effective unless the same shall be in writing and signed by
Mortgagee and then such waiver or consent shall be effective only in the specific instances, for
the purpose for which given and to the extent therein specified. No notice nor demand on Mortgagor
in any case shall of itself entitle Mortgagor to any other or further notice or demand in similar
or other circumstances. Acceptance of any payment in an amount less than the amount then due on
any secured obligations shall be deemed an acceptance on account only and shall not in any way
excuse the existence of a default hereunder.

     Section 4.7 Forbearance or Extension. No forbearance and no extension of the time for
the payment of the obligations secured hereby, shall operate to release, discharge, modify, change
or affect, in whole or in part, the liability of Mortgagor hereunder for the payment of the
obligations or performance of the obligations secured hereby, or the liability of any other person
hereunder or for the payment of the obligations secured hereby.

     Section 4.8 Place of Payment. All secured obligations which may be owing hereunder at
any time by Mortgagor shall be payable at the place designated in the Development Agreement (or if
no such designation is made, at the address of Mortgagee indicated at the end of this Mortgage), or
at such other place as Mortgagee may designate in writing.

     Section 4.9 Application of Payments to Certain Obligations. If any part of the
secured obligations cannot be lawfully secured by this Mortgage or if any part of the Mortgaged
Properties cannot be lawfully subject to the lien, privilege and security interest hereof to the
full extent of such obligations, then all payments made shall be applied on said obligations first
in discharge of that portion thereof which is not secured by this Mortgage.

     Section 4.10 Compliance With Usury Laws. It is the intent of Mortgagor and Mortgagee
to contract in strict compliance with applicable usury law from time to time in effect. In
furtherance thereof, it is stipulated and agreed that none of the terms and provisions contained
herein, in the Development Agreement or in the Conveyances shall ever be construed to create a
contract to pay, for the use, forbearance or detention of money, interest in excess of the maximum
amount of interest permitted to be collected, charged, taken, reserved or received by
applicable law from time to time in effect.

     Section 4.11 Release of Mortgage. In addition to the partial releases required
pursuant to Section 1.5 hereof, if Mortgagor has satisfied its obligations under Article II
of the Development Agreement, upon request by Mortgagor, Mortgagee shall promptly cause
satisfaction, discharge and release of this Mortgage to be entered upon the record at the expense
of Mortgagor and shall

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execute and deliver or cause to be executed and delivered such instruments
of satisfaction, reassignment and/or release as may be appropriate.

     Section 4.12 Notice. All notices, requests, consents, demands and other
communications required or permitted hereunder or under the Development Agreement shall be in
writing and, unless otherwise specifically provided in the Development Agreement, shall be deemed
sufficiently given or furnished if delivered by personal delivery, by telefacsimile, by delivery
service with proof of delivery, or by registered or certified United States mail, postage prepaid,
at the addresses specified at the end of this Mortgage (unless changed by similar notice in writing
given by the particular party whose address is to be changed). Any such notice or communication
shall be deemed to have been given (a) in the case of personal delivery or delivery service, as of
the date of first attempted delivery at the address and in the manner provided herein, (b) in the
case of telefacsimile, upon receipt, and (c) in the case of registered or certified United States
mail, three (3) days after deposit in the mail. Notwithstanding the foregoing, or anything else in
the Development Agreement which may appear to the contrary, any notice given in connection with a
foreclosure of the liens or security interests created hereunder, or otherwise in connection with
the exercise by Mortgagee of its rights hereunder or under the Development Agreement, which is
given in a manner permitted by applicable law shall constitute proper notice; without limitation of
the foregoing, notice given in a form required or permitted by statute shall (as to the portion of
the Mortgaged Properties to which such statute is applicable) constitute proper notice.

     Section 4.13 Invalidity of Certain Provisions. A determination that any provision of
this Mortgage is unenforceable or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any provision of this Mortgage to any
person or circumstance is illegal or unenforceable shall not affect the enforceability or validity
of such provision as it may apply to other persons or circumstances.

     Section 4.14 Gender; Titles; Construction. All references in this Mortgage to
articles, sections, subsections and other subdivisions refer to corresponding articles, sections,
subsections and other subdivisions of this Mortgage unless expressly provided otherwise. Titles
appearing at the beginning of any of such subdivisions are for convenience only and shall not
constitute part of such subdivisions and shall be disregarded in construing the language contained
in such subdivisions. The words “this Mortgage”, “this instrument”, “herein”, “hereof”,
“hereunder” and words of similar import refer to this Mortgage as a whole and not to any
particular subdivision unless expressly so limited. Unless the context otherwise requires:
“including” and its grammatical variations mean “including without limitation”; “or” is not
exclusive; words in the singular form shall be construed to include the plural and vice versa;
words in any gender include all other genders; references herein to any instrument or agreement
refer to such instrument or agreement as it may be from time to time amended or supplemented; and
references herein to any
Person include such Person’s successors and assigns. All references in this Mortgage to
exhibits and schedules refer to exhibits and schedules to this Mortgage unless expressly provided
otherwise, and all such exhibits and schedules are hereby incorporated herein by reference and made
a part hereof for all purposes. This Mortgage has been drafted with the joint participation of
Mortgagor and Mortgagee and shall be construed neither against nor in favor of either such party
but rather in accordance with the fair meaning hereof.

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     Section 4.15 Recording. Mortgagor will cause this Mortgage and all amendments and
supplements thereto and substitutions therefor and all financing statements and continuation
statements relating thereto to be recorded, filed, re-recorded and refiled in such manner and in
such places as Mortgagee shall reasonably request and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.

     Section 4.16 Certain Obligations of Mortgagor. Without limiting Mortgagor’s
obligations hereunder, Mortgagor’s liability hereunder and the obligations secured hereby shall
extend to and include all post petition interest, expenses and other duties and liabilities with
respect to Mortgagor’s obligations hereunder which would be owed but for the fact that the same may
be unenforceable due to the existence of a bankruptcy, reorganization or similar proceeding.

     Section 4.17 Authority of Mortgagee. All persons shall be entitled to rely on the
releases, waivers, consents, approvals, notifications and other acts of Mortgagee without the
joinder of any party other than Mortgagee in such releases, waivers, consents, approvals,
notifications or other acts.

     Section 4.18 Counterparts. This Mortgage may be executed in several counterparts, all
of which are identical, except that, to facilitate recordation, certain counterparts hereof may
include only that portion of the applicable Exhibit A to the Conveyances which contains
descriptions of the properties located in (or otherwise subject to the recording or filing
requirements or protections of the recording or filing acts or regulations of) the recording
jurisdiction in which the particular counterpart is to be recorded, and other portions of the
applicable Exhibit A to the Conveyances shall be included in such counterparts by reference only.
All of the counterparts hereof together shall constitute one and the same instrument. An executed
counterpart of this Mortgage containing the full text to the entire Exhibit is recorded in the real
property records of Greene County, Pennsylvania.

     Section 4.19 Successors and Assigns. The terms, provisions, covenants,
representations, indemnifications and conditions hereof shall be binding upon Mortgagor, and the
successors and assigns of Mortgagor, and shall inure to the benefit of Mortgagee and its respective
successors and assigns, and shall constitute covenants running with the Mortgaged Properties. All
references in this Mortgage to Mortgagor or Mortgagee shall be deemed to include all such
successors and assigns.

     Section 4.20 FINAL AGREEMENT OF THE PARTIES. THE WRITTEN TRANSACTION 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.

     Section 4.21 CHOICE OF LAW. WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAW THAT MAY CAUSE THE APPLICATION OF LAWS OF ANY OTHER JURISDICTION, THIS MORTGAGE SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA.

 - 15 - 

 

     Section 4.22 Exculpation Provisions. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS MORTGAGE; AND AGREES THAT IT IS CHARGED WITH
NOTICE AND KNOWLEDGE OF THE TERMS OF THIS MORTGAGE; THAT IT HAS IN FACT READ THIS MORTGAGE AND IS
FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS, CONDITIONS AND EFFECTS OF THIS
MORTGAGE; THAT IT HAS BEEN REPRESENTED BY INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE
NEGOTIATIONS PRECEDING ITS EXECUTION OF THIS MORTGAGE; AND HAS RECEIVED THE ADVICE OF ITS ATTORNEY
IN ENTERING INTO THIS MORTGAGE; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS MORTGAGE
RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND
RELIEVING THE OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND
COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION OF
THIS MORTGAGE ON THE BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT “CONSPICUOUS.”

[Signature Page Follows]

- 16 -

 

     IN WITNESS WHEREOF, this Mortgage is executed by Mortgagor on the date set forth in the
acknowledgement below, to be effective immediately after the granting of the Conveyances and
simultaneously with the execution and delivery of the Development Agreement.

	 	 	 	 	 	 	 

	 	 	ENERGY CORPORATION OF AMERICA
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Donald C. Supcoe	 	 
	 

	 	Name:
	 	 

Donald C. Supcoe
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

The address of Mortgagor is:

Energy Corporation of America

4643 South Ulster Street

Suite 1100

Denver, Colorado 80237

Attention: Michael S. Fletcher

Facsimile No.: (303) 694-2763

With a copy to:

501 56th Street

Charleston, West Virginia 25304

Attention: Donald C. Supcoe

Facsimile No.: (304) 925-3285

With a copy to:

Vinson & Elkins L.L.P.

1001 Fannin Street, Suite 3500

Houston, Texas 77002

Attention: David P. Oelman

Facsimile No. (713) 615-5861

Prepared by:

Vinson & Elkins LLP

1001 Fannin Street

Suite 2500

Houston, TX 77002-6760

Attention: Thomas Herbert

Signature Page to Mortgage

 

 

CERTIFICATE OF RESIDENCE

I do hereby certify that the address of Mortgagee is:

The Bank of New York Mellon Trust Company, N.A.

919 Congress Avenue, Suite 500

Austin, Texas 78701

Attn: Michael J. Ulrich

	 	 	 	 	 

	ECA MARCELLUS TRUST I	 	 
	 
	 	 	 	 
	By: The Bank of New York Mellon Trust Company, N.A.
	 
	 	 	 	 
	By:
	 	/s/ Michael J. Ulrich	 	 
	Name:

	 	 

Michael J. Ulrich
	 	 
	Title:

	 	Authorized Signatory	 	 

Signature Page to Mortgage

 

 

	 	 	 

	THE
STATE OF COLORADO

	 	§
	 

	 	§
	COUNTY
OF DENVER

	 	§

     On
this, the 7th day of July, 2010, before me Julie Ann Kitano, a Notary public,
personally appeared Donald C. Supcoe, who acknowledged himself to be the Senior Vice President of
Energy Corporation of America, a West Virginia corporation, and that he as such Senior Vice
President, being authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as Senior Vice President.

     In witness whereof, I hereunto set my hand and official seal.

			
	[SEAL]
	 	/s/ Julie Ann Kitano
	 
	 	 

My
Commission Expires: 4-26-2014

Acknowledgment to Signature Page to Mortgage

 

 

ANNEX A-1

COPY OF TERM ROYALTY CONVEYANCE (PUD)

Annex A-1 to Mortgage

 

 

ANNEX A-2

COPY OF PERPETUAL ROYALTY CONVEYANCE (PUD)

Annex A-2 to Mortgage

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